The 3rd edition of The Profit, the official newsletter of the Tampa Real Estate Investors Alliance (Tampa REIA), is out for the month September 2012! Read and enjoy a variety of articles on real estate investing from Larry Harbolt, Don DeRosa, Bob Massey, Russ Hiner, Robyn Thompson, Erven Kimble, Mike Barnes, Jim Hitt, Kathy Kennebrook, Tony Pearl and more. Don’t forget, Tampa REIA Business Members can advertise in The Profit at deeply discounted rates.

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Today I am seeing all too many investors making mistakes that are costing them thousands of dollars of profit every year simply because they lack focus. Any truly successful investor will tell you that you must focus on what you are doing and become the very best at what you have chosen. Having been an investor for over thirty years, I learned there are five common reasons why many investors fail to make more money, especially in today’s market of properties with mortgage balances higher than what the properties are worth and thousands more properties in the foreclosure process.

Believe it or not, there are many more properties that are not over-leveraged and have a possibility of being bought at a fair price without wondering if a Bank will take your low-ball ALL CASH offer. To be able to better understand what the problems most investors face I want to talk about what I believe are the five most common mistakes most investors make. Read More→

“An agreement cannot be the result of an imposition” ~ Nestor Kirchner

Imagine. You have a hot lead in your hands that could make you thousands in the next 30 days. Tens of thousands. Appears to be a decent house. Needs a little updating. Good neighborhood. Great schools.

But the owner tells you he’s talked to other investors. He tells you, “Don’t bother to come if all you’re going to do is make a low offer.”

So…do you go? Even if you’re going to make a low offer.

The answer is yes. Always yes.

You’ll go because you’ll get a ‘yes’ to your offer. You’ll be prepared. You’ll do your due diligence and analyze the numbers. And unlike the other investors, you’ll have a tool that will explain the numbers, explain why your offer is reasonable. Your tool will negotiate for you. In fact, you will become the seller’s advocate. You’ll try to make the numbers work, for both of you.

Even if your offer is tens of thousands less than the seller wants out of his house, you will get them to say ‘Yes.’ Read More→

The majority of mortgages in the United States are sold into securitized trusts called REMICS and are not held as in-house or “portfolio” loans. All sub-prime loans are sold off in this way and have been since the late 1960s. The practice became especially common in the 1990s when the writing of sub-prime loans became more prevalent. Many prime loans also wind up sold as mortgage-backed securities.

REMIC is short for Real Estate Mortgage Investment Conduit. They are investment vehicles which hold commercial and residential mortgages in trusts and then issue securities representing an undivided interest in these mortgages. Investors, such as insurance companies, pension funds, and wealthy private investors, buy these mortgage-backed securities. The securities are assembled into pools called tranches according to their level of risk. Higher risk mortgage-backed securities command higher rates of return. REMICs are managed by a trustee, often a large investment bank, and are governed by pooling and servicing agreements (PSAs). Read More→

There is a house located in a working class neighborhood. The Realtor is offering it for $60,000. It is a 3/2 bath house in average condition, 10 years old and 1200 sq ft with a one car carport. Taxes are $950/year. Insurance is $850/year.

The repairs are quoted by a shade tree contractor for $9,500. This would get you paint inside and out, carpet, counter top, and door knobs. The roof is 10 years old, the hot water heater is 3 years old, and the bath room is 10 years old. I figure since owner does not recognize that the house smells like smoke and cat urine, the 3 cats must be smoking 2 packs day and using the whole house as a litter box. The house has a floor plan of a split foyer, average schools, and average shopping. You live 45 minutes from the house. You like your house and you are not moving. The houses in the subject house area are selling for about $59.16/ SQFT. The rents in the area are $ 875/ month. Your situation is you have $12,000 for a down payment, repairs, and everything.

What should you offer? To answer these questions…answer these questions. What is your exit strategy? How much cash do you have? How good looking are you? (This allows you to get more money) Do you know people how have cash? Read More→

Is this depressed housing market making you nervous? Are you thinking that you can’t make money when real estate prices have dropped by as much as 50%? Do you think it is impossible to sell a house in today’s market? If you answered yes to any of these questions, this special report was written for you.

Many real estate investors are shying away from the ugly house business right now because they fear selling houses in a depressed real estate market. We have all heard the horror stories of real estate investors who lose their shirt because they get stuck with a property they just can’t sell or rent.

I am here to tell you that this does not have to happen to you, but there are nine rules you can never violate. Selling a house starts before you ever buy it. I start focusing on marketing strategies as I pull up in the driveway for the very first time, not after I purchased and renovated the house. Most untrained investors never focus on selling until after they have the property renovated and by then it is too late for most. Let me explain why in more detail. Read More→

“My child, if you have put up security for a friend’s debt, or agreed to guarantee the debt of a stranger; if you have trapped yourself by your agreement and are caught by what you said— follow my advice and save yourself, for you have placed yourself at your friend’s mercy. Now swallow your pride; go and beg to have your name erased. Don’t put it off; do it now! Do not rest until you do. Save yourself like agazelle escaping from a hunter, like a bird fleeing from a net.” (Pr 6:1-5)(NLT)

By definition, a co-signer is obligated to pay when the other person defaults on their obligation. A promise to pay another person’s debt is an entrapment by one’s own words. So when the borrower fails to make the payments, the creditor can come after the other person that has signed and agreed to be responsible for re-payment of the loan. In such cases, the borrower receives the benefit and the pleasure, and the co-signer receives the obligation and the burden to re-pay the debt.

Even if the borrower pays on time, the full amount of the unpaid loan will negatively count against the co-signer’s debt-to-income ratios (DTI). This DTI formula is used to help determine if a person has more debt than they can handle. So, since the co-signer is also responsible for paying off the loan, that debt may hamper their ability to get a mortgage, other financing or other benefits that depend on a good credit score. Read More→

Have you created a mobile friendly version of your website(s) yet? If not, why not? Your customers are not going to wait until you do. Statistics are warning us of this! With more people accessing your website/blog, Twitter posts and Facebook posts using their smartphones, they are also visiting and seeing your marketing with a smartphones as well.

If your website is not easily readable on a mobile phone, you’re in trouble since many (or most) mobile users will simply leave your site and take their business elsewhere. More than half of all users say they wouldn’t recommend a business with a bad mobile site. So even if you don’t think you need a mobile version of your site, you could, in fact, be losing customers without one.

Having a mobile friendly website, amongst other things, will render your images differently, helping on load times. Readability is also another huge concern. Your average mobile user will not want to spend much time trying to find the content that they’re interested in.

The art to designing a good mobile website is to eliminate all the content that is not all that important for users to see on a smartphone. Consider providing a clean and easy way for customers to “tap to call”, “tap to email” or “tap for directions” which will help the overall functionality and effectiveness of your website on a mobile device. Read More→

The Dream

George L., a client of American IRA, LLC, wanted to purchase a 56 unit, 1.2 million dollar mobile home park inside his IRA account.

The Details

George was determined to make this dream a reality and worked hard in negotiations with the owner of the mobile home park finally settling on these details:

• Purchase price $1,200,000
• Down Payment $200,000 from an old 401(k) plan
• Owner financing $1,000,000 at 6% interest

A Word of Caution about Loans inside an IRA

The American IRA account specialist informed George that the owner financing needed to be “non-recourse” to qualify for IRA financing.

The account specialist explained further that “non-recourse” means the property is the only collateral; neither George L. nor his IRA can be held liable.

George went back to the table with the owner and was able to negotiate non-recourse terms for the owner financing. Read More→

Throughout your life, no matter who you are or how you earn your living, you need to be concerned about protecting your assets. Your assets may include your home, vehicles, jewelry, boats, artwork, properties and whatever other assets you accumulate along the way. After all, you work hard for what you have and there are always going to be people out there who want something for nothing. The more money you have the greater a target you become, and you’ll want to protect yourself from frivolous lawsuits.

In the real estate investing business this is especially true. The real estate business is one of those where you will be piling up assets quickly. If you are holding properties and you have tenants or tenant/buyers in your properties, this can make you an even bigger target for possible lawsuits. For this reason alone you want to be holding your assets in another entity, such as a land trust in order to keep your name off of public record. The main advantage to purchasing properties in land trusts or other entities is anonymity. If everything you own is in your own name, it makes it easy for someone who wants to sue you to find out what you have. If a plaintiff’s attorney looks on public record and it appears that you have nothing, you are much less likely to be sued. Read More→

Hello again! Picking up from where we left off last month, we were discussing how almost everyone now has a smartphone, email, Facebook, and they read their text messages within 5 minutes of getting it. We also discussed how most other types of traditional media are on the way out: Yellow Pages, newspapers, etc. Basically, everyone is using the internet these days.

So if you’re in business, you need to not only BE on there, you also need to position yourself correctly AND take advantage of the emerging technologies that your prospects are using to possibly find you. This includes having an optimized, converting website. Please look at Part 2 of this series to see what needs to be on your site. Contact me if you need help with this.

So, I’d suggest you get that website set up first. Use the ideas that were presented earlier to get your content together, and ALWAYS try to answer the main question your visitor is asking himself as he looks at your site: “What’s in it For ME?”

After you have your site together, you can take that content and use it to set up your Facebook Fan Page. Again, do a Google search on a recent post to see how this is done, because there’s not enough space in this article to teach you. But basically, you’ll just sign in to your existing Facebook account & set up a Fan Page from there. Look for the links. Read More→