I wanted to throw down my real estate investing goals and thoughts for 2012.
I’m excited about the year, the current market, and the potential opportunities.
I was not around during the boom of real estate when the deals flowed like honey.  In fact, I started investing in real estate approximately 4 years ago; after the crash.

I’m surrounded by people that just don’t understand.
I tell people that I’m in real estate and they usually reply with “wow, isn’t this a tough time to be in real estate?”
The only thing I reply with is: No, it’s a great time, you’ve got to have a niche in this economy

They may think I’m crazy – they may not – I don’t really care.  Either way, those are the facts.
Wealth is made when there is fear in the air.
Success happens when people look the other way because that’s what the masses are doing.

I feel blessed to have been able to be self-employed for the last 4 years without having a traditional W-2 job in that time frame.
There’s no boss, and I’m the first to admit that this has both pros and cons.
There’s nobody to tell you what to do — Yesss!!
But…there’s nobody to Tell you what to do — Yikes!
So you better have a gameplan – goals, etc.

My First plan of attack for 2012
Always have my day/week/month lined up.
Being self-employed, there are times when you feel that you’re not getting done what you need to – and it’s a strange feeling.
This comes from being trained at a job where you clock in and out — when you’re ‘in’ you’re working and when you’re ‘out’ you’re not.

Well, being self-employed, the wheels never stop turning.  That doesn’t mean that I work 24/7 and nor does it mean that I have to.  But a great idea may come to me at any time (for me the shower and in the middle of the night are two of these times) so always have a pen/paper handy to jot these ideas down – by the way, that’s not from me, I learned that from the billionaire Richard Branson.

If you don’t have a written list with your tasks that’s prioritized then you’re wasting your time.
Have a list that you’re going to accomplish the following day created the evening Before!
Set goals for the year — but work backwards and set monthly goals and even weekly goals — this way, you can break items down into bite sized attainable chunks — a great book I’d recommend on this topic is Eat that Frog by Brian Tracy (cheesy name I know, but an effective book; I’ve read and highlighted multiple times).

That being said, I’m Nowhere near where I want to be financially.
I am single and am close to owning my house outright (a year renovation in itself that I will write about), but if I had a wife and children I’d be feeling the pressures of financial life.

2nd Goal for 2012
Buy at least 1 rental property per year with cash or financing at an LTV of 50% max.
Why?  Less stress, hassles, etc.
Is this the smartest thing for you to do?  It completely depends — on your personal goals, on your lifestyle goals, etc.
It’s like renting vs. owning – there are strategic reasons to rent – owning is not always the better choice.
If I fully finance houses (whether via a bank or private lender) it takes a lot more houses (headache) to make the same monthly cash flow.
Let’s use really simple numbers.  If I get $750 in rent and my payment on a financed house is $250, then it takes me 3 houses to get the same cash flow as if I owned 2 houses free and clear.  Am I saying that this is what You should do?  No.  Do I think that using other people’s money is great and that you can leverage this borrowing power?  Yes.  Do I feel pressure when I owe people money?  Yes.  Do I like this?  No.  Am I willing to take less of an ROI for less pressure and headache?  Yes.  But that’s Me.  What are your thoughts?

Big #3 for 2012
I can use this message and I think you all can too.  Market and Get More Leads.  I don’t do the amount of deals that I want because I’m not having enough sellers ask me to make an offer on their house.
If you’re not making offers, you can’t purchase.  If you’re not marketing, you can’t make offers.  It’s a vicious cycle that’s so simple to see but in reality is hard to fight against.  Most investors (yes I’m raising my hand) market and when they get a deal they slow down their marketing effort (or even stop) the marketing.  Then they make some cash and have to get the wheels turning for marketing again.  This is so easy to see objectively, but it’s much harder when it’s your own business.  For example, I know that I need to market consistently, but I can honestly say that I haven’t done this correctly in 3 years.  I have poked at a multitude of marketing (mls offers, postcards, letters, bandit signs, networking, craigslist, google adwords, natural search to my house buying site, REO agents, driving for dollars, etc. etc.) but never on a consistent basis yearly.  This takes patience, dedication, and discipline.

So in 2012, I plan to have at least 3 arms of marketing that will be consistent for the entire year whether I get deals or not.  Because the truth is that I will get deals.  The marketing works, you just have to have faith and trust in the system.  It may be that the deal pops out 90 days from when I first put the wheels in motion, but it will pop out.

These are 3 huge goals for my investing business in 2012 — What are Yours?

I will admit that I have many qualities that need brushing up.  One of many is that I tend to want to finish people’s sentences at times.  It is usually done out of excitement but still involves me assuming what someone is about to say – not good.  Thank Goodness for New Years Resolutions!  With that out in the open, I have two important messages today for your real estate investing business.

First: you were created with two ears and one mouth for a very specific reason. I truly believe that listening is much more important than the skill of speaking.

People love to talk about themselves. It’s human nature. When a potential seller calls me from advertising, I have a list of 12 or so questions that I ask them. I can typically get all of the answers that I need with 3-4 questions. My goal is to just ask a question and listen. If you are kind hearted and genuinely show interest in a person, they will open up to you. If they feel comfortable and know that you truly care this business becomes much easier.

Second: Think before you speak. Don’t interrupt people. Don’t jump to conclusions about what they are telling you. Don’t Ass-u-me that you know exactly what they are going to say.  As already mentioned, I am constantly working to improve on this one, no matter how excited I get during a conversation.

So today I want you to know what happens if you don’t listen carefully and you speak before you think.

Ouch! Every time I watch this video I hurt for this guy. Yes, the kid was excited and hyped off coffee, but if he had taken a few more seconds to think it through, he would have gotten it correct. He’s not dumb (well, some would argue otherwise) but he made an assumption that the first question is as easy as they come and there’s no way that he could miss it.

Well, he was wrong. For your sake (and for all of your friends and family watching you on national television) please make sure that you listen more than you talk and that you think before you speak.

One more, just to drive the point home…

I am often asked how I find contractors for my renovation projects that work so inexpensively. I respond with, “It comes with a lot of hard work and experience” – Not! I simply know where to look to get contractors to do work for a reasonable price, and you can too with a little clandestine handy work. So put on your tuxedo and give me your best Tom Cruise impersonation (jumping on your sofa qualifies as an impersonation) because we are going to dive right on in (Mission Impossible theme music in the background…)

 
1. New Track Home Subdivisions – Most of you have a Ryan’s Homes, Mitchell Homes, Pulte Homes , or a DR Horton Homes in your area. These are regional or national homebuilding companies. These companies spend a tremendous amount of time and effort to get the best and the least expensive contractors to do work for them. They promise the contractors volume so they usually do a job way cheaper than they would normally do it for. You can literally any time of the day, drive these newer subdivisions and see the guys working on houses and approach them and tell them what you do. I once paid $2000 for a roof on a rehab project that would normally costs $4500 using this method!
2. MLS Sniping – You can literally have your real estate agent pull up a list of houses that are on the market that look like they have been recently renovated . You can then get the listing agent’s phone number and call them up. Ask them if they can get you in touch with the owner that did the great job on their listed house (a little flattery goes a long way). Then you call up the owner and ask them for their number to their contractor . Sometimes they will tell you sometimes they won’t. If they won’t, there are other ways to find out. (Mission Impossible music playing in the background…)
3. “The Dumpster Effect” – You can drive around and look for houses with dumpsters in the yard. You know those big old 20, 30, or 40 yard dumpsters. When you see these more times than not  there is a rehab going on. You can stop  and introduce yourself to the contractors (FYI – I would ask the owner of the property’s permission first). If the owner is not there and there is a permit posted in a window or on a post you can read the contractors name and phone number off the permit and simply call them up.
4. Supply Houses – If you are trying to find a certain trade to do work you can call the place they get their supplies! You just call the local supply house for that trade and ask for referrals (most cities have several). I like this method because typically the supply house workers are only going to refer contractors that pay their bills on time and frequent their business a lot. To find these supply houses in your area just google the name of the trade (i.e. electrician or electrical) and the words “supply house” or “supplies” and your city or county name and state.
5. “The Daily Record” – Most municipalities have a newspaper that tells you what has been filed at the courthouse that day – deed transfers, mortgages, liens, bankruptcies, divorces, permits pulled – Stop right there… Did I just say permits pulled? In my area we have a paper called the “Daily Record”. Any day of the week you can get your hands on this newspaper and see who pulled permits for what house. I know you can probably see where this is going. You look at who pulled the permits for what house. Log the address in your GPS. Drive by the house during the day and BAM you have your contractors.
6. Running Ads – When I first got started in real estate investing I ran an ad in my local newspaper and on internet classified websites that read: Local Investor looking for Quality Contractors to do Multiple Jobs in the (blank) County Area, Call Me @ 251-. I had several people call me but one guy stood out. To this day, over 5 years later, he does the majority of my rehab work very inexpensively.
7. Your Local REIA: This is pretty much self explanatory. You can network at your local Real Estate Investor’s Association (REIA) – The one in Mobile and Baldwin County, AL is called Port City Real Estate Investor’s Association (PortCityREIA.com). Most times investors, real estate agents, mortgage, and title professionals that come to these meeting are willing to share with you their quality inexpensive contractors that they use on a regular basis.
8. We Buy Houses signs – The people that put these signs out are obviously investors looking to buy houses. Some of them already have contractors in place they are willing to share with you if you share some of your contractors with them.

That sums it up! I hope this article gave a you a glimpse on how you can find good, quality, inexpensive , reliable contractors to do you renovation projects for you.

Get tips like this and other valuable resources to help you become the best real estate investor you can be by going to my website at www. JoinMyREIMastermind.com

Lawrence Roberts

This article will self-destruct in 3 seconds…

So I just figured out a way to make $25 every time I go to my local recycle center to drop off my paper, plastic, and glass.  This $25 goes directly back into my real estate investing business.  It ain’t pretty, but it’s effective.

I’m gonna keep it simple and let you connect the dots.

Did you connect the dots???

And if you look closely, you’ll see some super cheap property pricing!

Yes, we actually have properties in my market that you can sell for $9,900.

And yes, we can actually buy it for much cheaper in order to make money.

This is your free tip of the day – if you’re in my market, don’t go stealing my stakes

If you have another tip, feel free to share!

And make sure you join our email list for ninja investing tips!

A friend and I got into a private concert of an artist that I really wanted to see.  You couldn’t buy tickets.  You had to win them or be given them, and we had done neither…

This reminded me of 3 very important life/business lessons that I want to share with you.

1)      Showing up is half the battle.

2)      Being kind pays dividends.

3)      You appreciate things that you work for more than things given to you for free.

You may or may not have heard of this guy – they are blasting this brand new guy all over our local radio – and since I live in Alabama, you guys probably already own his second album.

Andy Grammer, if you’re listening, great show – you’re song is catchy, positive, and instantly transforms me into a happier mood – you should All have a listen!

Keep Your Head Up

Showing up is half the battle.

95% of people would have said, “Oh well, we didn’t win tickets, too bad.”  But we didn’t – we showed up.  We thought that tons of people would have had the same idea that we had.  They didn’t  – we showed up.  Since this was in a downstairs section of a cool restaurant on our bay, we decided that our worst case scenario would involve having some food, a good time, and heading home.  But we got in!

Being kind pays dividends.

We arrived and scoped out where the show was going to be held.  We walked up to the ticket booth and said “Hello!”  They said, “What’s up guys, here for the show?” We responded with, “Absolutely, but we don’t have tickets, so we’re just gonna’ eat and try our best to overhear.”  He told us that he didn’t think it would be a packed out show. After some friendly conversation he asked us our names, said it was nice to meet us, and then added us to the bottom of the guest list.  We thanked him and went upstairs to grab a meal before the show.

You appreciate things that you work for more than things given to you for free.

When I caught a glimpse at the guest list there had to be at least 100 names on it.  This show was intimate with only approximately 50 people.  People received a FREE ticket and couldn’t even get away from whatever TV show they were watching in order to come listen to some great live music.  They didn’t appreciate it because they didn’t have to do anything in order to get it.

Show up, be kind, and appreciate.

About Andy Grammer – His story behind the song was pretty cool.  He mentioned waking up early to load up his mom’s van in order to race out to get one of the best spots in LA to sit and play.  After a day of earning like $15 he came home and wrote this song.  He said, “I’m sure glad I did.”

Overview:

I recently made a $5,000 wholesale fee on a property that I bought at a real estate bank auction.

The foreclosure auctions are not the only place to find great auction deals.  Some banks hold their inventory for too long and need to get it off their books and will sometimes hold their own auction after the property has been on the market for a while with no bites. Some auctions have a reserve price and are not as desirable because a certain price has to be met before they have to sell the property.  This particular auction was an absolute auction with no reserve or minimums – meaning that whatever came in as the highest bid was the price that the property was going to be sold at – I’ll add that this is quite uncommon.

How I acquired the deal:

I was out taking pictures for a BPO [I’m actually in the process of creating an educational product on ‘how to make money doing bpos’] and I happened to see an auction sign at a property – I had never heard of this auction company before.

I researched them online and realized that the online auction was happening the very next day!  I actually put it at the back of my mind, because I just assumed that there would be a bidding war and an owner occupant would win out on this house – bad assumption.

The next day I was knocking items off of my to-do list and I remembered the auction just in time!

65 minutes to go – and this property was only at $15k – to put that into perspective, the lowest property sold in this neighborhood was $51k – and that’s investor pricing.

So I perked up and got attentive.  I quickly read the rules on the auction site and signed up as a user.

48 minutes to go.

An investor friend of mine happened to be online and I asked him what he thought about the house.  He confirmed that it was a deal and we mulled over a max bid – we picked $37k as our high bid and stuck to it.

3 minutes to go.

Another investor placed a bid and our higher bid was automatically placed at $35k.

O minutes to go.

We won the auction at $35k ($38.5k including the 10% auction premium)

Now it was time to go see the property! Yes, truth be told, we bought it sight unseen.  All that we had to go by were a few pictures from the MLS.  But how bad could it be?!?  PS – This action is not recommended for beginners.

The absolute worst case scenario meant that we would pass on the deal and would only be charged $2,500 to my credit card on file – now I sure didn’t want that that to happen but it wouldn’t be the end of the world ; )

We calculated that it needed $25-30k in repairs.

The property would fly off the shelf at $105k but might sell as high as $110-115k.

My investor pal has some cheaper sources of money than I do, so I was willing to sell the property to him and collect the $5,000 difference as immediate profit.

This was a tough decision for me to make.  As every time I wholesale a property for a fee, I leave the potential for a lot more money on the table.  But I also lower my risk to basically zero, take a quick payday, and free my time to go find another deal – I can always renovate the next one!

I am also going to list the property for him after it is renovated and will make a commission on the listing as a real estate agent.

The Specific Details of this Wholesale Flip:

If you want to know the details of the deal, this is how it actually went down —- the nitty gritty.

The offer was actually made in the company name that the end buyer and myself both actually started a year or so ago.  The plan was for us to quit claim deed the property to his entity and I would be paid $5,000 to give up ownership rights.  Doing this is much cheaper than having a separate closing and set of costs in order to transfer title.  Well, we actually got the seller to add the end buyer’s company to the contract before we closed, so we were able to deed the property directly to his entity and pay my fee all on the same HUD-1.

Resources for you to go to find the same type of deal:

www.REDC.com

http://www.realtybid.com/

http://www.rowellauctions.com/ (who I purchased this property through)

https://www.bidselect.com/

http://www.williamsauction.com/

You can register with these online auction sites and actually create a watch list on some of them and they will actually email you when auctions are coming up in your area.

Conclusion:

To me this was a successful transaction.  I minimized my time in this deal to less than 7 days from contract to close, put up $5,000 EMD which was returned in less than 7 days, and made a 100% return on that investment by making a $5,000 wholesale fee.

His money funded the deal.  I collected $5,000. Everyone is happy.

Have you purchased (or looked at purchasing) an auction property before?  Please share what you’ve seen in your marketplace so that we may learn from you!

First of all, let’s define the term BPO.  The definition of a BPO (which stands for broker price opinion) is a report prepared by a real estate licensee that gives their opinion of the current market value of a particular property.  The BPO has become an important tool in valuing assets in the current marketplace – they are used for negotiating short sales, pricing foreclosures, loan modifications, and mortgage refinances.

Professional BPO agents can make a lot of money.  Many agents are learning to do broker price opinions in their part time in order to make an extra $1,000-$2,000 per month in income.

We’re off to the races on research and development for our new digital product that will be an incredible answer to the commonly asked question ‘’how can I make more money as a real estate agent in today’s market?”

The answer: perform BPOs

We are going to be creating this product publicly – partly to keep us accountable, but also so that feedback can be provided where needed -you can view the initial bpo article here to get an overview of what this product will offer.

I want to share what we have accomplished up to this point:

• Software used for collaboration
• Keyword Research
• BPO Company List Compilation

Let’s get started.

Software Used for Collaboration

We have decided to use www.basecamphq.com for our collaborative efforts.  I have great things about it and have been looking for a reason to give it a try.  It’s a paid service, but is free if you only have one project that you are collaborating on – we went with the free version.

Keyword Research

We used google’s keyword search tool in order to discover search terms and see the traffic for each. I also sat down for an hour and manually ran a number of google searches to measure returns.  I took specific notes on specific results that were returned.  The goal is to determine how we can best be discovered in a google search.  This includes determining our competition for bpo search terms, discovering other bpo educational products out there, and figuring out the best channels for distribution to get this out to those who need it the most!

BPO Company List Compilation

PPhhhhewww [brow wiping involved]!  We have finalized the list of companies that will be included in the eBook.  We want the list to be accurate and useful.  BPO companies come and go.  There are of course a number of big players to work with, but there are many reputable smaller companies that have to be found, given that they don’t advertise in a major way.  We plan to give our customers the best information possible with our opinion of each company.  We’ll possibly use a star rating system or a grade scale of some type.

This is where we are now.  In the next BPO product post, we will be covering:

Channel distribution research

Domain name research

Networking done for promotion

BPO company updates

Leave a comment if you have questions or ideas about how we can improve our digital product.  In the meantime, I hope that you’re pushing hard and striving to be better in your personal life and in your business.