The March 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.

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What is the first thing you need to do for your first or next successful real estate deal? You need leads of course. How many leads do you need to do one single deal? If you are a new investor or even a seasoned one, you may need to go through as many as 10 leads to get one solid, profitable deal.

So how many leads are you generating each month? Are you generating 5, 10, 15, 20, 30, 40 or 50 leads per month? If you are not generating at least 50 leads per month, you are not alone. Most investors don’t generate anywhere near 50 leads per month. In fact, it has been said that only the top 5% of all real estate investors generate and capture 80% of all the leads floating around out there. So what do these top investors know that the average investor doesn’t know?

The answer is simple… the top 5% of all investors know how to generate all the leads they can handle and more. Perhaps you know some of the top lead generating real estate investors in your area. Chances are you see their marketing efforts every time you turn around.

One such investing company that you should all be familiar with is HomeVestors^®, the nice folks with the “We Buy Ugly Houses^®” signs all over town. HomeVestors^® used to be a huge 800 Pound Gorilla before the housing market crash, but as of mid-2012, they are back in force and are quickly regaining their marketing dominance once more. 

An “800 Pound Gorilla” is “One that is dominating or uncontrollable because of its great size and power” or “An overbearing entity in a specific industry or sphere of activity”. An 800 Pound Gorilla is “A seemingly unbeatable presence always to be reckoned with, whose experience, influence, and skill threatens to defeat competitors with little effort.” As the number one home buying franchise in the country, you can see how HomeVestors^® definitely fits the description of an 800 Pound Gorilla Marketer. Read More→

Kim and I are teaching a financial calculator course later this month (February 23, 2013). Yesterday, an investor called to ask whether he really needed to take the course. I explained that a contractor’s most important tool is a hammer, a NASCAR driver’s most important tool is a racecar, and a real estate investor’s most important tool is a financial calculator.

After a bit of discussion, the investor said he’d pass on the course because it would be a waste of time. Out of curiosity, I asked how many real estate investing seminars he attended each year. His answer wasn’t surprising: NONE!

Here’s the funny thing: Even though I teach a financial calculator course, want to guess where Kim and I are this weekend? We’re in Vegas attending Gary Johnston’s Money Not Math seminar – it’s a three-day intensive financial calculator course.

I already can make a financial calculator sing and dance. For years, I’ve taught folks how to use them. So why do I “waste my time” taking financial calculator classes? Seriously, I want you to answer this question! Read More→

Throughout the late 1990s and early 2000s, we experienced an unprecedented housing boom. Easy credit flooded the marketplace and home ownership surged to unheard of levels. Along with inflating an unsustainable bubble, the housing boom created a rich climate for mortgage fraud.

The bust that followed changed the nature of the crime, but it has also provided continued opportunities for mortgage fraud. Fortunately for homeowners, there is a new wave of investigative agencies emerging that are trying to figure out just how widespread and insidious the mortgage fraud epidemic is. Investigators hope the increased awareness will help to educate the general public about the threat that these crimes present.

The scary fact is that fraud continues at astounding levels. The allure of mortgage fraud is clear – it can generate amazing profits with a relatively low risk of discovery. After all, there is a byzantine mess of laws and regulations that govern the finance industry and keep all but the most ardent investigators from figuring out exactly what fraudsters are doing and how they can be prosecuted. Read More→

To Deed…Or NOT To Deed? THAT Is the Question
(When Buying Real Estate)

Welcome back again! If you’ve been keeping up with my last 2 articles, you’ll remember that we’ve been discussing one of the best strategies for doing deals in 2013 & beyond – Wholesaling Pretty Houses!

This type of deal is most advantageous for you, the investor, to do when you’ve come across a house that’s overleveraged or has very little to no equity. Rather than walk away from the deal because you believe there’s no money to be made, you simply get an agreement from the seller to find a qualified tenant buyer to occupy the property on a rent-to-own basis (aka lease purchase) & have the tenant-buyer make the mortgage payments until such time as they’re able to buy the house outright with a new loan and there’s enough equity in the house to justify them doing so.  You would collect your money from the tenant buyer as an assignment fee for getting them in to this house buying opportunity that you’ve negotiated.  Make sense?

Naturally, you would then be completely OUT of the deal from that point on.  Why would you want to stay in? There’s no more money to be made, so it’s best that you collect your money (usually $5k+) and get out quickly.

So let’s take a moment to look at some types of deals where you WOULD want to stay in & why. Read More→

Making creative offers is one of the most lucrative skills a real estate entrepreneur can master. Creative offers lead to creative financing and creative financing leads to faster financial freedom. I have built a portfolio of almost 400 units and I have never walked into a bank, qualified for a loan and put money down. I have a lot of bank loans now, but I took control of each property with some form of creative financing and then refinanced at a bank.

I did this by understanding one simple concept- “Solving people’s problems pays well!”

The first step to making offers that get accepted is to create an offer that solves one or all of these three problems; the seller’s problems, the properties problems, your problems.

You will need to gather a bit of information to effectively make your offer. Start by asking about the seller’s motivation to sell. Don’t always assume that money is the only motivation for a sale. Sellers often have other reasons for selling such as dealing with bad management or need to retire. Whatever the motivation is, finding a way to solve that person’s problem is key to writing an offer that gets accepted. A master lease works well for these situations. Read More→

“The right tool for the job” ~ slogan for True Temper Tools

Congratulations – you made it through the winter and spring is on its way! I think spring is a perfect time to take an inventory of your real estate investment “tools.” And if you’ve been sitting on the sidelines, wondering if real estate investing is for you, spring is also a great time to dive in! Either way, it’s a good time to get back to basics. Today, let’s focus on one of my favorite investment techniques: “subject to” mortgages.

Most of you know that when you buy a house, you usually receive a warranty deed, which gives ownership of a piece of property. If you’re paying all cash for a property, you just exchange the cash for the warranty deed. So far so good.

But if you don’t have all the cash, you have to borrow the money. Most of you know how the typical mortgage loan works: Buddy Banker says, “Sure, just sign this promissory note that says you’ll pay it all back.” In return, you get a security instrument that says if you don’t pay the promissory note, the bank gets the property. In most states, that security instrument is the mortgage (In Georgia, we use security deeds). That mortgage, when it’s recorded, creates a lien on the property. In other words, the bank puts everyone on public notice that if the owner sells or transfers the property, the bank has to be paid off first.

A “subject-to” transaction is a little different. When you buy a house this way, you’ll take over payments on the original mortgage. You’ll bring the house up to date on the mortgage and back taxes and then continue to make mortgage payments, subject to the existing financing. The seller gives you a warranty deed, which conveys ownership to you. That means you get the tax benefits and the profits, but you also get the headaches and costs. Read More→

“The generous soul will be made rich, And he who waters will also be watered himself.” (Proverbs 11:25-26)

Have you ever asked yourself the question, “how much should I give to my church or synagogue?” This has always been a touchy subject, with many different views. Of course, the answer is always personal and depends on the person’s relation with God; as well as their involvement with the activities of their local church or religious organization. The responses and personal opinions of many successful business people are as varied as the individuals themselves.

However, the Bible has much to say about this subject. The reality of the matter is the same with all of our material possessions. God allows us to control, manage, and enjoy our earthly belongings for a finite period of time. After that, another person will get them and be given the opportunity to do the same. You see, every material or visible asset that we say… “I own ___”; will either be consumed, traded, given away, taken away, or left behind for someone else when we die. Consequently, since these assets are temporarily under our control, it is vitally important to consider to whom and to what cause we contribute them. Read More→

FDIC Insured

All un-invested cash in your self directed IRA is FDIC insured.

As a note, FDIC insurance only covers cash balances, not once you make a purchase of a non-traditional asset. All credit card transactions are safe — American IRA is certified by Security Metrics. All accounting is processed through a top-rated trust accounting system. We maintain professional insurance coverage, including crime shield policy and errors and omissions policy.

Asset Vesting with Your Self Directed IRA

All assets are vested in the client’s name at the time of purchase… “American IRA, LLC for the Benefit of Client’s Name IRA”.

Investing with Your Self Directed IRA

Investing within a self directed IRA is completely within the investor’s control. Is it safe? Yes, to the extent that the investor controls it. Here’s something that’s overlooked many times when we’re talking about safety between the securities industry, and let’s say in this case we’re talking about the real estate industry. Each investment has its own characteristics as to safety. Read More→

This is the big question that I get a lot! The true secret to success for a Real Estate Investor is finding sellers who really need to sell. I use several different targeted direct mail campaigns to locate different types of highly motivated sellers. Some examples of these types of mailings are out of state owners, estate and probate properties quit-claim deeds, expired listings, burned out landlords, vacant properties and pre-foreclosures, just to name a few.

The key to success using direct mail is customizing your direct mail piece and your list to reach exactly the kinds of motivated sellers you want to deal with in order to create the kinds of deals you want for your Real Estate Investing business. The very best way to do this is to locate mailing lists from reputable companies, refining them to meet your individual criteria, then mailing to these potential sellers again and again.

Investors often neglect to market to sellers in this way because they think the list is too difficult to get, or they only send the mailings once and quit. These are some of the easiest lists for you to obtain and it will be very profitable for you to do so. After having mailed thousands of letters and done hundreds of deals I can personally attest to the power of direct mail for finding all the motivated sellers you could want. Read More→

Last month I mentioned that there has been a turn in the market. A recent Creative Loafing article confirmed the information that I gave you—that the market is looking different than it has in a long while. Many people are afraid of another bubble. And in the last few articles, I’ve asked you to plan, to have a strategy, to do your research. And maybe you’ve made that plan. Maybe you’ve done that research.

But here is the nature of our business: just when you think you have it figured out, it changes. So we have to ask ourselves anew: How can I continue to make money? How can I get in on the current market and live well? The answer is that you need to know what is ahead.

But if you’ve not encountered this kind of change, then you can’t make an informed guess. One opportunity for success is to become David. You can go it alone which is very risky. Or you can work smart: get a mentor. Work with someone like me who has survived battles with Goliath before. Read More→

Many of the Sellers that are upside down on their home are stressed out and don’t know what to do. First off, I want all Sellers to know that when they got a loan from the bank their money was given to the bank from an investor. This investor could be a trust, reit, or maybe the government. The bank guaranteed the investor or group of investors a set interest rate. Many Sellers are attempting a loan modification hoping to keep their house. I always ask my Sellers if could wave my wand what do you want from the bank. Most of them will answer that they want the bank to reduce their balance on their loan or they want a certain amount for their monthly payment. Here are some facts I want to share with the Sellers:

1. During a loan modification the bank is still continuing with the foreclosure.
2. I have not spoken with a Seller yet that got a reduction in the value of their home on a homesteaded property and I have done over 500 short sales.
3. The monthly payment the Seller wants makes no sense. They are not considering how much their taxes and insurance is on the property nor are they considering the interest that will be charged for the loan amount. Example: Seller owes $300,00,000 on the loan at 4% for 30 years is $1,432.25 – Yearly Taxes are $3,000 per year $250.00 a month – Insurance is $1,500 per year – $125.00 per month – Total monthly payment NOT INCLUDING HOA (homeowners association dues) would be $1,807.25. Many Sellers want a lower payment than this amount because they can’t afford it.
4. I have only seen the bank take the monthly payments that they are behind plus interest, late fees and attorney fees and add it to the end of the mortgage and/or change it to a 40 year mortgage. Which would make their monthly payment $1,253.82 on the loan plus taxes and insurance would be $1,628.82.

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We are already in the second month of 2013 and I just had a conversation with one of my students who wanted to know how to create wealth in the shortest possible period of time. The following is my idea how wealth for any real estate investor can be created in the shortest period of time.

Here is an example of how you can quickly achieve financial freedom and then wealth investing in real estate.

For instance, the first thing you need to do is buy 10 to 15 well selected income producing properties you are willing to keep long term as your retirement program and the base of your future wealth. I personally love the thought of someone else having to go to work every day to earn money they give me in the form of rent each month that pays for my properties without me having to have a job or have to go to work every day. Then once you have bought your 10 to 15 keeper rental houses in good neighborhoods, with tenants who are paying on time, every month, let’s say, $1,000 each month of which $520 goes for the monthly loan payment, and after monthly expenses of property taxes, property insurance, a maintenance fund and a vacancy fund leaves you from the $1,000 gross rent approximately $150 each month to put into your pocket. Let’s say for each of your keeper rental properties you paid $88,000 with very little money down and were able to get seller financing terms for 30 years. Read More→

We should start with defining what a pretty house really is. It’s not the price that makes the definition. The house could be high-priced, but most people in the pretty house business work in a range from $70-$200,000. If you’re in a high-priced market such as San Francisco where a $200,000 house is rare, your range will be higher.

The point is, pretty houses start at the bottom end and go up. It’s not just expensive houses. My definition of a pretty house is any house requiring less than $5,000 in work to get it in a good, saleable condition. An ugly house is one that needs a rehab or a lot of repairs.

I’d want you to work both sides of the business and become a transaction engineer who can recognize a deal when you see it, whether it’s pretty or ugly. Don’t fall into the trap of trying to get so specialized that you turn your back on lots of other profits. There’s gold in both the ugly and the pretty house business. Besides… Read More→