Build Your Own Successful Property Portfolio

I do not normally wear my heart on my sleeve, but an explanation for the intermittent publication of this daily blog is required.

No doubt most of you will be aware of the trouble that is ongoing in Kenya. I originate from there and unfortunatley a large number of my immediate family still live there.

Clearly in the circumstances I am unable to keep my eye on the ball as well as I would like - hence the intermittent postings to this blog.

Bear with me and as things return to normal and as soon as I can ascertain the safety of my family I will recommence this blog on its more regular daily schedule.

In the meantime do look in from time to time because I will keep posting as and when I can.

Thank you all - ed

Alan Cowgill

This topic is near and dear to my heart.

When I started my Real Estate career, I heard about the necessity of finding private lenders. In fact, I even found two. But then I stopped. For four years I PROCRASTINATED. I didn’t get it!!! For four years I continued to go to banks and jump through their hoops.

I also had used hard money lenders, but found them VERY expensive.

It wasn’t until I quit my J.O.B. and found that banks wouldn’t loan me money that I realized that I needed to bring private lenders into my life quickly.

When I took that step, everything changed for the better.

What are some of the advantages of using private money for your real estate investments? Well, if you haven’t decided whether or not to use private money, I decided to lay it on the line here for everyone to see.

- Fast & you can buy at a discount
- No credit check & doesn’t show up on your credit report
- Unlimited funds
- Control, you set the rules
- Help friends, family & meet a great group of people
- Get some of your profit when you buy
- Cash flow
- Flexible
- Can make offers with confidence
- Can structure quick and more profitable exit strategies
- Saves you money
- Cheaper than a partner
- Fund the purchase of defaulted paper
- It is the foundation for a very profitable brokerage business

In this business when a deal comes along you have to move fast. Many Real Estate investors have watched a deal slip through their hands while they waited for the bank to approve their loan. Once you have private money available, that won’t happen to you! You can make an offer knowing you can go ahead and set a closing date. Meanwhile, your competition is wondering how you did it so quickly!

Perhaps the most unexpected aspect of using private lenders is the accumulative response by satisfied lenders.

After my first seminar I got only a few responses, at first. Then came the steady, unending trickle of eager lenders. Today, that trickle is more like a river!

Maybe it’s the credibility of one investor to another, or the proof of another’s prosperity through investing, but word of mouth is so powerful that once you’ve established a few private lenders, you’ll have a continual revenue stream with which to invest.

A real estate guru told me, “There’s plenty of capital out there. All you have to do is ask, and make people understand what you’re using it for and how safe they are. It’s really not difficult to get it.” Simply educate lenders about the high rate of return available through your real estate investments, and watch them line up to give you money!

Incredible, I know.

But listen to this: here are a few of my recent deals, made possible only because I had the cash on hand to close these deals quickly.
• Short Sale: $59,900 bank discounted to $25,000 = net $32,900
• Rehab: $51,000 purchased for $15k plus $13k rehab = net $23,207
• Subject to: $85,000 for $71,000 + $1,264 repairs = net $12,736
• Wholesale: $28,000 purchased for $22,000 = net $6,000

That’s $74,843 in only four deals, and all because I had the confidence and flexibility of assured funds through private lenders.

Today I shake my head at the thought of it, but once upon a time I was practically begging for bank loans – for the opportunity to wait in line, fill out applications, and wait weeks or even months to see if they would deem me and my prospective property a good “risk.”

I could have been using private lenders years earlier, but I hesitated. I lacked confidence and I wasn’t sure where to start. If I could give one piece of advice to any budding investor it would be this: Start today.

Don’t let even one more deal pass you by. You never know where life is going to take you. That one, 2 a.m. infomercial started me on this path, and today I’m the one appearing in the infomercials, teaching people how to change their lives through real estate.

With private lenders in line, you’re always equipped with the funds you need to grab each opportunity as it arises. Your confidence will soar and you’ll be making the kind of money of which you’ve always dreamed.

Private lending allowed me to finally take control of my destiny. You’ll gain nothing by waiting. Discover the key to true freedom and big money in real estate investing. Private lenders are out there. They’re waiting for you…

Sell your house quickly for cash

Steven Gillman

“Fix and flip” property is a great way to make money in real estate. However, it isn’t about repairing drywall and planting flowers. It’s all about how you do the numbers.

People often buy and sell a fixer-upper without a definite plan. They buy a house, fix it up, then add $10,000 or $20,000 onto their costs. They then put the house up for sale at this price.

Have you ever bought a house according to what the seller has into it? Of course not. You look at similar houses to determine the value. If you have $110,000 into a fix-and-flip project, and similar homes are selling for $105,000, how much will you get? It has nothing to do with what you’ve spent, does it?

The Fix And Flip Formula

1. Determine the after-repair value of the house you’re looking at. Get an appraiser’s help, or look at what similar houses have actually sold for (not asking prices). The price it’s likely to sell for is going to be your starting point. - This is critical ! You must obtain a professionals view on the post fix value of the property (ed)

2. Calculate costs: closing fees, loan fees, document prep, homeowner’s insurance, title policy, repair costs, interest on loans, property taxes, sales commission, fees, title policy, etc. You want projected costs of all four categories: buying, improving, carrying, and selling. Subtract all costs from the expected sales price.

3. Subtract a profit that makes it worth the effort. Now you have the highest price you can pay. You have to walk away if you can’t get it for this price or less. You’ll offer thousands less, of course, to give yourself negotiating room.

A Fix And Flip Example

You’ve found a fixer-upper, and determined you can get $98,000 for it when it’s done. Buying costs will be $2,000. Repair estimates add up to $8,000. Carrying costs will be $2,500. Sales commission and other closing costs will be around $8,000. You figure in $1,500 for the “unexpected.” For you effort, you want a $10,000 profit.

When you subtract all of that from your expected sales price, you have $66,000. That’s the most you’ll pay if you want a safe real estate investment. Offer $61,000, and walk away if you and the seller can’t settle on something under $66,000.

You always start with the eventual sales price and work your way back. This is the right way to safely do a fix and flip.

Burn this article’s message into your investment brain if you are into fix and flip - see yesterdays blog about this category of real estate investment (ed)

Sell your house quickly for cash

Steven Gillman

Below are ten categories of real estate, and different ways to invest in them. The best one for you is something only you can decide, according to your particular needs. To help you do that, I list a couple good points and bad points for each type.

1. Renting single family homes. Good points: An easier way to get started, and good long term return on investment. Bad points: Being a landlord isn’t much fun, and you typically wait a long time for the big pay-off. You also lose all your income when a house is vacant.

2. Fixer-uppers. Good points: Fast return on your investment, and it can be more creative work. Bad points: More risk (many unpredictables), and you get taxed heavily on the gain.

3. Low income housing. Good points: Similar to any other rentals, but with higher cash flow. Bad points: Similar to any other rentals, but with more repairs and tenant problems. This also has the plus of high yields although capital gains can be small (ed)

4. Selling rent-to-own houses. Good points: If you buy, then sell on a rent-to-own arrangement, you get higher rent, and the buyer is usually responsible for maintenance. Bad points: Bookkeeping can be tricky, and most tenants don’t complete the purchase (this can be an advantage too, but it does mean more work for you).

5. Commercial properties. Good points: Multi-year triple-net leases mean little management and high returns. Bad points: A tough market to break into, and you can lose income on vacant storefronts for a year at a time.

6. Land, split and resold. Good points: Simpler than some real estate investments, with the possibility of great profits. Bad points: It can be a slow process, and you have expenses, but no cash flow while you wait.

7. Boarding houses. Good points: You’ll generate more cash flow renting a house by the room, especially in a college town. Bad points: You’ll generate more headaches renting a house by the room, especially in a college town. These are known as HMO’s (houses of multiple occupation in the UK (ed)

8. Invest cash, sell with terms. Good points: A high rate of return is possible by paying cash to get a good price, and selling on easy terms to get a high price AND high interest. Bad points: You need a lot of cash, and you tie up your capital for a long time.

9. Invest, live in it, sell it. Good points: The tax law lets you fix it up, and sell it for a big tax-free profit after two years (if you live in it), then start the process again. Bad points: You may become attached to your investment, and you’ll have to move a lot.

10. Pure speculation. Good points: You can make large profits buying in the path of growth and holding until values rise, and it is a low-management investment. Bad points: Growth in value isn’t always predictable, you have expenses with no income while you’re waiting, and transaction costs can eat much of the profits.

There are many ways to invest in real estate. These ten are just to get you thinking about what is possible, and what type of investing suits your personality. Once you figure that out, you may want to look into other categories of real estate investment.

Sell your house quickly for cash

By Matthew Keegan

If you have recently purchased some real estate for investment purposes, you are in good company. Recent reports suggest that as many as 25% of these purchases are made by those who plan on using the property for investment purposes only. If you hope to “flip” the property there are 4 things you must be aware of that can put a crimp on your profits.

1. Property Taxes. Keep the property for a few years and you may experience a surge in property taxes especially if your taxes are reevaluated during that time. Some hot real estate markets have seen taxes nearly double in just 5 or 6 years.

2. Renovation Expenses. You may have purchased a “fixer upper” at a bargain rate. Once your project is complete will you be able to recover the expenses and make a profit especially if the value of your renovated property is above those in your neighborhood? In addition, can you withstand a correction in real estate values?

3. Insurance and Mortgage Costs. You will pay more for homeowners insurance if you do not occupy the residence and you have tenants. If you are financing the property you know that your mortgage rate is higher as well.

4. Rental Pressures. A market saturated with rentals will mean that the rents you can charge will be less than what you had hoped to receive. In some markets you are required to get special licensing in order to be a landlord. In other markets the legal rights of tenants mean you could have a lengthy and expensive battle in ridding yourself of a bad tenant. Will the lower income levels coupled with the added expenses drag your investment down?

Of course, you can limit your risks [and costs] by doing the majority of the upgrades yourself, appealing excessive property tax increases, and finding for yourself a trusted and dependable tenant. It isn’t easy flipping a home, but with a lot of pluck and determination it can result in strong profits for you.

I would add a fifth danger - selling in a downward trending market - In downturns the trick is to buy (if you can) or hold. Uptrending markets are a flippers delight. (ed)

Sell your house quickly for cash