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If you’re like most people, you’ve been wondering all along when we were going to discuss all the awful things you’re imagining might happen to you as a wholesaler. And I have no desire to sugar-coat things for you, but the truth is most of the things you’re imagining are extremely rare, and easily overcome. Here are some of the most frequently asked questions about such fears:
What happens if I can’t find a buyer for a property I have under contract?
If you can’t find a buyer, one of three things has happened:
As you’re probably already aware, any of these 3 failures is unlikely to harm YOU, if you exercised the recommended inspection clause. You’ll simply void the contract under that clause, or renegotiate for a lower price or more time, or in a worst case scenario, let the seller keep any earnest money as per the liquidated damages clause.
In the first case, you might try renegotiating the contract price or option price—you’ll know what to re-offer after you’ve shown the property to 4-5 people. In the other two cases, if you’re certain that you’ve created a good deal, you might consider paying the seller an additional, non-refundable option fee or deposit to extend the period of the contingency and closing. A third possibility is to buy the property yourself, although that is outside the scope of this course. Remember, as long as you have a liquidated damages clause, you’ll lose only your earnest money; if the property is controlled via an option to buy, you’ll only lose your option fee for not closing. But don’t make it a habit.
In any case, it’s important, as an ethical wholesaler, that you let the seller know as soon as possible that something has gone awry, and that you won’t be closing as promised. Read More >>
“The secret to multitasking is that it isn't actually multitasking. It's just extreme focus and organization.” ~ Joss Whedon
Have you ever watched a really good store manager while she works? It’s incredible! She can handle two or three customers at once, answer the phone three times while she’s at it, and approve a couple check transactions at the same time. And when you compliment her on her talent, she just shrugs and says, “I’m a multitasker.”
A few years ago, businesses were all about multitasking. Employers wanted people who could multitask. With life moving faster all the time, all of us have learned to do it to some extent. But experts now believe that multitasking isn’t really all that productive or efficient. For a lot of us, multitasking just means we do a bunch of things at once, but we don’t do any of them very well. I don’t know about you, but I’ll never be able to do what that store manager does.
So it turns out that it’s better to focus on one thing at a time. But this doesn’t fit too well with modern life. Between home, work, school, church, and hockey, it’s a wonder we ever get anything done at all.
Luckily, I don’t have to multitask anymore, because my cellphone does it for me. I can hardly remember anymore what life was like before I had an iPhone. I used to say that having a cellphone was a good idea, but not an absolute necessity. Well, it’s sure a necessity now. Read More >>
The rental business can be very lucrative for the real estate investor. It can also be a pain in the neck. The trick to an effective rental business is the management. We have many rentals as a part of our real estate investment business and we have always said that managing tenants is like raising another set of children unless you do it correctly.
The first thing you should do is to decide if you are going to manage your properties yourself or if you are going to have someone else do it for you. There are ways to automate these systems either way and I will discuss both. You just need to choose the system that works the best for your own needs.
You can use a property management company and run your rental business pretty much hands-off. Just remember that there are costs involved in doing it this way and you don’t have as much control. If you do choose to work with a property management company check references before doing so. In the beginning, keep a closer tab on what’s going on with your properties. Some property management companies are definitely better than others and some will take better care of your properties than others.
When using a property management company who is going to place tenants in your properties, make sure they are using a reputable tenant check company and make sure you look at the applications and tenant check reports of prospective tenants before they are placed in your property until you are sure that you and the management company are “on the same page” regarding the tenant requirements you want for your properties. Make sure your property management company understands your personal parameters when placing tenants in your properties. Read More >>
You may have heard the news that the real estate market is improving throughout the USA. While in some areas, the market improvement is steady, some markets are just hot! An interesting observation we have noticed is that private sellers in particular hear the news on Fox, CNN, CBS, etc. and immediately think their property is worth what it was in 2007 at the peak. The idea of gradual appreciation seems to escape a significant number of them as it seems at every corner everyone is saying sell! Even banks are selling REO’s at or near full retail value…before rehab!
In the midst of this, you may be hearing the phrase ‘limited inventory’ or ‘fierce competition’. And depending on your market, there is probably some truth to this. More agents are coming back on the scene. Real Estate gurus are selling Wholesale courses like M&M’s at the grocery store about how easy it is to be rich tomorrow. They all have some kind of ‘secret’ message to get deals flowing in to everyone. However, if you sell it to everyone, how is it a secret at that point?
So what is a wholesaler to do? Read More >>
It's probably one of your favorite QuickBooks activities. Be sure you understand the mechanics of recording payments.
There are numerous ways to prioritize your workday. Do the most difficult things first. Get important phone calls out of the way. Respond to various emails.
But it's likely that one activity takes precedence when you see that it needs to be done: recording payments. While you're probably very careful with this process, it's critical that your actions here are accurate. If they're not, you could either lose money that you've earned or anger tenants by requesting payments they’ve already made.
QuickBooks comes with some helpful pre-defined payment types; however, you also have the flexibility to edit that list and add new types. To see your list, open the Lists menu and select Customer & Vendor Profile Lists, then Payment Method List. This window opens: Read More >>
Improper goal setting can really hurt your business. Proper goal setting can make you rich. This is a concept that I see most new investors and real estate business owners learn the hard way. If you don’t know how to set proper goals for yourself then you are very unlikely to obtain any goal. In this article I will help you to learn the art of goal setting.
Whenever I begin mentoring a new student or business client I always start by having them submit their goals. I am actually more interested to see how this person sets goals more than the goals themselves. Most people will set goals based on what they want with little knowledge of what it takes to accomplish those goals. Understanding the requirements of the goals we set will greatly help us achieve them.
I follow a similar process for goal setting that the U.S. military follows. It’s called “Backward Planning Process”. Basically I decide where I want to be. What is my end goal? Once I know exactly where I am trying to go, I work backwards from that point. For example if I want to buy an apartment complex I start working backward with questions like this... Read More >>
My students always ask me “How many letters do we have to mail in order to get a deal?” Before I answer, I want to state that the #1 reason a Seller sells their house for less is because they are motivated. An unmotivated Seller will not take less for their house, as they are not in a hurry to sell. Let me clarify the situations that make a Seller motivated:
I’ve been in a few businesses in my life, still have a few and probably will until I check into the nursing home, and maybe even after.
When comparing buying and selling houses to other businesses, the contrast is so big, sometimes I wonder what the world would be like if all small business owners were exposed to my training before they opened their businesses.
Let’s take a look and compare to my restaurant.
You can start real estate immediately with no money, no credit and no risk and expect to make a profit within the first month or two.
The restaurant required several months looking for a location I had to build out. Then, I signed a long lease with a $7,500 deposit (albeit non-recourse). Then it took 10 months and several hundred thousand dollars to get it opened and a massive amount of my time. As to the profit…it’s been a serious negative and will take many more months to break even. Then we’ll discuss a profit, maybe.
Your real estate business has no employees, only a virtual assistant or two. That means no payroll alligator to suck you dry and no employees to manage or account for and no regulations strangling the life out of your business. Read More >>
All good real estate investors know the valuation of their deals is key to insuring success and projected profits. Since late 2013 transactions in numerous market areas have seen strong sales activity. But what to do when transactions start to slow? All the market areas covered by REIComps, insure when sales changes happen you are not caught off guard.
Last week, we began seeing a number of Support Tickets asking the question, “My retail sale properties aren’t getting multiple offers any more. What am I doing wrong? Equally, we have seen tickets which ask, “Several of our current units for sale in the same area where they have sold in less than two weeks aren’t getting showings”.
Truly, essentially these are the same question, but we had to dig deeper from a valuation perspective. Remember, when we “buy right” typically we can drive the market selling slightly lower. Or in some cases due to sound acquisition, an investor is able to improve a dwelling insuring that buyers can’t wait to make an offer. Read More >>
How many times does your phone need to ring to make a deal? Well, the more rings you have, the more possibilities there are, right? But here is the catch: you don’t want just any calls. You want quality calls. It doesn’t matter how many calls you get if they aren’t ones that are going to lead to getting paid.
You may have heard real estate gurus telling you how to get that phone to ring. But I can show you how to get the phone to ring so that when you answer, you’ll have a potential good deal on the other end.
First, quality calls will decrease your overhead. I typically spend $1000 per closing on marketing. In the past, I bought the latest in high tech products which were supposed to send me 10 leads per day. The problem was that, while the leads were plentiful, the number that actually worked was less than I wanted.
You see, I want to make the time that I spend worth it. I want sellers who call me so ready to sell that I can barely finish saying, “Hi, this is Russ. How may I help you?” And I want them to say, ” I heard you were the best in the Atlanta area, you pay a fair price, you are respectful, and you do what you say you are going to do. I don’t care what you offer me, I will take it because I know you will be fair. I know you can close in 30 days. I trust you.”
How can YOU get these kinds of calls? I’m about to tell you. Read More >>
This month I believe what I will be sharing with you can be very important to you financially as well as to build your financial freedom faster and easier. Last month I questioned why all of the so-called Guru’s are pitching how everyone should be wholesaling properties to build wealth. From my own experience as I said last month, if all you do is wholesale deals you have a job. This month I want to explain what I have experienced over the years doing this type of deal and what I have learned that keeps my buyers clamoring for more deals on a continual basis. The reason I decided to write about this subject is because without the practical knowledge of how to structure your wholesale deals, it is going to be more difficult to pass those deals along to other investors. I hope this information will open your eyes to the real world and what it takes to be more profitable.
Last month I left off by saying, if you always pay too much for the properties you wholesale, the seasoned investors aren’t going to be interested in the properties you find and you will be forced to sell or assign the purchase agreement to other people who don’t know what they should pay. This is because those people don’t really understand how to figure the numbers and once they do figure out they paid too much, it only stands to reason that they won’t want to buy more properties from you. Once word gets out you are asking too much and it will be assumed you don’t know what you are doing and investors will avoid you like the plague. Everyone wants to make an adequate profit from every deal they do or they won’t do the deal. You must realize that there are other ways to profit from real estate other than being a wholesaler. Read More >>
Ok, I admit it. I use four-letter words. A lot. Some of these four-letter words are the kind you may not like to hear if you’re a fine, upstanding person of high moral fiber. Oh well.
The OTHER four-letter words I use are awesome, and if you know how to utilize them properly, they can make you super RICH! Best of all, you can say THESE four-letter words in ANY crowd, around anyone, without having to worry about getting slapped or getting the evil eye.
So, without any further delay, I’d like to share a short list of some of my favorite four-letter words that can make you rich & are safe to say around women, kids, and Baptists. ;)
I’ll also present these words in a way that mostly applies to real estate, but I promise you that what you’re about to learn here will apply to ALL areas of your life where you want to have success!
FAIR enough? (hey! That was a four-letter word already!) Here we go…
The first word on the list is an F-Word: FLIP. Read More >>
Just got a call from a realtor. She represents a homeowner who needs a quick sale. The realtor said, “Bill, my client will only consider an all-cash offer. We’re not interested in any of your creative razzle-dazzle deal structures, understand?”
Kim and I get a lot of calls like this. I’ve learned not to say, “No seller wants cash – EVER – ya dingbat!” Saying such would ruin the relationship and destroy the possibility of meeting face-to-face with the seller.
So what do you think? Do sellers really want cash or could I possibly be right?
In this situation, what if I immediately agreed to pay the seller’s $80,000 asking price – in cash? There’s only one condition: The seller must put the $80,000 on her kitchen table, cover it with plastic wrap, and agree that once a month the seller, realtor and I will get together and marvel at the big stack of money.
Sure, this is a silly stipulation that no seller would agree to. But why – since the seller is getting exactly what she wants – wouldn’t she agree to it? Think hard on this. It’s an important question to contemplate! Read More >>
Many of us are aware of the potential for real estate to function within our portfolio. Not only do we believe in real estate as an investment, but we know that over time, it tends to go up in value – there is, after all, only so much land to go around! But what happens when you incorporate real estate into your retirement portfolio? Do the rules change when you’re running a Real Estate IRA?
Truthfully, many of the same principles of real estate hold true when you’re investing in real estate from within a Real Estate IRA. But that doesn’t mean there aren’t some other things to be aware of – this is, after all, a different type of investment account.
Even so, you’ll find that investing in real estate through a Real Estate IRA isn’t only intuitive, but can be just as intuitive as investing in real estate from a “general investment” perspective. We’ve put together three “Golden Rules” here to not only demonstrate some of the similarities but some of the differences in investing in real estate for short-term growth and investing in real estate for retirement: Read More >>
Last month I wrote about how you could use the right of rescission as a silver bullet to stop a foreclosure in its tracks. Once you drop a notice of rescission in the mail, your loan has been nullified as a matter of law and the bank must either comply with the rescission or prove within 20 days that they have the right to enforce the note. Well, over the last few weeks I have been seeing more and more from the banks that the right of rescission has them on their heels. The banks are sending their lawyers around their offices explaining exactly how rescission leaves them vulnerable.
The main point that the lawyers are making to the banks is that mailing in a notice of rescission is all it takes to cancel a borrower’s loan, note, and mortgage. The notice is effective from the moment it is dropped in the mail as an act of law. This was written specifically into the Truth in Lending Act (TILA) so that homeowners wouldn’t have to use an attorney to act on their behalf, thus restricting the remedies provided by TILA to borrowers who can afford an attorney. While the note is canceled immediately as soon as the notice is dropped in the mail, the bank has 20 days from the date of receipt to respond. This is a good reason to send the notice with return receipt requested. This provides you with proof of the exact date the notice of rescission was received. Read More >>
Wholesalers send me deals daily but I have started to notice that many of these wholesalers are wholesaling another wholesaler’s property. Before proceeding, I want to be clear that I have no issue with this but there is a right way and a wrong way to go about it. Also, understand that if a buyer/investor receives the same property from multiple sellers he/she will contact the seller with the best price. Wouldn’t you? Keep in mind that you did nothing to acquire this property. You merely sent it out to a buyers list you put together, which with today’s technology takes only a few minutes. So what should you avoid and what should you do when wholesaling a wholesale?
Let’s list a few of the major DON’TS:
This month we are in for a special treat. We have several speakers lined up for you to deliver great content that will help you in your real estate career. All of these speakers work for the local government and will be teaching you about how each of their departments work and how you can connect with them and their offices for your investing business.
Christy Lawrence - Development Services Department
Leron Mitchum - Landbank Authority
Darrel Daise - CHSA Housing Department
Cynthia Knight - Property Maintenance Department
This will be a meeting that you will not want to miss. Come out and learn how to work with our local government offices to tap into resources that many other investors are not even aware of!
We look forward to seeing you at the meeting!
Are you ready to take advantage of the rising real estate market and get in on the red hot house flipping scene? Are you thinking about flipping but don't know how? Does the idea of renovating properties scare you to death? Don't know where to start? If the answer to any of these questions is yes then you absolutely need to attend Don's new two day renovation event.
Come see Don on July 25th and 26th where he will spend two full days teaching you how easy it actually is to Find 'Em, Fix 'Em, and Flip 'Em. You will spend two full days learning the art of flipping houses. Don will show you a Step-by-step process to evaluate, avoid rookie mistakes and build a highly profitable fix and flip business.
Day Two (Bus Trip):
Don will give you practical tips with real life examples, easy to use systems and killer paperwork so you can tap into this exciting and potentially unlimited source of income and financial freedom.
PLEASE NOTE: Savannah REIA Members can attend at Atlanta REIA Member Prices. Location and schedule subject to change. Pricing is per person. No refunds 5 days prior to event. Register before early registration expires to save $100 off tuition.
“I always say shopping is cheaper than a psychiatrist.” ~Tammy Faye Bakker
The other day I was in the grocery store picking up some milk. In the checkout line, the checker asked the guy ahead of me if he had one of those loyalty cards. Well, this guy took out a shoebox full of those cards – a shoebox! –and started searching through them. It took forever!
Okay, maybe I made that up. Actually, if anyone needs a shoebox for those cards, it’s probably me. And if I were to pull out that shoebox in the checkout line, I’ll bet no jury would convict the checkout lady if she shot me right then and there.
Now, just in case there’s anyone who still doesn’t know about loyalty cards, it’s time you did. They’re promotional wallet cards that big retailers and businesses give out, usually for free. When the checker scans the barcode on the back (or when you give the checker the phone number they have on file for you), you can get all kinds of deals that are only available for people who sign up. Read More >>
Signage is an important tool for you to use in your real estate investing business. Using signage is another inexpensive way to draw motivated sellers and deals to you. Many real estate investors find that signage can produce more deals in a year than some of the other methods they use in their businesses. Once again, you need to test and track the results in your own business. There are several different types of signage you can use. Some are permanent, some are temporary. Some are very inexpensive and some will cost more. I will discuss several different types of signage I have used in my own business.
One type of signage you can use is magnetic signs or vinyl lettering that goes on your vehicle. You can also "wrap" a vehicle with signage. Wrapping a vehicle means signage all the way around it. There are sign companies who will design this type of signage for you. This is a little more expensive and a little more permanent; however, it can be easily removed should you decide to sell your vehicle. Magnetic signs work very well, especially if you only own one vehicle. Sometimes you will be working with a seller who doesn’t want their neighbors to know they are selling their house and you will need to remove your signage before going to see that seller. Make sure your message is short and to the point since other drivers have only seconds to see your message unless your vehicle is parked. Read More >>