tips
No Surprise Here: House Hunting Goes Mobile
Friday, April 6th, 2012 | Real Estate Investing | No Comments
This article underscores the importance that mobile technology is having on the housing market and buyers and sellers alike. A whopping 68% of house hunters are using their mobile devices (smart phones or tablets) to search for home, and then contact a real estate professional to close in on the deal.
In this survey, conducted by The Real Estate Book, the prospective homebuyers who relied on their mobile device during their search found it “an essential tool.” They use them for narrowing their search area, viewing photos and videos, finding details, making inquiries and even setting up viewing appointments. This is a great emphasis on the importance we at SREC place on marketing and taking advantage of all the tools available, including mobile technology.
To read more, click here.
Avoid these real estate markets
Thursday, September 8th, 2011 | Bank owned, Foreclosures, Real Estate Investing | No Comments
That headline sounds pretty ominous, doesn’t it?
Don’t let it scare you! While it is accurate, the flip-side is that there are a whole lot of real estate markets that you can hone in on and make a killing!
That’s what I’m doing in my local market. I told you about my most recent finds, and that was just in one afternoon! The trick is knowing where to look.
For years, many cautious investors have been saying that now is not the best time to invest in real estate. That is one train of thought, and it has, in fact, saved many people from losing a lot of money. BUT, if you have the right information and resources, now’s as good a time as ever. Maybe even better!
Things are finally **starting** to change in select markets. You have to know what those markets are.
— > Know How to Spot Strong Markets here <—
When you click on the link above, you’ll have the chance to gain access to my good friend, Ken Wade’s forecasting video and eBook. He will show you how to get access to tomorrow’s real estate deals, TODAY. And his eBook won’t cost you a cent.
Imagine having a crystal ball for real estate deals in the palm of your hand. Find out which markets are at the top, which are at the bottom and which ones are rebounding. Even better, find out what’s going on in your own backyard.
Ken is a Harvard-trained CPA and has done over $100 Million in real estate deals, so I’d say he knows what he’s doing.
Don’t get me wrong, it’s bad and going to get much get worse in many markets; you still need to avoid them for a while. However, it’s no longer true across the board …you can start dipping your toes in (if you know where).
There’s NOTHING more important than getting in (and out) at the right time, THAT’s how you create generational wealth with real estate and avoid the catastrophe millions of people have been living through.
You have nothing to lose – check it out today.
—> Click here <—
Closing Costs on the Rise
Wednesday, July 27th, 2011 | Real Estate Investing | No Comments
Origination fees. Title fees. Appraisals. Title insurance. Survey charges. Even postage. All these fees add up to the total cost of homeownership for the potential buyer. While we know those additional costs are there, did you know they are on the rise?
On average, the origination fees (underwriting, processing) from lenders have increased over 10% from last year, up to an average of over $1,500. Third party fees (appraisals, title, postage) have increased nearly 8%, to an average of nearly $2,500. These fees don’t even include property taxes, recording fees and homeowner insurance.
So what’s to blame for this increase? Lenders are saying it’s due to the more tightly controlled mortgage regulations from the government. The strict regulations means more staffing and more resources, which is a cost that is passed along to the borrower. There are now extra steps that the lenders have to follow in the process, more forms to fill out. Lenders are being careful not to do anything that would draw attention from Freddie Mac and Fannie Mae, who now have no tolerance for missing documents or paperwork errors.
Are any of these fees negotiable? Some are and some are not. Lender fees and title insurance rates are certainly negotiable, so it pays to shop around. While things like appraisals and credit report fees are not. It’s up to the consumer to ask the right questions and obtain a GFE – good faith estimate – from at least 3 mortgage brokers and 3 banks.
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52 Different Ways to Make Money in Today’s Real Estate Market
Friday, March 18th, 2011 | Bank owned, Commercial Real Estate Investing, Foreclosures, Real Estate Investing, Real estate short sales, Short Sales, Wholesale properties | 5 Comments
Everyone knows that real estate has made more millionaires than any other industry, and that it has a low barrier to entry for a new investor. You don’t need a degree or any experience to begin. You just need a strong work ethic and a desire to learn.
And that’s where we at SREC come in. We’ve been at this for some time, nearly 7 years, and we remember what it was like to start a new business that we knew little about. It was a tough start. With so much conflicting information, the real estate landscape is littered with courses and gurus that promise untold riches if you follow their system.
What we learned is that the only real short cut is education and action — both the kind you get from being on the streets buying property, and the kind you get from working with other investors who have achieved the success that you want to experience.
What we hope to do here is give you a snapshot look at the strategies we have used to make money, no matter what the situation. I hope you see the tremendous opportunity for serious wealth accumulation, and the fun you can have by using so many different exit strategies.
Consider this a grab-bag look at all the different ways to make money with real estate, depending on the situation – there’s actually more than 52 ways included here. This is where it gets fun.
- Sheriff’s Auction (1) – This is the method banks use to take back properties in default from those homeowners who have failed to make their mortgage payments. With some research, effort and some luck, you can pick up a good property here. Once you have made your bid, put your money down, and seen the house — what’s next? Well, it depends on what you want to do. What repairs need to be made? What is the neighborhood like? Is there demand for housing? Is there employment? In answering the above questions, you can decide to do any of the following: wholesale the house to an investor or end buyer who wants it (2); rehab the house and sell (3), or keep it as a rental (4).
- Free & Clear List – This is a list for purchase that provides the names of those individuals in your market that own their properties outright. In other words, they have equity because they have owned their houses for a number of years, and have kept current with their payments. Once you have one of these houses under contract, you have a multitude of ways to make money. For instance, you can wholesale the house to an investor who will make repairs (5), or you can rehab the house and sell it yourself (6). You might decide make the repairs and rent the house (7), adding to your rental portfolio. Here’s another strategy, but it’s somewhat advanced: You can buy the house using owner financing and then sell as a lease option (8). You can also set up what’s called an equity split (9) by making an agreement with the seller on the front end that, for a discount on the house once it is rehabbed and sold, you’ll give him or her a percentage of the profit.
- Out-of-State Owner – This is very simply a list of out-of-state owners. These people may be landlords who have property out-of-state (consider all the Californians that were buying cheap residential property in the Midwest during the housing boom). They might also be individuals looking to get rid of that vacation home as a way to cut back on expenses. These individuals can be extremely motivated to sell fast once they grow tired of the care, maintenance, and general expense associated with their property. There are two strategies to use, depending on whether the property has equity or is in default. If the house has equity, you can treat the transaction just as you would any other house with equity — wholesale (10), rehab and sell (11); rehab and rent (12); or buy using owner financing and sell as a lease option (13). If the house doesn’t have equity, then you’ll need to short sale (14) it, wholesale (15) it, rehab and sell (16) it, or keep it as a rental (17). One other option is that you could simply send the lead to another investor (18), who can pursue any of the above strategies.
- Fire-Damaged Houses – These are people looking to sell a home that has been damaged by fire. As a general rule, if you decide to take on one of these, then you need to have a crack team of contractors to back you up. Depending on the damage, it may be cheaper to knock the house down and rebuild than to make the repairs (19). That being said, for some investors, fire-damaged houses are cash cows. They like the fact that if they can get to the seller before the insurance money arrives, the seller can be instructed to pay down the mortgage, which creates equity and room for a discounted offer to be accepted. Essentially, in the above scenario, the investor can buy cheap, rehab and sell (20), rehab and rent (21), or simply wholesale (22) to someone else looking for a project.
- Probate – This is the legal process of determining the validity of a will, paying off the debts of the estate and determining who is to receive the remainder of the estate. What this means for you as an investor is that, when targeting probate houses, you’re looking for houses that have been inherited. Such houses go to family members who don’t want them and are looking to sell, fast. They are a great way to find motivated sellers. Unfortunately, depending on the specific situations (such as if a will is involved), the house can be tied up in probate for several months and the waiting will seem to drag on forever. So what are your exit strategies here? Well, if the house has equity, you can wholesale (23), retail (24), or buy, fix and rent (25). Likewise, if it doesn’t have equity, you’ll need to go through the process of a short sale (26), and then wholesale (27); retail (28); or buy, fix, and rent (29). Or you can just act as a bird dog (30) and send the lead to another investor for a fee.
- Divorce List – People looking to get rid of a house due to a divorce can be motivated sellers. Your primary strategy when working with a property in this situation is going to be a short sale. There just aren’t too many houses that aren’t upside down these days. Besides, since financial stress is the leading cause of divorce, chances are slim that you’re going to find a house in a divorce case that has equity. That means a short sale. Once completed, you can use the strategies mentioned above to turn your hard work into pocket money.
- NOD List – The Notice of Default list includes all the names of those people in your market who are 90 days late in paying their mortgage. At this point, the lender has filed a notice of default and has begun the foreclosure process. But as a way to find motivated sellers, it can’t be beat. They may not want to sell when you first contact them, but just keep coming back (ask for permission first) and at some point, most wake up and see that losing the house is a certainty, and that they need to consider the next step. You won’t find too many houses on this list that have equity. Thus, your primary exit strategy will be to do a short sale (31). From there, you can wholesale (32), rehab and retail (33), rehab and rent (34), or whatever is appropriate here.
- Code Violations – Many cities and towns across the U.S. have empowered their building departments to inspect houses in their municipalities to make sure that they are being maintained. The inspector will assign a violation that the homeowner has to address by making the necessary repair in a specific amount of time. A house that is on this list often suggests financial distress, which usually means motivated sellers. Exit strategies for houses in this group are wide open. While most won’t have equity, you may come across a few that do. The strategy you choose depends on what you find. Wholesale them (35); buy, fix, and sell them (36); or keep them for your rental portfolio (37). For those without equity, pursue a short sale (38).
- Driving for Dollars (39)– When you’re driving around town, keep your eyes out for distressed properties. Indicators of distressed properties often include things like peeling paint, shoddy roofs, tall grass, mail at the doorstep, etc. With a little effort — either by knocking on the door to see if anyone is home, or by checking with the neighbors to see if anything is known about the house — you can get enough information to track down the owners to see if they are willing to sell. What you do for a money-making exit strategy depends on if the property has equity. If it does, by now you should know what to do: wholesale (40); buy, fix, and sell (41); or keep it as a rental (42). If there isn’t any equity, then your strategy is…? You guessed it — short sale (43).
- Tax Liens – Property owners who do not pay their property taxes often will be subject to a tax lien. Usually, the two go hand in hand, but what you need to know is that property taxes take precedence over mortgages, which means that the city can sell the house for cheap. The reason they sell cheap is that they are just looking for enough money to cover the taxes, which should be a smaller amount than what’s owed on the mortgage. These leads can be a great opportunity for you, but you’ll also face some competition from other investors in your market. Since many of these houses won’t have equity, you’ll need to pursue a short sale (44) with the foreclosing lender in order to do anything with it.
- Bird-Dogging – This is simply the practice of providing secured leads to other real estate investors for a fee. You’re doing the leg-work. You can either sell your lists to local investors (45) for $1000 (making sure to update them monthly for continuity), or take the time to qualify the lead, set the appointment, etc., and deliver a done-for-you lead service for investors (46) willing to pay your price. As you acquire these opportunities to buy houses, you should use some of them to help you build your network of buyers — other investors, rehabbers, landlords — in your area.
- Buy the house outright as a traditional sale, take ownership of it and then resell it.
- Assignment (47) – An assignment is a good option when you have a house under contract, but for whatever reason you decide that you’d rather not buy it. Since every lead is money, you don’t want to just walk away. If you don’t want to make the buy, then another investor in your market probably will, if the contract price is low enough. This is called wholesaling. The process involves the use of an assignment form, which gives the new investor the right to buy the house for a fee that goes to you in return for you giving them your contract and pre-negotiated price.
- Back-to-Back Closing (48) – This will be an important strategy when you need to sell fast, and you don’t want to hold onto the property for more than a few days. In a back-to-back transaction, the investor (B) buys the property from the bank/seller (A) and then immediately sells to the end-buyer (C).
- FSBO – For Sale By Owner (49) – You own a property, and are looking for a buyer to sell directly to.
- Green Light Selling System – When you use this strategy, you are using a combination of yard signs, staging, and the Internet to generate interested buyers. There is a three-phase approach we use to getting massive amounts of traffic (potential buyers) to the house.
- Wholesaling (50) – This is when you sell a property quickly to a buyer who will close quickly and accept the property in its as-is? condition — even if it needs work. Another way to think of it is being a middle man. Wholesalers buy low and sell fast with little to no work done on the property.
- REOs –These are properties that have gone through the foreclosure process and have been taken back by the bank. They are usually listed with a specific real estate agent in your area (or several) who is then responsible for selling the property.
- Short Sale – A short sale will occur when the bank agrees to take less than what is owed on the home’s mortgage. In essence, they are shorting? the loan. This gives real estate investors a wonderful opportunity to buy property for less than they otherwise could.
- Rehab (Fix and Flip) – This is when you buy, hold, rehab and sell a property (or fix and flip). The common approach for establishing what to offer the Seller is to take the After Repaired Value (ARV) of the house, multiply times 65% then subtract repairs.
- Note Buying (51) – When you buy a note, you become the bank. It is a promise to pay. It must have a beginning date, an ending date, and a place to pay; it must state who to pay and under what terms. In real estate, you need to remember that a note is secured by a mortgage. Without a mortgage, a note is only secured by a person’s promise to pay. When you buy a note, the persons involved are normally the seller of the property (the homeowner), the seller of the note (the bank), and you as the investor looking to buy the note.
- Long Term Rental (52) – You may choose to make money by purchasing a property and then renting it, thereby acting as a landlord. This can be a profitable investment, particularly if you find tenants who will pay their rent towards the eventual purchase of the property (lease to own).
There are a lot of details surrounding each method listed in the article above – but of course there’s not time to get into that here. For more specifics, be sure to download the FREE full report.
Our goal is to give you ways to achieve complete and total financial freedom – be your own boss and control your financial future. We do this through a wide range of products and mentoring programs that can be tailored to meet your specific needs.
To learn how you can take advantage of the current housing market and put money in your pocket NOW, click here and fill in the short form and you’ll get access to tons of free training materials about how you can get an Instant Cash Infusion, including documents, audios and videos. You don’t want to miss this!
Locus of Control
Friday, September 3rd, 2010 | Real Estate Investing | No Comments
Successful people have something called “locus of control,” that describes where and how people feel grounded. Locus of control refers to an individual’s generalized expectations concerning where control over subsequent events resides. In other words, who or what is responsible for what happens? An individual, whose locus of control is external, sees the world through the eyes of someone reacting to circumstances that life imposes upon that person. They don’t believe that they have much control over the outcome of their life. Conversely, an individual with an internal locus of control experiences the world as someone who has choices, no matter what life gives them. Can you guess which group all of our successful coaching clients come from? That’s right, they all have a strong internal locus of control. They understand that life is theirs to create and live. They have a choice. They want to take control of the outcome and live on their own terms.
The Buy Price Formula
Friday, August 27th, 2010 | Real Estate Investing | No Comments
Knowing when to pull the trigger doesn’t have to be complicated. If you know you are getting a good deal then just buy the property, fix it and re-sell it. They key is “buying right.” If you follow this formula, can ballpark repairs with some accuracy, and know your exit strategy then chances are you’re off to a good start. So what’s the “buy price formula”? The formula that I have used and my students have used to buy and resell thousands of properties is this:
Take the after repaired value, multiply times 65% and subtract the repairs. That’s your buy price.
Example:
- Mortgage Amount: $330,000
- House Value: $300,000 after it’s been fully repaired (ARV).
- House Needs: $20,000 in repairs
- As-Is Value: $280,000 as is value = $280,000
- “Buy Price Formula” After Repaired Value (ARV) X’s 65% minus Repairs
- Example: $300,000 X 65% minus $20,000
- Offer Price: 195,000 – $20,000 = $175,000
- Notice that the amount owed is not relevant.
This formula works on all properties, too. Probates, Wholesaling, Short Sales, Free and Clear, Rehabs and REOs. I always like to say that if you’re not embarrassed by your offer, you’re offering too much. Most everyone at some point offers too much, only to find that costs go up, or the property doesn’t sell. Do that enough times and you’re either out of business, or hooked on antacids for heartburn or both! Buy right!
Short Sale Insider Series Tip #2
Tuesday, October 28th, 2008 | Uncategorized | No Comments
Consider this week “FREE” week at Strategic Real Estate Coach. Everyday this week I will post some sort of video or article with tips about Short Sale investing. So be sure to check back!
Everyday when I drive home I have tons of thoughts running through my head. So I decided to start capturing some of those thoughts on video and sharing them with you through something I like to call “The Short Sale Insider Series.”
So be sure to check back consistently to keep up to date with all of the FREE information and tips that we post.
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