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Category Archives: Buying Investment Properties

Sallie & Freddie Get Kicked in The Fannie!

Sallie & Freddie Get Kicked in The Fannie!

There is a lot of talk these day about the Federal interest rates.

Are they going up, are they going down, what will happen next?

A lot of investors are wondering, distracted and some just waiting for the market to “cool” down before they get in. But the opposite is true!

Now is the best time, especially with this strategy that I am about to share with you. I have been doing this for years. Recently this method went unnoticed, no one cared, it wasn’t on TV, even investors didn’t talk about it at investment groups. But that didn’t stop me, I guess because I like to do things before the waves form. I look out into the ocean and see what’s coming next and start.

This strategy has gained more popularity and status in the recent years because of the biggest bank crisis ever in US history and I will share it with you here…

Did you know that more millionaires were made after the great depression than any other time in American history until recently?? The numbers are staggering and the tables are being over-turned. Here’s what I mean. In 2008, when the “credit crunch” hit the world, banks froze up so much that it seemed like even oxygen was going to be lost…

Jobs were downsized, businesses forced to close, bankruptcies hit all time highs, and sadly people took their lives because they couldn’t handle the pressure of a shrinking economy and a banking strategy that could no longer be trusted.  And that’s when the government had to step in.

This became the newest and biggest financial collapse the world had ever seen.

However, there was a few investors that looked at “rebuilding the economy” as a rehabber would. Gutting it all out. Putting on protective glasses to see through the dust that has taken years to settle and they went to work on a strategy called Owner Financing. A strategy that allows investors to work directly with homeowners WITHOUT the “big” banks getting in the way with their loopholes and “over extended” ways.

I too had a pair of those protective glasses! Let’s just say I have learned from past experiences that it’s important to come prepared so you see when the going is going to get dusty.

When other investors saw what I was doing and how I was still turning deals in a “tight” financing market they wanted some glasses too. So I showed them how to get them and use them to get great deals during this crisis.

Hey, I hope you like my examples here, but the point I am driving home here is that there is a lot of talk from the media about what could or couldn’t happen with interest rates and the economy but don’t let it stop you from investing. Get started now.

At the link below is a training I put together for you on how you can start using this same strategy that I used while everyone was panicking. I was closing deals and making money.

Here it is: http://filthyriches.com/

After you watch this, let me know what you think okay?

Larry Goins, Author

Where To Find Filthy Riches Homes

Larry Goins here and I have spent years perfecting my Filthy Riches model to real estate. If you haven’t heard about my Filthy Riches model, it is all about making more money on a run down $5,000 – $10,000 house no one else wants than most investors make on a $100,000 house…Guaranteed!

Yes, believe it or not, you can pick up a great deal on a $5,000 – $10,000 house and sell it for 3-6 times what you paid for it with no buyer’s list. More about the model later. But where are the properties that I target to generate so much personal income?

The houses in this program are low-income, distressed properties that no one else wants, just not the “dog with fleas” homes. They will need some work before moving in, they just aren’t going to be in too bad of shape. The idea here is you want fixer uppers, not blower uppers. Something that is either livable or close to livable.

These homes might have been on the market for a while for real estate agents, but they are very attainable at a cheap price and with the right approach, can be amazing money making ventures. And the best part is you can buy them at 20-40% of the list price.

So, with all the houses out there that might fit the criteria of a Filthy Riches house, where does a potential investor begin? Some of the most profitable and fastest ways to locate these houses are below.

Vacant houses: We’ve all seen them, the “It’s a Wonderful Life” types of homes. You see tall grass, maybe a window broken or a shutter has fallen down. You know, the kind of house that some people might make fun of…but for the right person, it’s everything they’ve wanted and a huge money maker for you.

In a typical deal, the property owner might have inherited the house from a relative or bought the house as a rental property, but is tired of being a landlord. Or the last tenant skipped town and the property owner hasn’t been able to generate the funds to fix the house up to re-rent it. It might be difficult to find the owner of a vacant house. Most counties have tax records online so anybody can look up a homeowner with the correct address to plug in. In fact, you may just find someone willing in the local tax department to steer you in the right direction, particularly if a home’s taxes are in arrears. Or, you might be able to solicit information from a neighbor, either personally, or through their information via county records and people finder sites.

One “last resort” method that I learned a while back that has been used: take your own “for sale” sign and plunk it on the lawn with your name and number on it. Invariably, the message will get back to the homeowner, who will call you to find out why you put a sign in their yard. This is kind of sneaky but it works. And hey, no harm done.

If you do have the homeowner’s name, you can contact a credit reporting agency and buy a “credit header.” These look like credit reports on a person – minus their actual credit information – which contains all their contact information, including current phone numbers. To find a qualifying credit agency, just Google credit header.

Realtors: Many properties can be found directly through real estate agents. Before contacting one, you might want to look through their website or realtor.com for properties under $30,000. From here, you can contact the Realtor and use a script and projected offer that we discuss in the Filthy Riches course. Even if they don’t have anything readily available, you can always ask them to put you on a notification list if they get more properties under $30,000.

So, why would Realtors be willing to work with you if they’re only getting a 6% commission on a house listed for $30,000 that you pick up for $10,000? That would only be $300, right? Wrong. Many listing agreements have a minimum commission, which research has shown can be around $1,500 per property.

REO Realtor: A third option is to locate and utilize a local REO (real estate owned) Realtor. An REO Realtor is a person who works directly with banks or asset managers who have foreclosed on a property.

Call one of these Realtors and ask them to pull up a report for you that uses these words: REO, Bank Owned, corporate owned, Seller Addendum Required or Foreclosure. These lists will have the coordinating listing agents that worked on these properties. From there, you have a new list of Realtors that work with banks and asset managers who traditionally work with these types of properties.

Bank Owned REOs: You might also be able to find properties on bank’s REO websites. This is a great way to look for properties that are listed before a Realtor has a chance to list it on the MLS or their own website or Realtor.com. If you’re looking to get a jump on the competition, this is a great avenue to explore because you can find properties before other investors have even seen them.

Free Classified Sites: You can use sites such as Craigslist to search for properties or to list your own ad to get homeowners to contact you. If you’re looking for property, be sure to use search criteria such as “handyman special”, “fixer upper”, “cheap”, “cash”, etc.

Houses for Sale Sites: These are similar to classified sites, although they are tailored specifically to real estate transactions, both selling and buying. Sites such as propbot.com are classified sites but are real estate specific.

eBay: You can find some great deals on eBay, although you might have to do a little weeding through the ads. Go to realestate.ebay.com and use similar keyword searches as you would for a classified ad. Additionally, if you bid and buy a house through eBay, make sure you get a general warranty deed or special warranty deed. If they are offering a quit claim deed, it may be because there are back taxes or code enforcement issues involved. Regardless, title insurance will help verify that there are no back taxes.

Auctions: Look for local auction companies and make sure you are on their regular mailing or email list. Also, search websites such as auction.com for properties. Attending live auctions can also help you build your buyer list.

Code Enforcement: Local code enforcement officers can tell you what properties may have code violations against them. They may not be able to get a hold of the owners or the owner may not have the ability to fix the code issues. Some code enforcement officers may be hesitant to provide this information to you, but these records are public information.

A Few Other Sources: Other sources of property information are property management companies (who work with low end property rentals and might know who wants to get out of the business), hard money lenders (who make rehab loans and may have to foreclose on a property for nonpayment), bird dogs (someone who house hunts for you) and “for rent” signs. Often landlords may be willing to sell their properties.

These are some great areas to look if you want to focus on the fastest, best and easiest ways to find properties in order to start making money as soon as possible.

Larry Goins is an author, speaker and coach for real estate investors. His best selling books are: Getting Started in Real Estate Day Trading and HUD Homes Half Off! For more information on the Filthy Riches model where you can learn how to earn returns of 119% – 788%, visit LarryGoins.com or call 803-831-2858.

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Building Passive Income – The Buy Side

Randolph Cunningham joins Larry Goins to talk about locating properties that are good for building passive income from your real estate investments. Topics include what types of properties to look for, what sources you can use to buy the property, as well as how to structure the deal for passive income generation.

You’ll find out about buying with cash, using terms and a lot more information on building passive income by real estate investing.

Your Content Bonus – Listing Agent Questionnaire

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The Skinny on Bulk Purchases

House for Sale

Bulk purchases are the grab bag of the real estate industry. Like any other grab bag you might have been tempted to get, there’s going to be a handful of good for as much bad.

In this industry, there are bulk REO lenders who sell bulk packages of property. I’ve seen bulk purchases anywhere from 10 to as many as 500 properties in them. You aren’t going to get a lot of information on these properties and may not even get pictures. You have to agree to the sale sight unseen. I’ve known extreme cases where somebody thought they were buying a house only to find out it’s just a vacant lot.

Where do these houses come from? Banks sell bulk properties because these properties generally don’t sell for a realtor or have back taxes or other liens against them. Sometimes, there’s fire damage, or title issues that the banks just want to move to get off their books without having to clean all the problems up themselves

Another potential problem with bulk sales is that a lot of times, it can take awhile for you to get the actual deed to the property. The longer you have to wait for that deed, the longer you have to sit on that parcel before you can turn it around and resell it. So, before buying any bulk properties, make sure you’ll be able to get the deeds within a specified amount of time or your $5,000 investment is going to sit stagnant.

Also, there can be back taxes owned on the property. There is no way for you to find this out until you go through each and every property to find out how many taxes are owed. Usually the quickest way to do this is to go to the National Association of Counties website: www.naco.org. From here you can click on the state, then the county where that property is listed to access any information on back taxes. Just be aware that not all counties in the country are online; there should still be a phone number listed that you can call to access this information.

Banks will issue a quit claim deed on these bulk purchases, as opposed to a general warranty deed. That means as soon as this property is in your possession, you take responsibility for those taxes. Additionally, if there are any utility payments owed, those costs may transfer over to you, depending on what state the property is in. You’ll have to verify this information with each utility company associated with that property.

Obviously, there’s a huge amount of risk when buying bulk purchases. So, why would anybody in their right mind do it. Well, as much risk is associated with buying in bulk, there is also a potential goldmine. Let’s say you buy 10 houses for $50,000. Just assume that one or two in the group are going to be in such disrepair that you’ll practically have to give them away.

After you make the purchases, you’ll have to have someone go to each of the properties to inspect, secure and put a lock box on it. They’ll have to take pictures to send to you, since, of course, you purchased these properties sight unseen. Even the horrible ones – the ones you’re not sure you can even sell – will have to have a sign either in the yard or in the window directing potential buyers to call you.

Then the phone starts ringing. It might be a neighbor looking to expand their property. Suddenly, you have a cash sale when you didn’t expect it. They might not offer the full $5,000, but they might offer $3,000 or $4,000 because the property is in such disrepair they want to tear it down and get rid of the rats that have apparently colonized the place. In fact, it might be worth taking the extra time and doing a search to determine who those neighbors are and calling to see if they are interested in buying the adjacent property you want to unload. Or, you could donate the property and use it as a tax write off.

So, now that you’ve rid yourself of the unsellable property, you can turn your attention to the remaining ones. Assume you could only sell that bad property for $1,000. Then you had another pretty pitiful house that you could barely get rid of. But with the remaining eight properties, you were able to sell each at $29,000. That’s $232,000 in total notes that you have left. You can take some of those notes and sell them to recover your money faster, or you can hold onto them, it’s your decision.

Another reason some people are drawn to bulk sales is because you can typically get better deals up front when you buy in bulk. There is generally no negotiating because banks priced these properties to move very fast.

Just remember, although it seems like a great way to get a large collection of properties up front – particularly if you’re just starting out – there is more work and risk that goes into this type of purchase as opposed to buying one house at a time.

Regardless, as long as you got a little money out of the deal, it’s better than nothing. Take your money and move on to the next venture.

Ideally, if you can find these homes before they go into a bulk sale, you’ll be better off. They are often listed with realtors and have likely had a handful of price reductions but are still not sold. If you can go through a realtor instead of a bank in a bulk sale, the bank has to pay the back taxes, and you get a clear title to the property.

Some real estate investors like to take the risk on buying bulk properties and there’s nothing wrong with that. If you’re lucky, you can make a lot of money when you buy in bulk. Just remember that you are likely going to encounter some surprises, and not all of them will be good ones.

Finding Real Estate Bargains

Finding A BargainIdeally, for a start-up real estate investor, probably the best way to open up such career is to find yourself a decent, small, long standing apartment but strategically located, at a very low price and only requires a meager amount of cash down payment. To find this type of bargains, there are several ways of doing it. But everyone should bear in mind that until now, there is no perfect formula that could work all the time.

In scouting for real estate bargains, first stop is the typical and basic reading and studying of local newspapers. There are properties that are listed for sale by their respective owners. These owners opted to sell directly to potential buyers and avoid having to deal with real estate brokers and their commissions which are usually provided by the sellers themselves. Look for classified ads and under the column real estate wanted, place your ad “Wanted: Real Estate”. This would surely create a buzz and you will both have brokers and property owners come knocking down your door.

As you get serious along the way, and your search starts to drain you a bit, it would be timely to start consulting real estate brokers. These people possess vast amounts of detailed information and are also very familiar with market trends. Brokers can also be of big help for a first time real estate investor. They can brief you on building plans, permits and licenses, taxes and other pertinent matters. Since their commissions are paid by the seller, brokers can sometimes become very much aggressive in closing out deals.

Conducting real estate searches on the net has just recently picked up. Every minute on the world wide web, information is added and shared to the rest of the world. Thus it is an ideal place for start up real estate investors in seeking for real estate bargains. Though the net still needs to be further explored by real estate investors, experimentation and relentless research still promises opportunities for real estate bargain prices and deals.

Other not so typical means of real estate bargain hunting is through establishment and provision of commission based sales leads. There are everyday small companies that can provide sales leads to a real estate investor. You can provide sales commissions to taxi drivers, mailmen, movers or moving companies. These people are frequent roamers of a particular city or area who at one time or another could catch a glimpse of potential real estate properties on sale. They can provide a real estate investor with first hand information on vacant buildings, potential commercial and residential areas. Once information is provided, it is now your task to make further contacts with the owners of the property.

Another option is to visit public auction houses and banks for a list of their foreclosed properties. Usually, foreclosed properties can be acquired through bargains, for the reason that some banks and auction houses also need to dispose of their real estate properties because it also entails bigger asset management costs on their part. Though there are no limits as to how real estate bargains can be found, it is always best to always have common sense and practicality along the way in order to achieve and accomplish the goals and aspirations as a real estate investor.

 

Using Bing and Google Maps

Another day, another training video by Paul Olson of Investors Rehab.  In this video, he shows you how to use bing and google maps to scout out the area in and around a potential investment property.  Investors Rehab uses this a lot as part of their initial due diligence.

Take a minute and learn some of the tips to use the software, plus how you can get a street level view of the area of your investment.  Find out what Paul looks for, not just in the home, but in the neighborhood around the home, that gives him some clues on whether or not he should continue the due diligence process on the property.

 

Investment Property Physical Tour

Ever wondered how to quantify what needs to be done to rehab an investment property?  In this training video, Wendy Sweet of Carolina Hard Money does a physical home walk through of a property with a group of Inner Circle students.

Wendy goes in depth on exactly what to look for and how to remedy it.  Roofing, siding, windows, walls, she does it all, and has an eye for things that only years of experience can provide.  The video is filled with questions from investors and is filled with tidbits of information valuable to the real estate investor.

Online Property Walk Through

What do we look for when we scout properties online? In this short training video, Paul Olson of Investors Rehab walks you through how we use online property sites to start an evaluation of a potential deal.

As you may already know, in the digital world, we rely a lot on the internet to find and scout investment properties.  This video uses one of the sites we rely on a lot for that, Zillow.  Zillow contains a lot of information about prospective properties, and also sometimes it will even have photos that are not in the MLS listing.

Paul will show you how we pick apart this information, especially from the provided photos, to aid us in forming an opinion on whether a property is one that we might be able to make money on.

Where to Find Viable Real Estate Investment

Finding viable properties to invest inThe current world financial crisis has brought a lot of difficulties not only to big corporations but even to small businessmen. This situation has brought a good lesson to many investors and they are now being transformed from reckless to cautious investors. Hence, you will see new breed of very smart and well informed investors who will scrutinize every detail of the properties to be purchased.

Today many businessmen cannot afford not to carefully evaluate in which industry they will be investing. One of the most popular and viable businesses to venture nowadays is investing in real estate industry. However, unknown to many businessmen there are few basic factors in this industry which if properly analyzed will result to viable investment.

It should be understood that individual property in different locations is only one of its kind and is not directly interchangeable; hence, it should be evaluated separately. Consequently there is significant work to done in buying properties and getting a good deal depends also in competition and availability of the property as well.

There are several sources of real estate investment and for the informed and resourceful investors they can easily find many properties at very reasonable prices and easy terms from the following:

  • Real estate market listings – these are lists of all properties for sale in any location of your choice and unbelievably these are available at your fingertips through the hassle-free internet.
  • Real estate brokers or real estate agents – these are parties who usually have the real estate listings and are bringing these to your doorsteps for the investors’ convenience. They represent certain company which they act as intermediary between the seller and the investor.
  • Real estate companies – these companies have listings mostly coming from their own development usually on new project sales
  • Banking institutions – This has significant listings of real estate properties because most of its inventories are foreclosed properties. Hence, if you are smart buyer this is the best place to go to find the very cheap real estate properties.
  • Public Auction – this is also another source of bargain basement priced real estate properties because most of its listings are coming from donation and foreclosed properties.

In addition when you have already located the property it is important that you should conduct a preliminary due diligence in order to be assured that there are no infirmities and problems of the properties. Due diligence is an investigation and verification of the status and condition of the property. After this process it now the right time to negotiate seriously for the price and its sale terms, before signing a contract with the seller.

At this particular time of tight finances it is best when making real estate investment to really exhaust all means to evaluate properties available for sale in terms of viability, locations, price and conditions. Hence, a very good grasp of these factors will result to a successful and viable investment in real estate properties.

Why you want Bird Dogs Finding Your Deals

use a bird dog to find you dealsFor every business the hardest thing is how to get started. The fear stagnates or discourages many people before they ever reach their first business. In every encounter the first is always the hardest it might be curriculum, business or even at playing field. For real estate investors the hardest thing is how to start the real estate investment that will outreach to progress.

Real estate investors must first build a buyers list, for without buyers even the best deal offer will never be at its best deal if you don’t get paid. Now you will ask how to find a great real estate deals. Thousands of deals are just sprouting all over. It can be found on the net, classified ads, lead generators etc. But those deals aren’t overlook by others too so normally there are plenty of investors who is looking forward to the classifieds and other deals. Since there are great competitions also investors find it difficult to find the best deals.

The competition is great so we need something or we need someone to get the deal for us. Who are these persons they are the “bird dogs”. They are the scouts that sniff out deals for you. Their sole job is to locate deals and lay the groundwork for you as investors to move in and close the deal for you. The idea is to help you save time and it is almost a done deal when a bird dog works for it. When they (bird dogs) work for you basically you save more time and energies on more profitable activities. Bird dogs are both non realtor and a realtor. It’s better if you choose the realtor bird dogs. Since their sole job is to find the best deals for you. Most bird dogs knows what buyers are looking for they know what to do and what will it take to get it in resale condition. They also have access to motivated buyers and sellers and find them for you.

A good bird dog isn’t born: they’re made. So everyone is capable of being a bird dog as long as you are motivated and resourceful. Bird dogs are needed especially when you still work for other. The time and effort is needed if you plant to have a real estate investment business. So normally if you have a full time job to other less time you have for your marketing and prospecting efforts.

Bird dogs can be the path to your real estate investing goals. Don’t worry about the bird dogs fee because the deal is much important than there service fee for finding a good deals for you. And the good thing is: no close deals there’s no payment. It is still a win-win strategy for you. Remember this value and the wealth they will generate is far greater than they’re normal service fee.

Again is not all the time you will use the bird dogs. If you have the luxury of time then base on experience you can notice that you get familiarize with what the bird dogs does. With this you will learn some basic and even master their skills. Remember they are not born as bird dogs instead they’re made.