Author Archive
Different Ways To Generate Substantial Income For Your Portfolio With Assets Other Than Real Estate – Part One
Posted on September 17, 2015 byRecently I was having a discussion with a friend of mine discussing some of the different ways to create wealth not only from real estate but other forms of investing that can give huge returns. We talked about the usual ways of making money buying real estate and we also talked about other ways of creating income without having to do any physical work for the money. Of course when you are a real estate investor your first thought is usually either about, buying foreclosure properties, wholesaling properties, fixing and selling houses at retail prices, and also buying long term income properties.
One subject I have never talked about before that I think is an important part of every real estate investors portfolio of investing opportunities is to also own paper assets for income. From this point forward we will refer to paper assets simply as “Paper”. So what are paper assets? Paper assets come in many different forms. Some different paper assets come in the form of property tax certificates, land contract paper, contract for deed paper and promissory notes secured by a mortgage or a deed of trust paper. It is my belief that every real estate investor should be diversified and have several different income streams to help them build the wealth they desire. Read More→
Why Does Everyone Want to Become a Wholesaler? – Part Two
Posted on August 10, 2015 byThis month I believe what I will be sharing with you can be very important to you financially as well as to build your financial freedom faster and easier. Last month I questioned why all of the so-called Guru’s are pitching how everyone should be wholesaling properties to build wealth. From my own experience as I said last month, if all you do is wholesale deals you have a job. This month I want to explain what I have experienced over the years doing this type of deal and what I have learned that keeps my buyers clamoring for more deals on a continual basis. The reason I decided to write about this subject is because without the practical knowledge of how to structure your wholesale deals, it is going to be more difficult to pass those deals along to other investors. I hope this information will open your eyes to the real world and what it takes to be more profitable.
Last month I left off by saying, if you always pay too much for the properties you wholesale, the seasoned investors aren’t going to be interested in the properties you find and you will be forced to sell or assign the purchase agreement to other people who don’t know what they should pay. This is because those people don’t really understand how to figure the numbers and once they do figure out they paid too much, it only stands to reason that they won’t want to buy more properties from you. Once word gets out you are asking too much and it will be assumed you don’t know what you are doing and investors will avoid you like the plague. Everyone wants to make an adequate profit from every deal they do or they won’t do the deal. You must realize that there are other ways to profit from real estate other than being a wholesaler. Read More→
Why Does Everyone Want to Become a Wholesaler? – Part One
Posted on July 6, 2015 byI have noticed over the past months that almost everyone I talk to today tell me they want to be a wholesaler. These people want to wholesale deals as a way to generate fast money to pay their living expenses each month. What in the world is going on here? Why is it that all of a sudden everyone wants to become a wholesaler when there are so many other different ways to profit from real estate other than wholesaling?
Don’t get me wrong I’m not suggesting that wholesaling isn’t a great way to get started as a real estate investor. All I am suggesting is wholesaling is only one way to make money buying real estate but it’s not necessarily the best way in my opinion. Having done many wholesale deals over the years I have come to the conclusion that if the only way you buy real estate is wholesaling where the investor either buys or gets the property under contract with the seller and then resells the property to another person or assigns their assignable purchase agreement to another investor and passes along the deal you structured with the seller for a fee. Read More→
It’s Time to Get Your Money Machine Started TODAY!
Posted on June 8, 2015 byRecently a friend of mine sent me a chart created by the United States census bureau showing the numbers of home ownership from 1965 until 2015. Amazingly the number of home ownership in 2015 was almost exactly the same as it was in 1965. I found this very interesting because throughout all of those years between 1965 and 2015 homeownership escalated slowly until 2006 when the real estate market crash took place because of all the defaulting loans. As house prices dramatically declined people felt their homes were worth less than what they owed so many people quit making their loan payments causing many of the defaulted loans people could no longer afford. I thought about what this chart represented for today’s real estate investors and I believe this chart shows us there is great opportunity for real estate investors of all kinds everywhere.
I am starting to see more and more new construction everywhere I travel and I am also seeing more and more deals completed by my students who are savvy investors all over this country. I’m an optimist, I truly believe that we are going to see huge profits made by those who step out of the traditional box and structure their deal differently than those who only do what everyone else is doing. I believe those of us who think different than the masses will prosper far more than the status quo. I am seeing the market slowly making a comeback from the disasters of 2008 for some of us but not those who are stuck in yesterday’s methods and mindset. Read More→
The Way You Spend Your Money Can Make a Huge Difference Creating Your Real Estate Wealth – Part 2
Posted on April 29, 2015 byThe real beauty of owning rental property when the seller will allow you to pay them directly every month allows you to collect rent from each rental property you buy to pay for those properties.
The key to make this strategy work is to buy each income property so a tenant who will be renting the property will pay enough rent each month to cover 1/12th of the annual property taxes, 1/12th of the annual property insurance cost and at least 10% to 15% of the monthly rental income to cover the cost of the maintenance for that property when needed. This money for maintenance is set aside to pay for making the property look new when a tenant moves out such as new carpet, paint and any other damage to the property the tenant did during their stay. Also money for when the roof on that property eventually wears out, when the water heater eventually goes bad or the furnace or air conditioner breaks down and also enough money remaining each month to make the monthly payment to the seller and hopefully provide extra money each month for the owner to put into their pocket. Here is an example to show what I am talking about.
For this example each rental property brings in $1,000 in rent each month. This is the formula I use to determine if enough rent collected for each potential rental property to support itself and also provide extra income for the owner each month. Read More→
The Way You Spend Your Money Can Make a Huge Difference Creating Your Real Estate Wealth – Part 1
Posted on April 7, 2015 byBecause money has been easy to get over the past 15 years I wanted to show you how leverage can truly maximize your profits regardless of your credit history. If you can think about the conservation of cash idea borrowing money from banks can definitely be a thing of the past. Leverage is one way how you can use the limited money you have in the most effective way to maximize your profit potential on every property you buy. If you have less than good credit or if you simply don’t want to use your credit you may want to learn how to use less money and with leverage maximize your profits. If you already have limited money you can use what money you currently have to buy one house but you will only profit or grow your money from that one house and nothing more when you rent or sell the property you bought. Leverage can accelerate how you build wealth if done correctly.
Here is a simple example of what I am talking about. For this example let’s say you have $100,000 you have worked hard to acquire over several months or years or you have the ability to borrow $100,000. One day you decide to buy a rental property. You quickly find a house you believe will be a good rental. The sellers of that house are asking $100,000 for their property. During your face-to-face discussions with the sellers you find they would be willing to allow you to make payments to them every month until the property is eventually paid for over the longest period of time you can get the sellers to agree to. Read More→
How Can One Piece of Software Be the Answer to Making Huge Profits and Fast Wealth?!?
Posted on March 9, 2015 byRecently I was at an event and listened to one of the new real estate Gurus who was selling his software product he said would do everything you need to be successful buying real estate. He referred to his software as “Done for You”. He said it is the greatest thing since sliced bread. He said it would find the good deals, figure what you should pay for the property and what the repair costs will be for every property you look at without ever seeing the property. I was amazed how easy he made it sound. I couldn’t believe how many beginning investors in the audience fell for his pitch and bought his product for $997.00. I know we are in the computer age and I realize that the computer as well as our I-phones can be valuable and time saving tools in our real estate investing businesses. In the quest to simplify and broaden our profit potential tools like these can be helpful to find more opportunities.
I have seen software products presented that give the investor lists of different types of properties, their location, their price and comparables in the area. A system that helps the investor find money to fund their deals from a list of people who lend money. I have seen software that tells you how much you should pay for a property even if you haven’t seen the property. Good luck on that one. I have also seen different products that show you how to calculate repair costs from a data base of items from Home Depot and Lowes. I know for sure that there is no substitute for doing your own due diligence before buying any property and no software can adequately do that for you. Read More→
It’s DeJa Vu All Over Again and It’s Time to Make a Change
Posted on February 9, 2015 byHere we are already in the second month of what I believe is going to be a bumper year for real estate investors. For real estate investors who decide that they need to change the way they are trying to buy houses, many have little success without available affordable financing.
Did you see the movie Groundhog Day? In the movie events kept repeating themselves over and over. Today I am seeing this very same thing happening to real estate investors. Many investors today are still trying to do exactly what they did in the past and it still isn’t working for them. Most of these investors are getting what most of the other investors who lack the ability to borrow money are getting which isn’t very much. Many of these beginning investors are struggling to make little money, most are just going through the motions of what they were taught by some guru.
I just spent 5 days teaching with Robyn Thompson at her Junkers to Millions boot camp and I was amazed to hear her students who are totally unaware of any method of buying houses other than getting institutional financing to buy houses. I discussed this with most of her audience during my time at the boot camp and found that over 75% of those attending were unable to get any type of institutional financing for one reason or another. Does this sound familiar for you too? Read More→
It’s Time to Start Thinking About Your Financial Goals and Needs for the New Year
Posted on January 6, 2015 byI’m very excited about the New Year and all of the possibilities I believe real estate investors will have the opportunity to take advantage of in 2015. Every New Year I sit down and write out my goals and needs for the coming year on my yellow pad. Once I have my goals written down for the year I then write a contract with myself setting forth what I promise myself and my family I will do this year to achieve my goals. For years I used to do a New Year’s resolution and I found that by the third week of the New Year my resolutions were already forgotten and I was just going through my days as I had always done in the past, sometime productive, sometimes not productive.
I don’t know about you, but when I give my word to someone in my mind I have just made a contract with that person. When I give my word, I will do whatever I can possibly do to keep my word to the other person. I want the other person to feel confident whatever I tell them they can believe in. I feel the same way about signing a contract. As with giving my word to someone, signing a contract to me is a very significant obligation I don’t take lightly whether to someone else or to myself. I started writing a contract with myself 20 plus years ago as what I promise myself I will do in the coming year. Some year’s life got in the way and I wasn’t able to fulfill my promises to myself even though I tried my best. Other year’s just because of the fact that I had the contract I could review every couple of months kept me on track to achieve what I had planned to do that year. Read More→
How Sellers Think Differently Than Investors
Posted on December 5, 2014 byThis month I want to continue the line of thinking how sellers think differently than investors. Last month I talked about how sellers believe their property is worth top dollar even though many times they failed to keep the property in good condition.
Once you realize this will be what you will be facing when you first talk to most sellers you will have a better understanding of why sellers say the things they do when you ask them questions, such as “We Want ALL Cash” for our house.
You need to realize that the investor is trying to buy just another house they can make money with, while many sellers are selling a home that has emotional meaning to them if they live in the property. This difference of thoughts and emotion make a huge difference when you are negotiating. As I said before, this isn’t rocket science it’s just a fact of life. When you understand how sellers think you might have an easier time putting together a more profitable deal. By finding out what the seller’s true needs are, will give you a position of power when negotiating your deals. Remember, each seller has just one house to sell and you have thousands of houses to look at and choose from. This is why you are the one in the position of power when negotiating.
More than anything else you need to know why the seller is selling their house if you want to create a win-win deal. You truly are in control of each negotiation. You just don’t realize it. I concluded many years ago that I have lived many years without this seller’s house and if I am unsuccessful making a deal I will probably live out the rest of my life just fine without that house.
Here is a list of things you need to think about when talking to every seller. Read More→
Would You Believe Sellers Think Differently Than Buyers? What a Shocker!
Posted on November 11, 2014 byIt took me years to understand that Sellers think differently than buyers. I know this sounds too idiotic to even discuss but from years of negotiating with sellers I can tell you that if you don’t understand how sellers think it will be impossible to negotiate profitable deals. Jimmy Napier told me years ago that we investors are trying to buy just “another house”, while the seller is selling a “Home”. Once I heard this it got me to thinking. It’s true; a seller has a different reason for the way they negotiate. This has changed how I negotiate and the techniques I use. I no longer believe that always offering CASH for every deal is the best offer to make.
Because I know there are as many ways to buy a property, as there are properties to buy I understand every seller has a different reason why they are selling and just getting all cash is NOT the only reason why they are selling their property. It will be your job to figure out what the seller really wants. While sitting at kitchen tables I have heard time after time what a seller really wants and money isn’t many sellers only motivation. Once they tell you what they want then hopefully you can then go on to solve the seller’s problem whatever it may be.
Over the years I have heard a myriad of reasons why each seller wants or needs to sell their house. Some needed to sell because the size of their family had grown and they have simply outgrown the house they have. Possibly I could sell them one of my other houses in exchange for the house they need to sell. Some sellers have reached retirement age and no longer need such a large house to take care of. Again, I might be able to sell them one of my houses or find them a house they would be happy with, buy it and exchange my house for their house. I call this “double dipping”. Some sellers may have had a job transfer and need to sell their house quickly because they are now making two house payments they can’t afford to make, the house they left and the house they are now living in. Some sellers may no longer be able to take care of the property because of their age or physical condition or, they can’t afford the monthly payments any longer. Some sellers may simply want to rid themselves of the large monthly payment they are paying and are having trouble making each month while trying to save their credit score. Some seller’s have back property taxes they can’t pay and their lender is threatening foreclosure if they don’t. You will never know what motivates the sellers until you ask. Read More→
Sometimes You May Be Forced to Take a Step Backwards, But It Doesn’t Mean You Have to Lose Money!
Posted on October 7, 2014 byAs many of you know I have taught hundreds of students over the years and I am constantly asked what the most important things a new real estate investor needs to know. First of all I believe every new investor needs to realize that if they plan to be successful and make money from the real estate they buy, they will find that every situation will require a different strategy and structure that they will need to learn if they wish to achieve their goals and dreams.
The key to make almost every deal work is not to “Buy High and Sell Low”, it’s how you structure the deal. Actually this has happened to me a few times over my 35 years as an investor, this IS NOT a good strategy to adopt but it shouldn’t mean you need to lose money. Over the years I have done two deals where I bought a property and because of circumstances beyond my control I was forced to sell those properties for less than what I paid for them. Even though I paid too much for those properties “over time” I made a nice profit on both of those deals.
Each of those properties I bought with seller financing terms and then sold each with seller financing terms. Even though I sold each property for less than what I paid for them I received a higher interest rate when selling than the interest rate I was paying to buy each property. I was able to make a nice profit on each. Read More→
What Not to Do When Negotiating – Part 3
Posted on September 8, 2014 byThis is the final part of this article but it is not the end of the mistakes I have made negotiating with sellers through the years. I will continue to provide more negotiating ideas for every serious investor who realizes that negotiating directly with the seller is where the most money will be made.
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Being Inflexible – can you imagine a real estate genius like me passing on a deal just because the sellers and I were $500 apart on the price? Even at the higher price it was still a good deal for me but my pride and ego wouldn’t let me give in and do the deal because I wanted the deal to go my way and the sellers wanted the deal to go their way. I can’t believe I was that immature that I let a beautiful asset like that house slip away over $500. I have learned over the years, there is no place in this business for your pride or your ego. If you have negotiated a good deal get the deal closed and enjoy the benefits that property will give you and your family. Read More→
What Not to Do When Negotiating – Part 2
Posted on August 7, 2014 byLast month we discussed four of the major mistakes I made when I was learning to be a real estate investor setting at sellers kitchen tables trying to structure profitable deals to better provide for my family and the dumb things I did that cost me thousands and thousands of dollars over the years. This month I am sharing with you more of the things I did when I didn’t know what I was doing when negotiating. If you will learn from my mistakes it should take years off of your learning curve and help put thousands of dollars in your pocket every year.
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Sounding Like and Expert – this is a mistake I see all too many beginning investors make. Many years after I started buying houses, my mentor, Jimmy Napier told me to always be at or just below the sellers intelligent level if you want to be successful negotiating with them. Until I learned what Jimmy told me I would say the things I would hear from a seminar speaker that the sellers didn’t understand. This was not good. I found out that when you sound too smart many sellers get uneasy because they start to think that you could be getting ready to take advantage of them in some way. Never sound too smart when talking to the sellers. Read More→
What Not to Do When Negotiating – Part 1
Posted on July 7, 2014 byJimmy Napier made the following quote and I truly believe these words are a key to create wealth in today’s real estate market.
Quote: “You Make The Majority of Your Money In Real Estate During Your Negotiations”.
Last month I made reference to what I believe will be the key to success for real estate investors in the event the economy tanks like the economist Harry S. Dent has recently predicted. As you may remember I talked about how every investor needs to learn how to talk to sellers face-to-face and negotiate profitable deals without thinking that all every seller wants is all CASH. Since then I have had much thought about things I have experienced through my career of over 35 years that were what I call “Deal Killers”.
If you want to be a successful real estate investor you need to not make the same mistakes I made when negotiating with sellers. For the first 20 years of my career I had no training of what to say and what not to say, I learned negotiating by just opening my mouth and saying what I thought every seller wanted to hear. I can’t tell you how many deals I screwed up just by saying the wrong things or by not asking the right questions. This article is about some of the things I have said and how those things were deal killers for me. Read More→
Do You Believe Everything You Hear Is True?
Posted on June 9, 2014 byToday I read an article written by Harry S. Dent who is a famous economist. Mr. Dent is predicting that the Dow is going to tumble down as much as 60% to 6,000 then ultimately tumble again to somewhere around 3,300. Mr. Dent predicts that Gold will fall to $750/ounce and crude oil will eventually fall to $10 per barrel and unemployment will skyrocket, he quotes “It’s going to get ugly”. Mr. Dent predicted the 2008 financial disaster and has been correct about many financial issues over the past 10 to 15 years.
I’m not an economist but I know that we, in the business of houses, have always survived through every cycle the economy has ever thrown at us. Even during the great depression of the 1930’s landlords who had affordable housing survived through those tough years. I believe the secret of being able to keep our properties and even make money in tough times will be based on not so much how much debt we have on each property but how much our monthly mortgage payment is every month. Whether you plan to keep any property as a rental or you plan to sell a property with seller financing terms I believe this will be the key to your survival and ability to prosper in a down cycle of the economy.
A problem I am seeing today where newer investors are concerned is they have no skills talking to sellers. For the past 15 years money has been easy to get for most real estate investors until 2008 when the market dropped out of sight and many investor/speculators lost most, if not all of their properties to foreclosure. Because of the looming market predictions I believe every real estate investor should learn the skills many of us have used for years to negotiate our deals with the sellers directly. I see all too many investors who continue to throw dollars at deals hoping they can get property for CASH. The problem, not all investors have access to unlimited funds to buy property. Read More→
Houses You Want to AVOID! Houses that Will Be Hard to Sell or Rent – Part 2
Posted on May 6, 2014 byThis month I’m going to give you the other houses I believe you need to avoid if you plan to buy and sell real estate quickly and profitably. I feel very strongly that you need to know about each of these houses so you never find yourself trying to rent or sell properties that just won’t sell. All of the houses I mention have very difficult issues you can’t easily overcome. Why would you want to buy one of these houses when there are hundreds of houses that do not have these issues?
Houses Where Someone Was Murdered or Committed Suicide.
I won’t buy these houses because I fear if a new family moved into a house where someone was murdered or committed suicide without knowledge of what happened there and the children at school were to tell the new children now living in the house what actually happened could cause trauma for the children now living in the house and I don’t want to be responsible for doing that to the kids.
Houses That Are Just Plain UGLY.
Ugly will always be difficult to rent or sell and will be far more costly to correct the problem. When you find a house that is just plain ugly turn and walk away. There are thousands of houses for sale, so why would you want to waste your time trying to completely overhaul an ugly house when there are plenty of pretty houses available across the country? Read More→
Important Information About Houses You May Want to AVOID! Houses that Will Be Hard to Sell or Rent
Posted on April 8, 2014 byThis month I decided to share with you my thoughts about some types of property you may want to avoid if you plan to maximize your profits from the deals you do. I have personally bought several of the houses I now recommend you think about not buying. I believe buying any of the following properties will definitely give you a financial seminar you really don’t want to take for numerous reasons.
I have taken a few of those financial seminars and I can tell you that you don’t want nor need to go there and make the same mistakes I have made. For those just getting started in the business these examples are a must for you to know so you don’t buy houses that will be extremely hard to sell or rent.
This is a two part article for April and May.
Houses in Area’s with Many “FOR RENT” signs.
Any house located in an area with many For Rent signs leaves little hope of selling to a family who wants to live in that area and can qualify for a loan. Too many renters in any neighborhood will many times run out the families with small children who can qualify for a loan that want to buy. Read More→
4 Types of Houses You Need to Look for to Exponentially Increase Your Profits
Posted on March 10, 2014 byLast month I mentioned I had discovered that every property I drove past was one of four different types of houses every investor needs to be able to quickly recognize if they want to increase their bottom line every year. This month I will explain two types of houses that can really increase your income every year.
I struggled for years to find properties that would allow me to make enough money to feed my family and pay my bills. I had no idea what I was doing or what I was looking for. All I knew was I was trying to buy any house I could find just to make money. I struggled to figure out what I should look for so I started buying houses that I could fix and sell retail. This was a good idea but I could only do a few of these houses each year because I did my own rehabs at that time. It was taking long periods of time to fix and get every property sold and I kept running out of money. It was always a struggle to pay the bills each month. I wasn’t getting checks from my closings very often. All I could do was try to buy houses I thought would make me the most money. Read More→
It’s Impossible to Run a “4” Minute Mile Before You Learn How to Walk!
Posted on February 10, 2014 byI recently had a telephone conversation with one of my students who asked me what I thought was going to be the next best strategy to use to do more deals in 2014. My student is thinking the market is making a real come back. He is very excited because he is seeing house prices starting to go up, house sales are increasing every month and he had just been told by a traveling Guru that the market has huge profit potential and the market is headed back to 2006 price levels just like it was before the crash.
I can truly appreciate his bright eyes and positive enthusiasm. This student is someone who spends time and money constantly in seminar land listening about the latest niche that will be the next million dollar method for investors to create wealth. I must admit that some of the most recent strategies being pitched could, if done using thorough research and use the correct paperwork could be profitable. My problem with all of these new strategies…. Most of these new strategies aren’t really new. Many have been around for years. The problem, many new investors quickly bore with each strategy as they hear about the next great money making idea that is making investors wealthy. Most of these new strategies will require large sums of money to learn and implement. As market conditions continually change another will soon appear and the investor is again quickly off in a different direction without perfecting the last. Read More→
