All Forum Posts by: George Azita

 Thank you very much. I don't know everything!

It may happen, but I am still thinking there should be some sort of protection in place where the first entity that records the transfer with the county recorder is the winner. Otherwise, what stops a bidder at an auction from participating as a bidder and bidding on the property as long as it goes for less that what he is offering the property owner and if the bid at the auction is higher the bidder could have someone buy the house at the auction, run to the seller and buy it for less and then the bidder at the auction gets a refund. Hmmm! Maybe, I should try that and that could be a win win every time.

I find it hard to believe you can re-wire any house for less than $20,000. I have a California C10 Electrical contractor license. Last week, I re-wired a 1400 sq ft house and the electric wiring and supplies was $8,000. Then, I have to pay for permits, labor, plaster and stucco patching. Then, the customer has to repaint the entire house. I don't generally buy my electrical supplies at Home Depot, but yesterday one of my employees was doing the electric wiring for a tankless water heater and I was close to Home Depot. The little bit of wiring, GFCI, boxes and wiring was $406 and I could carry everything in my hand without a shopping cart. The cost of all supplies is depressing and the increases have to be passed on to the customers.

I purchased many properties at auctions for many years and never heard of someone winning a bid at an auction and then finding the property was sold prior to the auction. I think you should speak with an attorney because I think there is a period before the auction where the person being foreclosed on cannot sell or transfer the house. Otherwise, your bad situation should be very common.

One thing you need to be seriously worried about when buying at auctions is make sure you are buying the first lien and not a junior lien. I've seen many bidders buy the 2nd and 3rd positions on a property and lose every penny.

I also sold properties where I foreclosed on my buyer and I remember there was protections in place where I could not sell the property to someone without notifying the auction.

Door-to-door canvassing can be a terrific way to earn money and to hone in on marketing and sales. I have an employee who earns $5,000 to $7,000 every week (his paycheck) canvassing door-to-door and he sells home services i.e. plumbing, heating, roofing, house painting, etc..

My company has been hiring door-to-door canvassers for about 20 years and it is the best and most-productive marketing and sales arm reaching out that any business can have. Anyone interested in marketing and sales should do a lot of internet research and you will find many successful businesses that use only door-to-door for their marketing and sales like a window company on the east coast that does $350 million per year in sales.

Like every profession, door-to-door marketing and sales requires a lot of skills and anyone interested in it should seek as much training and mentoring as possible. I have another employee who earns $5,000 per week doing door-to-door. This employee is the laziest person I ever met. He works only 3 hours per day 3 to 4 days per week and still earns $5,000. The reason this employee is so successful is because he is street smart and he has a very rare ability to read and profile people. So, he doesn't waste his time talking sales pitches to mannequins. He has the ability to profile people based on the type car they drive and the appearance from the outside of their house. I can tell you some stories about how he spoke with people on the phone he never met and he described the clothing they were wearing, their height, whether or not they had a mustache, when they had a morotcycle, what brand motorcycle and even the pattern and color of their clothing. This may be hard to believe, but I've personally witnesses this several times. Not every, but enough times to wonder about his special abilities to read and profile people.

I am also very good at doing door-to-door sales and I have a super simple approach. I knock on doors, never introduce myself by stating my name and never state the name of my company. I get right to the point!

Me: "Knock Knock"

Homeowner: "Can I help you"

Me: "Hello! I noticed your home needs a new roof"

Homeowner: "I've been thinking about putting on a new roof for a long time. Can you give me an estimate"

It is that simple and long introductions tend to scare people, turn them off and allows them to build a block wall barrier.

I relate door-to-door sales like asking you if you want a bottle of water. I never met you before. I see you walking through a park and I put a bottle of water in your face. I don't have to explain to you what water is and I don't need to tell you my name to be friendly and to offer you the water. You smile and take the water, or you tell me you are okay, smile and walk away.

I always thought that investing for cash flow is the worst business model since cashflow is miniscule compared to profit from appreciation. Collecting rents and cashflow barely keeps up with inflation.

My 2nd worst thought and business model is the risks involved with getting into syndicated real estate deals where someone (not you) controls the investments and controls your money. "No Way, Jose!"

It makes more sense to have a business model where you have 100% control of your investments, 100% control of your money and your business model is to earn both cashflow and profits from appreciation. 

If you cashed out today, according to my calculations you would have $3.3 million minus 30% for capital gains leaves you with about $2.1 million. With $2.1 million you could pay yourself $200,000 per year for the next 10 years, or $16,000 per month, or continue to invest for appreciation and maybe in 10 years you can pay yourseld $30,000 per month, or $15,000 per month for 20 years.

It is easy to lose money and I would think you would not want to take any risks when you already got this far.

Maybe, you should come up with an excuse to back out of the escrow even if you take a little loss.

"Not all money is good money" That is what one of my employees tells me almost every day. I think he means; if you have to suffer to earn money then the money earned is not worth the stress and grief

It seems like many people get into real estate because they hear of others earning money. They read books, watch videos and think they are ready to walk on water.

Sadly, I read many threads where OP's ask questions and then provide tidbits of facts. It would be nice to see how you did the math before opening escrow and then maybe you and others can learn from success and mistakes. When I purchase properties I do the math about 10 times, ask my broker to do the math, a relative with extensive math skills helps with the math and then I compare the math and save every sheet of paper with math calculations for future reference so I can see how good or bad we meet our projections.

Saving all your math calculations helps you to see whether you are doing well or bad with your investments and even if some investments are doing bad your keeping your math calculations can help motivate you do do better because you will know where you made mistakes. If you don't do the math and don't save your calculations then you are investing blindly and with no compass to guide you.

Hello! I am new to this forum. Thank you for having me on the forum.

It would be interesting to see the entire math for this property and if you post the numbers I will do the math for you.

Recently, an investor was bragging about earning $5,000 per month on a few rentals he was purchasing out-of-state and he claimed he was earning cashflow of about $500 per single-family home. As shown in the charts below, I came up with $185 vs $500.

Many investors put capital expenses and maintenance in their projections, but those two expenses are totally aside from the costs to clean and bring a property up to snuff after a tenant moves and when a tenant moves the costs to clean a home usually exceed $6,000 even if you do the work yourself. You need to figure that the average tenant will stay in your rental for 2 to 5 years and then the cost to paint a $1200 to $2000 sq ft home is about $3,000 to $4,000 plus flooring replacement, tree trimming and other yard work, blinds, cleaning and many repairs like broken sinks, faucets, appliances, fence repairs, etc.

Post all your numbers and lets have a look. 

I am guessing that by the time you pay a property manager and pay for the inherited additional expenses due to owning long distance you will lose money on this property with the exception of if the property appreciates in value, significantly, and my guess even includes factoring in the principal paydown. I included in my calculations an annual appreciation rate of 5% and that is actually super high since everyone is taking a wild guess in regards to how prices will continue when they are already at a very high ceiling. I purchase properties hoping they would appreciate only 3% annually and 10 years later they didn't even appreciate 2%. So, rather than hoping, praying and crossing my fingers I always project the bad that can happen in the future and not what I hope will happen in the future.