Posted on September 9, 2008 by therei
When starting out in real estate investing you need to understand there are 3 ways to make money in real estate. Real estate can make you quick cash create cash flow or wealth building as equity grows. You need to understand where you are at in the investing game to determine what you should start out doing.
If you are new to real estate investing then I would start at generating cash. New investors will need cash for more deals and as a cushion for any mistakes. To be honest with you even seasoned real estate investors should be generating cash as you build your real estate portfolio. Cash reserves for a rainy day will help you get out of tight spots.
Cash flow is great for long-term wealth and more stability in your business. I know alot of real estate investors that buy homes and get them paid off to live off the rental income when they retire.
Equity riches are another way to make money. This is a long-term strategy but as time goes on this becomes very powerful as the property value goes up year after year.
What are the biggest mistake real estate investors make?
You will buy property just as the gurus taught you in their courses or seminars. You accumulate 5, 10 or 15 properties all with some cash flow or break even only to wake up and discover you are still broke. What happened, you thought if you followed the guru’s course you would be on your way to riches. Real estate is a great long-term investment but you need cash flow, which means generating cash by wholesaling or flipping. Most investors make the mistake of buying to hold and they stop generating cash. You must do both generate cash while buying to hold if you want to get ahead in real estate investing.
Tolearn more about real estate investing visit us at College Of REI.
Filed under: Uncategorized | Tagged: buy property, flipping, property, real estate investing, wholesaling | Leave a Comment »
Posted on September 5, 2008 by therei
You need to know what your exit strategy is for every property you buy. This also includes knowing your exit strategies for doing a short sale. I know this may not make sense knowing what to do with a property before you even know if you can buy it. Let’s take a look at it and go into detail on how and why this strategy works.
You are helping homeowners out of a bad situation which is pre-foreclosure. You do not want to do all the work that is required for a short sale and have the deal fall through because you do not have an exit strategy. To negotiate a great deal with loss mitigation getting the price you asked for then not being able to buy or sell the house is not the solution the homeowners we looking for.
You will get an acceptance letter from the bank or lender once your deal has been accepted. The lender does not give you much time at all to either buy the house or sell to another investor for all cash. With the limited time you will have to move the house I would not wait till the last minute to figure out my exit strategy.
The exit strategies are pretty straight forward:
- Sell to an end user for all cash or financing. If the end user is getting financed make sure they have a letter and are pre-qualified to get a loan for the amount you are selling.
- Sell to an investor for all cash or financing.
- You buy with all cash or get financed and use the property as a rental or rent to own property.
Make sure you know what you are doing when doing a short sale. Putting together an exit strategy right when you are talking with homeowners about doing a short sale will help you in determining if this property is a good candidate for a short sale. Not all properties are good candidates for a short sale.
To learn more about how to invest in real estate visit us at College Of REI.
Filed under: Uncategorized | Tagged: foreclosure, pre foreclosure, real estate investing, short sale | Leave a Comment »
Posted on September 5, 2008 by therei
The amount of so called guru’s pushing real estate investing information is at an all time high. Some of the information is worth the cost but most of it is not. How do you figure out which courses are worth buying and which courses are not?
Let’s take a look:
1) Refund policy would be on the top of my list because if they do not have one then it probably is not worth it.
2) Price – The internet has changed this a little because you can find some good information for free or at low cost. Most of the detailed training that you will need to be a serious real estate investor is going to cost you something. There are several new membership sites that allow you to pay monthly while you go through their real estate training courses. These membership sites cost $19 to $50 a month so your risk is small if it does not meet your needs.
Gurus typically will sell you one course such as rehabbing or wholesaling and that course will usually have good detail but the cost is $500 to $3,000. What if you decide to buy the wholesaling course for $500 only to realize you do not like wholesaling? You may want to try the membership sites learn about the different real estate investing techniques before buying the expensive courses and seminars.
3) Seminars – Most guru’s main goal or objective is to get you to buy their manual with the hope you will be swayed into attending their $5,000 seminar. This is where they make all their money but the question you should ask is do I really need that seminar training?
4) Internet – The internet has changed everything so you should be looking there first for your real estate training. Membership sites, free forums, blogs and real estate investing websites would be the best place to start your road to real estate training.
5) Are you ready – Do you really want to spend $500 to $10,000 on real estate investing courses to learn the fact that you do not like real estate investing or it may not be the right time for you? I have seen alot of the top investors in my city learn real estate investing by using the less expensive techniques and building from there.
You need to get educated about how to properly invest in real estate. Right now is the perfect time to get into the mix with property selling so cheap. Look online to see what training is offered to get your feet wet and for those seasoned investors online training is a perfect supplement.
To learn more about real estate investing visit us at College Of REI.
Filed under: Uncategorized | Tagged: property, real estate courses, real estate gurus, real estate investing, real estate seminars | Leave a Comment »
Posted on August 24, 2008 by therei
Other Peoples Money – There is plenty of money out there for you to use to buy real estate. You just need to go out and find other peoples money to buy discounted property. This is a great reason to invest you are not using your own money.
Tax Breaks – Owning property gives you serious write offs and depreciation on your property. At tax time this will definitely help in lowering taxes paid.
Equity – Buying property at huge discounts can give you a ton of equity in property. The best part is once you pay off the property you can keep it for cash flow or sell to withdraw your equity.
Its Not That Hard – Everyone says they do not want to fix toilets at midnight when a tenant calls. You should have contractors that can take care of this for you so you do not have to do it. Landlording or investing is only as hard as you make it. In all honesty it is probably just as hard as the job you are currently working.
Cash Flow – This should be your top reason to invest. In real estate you can build up enough property to create a residual income for you and your family.
Lets look at some numbers:
You own 10 rentals free and clear at a value of $100,000 each. The rent on each property is $1,000 a month. We will calculate vacancy, taxes, insurance and repairs at 40% just to be safe. That would give you $6,000 a month cash flow not including the taxes you have to pay on that income. This is not bad with just owning 10 properties free and clear, what if you got the number up to 20 properties owned.
Owning 10 to 20 properties require work but would not be a full time job at most it would take 2 or 5 hours a week to manage the properties.
To learn more about how to invest in real estate visit us at College Of REI.
Filed under: Uncategorized | Tagged: buy home buy house, cash flow, flipping, real estate investing, rehab | Leave a Comment »
Posted on August 20, 2008 by therei
There is a notion out there that in order to make money flipping investment properties you first must purchase a investment property, rehab the property, make upgrades, and then resell the property on the market at retail value. Although this is true and can be very lucrative if done correctly there are other ways to make money in flipping properties for cash without investing your money and taking the financial risk.
I think we all can agree that the only way to make profits in real estate investing especially flipping is to buy a property for considerably less than the retail price and then in turn sell at some point for a higher price. If you are like me when I first got started you had very little if any capital needed to buy an investment property and spend the cash it takes to rehab it. Sure you can borrow money and get a rehabbers loan but if your just getting started why not make some cash and learn a little before you take the risk, you might just find out that the mistake you didn’t make was worth waiting for. With a little hard spent time researching you can trade your time for some substantial profits.
If your just getting started do some networking first, find out who the big players are in your area who are buying, fixing, and flipping properties. Become a research agent for these buyers and find potential deals for them. Doing this will provide you a way to make some extra money and more important learn how the experts do it.
First and foremost you are not investing any of your own money to do this, your just investing your time. Secondly these investors will pay you for the time you spend finding them deals anywhere from a couple hundred dollars to a couple thousand for your finds. The knowledge you should obtain from this however will be the most valuable the do’s and don’ts, red flags to look for, costly expenses, how to price out the area for resell values, dealing with sellers (what to say and what not to say), what to fix, what to leave, ways to cut your cost, and how to determine a cost analysis.
To learn more about how to flip homes for cash check us out at College Of REI.
Filed under: Uncategorized | Tagged: flip this house, flipping, real estate investing, rehab, rehabbing | Leave a Comment »
Posted on August 7, 2008 by therei
This is the 2nd part of a three part series on how to do short sales. Let’s take a look at what you will need to know to do a short sale.
In the first series you learned how to find, contact and talk to a homeowner in foreclosure. Lets look at the next part of the short sale process which involves finalizing paperwork and dealing with the bank.
When you decide that the homeowner’s situation is a good fit for a short sale then set up an appointment. You will have to meet the homeowners to look at the house and get documents signed.
Set up a time to meet with the homeowner at a time convenient for you both. Make sure their spouse is present at the sit down.
Meet with the homeowner at the designated time have them walk you through the house letting them talk. You need to connect with them to gain trust and a working relationship. Once done gaining rapport then the next step is to sit down explain what you do, see if they are interested and start reviewing the paperwork if they want to move forward.
Review the paperwork that they will need to sign for you to start the short sale process. You will also need several items from them which you should try to get why you are there.
Homeowner needs to give you:
Tax Returns – 2 Years
Bank Statements – 2 Months
Pay Stub – 2
You will need them to sign or you will provide:
Authorization to release loan information
Contract to purchase home
This information that you gathered is what the bank or lender considers the short sale package. Never send the package into the bank incomplete.
6) Get the number of the lender or bank to call the loss mitigation department. You need to find the fax number to send the Authorization to. Send in the Authorization then call back in 48 hours to make sure they received it.
To learn more about short sales or real estate investing check out College Of REI.
Filed under: Uncategorized | Tagged: buy home, foreclosure, how to do a short sale, real estate investing, short sale | Leave a Comment »
Posted on August 7, 2008 by therei
Let’s review the first series of how to do a short sale in today’s market. The second and third series will be coming soon.
1) You have to find property in foreclosure, which is easy since by law they must be listed in the local newspaper. Check your local newspaper for the listings of property in foreclosure or you can check with the courts they may produce a list every week.
2) Once you find a list we are going to have to market to them. I send letters to the homeowners asking if I can buy their house.
3) I will send that letter the same day I get the list because the competition can be aggressive in some areas of the country. You want have your letter be the first to arrive at the homeowners doorstep.
4) Make sure you answer your phone when homeowners call you to talk about their situation and how you can help. If you do not answer they will call the next letter and will usually go with the first person that answers their phone.
5) Experiment with different types of letters to see what works best. One letter me get a far better response then another so keep testing.
6) When the homeowner calls holding your letter in their hand just talk to them as if you were helping a friend. Do not start talking about them being in foreclosure, let them tell you their situation.
7) Just ask the questions that we have posted on our download section. This call sheet will get you the information you need to see if a short sale is feasible for this property.
8) Once you have asked the questions you will need to ascertain if this is a good house to do a short sale on. Not all homes or owners warrant your time to do a short sale on their property. Certain homes have a better chance of accomplishing a short sale then others.
I hope this first series on short sales was helpful to you. We have two more series coming out on short sales so stay tuned. For more training on real estate investing and short sales visit us at College Of REI.
Filed under: Uncategorized | Tagged: foreclosure, how to do a short sale, real estate, short sale | Leave a Comment »