All Forum Posts by: Andy Collins

I negotiate contracts for a living, if we are doing something "different', I write a contract and send it to attorney for review,,we work together to get something that accomplishes what I want, and still is legal and offers the protection he wants.

If I am making very minor changes to that agreement I go ahead and make them (minor terms etc), but if any change is very complex, I run it back by the attorney.

I have read and reviewed thousands of contracts in my life, and I very rarely miss anything, but I am not an attorney, and am constantly surprised by some small change an attorney will make that gives us better protection.

If you didn't go to law school, don't play lawyer

always remember the important thing is what your audience (investor) wants.

How safe is the investment and why, how much money can he expect to make and why,,not BS numbers, but solid numbers that you can show of specific houses that are for sale now (or recently), what the rental income would be, and the entire breakdown showing your calculating projected maintenance, vacancy etc.

You HAVE TO KNOW WHAT YOUR TALKING ABOUT,,what will interest the investor is your knowledge, showing you have done your homework,,you have to do a lot more reseach before your ready to pitch anyone (unless they are a relative, but even then I recommend a lot more research,,,talk to investors in your area,,,,get to know your market,,after you have done all that a 'business plan' is just an outline of how you plan to move forward, what is important is the thought/expertise you have put into it

I once knew an MBA from UCLA that couldn't accomplish anything,,he could write fancy reports, business plans,,but when it came to actually performing,,he fell short,.,,show your good in both areas (anyone that has a history of accomplishment will find investors much faster than someone that has a history of failures,,,but most of us have had some failure along the way,,but show you area a leader

I negotiate (other than real estate) for a living, there are times it is better to throw out the first number, especially if you think a seller has a crazy high number in their head.

If you have reason to believe they think its worth (pick a number) $100k, and a fair deal would be more like $60k, throw out a low number to start, this makes the negotiations start at the lower number.

Now I will say, don't throw out the top dollar you will give for the property, and I agree in most cases let them throw it out, but I'd rather defend a $50k offer that is somewhat realistic, than start at $100k and work your way down,,and don't just 'throw out a number', given the reasons for your offer before you give the number.

If from your conversations you know the seller is going to use the house down the street that sold at $110k, then go ahead and deal with that now,,explain that there are houses in the market that have sold for very high prices, those houses (explain the difference),,,take away what he is going to try to use against you in negotiations before he can.

Vinyl plank, it looks like wood but is extremely durable.  I had my flooring person at a vacant property yesterday, we are replacing all the downstairs carpet,,however the vinyl plank in the living room and kitchen looks as good as new

If your building your real estate portfolio then use 30 year mortgages, its hard to beat interest rates of less than 5% for 30 years. 

You will be limited to 10 conforming mortgages, so use all 10, then look at commercial loans (or if your spouse can qualify put 10 in her name).

One issue with paying down mortgages, after you get past 4 mortgages, you can't pull cash out of a rental property (with a conforming mortgage).

Develop a plan and follow it, you will be glad you did!

I have owned a Testarossa, a race car and two airplanes,,with each of them I will tell you the old saying holds true, the two happiest days are the day you buy them and the day you sell them!

Enjoy, but right now if I have a $1200 payment there better be about $2,500 in revenue coming with it

In your situation there is nothing 'crazy' about renting while investing.

I would recommend finding someone with experience in vacation rentals (I have none) and talking to them about the deal, I'm sure they have a different set of formulas/problems/issues,,,that doesn't mean your deal is bad, just get someone with that specific type of rental experience to look at them for you

andy

To complete a $50k rehab with $0 cash on hand is going to be a challange,, I've used hard money lenders several times with very little out of pocket when the job was completed, but I was out cash along the way to pay contractors until I got a draw.

If it was a short rehab it would be easier, but most hard money lenders won't give you a draw until a certain job is complete.

Try to leverage the Lowes credit you have,,see if you can get your hands on a few thousand dollars by selling something, it will make your life a lot easier than having contractors always mad because it is taking you longer to get a draw than you expected.

Are there any jobs you can do yourself and get a draw based on finishing those jobs?  That might put some cash in your pocket 

I'm not saying it can't be done, but you want to finish the project and have a positive relationship with the contractors and your HML,,if you can find a way to borrow some cash, it will save you headaches and money to bridge the time between you pay a contrator and get a draw

Look at your HUD1 statement they should have provided, you will have some 'pre-pays' in there such as insurance etc, that will drive up the cost at closing, but they are paying insurance for the next year.

Until you look at the HUD1 you won't know what your payingi for

I've been in business to business sales my entire life, primarily intangible products.

When you say "sales" it has such a broad meaning, it could be someone knocking door to door selling something, or someone that negotiates  contracts for many millions of dollars, they are both 'sales'.

The biggest thing my background brings is the ability to build relationships, that could be with contractors, real estate agents or tenants.  It's not complicated, I treat people the way they should be treated, fairly and honestly.    My tenants stay for years, I use the same contractors and they are happy to work for me (not saying we never disagree).

People will tell me that trust me, and want to do business with me (people will spend very large amounts of money with me based on a concept they often aren't familiar with, this doesn't happen overnight but over sometimes months of discussions), is it because I know some sales techniques taught in a book, no (but I have read hundreds of sales books in my life), they realize I'm an honest guy and want to put together a deal that is fair to both parties.

Anyone wanting to learn how to sell should remember these two things and they will improve their sales ability considerable.

  1.  Treat people honestly

  2.  Ask for the sale, ask them to make a decision on whatever it is you have

       presented.