Tampa Real Estate Investors Alliance Blog

When a real estate developer runs into a snag, and needs additional money to complete a project, or he wants a shorter-term loan of, say, six months to six years, he frequently turns to the “hard-money” market. In a nutshell, these are lenders who are looking to get a decent return on their money, with a margin of safety. They usually do this by holding a lien on the property, or on another property the borrower owns, in a practice called “cross-collateralization.”

If you’ve got a lot of money in your self-directed IRA, and it’s been earning relatively weak returns, hard money lending provides a potentially lucrative way for you to “take charge” of your assets. With hard-money lending, you aren’t depending on the skills of a mutual fund manager you’ve never met, nor do you need to settle for the lackluster interest rates currently available from investment-grade bonds and treasuries.

Instead, you’re free to seek your own deals with any number of private real estate developers. Here are the advantages to hard-money lending in your self-directed IRA: Read More→

With the real estate markets slowing in many areas of the country, we are seeing a resurgence of owner carryback financing. Most of you are aware of the basics of such financing, but you may not have been exposed to some of the more creative approaches.

Let’s look at Jack who wants to move away from day-to-day management of his properties as he is involved in another business venture that is taking more of his time. He could just sell off his properties, pay the taxes and re-invest the proceeds in an investment that doesn’t require the management oversight.

One house Jack purchased some time ago for $100,000 is now worth $150,000. After concessions, realty fee and closing costs, Jack nets $140,000. And after the $80,000 mortgage is paid off, he has $60,000.

But hold on, federal and state taxes have to be paid. Between depreciation recapture and capital gains, taxes total about $12,000. So, Jack is left with $48,000 to invest. Read More→

Funding can be one of the largest barriers to entry in the real estate business. I remember the very first time I walked into a lenders office and tried to discuss funding for my first apartment complex I wanted to buy. My experience (or lack of) was immediately brought to my attention not to mention my complete lack of liquid assets (NO CASH!)

That day was quite sobering as I left that office although I was still determined to break into the real estate business. Which was a fortunate attitude seeing as I had quit my job as a pilot to go into real estate full time two weeks earlier.

What followed was the next 8 years of survival in the business and ultimately an almost 400 unit portfolio. I survived the Great Recession by mastering the techniques of creative financing such as seller financing, master lease options and raising private capital just to name a few.

If you are just starting out or whether you have been in the real estate business for a while, you always want to complete each transaction with as little cash out of your own pocket as necessary. The more cash you keep in your pocket the more options you keep open to yourself. Remember; Options = Cash! Read More→

If I could wave a magic wand and re-live my early real estate investing career from the beginning, I think I would first try to learn more about what seller’s needs and thoughts are. I would also want to better understand the thoughts and logic that run through a seller’s mind when they are motivated and want to sell their house.

If I had a better idea of what the sellers wanted it will be much easier to make offers the seller might be happy with and hopefully get them to sell me their house at a price and terms I’ll be happy with, and they will get what they want and also be happy with. If I had only known what I know now it would have been far more profitable for me and my family. 

I shudder to think of all of the lost deals I have had simply because I never stopped to think about what the seller’s needs were? My thoughts were usually about how I could make a killer deal for myself. This was not the best nor the most profitable way to make money buying real estate. You need to take a minute, step back and  analyze what the seller’s wants or needs are, (or at the very least use a little logic to try to think about what the seller might want or need before making them an offer) if not, you are making a big mistake. If you think about what the sellers needs are you will have a distinct advantage while actually sitting face-to-face with them and are negotiating. If you will do this, at least you would have a direction to start going in.

As you talk with the seller and start to ask them the important questions you will start to better understand what is motivating them to sell. If you don’t ask the important questions you’ll never get the answers you need to put together a profitable deal – a deal which is good for both you and the seller. Let me explain… Read More→

Don’t Question Having a Mentor… JUST HAVE ONE!

I remember when I decided to quit my job as a legal secretary and become a millionaire in real estate! I started with Carleton Sheets’ course. Once it arrived, I was to read it and take action. Yeah, right! I found that between my J.O.B. (Just Over Broke) and taking care of my children, I was busy and distracted, so the course sat on my shelf collecting dust. About 6 months later, I got a call from Carleton Sheets’ organization asking if I wanted to be in their Mentor Program. How much? They said $2,000.00. At that time, I had to make a crucial decision that would change my life. Did I just want to “dream” about leaving my 9 to 5 job or did I really want to take action and make it happen? I thought about it for a couple of days and I said “YES!!” The training was just the start. I was able to purchase 6 homes following the course. Working in my home environment with so many interruptions was the hardest thing I have ever done in my life! I can tell you one thing, if it wasn’t for the Mentor pushing me… I would have given up and quit!

Just like many of you reading this article, I attended multiple boot camps and ordered over $250,000 worth of courses. The only difference between where I am in real estate and where you are, is that I took action and hired a Mentor to continue to push me forward and hold me accountable. And a Mentor gives you the answers to EVERY question you have! I am only quoting one of my students, “Having Kimberlee is like having personal access to your own magical Real Estate Encyclopedia! She has answers and solutions for everything!” That’s gotta give you some relief right there about what a Mentor can do for you! Everyone learns differently. Some people are visual learners and have to come to a class room and be taught, other people have to physically do a transaction to understand the process, and then some can pick up a book and do exactly as it says in the course and become successful. Read More→

As the market improves, I have more and more people coming to me for coaching. I am excited about this because it means that you are taking responsibility for your success. You are reading my articles, and you are talking with me to achieve what you want in your life.

One thing that I continually ask new investors to do is reflect on each deal, each interaction, each transaction. This allows you to see what was successful so that you can apply it again and thus achieve even more success.

Here is what I have found that will make our relationship even better (and thus your experience and profit even better): ANSWERS.

Before I can truly help you, there are…

Four Answers You Must Know

1. How much Money is in it for YOU?
2. What are you buying?
3. What is the owner’s story?
4. What is the area?

You MUST have these 4 questions answered
BEFORE I can help you make a deal. 

Recently someone I was coaching came to me with what he thought was a great deal. Read More→

“The future starts today, not tomorrow.” ~ Pope John Paul II

Remember last month, when I talked about how amazing it is that one little smartphone or tablet can do so many useful things? Well, not everyone has much use for smartphones.

Take my Uncle Milt: He’s convinced that true happiness lies in a phone that’s just a phone. And he’s pretty sure iPads are, well, evil. Every time I see him, he grumbles about the latest new-fangled technology. Bad enough they invented the fax machine, he says – he never did get the hang of that thing. Too many buttons, and he never knew whether to dial 9 or 1 first. And don’t even mention that curly fax paper!

Well, yesterday Uncle Milt’s mentor told him he has to learn how to use an iPad. Uncle Milt is not a happy camper.

Does this sound like you? If it does, this month’s column is for you. Read More→

By now you have heard in the news about robo-signing, MERS, etc. and how the economy was brought down by Mortgage Backed Securities. But what, specifically, does that mean and how does it affect us as homeowners and real estate investors? As can be expected, the greatest financial fraud every pulled over in the history of the world began with taking away responsibility from banks and brokers…

When a broker purchases a stock or bond with your money, it’s standard practice to buy the stock in the name of the brokerage. This was all well and good when the owners and partners of the brokerage were personally liable for all of the consequences of an investment. After brokerages were allowed to incorporate and become “legal persons,” the owners of the brokerage houses were shielded from all of the legal and financial responsibilities for the consequences of their investments. This took away all of the personal risk they incurred by making wild bets on exotic investments with their clients’ money. After all, it was just the company that would get in trouble, not the individual brokers or owners of the company!

This left the commercial and investment banks free to concoct the securitization scheme.

The way a bond is supposed to work is that an investor purchases a bond from a trust. The trust then was to use this money to purchase mortgages or originate their own. The trust then uses the money made off of these mortgages to pay off the bonds to their investors.

That’s how it is supposed to work. Read More→

If someone would have told me one year ago that I would be a full time real estate investor together with my husband and flipping houses for a living, I would have laughed at them!   To be totally honest, real estate was never a passion of mine and I hadn’t given it much thought until I read “Rich Dad Poor Dad.”  That got the wheels turning and when Matt (the hubby) discovered the niche of real estate we now love best…. Wholesaling… it seemed too good to be true!  I was a total skeptic, but in the end, there were a few things that changed my mind and made me want to take the Plunge!  In less than one year, we’ve flipped 44 properties totaling over $1,000,000.  We’ve attended meetings almost nightly during the week, networked our rear ends off, attended classes, and met a lot of people.  What we’ve discovered is that “taking the plunge” is often the hardest part for people even though they despise their jobs and know that real estate could be their vehicle out of the rat race. 

So, what changed for me you might ask?  How did I go from skeptic to believer and what does it REALLY take to make the plunge and ramp up a full time real estate career?  It may not be for everyone, but for those who really want it… continue to read because I’m going to share my tips for “Making the Plunge!”

In the beginning, something that got me motivated to take charge was thinking about my financial future and looking at the statistics of the average American at retirement.  We were barely making ends meet as it was, despite the fact that we were both working full time.  The average American retires at 62 years of age and 95% of them are either dead broke or DEAD by that age!  I couldn’t tolerate the thought of being a work horse for the remainder of my life only to pass on debt to my children and be a bother to them during the last years of my life.  I didn’t know HOW this would all work out, but I was ready to look at some “other options!” Read More→

You can locate motivated sellers even if you have little or no money to work with. Way back in the early days of my business I used some very inexpensive techniques to locate very motivated sellers, since we only had a limited budget to work with like many people who are just starting out in the real estate business.

One technique we used was to develop a special flyer for ourselves. We then had it printed on legal paper in a bright color. Fluorescent paper works really well for this technique. The reason I used legal paper was because I could print two flyers to a page. That way I could get twice as many flyers for half the money. On a weekend, my husband and I would stick these flyers everywhere we could think of, in gas stations, phone booths, Laundromats, on public boards in grocery stores, home improvement stores, delis, bars, etc.

We would also take these flyers and lay them door to door during the weekend days at least twice a month. Each time we would lay the flyers door to door, we would pick a neighborhood we wanted to buy houses in. We kept a chart on the wall to show us which neighborhoods we had done and when. This was one way we could use to track the leads that began coming in. We ended up getting our exercise and doing something for our business at the same time, which was creating leads that turned into deals. Read More→