All Forum Posts by: Michael Woodward

I've been investing in real estate for most of the past 10 years. My strategy has always been to use cash to purchase distressed properties (rehab and sell). Some of the money came from a family member and the rest from a local bank (before the extinction of the unsecured line of credit). Right now I have several projects under way with the same family member investor but I want to do more deals than he can finance. I have NO other money available to do more deals which means I need cash to purchase the properties AND cash for remodeling. I've done a lot of research on alternative funding methods (subject-to, etc) and understand HOW they work but am wondering if they REALLY do work in today's market....i.e. is anyone in BiggerPockets actually using them right now with predictable and reliable success.

So my question is.....Given these parameters, what is the best method(s) for finding capitol to do more projects in todays market?

BiggerPockets is loaded with enormous talent, expertise, and experience. I appreciate any and all advice.

That's funny! I'll have to remember that line for the next high-pressure salesman I run into.

I whole-heartedly agree with Ned that dealing with contractors is my number one hassle. They're usually at the technological level of a hammer and just as stubborn. I don't want to anger any of the contractor/investors that might see this post so let me qualify my statement by saying that I'm sure there are some contractors out there.....somewhere.....far, far away.....that would be easy to get along with and always do their job well. I just haven't ever seen one so it's hard to keep the faith.

On a more serious note, if you want to explore software opportunities to help the investor industry, you're going to need to know a LOT about real estate investing. There are thousands of nuggets of knowledge required to make successful investing possible that usually take years to learn. If you can assemble a good team of researchers you might have a sporting chance but expect a challenge.

Investors are usually fairly tech savvy but we have to deal with a very tech-resistant support base (contractors). Maybe you could think of ways to bridge the gap.

Good Luck!

I agree that charging $25k for a real estate training course is absolutely ridiculous. I've seen these sales pitches before. They keep hammering the point that "Just one deal will pay for our obserdly priced training program". Then they'll start calling you sissys and cowards if you aren't brave (stupid) enough to buy in. Sometimes they play the "oh, you're too poor to afford this" card to try to get you to make a rash decision. The hype of the event is their number one asset. The actual content of the material they're selling is likely fairly shallow too. DON'T FALL FOR IT!

Try this and see what kind of reaction you get from them. Tell them that if they will find, purchase, rehab, and sell a property while letting you watch their every move, you will let them keep the first $25k they make on the deal. That should get your meeting invitation revoked pretty quick.

Like the above posts said, start right here with your education. It's real-world information and it's FREE. Spend a couple weeks just reading the daily posts and taking notes. You'll find yourself leaning toward a investing path that suits you.

Also, get some good books on the fundamentals of real estate investing. The kind that explain all the different types of investing and how they work.

Good Luck!!

Yes. It all comes down to price. It doesn't matter if it's REO or something else. You hear a lot about REO's in the forum because that's where most of the really good deals come from. It's possible to find motivated sellers that need cash "right now" and will sell at serious discounts but in my experience, they're as rare as hen's teeth.

Here's how a good investment is born....... A house goes into foreclosure because the owner loses the ability (or desire) to pay their mortgage. If they can't pay their mortgage, they usually lose interest in keeping the property in good condition. As the property's condition deteriorates, it's value plummets. Many homeowners in this situation become angry and distraught and take out their frustrations on the house leaving an even bigger mess. The walls might be painted with all kinds of nasty graffiti that you can't read and wouldn't repeat if you could. Many times the pets are given free reign to do whatever they want, where ever they want (yuck)! By the time the bank gets the house, it looks (and smells) like the local landfill.

For a (rehab) investor however, this is the look and smell of money. The worse they look the bigger the discount.

My advice is to look under every rock for a good deal....but you will probably find that you keep finding deals under rocks that have "Bank" written on the side.

Hi Josh. I'm new to BiggerPockets but I've got about 12 years of investing/construcion experience so I'd be happy to help. I've always felt that teaching is the best method of learning so this could be a good opportunity to refresh my investing techniques. Participating in this project sounds like time well spent.

Count me in.

Realtor.com is a good source for current listings but it's not very good for finding details about the ownership of properties. Most states and counties publish their public records on the Internet but sometimes the information is limited. In TN, the property assessment website only shows the owner as of Jan 1st of the current year so if a bank forecloses and takes possession sometime after the first of the year, the public data won't show any of that information. Zillow however is doing an excellent job of keeping their information current. I listed a property two days ago and the current pictures and status are already shown on the site. It shows the date I purchased it and even shows the date I listed it for sale.

Go to www.zillow.com and type in the city (or county) and state that you're searching. When that comes up, look on the left side of the page for the "filters" link. Click on that. That will bring up a search page with several search criteria that you can choose. The REO's will show up if you check the "Foreclosures" box. One of the really nice features about Zillow is that you can search your area using a map view. Just drag the map to where you want to search and all the housing data (for sale, recent solds, etc) will show up right on the screen.

Trulia and RealtyTrac are two more sites with LOTS of property details.

As far as investors keeping secrets, there are two very different mindsets for investing. One is to create your own secret system including formulas and contacts....and working your system in isolation. They feel that if anyone else knows what they're doing, there will be less opportunities for them. That might be true for some methods and locations but that usually isn't the case.

The other method is to actively communicate with local investors for the purpose of cooperation. You won't find many "isolationists" in this forum because most of us are here to learn from and help one another. I've used both methods and have decided that cooperation is much better than isolation. One is a lonely number.....

Hope this helps.

In a word..... PATIENCE.

As you can see from this discussion, there are many different directions you could take your investing career. Unless you're ABSOLUTELY certain about which type of investing you want to do, I would strongly encourage you to spend lots of time getting your investing "Degree". Read as much as you have time for! Read through this forum and pick up some books on the fundamentals of real estate investing so you can get a good look at all the different styles and methods of investing. It's easy to hear about one strategy and say, "I can do that", and go full-force into it but later find that there's an even better strategy that you like better.

You're at the starting gate now so this is the very best time to determine your direction. Building your career will be just like building a house. Start with a good, solid, proven set of blueprints (knowledge). Critique your blueprints and MAKE ADJUSTMENTS TO YOUR PLAN HERE, before you begin constructing your career. Making changes to your BLUEPRINT is always easier than making changes to the actual structure! Be methodical and follow the plan you chose.

On a personal note, I started out in investing by buying my first house as a primary residence. Eighteen months later I sold it for a $25k profit and was instantly hooked on rehabbing. Now that I've streamlined the rehabbing process, I can turn one in a matter of a few months and get returns between $10k and $50k per deal. I'm not at all against buy-and-hold but I haven't been able to convince myself that it would work better for me than rehabbing. My personal comfort level is in getting payments in big chunks instead of small, long-term payments. That's just me.

In the end, you should pick what feels right for you. Just make sure you've done enough research to be able to see the big-picture of real estate investing so you will know what your choices are.

Good Luck!

Jack, I always make sure that I really have the cash to close my all-cash offers. I've heard of people that will scramble to find financing to cover a deal that they said they had cash for but really didn't.....but I don't sleep well doing that. I have done some cash-out refinances in the past to get the next deal going but the conditions in banking now make it a lot less beneficial than it used to be. Getting good comparable sales data was consistant and predictable but with the flood of foreclosures on the market, it's hard to know exactly what the bank will think the property is worth. Dealing with banks can be frustrating so I try to avoid it whenever possible. I'm just a lot happier and more comfortable using all-cash for purchase and rehab.

I've found that anything with a high reward comes with a high entry threshold of some kind. In the case of real estate, the easiest, most efficient method is all-cash. The hard part is finding the money! There are lots of people teaching methods for "easy, no-money down" investing but I haven't found one that I feel would work for me. I guess I'm not aggressive enough as a salesman to use those kind of techniques so I've spent a lot of my time looking for the money.

That's surprising! Kudo's to your tenacity. It's a good reminder that the last one to flinch is the winner. Thanks for sharing your experience!