The November 2013 edition of The Profit Newsletter is available for download just in time for our Tampa REIA Meeting on November 14th. You can download The Profit Newsletter as a High Quality PDF (Recommended) or Low Res PDF for slower devices. The Profit Newsletter is the official newsletter of the Tampa Real Estate Investors Alliance and is a digital, interactive newsletter for new and seasoned real estate investors delivered as an Adobe PDF file to read on your PC, Mac, Smart Phone, iPad or other mobile ready devices with a PDF reader. 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! The high res version of The Profit is “print ready” for those who want to print the newsletter on their home or business printer. Also, be sure to Subscribe to The Profit so you don’t miss a single monthly issue.

High Quality PDF / Low Res PDF
See The Profit Archives for our past editions.

Read More→

When I began my career as a real estate investor in 1985, I stumbled across a little known area of real estate that had the potential to make us a ton of money. This was an area of the market that went unnoticed by most people. This was the area of abandoned properties.

How To Profit From Abandoned Properties

You might pass these properties on a daily basis, but just never paid much attention to them. You could be passing up hundreds of thousands of dollars in profits! These are properties that the owner has walked away from for whatever reason. It could be a divorce situation, an illness, a death in the family, a job relocation, or any number of other reasons. Do we care why? Absolutely not! Don’t waste your energy trying to figure out why sellers do what sellers do. Read More→

Recently I wrote an article on “Determining Your Marketing Plan in 7 Easy Steps”. You can apply these 7 Steps to market your home buying and selling business or pretty much any other business, product or service you wish to promote.

In this article, I want to expand on Step #1: Determine How Many Leads You Need to Succeed at _____________. For the purposes of this article, let’s fill in the blank with Wholesaling. In order to determine how many leads you need to succeed at Wholesaling, you need to begin with the end in mind and ask yourself a few more questions…

1. How many deals do you want to do per month and per year?

You need to set a target number of deals you want to quick turn (put under contract to buy and immediately resell or assign) each month to know if you’re achieving your goals. Let’s say you want to find and flip 1 to 2 deals per month or 12 to 24 deals per year. This is a very, very realistic and achievable goal for any part-time real investor.

2. How much cash do you want to make per month and per year?

You need to set the monthly and annual financial goal you wish to achieve so you know if you’ve succeeded or not. Let’s say your goal is to make $10,000 per month or $120,000 per year wholesaling houses on a part-time basis. Again, this is a very realistic and achievable goal for an investor who is willing to put in the time and effort to get the job done. Yes, wholesaling is like a job. It pays you well if you work it and pays you nothing if you don’t. Read More→

“I’m writing a book. I’ve got the page numbers done.” ~ Steven Wright

Last month, if you’ll remember, I talked about starting a blog. I began with a reality check, which I’ll repeat here: Blogging can be a great marketing tool, but it takes a lot of work to keep one up. And don’t expect riches!

I gave you four other tips as well: make sure you have something to say, know your goals, identify your audience, and read other blogs. Those tips are just as important when you sit down to write individual posts, too.

Remember my second cousin Flora, the cat lady? I told you about her last month. She has a blog called “Cats.” I’m afraid it’s not very good. The background is hot pink, the text is yellow, and there’s a hamster dancing around in the corner. As soon as you enter the site, you hear the song for the Chicken Dance. I’m pretty sure she has posted every single picture she’s ever taken of her 34 cats, including the pictures that are blurry and underexposed. Plus, she adds lots of kitty pictures off the web. Oh, and a recipe for Flora’s Skinny Butterscotch Potatoes. And that was just yesterday.

Thank goodness she only posts about three times a year! Read More→

Have you ever made a great offer, had it accepted and then for some reason it just fell apart? This is an all too common occurrence in the real estate business. The most common reason for this is an improper negotiation prior to the acceptance of an agreement. If you view a real estate negotiation as “win/lose” situation, then you probably got the buyer or seller to agree to something that they really weren’t comfortable with. They said “yes” in the heat of the moment, to relieve themselves of the pressure of the negotiation but then had second thoughts when they went home and thought about it. A good negotiation creates value for both sides. This is the best way to get both parties to honor the agreement all the way to a closing. Here are some tips for your next negotiation.

Gather Data! Gather Data! Gather Data! This is so important it’s probably worth mentioning again. Try to find out what the real interests of the other side are. Why is someone selling? Are they burned out? Do they need to have all cash? Are they in a hurry to close? How motivated are they to sell? Read More→

My last two articles focused on the great Securitization Swindle the banks have been perpetrating for over a decade. It was successful because the banks created such a tangled web that it was nearly impossible for everyday people, lawyers, and judges to understand what was happening. But what if they committed a comparatively straightforward fraud? Surely that would be caught and stopped, right?

In this month’s article I’m going to explain how Countrywide fraudulently created 3.5 MILLION loans at taxpayer expense with a scheme so simple it seems impossible they got away with it at all.

In 2003 Countrywide wanted to dominate the housing boom. The problem they were facing was that each state has its own licensing fees, corporate taxes, and regulatory costs that Countrywide would have had to pay in order to do business. That’s when they cooked up the scheme. Instead of becoming licensed and registered in every state, Countrywide simply made up a trade name (DBA) that they could register in every state that would slide under the radar of the regulators. They made up the innocuous name America’s Wholesale Lender and got to work.

Their scheme worked and nobody noticed that America’s Wholesale Lender wasn’t a corporation registered or licensed to do business in their state. Countrywide got cranking and created 3.5 MILLION loans across every state in the country under the DBA “America’s Wholesale Lender.”

The catch is that a DBA such as America’s Wholesale Lender is not a legal entity. It is simply a trade name. A DBA has no ability to own property, file lawsuits, or hold any security interests. Read More→

A realtor asked me to talk about a real-world example of a recent deal we did that demonstrates how we make impossible deals possible. No problem, but I ask one favor: As I describe the homeowner’s situation, BEFORE you read how we structured the deal, think about how YOU would have done it!

The seller had a three-bedroom, two-bath home in Acworth, Georgia. The property needed zero work – it was beautiful! Fair market value was $60,000. His mortgage balance was $92,000 – making him $32,000 upside-down in the property. The home would rent for $850 per month. His mortgage payment was $925 per month – a $75 negative cash flow. At the time, the home was vacant and costing the owner over $1,000 per month. The financial drain was killing him. One last thing: The owner HATED tenants! His last two tenants all but destroyed his investment property.

The owner just wanted done, but he wouldn’t consider doing a short sale or letting the home go back to the bank.

Can you make this impossible deal possible? What if I told you that structured creatively, this deal will make you $200 per month, risk-free…with a tens-of-thousands-of-dollars bonus at the end? Please take a few minutes to structure this deal. Read More→

Many people are surprised to learn that not only can they take direct ownership of real estate within their IRA, but they aren’t even restricted to owning land within the United States. The IRS rules regarding what you may or may not invest IRA assets in are very liberal, and there is no IRS restriction whatsoever on ownership of foreign assets, including real estate.

Benefits of Foreign Real Estate Ownership

Owning assets abroad can be an important way to help diversify your investment portfolio. The economies of other countries and regions don’t necessarily move the same way as the U.S. economy. When U.S. assets are in decline, real estate in other countries is sometimes doing very well. For example, many regions in the Caribbean are benefitting from rapid economic growth due to a rise in traffic from more affluent Europeans. While real estate in Florida continues to struggle, some areas in Jamaica and the Bahamas are experiencing rapid development – creating opportunities for enterprising real estate investors. Case in point: A Chinese company is currently building a massive $3.4 billion resort at Baha Mar in the Bahamas, scheduled to open in December of 2014. If the project succeeds, that casino is projected to boost the gross domestic product of the entire country by 10 percent.

Meanwhile, even a relatively small amount of money, by American standards, can purchase a vacation rental home that will be extremely attractive to a European, Asian or Middle Eastern tourist. Homes in some areas of the world still sell for a fraction of what comparable beach front or other resort area homes would go for in the United States. Read More→

Sally and Julie grew up together and have decided to invest in real estate. They both have regular jobs, but figure they can find a property, fix it up and rent it out in their spare time. They find a good property which takes most of their savings as a down payment. They figure that over the next few months, they can get the repairs done with money earned on their regular jobs.

They decide that with contractors on the property and tenants once it is fixed, they need to have a liability shield to protect them personally. They set up a Limited Liability Company and purchase the house in it.

Sally and Julie are so excited and anxious to get the rehab done that they neglect to have an organizational meeting nor do they have any subsequent meetings. They figure it is no big deal since they are close friends and talk every day anyway. They also want to save money and decide not to set up a bank account for the LLC. Julie agrees to use her account to run all the expenses through with Sally putting in half the costs. Julie then agrees to put the utilities in her name.

They also failed to get a Tax Identification Number (TIN) from the IRS. If they had opened a bank account, they would at least have gotten the TIN since banks would require it. They figured they would just work out the expenses later. Read More→

Recently we were working a short sale through Nationstar who requested that the Seller sign a document allowing Nationstar’s affiliate, Auction.com, to sell our short sale. Yes, you heard me correctly! We already had a buyer, submitted all the financials to Lender, and had the BPO (Broker Price Opinion). However, they hadn’t countered the buyer yet. The form that my agent and her Seller signed stated that Auction.com was allowed to hold an auction on the property and should my agent be a dual agent on both sides, that she would not get paid more than 3% commission. First off, I want all Brokers to be aware that agents do not have the right to sign away commission unless the Brokers previously allowed this right, nor do they have the right to sign away the Broker’s Exclusive Listing Agreement terms and conditions.

I was furious as Auction.com was advertising this house illegally and unethically to the public. They were advertising as Bank Short Sale Approved! Well, if it was approved, I would have already had the approval letter for my existing buyer that had been waiting during this short sale process. In addition, how can a Seller back out of my Buyer’s contract and enter into a contract with the winning bidder’s contract without having some legal ramifications? The winning bidder was to pay 5% to Auction.com for acting as auctioneer, place a deposit immediately with Auction.com plus all the forms that they had to sign which gave away all their rights for inspection with clauses saying that they would have to pay money to Auction.com for cancelling the contract. The highest bid was $80,000 plus $4,000 over and above to the auctioneer for conducting this auction. They forced the Listing Agent to hold their own open house but then reduced our commission as Listing Agent. Read More→

Welcome back! In Part 1 of this article, we covered how crucial it is to have a website if you want to sell/educate/entertain/enlighten/etc. just about anything to anyone in the world in the current century. We also discussed HOW to actually get a FREE, performing website up & running quickly.

Having a free website is great! You get to put some content up for the world to see. You start to learn how to add images, videos, etc. to your site. You can get people to add comments to your site. And you can quickly gain confidence on how all this internet “stuff” works.

This is particularly an attractive option IF you don’t run a “real” business, or if you’re only concerned with sharing your thoughts or ideas with the world. So if you’re happy with that, great! You can stop reading now.

However, if you DO run a legitimate business, or if you’re interested in making money or being perceived as legitimate… or if you want to learn how a true website is made these days, then keep reading! Read More→

Howdy! As I am writing this in early October, I’m celebrating my one year anniversary of quitting my job as well as our 50^th deal, as we closed deals 48, 49, and 50 last week. We are also a couple of weeks away from our one year anniversary of our 1^st deal back in late October 2012. So as I reflect back on these milestones and the last year, I wonder how to attribute our early success. Was it luck?

Sure, you can call it luck. I’m fine with that. So let’s talk about how to get lucky. But first, let me tell you a quick story about our 1^st few deals. We started researching real estate investing and wholesaling real estate last spring (2012). We started reading some books, reading real estate investing blogs, and listening to podcasts. That summer we finally got into the game and started doing some marketing – bandit signs, driving for dollars, and yellow letters. We started going to REIA (Real Estate Investors Association) meetings religiously. The 1^st few deals we put under contract went nowhere for various reasons – bad title, priced too high/won’t sell, seller backs out – we learned a lot. We also started to get very discouraged and nervous about this working out. Bad luck right?

Then in October of 2012 we finally did our first deal ($5K) and we realized that this stuff really works and is for real and obviously gave us a massive confidence boost. In November we did (2) more deals – small deals – but we were gaining some momentum and learning along the way. With one of those deals, the seller told us they had (12) more properties they wanted to sell. So I went ahead and said we would take all of them for a good deal and wrote up a purchase contract for all (12) – $275K – and we had to close within a few weeks. Crazy huh? Crazier yet was that the next week we got (2) more deals under contract that had to close within a few weeks (before Christmas). We had done (3) deals in our entire lives and now we had (14) deals that we had to close on. Would you consider that lucky or just us being freaking nuts? Well let’s find out what happens next. Read More→

More people are becoming millionaires today than ever before in the real estate business. So what makes these wealthy entrepreneurs so different? They chose the road to wealth and real estate as the vehicle to get there.

When choosing the road to wealth, there are some important distinctions that set the truly successful people apart from everyone else. Some of these include the ability to visualize a specific outcome, pursuit of a dream, constant motion and a relentless determination to reach the goal. Giving up is not an option. Like the saying goes, “Quitters never win; winners never quit!”

I have found in the real estate business that there are two kinds of people, the “doers” and the “wannabes”. There are truly focused folks who get up every morning with a clear and defined direction who want to make their business work no matter what it takes. They pursue their dream relentlessly and continue to grow on a daily basis, garnering all the education they can along the way to take them even further along in their business.

Then there are the people who go to seminars or buy books and tapes and do absolutely nothing with them once they get them home. I have personally witnessed this over and over again. They have one excuse after another why they can’t do this business. For them, the status quo is the easy way in any situation. Read More→

As a regular writer for the Atlanta REIA and Tampa REIA, I look forward to sharing with readers current, timely concepts and ideas regarding the valuation of real estate in many markets. Perhaps even better than sharing in these articles, is knowing REIAComps helps to quickly see how the location of your market impacts the profit of a deal year to year and in some cases, month to month.

Each month, I will share facts on local real estate statistics, market trends and provide useful tips for buyers and sellers. Additionally, I sometimes will discuss the lending process, real estate appraisals and other topics residential real estate investors can benefit from.

Now, in most cases nearly all investors are familiar with the “age old rule” concerning real estate: “Location, location, location.” Many times, the high importance of location is overlooked when examining broader national or even regional real estate trends.

In your own market, property values and selling trends will frequently differ vastly between counties, subdivisions, school districts and neighborhoods. Often there is a huge difference in home values between streets within even assumed stable neighborhoods. To prove out this point, consider the three-mile radius around your very own home. Note the variables impacting its value either positively or negatively. Some examples include the home’s proximity to traffic congestion, a school, amenities, places of worship or a busy commercial district. Read More→

Last month, I said we were going to spend the next few issues going through an ACTS or Sandwich Lease Option deal. The first step is locating prospects, and that’s what we’re going to cover here.

Actually, this is one of the easiest steps in the multiple steps of getting through a deal and getting your first check. Today, my team does nothing but call FSBOs to get more leads than we can handle, and in fact, recently have added more manpower because we can’t cover all the leads we get from calling the ads that sellers run online and from some off line sources as well.

Now, when I say my team, that’s actually one virtual assistant (VA) calling For Sale By Owner ads she finds online on a handful of websites. She does the research to find the websites like Craigslist and a few other sites where For Sale By Owner ads are run in our city. Then she calls them and fills out the property information sheet located on the Gold Club under Resources/Forms and Agreements. And in fact, you’ll also find a 17 minute video there under Training/Residential Real Estate/Lesson 74 where I went through the property information sheet with the purpose of you sending it to your virtual assistant to train them on how to properly fill out the form. Read More→

One of the most important rules to remember is that…
Cash Flow Starts and Stops a Business.

As my career has matured, I have realized that the best way for me to grow my business is by making others wealthy — making YOU wealthy. I want you to learn from my mistakes and enhance your life and your business. I know that you can do it with certain essentials in place.

This is why I want to share with you some fundamentals about how to get private money.

First: Qualify Them

Not everyone is an investor, and you need to know who will be the best prospect for you. Here are some qualifications to look for in potential lenders: Read More→

Recently I was talking to several of my students who each said they wanted to buy 100 houses next year. These students had listened to one of the gurus who had bought and sold over one hundred houses in one year and is now teaching people how to duplicate what he had done. I listened closely to these bright eyed, inexperienced students tell me they wanted to do the same as the guru, which frightened me to death. Later over dinner, I mentioned what I had just heard to my wife. She encouraged me to tell my tale of woe about the years of agony we experienced because I got too big for my britches and against my wife’s better judgment I had tried to do the same thing myself.

What the students were thinking about doing frightened me because several years before I thought I knew enough about buying and selling houses that I could easily buy 100 houses in a year. I thought it was a noble goal and I clearly believed I could create my fortune in months, not years. At the time the market was right to be able to buy houses at the rate of 100 houses per year. That is why I want to tell my story so every overzealous beginning investor will think before they set about to try to do the same. Read More→