Taking Personal Responsibility - the Best Way to Ensure Your Rehab Real Estate Investing Success There are a lot of factors that are involved in a successful rehab real estate investing transaction. You need a property, a reputable appraiser and contractor and a funding source to purchase the property. Depending on what you plan to do with the property, you may also need a good mortgage broker to refinance you, a motivated REALTOR to sell the property or a good property management company to locate and interview tenants and manage the property for you. This doesn't include other possible service providers, such as a surveyor, landscaper or handyman.
A good real estate investor will make sure that they have all of these components line up. However, you can't forget the most important part of the equation - YOU! Isn't this a No-Brainer? You would think that it would be. Purchasing an investment property is serious business. However, many real estate investors actually abdicate responsibility to everyone else who is involved in the process.
They assume that, because they are surrounded by professionals, that they do not have to concern themselves with the details. Nothing could be further from the truth. As creators of the Ultimate TurnKey Real Estate Investing System, we know first hand the value of setting up a system. This is why we did it. If you have ever spoken with us in person, you will know that we created the system to make real estate investing an easier process for other real estate investors. We didn't see any point in other real estate investors having to re-invent the wheel, and start from scratch.
So, we put together a team to help ensure our clients' success. Again, if you have spoken with us, you know the story. The System was created as a support for real estate investors, not as a replacement for their active involvement in their own transactions. We have talked to other wholesalers who have experienced the same phenomena. The funny thing is, they do not even offer the support system that we do, but they have run into several clients who want to push responsibility back onto them. Whose Responsibility is it Anyway? Simply put, it is your responsibility.
Probably 99% of investment properties are sold AS-IS and earnest money deposits are non-refundable. This means that, if something is wrong with the house, or needs fixing, it is the responsibility of you, the buyer, not the seller. This differs greatly from transactions where you are buying a house to live in yourself. Those types of homes are typically not fixer-uppers. If they are, they are probably sold as is, and you are going to get the house for a lot less than you would if it did not need fix up.
Of course, the fact that the property needs repairs is what makes it a good candidate in the first place. Remember, your best investment properties are ones that need repairs. So, you should go into the project with the mindset that you will be painting, replacing carpet, fixing drywall, and possibly even adding on bathrooms or replacing kitchens. The key here is to know all of this when you go into the purchase.
This is your responsibility. So, how can you do this? You might be a new investor who has no idea what repairs would even be involved. Or, maybe you don't have time to get that involved. We would suggest that you take the time to find out, and you educate yourself where needed. This is not because anyone is going to try to take advantage of you, but because you need to have your knowledge base intact before going into your endeavor.
If you still feel like you don't know enough, or you are still too busy, you are probably correct. However, if you are ready to get started, make sure that you have a quote on hand from a licensed contractor and see what repairs they are going to do. Make sure that you walk through the house or see interior photos. This way, you will know if there is something else that you think should be done or that you just want to do. This way, you can have the bid adjusted before you begin the process.
If you wait, any increase in repair funds will have to come from your pocket, because they will not have been escrowed in the beginning. What Else Do I Need to Know? You really need to be involved in every aspect of your transaction. Of course, some things will have greater bearing on your success than others.
You definitely need to know how your up-front financing works. The vast majority of rehab real estate investors use private funds or hard money to purchase their property. But, depending on the lender, the programs vary. Make sure that you know your interest rate. What is the term of the loan? Are there any pre-payment penalties? Do you have to make mortgage payments during the life of the loan? If so, how much are they? These are questions that you need to know the answers to.
A reputable lender will go over all of this information with you. However, it is your responsibility to make sure that they do. You also need to make sure that you remember what you agreed to.
You shouldn't allow yourself to be surprised later by something that was explained to you at the outset. Something else that we recommend is that, if you plan to refinance your property, that you get qualified for your refinance at the same time that you get qualified for your purchase loan. Why? Because you want to make sure that you will be able to refinance and get out of your loan. Remember, if your goal is to do a cash-out, you need to make sure you will be able to do so.
You also need to make sure that you stay in touch with your mortgage broker throughout the process. This way, if anything changes, you will know about it right away. For example, you can make sure that you know what programs that your mortgage broker has, and what you qualify for. There may be a new program that comes out that is more advantageous for you, or the program that you may have thought you were using may no longer be available.
Either way, you need to be informed of all of your options. By the same token, if anything changes about your financial or employment situation, you need to let your mortgage broker know as soon as possible. The changes may not affect your ability to close on your refinance, but they may.
You may have to pursue a different strategy, and it is good to know this in advance, rather than at the last minute. This Actually Makes Sense. Yes, it does make sense to be informed when you are purchasing an investment property (or any major purchase). But remember, you should be proactive, as well as informed.
Legitimate businesspeople will not have a problem with you asking questions or being involved. In fact, we welcome this. It shows that you are concerned, involved and take responsibility.
While everyone involved in the process does what they can to ensure that everything runs smoothly, this is not guaranteed. But, if you remain involved, there are few surprises and you are well equipped to handle anything that does come up. Because, at the end of the day, this is your property.
R. Most of us have heard what this acronym stands for: F - False E - Evidence A- Appearing R - Real A lot of us don't realize how this can truly impact our life. In real estate investing, as in any venture in your life, you will have to step out on faith. This simply means that you believe that something good will happen; that you will be able to make it work. Stepping out on faith means that you believe in yourself. This doesn't mean that you go off half-cocked, but that you prepare yourself and know that you will be able to deal with the unknown.
This can be a scary thing. Stepping out on faith is not something that many of us are comfortable with. In fact, we often talk ourselves out of doing something, rather than into it. Then, there are all the well-intentioned naysayers in our lives.
They take their fears and put them onto us. They mean well, but they can make you miss out on your dreams. They would never have the guts to go out and do something like this, and they can't see you doing it either. They don't see themselves as snatching your dream away. They probably think that they are protecting you.
But many times, snatch away your dreams is exactly what they do. It is okay to be afraid when you are starting something new. It is perfectly normal.
The important thing to remember is that you can't let that fear stop you. You can use it as a tool to make sure you are prepared. Fear will make you feel a little on edge. Use that extra energy to make sure that you have all of your decks in a row. Make sure that you are as prepared as you can be. Use the fear, don't let it paralyze you.
Educate yourself. Get coaching. Find a mentor. Do what you can to prepare yourself. But remember, at some point, you will have to stop preparing and do something.
You will have to step out on faith. That is a good thing. It allows you to test yourself and the courage of your convictions. Things probably won't work out exactly liked you planned. And that is okay too. It is when we are dealing with challenges that we learn new ways of doing things.
We see things in a different light. In fact, we see ourselves in a different light. You might not know how strong you really are until you put yourself out there. You won't know what you can truly accomplish until you push yourself.
So remember, it is okay to be afraid. Fear can't hurt you, unless you let it stop you; instead, step out on faith. Remember, faith can move mountains.
Marketing for Real Estate Investors: 4 Marketing Tips to Put Your Real Estate Business on Steroids Many real estate investors simply do not pay enough attention to their marketing. You don't have to have a huge budget to start a marketing plan. But if you don't market, it will definitely cost you money.
Here Are My Top 4 Marketing Strategies to Create 6-Figure Income Real Estate Investing Businesses in 6 Months: 1. Direct mail campaign - A mail campaign is one of the best ways to market your real estate investing business. And, it's very easy and cost effective. Besides the cost of acquiring the names, you will only have to pay for copies, envelopes and stamps. Here are a few things to remember when starting a mail campaign: When starting a mailing campaign, consistency is key. It takes several exposures (at least 3-5) before your prospects start feeling comfortable with the thought of doing business with you.
This means that you cannot send out one mailing and expect to get a response. You will need to send out at least seven mailings, spaced seven to fourteen days apart. Send both postcards and letters as part of your mailing sequence. Envelopes should always be hand-addressed.
Those that have pre-printed labels do not get opened as frequently. Always start your mailing off with a headline that benefits the customer. Let them know what you can do for them. For example: "End your house worries today.
" or "Sell your home for Fast Cash." 2. Newspaper Ads -- This is a more costly way of marketing, but when done correctly and consistently, you can get you a lot of bang for your buck. Newspaper ads can give you a lot of exposure, whether you are using them to buy or sell. The larger the circulation, the higher the advertising cost; but more people will see your advertisement. Here are some things to remember when running ads: Don't be too wordy.
Typically, you will pay for your ad by the word or by the line. You do not need to write a novel to get your point across. Write succinctly and you will spend less money and get a better response to your ads.
Don't over-abbreviate. Some people try too hard to abbreviate the words in their ad that the reader almost needs a translator to read them. You want people to be able to read your ad quickly and understand what they have read. Weekends give you the biggest bang for your buck.
Most newspapers offer advertising specials encompassing the weekends. And more people have weekend subscriptions than daily subscriptions. 3. Website - Your website is an awesome tool that will create an air of legitimacy and credibility for you right off the bat. Of course, your website should look professional and well-maintained.
Here are some things to remember when marketing your real estate investing business with a website: You can use your website whether you are buying or selling. If you are doing both, I suggest having two separate websites. Present information clearly. Your site should be easy to read and should not have too much information on one page.
This can get confusing. Remember with your website, less is more. If you are selling, put pictures of your houses. The more information that you provide for people to look at independently, the more sales you will make. Make it easy for your prospects to contact you. If people are visiting your website, they are interested in the services you offer.
Because people tend to be impulsive, you want to make sure they have a way to contact you immediately. 4. E-mail Blasts -- This technique is typically used when selling properties. It is very effective, whether you are selling to homeowners, investors or people looking to rent. Simply put, you gather their e-mail addresses and whenever you have a new property available, you send an e-mail to your list to let them know. Here are a few things to keep in minding when sending an e-mail blast: Don't send unsolicited e-mails.
If the person has not signed up for your e-mail list or asked you to e-mail them, don't do it. This is called spamming and Internet service providers take it very seriously. When sending out a mass e-mail, put all e-mail addresses in the BCC field. Before sending a lot of e-mails, look into an e-mailing program.
I recommend one that allows you to send both text and HTML e-mails. There are some now that also offer shopping carts and merchant accounts that will allow you to take deposits and earnest money online. It is important to include as much specific information about the property in the e-mail as possible. In fact, try to include a picture.
This will allow your potential clients to view the house before they speak with you. In fact, by the time you speak to them, they may be ready to move forward. Of course, there are many more ways to market your real estate business. But, I suggest you start with these four methods first. See what works for you.
The more methods you implement, the more successful you will be. Follow these high powered marketing tips and you will create a six-figure income real estate investing business in just six months. About the Author: Real Estate Investing Expert Charles Petty and his wife have been involved in over 700 real estate transactions in the last 9 years and are the creators of the Ultimate Turn Key Real Estate Investing Systems.
For a FREE Special Report on how you too can make$10,000 in 30 days and Six Figures in Six Months buying and selling Properties across the USA & abroad go to http://www.RealEstateInvestingProfits.com Making Real Estate Investing Work - When You're Married to Your Partner Something that investing in real estate full-time gives you is flexibility. It gives you the flexibility to choose when to work, where to work, and who you want to work with. You can literally choose the people with whom you do business, the people with whom you will spend the majority of the time.
In fact, if conditions are right, you may even decide to work with your spouse. In this article we will discuss working with the person who may you most important business partner, your spouse. We will focus on the following: 1. Deciding to work together 2. Setting ground rules and expectations 3.
Pitfalls to avoid 4. Lessons Learned 5. Division of Labor 6. Pros and Cons 7. What about the children? Deciding to Work Together Deciding to go into business for yourself is never a decision that should be made lightly. Deciding to go into business with your spouse is one that should be considerable thought as well.
There are several reasons why we say this. Any new business ventures will be full of the unknown. You may be figuring things out as you go, or things may not be going the way that you had originally planned. When both you and your spouse are in the business together, any tension from the business may seep over into your married life as well. Because it is a very personal decision to go into business for yourself, you may take it personally if there are challenges.
Too often, frustration can also be taken out on your spouse. Of course, there are some very compelling reasons to go into real estate investing with your spouse. First, the reason that most people decide to get started investing in real estate is because they want to make a change in their lives. They may want more money, more free time, and/or to improve their quality of life. Those are very powerful reasons, and they create a very powerful image in the mind and heart. Imagine how powerful that vision is when it is shared by two people whose very futures are intertwined.
Everything that they do will impact their future, their home and their family. They both see where they are going, and are willing to make the sacrifices to get there. Two people who share a common goal can make a lot happen. We know this from experience.
As you know, things will not always go as planned, but two working together can weather anything. This is not to say that real estate investors who have their own business cannot make it work. Rather, it is to say that, when spouses work together, they can help to lift each other up; to encourage each other not to give up the vision. There is a support structure built into the business. Finally, it makes it a lot easier when both of you are on the same page. We have talked to countless people who are investing in real estate and want to get their spouse involved.
Their spouse might not have any interest in real estate, they might have misconceptions about the market and what it takes, or they just might not be interested. To those people, we recommend that they help their spouse to get educated. Take them to a seminar or workshop, listen to CD's together. Even late night infomercials are a great way to expose a spouse to what real estate investing. Setting Ground Rules and Expectations Once you and your spouse decide to work on and in your business together, it is very important that you sit down together to discuss your expectations, and lay down some ground rules. Whether you are doing the business full-time, part-time or a variation of the two, it is important that you treat your real estate investing as a business.
This starts with the two of you sitting down and writing out your goals, expectations and ground rules. In most cases, one of you guys will know more about real estate investing than the other. You will find yourself in a position of "authority," simply because of your knowledge base.
This was the case with us when we got started. Charles had begun researching real estate investing while still in law school and had begun to build an educational foundation. Kim, on the other hand, had no real knowledge of or interest in investing in real estate.
It was up to Charles to convey the vision - all of the things that real estate investing had to offer, all of the life changing things in store. Things would have gone a lot more smoothly for us if we had set our ground rules from the beginning. But, we didn't.
That is why we know it is so important to do. You need to have a plan of who will handle each part of the business. Think about the job that you may hold right now, or a job that you have left. In either case, you have known what was expected of you each day. You had measurements and goals, and you knew what you needed to do to be successful.
Investing in real estate is no different. When spouses work together, this is even more important. We tend to have assumptions when it comes to our mates. We may think that we know what they can do, or what they want to do. But everything should be explicitly spelled out, by both of you. Try not to limit each other, or put yourselves in a box.
You would be surprised at the ideas that you come up with when you give each other the freedom to grow, think of new ideas and try things out. In fact, we got involved in wholesaling because of a suggestion that Kim made. We decided to try it out, and the rest, as they say, is history. Lastly, you have problem heard the saying that you can't have more than one boss.
In answer to this, we would just like to say, that how you divide your labor is up to the two of you. One of you may feel more comfortable taking on the majority of the responsibility, and the other may want to give that responsibility away. Or, you may decide that one of you will be the boss. Or, you may even decide to divide your business in two parts, and each of you is the boss of that area.
The key is to discuss it, write it down and make it happen. Pitfalls to Avoid Being aware of the following potential pitfalls will help make your real estate investing a lot more profitable and enjoyable. Don't give anyone the majority of the dirty work. In business, as in life, there will always be some things that are not pleasant to do.
Be sure that these types of tasks are divided between the two of you. No one person should be stuck doing the junk. Of course, what is considered junk can vary by couple, so you need to decide this for yourselves.
But remember, you should be having fun. As you change your life, you want to both be happy doing it. It doesn't matter if one of you is working the business full-time, and the other is part-time, neither of you should have the majority of the undesirable work.
Do your best to divide it as equally as possible. Don't let issues in the business affect your marriage. When you are working closely together day after day, this can be easier said than done. And, of course, when things are running smoothly, this is not an issue at all.
But when things are a little bumpy, this can be a totally different story. You have heard the expression "Don't bring your work home with you." This is so true when you are working with your spouse, even if work is the office you created in the guest room. Your marriage is a very sacred entity. You want to protect it at all costs.
This does not mean that you will never argue or disagree. But, try not to do so about your real estate investing business. Not only will it make your off-work hours stressful, it will also make your working hours less enjoyable. You don't want to get so upset with each other that you lose appreciation of the opportunity in front of you. Lessons Learned One of the biggest lessons that we learned is to give each other the freedom to make mistakes. Again, nothing happens perfectly.
In fact, some things flop. But, we love each other, we know our commitment to each other and the business and we do our best to support each other at all time. Again, this freedom that we give each other allows us to try new things. Sometimes, we just brainstorm about new things that we could do, new ways we can help people, exciting ways to grow our business. We are able to do this in a non-judgmental atmosphere and we have seen some tremendous fruit because of it. Of course, you have to have good communication.
This is very important in your marriage anyway, and you definitely want to carry this over into your business relationship. Don't come down hard on each other. Watch your tone of voice (or your tone of e-mail). This person is your spouse; they deserve the same amount of respect that you would give your co-worker or employee in any other situation.
You should also structure your business so that you are each utilizing your strengths. Whether or not the business consists of just the two of you, or if you decide to hire staff, you still need to play to your strengths. Each of you should do what you do best. If that happens to be the exact same thing, you probably want to look into hiring someone else to do the other stuff.
Division of Labor We have touched on this briefly in the previous sections. In order to maintain a strong relationship and to have a fun, profitable business, you both need to enjoy what you are doing. The best way to do this is to decide what your strengths are and divide the jobs up within your company along those same lines. For instance, Charles loves to look at houses.
He can look at a "fixer upper" and see it as it will be after repairs. Kim, on the other hand, doesn't particularly care for rehab houses. She sees them as they are, and smells them as they are too.
So, it makes sense that Charles is the one who evaluates properties. Kim is more of a detail person. Charles is the visionary, who looks at the big picture. Even though she doesn't work in the main office, Kim oversees the employees, pay roll, book keeping and the nuts and bolts that keep the business running. We are both very creative, in different ways, and are involved in the marketing.
Even here, we have different strengths and enjoy different things, and we divide our responsibilities accordingly. Remember, we grew to this point. It wasn't crystal clear to us the way it is today. That is one of the reasons that we wanted to bring you this message. If you are thinking about working with your spouse, or you have started it, and things are kind of bumpy, we want you to be able to use our experiences to make it work for you. Pros and Cons As you can see, there are pros and cons to working together.
Some people cannot see how we can spend so much time together, every day. We know that this is a challenge for some people. We feel very blessed that this is not the case for us. Some people would consider the fact that you are both doing the business full-time to be a con.
You might not want to be together that much. At the same time, you could consider that fact that you can both take vacation together, without having to ask anyone's permission to be a pro. Again, some of these things are going to depend on you, your relationship and your goals.
What about the children? Whether you have children or are thinking about them, being in business for yourself provides you with a wonderful opportunity to open up new worlds. Charles's parents own their own business. Even though he has both his JD and his MBA, he has always wanted to run his own business. He saw his parents doing it, and he wanted to do the same thing. We have three young children (ages 2, 4 and 6) with a fourth on the way.
Investing in real estate has given us the freedom not only to have these wonderful children, but to spend time with them. They have all been on airplanes and they have been places that we did not visit until we were much older. They see how much is out there in the world, and they know that it is theirs for the taking. Family and church are very important to us. Investing in real estate, together, as partners has allowed us to nurture both of these.
We can go on fieldtrips, attend Bible study and just spend time together, because we work together and we make our own rules. We set our goals and we are responsible for making things happen. We love each other and the challenges and rewards of working together. When Kim was pregnant with Hannah, our first child, we decided that she was not going to go back to corporate America. That same December, Charles decided that he no longer wanted to work in the law firm. He knew that, if we invested in real estate full time, we could make some significant changes in our life.
It was an exciting time. It was a fun time. It was a scary time. But every day, we are so glad that we did it, together.
No matter what has happened, or what will come, we know that we are working our real estate business - together. Charles and Kim Petty are a husband and wife real estate investing team in Metro Atlanta. They are the creators of the Ultimate TurnKey Real Estate Investing System. For further information on Real Estate Investing products and services offered by Kim and Charles Petty call 1-800-841-2579. Ensuring your success when working with Contractors! Buy it, fix it, flip it! Buy, fix and sell! These are slogans that many investors live by.
They describe the concept of finding a house that needs repair, fixing it up and then selling to an end buyer, usually a homeowner. However the key to buying, fixing and selling is the "Fixing". There are many courses and gurus that will tell you to rehab a property and you will make so much money you won't be able to stand it. But the key is to find the right contractor.
If you are to be successful in real estate investing or any endeavor at all, you must find the right people to do business with. You must find the right contractor to work with you to fix up your properties. The contractor that you work with must meet the following criteria: The contractor that you choose to work with must be 1) reputable 2) dependable and 3) economical. Their reputation - when you decide to work with a contractor it is critical that you get references. When you get these references, make sure they are for people who the contractor has already done worked for.
While a reference from a pastor or business associate is good, you need to know that they performed quality work and that the client was happy. It is also important that you call the reference. Too many people request references and are satisfied when they receive a list of them.
But, you must call these people. See what they have to say. Make sure that the phone numbers work! Their dependability - simply put, your contractor should do what he says he's going to do, when he says that he is going to do it. This is very important, because you do not want your rehab project to drag on needlessly or endlessly. A good contractor will have his workers on the site when he says that they will be there.
The work will be done quickly and professionally. If your contractor is working more than one job at a time, your job should receive equal attention. Their economics - for as many properties as there are in the market, there are just as many contractors and their pricing runs the gamut! You will be surprised to see the wide range of pricing that you could be quoted on one specific job. Typically, contractors who advertise in the Yellow Pages have a higher overhead, and charge more money. Someone who is your friend's cousin's brother may have lower prices, but they also might be just starting out and not have the experience you desire. There are other things to be considered besides price.
Here are some other items to consider: 1. You want to know if they need "up front" money to get started, or if they can bankroll themselves. Typically, the lower the price, the more money that will be needed up front.
2. Do they have a bank account? If you are dealing with someone without a bank account, you are in for a lot of headaches. Someone who hasn't taken the time to open an account for their business is not someone that you want to deal with.
3. How many people are in their crew? 4. Do they have their own equipment? 5.
Do they have a business license? 6. Are they insured? You can decide which of these items are most important to you. You do not have to compromise your value system.
It is possible to find a good, reliable, dependable and economical contractor that you can work with. When you do, hold onto him! A good contractor can make you a lot of money. Find a good one and grow your relationship with them and you will be well on your way to building your real estate empire! We wish you much success! Kimberly and Charles Petty In the last 7 years they have been involved in over 600 real estate transactions. And there is no reason you can't experience the same success. For further information on Real Estate Investing products and services offered by Kim and Charles Petty call 1-800-559-9702 right away.
Ensuring your Success when Purchasing Rehab Properties You have heard all of the hype surrounding real estate investing, and you're ready to get started. You know that there is money to be made - you've seen the late night infomercials, and you even know some people who are investing in real estate successfully. So, you ask yourself the following questions: "How do I get started in real estate investing?" "What kind of property should I buy?" "I don't know anything about working with contractors, should I do this?" "How do I know that won't get in over my head?" We are going to discuss those questions, and give you some good, solid answers that will allow you to get started investing in real estate - on the right track. Getting Started The best way to get started investing in real estate is to educate yourself.
This does not mean taking a course to become a licensed real estate agent, or reading countless books. You can educate yourself by taking advantage of the numerous resources that are available to you. In most major cities, you will be able to find a Real Estate Investors Association (REIA). This is a group of people who are either investing in real estate or thinking about doing it.
Almost all REIA's have monthly meetings where you can network with other real estate investors, meet service providers, listen to speakers with expertise in varying areas, and even find properties to invest in. Locating a REIA is a great way to get started. In the metro Atlanta area, there are two such organizations. One is the Georgia Real Estate Investors Association.
They hold monthly meetings the 2nd Monday of the month. They also offer subgroups, to allow you to meet in a small group setting with experts in various areas. You can even stop by their office and take advantage of their many resources, including software, computers and more.
Membership is required. There is also a smaller, more intimate group in the metro Atlanta area. This group is simply called Real Estate Investors Association. They meet the 2nd Thursday of the month. Their meetings always have a speaker and there are service providers there for you to speak with as well.
There is no membership cost, but there is an admission charge. Another way to educate yourself is to attend a seminar. You need not spend a lot of money doing this. There are a few companies in the metro Atlanta area that offer seminars to help you get started in real estate investing. Some of these are free, while others charge a fee. The key here is to make sure that you get good, solid information that you can use.
These seminars provide an excellent opportunity for you to meet key players in the investing business. You can ask questions in a smaller, intimate atmosphere. Again, you have the opportunity to network with other investors.
Take advantage of it! As you can see, there are many ways to get started. You are doing one of them right now! By reading Investor 2 Investor and publications like it, you are exposing yourself to an abundance of quality information. That is an excellent step.
The most important thing is to actually get started. Don't educate yourself to the point of not doing anything. There is always more to learn each day. That will never change. But, in order to succeed, you have to start. And there is no better time than today! Destiny is not a matter of chance; it is a matter of choice.
- Unknown Your Investment Strategy There are several types of property that you can invest in. There is commercial real estate - such as office buildings, apartment buildings, etc. and there residential real estate.
Residential real estate can be either multi-family or single-family. In today's market, single family homes are your best investment vehicle. I say this because; it is the American Dream to own a home. Most people, who are for looking for a home, want their own house, not one that is attached to another. Noted Real Estate Investor, John Adams* lists the following 9 reasons for investing in single family homes: 1.
Bargains are readily available in single family homes. 2. Financing is easy to get for single family homes. 3.
Single family homes are readily available in most communities. 4. Single family homes are easier to rent. 5. Single family homes are easier to sell.
6. The single family home market is extremely stable. 7. Single family homes are relatively easy to understand.
8. Single family homes offer excellent tax benefits. 9. Single family homes make great retirement plans. Let's take a minute and review these points in greater detail. First, it is true that you can get great deals on single family homes.
Since most people who live in single family homes also own them, this means that, at any given time, there are a number of them available for purchase. People go through lots of life changes that require them to sell their home. They may be increasing the size of their family, moving into a smaller home because their children have moved out or they may have been downsized or have experienced any other circumstances which require them to sell their home. Lots of these people need to sell quickly and are able to be flexible on their asking price - and that means a bargain for you! Financing is extremely easy to get for single family homes. In fact, there are a group of lenders who specialize in lending to investors who purchase and fix up single family homes. In most cases you can borrow the funds to purchase the property and complete the renovations.
We will go into how this works in greater detail further along in the series. Think about how many single family homes you see every day. They are everywhere. And because they are so readily available, they are very easy to rent and sell. Many people want to move up from an apartment and decide to rent a house. There are others who have gone through adverse conditions and although they may no longer own a house, they still want to live in one.
They are very happy to rent. And for as many people looking to rent a house, you have people looking to buy them as well. The single family home market is very stable, for all of these reasons. They are easy to manage.
There are only so many things to take care of in a house, and with a good property management company, that task is made even easier. There are great tax benefits that come from investing in single family homes. This is not the forum to go into all of them, but make sure you speak to a good accountant who can help you reap this additional benefit of your real estate investing. Finally, it takes more than one house to build your empire, but with as few as ten of them, you can retire and live comfortably. You have many options available to you. You have your monthly rental income (less any property management costs), you can do a refinance and get tax-free cash based on the equity in the house, and lastly, you can sell whenever you would like.
The secret of success in life is for a man to be ready for his opportunity when it comes. - Benjamin Disraeli Building your team In order to make your real estate investing more successful and enjoyable, you need to surround yourself with a team of professionals who know the business and have your best interests at heart. There are several ways to build this team. You can network at meetings, seminars and other events and collect business cards.
You can speak with individuals to get a feel for them. Let them know what you are trying to do, and see if they can help you achieve your goals. You can also look in the yellow pages and the newspaper for additional contacts. Just a note - Yellow Page advertisers may have higher prices than you would like to pay, simply because their advertising costs are built into their pricing.
It is a good idea to speak with people whom you know that are already investing, or simply know people who do the job that you are looking for. It is important to get references, and when you are getting quotes for work to be done, get two or three. You can also hook up with a company that pulls everything together for you. This type of system is often called "TurnKey" or "Automatic." This simply means that everything has been set up with you, and the service providers have been tried, tested and proven to be true.
Many investors prefer this type of system, because it takes the guesswork out of their real estate investing. Here are some of the resources that you can expect to find in a TurnKey System: Investment Properties - these are typically single family homes, but can be any type of real estate that meets your investing criteria. They should be offered at a fair price, with plenty of equity for you. Lenders - this includes purchase money lenders (often called hard money lenders) and mortgage/refinance specialists.
Ideally, these individuals are accustomed to working with real estate investors and will have programs that are tailored to your unique needs. You will often find that serious service providers in this arena often specialize in working with investors. Appraisers - a good appraiser is one of your best friends in this business. A good appraiser will be familiar with the market conditions and prices and ensure that the house is appraised with a realistic value. In the majority of cases, the appraiser must be approved by the lender. This should make you feel good because it means that the lender is comfortable with the appraisers work and is willing to lend based on it.
Contractors - there are a wide range of contractors out there. It is important to get a good, reliable contractor on your team. This will allow you to control your costs and your time.
When you know that a job will be completed at a reasonable cost within a reasonable time period, you will be able to breathe a lot easier. Contractors who are recommended through a TurnKey System have been through a screening process. While there are no guarantees, this should make you feel better to know that their pricing, quality and timeliness are typically in-line, or they would not be recommended to you. Property Management - a good property management can change your outlook on owning rental property. Many people are hesitant to get started investing, because they have heard horror stories from other investors about leaky toilets, midnight phone calls and more.
Well, with a good property management company you do not have to worry about that. They will run your ads, interview your prospective tenants, collect the rent, handle maintenance and even send in your mortgage payment, if you would like. This will either be done for a flat fee based on the number of properties that you own, or a percentage of the monthly rent that you receive from the tenant.
Those are the major players that you will need on your team. Surround yourself with good, honest reliable people and you will have a successful real estate investing career. Don't be afraid to make mistakes. Mistakes are how we grow and learn. The important thing is to learn from your mistakes, so that you do not repeat them.
More importantly, if you can, learn from the mistakes of others. Hook yourself up with someone who is honest, fair and knows what they are doing. Congratulations on getting started! Your life is about to go in directions that you have only imagined. Don't wait another day.
The life that you keep dreaming about is really there for you! It is within your reach. Make it a reality by investing in rehab properties. We wish you much success! Kimberly and Charles Petty In the last 7 years they have been involved in over 600 real estate transactions. And there is no reason you can't experience the same success.
For further information on Real Estate Investing products and services offered by Kim and Charles Petty call 1-800-559-9702 right away. Ensuring your success when working with Real Estate Agents You have heard all of the hype surrounding real estate investing, and you're ready to get started. You know that there is money to be made - you've seen the late night infomercials, and you even know some people who are investing in real estate successfully. But how do you find deals that will make you money? One of the best areas to make money in real estate is through fixer-upper or rehab properties. One of the best ways to find these types of deals is through a real estate agent. You know them.
You have seen their billboards with their smiling faces and catchy slogans! But how do you find the right real estate agent? First there are two types of real estate agents: Buyer's agents and listing agents. The buyer's agents are the ones that represent the buyer's and make offers on listed properties. Listing agents are the agents that list properties and represent the seller of a property. The seller can be a private individual, a bank, the Department of Housing and Urban Development (HUD) or any other person or entity that has decided to sell a property. Some agents represent both buyer's and sellers, while some agents are only on one side of the business.
There are many courses and gurus that will tell you to find a real estate agent and you will make so much money you won't be able to stand it. But the key is to find the right agent. If you are to be successful in real estate investing or any endeavor at all, you must find the right people to do business with.
You must find the right buyer's agent to work with you on finding properties. The buyer's agent that you work with must meet the following criteria: 1. Experience with working with investors 2. Ability to think "outside of the box" 3. Friendly 4.
Aggressive Experience working with investors. You wouldn't go to Burger King and ask for a bucket of chicken, would you? Yet many investors will attempt to work with an agent that is used to working with first time home owners and expect to have success. You must have someone in your corner that knows the territory and knows what to expect. The market for real estate investors is very different than that of a homeowner looking for a house in which to live. The real estate agent must understand not only the value of comparable sales and how needed repairs affect a sales price, but a myriad of other real estate investing specific criteria. You also want an agent that is used to Bank Owned (REO) properties, Government owned properties (HUDs), etc.
Ability to think outside of the box All profitable investors must be creative and go against conventional wisdom at times. You must have an agent that thinks like you and is not offended if you are making a creative offer or attempting to put together a creative transaction. Friendly This rule should apply to anyone you are going to do business with on a consistent basis. Real estate investing should lead to freedom and security and if you have to deal with someone who is not a joy to be around takes away from your freedom. Your agent should not only be friendly, but should genuinely appreciate your business.
Friendly agents get better results; they develop a better rapport with sellers and seller's agents which will result in more closings. This will result in more money in your pocket. Aggressive Many times your buyer's agent must call the listing agent of a property several times in order to get a response.
Your buyer's agent may also have to make several offers before one gets accepted. Your agent must be able to press and not get frustrated. Once you have found an agent that fits this criteria, you want to grow and develop a long term relationship with them. You want to do your best to close on time once you have a property under contract with them. Once you have closed several deals with them you also should send them birthday cards, Christmas cards, take them out to dinner etc. to show them that you value their business.
A good real estate agent can make you a lot of money. Find a good one and grow your relationship with them and you will be well on your way to building your real estate empire! We wish you much success! Kimberly and Charles Petty For further information on Real Estate Investing products and services offered by Kim and Charles Petty call 1-800-559-9702 right away. Developing your winning team As a real estate investor, it is very important that you surround your self with a good, strong team of trustworthy individuals. You will need to develop and maintain good working relationships with professionals for each stage of the process. As we discuss developing your winning team, we will break it down by the process. The processes we will discuss are: 8.
Finding the Property 9. Funding the Property 10. Closing on the Property 11. Fixing the Property 12.
Selling the Property Finding the Property As we discussed earlier, there are several ways for you to locate your properties. Established relationships can make finding the right house easier for you, especially with motivated sellers. Once you locate a wholesaler who specializes at finding good, quality houses in your target areas, you want to develop a good relationship. In some instances, you may be able to get on an "early notification" list, or after you have purchased a property or two, the wholesaler might even look for properties specifically for you. This will be an important relationship for both of you; you will have a steady source of quality properties and the wholesaler will gain a client who they know will do what they say that they are going to do.
Another member you want to have on your team is a strong Realtor. It is important that the Realtor be used to working with real estate investors or at least has a basic understanding of real estate investing. At the minimum, your Realtor must be open to learning and listening. You will be looking for atypical properties, and your Realtor will really need to be on board with what you want. It is important that you stay in the driver's seat and only look at properties that fit your criteria and business plan.
You may find that many Realtors want to show you the properties that they have listings for or what they think is a good investment. Remember everything that you have learned about what makes a good investment for your portfolio, and stick with it. The good thing is, there are a lot of Realtors out there, so you should be able to find one that you can work with. Other people who have access to motivated sellers and/or distressed sellers are good to have on your team. Probate attorneys and divorce attorneys are just two such examples. If you can find someone who can give you the scoop or the inside track on available properties, cultivate that relationship.
Funding the Property When you locate a great property, you will need to be able to move quickly to purchase it. This is especially important if the property is one that you are competing with other investors to purchase. You will want to show the seller that you can purchase the property, just like you said that you could. Unfortunately, many real estate investors put properties under contract and never close.
If the seller is one who works with a lot of real estate investors, they may be gun shy. Even if the seller has no negative experience (or no experience) with real estate investors, it is a good idea to be able to show that you have the funds to close the deal. In order to ensure that you can close on the deal when you say you can, you need to develop strong relationships with both hard money lenders and private lenders. You will find that the terms will differ between hard money lenders and private lenders, but each type of loan has its place in your real estate investing business. Hard money lenders typically charge between 12% and 14% for their loan. They also charge points and some have pre-payment penalties.
All of the loans are interest only, most with monthly interest payments. Many new investors are taken aback when they see what the terms are, but more seasoned investors know that the terms are definitely worth it. It is basically an opportunity cost. Banks are not going to loan the money for an investment property. Even those banks that offer "rehab loans" usually do not close in a timely manner and have all sort of specifications that you will not find in a hard money loan. There are many other benefits of working with hard money lenders.
Hard money lenders know the market and specialize on working with real estate investors. They are familiar with values, areas and appraisers. And most importantly, they have the money to lend. Because they are in the business of lending, most hard money lenders have several million dollars available to lend out. As long as you and the property meet their criteria, you can usually close in as little as seven to ten days. If you have developed a relationship with the hard money lender, and have already closed several deals with them, you can probably close even more quickly.
The terms for loans with private lenders vary on the lender, and often on you, the real estate investor. In many instances the private lender is new and you can determine the terms. You always want to be fair to the lender, and make sure that the loan is worth their time. However, you will most likely pay a lower percentage rate and few to zero points. However, you may have to educate your private lender if they are new to lending.
They will rely on you to provide them with good information and a good investment. This is a really amazing responsibility. You must make sure that you put checks and balances in place to protect your lender. You will also be responsible for finding good appraisers, surveyors and closing attorneys. Closing on the Property In order to close on your property, you are going to need three more strong players.
They are your appraiser, your surveyor (if the lender requires it) and your closing attorney. It is important to note that, if you are funding your deal with a hard money lender, all of these team members will actually be picked (or approved by) your hard money lender. Each of these members ensures that the investment is a good one, that the values are solid and that everything closes in order.
These things make sure that the lender's investment is as secure as possible. However, just because these team members represent your lender, this does not mean that you cannot develop a relationship with them. Developing this relationship will allow you to check on the status, schedule closings to your convenience and just make sure that everything stays on track. Also, once you get your own private lenders, you can utilize these same people with whom you have already developed a relationship.
The appraiser will be responsible for providing the After Repair Value (ARV) appraisal. Again, the appraiser should be someone who is used to the real estate investing market. If you attempt to work with an appraiser who works primarily (or only) with homeowners, you are in for a lot of headaches. I fact, don't even go there. Use the appraiser that your lender has approved, or talk to other real estate investors and find a good, reputable appraiser.
Now, not all lenders require a survey. However, if they do, they will already have a survey company that they use. Just go with them. The closing attorney is another important member of your team.
If they are not selected by your lender, they will have to be approved by them. The closing attorney is very important to your deal. Their office makes sure that all of the details are taking care of. They make sure that title is clear and title insurance is obtained. They prepare all closing documents and wire funds. In some parts of the country, a title company handles these same tasks.
Fixing the Property The contractor that you choose to work on your rehab can make or break your project. This is a hard fact. It is hard because many real estate investors do not choose licensed contractors to work on their jobs. They often use their brother, their cousin, their uncle or their friend.
These contractors might do an excellent job, but they also might lack the experience and the business acumen necessary to complete the project in a timely and professional manner. Regardless of your level of expertise, you have to make sure that you have checks and balances in place to protect yourself. You should have agreements in place that specifically detail the items to be completed, the prices and the timeline for completion. Find out how many members are on the contractor's crew. Does he have his own trucks? Does he have the money to begin a job, or does he need start up money? Finding a good contractor can be a long process. Be sure to get referrals and before and after pictures of work that the contractor has completed.
When you get the referrals, call them. Find out if the clients are satisfied and if they would use their services again. When you locate a good contractor or two, and you will, hold onto him! A contractor who does quality work at a fair price in a timely manner is worth his weight in gold. Knowing that you have someone that you can count on to will give you the confidence to put properties under contract and market them and move them quickly. Selling the Property When you decide to sell your retail property, there are two key members on your team, your mortgage broker and your Realtor. It is key that you locate a mortgage broker that will be able to finance your buyers.
Your mortgage broker should have programs for all types of sellers, whether they are first time home buyers, have credit issues, or retired or any other "out of the ordinary" situation. It is crucial that your mortgage broker has experience closing loans. You want to know that when you find a buyer with reasonable qualifications, your mortgage broker can get your buyer qualified and closed. You do not want someone who is trying out new programs or just getting started. You need to get your properties sold, and your mortgage broker can help you do this.
Ideally, they will have a 100% financing program and you will be able to advertise it when you advertise your house. The second member of your selling team is someone that we have already mentioned, your Realtor. You want someone who can find you a buyer, quickly. Again, your Realtor should be able to think outside of the box. There are so many financing options out there, you don't want to look for only "traditional" buyers. It will take a little time and effort to develop your winning team, but it is worth it.
This is another reason why a turnkey system is so attractive to real estate investors. All of the keys are in place, and you can just plug in and take advantage of what is already in place. No matter how you find your team members, putting together a strong team is crucial to your success. Charles and Kim Petty are a husband and wife real estate investing team in Metro Atlanta. They are the creators of the Ultimate TurnKey Real Estate Investing System. For further information on Real Estate Investing products and services offered by Kim and Charles Petty call 1-800-841-2579.
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