All Forum Posts by: Tom Goans

@Gary Kurtz,

Research.

Without even being there or have ever been there, I would bet there are real estate investment opportunities. This is true in almost every market for the very wise and prepared.

I would recommend your first step is reading the book "Think and Grow Rich". One of the common elements of most successful entrepreneurs is finding a need and filling the need.

Secondly, learn everything there is to know about the community, the people who live there, the major employers, trends, attitudes, the thoughts, considerations and plans of government agencies ... EVERYTHING. Become the best informed and prepared person in the community.

While you are doing this research, you will uncover many opportunities that others do not see.

Chasing opportunities in areas where there are many competitors will not yield as good of a return on the investment potential.

The best investments and return on investment I ever made was buying land that was mostly ignored by other investors. For example, I have bought 5-acre tracts of vacant land in an existing development for $800 (eight hundred) each - total price for all 5 acres. Each 5-acre tracts of land were sold in less than a month for $8,000 to $12,000. I had NO holding costs. The only additional cost was my time to create individual websites for each property.

• One added note: my father repeatedly stated there are more buyers for Chevys than Caddies. While you are researching, you may want to keep this philosophy in mind.

Best of luck.

@Lindsay Wilcox,

Please Be Cautious. Don't let dollar signs cloud your judgment. Conduct thorough research. Just from the little amount you wrote in your post, I see red flags. To list a few:

1. "HUGE growth potential"
2. "awesome triplex"
3. "...couple of which appear to be abandoned."
4. This is my opinion and experience: if the market is hot or trendy, you may be too late to the party. The best investment opportunities come during the making of the trend, not at the peak.

I have been associated with buying every property within several blocks. However, the plan was to demolish every property, not rent the existing ones.

Good luck.

@Will W.,

It is wise to seek advice from a licensed tax professional.

You have not provided near enough information to provide a remotely accurate response. It would be a very economical and wise decision to seek the advice of a licensed professional whom you can meet with and will take the time to review all of your specific information and then provide you with options catered to your specific needs.

@Shiva M.,

This should already be incorporated into the purchase agreement. If not, please seek legal advice.

Seeking advice from an attorney in the area where the property is located can be a wise and very economical decision considering the alternative. An attorney will assure you are abiding by the federal and state laws.

• Every state has unique laws.
• Every state has unique legally acceptable legal forms.

The attorney will also provide the best advice and options for your specific needs with a consideration for your future. The results will be legally drawn up agreements for your use.

• Just they way you communicate with a tenant is regulated. Your attorney will help you with this process.

Your attorney may recommend the seller to contact the tenants in writing prior to closing to notify them of what is about to take place, what to expect, where to send future payments, and how to contact you after closing. The attorney may also recommend obtaining in writing from each tenant the balance due, the payment amount, any outside agreements with the seller, and any necessary or pending repairs. Your attorney may recommend you receive these written and executed statements from each tenant prior to closing so that you know from each tenant what they feel and understand is their agreements and the conditions of the property.

To repeat myself, just the way you communicate with tenants is regulated by unique laws in the state where the property is located. You must know and abide by the laws that protect tenants and their established rights by law. Even if you want the tenants to leave, the notice you must provide and the time limit is regulated by law. Your attorney will be a lifesaver and a cheap investment.

@Georgia H.,

I am an older investor that believes in the tried and true marketing methods that are always the foundation of any solid and successful marketing plan.

• Focused Marketing
  

First, you need to determine the area that best suits your investing business plan. Locate the neighborhoods that best meet the business plan. Then narrow this down to one neighborhood. Study the neighborhood. Learn more than any other person knows ... even those who live there. Learn everything there is to know about the residents, demographics, trends, employers, activities, events, etc.

Once you have done this, you have a better understanding of the people and how to market to them.

The best real estate listing agents walk the neighborhood after becoming masters of knowledge. They knock on every door, introduce themselves, offer to answer any questions or assistance the residents may have about real estate and the neighborhood. Have an ear to the ground so you can discuss rumors with knowledge.

By doing this, your are the neighborhood expert. In time, this ground work will turn into a pot of gold.

Enduring success in the real estate business is not a get rich quick scheme. It takes time and effort. Many do not understand or appreciate the work it takes. Even a successful Las Vegas gambler knows some get lucky, but enduring success takes a lot of knowledge and work, just like any business. Very few will hit the Lottery ... and then their money is gone and they are broke.

• Moreover, forget and ignore the get rich quick books and tapes. While the books and tapes will make the authors rich, they are not the best concept for enduring success. TV infomercials and flip shows are a hit and miss wild gamble.

If I may offer a suggestion, if money is that tight, YOU SHOULD NOT BE DOING THIS ON YOUR OWN. Please seek a partnership with an experienced investor with similar goals. Or, better yet, seek employment with an experienced investor. Earn while you learn. At some time later, ask the investor to be your partner in an investment or two.

Real estate is extremely complex with many federal, state, and local laws you must know and follow. If you are not well prepared, there is a huge chance you will get hurt in some way. Some never recover for the rest of their lives from financial mistakes. Please do not become a member of this failure club.

I hope this helped. Best of luck.

3 Myths of the Financial Crisis

MYTH #1: Greedy Bankers Preyed On the Weak

Greed is not unique to bankers. A culture of house-flipping, "liar loans," and easy money ran deep through the post-2000 culture.

MYTH #2: Glass-Steagall Would Have Prevented the Meltdown

MYTH #3: The Transactions Were Too Complicated For People to Understand

The bottom line is this:

• We ALL created the housing mess as a society - you, me, Wall Street, and the pandering financial dilettantes we voted into office. Unless we accept those hard facts as a society, we are doomed to be forever on the brink of yet another financial crisis.

@Joe Boggin,

Please Seek Legal Professional Advice

This is a situation where you should not guess or seek unprofessional advice and guesses.

Seeking advice from an attorney in the area where the property is located can be a wise and very economical decision considering the alternative. An attorney will assure you are abiding by the federal and state laws.

• Every state has unique laws.

The attorney will also provide the best advice and options for your specific needs with a consideration for what you are currently experiencing and your future. The results will be legally drawn up agreements for your use.

• Just they way you communicate with a tenant is regulated. Your attorney will help you with this process.

I do suggest that from now on, in all situations regarding real estate or any business transaction, you put everything in writing. This greatly reduces problems and misunderstandings. Moreover, it makes for better results should the problem be escalated to a courtroom.

@Account Closed,

The asking price is irrelevant. The acceptable price you can pay for an investment opportunity will be determined after you conduct extensive research.

• You must first determine who is the target market. From this, you then determine the realistic rental amount. This will also help you to best structure the payment schedule to ensure timely payments.
• Determine the demographics.
• Determine the stability of the primary employers.
• Determine the stability of the neighborhood.
• Determine the realistic cost of ownership.
• Determine the realistic cost of repairs, maintenance, and enhancements.
• Determine your acceptable risk and workload vs. reward regarding this property.
• Determine how this investment fits into your business plan and adds to your goals.

Now you have a better understanding of the appropriate amount you can pay for the property.

Two added comments:

1. "about" is a word that should not be a part of any investment analysis - especially when determining the cash flow.
2. Yards and basements are not important unless it is something the Target Market wants. Like swimming pools, they turn into more work than they are worth. It will be your responsibility to maintain the yards if you think they are important and want it done well.

@David Franza,

Terms dictate selling price more than any other item. By terms, I am primarily referring to the payment amount and terms. Have you ever noticed how auto dealers advertise the payment amount or the low down payment more than the selling price or interest rate.

• People buy based upon out-of-pocket cost.

History teaches us that one should not assume when investing in real estate - especially a certain percentage amount of appreciation or valuation range. Assuming and assumption are words for wild guess.

I personally know a number of people who filed bankruptcy after assuming appreciation on their real estate investments.

I also know a number of former owners of Savings and Loans who lost everything when they assumed real estate would always increase in value. Have you heard of the RTC?

I do not know how your calculations are going to make you money.

From what I can tell, your calculations have not valuable meaning.