Tampa Real Estate Investors Alliance Blog

The April 2013 edition of The Profit Newsletter for Tampa REIA is now ready for download as a High Quality PDF or Low Res PDF format. The Profit Newsletter is a digitally delivered, interactive newsletter for real estate investors to read and use with your PC, Mac, Smart Phone, iPad or other mobile ready device. Many of the articles and ads in The Profit contain hyperlinks you can click or tap to visit websites, watch videos, listen to audios, download content, send emails, comment on articles, share socially and much more! And “Yes”, The Profit is “print ready” and prints out beautifully on your black and white or color printer. Be sure to Subscribe to The Profit so you don’t miss a single monthly issue.

High Quality PDF / Low Res PDF

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When you hear most real estate “guru’s” talk about how to do real estate deals, they make it sound so easy, and it gets you pumped up – right?  But most of the time they are giving us very high level information.  Usually not the nuts and bolts mechanics of an actual deal – it leaves us wanting more.  As new real estate investors, I know we are always wanting to know a little more to make us feel more comfortable to know that this stuff actually works.  Can you relate to that?

That’s why in this article we wanted to share with you an actual case study of a deal that we did just last month( March 2013 if you are reading this in the future).  We’ll provide the nitty gritty details of a deal where we make an even $10K on a Wholesale Flip.  We did it pretty much the same way most “guru’s” describe that the deal is going to go.  It was an easy one with very little hiccups, which is usually never the case unfortunately, but they do happen every once in a while (THANK GOODNESS!).

Quickly, as a precursor, we have only been in the business about 9 months, so this is still new to us and we have much to learn, we just want to show you that if you take action and follow some simple steps like we did, these deals do happen. Read More→

In last month’s article I explained how the housing boom of the early 2000s created an equally big boom in mortgage fraud. While the housing collapse changed the nature of the crime, the ensuing flood of foreclosures just gave the banks another reason to commit fraud.

Fortunately for homeowners, there has been a wave of investigative agencies that are exposing exactly what the banks have been up to. While my last article covered the types of fraud that the banks have committed, this article will focus on the methods that investigators use to find the fraud in real estate deals.

Due to the fact that the fraud examinations are normally conducted with the purpose of being used in litigation, they tend to fall under the mantle of forensic accounting. In other words, they are conducted with the assumption that the case they are investigating may end up in litigation or a criminal trial. This means that fraud investigators must possess the skills to follow through with a mortgage fraud investigation from beginning to end. This includes but is not limited to researching, collecting evidence, taking statements from people involved, and testifying to their findings in court or a deposition. Read More→

Once again, we are at the end of the first quarter. Over time, I have asked you to make a plan, do your research, and utilize your mentor’s skills. Now I want you to consider something essential. As a mentor, I have begun to ask people these questions:

What kind of relationship do you have with money?

How does this affect your success?

Think about it. Many of us were programmed to see money as the root of all evil. We think that people with money are corrupt and greedy—and yet we want what they have! How can you achieve wealth when you believe it is bad? You are contradicting yourself, aren’t you?

Do you continually shut yourself down with thoughts like “I can’t afford that”? If so, how can you think this and simultaneously expect to attract wealth into your life?

The answer is that you can’t.

I can help you to see that you can.

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Focusing on current real estate comps will prepare you for making deals happen in today’s real estate atmosphere. Are you ready to dive into the real estate market by investing in a rental property? The opportunities are ripe, but don’t make rookie mistakes. Follow these tips and you’ll be on your way to securing a successful deal.

1. Don’t trust the owner’s numbers. Your due diligence should involve checking with unbiased sources to determine the expenses, maintenance fees, leasing commissions and other costs associated with any property. Double check data provided by the broker or seller using your own real estate comp source . Talk to another apartment owner. Check public records. Confirm all numbers so you know exactly what kind of expenses to factor into the deal.
2. Don’t underestimate property taxes. Factor in the right property tax amount, not what the current owner had been paying, particularly if it’s a long-term owner. Your property taxes could be based on the sale price. Check with the county assessor for accurate numbers.
3. Give special attention to the big-ticket items. The heating system and roof can be your biggest headaches and most costly repairs. Know what you’re getting into. Have them inspected by HVAC and roofing specialists, respectively, not a general inspector. Issues are not a deal killer, however. In fact, it can work in your favor and give you the negotiating room to improve the deal. Read More→

Recently, an investor asked us to explain the difference between “yield” and “return.” When Kim and I first became real estate investors, we asked this exact same question.

Yield and return are different ends of the same stick.

A yield looks forward – it’s looking into the future. It hasn’t happened yet. It’s what you project your investment dollars to earn each year for the life of the investment.

A return looks backward – it’s looking at what your investment actually did. There’s no guesswork about what you made because everything has already happened.

To better understand yield, let’s look at an example: You buy a 12-year-old, two-bedroom, two-bath mobile home in a park. Your all-in purchase cost is $2,750. You sell this home for $8,500 with the following sale terms: $500 down, with monthly payments of $275, at 18.63% interest, for 39 months. Read More→

“Treat your password like your toothbrush. Don’t let anybody else use it, and get a new one every six months.” ~ Clifford Stoll

Tonight you’re closing on a lucrative short sale. Afterwards, you’ve got a special dinner planned. And it’s good to know your seller will sleep better than she has in months. Yes, it’s going to be a great night. All you need to do now is print out the paperwork.

So you turn on your laptop and … nothing. Nothing. Just the dreaded blue screen of death!

Viruses happen. Spilled coffee happens. Accidentally dropping your iPhone in the swimming pool because you insisted you could carry four margaritas while you dance the hula with your cute cousin Betsy, well, that happens too.

If you’re like me, your whole life is in your iPad. Heaven forbid all that information should suddenly disappear! You can install anti-virus programs, you can be careful what you download, but here’s the bottom line: It’s not a matter of if your system will crash. It’s just a matter of when. It’s true for notepads and smartphones as well as laptops and PCs. So no matter what else you do, you’ll need to make sure all that wonderful information lives somewhere safer than your laptop. Read More→

“Listen to advice and accept correction, and in the end you will be wise. People can make all kinds of plans, but only the Lord’s plan will happen.” (Proverbs 19:20-21)(NCV)

Many smart business men and women pride themselves in knowing the trends, critical success factors, competitive strategies and other business indicators that could affect the success of their business. It would be totally unwise for an entrepreneur to develop a comprehensive business plan without the consultation of an attorney, accountant and other business professionals. The reason for these abundant resources is obvious. In order to succeed it is necessary to have sufficient expert and credible counsel. That being said, I find it so amazing how many extremely brilliant business professionals fail to see the relevance or the need to get counsel or instruction from the one expert that has a flawless track record for the successful oversight and management of the entire universe; God, the creator of the universe!

Most business professional are highly proficient in their trade. They have acquired specialized skill-sets, training and experience that allow them to comfortably make informed day-to-day decisions. They take advantage of a plethora of seminars and high level training to assure they remain abreast of cutting edge technologies, best practices, and current trends in their specific industry. Business men and women make commitments to pursue continual personal development activities that include empowering seminars, formal learning, the latest industry training, speaker guilds, and a host of other events designed to improve themselves, their employees, and their company. Read More→

How to Find Investors – It’s Fairly Simple!

When you’re looking for private money, it is not an art. It’s a fairly simple process.

How to Find Investors – Benefits

The benefits really depend upon the negotiation with you and the lender. Here are a few of the many possible benefits:

• You’re dealing with an individual who can make the decision right then and there, or as close to right then and there as you can.
• You generally pay points for loan origination fees to traditional lenders, with private lenders, whether points are paid or not is a matter of negotiation.
• Traditional lenders require payments on loans; with an IRA it may be possible to arrange a no payment loan.
  • If you need a one-year or two-year loan to do a rehab and the investor says “I don’t need the cash flow because it’s in my IRA, I’d rather have the extra one or two percent.” That’s great; you’d rather not make any payments until the house sells.
• You set the terms with the private lender, not the bank.
• Many times, there’s no personal credit required; however, not always.
• There are often no personal guarantees; this varies by lender and negotiation.
• In some cases, you can get dollars upfront for funding expenses.
  • That’s not always the case. Many private lenders will say “no money upfront”; still others will say “100% as long as the Loan to Value is 65% or less.”
• Some lenders will require some sort of equity, “skin in the game”, to make a loan. That’s one of the nice things about dealing with private lenders; the terms are completely negotiable between you and the lender.

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Master lease options are a great way to get started in the real estate business but are often misunderstood. A master lease option is two separate contracts, the master lease and the option to purchase. Together they make up the master lease option (MLO).

A master lease gives you the right to “rent” an entire property. This could be anything from a single family residence to a large apartment complex or strip mall. Once you have a master lease in place you control the property. This includes the management and the operations. You can essentially become the landlord yourself or hire management at your discretion.

The option to purchase sets the purchase price for a certain amount of time and for a certain price. You will negotiate this price and time frame during your offer and negotiation process. Usually an option fee is placed at the time of the signing. The option money is used as a non-refundable deposit to the seller in order for you to control the sale of the property. If you do not close the sale in the time frame set in the purchase option, then you will lose the option money. If you do close the sale then the option money is applied to the purchase price. Read More→

Let me ask you a question; are you properly managing your prospects? Are you taking the time to follow up with the sellers who didn’t initially accept your offers, or the sellers you still need to make offers to? Did you know that you are leaving thousands of dollars in potential income behind if you aren’t following up with sellers? One of the easiest ways to make a fortune in the real estate business and gain the advantage over your competition is to take the time to follow up with motivated and semi-motivated sellers. You’ve already got the seller in your pipeline, you’ve already done the marketing and spent the money to find this person, now all you need to do is to follow up with them until they either sell you their property or tell you to go away. How much simpler could it be?

There are two types of sellers we are going to follow up with, those we’ve already made offers to who haven’t accepted our offer and those who have not made any decision after our initial contact with them. Quite often, you will need to make multiple contacts with sellers before their situation changes and dictates that they sell their property to you. If you stay in touch with these sellers, you build credibility with them and when it comes time to sell they will contact you first, even if they have been contacted by someone else in the meantime. Read More→