Should New Real Estate Investors Attend Local REIA Meetings?

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By Lex Levinrad

Find the local Real Estate Investment Club in your area and go to the meetings. Attend each meeting religiously. Get involved, become a member and make new friends with other investors who want to learn about real estate as much as you do. Network with rehabbers, wholesalers, investors, mortgage brokers, title companies and realtors at these meetings. If you have very little money to get started investing then know that there are partners, private lenders and hard money lenders at these meetings that will help you. Don’t bring a friend who is not interested in real estate. They will want to leave or they will bring their own opinions which will influence yours. Do bring a friend who is as passionate as you are about learning about investing in real estate. If you are a realtor keep in mind that there are many new concepts that you will learn about that you may have not been aware of previously. Be open to that and also be open to new ideas.

Network effectively. Make sure you have a business card with a photo. Your card should describe exactly what you do and who you are. Your website on your card should match what you do and who you are. If it doesn’t you will not be taken seriously. If you are a wholesaler then have a card that says that. Make sure that you get a good quality business card and don’t go for the cheapest option. Get a professional logo and picture taken and use a thicker card stock and pay someone to design your business card (you can do this on www.upwork.com). Do not act like a know it all at meetings or make like you know more than you do. You are there to learn, and you learn best by listening to others. Find out the smart people who are having meaningful conversations and introduce yourself and listen.  If you don’t understand something ask. Most investors are more than willing to help new investors.

Do not rush to shove your business card into everyone’s face at every opportunity. Instead make the conversation about the other person (amazing concept). Ask them questions about what they do and be interested. Have one or two meaningful conversations at every meeting with someone new. After a few meetings you will begin to recognize the familiar faces. You will also notice the newbies that show up at every meeting. Those are your potential bird dogs. Don’t skip meetings. That is what newbies do. They show up once or twice and then they don’t come back. If you want to wholesale or fix and flip houses you will need to put in a lot of effort. Start by attending meetings religiously and look at it as a work obligation like an important appointment you can’t miss. Some meetings will not be great and you will question why you bothered going (especially if is raining or the weather is bad). Other meetings will be amazing and you will learn new things and make new connections with other investors.

Remember, you need to know people and they need to know you. The way you do that is by showing up every month at the meeting regardless of how small it is or how many people attend. Attend more than one REIA meeting if you can and there are multiple meetings in an area. Yes, there will be speakers presenting at these meetings and they will often end their presentation with a sales pitch. Look past that. Learn from the one-hour presentation.

Remember you don’t have to sign up for every item that is presented to you (beginners pay attention). Avoid the shiny new object syndrome where every week or month you are on to a new strategy or technique that you heard about. There are no shortcuts. Learn and focus on one thing. Become good at that. Then move on to the next thing. Be wary of charlatans. Every REIA has them. If you are the beginner in the room then as Warren Buffett says, “if you don’t know who the sucker is then it’s you”. So be cautious of the scam artists out there (especially the guys promising you low interest hard money loans with upfront fees).

As a beginner your job is to listen and to learn and network and to educate yourself. Only work with people that have referrals and that other members say good things about. The good people will be easy to spot. They will always show up, will have lots of people who have done business with them, and will have many people who say good things about them. Use your bullshit detector radar. Scam artists are quite easy to spot. Go with your gut feeling about a person. 9 out of 10 times you will be spot on.  

 

The Perfect Investment…One Of Real Estates’ Best Kept Secrets

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By Reggie Brooks

When we look at the investment opportunities in the marketplace, we see the same old patterns. “The greater the risk, the greater the reward”. To see where this is played out, look at the stock market. While fortunes have been made in the stock market, fortunes have also been lost in the stock market. Well, if you’re anything like me, you’re going to want to invest where you can gain an edge over your competition. You’ll want to earn higher interest than you can get from anywhere else, and you’ll want to have your investment guaranteed by the strength of our government. Well, hold on to your hats! Such an rare animal actually does exist. It’s investing tax sale instruments. I’ll explain.

We use so many services that are provided by our various counties that we tend to take them for granted. For instance, our firefighters, our police departments, some hospitals, and our school districts are all services that would strongly affect us if they were to suddenly loose funding. So, where do they get their funding? I’m glad you asked. They get it from “property taxes”. But you have to understand this part. This is where you and I as entrepreneurs can make money…

Our government is smart. They know that the average person has an aversion to paying their taxes. That’s why the various state and local governments have enacted laws that provide for very heavy penalties when a person does not pay their property taxes. Then, the government will allow us to pay up the owner’s back property taxes and whatever other fees that have accumulated, and essentially step into the government’s lien position (this is BIG)! Now, the delinquent property tax payer has to pay you instead of the government. And they’ll pay you big! I’ll explain.

When you invest in tax sale instruments, be aware that there are certain states that are tax certificate states, and other states that are tax deed states. A tax certificate state essentially sells to an investor the right to collect interest on unpaid property taxes. The state law sets the amount of interest that the investor can collect. On the other hand, a tax deed state will let the interest and penalties pile up against the delinquent tax payer. If the delinquent amount is not paid within a certain period of time (this is the Redemption period. We’ll talk about the Redemption period in a few minutes) the property will be sold at public auction.

This is our opportunity to possibly acquire property for pennies on the dollar, or make significantly higher than market returns on our investments. These high return on investment interest rates are guaranteed by law to stay high. They don’t adjust based on what any market is doing. They are set by law, and they don’t change. If you invest in Arizona for instance you will earn 16% on your money. Even if you tell them that you only want to be paid 12%, they’re going to pay you 16% anyway.

The only thing that can change the amount of money you make in your investment is a change in the state law. What are the chances of that happening?? Many counties will allow you to invest in these tax instruments by simply mailing in a check. Some will allow you to pay with a credit card, and some will even allow you to invest in these money making tax sale instruments over the internet! Can it get any better?

Here’s something else you need to know. A delinquent tax payer will be given a short grace period where they can pay their taxes without having to pay a penalty. When the grace period expires, the Redemption period starts. The Redemption period can run anywhere from 6 months to 5 years, and will allow our delinquent tax payer to pay the delinquent taxes, accumulated interest, and penalties, and they would then redeem their property. If payment is not received by the end of the redemption period, the local taxing agency will generate a list of liens to be offered at the next tax sale, a “Notice Of Sale” is advertised in a newspaper of general circulation, and the “public auction” scenario is initiated. In some cases the notice of sale will appear in the newspaper 2 to 3 weeks before the auction date. This period is to allow the delinquent tax payer a little more time to pay the back taxes, interest, penalties, etc. If these amounts are not paid, and after many public and private notifications to the delinquent owner, the property can be seized and sold at public auction.

You can greatly reduce your risk by diligently doing your research. It might be wise to do a title search just to make sure there won’t be any unpleasant surprises. Watch out for property that have an IRS lien, or that might be going through bankruptcy. These can become nightmares.

Are you ready for some more exciting news?? This is the part that I like best – all of the junior liens get wiped out! Understand just how big this is. Some of you might not know that in a foreclosure sale, liens that were recorded after the lien that initiated the foreclosure, will be wiped out. Keeping in mind that the laws can differ considerably from state to state, a tax lien is usually considered senior or ahead of the first lien. If you foreclose on a delinquent tax lien and you end up with the house, you’ll own that house free and clear of any liens!!

If you’re looking to improve on the meager little return you’re getting at your local bank, how would you like to earn 18% interest on your money guaranteed, and your checks come straight from the government? If you wanted to invest in tax certificates in West Virginia, you’d earn your 18% return! And if the property is not redeemed within 18 months, you could foreclose and end up with the property.

Maybe you’d like Delaware a little better. Delaware is one of the best places to invest on the East Coast. Investing in Delaware can get you a big 20% return, and if the delinquent tax payer doesn’t redeem his property within 12 months, you get the deed.

In Maryland, you can earn 24% on your money, depending on which county you decided to invest in. The Redemption period is usually 1 year, although it can be as little as 6 months.

If you want to go to Illinois, you can do pretty well. Depending on the type of property involved you can get 18% return if the delinquent property owner redeems the property within 6 months, and 36% return if the property is redeemed after the 6 month period.

Or, maybe you might like to invest in Texas. As an investor, you’ll earn a 25% return on your money if the property is redeemed within the first year. If the property is redeemed after one year and one day, you’ll earn 50% return on your money. Depending on the type of property, the redemption period can be as little as 6 months.

Investing in tax deeds and tax lien certificates can be a fun, risk free strategy to create big income, or an opportunity to capture investment properties for pennies on the dollar. Remember, when you take over ownership of one of these tax delinquent properties, you own them free and clear. There is no better way to get your money working super hard for you than by investing in real estate secured tax sale instruments.

 

Real Estate Investing With No Money Or Credit

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By Laura Alamery

So, you want to be your own boss and do not want to put a lot of start-up capital into your venture. You have been researching which business options might be best for you and keep reading about real estate wholesaling and other strategies that allow you to make a profit in real estate investing without putting any money down or having credit checks performed.

It is not too good to be true! There are a number of different directions that real estate can take, and the no money, no credit path has many options.

  • Wholesaling
  • Co-wholesaling
  • Subject To Sales
  • Seller Financing
  • Transactional

Excelling in each of these areas requires the proper knowledge, as well as the people skills necessary to grow your real estate investing business. Regardless of the real estate direction that is chosen, building solid connections with others in your community will grow your business faster than any other sales or marketing campaigns that exist.

What is Wholesaling?

Let’s start with the most important players involved in a real estate transaction. The seller, the buyer, and the person who facilitates the sale. Most commonly, the facilitator is a real estate agent. They list the property for the seller, or scout available properties for the buyer, and they most definitely need to be licensed by the state the transaction is taking place.

Real estate wholesalers act similarly, to an extent. Like agents, wholesalers are always on the lookout for sellers. Unlike agents, most wholesalers are looking for properties that are selling at a very serious discount, in order to resell it at a higher price and make a sizeable profit.

Wholesaling requires dedication and the people skills to build a comprehensive database of both sellers and buyers. And is a common niche for new (and veteran) real estate investors. The wholesaler finds the contract and either assigns the contract to a buyer at a higher price or has a double closing, meaning the wholesaler technically buys the property but then immediately resells it the same day.

Co-Wholesaling

Connecting with other wholesalers can expand both your customer list and your bank account. If you have a buyer looking for a specific property, a fellow wholesaler may have the perfect place. Generally, the wholesale fee is split between the two and both can profit from the sale.

Another advantage to co-wholesaling is that it opens your customer base to include more opportunities. Often times, wholesaling is where investors meet and connect to collaboratively purchase a property through a real estate investment trust (REIT). Working together can work wonders! Investment properties such as this are often large commercial buildings that significantly impact the community.

Subject To Sales

Subject to real estate transactions are the best option for those with no or bad credit. This agreement is between the seller and the wholesaler or investor. No down payments are made or credit checks performed, as the buyer ends up simply assuming the mortgage.

There are a few things to be aware of before entering into these types of deals. In the mortgage contract, the lender has the right to call the note due at any time, in full. Speaking with the bank before the transaction is a good idea to know where you stand going in.

Rarely does happen, as the lenders are simply happy that the loan is getting paid. This is a great example of why wholesalers are always looking for distressed properties. Homeowners have many reasons for needing to relinquish responsibility of their property. Wholesalers make the transition easy, as they already come with a list of buyers, the seller does not have to go through the hassle of listing and showing, and the sale usually happens quickly.

Seller Financing

Another great option that does not require money down or credit checks is when the seller will provide the financing. How this works is usually that the seller keeps the property in their name and the buyer simply pays the seller instead of the bank.

There is also usually an option for the buyer to make the purchase once they are in the position to make the down payment or get a mortgage of their own. Sellers like these kinds of sales because they have a steady stream of monthly income from the payments.

Transactional Funding

Here is where those relationships that you have been building are going to come into play. Bank loan officers are a necessity to wholesalers and their relationship should be as important as the buyers and sellers.

A great example of when transactional funding will come in handy are bank owned and short sale properties. These properties often sell at bargain prices and a substantial profit can be made. Unfortunately, these sellers do not allow assignment of the contract or double closings, and do require cash at the end of the deal.

Finding Your Place in the Real Estate Investing World

Real estate can be overwhelming and finding the niche that works best for you is important to maintaining a successful and lucrative business. Once the journey begins, so many doors will open with possibilities of avenues to pursue.

The options outlined here are some of the most common areas for new real estate investors. Once a few sales have taken place it will be easier to determine which speciality is right for you. A very big part of real estate investing is relying on your intuition and listening to where you feel most comfortable will only help build your business, portfolio, and bottom line.

Enlisting the help of experienced investors, and finding a mentor who wants to help, can catapult your business into the next level. There are so many things to learn when it comes to real estate, and while much of it is simply learning by experience, there are options to make it easier. The knowledge of those veteran investors and agents is invaluable and learning from their mistakes can save you many.

Start building your real estate investment portfolio with little to money down, with no credit checks, by following these noted strategies. And watch your business take off!

Just DO It: BE the difference you want to make

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By Karen A. Walker

You want to make a difference? Start by BEING the difference. And if you’re serious about being the difference, start with trust.

Famed leadership consultant Stephen R. Covey said it best: “Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.”

John Aaron and Gene Simmons, co-founders of Florida-based Prestige Executive Funding, have each independently put mutual trust and the strength of honoring their word primary in their real estate and lending relationships long before they partnered together to better serve their sophisticated clients.

In fact, trust is so fundamental to everything they do in business that it’s second nature to them, and to their team. 

Trust is an integral part of every transaction in which they participate, regardless of client sophistication, background or anything else…. that is, regardless of anything else except the equal trustworthiness of their clients and their arrangements.

Noteworthy

This year, at age 29, John Aaron was featured in Forbes magazine’s “30 under 30” highlight.   He achieved consistent success in the fix and flip marketplace with, according to Forbes, more than $100 million in residential properties purchased and flipped at the time of the article.

Gene Simmons, co-founder and co-president of Prestige Executive Funding, says Aaron has about 80 properties in his portfolio at any given time. Parlaying his residential fix and flip success into the commercial arena, Aaron is also purchasing large commercial apartment buildings, developing modern waterfront properties, condominiums, hotels and retail properties.

But Aaron would rather DO it than talk about it.  He’d rather lead by example than tell you what to do.

For Aaron, his early character traits and principles of good business remain the same as they did when he first started: Focus, Integrity, Quality, Consistency, a lot of Hard Work, and Giving Back.

Just for the record, Giving Back is a core motivator for Aaron.  Years ago he launched a nonprofit foundation and, as Simmons describes his young, motivated and sharp partner, “Aaron is always doing stuff for the community.  He’s at soup kitchens a lot and helping homeless and those in need. He likes going into an area, purchasing retail and bringing much needed jobs and opportunities into areas where people are struggling. He does at least five major service-oriented events a year. That’s a big part of who he is.”

New York to Florida

Gene Simmons comes from the other side of the real estate development and investment business; the lending side.  Originally from New York, he relocated to Florida years ago.

At this point in his career, with more than 20 years experience in mortgage and loan business, he’s seen his share of ups and downs in the industry.  He’s also seen—and chosen to live by—the timeless principles of good ethics and honoring one’s word, regardless of what this or that other lender is doing.

Those principles have served him well, even through some wild years for some sectors of the lending industry.  But Simmons never veered from his core path of excellence in service, good ethical practices, and high-quaiity loans.

For Simmons, it’s not solely about the money or the profit.  He takes a longer view.  For him, it’s always been about building solid, trustworthy and valuable, long-term relationships with his clients.  This makes his partnership with Aaron a solid one.

Early mentors

Both Aaron and Simmons know their area of expertise so well that they practically could do it, excellently, in their sleep.  But when you talk with either of them about their beginnings, they are each quick to point out excellent mentors in the beginning of their careers.

For Simmons it was an early boss in the loan business.  The man was renown for not only his nimble and creative loan solutions, but also, and more importantly, for the ethical way he did business. Every. Time.

For Aaron, it was a real estate investor guru. Again, this mentor was bold, challenging his mentees and always available when a student needed help. Above all, he was ethical to the core, and Aaron valued that.

But mentors without students who are willing to follow the advice of their mentor yields no fruit.  The students themselves have to be willing to DO what they are challenged to do, even if it is out of their “comfort zone” and doesn’t seem to make sense at first. 

Both Aaron and Simmons were willing to take those newbie leaps of faith, to take advised action, to “just do it,” but only because of the high level of proven trust they each had for their early mentors.

Now they, in turn, are trusted guides for their team, for each other, and for their select clientele.

Customized Solutions

“Each deal we do is customized,” says Simmons, whose first-hand, creative, ethical funding examples lie ready for sharing when the need arises.

“We are a full service commercial lending source,” continues Simmons, who often recognizes ethical, creative financial solutions that are unique for each client’s situation long before others even—if ever—figure them out.

“Our staff has over 30 years experience and are able to structure financing requests in just about every aspect of commercial lending. We cater to Corporate Executives, Music Industry Executives, Entrepreneurs and Professional Athletes as well as Entertainers and Actors from Television and Film. We pride ourselves in being extremely competitive and honest . We work closely with our more than 100 institutional relationships in order to meet our client’s customized needs, and to guide our clients every step of the way.”

Prestige Executive Funding primarily serves sophisticated clients since they are capable of, and truly enjoy, providing customized, sophisticated solutions that create exciting win-win-wins for all parties, including the local community.

Summary

In sum, Prestige Executive Funding (FundMePrestige.com) finances and provides a wide scope of investment opportunities and solutions, including Office, Industrial/Warehouses, Multifamily, Mixed Use, SBA, Lines of Credit, International, Churches, Equipment Financing, Factory, Hotels/Motels, Hard Money Loans, Private Equity Mortgage, Bridge Loans, and Development Financing.

What do you call any partnership with two trail-blazing, ethical real estate investing and lending entrepreneurs? Unstoppable. Successful. A win for all parties.

Put a more practical way, Prestige Executive Funding provides access to institutional capital, family office funds, and direct private money for funding all types of real estate investments. Lending in all 50 states. Up to 90% LTV, Prestige Executive Funding represents a group of investors who have financed more than two billion dollars worth of loans nationwide. Loans from $1 Million to 100+ Million.  Learn more at www.FundMePrestige.com.

Yield Hungry Investors Discover New Real Estate Opportunities Online

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High yield seeking investors are finding exciting new investment opportunities in a $200B online landscape

JP Maroney and his investors have found a new form of real estate online. So, far this new frontier has been delivering strong double-digit returns, with no signs of slowing any time soon.

While the massed has been desperately searching for yield, a few has discovered high returns in the new digital economy. Bonds and CDs may be paying negative net yields, and the stock market as a whole may be so over bloated that price to earnings ratios are a joke. Yet, there are opportunities out there. At least for those willing to adapt to the fast-changing world we live in now.

From Aging Technology to Albert Einstein-Like Epiphanies

JP Maroney started his first company at 19 years old. In the 90s, he was running successful magazine companies, which he successfully exited in 1999. He and his wife went on to launch a video training company for franchises and trade associations. In 2004, Maroney upgraded to the arena of online coaching, and began generating leads online. Out for a walk one evening, JP was thinking over a recent news show on MSNBC or CNBC, in which a top fund manager was talking about the importance of embracing alternative investments, providing they could put a dollar in, and get a reasonable yield out.

This was JP Maroney’s “Eureka!” moment. He gained a new perspective, which has paid off handsomely. He realized he was already investing in online real estate, with great success. He was investing in online lead generation to the tune of around $2.50 per lead, and was easily able to sell those leads at $3-$5, and flip his money for outsized returns and a big IRR every 30 days.

The $200B Online Investment Landscape

The importance of the internet, and the ability to effectively and efficiently get in front of, and connect with consumers, with measurable results verifiable for every dollar spent in marketing is obvious. At least 19 of the biggest and best-established retailers in America are either going bankrupt, or are at least slashing stores and staff, and are cashing out their brick and mortar real estate. They just started marketing online too late. Then we have Amazon, who is leveraging its online prowess to dive into brick and mortar assets, becoming the largest landowner in Seattle, and taking over Whole Foods with a $14B bid.

Digital marketing is already a $200B business and growing. It’s already bigger than TV advertising, including the Super Bowl. Most entrepreneurs and VCs look for at least $1B to $2B markets as a measure of a good industry to be in. This is already 100x that.

43% of respondents in the State of Digital Advertising 2017 survey and report said they increased paid search advertising between 2015 and 2016 alone. eMarketer estimates growth in US digital ad spending to accelerate at 9.9% to 28.4% per year between 2015 and 2020.

Getting Responzive

From realizing he was doubling his money every 30 to 90 days in digital advertising, and realizing he could do it for investors too, JP has delivered double digit returns for others for 4 years straight. His biggest problem has been having to under-promise, as the returns on digital marketing make current bond, stock, and fund yields look like a joke.

Maroney’s B2B facing portal, Responzive, eliminates the need for ‘hope and pray advertising’, and enables businesses from real estate to insurance companies to obtain ready to buy consumer leads, on-demand. JP says that the service is for serious businesses and those serious about scaling quickly, and have an appetite for 5k+ leads per month.

The New Frontier

JP Maroney’s investment firm Harbor City Capital has appeared in Inc. Magazine, and many other major news sites. Harbor City Capital is the investment engine which fuels Responzive, and other digital marketing arbitrage ventures, as well as branching into acquiring and monetizing big data and data centers.

Via an exclusivee phone interview with Realty 411, JP broke the news that the firm is currently acquiring a high profile $100M retail domain, complete with its trademarks, and data on 15M active users. As of July 2017, the firm already had in excess of 1.2B data records in-house, and is generating 4/5M leads per day in different niches and verticals.

Opportunities for Accredited Investors

Harbor City Capital continues to grow quickly, and has just announced a unique opportunity for accredited investors to participate in its success. This is via a 506c filing and seeding funding round. Investors receive preferred shares via a convertible note, with a 5 year redemption period, offering a minimum of 17% returns. However, an IPO could be quite likely within the next 12 to 18 months.

Accredited investors are able to diversify their portfolios into this industry with a minimum of a $50k investment. Though the opportunity closes once the funding round hits $25M.

Summary

Investors are still hungry for yield, and there aren’t many places to find it these days. Digital marketing is one of the biggest and most vital industries today. Those that do it well stand to gain sizable market share, while others fade out. Digital marketing arbitrage and big data offer an exciting apex where these trends meet. One which could dwarf the returns and performance of many other business and investment models.

For more information about online leads for your business visit Responzive.com. Visit HarborCity.com and fill out the contact form for more details on the investment opportunity.

Following Up with Motivated Sellers Can Make You Millions

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By Kathy Kennebrook (The Marketing Magic Lady)

Let me ask you a question; are you properly managing your prospects? Are you taking the time to follow up with the sellers who didn’t initially accept your offers, or the sellers you still need to make offers to? Did you know that you are leaving thousands of dollars in potential income behind if you aren’t following up with sellers? One of the easiest ways to make a fortune in the real estate business and gain the advantage over your competition is to take the time to follow up with motivated and semi-motivated sellers. You’ve already got the seller in your pipeline, you’ve already done the marketing and spent the money to find this person, now all you need to do is to follow up with them until they either sell you their property or tell you to go away. How much simpler could it be?

There are two types of sellers we are going to follow up with, those we’ve already made offers to who haven’t accepted our offer and those who have not made any decision after our initial contact with them. Quite often, you will need to make multiple contacts with sellers before their situation changes and dictates that they sell their property to you. If you stay in touch with these sellers, you build credibility with them and when it comes time to sell they will contact you first, even if they have been contacted by someone else in the meantime.

There are a lot of investors in the market these days, and most of them have a very limited knowledge of how the whole follow-up process works, not to mention the inability to create successful deals. What they don’t realize is that many of the sellers you will be dealing with have a variety of problems they aren’t sure how to solve until they are contacted by you.

Some of those may include divorce situations, estates or health issues where there may be emotions tied to the property. With these sellers it may take a little longer before they make that final decision to sell. Most of your competitors will simply throw these potential deals in the trash when they don’t get the property under contract after the initial contact or offer is made. I have made deals many months after the initial contact with the seller was made simply because I took the time to follow up. Not only did I build credibility with the seller, but now they like me better and trust me more than the next investor who may come along.

These are the types of sellers I will place in my follow-up system and follow up with at least every thirty to sixty days if not more often. I have made thousands of dollars on deals other investors would simply have thrown in the trash because I took the time to follow up with a semi-motivated seller. Probably half of the deals I do in a typical year come from following up with these sellers.

In addition, with the help of a fellow investor who is also a software developer, I now have an incredible software system that does all the work for me. It reminds me when I need to do my direct mail campaigns, it reminds me when to follow up with sellers, it has a section to track potential buyers and build a buyer’s list, and it keeps all the information on the properties stored including a photo.

In fact, once I have followed up and purchased the property, my system will match the property with one of the buyers on my buyer’s list, so now; even that part of my business is automated. And once again, isn’t that the whole point to this business, to automate as many things as you can so you can work with the sellers and make the deals happen. You don’t need software to get started with this type of a system. You can simply use an auto-responder and a folder system to begin following up with motivated sellers.

Here is a recent example from my files- I contacted a seller who had inherited a property in Florida where I live and he lived in Michigan. The home belonged to his aunt who had pretty much raised him his whole life. When she passed away the home was left to him and he just couldn’t bring himself to sell it right away. I actually met with the seller and made an offer on the property. He had initially accepted my offer, and then he decided to hold onto the property for awhile and use it as a vacation home. After a year and a half, he got tired of having to deal with all the maintenance issues on the property and ended up selling the property to me for the initial offer I made because I took the time to follow up with him every thirty days or so.

I actually ended up making even more money on this deal than I would have in the first place because the house had appreciated in value during the period of time that he kept it and he had made improvements to the home. Most investors would have thrown this deal in the trash as soon as the seller said no to their initial offer, but because I took the time to follow up, I purchased the property and made a significant amount of money on this deal. I still get holiday cards from that seller.

I’m sure you’re already aware of how important it is to follow up with sellers. It only takes a few minutes each week to follow up with these sellers if you have a good follow-up system in place. I use my follow-up system to follow up with sellers I have made offers to but who haven’t said yes or no to my offer, and with sellers who own homes in areas where I want to buy. I do this by using both direct mail and e-mail to follow up with these sellers. Sometimes if the situation warrants it, I will call them. My system even reminds me to do the follow up. How much simpler can it be? AND…since the seller has already been getting contact from me for a few weeks, if their situation has changed they are ready to sell to me. This is a pretty typical scenario.

With sellers who specifically have properties in areas where I want to buy, I do repeat mailings to a specific list with specific parameters in mind such as out of state owners, quit claim deeds or old sale dates. Each time I do the mailings I continue to clean the list I am using by taking out bad addresses, deals I have purchased or folks who tell me not to mail to them again. The more I mail to these folks, the more credibility I build with them. If you are using a follow up system in your business it is very easy to track these mailings. This is an absolute marketing machine because not only are you doing deals day after day, you are constantly planting seeds for future deals.

If you take the time to follow up with motivated and semi-motivated sellers, you will make more deals and buy more properties with absolutely no competition for these properties whatsoever. It’s a win-win situation for you and the sellers.

For more information on following up with sellers, check out my website at www.marketingmagiclady.com. While you are there be sure and sign up for our free newsletter and get $149.00 in bonuses absolutely FREE.

Key Vocabulary for 1031 Exchanges

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By Dr. Robert G. Hetsler, Jr.

If you’re new to the world of section #1031 of the IRS Tax Code, the terminology that comes along with these tax-saving exchanges can be confusing. To help you understand the phrases you will undoubtedly hear if you choose to complete a tax-deferred 1031 exchange, here’s a list of the key terms you will come across.

Like-Kind: A term that refers to the nature or character of the property being exchanged. In order for the exchange to qualify for tax-deferred status, both the relinquished and replacement property must meet the IRS definition of like-kind.

Boot: This is the fair market value of any non-qualified property you receive during the exchange. It can be cash, loans, property, reduction in debt or even supplies. Basically, anything of value that you receive during the exchange could be considered boot.

Constructive Receipt: Any indirect control you have over the proceeds of the exchange. If you benefit in any way from the proceeds (aside from the purchase of replacement property), this could be considered constructive receipt and can jeopardize the tax-deferred nature of the exchange.

Qualified Intermediary: The individual or entity that manages the exchange and holds sale proceeds for relinquished property (to avoid the exchanger having actual or constructive receipt) and title to the replacement property (again, to avoid receipt issues during the exchange).

Relinquished Property: The old property the exchanger is getting rid of during the exchange.

Replacement Property: The new property the exchanger will acquire during the exchange.

Exchanger: The investor who is conducting the 1031 exchange for his or her own benefit.

 

Feeling a Little Lost? How to Get Your Groove Back

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By Sharon Vornholt

Do you ever feel a little lost? Like you just can’t get your groove back?

That’s not too surprising. The world is full of amazing opportunities. There are so many ways to make money in real estate investing, it’s easy for us to jump from one thing to another. Generally speaking, shiny object syndrome is not your friend when it comes to business.

However, know that you’re not expected to have it all figured out right out of the gate.

If you’re like most people, you will go down a lot of different paths before you figure out your investing strategy, and how to be your best and most authentic “you” and that’s OK. It’s all part of the process. When you’re finally in the place where you belong; the place that’s right for you, you will know it. That’s when you get your groove back, and you’re ready to rock and roll.

How to Get Your Groove Back

So how do you find the right balance between jumping from one thing to another while you’re finding your way, and staying on your predetermined path? (The path you decided was right for you.)

You slow down a look at the big picture as you begin the adventure of building a business.  This is a little like following a map to get from place A to B.   When we take a trip, we almost always take little side trips along the way.  When we look back when the trip is finished, there’s rarely any regret over these detours and unplanned stops.  It’s all part of the process in travel and in business, and it makes for a much more interesting trip when it’s all said and done.

Building a Business and a Brand that Stands Out

You’re probably wondering, “What does this have to do with building your business and your brand”? 

A lot more than you think. 

It’s important for your potential customers AKA motivated sellers, to see authenticity in your brand.  All of these little detours and side trips you make along the way while you’re growing your business, influence who you ultimately become. That person you become will be the face of your business going forward.

This is the time that the collection of experiences you had along the way begin to pay off. It’s also one of the ways you become different from your competition.

Be Bold

My advice to you is to be bold when it comes to chasing your dreams.  Take risks along the way.  Dare to be different.  Go out on a limb when you need to take a stand.

Remember the movie, “How Stella Got Her Groove Back”? Let’s just say Stella had to really go out on a limb to find it.  She had to get way out of her comfort zone.

What will happen when you do this, is you will start to build your tribe. People will be attracted to your authentic self. These are the people that will follow you along on your journey. They will be your best cheerleaders, and they will refer people to your business.

Remember, you won’t be a fit for everybody.

This confidence you’ve gained will shine through when you talk to motivated sellers, and people will trust you to help them get where they need to be. They will feel confident that you are the one to help them with their problem.  When you can’t seem get your groove back, it’s almost always because you aren’t being your authentic self.

I love this line from the book Fascinate by Sally Hogshead.

“Different is better than better”. – Sally Hogshead.

Dare to be different.

How Will You Be Remembered?

According to Brendan Burchard, there are only 3 things anyone will ultimately be remembered for:

Character, relationships and contribution, so let’s talk about these a little bit.

Character

There is little to say about character that hasn’t already been sad a million times.  Your character will determine your long term failure or success in this business. You will be quickly found out if you’re not an ethical business person. You will become invisible to people that should be part of your tribe.

Relationships

Real estate is a relationship business. Whether we are taking about other investors, contractors or motivated sellers, this business is all about relationships. It’s about having conversations that build rapport with people you do business with.

If you’re one of those folks that struggle with this particular thing, contrary to what you may believe, this is something that you can get better at with practice.  Full disclosure here: you’re going to need to be prepared to spend a lot of time outside your comfort zone in the beginning.

Contribution

When I think about contribution I immediately think about giving back. How can we make the world a better place? There are so many ways.

  • We can do volunteer work for someone like Habitat for Humanity or other charity
  • I know an investor that wrote a book and donated the proceeds to charity
  • If you are a rehabber, maybe your mission is to revitalize neighborhoods
  • How about sharing your expertise with others?

Contribution isn’t just about money.  It’s finding a way to leave the world a better place when you’re gone.  It’s how you will be remembered, and it’s up to you to decide how you will be remembered.

Giving back could be as simple as mentoring folks just getting started in this business. Be bold, get involved, take a stand and get your groove back in the process!

 

Steve Bighaus: Leveraging Technology to Improve Investor Lending

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By Anita Cooper Investing in property can be frustrating, especially when you’re always searching for good financing options that suit where you’re at as an investor.
Having someone in your corner to provide quality information and advice can help you reach your goals more quickly than going it alone.
As founder of Team Bighaus, Steve’s clients know they can count on him when they need to finance a new opportunity…even when that opportunity is their own place of residence! Steve has a vested interest in property investors’ success…it’s why he does what he does. His number one goal is to become the all-in-one resource for property investors. But as a forward thinking kind of guy, Steve is always on the lookout for ways he can improve his processes to get better results for his clients. One such process is technology…using it efficiently and effectively. techsmall That’s why, after speaking with thirty to forty companies, Steve settled on working with Sierra Pacific Mortgage Company. They understand his goals as a specialist in lending to investors, and they share his vision of using technology to deliver exceptional products for his customers. One exciting development is the creation of a new loan origination system that will allow a borrower’s information to be obtained straight from the source. This will simplify the process for both investors and homeowners and expedite the loan origination process. One particular issue that many fix and flip investors are facing is the challenge of finding eligible buyers for their properties. Steve’s research has found that these investors are experiencing a dismal fall-out rate of 40 to 50 percent! As part of his goal to be a full service company for investors, Steve and his team aspire to preclude any potential problems as early in the process as possible. Using all of the tools at their disposal, they provide quality pre-approval letters towards the goal of improving results for investors. goalsmall Other tools at Steve’s disposal include an automated system for appraisals that will let the lender know whether or not an appraisal is needed, and a great customer relationship system. And as any of Steve’s customers will tell you, Team Bighaus is known for their stellar customer service. Whether you leave a voice message, drop an email or send a fax, you will receive a response the same day. Need a prequal letter and it’s the weekend? Just call Steve…he’ll take care of it. If you were to sit down with Steve he’d tell you to think of him as your banker – someone you can count on to be in your corner. Bottom line, while pricing is important, there’s something Steve and his team can offer that few can…responsive customer service paired with innovative technology to create exceptional products to help investors grow their wealth.  

7 Bookkeeping Mistakes That Real Estate Business Owners Make and How to Avoid Them

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By Leon McKenzie, CEO, US Probate Leads

How would you feel if you had to watch as your hard-earned wealth goes up in flames because you failed to make sure that your finances were in order?

The word horrible comes to mind.

Statistics show that about 49% of small businesses will not be able to survive for 5 years or more. So, if this is a fate that you want to avoid as a real estate investor, your bookkeeping must be in order.

And while you have the option of hiring a bookkeeper to sort out your business finances, you still need to take an active role in managing them. You could start by identifying the common mistakes small businesses make and do everything you can to avoid or rectify them.

So, what are these mistakes? And how should you go about addressing them?

1. Using a Personal Account for Business Transactions

A personal bank account is for personal financial transactions. This is the account that allows you to pay your personal expenses and keep your savings. But many small business owners, which include those in the real estate, tend to use personal bank accounts for business transactions.

This is a big no-no.

At no point in time should you do such a thing. How are you going to trace what is coming in from your business? And how will you be able to separate your personal and business transactions?

Mixing things up in this manner is a recipe for trouble. Sooner or later, the IRS may require you to account for all monies coming into your real estate business, and you will be unable to meet their requirements – at least not without some expensive accounting help.

If you are currently running your business and personal life from one bank account, you need to do something to change that. Opening a business account takes a short time but will save you a lot of grief in the long term.

2. Paying For Business Transactions Using Personal Debit and Credit Cards

Are you one of those real estate investors that use your personal debt and credit cards to pay for business transactions?

You need to stop.

Doing this is just as bad as using a personal bank account to run your business operations. It’s going to be very difficult for you to keep track of your personal and business expenditures. You will need to spend more time and effort to find out what belongs where, which you may not be able to do.

So, what should you do?

It’s really simple: get separate debit and credit cards for your businesses. And if you are not in a position to do so, then dedicate one debit or credit card to business transactions for easy accounting. Doing so helps you build creditworthiness not just on a personal level, but on a business level as well.

3. Poor Record Keeping

Are you one of those people who assume that when the time comes to do your taxes you will remember it all?

How is that working out for you?

Poor record keeping is a serious issue for some real estate investors. You may fail to keep receipts of the building or renovation materials that you use. You may also fail to keep a record of your debts or payments to freelance professionals that you hire. Categorizing employees or expenses wrongly may also be an issue. Regardless of what the problem is, poor record keeping will come back to haunt you in the very near future – when the taxes come calling.

The first thing to do is write down everything you spend in the way of business transactions. Use a business credit or debit card to pay off your expenses because it makes everything much easier to track. Be sure to ask for a receipt – always. Then make sure that you have categorized your business transactions and employee-related expenses correctly. In addition, keep a very close eye on what is coming in and going out of your business accounts. Be sure to keep a record of your business activities going back a few years, just in case.

It may seem like a nuisance to keep good records, but when you need to account for your money to IRS or potential business buyers, you will thank yourself for doing so. Not only will you be able to stay out of trouble, but you will also be able to stay on top of reimbursable expenses that will help keep more money in your pocket.

4. Not Reconciling Your Bank And Credit Accounts

If you have a good record of your business transactions but do not reconcile your bank and credit accounts, then there is no difference between you and hoarders who buys things that they do not use.

What’s the point?

Those receipts and statements you keep should be used to reconcile your credit and bank accounts. It is the only way for you to get a clear picture of your real estate business in terms of what you owe and how much you really own as equity and cash.

So take time every week or month to balance the books. Don’t procrastinate until it is too late to save your business.

5. Setting Little Money Aside For Taxes And Other Bills

Are you setting very little money for taxes?

That’s probably the reason you get penalized often.

How about a steady cash flow: are you always short of cash to run your business?

If you run a real estate business, then you are self-employed. That means that you are responsible for setting aside enough money aside to pay your taxes and any other financial emergencies that crop up. We are talking about Social Security, Medicare, and retirement savings for the future.

Your poor cash flow on the other hand, could be attributed to poor accounting or the fact that you are overextending yourself financially. If you are spending most of your business revenues on expanding your business without keeping a financial emergency fund for the business, then between your regular business expenses and debts, you will have little money for emergencies – hence the poor cash flow.

So take stock of your finances, and leverage debt to help you expand that real estate business without compromising your ability to pay taxes or keep the business in operation.

Cash is still king.

6. Not Backing Up Data

After all the effort you have gone into to digitize your business and learn how everything works, you are currently sitting tight and have no care in the world.

This is a dangerous mindset to have.

Digitization of business data makes taking care of your real estate investments much easier. But what happens when your systems are hacked or your servers fail?

You will need to resort to your backups, of course.

So, the question is: do you back up data? How often do you do it?

What are you waiting for?

You need to back up your data digitally and manually. You can back up your real estate business data in the cloud or a second business server. You should also keep your paper records as a backup just in case your entire digital system fails completely.

You can set up your digital system to back up data automatically after a set period. That, in addition to keeping a paper record of your business transactions, will be helpful should your business ever need an audit or should your systems fail.

7. Trying To Do It All

Nobody understands your real estate business better than you do. You have put blood, sweat, and tears into running it and making it a success. For that reason, you are having a hard time ceding the control of your business to someone else. So you try to do it all. And you are failing- miserably.

“Pride comes before a fall.” How often have you heard that statement?

Is it more important for you to be in control or to be successful?

Well then, it is time for you to try to keep up with every aspect of your business. While it is wise for you to keep up with your business finances, it does not hurt to hire a bookkeeper to help you out. Not everyone has a head for numbers, and it is okay to hire those that do.

And when you do hire a bookkeeper to help you with your business finances, supervise but do not micromanage. Take the time to discuss what you want that professional to do, and then provide him or her with the chance to do the assigned job properly.

Business bookkeeping is part and parcel of running a real estate business. In order for you to make money, what comes in must be more than what goes out. And in order to make good profits, you have to understand what goes on in your business, right? So, it all comes a full circle. What this implies is that you must know what goes on in your business on the financial front. Be sure to hire a professional bookkeeper to help you out if you cannot manage your business finances. But even as you do, make work easier on yourself by avoiding the common bookkeeping mistakes that business owners tend to make. It will make your business operations much more efficient and profitable.