All Forum Posts by: Account Closed

Sometines, it is better to put your money on the sideline than to work your butt off to make less per hour than cleaning tables at Mc Donalds. Let the other fools waste their money by paying high prices.. Wait for the right deal to come. Lower your risk-to-reward ratio by being patient like an alligator.

Where do you find the right deals? Go to every real estate club and ask everyone you meet that question. The best way to learn is by networking with investors.

We deal with many at tenants several locations and collecting the rents is fun and a pain at the same time. We have very strict policies we adhere to. Our rents are due on the 1st and late at 5 pm on the 5th. After 5 pm on the 5th the tenant is charged the late charge regardless of the excuse.

As for evicting tenants who are late, we never evicted a tenant as long as they pay the late charge because we earn a nice little profit of $85 and sometimes a little more. So, what do you have to complain about as long as they are polite and willing to pay for your inconvenience and your time.

While I am a hard butt when dealing with tenants I a little bit of heart because I know what it feels like to be short on the rent money and stressed out.  Show some compassion and accommodate tenants who are late as long as they are polite and and nice people.

There are many articles in apartment association magazines about how landlords devise payment plans to accommodate their tenants needs. Every landlord does not have to be a hardliner. Some landlords devise rent payment systems where their tenants pay every week or every two weeks. This helps the financially unfortunate tenants with their cash flow.

datazapp.com charges 3 cents for both phone numbers and email addresses.  They are fast and the service is as good as any I've used. They have a $125 minimum order (4166 records, or something like that). If you pay them $250 in advance for one month you can place as many orders as you want until you reach 6,000 records.

I've used many services and the results are about the same. For every 3,000 records you will get a return of about 1,000 email addresses and 1,000 phone numbers. When you call the phone numbers don't expect many people to answer their phones. Maybe, about 30% of the phone numbers are no longer in service, or the phone number now belongs to someone else. For email, expect to get about 30% of them returned as non-deliverable. It is just the way the business works.

I like email much better than letters because the results for both emails and letters is very bad. If you are sending letters to pre-foreclosures you should know that about 95% of the foreclosures get cancelled. That means, 95% of the letters you send are going to the wrong people. Expect to get less than 1 response for every 1,000 letters that will cost you about $600 with stamps, envelopes and paper. I have been doing direct mail for more than 50 years and I am still waiting for someone to show me a letter that gets a better response.

The nice thing about sending bulk email is you can send them from your computer in-house for free and you can send an email 3 to 5 times.

I use propertyradar.com to download my list of pre-foreclosures. The list has the owner's names, but no phone nor email address. Then you need to convert the Excel list to a comma delimited file and send the list to datazapp.com. You can also download lists of pre-foreclosures from auction.com, but the list has no names.

From Hermosa Beach to Florida? I live in Gardena and ride my bicycle through Hermosa Beach every S. I just built the Shade Hotel next to the Cheesecake Factory. Very pretty picture on your profile! I ride my bicycle every Sunday from Gardena, through Hermosa Beach and to the Del Amo mall to wait for my wife to do her weekly purse shopping. Women sure love to buy purses!

The best service you will find with the best search filters is search on Google for Haines List. It will come up as Haines Criss + Cross Directory. You can pull up tens of thousands of properties at one time and you will get all the property info you need including property owner names, addresses, mailing addresses, baths, size and everything that every other list includes.

One thing to expect is the services is something like $1,300 per year. I use the list every 2nd or 3rd year to download about 150,000 records and then I don't use the service for a few years. I pay workers in the Philippines $3 to $4 per hour to do my data mining and they do a beautiful job. Purchase a used computer on Ebay for $69 to $79. Set in up with only what you want your workers to do. Use Teamviewer and you can watch your worker(s) on your monitor as they work. Usually in the late evening because they are 13 hours ahead of us in California. Maybe, 16 hour difference in Florida.

Direct mail is not what it is cracked up to be. Especially, at a cost of 60 cent each with envelope, stamp and paper plus your labor. I send thousands of direct mail pieces and the results are less than 1 response for every 1,000 pieces and that response does not necessarily result in a sale.

Now, I already know what people are going to say. My message is bad, or whatever, but I have been doing more than 500,00 flyers every year for almost 50 years, 80,000 direct mail pieces every year and the results you get depends on many factors. When my advertising is to give something for free I get about 3 leads for every 200 ads. Trying to purchase a $500,000 home does not get you the same results. I will stick with my have a lot  Until someone provides a better mail piece with absolute proof I will stick with my 1 in 1,000, or less until someone provides a better ad copy and absolute proof.

The cost to send direct mail to everyone is too expensive. I send direct mail to homes in pre-foreclosure, but about 95 percent of the foreclosures get canceled. That means, 95% of the stamps, envelopes, paper, labels and labor is a waste.

A better, less expensive, and more effective option is sending bulk email, but this still takes a lot of work and technical knowledge regarding how to get the names of the properties owners and then you still have to get their email addresses from another website. You can get a free list of foreclosures from Auction.com on an Excel file. Then, you need to find the property owner's names and email addresses. This requires either looking them up yourself on Haines List or another service i.e. parcelquest.com. You still need to find the email addresses and I use datazapp.com at a cost of 3 cents per email address lookup. A list with 3,000 addresses will return about 1,000 email addresses for $90. So, 5,000 email addresses will cost you about $450.  To get the names, property addresses and email addresses and doing the computer work to send the bulk email takes about 3 hours when you know what you are doing. 

The best part of email is I send 90,000 emails every month and my cost is $450 to get the information and $16.00 per month to send the 90,000 emails in-house. Then, instead of sending a property one letter at 60 cents per letter plus a lot of stuffing and licking envelopes you can send 3 to 5 emails to 5,000 property owners for about $466. To send 5,000 letters 3 times your cost would be about $9,516.00 plus your labor and I pay my workers 20 cents to stuff each envelope. So, my cost for 5,000 pieces 3 times is $12,516.00.

To get a list of pre-foreclosures from auction.com enter in the search box the city or zip code you want.

Click on any property that says "Foreclosure Sale, In Person".

Then,  look to the right side of the screen and click on "Other Properties At This Auction".

Now, you can load a list of all the properties onto an Excel file.

This is what I do. I download the list and filter out the properties I am not interested in. I send the properties I like 1 letter. Then, I send each property 3 emails. I drive by properties I am interested in, knock on the doors and talk to the owners. Then, I try to get the property at the auction.

DO NOT ATTEMPT TO BUY FROM THE ONLINE AUCTIONS. Read up about the very bad things that happen even after you win the bid. The live auctions are a whole different ballgame and you usually get clear titles, but there are a few exceptions. I have always had great luck at live auctions and the most profitable properties are those that go for about $1 million because there are less bidders and the spread between what you pay and what you can re-sell for has always been about 30%. You are lucky when you can get a 20% spread for a home around $300,000 to $500,000.

Don't be afraid to talk to your loan officer about your plan.  Loan officers know the ropes and can tell you what you can do about living in the house, or not living in it. I am not for breaking any laws, but maybe, there are loopholes where you can have a valid and legal reason to rent the house a few weeks, or a month after you purchase it.

I have an employee who purchase a house FHA with 3 percent and he lived in it for only about 3 days. He is allergic to cat dander and the house has so much inside, in the attic, in the yard, garage and underneath the house he got instant sinus problems and severe rashes on his entire body . He paid workers to clean the property, paint it, vacuum and every time he went to the house he became very sick. Do you think the bank would call in the loan because he had a medical condition that prevented him from going near the house?

Your lender will tell you how to work the ropes. What would a lender do if you purchase the house FHA exactly as you say and your relatives decide not to loan you the money. That is the question I would ask the lender. Everything we do has inherent risks and then we have to consider the probability for adverse results.

My guess is that you don't have enough disposable cash to purchase a property and you are taking too many risks. Your relatives could back out. Almost every property needs some type of repairs during the first year. Maybe, the water heater will leak. That will cost you $1.000. The furnace may give out. That can be several thousand dollars. The stove fan could break. A circuit breaker could constantly trip. You may find the carpets are not clean enough for a tenant, or you need to paint a few rooms. You tenant could sign a lease, give you a deposit and never pay another month's rent. Now, you have to pay  a thousand dollars to evict the tenant. Can you count on your relatives to bankroll everything until you get on your feet.

I am guessing that FHA loans don't have pre-payment penalties??? I am also guessing that no lender is going to re-finance nor give you any type of loan when you have only 3% equity (your FHA down payment). Maybe, the only way you can get a loan is if you purchased the property for 20% to 30% less than its actual value, or if the property value appreciates significantly during the first year.

I never saw a case where an FHA borrower got into hot water because he (or she) did not stay in it for 1 year. I never heard of a lender checking. What happens when something in your life forces you to move out of the property due to a job change, or an illness. What happens if you buy the house FHA and you find a hot woman who wants you to stay at her place every night? Will a bank really spy through your window and call in the loan. I doubt it!

Wow!!! I am having some technical difficulties. Let me try this another way.

If i am reading it right, if everything goes right you are looking at a 1.85% ROI the first year. Put your money in the stock market. To know whether or not a property is a good deal you have to stretch your calculations to a 1-year, 10-year and 30-year projection that includes rent increases and appreciation.

My business model is to double my investment capital every 1 to 2 year, or to earn a 50% to 100% return on my investment capital every year. This is achievable by purchasing the right properties for the right and/or purchasing properties that were neglected for a low price and you can do improvements and increase the rent.

Sometimes, it is better to park your money and do nothing until you find the best deal.Here are two youtube videos I made for analyzing. The numbers is this first video are so amazing they keep me awake all night and earning this type of money. When you know how to crunch the numbers, have the right business model and philosophy earning this type of ROI is very doable. I did what you are going to see in this video many times.

So, if you own a 28-unit apartment building and you increase the rents by an average of $200 you earn a profit of $1,142,000 your first year. If you raise the rents an average of $400 over a 10-year period you earn $ 4,032,000 in 10 years and in 30 years if you raise your rents an average of $600 you earn $11,088,000.

How do I get those numbers. I use software. You multiply the total monthly rent increase times 12 times the Gross Multiplier. That total is the amount you increased the property's value.

Then, add to your increased property value your regular annual cashflow before you increased the rents + your increased annual cash flow. You can also add normal property appreciation, but my numbers do not include that.

Sorry!!! The video has two problem. 1) There is a banging sound in the background. I think I was talking with my hands and 2) The very last calculation is not correct because I gave an example for a 10-unit building and forgot to change the number or rent increases from 28 to 10.

I will correct the problems later, but the video still shows the amazing numbers for rental properties.

I am 100% PRO multiple units. You can make more money than you imagine when you understand the power of the numbers. Here are three scenarios showing how you earn an instant $36,000 just by raising the rent for 1 apartment only $200 per month. You earn an additional profit of $2400 every year and at the same time you earned an instant $33,000 by increasing the value of the building.

Unless you get sellers to carry, most lenders want 30% down for multi-units and investment properties. I think a more ideal down payment for a rental properties is 40%. I also think that borrowing against investment properties is very dangerous. I would not be your partner because should you have too much debt against several properties and the poop hits the fan your real estate empire will fall like a stack of dominoes. Now, if you were to buy properties that appreciate, I have no qualm about selling that property and upgrading to a property with more units and a better ROI.

Out-of state rentals are okay when you have a good management company, but it is fairly difficult to get a management company that is really good and there are hundreds of reasons they are not good. Management companies can have too many clients and they spread their work load too thin. Management companies want to show a good bottom line every year and they do this by doing shoddy repairs and deferring maintenance. Read up on the internet about the pros and cons.

Purchasing out of state makes the grass look greener in Texas, Arizona, Memphis, Kansas and other states because properties are less expensive, but there is a reason properties are cheaper. You have to realize that there are real estate investors in every state with hundreds of millions of dollars and then ask why local investors are not buying the properties and the seller have to advertise nationwide. Are you smarter than those local investors, or is their something wrong with the neighborhood. Are vacancies increasing. Is the neighborhood a war zone?

As for an LLC and investing with people you know, when an amateur sets up the partnership the chance are it will be a very quick disaster. Even though you are dealing with people you know there are many many laws you have to abide by when you are investing someone else's money. People get paranoid and they want out of the partnership for many reasons. The only thing the best contracts in the world can do is become a good Exhibit during your lengthy and expensive trial.

I am not a negative person. Just being realistic and warning someone who does not already have the experience. It is difficult to earn and bank a lot of cash. One bad decision can wipe out in a few minutes what takes a lifetime to earn.

Go to real estate clubs and hob nob with professional investors and get advice and opinions. Attorneys will advise you and do the paperwork for money, but they will not hold your hand to prevent a disaster.

It is doable, but you have to work very hard to educate yourself to avoid the potholes.