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Posts Tagged ‘biggerpockets.com’

Hello Everyone,

Hope everyone had a great Thanksgiving.  It’s back to work!

A couple weeks back, we made an offer on a great 3 family nearby.  It was recently rehabbed and de-leaded, rented with long term tenants and it also had a parking lot for extra income.   The cash flow would be at least $800 a month, depending on our financing.  We made a first offer of owner financing at 8% with a 10% downpayment (I looked at the on-line deed records and I thought the seller may have owned it outright).  The seller came back and countered with non-owner financing, he countered pretty close to asking.  We countered again for about 11k under asking. The seller came back asking about $6k under asking, but we said our last offer was highest and best.  We haven’t heard back, so I assume he’s not interested.  Our Agent told us that they also had another offer on the table, for the same amount (as our final offer).  Interesting, huh?   This one would have been great, but we’re not going to overpay.   The seller just bought this house back in April for $215k and wanted to sell quickly, but I guess he didn’t want to sell that fast enough, since he has it listed for $239k.   And I just got word that the house went under agreement today.  Another one bites the dust (cue the song).

Oh, and one of the REOs we made an offer on a while ago is back on the market again.  This means the property will be on the market close to a year and a half…and they wouldn’t take our offer?  These banks are really ridiculous.   I guess they want to go through another winter with maintenance, snow removal and the risk of  frozen pipes. 

In the process of looking at this deal, we talked to a lender about conventional financing for rentals. I knew this was a waste of time, since we are down to one income since my husband was laid off.  But, the guy I talked to was nice and suggested just going with my income, since I have long term job employment.  He was impressed by my (and our) high credit scores, but said my own debt to income ratio is too high to buy a rental, which I know, since we already have a mortgage and other bills.   But, I did talk to a couple of other hard money types that have been helpful.  There are some awesome people over at BiggerPockets.com (BP) that have been great.  BTW, if you are not a BP member, do join, it’s a great place to learn and connect with others.  The main sticking point is that we don’t want to take all of our reserves to use as a 30% (or more) downpayment, since that is a significant amount of money here with our local real estate prices.  So, I gotta figure out a way to make it work. I’m a little stuck in the private lending department, too.  It’s a long story, but with my 9-to-5 and the work I do, I do have SEC guidelines I follow with my day to day job, so private lending on the side is really not possible.  I need to find a way around this…I think I’d be ok with lenders with whom I have a previous relationship, but to seek out new people I think would not be possible.  I am still loving the PMBP course, and I knew my job would be an issue, but I may need to hold off private lending until I leave the job. 

So, in the meantime, we are still looking at REI and other ways of making passive and not-so-passive income…like getting back into eBay and stuff like that.  Anything we can do to make enough to pay our bills (to reach our “number” found in Shae’s Financial Freedom GPS), is what we need to do.

That leads me to my goals for next year.  I really need and want to be out of my job by next summer. I am willing to do anything I need to accomplish this.  I just wish all these things I want to do wouldn’t take as long as they should to happen!

Happy Investing!

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One of my favorite sites, BiggerPockets.com announced their Top 20 REI blogs.  There are some great ones on the list, some I visit regularly, and a few new ones I’ll need to check out. Congrats to all the winners!

If you’re new to real estate investing or even experienced, check out these blogs and I guarantee you’ll learn stuff and be entertained, too!

Happy Investing!

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Here’s a great article from BiggerPockets.com by Peter Giardini.

Unless you are just getting started in this business as a real estate investor, I am sure you have had to make continued and sometimes significant adjustments to your business practices due to new or more restrictive laws and regulations at every level of Government.

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Two new rules that come to mind that everyone on BiggerPockets should be aware of are the new EPA Lead Certification rules and the new HUD rules limiting seller financing.  Both of these rules, implemented at the national level, by non-elected bureaucrats are having significant impacts on how many of us do business including throwing the entire lease-option approach into question due to its implied “seller financing” focus.

At the state and local levels our business is almost constantly under attack by those who do not believe that we as investors should be able to take measured risks, put our names and reputations on the line and then profit in the process of providing a basic need “shelter” to individuals. 

Take the Maryland Homeowners Protection Act… Please!  This act prohibits an investor from even speaking with a homeowner whose mortgage is not current.

Or a similar law in Texas modeled after the Maryland law (In case you might have been wondering, the new EPA lead rules were closely modeled after existing Maryland lead laws) which I believe forbids lease-options.

In both of these cases the state under the guise of ”protecting” homeowners or individuals have managed to severely trample on individual property rights.

And then we have something like this: 
L.A.’s Big Freeze” from Investors’ Business Daily, describing a situation where an Los Angeles City councilman wants to “freeze” rents for a year due to “fairness”.

I could spend literally tens of thousands of words describing the various rules, laws and opinions that have been thrown at our business… all in an effort to protect the public from themselves while driving our profits ever lower.

I got so incensed with a discussion I had, had with one of my clients when I learned that potential buyers were questioning her level of potential profits, that I went into a 15 minute rant –a nd I mean a blood pressure increasing rant — on this subject during one of my radio show broadcasts about a month ago.  I must admit it was some of my best stuff, but the bottom line to that rant was that there is a growing bow wave of public opinion that real estate investors are crooks and our profits are ill gotten. 

Our business is considered predatory and by extension you and I are perceived as predators.  Our profits are deemed too large, rents too high and our overall business model is based entirely on greed! 

If you don’t believe me, just hang out on BiggerPockets for a day or two and you will see all kinds of stuff that will make the hair on your neck stand straight up.

WOW… not a pretty picture is it?  But just because our business and profits are under attack doesn’t mean that we need to close up shop and find something else to do… does it!

No… in fact there are many things that you can be doing which will help to protect your business. 

Here are a few recommendations I have:

1.  Best business practices:  I can’t stress this one enough.  If a tenant or recent home buyer, legitimately or otherwise, comes after you, how well you run your business may be the determining factor in how much damage is done to your business.

2.  When you see an announcement on the various online real estate sites (BiggerPockets is a great one) about some pending rule or law, stop what you are doing and send your (local, state or national) representatives or the bureaucracy trying to implement the rule an email or letter expressing your opinion about it. Be specific and be sure to identify how your small business will be harmed by its implementation.

3.  Take it one step further and sign up to testify for or against specific legislation at the local or state level.  If your elected officials don’t see many businesses testifying they assume no one cares.

4.  Join your local real estate investing association and become active in their legislative affairs commitment.  If they don’t have one, offer to start and chair that group.

5.  As much as it pains me to make this recommendation, make donations to local and statewide candidates that understand the value that your business brings to the community, and wants to help you to continue to deliver that value.

6.  Make it a point to visit the various municipal offices within your community.  Get to know those who make decisions.  Make sure they know what you do and how well you do it.  Make their job easy and they will remember you forever!

7.  Stay vigilant and speak up every time you hear someone attacking your business.  If you don’t, you have no one but yourself to blame when your entire business model is deemed illegal just because someone said it is.

Bottom line, if each of us doesn’t get more involved with the outside pressures attacking our industry, within the next 10 years we will be telling our kids and grand-kids about our adventures as real estate investors when it used to legal instead of illegal.

Please be sure to offer additional recommendations in the comments section below for actions each of us should be taking to protect our business.

View the Original article.

Happy Investing!

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In April, there were tons of people trying to buy homes before month’s end.  Of course we know that it was because the $8,000 or $6,500 home buyer tax credits were expiring. Most local builders were guaranteeing delivery of homes for anyone under contract by April 30th.  To what extent the credit helped won’t be fully known for several months yet.

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But what now, Batman? Did the stimulus actually help the economy? Did it merely push future demand forward? There are arguments for and against both questions. As usual, time will tell.

Accelerating Demand

Many people say that the tax credit only served to push future demand to the present day.  They argue that the people who took advantage of the credit would have purchased homes anyway. If correct, it may have been a colossal waste of taxpayer dollars. It could also mean that the effects will be short-lived and the housing market will have an even greater slump later in the year since those who may have purchased then have already done so.

To be sure, that belief is at least partially correct. But did people who may have otherwise rented purchased instead? There is little doubt that some did. The question is did they do so in significant enough numbers to make a difference? That remains to be seen.

Priming the Pump

In its simplest form, an economy is nothing more than money in motion. When money is moving in sufficient quantities everything is good. When the money stops the economy stagnates. When a water pump becomes air bound nothing flows through it; priming it with water can get it working again.  That’s the theory behind an economic stimulus. By priming the economy with stimulus dollars, such has the home buyer tax credit, the economy can start working again.

The argument here is that the housing numbers will start looking better and people will become more confident and feel better about buying a home. The home building industry also receives a much needed shot in the arm. If that argument turns out to be correct then the stimulus was a good thing. If it’s wrong the housing sector may be worse off than before.

True Beneficiaries

The stimulus is certainly going to make the housing numbers better than they would have been otherwise. The timing of it all is curious. The tax credit expired last month and contracts must close escrow by July 1st. That means the housing numbers released in the fall are almost certain to show a nice uptick. So what happens in the fall? Elections! Care to make a wager on how many incumbents up for reelection will take credit for an improving economy? Maybe I’m being too cynical, but somehow I don’t think so.

I don’t make jokes. I just watch the government and report the facts.

View the Original article on the BiggerPockets.com blog.

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I found the following article written by Julie Broad on one of my favorite websites, BiggerPockets.com.  Enjoy!

In October of last year I sent my Dad and my husband Dave to Ron LeGrands Quick Turn course. The landscape of how deals can be financed in Canada had changed so much, and both my Dad and my husband Dave were stuck in a rut as a result.

It just felt like they were spinning our wheels. I figured this would open their eyes to new possibilities.

It worked pretty well for all of us. We actually started a new family corporation, began an aggressive marketing campaign for new deals, and are quickly expanding our portfolio and our cash flow.

For others, Ron LeGrand’s course was simply the beginning of an expanding education and depleting bank account. One couple that lives near my parents signed on for the $20,000 mentor package Ron offered, and has also attended three other courses by other experts since October.

When you factor in travel costs and the course costs to date they have probably invested nearly $40,000.

They have sent out a few hundred letters and have received some newspaper publicity because a few of their letters touched a nerve with the wrong folks, but otherwise they have yet to make an offer.

Their Return on Time and Return on Money so far is a big fat ZERO!

My Mom and Dad received an email from them yesterday that basically concluded with the statement ìWell, as you know it’s a numbers gameWe weren’t sure if that meant they haven’t found a deal with the right numbers or if the numbers they have spent on education weren’t enough yet.

The number they are missing is the number of offers. If you’re not making offers you’re not creating deals. I don’t care how many letters you send or how many courses you take.

I’m all for education. I spent nearly $20,000 on a mentor and a few courses last year myself. The difference is that I apply what I learn and take immediate action. I don’t believe that any one course holds the missing piece of the puzzle because I know the missing piece is ALWAYS action.

Please don’t mistake my message for anything but what it is:

This is a call to action, and the action is for would be real estate investors everywhere to commit themselves to giving themselves the best education that the market has to offer: EXPERIENCE.

Educating yourself is smart. It helps you get started on the right foot, helps you accelerate your success and it definitely helps you avoid some pitfalls and problems.

But too many times I think that would be real estate investors spend a day searching MLS trying to find a deal, struggle, and then either give up or take another course.

The reality is that it takes time to find the good deals. We started marketing for deals after the Ron LeGrand course in November. We didn’t get our first accepted offer until February. And that was with us sending out about 600 letters a week, placing online ads and spamming the market with our business cards.

It takes energy and effort to research the market you’re investing in and build your network. It takes effort to make offers.

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But most of all it takes patience, persistence and a positive outlook. It probably doesn’t take another course. At least not until you have a deal or two under your belt and then want to learn a little more!

Remember, when you learned to walk it all began with a single step. It’s the same with real estate, you can spend all day reading and learning but until you actually start making offers you’re not going to become a real estate investor.

View the Original article

Happy Investing!

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Here’s an article from biggerpockets.com regarding creating effective ads (and great titles for the ads)  for your real estate deals.  Check it out!

Happy Investing!

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