All Forum Posts by: Account Closed

Go for it, good luck......make offers, know your market, hang around people you want to be like. Read, farm an area, study tax sales properties, spend some time at rent court, subscribe to your local legal newspaper  -- great place to find leads, people with back taxes, foreclosure, tax sale redemption notices and much more.

Charles

Getting started is a scary thing sometimes, the problems is that YOU DON'T KNOW WHAT YOU DON'T KNOW.

May I suggest that you start to attend real estate auctions (with no intend on bidding), before you go, write down the number you think it will sell for.  Do as much research as you can.  By doing this you will begin to understand values and what it takes to be successful in this business.

Also, you might want to try the 50 house rule (from Bill (Tycoon) Green's book). Look at 50 houses before making any offers. Keep a journal of every property keeping track of the square footage, determine the price per SF on each. Look at houses with agents and FSBO's. This system will force you into the market, you will learn very quickly what values are in your marketing area.

Charles

Before you take any and spend maybe $20-30,000, forget about it!  If you are not learning how to invest from someone who is local to your marketing area, you are wasting time (only my opinion, there lots of great programs on BP). But I am sure you can learn something from those courses.  Search the net for comments about those courses, you will find some very interesting comments.

May I suggest you order this book; Real Estate Exchange & Acquisition Techniques by William T. Tappan.  Bill is gone now but leaves a wealth of information that will help the most experienced investor as well as someone starting out.  You need to go to the creative formula section of this book.  You will be amazed at how many ways there are to acquire properties creatively.

I have been involved for over 40 years now and when I have a real estate problem this is my go to book for help.

A great idea I got from his book, I wanted some creative financing on this warehouse I am purchasing, the seller wanted to sell and not pay capital gains on his estate property, his accountant informed him that he could receive $470,000 without having to pay Sam. So the offer was we'll give you the $470,000 (contingent on a first mortgage}, and that we'll lease the land for 10 years with an option to redeem the land at $100,000 with 25% of the lease payment going to option when redeemed. This is called a vertical break up. You separate the land from the building.

You'll like his chapter on "Private Financing and Negotiation Techniques"

I am sure the book is out of print, but you can find one if you look on the net.

Good Luck

Charles

I have a different view on tax liens, I think they are great and I did well as a passive investors years ago.

I wanted to be more active and receive my rewards sooner. I wanted to find out why an owner of real estate is in this situation. There are reasons for tax sales, no one wants the embarrassment of losing their home; loss of employment, a death in the family, illness, incarnation, social problems.

 I believe by giving help and letting them know their options, the owner in tax sale have, can be very rewarding while helping others and positing yourself to do a transaction.

Many times these owners have given up, getting ready to move or has abandoned the property.

The other possible reason for a tax sale is that some investors see a tax sale as the city giving them a non qualifying loan for another 6-12 months. Sure the interest is high, but the investors could be just buying time until the property is sold or assigned, paying the taxes at settlement out of their equity profits.

I believe that if the investors can meet with the owner to chat with them, let them know that they have options; sell the house to you, list it, sell for all paper, pay the back taxes, take out a soft or hard money loan, negotiate with tax sale purchase, file counter claim, seek donations from local charities.

This tax lien system can keep an investor very busy.  It is a numbers game, getting to the right seller, making offers, taking tax lien assignments or referring the situation to a lender, an agent or a counselor can be profitable.

Charles

I think bandit signs are a form of sight pollution, I am sure people call on them.  I just hate to see them in our community.  In some areas the fines are very high, as much as $700.00 per sign per day.  I know of an investor that was fined $25,000 (he was warned more than once, but he  keep putting them up).  He doesn't hang them anymore.

Let's take the word "Bandit" out of this marketing concept and call them legal signs.

Design a sign, keep it simple, WANTED all real estate...houses, commercial or non-conforming. Call ______________________________________ X _______.

in small print ----- This sign has been placed here with the permission of the owner

Design an agreement to be signed by you and your sponsor. A sponsor is anyone who will put your sign on their lawn or in the window of their store. The agreement will say something like, I Charles Investor agree to pay you X $ for every lead (or sale, flip or assignment) that you refer to me.  In the agreement there is a script. The instructions are, when you get a call, ask the following questions and tell the caller that someone will call them shortly.  The questions are; what's the address, condition, asking price name and phone number. Keep it simple. When the sponsor calls you with the lead, go do your thing. Your sponsor has a record of all leads he refers to you.

So that your sponsor feels part of this program, his telephone number is put on the sign. It could be easy money for your sponsor and you will probably get leads and close some deal and you will not be a bandit.

If your sponsor does not want to be bother with taking calls, put your number on the sign and assign an extension so that you can identify your sponsor and the location of the sign.

How many locations can you put your legal sign; on the lawn at a busy intersection, in the window of supply houses, corner convenient store, your mother's house.....anywhere and anyone you can convince that this is a nice way to earn some extra money.

Charles

Forget about it, go but don't buy, some of these folks are very good at motivating their audiences, they are experts at getting their products sold.  i know people who have spent over $30,000.00 for a program that did not work.  If you are going to spend money on a program, spend it with a local mentor.

Charles

Hey everyone,

I've been listening to the podcast for the last few weeks and I'm hooked. I just got my Real Estate license and I am a Realtor in CO as of a few weeks ago. I am looking to develop my own real estate empire while helping others invest and buy/sell primary homes. I have gathered a ton of info from the 20 or so podcasts I have listened to this far and can't thank everyone that has come on the show enough.

I look forward to what the future holds and hope I can give back some expertise once I have some to give.

Terry Mclain

Terry,

You have the right goal, "to develop your own real estate empire", helping others is a great idea, but first help yourself to the knowledge that is out there. I am a Realtor myself, the problem with being an agent is getting into that agent culture, thinking about listing and selling real estate as a servant (helping others), driving customers around, escorting them through houses, writing conventional contracts of sale, and forgetting about making offers on real estate for yourself. To build that empire that you desire, you need to be 100% proactive, you need to be calling FSBO's, not for a listing but to make offers, it would help you if you had a goal to inspect 3-4 properties everyday (preferably FSBO's and expired listings). Doing this will give you some street smarts, you need this in order to identify a bargain when you run into it.

Remember when talking to sellers; you want to know how much equity is available and how to negotiate for the amount of profit you want to take out of the deal. FORGET about going to settlement........Control properties with a skinny contract of sale subject to assignment within a period of time.  Make full disclosures; Agent status, subject to assignment (clause: it is understood that this offer is made with the intent to earn a profit and to satisfy buyers and sellers financial needs, if a third party assignee is not found, this offer is subject to cancellation).

As for helping others, when you offer to control a property from a seller who is motivated.....you are helping them and yourself.

Wishing you good luck,

Charles

Cap rates are not a joke, a cap rate is important to determine how much the rate of return is, I still like the basic of how much does the property give me in my pocket after expenses.  I think if you can get a cap rate of 14 or higher, you are doing well.  But keep to the basics, how much are you spending and how much do you get to keep after expenses.

Negotiate the best deal you can and if the cash flow is great and the CAP isn't, you decide what you feel comfortable with.

Also, what if your negotiations with the seller is not calculated into the CAP rate. Suppose the seller will gives you $10,000 at settlement and includes all the furniture and the cars in the garage and gives you a 6 month grace period on the owner financed mortgage, how do you calculator s CAP rate.

I love CAP rates, but I love the other method of calculating my investment return, it's call the "Gut Feeling", do I feel good, am I making money, OK, I'll go for it!

I have been investing before pagers and cell phone came on the market, my gut has always been my determination if I wanted to do the deal or not.....Sorry about you CAP rate lovers.

Go for the Gut!

Charles

Hi all,

I need some help here please.... I have followed all the suggestions from bigger pockets and the books I have read. I have created a business/investment plan along with operations manuals. Funny thing is I only own two pieces of property, my home and a condo, but hey I am ready to go into a multifamily next July when the condo comes available to be 1031 exchanged. In the meantime I am practicing analyzing properties. I understand what IRR is I just can't figure out how to calculate it? Is there programs/software out there that the sophisticated investors are using that help them determine this metric?

Good questions, I remember when I took the first CCIM  course,

(in the 70's) they talked about the Internal rate of return and other mathematically systems to come up with a rate of return on investment.

Well...............I decided if I have to go thru all those calculations to find out how much I was making, I decided I did not have to be all that sophisticated. I figured that if I can't use simple math to determine out how much I was making by using basic arithmetic, I wasn't interested in having the CCIM behind my name and decided I'd do it my way, I wanted to know how much they owed,  and what's the market value to give me the potential equity that I was negotiating for.

I respect anyone who has competed all the CCIM courses, they are very smart, I on the other hand am Street Smart.  Show me the money and make it simple.

Charles