All Forum Posts by: Lee Allen

An very wealthy guy goes to my church. I would like to approach and talk to him about some real estate deals. I don't personally know this guy but my mother in law knows his mother.

How do I approach someone like this?

Should I just call him up and mention that my mother in law is friends with him and then ask him about the business oppertunity.

Or should I invite him to lunch to "get to know him"

Or should I call him and tell him I am trying to network with successful people.

Or should I just call him and tell him I am interested in learning how he started his business and get some pointers from him.

Thanks for any help

How do I approach someone for the first time and ask them about investing. Should I send them an email or call them first or should I just show up at their place of business.

Example: Should I just call doctors and tell them I want to come by and tell them about a business opportunity or that I would like to get their opinion on something.

I like gmail alot because of the spam and virus filtering. They also have a much faster reaction time to new virus coming out.

My website provider doesn't filter anything and will also send virus over to my PC.

Another benefit is that gmail integrates with google calendar and the other google applications.

Originally posted by Justin S.:

Why not just put all rentals into one LLC?

Putting all your rentals in 1 LLC makes them all vunerable to a lawsuit and everyone knows how many properties that you own.

Suppose a tenant child eats lead paint and the courts say that you are responsible and your insurance policy doesn't cover lead paint then all your properties are at risk.

Originally posted by John C:

Originally posted by Lee Allen:

It is true that that about 20% of the Real Estate Agents make about 80% of the money.

It is the same for Real Estate Investors. In my area there are about 150 Real Estate investors in the local REIA club but only about 20 of them are serious investors.

Wasn't that theorized by some economist? I believe that applies to many businesspeople/investors out there.

It is called the Pareto Principle or commonly known as the 80-20 rule.

Here is more info on it
http://en.wikipedia.org/wiki/Pareto_principle

Originally posted by Franklin Lee:

Not always true. My mother, who is a top real estate agent in her area, gets about 100% of the 6% commission, except that 32% of the commission goes to taxes.

Some companies allow you to pay a monthly desk fee and you get to keep all your commissions. One of the national chains allows you to pay a $1000/mo desk fee and you get to keep all your commissions. The only time that you would get the full 6% commission is when you are both the listing and selling agent.

It is rare when the same agent lists and sells the property. If I list the property it goes out to over 4000 other agents and one of them may already have a buyer for the property.

I found a document on First American Title Insurance on Land Trusts. It has some good information. It also talks about some reasons that title companies may not want to insure them.

http://www.firstam.com/listshortcut.cfm?id=3318

Originally posted by Jon Holdman:

How is that $7 million in equity?

The house has been for sale for about 10 years and that was what it has been appraised at by several appraisers. The only problem is that noone can afford it. It all comes back to supply and demand. There is no demand for this property.

I often disagree with what appraisers say that a property is worth. You can get 10 appraisals and each one of them will be different. The market determines the true price of any product.

You could have a beanie baby, comic book, rare coin, or any other collectible that a price guide or appaiser tells you that the item is worth $500. If you cannot find several buyers that will buy the property at that price then the appraisal is wrong.

In some areas in Birmingham you can pick up homes for under $20k and they will appaise for $80k after doing about $20k of repairs to them. Banks used to make $80k loans on these same houses. The problem is that the people that were moving into the house would try to sell the house after a couple of years but noone wanted to buy them. Normally the homeowner just moves out of the house and gives it back to the bank. Many of these borrowers were subprime borrowers. The bank tries to retail the house for 6-12 months for $80k and cannot sell it. They eventually sell it to an investor for $20k.

I have found that by eliminating the word Land in the name of the trust then I am able to get many title insurance companies to work with me.
123 Main Street Trust vs 123 Main Street Land Trust

Donna Bauer teaches that she uses land trusts on properties that she buys but I once her saying that she won't allow land trusts to be used on properties that her title company is insuring. Not sure of her reason for that.

George Paukert tells a story in one of his books. He made a visit to one of his listings and found 15 people living in the property. None of the squaters spoke english. The property was only 1200 Sq Ft and there hadn't been any power or water on at the property in several months. The squaters had been taking the front porch apart and using it for firewood in the fireplace.

The seller called the police to report that the house had been broken in and that the people were still there. The police said that he needed a court order to get them out.

The seller went to court and the judge ordered that the seller to turn the water and power back on because it was "inhumane" for people to live there without power and water. The seller told the judge that they had no right to be in the property and had never signed a lease or paid any rent. The judge turned a deaf ear to this.

The seller had to get the power and water turned on and then he was able to get a court order to have the squaters removed.

George said that weird things like this occassionally happen. It is rare but it does happen.