Saturday, May 30, 2009

Taking Advantage of the Foreclosure Auctions

I think that the foreclosure auctions are a tremendous opportunity to build a buyers’ list. Here are eleven tips to keep in mind as you attend your next auction:

1. Make sure to bring plenty of business cards with you.
2. Smile and show confidence, when you talk, hand shake and hand out your business cards.
3. Have a clean/professional presentation. Pay attention to details, no dirty shoes and/or shirts, etc.
4. Let the buyers know that you come across great deals BEFORE they get to the auction.
5. Be prepared to obtain their basic contact information (Name, phone number AND email), remember that your goal is to build a buyers’ list.
6. Have your “2 minute presentation” ready. Know who you are and have confidence about you and your services. Your clients can sense your confidence, people like to associate themselves with others that exude confidence.
7. Keep your eyes and ears open. Observe the participation of the auction, you will notice who are the movers and shakers. Anyone that you see buying several properties would be a great person for you to invest some time on them (invite them to lunch) and get to know them and their needs. This is a tip to WOW your potential customers, since you are willing to invest time and money on them and their needs it will make you different that others in the area that are only interested in their commission.
8. The people that participate in the auctions are cash buyers. Remember that at auctions, after someone wins the bid on a property, they have to immediately put down a down payment and then close within 30 days. So these are serious buyers, regardless of the amount of properties they buy.
9. Be persistent. Regardless of the results of this visit, do it again it will sharpen your saw.
10. Follow up. After you collect your buyers information, immediately load it into your contact software (i.e. Outlook) and follow up with them with a thank you email and share a free report with them (Rehab tips, How to Sell Your House on This Market, etc). Again it will make you stand out from the rest of the group of wholesalers/realtors who are only looking to make a quick commission.
11. Remember that all you need is 10 solid buyers. Keep in mind that if you have 10 serious buyers that on average buy one house per month and you make a wholesaling fee of $5,000 per transaction, you are making $50,000 per month. So you do not need all of the cash buyers in your area to join your company to become wealthy.

I hope this tips help you improve your success in your next foreclosure auction.

Saturday, May 23, 2009

Five Easy Steps to Staying Motivated

Motivating yourself to excel in real estate investing, should not be something you do only when the spirit moves you. It’s an ongoing process that should include every facet of your business life. This means your mental attitude, physical well-being and appearance, work atmosphere, your interaction with others (realtors, investors, and sellers alike), and your off-the-job environment.

Motivational experts get paid big bucks to tell professionals, striving for success, that they must constantly examine these factors. How do you do that? Follow the 5 tips that follow, and watch the changes.

1. Maintain a Positive Attitude – Let’s realize that life is only 10% of what happens to us and 90% how we react to it. We’re responsible for our own actions and attitudes, and changing them when appropriate. When you’re around people/things that are uplifting and positive, you feel that way. You have more confidence in yourself, and know you can change whatever needs changing. If you can make your workplace such a place you’ll find yourself achieving production.
2. Leave Personal Troubles Home - Everyone has problems, but they don’t belong at work. Turn your attention and energy entirely to your on-the-job tasks. This will actually be good for you because you’ll get a mental break from your troubles.
3. Create Positive Affirmations - The reason for writing goals for your business is the same as creating positive affirmations on paper. What your eyes see and ears hear, your mind will believe. Try it! After you’ve written them down, read them aloud to yourself – and do it every morning when you get into work. You’ll be amazed at what happens. Come up with a set of new ones every month. Statements such as, “I’m an important and valuable person,” or “I know I’ll make good use of my time today.” Repeating them out loud everyday at a set time will help reinforce positive actions.
4. Make Sure Break Times Are Really Break Times - This is an area where most entrepreneurs fall down. You become so intense about the project or situation you’re working on that you don’t ease up. Thinking that it’ll be solved in the next few seconds, and then you’ll get a cup of coffee can lead you right up to quitting time. Regularly adhering to a specified break schedule, even if you’re the boss, releases the tension.
5. Exercise, Exercise, Exercise - I know that lately it seems that “exercise” is the cure-all to every physical ailment or your love life, but despite that there is some truth to that ugly word. By “exercise” I don’t mean that you should go out and join a gym and spend your lunch-time, 3-days-a-week there working out. What is really beneficial and workable is that at those chiming alerts from your computer, get up and walk around your desk or room. Maybe go outside and get the mail and enjoy the sunlight (if you’re an entrepreneur that has a home office), or just get up and do a few stretches. Concentrated, tense thinking – typing - plotting plans - or whatever your work, makes all those muscles tighten up and knot up. Then when we move we “ooh” and “ouch” because we’ve knotted up into a ball of tension. Periodic stretching, even at our desk, or just getting up and walking over to the window and getting a different view can help. One of the greatest disservice modern business décor has done to us, is making our offices pristine, sleek, unencumbered spaces. There is nothing more relaxing than getting up from your desk and walking over to a peaceful, serene, seascape or pastoral painting and just drinking it in visually. Momentarily transporting your mind out of work and into that place does wonders. A few good paintings and less shiny chrome in offices would benefit us all.

It only takes a little concentrated effort on our part to keep motivated and productive, which leads to success. I know you’re going to hate hearing this, but it’s true anyway – and that is, “WHEN LIFE GIVES YOUR LEMONS – MAKE LEMONADE!”

Tuesday, May 19, 2009

Distressed Property; Is it a Positive Investment?

There are many investments that are made in real estate, most which are expected to allow the price of the property to go up. However, sometimes the value of a property starts down. With the housing market down and foreclosure on the rise, it is tempting to to jump and start buying and selling distressed properties. It is very tempting, specially with all of the infomercials about the riches to be made if you buy there 36 cd and 14 book guarantee to riches with distressed properties. Don’t get me wrong, I love real estate investing. What I don’t like to see is unprepared investors getting hurt in the real estate investment road.

I believe that right now is a good time to invest in real estate and to make money if you are well prepared for it. I think that it would be foolish for some to think that now might be a good time to invest in distressed properties, because they expect to find low hanging fruits that just anybody can pluck. I think it would be foolish to think that all distressed properties are made equal. That type of thinking is what get the inexperienced hurt in real estate investing. So prepare yourself, educate yourself about the your local market and trends, invest on some training, invest time on sites like this one and ask questions to those who have been in the trenches longer than you. There are plenty of books and websites that can teach you the basics, but beware of those that charge thousands of dollars for a “Get Rich Quick Real Estate Plan” (The ones getting rich are them, while you find out that a little bit of information – which usually you find free on sites like this one or on the internet and a lot of cheerleading is a costly combination.)

If you decide that the rehab business or “fix and flip” is your way to make money, then take a moment and study the property before you start. The first thing that should come to your mind is if a property is distressed, it means that it has not had the care and attention needed by the previous owners. Most likely, the home is part of a foreclosure, abandoned home, or other problem and may have not been lived in for a specified amount of time. Any distressed property will need a lot of attention given to it if you decide to invest in the property.

Before looking at this type of property, you will want to make sure that it will be worth your investment. While a distressed property will usually go down thousands of dollars because of the quality, it may not be cheaper. It will be expected that you put a specific amount of work and money into the home in order to repair it and get it back up to being part of the market. In other words, you need to develop an investment budget for the project.

If you are able to get an extra loan, have more money, and want to fix up a home, then a distressed property is for you. However, if you don't want to put in the extra effort, then finding this type of property may loose you money and comfort in your own home. You will also need to decide whether you will be able to profit off of the investment in the long run according to the neighborhood, market, and your intentions for using the property.

While a distressed property can benefit, it will need to fit your goals and your lifestyle in order to be an effective investment. As long as you have assessed your financial stability and goals and are able to put in the extra money, time and work, you can take a distressed property and turn it into what you want. This will give the property the dream of moving from rags to riches.

Monday, May 18, 2009

Real Estate Bird Dogs

Investment is the number one word for real estate. However, those who play a part in the investment will make a large difference in what is available to you. Whether you are working towards finding real estate property for profit or for your first home, knowing where the resources are and what they do can help you find the best deals.

One important person that is part of the real estate investment plan is the real estate bird dogs. The main job of a real estate bird dog is to find property for those who want to invest in real estate property. After they find a property, the investor will then pay them a service fee. The real estate bird dog will have no attachment to the property after it is found and given to the investor, leaving the rest of the changes up to the real estate investor. If one is going to invest in a property, they will expect the real estate bird dog to find them leads that are valuable and can be sold at a good price.

Part of your professional team should include good birddogs that understand the type of properties you are looking for. Understanding the process of real estate, and using the different resources can help you to find the best deals and make the best deals. If you aren't sure where to start, using a real estate bird dog is a good way to sniff out what is available to you. This will give you the ability to claim or give away a piece of property on the market.

Saturday, May 16, 2009

What to Look for in a Foreclosed Home

The first thing you should look for – or look forward to - is weeks and even months of diligent research. The opportunities in foreclosed homes often fall into the old adage, “If something sounds too good to be true, it usually is.” What is true is that some foreclosed homes will sell at 50% or more below market.

Location

If the foreclosure opportunity you’re looking for is an investment opportunity, then you would be wise to review five years or more of real estate sales history in the area. Have the homes appreciated sufficiently to make your investment risk worthwhile? The property doesn’t have to be in an exclusive neighborhood, but it should be in an economically stable area. This is not an issue of who is moving in and who is moving out, but rather how much is being paid for the homes changing hands.

One recently introduced factor to consider if you’re looking in the Southeast is the cost of homeowner’s insurance and coverage for windstorms. You might find some real bargains in Hurricane Lane there, but also find yourself buying a house you can’t afford to insure. You will also find areas where flood insurance is simply no longer available.

Physical Condition

Consider the circumstances of a foreclosure. Most people lose their grip on their homes after struggling to meet mortgage payments for an extended period of time. That probably means the home has received little or no maintenance, and the property you’re inspecting may appear to be in poor shape. If it’s in a quality location however, ignore the condition for the moment, take note of the obvious signs of deterioration, and incorporate rehab costs into your calculations.

Analyze the Competition

Keep in mind that just as in any real estate market, you are bidding against professionals. There are people in most areas who make a living from buying foreclosed properties, cleaning them up and putting them right back on the market. Professionals operating in that fashion may not be willing to bid up near market price for the neighborhood, but with any well located property you’re not going to walk away with a “steal.” Take a look at recent foreclosure sales in the area and see if you can find a pattern in the successful bids – how far below market are they?

Clean Title

With any foreclosed property you need to look closely at the condition of the building’s title. Check to see if there are any liens on it other than that of the lender who is selling it. If you can, determine if the former owner is embroiled in any lawsuits that could conceivably lead to a challenge of the sale and tying up the property. In theory, once a property reaches the foreclosure stage it is going to market unencumbered. That means nothing to an attorney who sees opportunity in attempting to delay disbursement of the former owner’s principal asset. Delay is the operative word here; if you’re going to invest in a property you need to be able to put it to work for you with dispatch.

I hope these tips help you in your real estate investing process. If you want to learn more about real estate investing, I invite you to join for free our mailing list and receive our monthly newsletter packed with tips and insight to help you become a savvy real estate investor. Go to http://tinyurl.com/rcs6al and join our mailing list.

Friday, May 15, 2009

Is Real Estate Investing For You?

This topic may sound harsh to many of you. If you are new or thinking about starting a profession as a real estate investor it is a question that you must ask yourself. It is important to find out now, rather than later so you won’t waste your efforts, time and money. My goal here is not to scare you, it is to help you be successful in life. Do you have what it takes?

We all have our own unique reasons why we want to be involved in this business. Among the most popular choices are “being your own boss” , the possibility of “financial freedom”, and having your own TV Series (hey you never know you may be the next Donald). Many are attracted to this business for the simple fact that real estate investing has made more millionaires than any other business in history. Ask yourself; What are your reasons?

Real estate investing is not a shortcut to wealth, despite what many of so-called “Gurus” say. They will motivate you to buy their books and tapes, go to their “Rah Rah” seminars and the only ones building wealth are them. In this profession, that I love and I am pationate about, to be successful you must have:
• Patience
• Persistance
• Faith
• Desire
• Specialized Knowledge
• Self-confidence
• Imagination
• Organization
• Courage

Over the last 18 years, I have seen many people succeed and fail in real estate investing. I will share with you the traits that would indicate to me that a person is not ready for this profession:
1. They want to know “every single detail” on how to do something, before they do it. Some of them become part of the elite group of “Real Estate Investing Book Investors”. They invest in books about real estate investing for months, even years and do nothing since they will never know every single detail of a transaction.
2. They are easily influenced and let others inoculate fear serum in them.
3. They are pessimists and see nothing but pitfalls to real estate investing; “But what if…? Or I don’t think I can…?”. Remember the wise words of Napoleon Hill “Whatever your mind can conceive and believe it can achieve” This applies to success and failure. Another person once told me “You find what you are looking for”, if what you are looking for is the way that a real estate transaction does not work, you will find it.
4. They lack commitment to make personal sacrifices to reach their goals.
5. They are the type of person that waits for “things to happen”, instead of taking control and making things happen. They let others or outside factors dictate their lives.
6. They expect overnight success and quit at the first sign of difficulty.
7. They are afraid of competition. (Let me give you a hot tip: You are not the only real estate investor in the United States, nor your state, nor your city)
8. They do not commit to learning and applying what they learn. Knowledge by itself is just potential power. The only way we convert our knowledge into wealth is by applying what we have learned.
9. They refuse to give up hobbies and time-wasters in order to succeed.
10. They are easily scared by the big numbers of real estate investing.

My advice to you is to take a hard and honest look at yourself and the question I posed here. If, after consideration, you answer yes, then welcome to the club!. Invest in yourself and your business every day and never give up your dreams.

Thursday, May 14, 2009

Why Wholesaling?

I decided today to answer one question many times I am asked why do I recommend wholesaling to those that are starting in the world of real estate investing. I have been in real estate investing for over 18 years (whoo hoo!). During those 18 years I have seen the ups and downs of the market and I have seen and learned from the mistakes that many people make in real estate investing.

One of the mistakes I see often made by those starting is that they chew more than they can swallow. Hence, the reason I think that one of the best ways to get started is through wholesaling. Wholesaling can be defined as the art of contracting properties that you plan to resell to another investor, wholesaler or retail customer before you close on the property.

So here are five reasons I think you should consider wholesaling when you are starting:
  1. It lowers the risk of getting involved in real estate investing.
  2. It is an excellent way to learn your market and learn more.
  3. It is a great way to meet other investors and learn from them.
  4. You can generate cash quick.
  5. You will find great buy and hold opportunities to build your real estate portfolio.
Today I still wholesale transactions as part of my real estate investing strategies. It has been the way I select the properties I want to keep and I know that the properties I wholesale are great quality properties. Start slow and take smaller bites as you start.

Great Real Estate Myths

If you pay attention to what people have to say about real estate investing, you will notice that most of the perception they have is based on fear. Most people will believe whatever they hear to be able to justify that fear. Mix to that fear a touch of laziness and disorganization and you get the most wealth preventing myths about real estate investing ever created. Now think about this, these individuals will procreate and conceive children whom they will infuse with the same fear serum and we get a great population of individuals not able to achieve their full potential.

Most of the myths discussed here and that you hear people talk about, are fear based. Others can be managed if we were to educate ourselves about the business, in this case real estate investing, we are about to embark. If you want to make money in real estate, you have to separate the myth from facts.

What are those myths?

1. REAL ESTATE INVESTING IS EASY – Real estate investing is not easy, it is SIMPLE. Unfortunatelty there are a lot of “gurus” out there selling the idea that if you buy their books and tapes you will discover “secrets” that will make real estate investing easy. What we have are basic principles to follow which makes it simple. It takes time, desire and dedication to learn those basics and be successful at it.
2. INVESTING IS A GAMBLE - There are many people that believe that any type of investing, including real estate investing, is about luck. The problem with these “investors”, is that they throw their money to anything that looks good, to the new “hot tip of the day”. These investors do not take time to educate themselves on what is a good investment and not to invest on emotions.
3. IT DOES NOT WORK IN MY MARKET - Real estate investing works in every market. You need to take into consideration that it may work differently in some markets compared to others. There are real estate investors making money in every city, every day of the week. You must educate yourself about your market. Learn about the rents, the trends, demands of your local market. Adapt the basic principles mentioned above to your local market.
4. I HAVE NO TIME – Like someone told me one day, “throw your television, and you will have all the time you need.” Real estate investing like any business takes time. You need to organize your tasks to be successful in any business.
5. YOU NEED MONEY TO INVEST IN REAL ESTATE – Focus on finding good deals, the money will find you. If you find good deals, you will find willing partners to join you on your investment.
6. “EVERYONE” SAYS THIS STUFF DOES NOT WORK – As I mentioned above, real estate investing is not easy. If you listen to all of the pessimists you will meet around your neighborhood and the news in the television, you will convince yourself that it does not work. Instead, gather information from those that have been investing for a long period of time. Those that have been through the ups and downs of the market. Find out what has made them successful. Remember the wise words of Henry Ford “Whether you think you can or think you can’t, you are right.”
7. I CANNOT INVEST IN REAL ESTATE SINCE I HAVE BAD CREDIT – Good credit helps. You do not need to have good/perfect credit to invest in real estate. There are a couple of creative investment options (flipping properties) that you can do even if you have bad credit. You can start with a method like bird-dogging or flipping properties and build up some capital, while you repair your bad credit.
8. YOU NEED TO TIME THE MARKET – Unless you have a crystal ball, you will never know what is going to happen in the market. The bottom-line is that you have to find good deals. Good deals work in any market condition.
9. ALL REAL ESTATE IS A GOOD INVESTMENT – Only good deals are good investments. It is not about the vehicle you use (buy and hold, short sale, wholesale, etc), it is about finding good deals.
10. REAL ESTATE IS TOO RISKY – You have to be willing to take calculated risk to make money. In my opinion, real estate is one of the safest investments you can have. The highest risk in any investment lies in the lack of education. The more you educate yourself, the less risky real estate investing becomes.

You are not alone in believing any of these things, they are said so often they sound like facts.