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Real Estate Investing – 24 hours to Section 8 Inspection

My contractor called me last Tuesday Night to inform me the Section 8 inspection will not pass due to a broken window.  The tenants son throw a toy and broke the window!

Talk about last minute, this meant I had 24 hours to get this window fixed.    The worst part it was a double pane window!  Plus my tenant attempted to take the window out and did more damage to the frame (wonderful news!).

All I could think of, “I have to get this window fixed and in a hurry”.   If the window was not fixed the inspection will fail and cost more money. 

Cost is High

·         Loss of Income

·         Section 8 charges landlord if 2^nd inspection fails!

·         Receive bad reputation from Section 8 Inspectors

I have never had a 2^nd Section 8 inspection fail in the 3 years of my real estate investing and this one will pass.  I just need to think positive and get creative.

What would you do in this situation?

I went home and looked through my rolodex of past contractors in the Green Bay area to find Duane.   Duane has done work for me in the past however he was more expensive than my normal contractor.   Would Duane fit the bill to get this job done for me?

I started thinking about Duane’s traits:

·         Past experience told me he does excellent work

·         Duane is reliable

·         Duane calls me every once in a while to see if I have any work for him

I called Duane at 9:00pm; yes it was late however this was an emergency. Duane was happy to hear from me and understood the issue facing us.

 We need to get the window fixed to pass Section 8 inspection in 24 hours.   Duane put in a brand new window, since it was cheaper to buy new than fix the old window.

Section 8 inspected the property 24 hours later!

Last Saturday we received a letter in the mail from Section 8 (HUD housing) informing us the inspection PASSED!!!

We all have hurdles to overcome; it’s how you handle the hurdles that will determine your success!

cashflow Cindy

P.S.  I am looking for people exactly like me to join my Winner’s Circle.   If you fit the criteria, then email me at cindee@dishmail.net for more information.

You have to want to WIN!

Real Estate Investing - Nothing Down Techniques

Written by Robert Allen author of “Nothing Down”

Technique No. 2 The Blanket Mortgage

The key to using the seller as lender in a real estate transaction is trust. The seller has to trust us to pay him his equity according to the terms of the agreement we work out with him. The conventional way to “buy” trust is to give the seller a large cash down payment That way he knows that we will not likely walk away from the property. We are going to stay around and take care of our obligations. Otherwise the seller will be able to take back the property, and we will lose not only that big cash down payment but also any appreciated value above the seller’s equity.

But how do we develop trust when there is little or no cash put down on the property? How does the buyer make the seller feel secure in such cases? Often the buyer can develop personal trust with the seller simply on the basis of personal qualities and win/win attitudes. In such cases, the equity of the subject property itself is sufficient to close the deal.

In some instances, however, a little extra is needed to remove lingering suspicions on the part of the seller. That is where the blanket mortgage comes into play. In any mortgage or trust deed arrangement, there are two basic documents that are prepared. One is a note given by the buyer to the seller setting forth the terms for converting the equity to cash, the other is a security agreement in which the buyer says to the seller, in effect, “If I don’t perform according to the terms of the note, then you can take back the property.” In a cashless or near cashless transaction, the security of the subject property may not be enough to satisfy the seller. Therefore, the buyer may choose to secure the note with additional collateral - not only the subject property but also additional property (equity) he may have in his portfolio. The note itself stays the same, but the security agreement is changed to increase the collateral and build trust with the seller. Naturally, the buyer will want to arrange to have the seller release the additional collateral as soon as the subject property appreciates to a predetermined value or as soon as the buyer has proven himself to be dependable and prompt in making his payments.

The blanket mortgage technique is not among the most frequently used in creative finance. The buyer hopes to build trust without having to tie up his other equities. Still when a seller needs that extra bit of persuasion, the blanket mortgage technique can come in handy.

For example, one creative investor we know of recently acquired a nice four-bedroom, three-bath home for $75,000. The investor put a new first on the property (which was nearly free and clear) and had the sellers move their remaining equity ($35,000) to another property owned by the investor. To build trust will the sellers, the buyer granted them a blanket mortgage that also included his equity in another rental property he owned. Although the buyer did not put any of his own money into the deal (the bank provided all that was needed), he was able to persuade the sellers to agree on the basis of his neck being on the line with the blanket mortgage.

Robert Allen  has been a mentor of mine since 2006.   His strategies worked when he wrote his book “Nothing Down” in 1980’s and hold true today.   In order for you to be successful in real estate investing you need to be highly creative. 

cashflow Cindy
P.S. Are you interested in joining the winner’s circle with us?  Robert Allen and I are looking for individuals who want more out of life.  Is this you?   

http://winnerscircletraining.com/

  If you feel you meet these qualifications after watching the video, email me at cindee@dishmail.net

Real Estate Investing - Success Lies In Valley’s

I watched the Good Morning television show this morning on a special on Michael Jackson’s musical career.     Michael Jackson’s Music Producer talked about Jackson’s career from where he first hear Jackson sing.   He seen talent in him that nobody else did.

He produced three albums with Michael Jackson and the rest is history.  

He watched Michael Jackson rise to stardom overnight as many others.  He talked about how success is an odd entity and how he seen stars handle or mishandle their success.

   His words:

Success brings Peaks and Valley’s; its the Valley’s where you find your true Potential!

As with real estate investing or a singing career.  You will encounter Peaks and Valleys.

During your first years of investing you are going through a HUGE learning curve.   You will encounter LOW valley’s unless you become extremely lucky where all of your investments are successful.   However, if this lucky situation happens to you; I will see you on your way down.

Success brings Peaks and Valleys.  However, the longer you invest and the more experience you gain; your valley’s become low valleys and then your peaks come along quicker and stay longer. 

The DEEP valleys disappear the more experience you gain.

The key however; is learning how to overcome the challenges we face daily to get back up to the Peaks Again!

This is where many real estate investors seem to fall.  If you hear anybody tell you Real Estate Investing is easy they are being untruthful.   As the old saying goes; if it’s so easy to earn a million dollars in real estate investing then everybody would be doing it! 

Real Estate Investing is a wonderful learning experience and I hope you all follow me on the journey to becoming Financial Free!

cashflow Cindy

Real Estate Investing – Do you feel like someone or something is kicking your butt?

I face many daily challenges in real estate investing as businesses do on a daily basis.  How do you overcome your real estate investing challenges?  This is where we bring out the winners from the losers.  Those who learn how to climb the mountain are the winners and those who fall and lose their drive to get back up again will lose!

http://store.sixminutestosuccess.com/?aid=590590

To be honest; I woke up this morning with a little bit of ah, a Monday, and it’s the first of the month.  First of the month; means Rent Collecting (great system in place; however with the turndown of the economy people are either losing or lost their job or loss of hours) this is a challenge in today’s Market.

I have other challenges facing me today as moving a mobile home out of a mobile home park.  Dealing with the owner of the park has been a challenge!  Today, I have to deal with the issue head on!

 Last Night I wrote down all of my challenges that faced me when I woke up Monday Morning. 

Did I sleep good, yes I did.    Why, because I wrote down my challenges the night before and thought to myself.  Get a good night sleep and I will tackle them in the morning.

Another challenge in today’s real estate market is finding loan officers to refinance rehabbed properties. 

This morning lesson with Bob Proctor on sixminutestosuccess he taught

http://store.sixminutestosuccess.com/?aid=590590

You don’t quit when You Are Tired, You Quit When The Gorilla Is Tired!!

 (What an inspiration quote!) 

Go rent the movie Rocky, did Rocky quit when he was tired or did he quit when his opponent was tired?

Your assignment for today is to:   Give It Everything You Got!   

But You Have To Keep Going…..

How can You Put More Energy In to What You Are Doing?

Cashflow Cindy

Real Estate Investing – Valuation on Multi-Units

 We are going to learn about how to determine whether an apartment building that a real estate broker is listing at $800,000 is really worth the asking price.  Commercial real estate investing is simple however in order to be successful you need to learn to think for yourself.  Get educated with Dessauer’s Making Millions in Multi-Units.  A small investment of $49.00 will save you thousands of dollars and heartache.  I know because I purchased my first duplex wrong and you guessed it.  I still have it.  Everyday its a learning experience for me to get education in real estate investing.

Making Millions in Multi Units
Find Your Life’s Freedom’s! Take Action Now!!

How do we know, it may only be worth $600,000.  Or it could actually be under priced and worth $1,000,000.  The bottom line is you need to know and understand the difference yourself and not solely relying on what the broker and seller are telling you.  You need to identify that information for yourself through the numbers on the property.  I’ve seen a lot of Brokers who believe that their client’s property is worth than it really is and I’ve also seen some inexperienced investors, over and over again attempt to justify the value that the broker is asking. 

The truth is you will over pay for that property if you do not know how to establish value and how that property performed in the past.

Proper valuation is the basis for all investment decisions in the apartment real estate investing world.

There are 3 traditional approaches used when appraising and valuing property.

1                     The Sales Comparison Approach

2                     The Replacement Cost Approach

3                     The Income Capitalization Approach

John Dessauer has made millions investing in multi-units.  John has tons of commercial real estate investor success stories to share.  His Making Millions in Multi-Units comes with 6 cd’s and a workbook plus MIT forms.  This program is a minimal investment of $49.00 for your education in real estate investing.

Making Millions in Multi Units
Find Your Life’s Freedom’s! Take Action Now!!

Real Estate Investing – Call Small Local Banks

Follow along with me every day and do the same steps that I do and you will earn $100K with me.  This is FREE education in real estate investing.  Real estate investing takes time, drive and motivation.  I am writing a daily blog to instruct you on the steps that I take every day, its up to you to follow and take action.  Go back down and read the first blog on Challenge Prep Course with all of the beginning assignments.  We are going to start looking for deals tommorrow so get moving!!!

Are you taking action with me to earn $100K within the next 6 months?  How devoted are you?  You can either read about it or follow along with me.  We are going to make $100K by flipping real estate or holding the property equity.

The moral of the story for those of you who watched the movie Rocky is you are going to have challenges along the way; the secret is how you deal with the challenges by getting back up again!

1st step:   Download my FREE e-book:  You are going to use these strategies to finance your deals.  These are the same strategies I use on a daily basis.  Go ahead and take action now!

I paid Big Bucks for my real estate education and am giving this knowledge to you for FREE, WHY, because, I want you to live your life stress free and enjoy your family.  Working all the time causes stress on relationships and God only put us on earth for a small time.  Let’s enjoy our time together and share our wealth!  Now, download my FREE e-book.  I used these stratgies daily and you will too.

Back to Real Estate Investing; I purchased a fixer upper in Indianapolis, IN to buy, rehab, rent, refi.  I am currently on the rent and refi step.  Many people are told me the banks in Indiana will not refi a property to out of state real estate investors. This is far from the truth. 

I have a small local bank who is refi by duplex at a 60% LTV to an out of state investor. (I am the out of state investor!)

 Meaning:  The appraisal comes in at $120K, then the bank takes 60%  X $120K.    This situation they will give me a loan for $72K.

In this market or I will say any market.  When you are buying cash flow properties, DON’T pull out as much equity as you can.  If you stay 60% or lower; you will not have an issue with refinancing your deals.

I’ve seen too many real estate investors pull out as much equity as they can to live on or just to pull it out.  Now there mortgages are too high to sell the properties in this market.  DON’T do this; its poor business planning.  Whenever you purchase a cash flowing real estate investment; always ask yourself, if the rental market has a downturn can I lower my rents to be competitive and pay my mortgage, taxes and insurance?

Assignment:  Start calling local banks in your area.  You may need to spend 8 hours on the phone to accomplish this task.  As Rocky did in the movie, did he quit?

Listen to Bob Proctor’s Think and Grow Rich Video on Six Minutes to Success:  Listen to this video for the next 5 days.

http://store.sixminutestosuccess.com/?aid=588985

Real Estate Investing – Learn your area of Investing!

For those of you whom are following along in the Real Estate Investing Prep Course Challenge.  I listed the items we discussed in our conference call last Monday.  If you have any questions, feel free to leave comments and I will respond ASAP!

First step is to sign up for my FREE e-book:  12 Steps to Financing Your Deals!
You need to know How to Finance your real estate deals
Now, you need to sign up for my e-book located on top right hand of page. 
Its FREE!

We will be using these strategies in my e-book to purchase properties.  As a matter of fact; I used one of them today to finance my last draw on my rehab in Indiania.

1)      Tool #1 Identify Your Asset!

This means to take an honest inventory of where you stand today financially.  This is a scary assignment for many people since most are afraid to take a hard look at your assets.  Assets are appreciating assets.  Items you can sell day for chunks of cash! 

This is a critical piece to you as a real estate investor.  If you don’t know where you are how do you know where you want to go?

Go to the bank and request a financial form.  This is the same form you will need to fill out when you get a loan on a piece of real estate as a single family house or a duplex.

2)      Tool #2 Contact List

 Contractors, handy man, private money lenders, banks, electric and gas companies.   This is a data base of people whom you can call to get a loan, fund your deal or a plumber to fix a water leak on your deals.  Always have this database at your fingertips.

3)      Tool #3 Invest within a 50 mile radius of your home.

 I suggest you  buy your first of real estate within these guidelines.  Once you understand and are successful with flips, rentals or rehabs.  Then you can start to broaden your investing area.  However, as a rule of thumb most real estate investor gurus will instruct you to learn your market and become successful in your backyard before moving into another market.

4)      Tool #4 Knowledge (education in real estate investing)

Continue to read, The Road to Wealth Book by Robert Allen

You need to mark up this book by noting key points by either folding over pages, using a highlighter.  Go back over the items you noted, mark up the side pages with pencil notes.  There are many ideas, strategies and lessons to be learned and use as a real estate investor.

5)      Tool #5 Turn off the T.V.

Turn off the negative news, media or friends.  You will be amazed to find out how much time you have without the boob tube.  It’s a waste of your time.  Has TV ever put $10K into your pocket?

Listen to real estate seminar tapes while you drive to work.  You can go to the library and pick up real estate tapes/cd at your local library.  Did you know only 3% of the population own a library card?  It’s FREE!!  If you don’t have a library card then I suggest you get one within the next couple of days.  While you are at the library, check out a CD by either Robert Allen or Rich Dad.  They have them at the library because I check out CD’s continuously.

Marshal Sylver has a 2 hour seminar you can listen to for free on-line:  Go ahead and grab yourself a cup of coffee or tea and enjoy! Most important is to believe in your self.

http://prosperityalliance.com/cindyconradt

Real Estate Investing – You Could Save HUGE Money On Your Real Estate Taxes

Has your house gone down in value that last year?  Do you know what your house is assessed at for tax purposes?

You may be paying too high of taxes if your house has gone down in value from two years ago.  If your house has dropped in price by $100,000 this could be a potential to save BIG MONEY.

Remember, you are paying taxes on the real estate property at the time the real estate was assessed.  Contact your assessors office to find out what price is your real estate assessed at?

With money being tight for many families these days, this may be an area when you can cut cost.  Taxes are a huge expense to home owners or real estate investors. 

However, in order for you to save money on your taxes, it will take some research and time.

Couple of pointers listed below:

·         Challenge this assessment that may have been based on an assessment from a couple of years ago.

·         Contact Assessor’s Office

·         Find out what other real estate properties in your area have sold for in the last six months.

·         Need to prove to the assessor what your house market value is at is today’s market.

Click on link below to view the clip from CNBC

 Save Big Money on Your Property Taxes: Fight Your Assessment

http://www.youtube.com/watch?v=Zxw6GB0gv68

This concept began in the 19th century when family businesses and commercial establishments offered this kind of indirect financial benefit to employees (who had no entitlements or facilities besides their salaries) as a means to reward and retain good people. From here it spread to labor unions, credit societies and even large publicly held companies. This should not be mistaken for charity or a gift since the investment has to be returned as stipulated and collateral needs to be provided.

 The second form of silent real estate investors is one who invests purely out of commercial interest and perceived profit, but stays in the background. The investor does not play any active role in the management of the property or in the promotion of profits and returns. This kind of real estate investor used to be called a “sleeping partner.”

 This kind of real estate investing is most common in the case of service industries like restaurants, hotels and properties that require maintenance and management like rental buildings. The operational aspects of running the business are looked after by a person with the required expertise – a chef, hotel manager or building maintenance professional. But this type of professional often does not have the financial resources to make the required investments or even to put up the kind of collateral that institutional financing will require.

The Don’t-Wanter Seller: You Pick the Price and the Terms

Excerpted from his best-selling book, Nothing Down for the 2000s

By Robert Allen

Best-selling Author and Co-founder of EWI

If you’re looking to buy a property on your own price and terms, search the Internet, the classified ads, and the for-sale-by-owner listings for the “don’t-wanter.” This is a seller who will do almost anything to get rid of this real estate property. He might take a personal note from you secured only by your signature. He might take your SUV or pickup truck in exchange. He probably will give you a price that’s well below the market average because he needs to sell now. He wants out!

This is the kind of seller you need to find. He won’t care if your MasterCard account is maxed out, because he won’t even check your credit. He’s irrational. He is flexible. Don’t-wanters are on their knees every night praying for deliverance, and you could be the answer to their prayers.

Check out these Cash Flowing Deal:

http://serene.ewimultiplestreams.com/index.php?base=featured

How many don’t-wanters are there?

Even in extremely tight sellers’ markets there are still plenty of don’t-wanters. Perhaps 5 percent of all sellers are willing to be flexible enough to be called don’t-wanters. And when things slow down in your local market you’ll find the percentage of don’t-wanters will jump dramatically.

A word of caution: Sometimes a don’t-wanter is a don’t-wanter for a very legitimate reason. Sometimes the problems that go with a property aren’t easily solved. If you are not careful in analyzing what has made the seller a don’t-wanter, you could buy the property and end up being a don’t-wanter for the very same reasons.

What makes someone a don’t-wanter?

Management problems lead the list of reasons why people want to sell their income-producing property quickly. Some people cannot deal with tenants on a daily basis; they bought the property hoping to make a profit and didn’t anticipate all the headaches that come with management.

Types of Management Problems

If you’re considering a real estate investment, you should know that management problems come in all shapes and sizes, including:

• Vacancy problems (Your tenants move into a competitor’s apartment.)

• Tenant problems (Your tenants refuse to pay the rent.)

• Current expenses (Your tenants’ air conditioner just broke.)

• Anticipated future expenses (Your building’s old water heaters need replacing next year.)

• Distance problems (An absentee landlord living in a neighboring state has to travel to the property to solve the problems that crop up.)

• Time problems (The owner is too busy with other business matters to pay attention to managing the apartment building.)

There is one simple solution to every one of these management problems. Wherever you live, you have access to professional management companies. For a fee—usually around 10 percent of the gross income—the professionals will take responsibility for the maintenance, collect the rents, handle minor and major problems, evict bad tenants, advertise vacancies, and handle bookkeeping. In short, they will do everything for you. Just make sure to watch over the management company.

Financial headaches can turn any owner into a don’t-wanter. Maybe he’s been hit with a tax bill he wasn’t expecting, maybe he has discovered another, better investment and needs cash to make the move, or maybe he’s in trouble—needs to reduce indebtedness, pay a note that is coming due, or save himself from foreclosure. With experience you’ll be able to recognize these symptoms of don’t-wanteritis. This kind of owner will usually negotiate willingly just to move his property quickly.

A third reason an owner becomes a don’t-wanter is that his property is suffering from physical problems—the building doesn’t meet fire codes, the plumbing is deteriorating, or the parking lot is too small. Like property management problems, physical problems also come in a variety of shapes. For instance:

• The competition is offering a newer or better building. Perhaps the nearby rental properties have been installing new swimming pools or fitness centers to attract new tenants, and the building’s tenants are moving out.

• The building is aging—and not gracefully. Structural elements like a roof or plumbing system may need replacing at great expense to the owner.

• A deteriorating location. The neighborhood is going to the dogs. Even if the building’s owner throws you a bone, the property may still be a turkey.

• Functional obsolescence. Appraisers use this term to describe the particular faults and out-of-date features of a building that cannot be easily corrected, such as small units, lack of electrical outlets, or wiring that won’t support cable TV or high-speed Internet access.

If you suspect physical problems, the guiding phrase is “buyer beware.” Physical problems are the most serious that confront any property owner. If you decide tohelp the don’t-wanter by buying his dilapidated building, you may end up making his incurable problem your incurable problem.

Owners Have Problems, Too

Individual property owners have all sorts of personal problems, either real or imaginary, that turn them into don’t-wanters.

Here are some things to look for:

Retirement. The seller decides he has worked long enough; it’s about time he sold his rental unites and lived a more relaxed lifestyle. Health. Some owners who have actively managed their own real estate portfolios may be stricken with serious health problems. One such owner, who couldn’t leave her home, refused to relinquish management of her lifetime investment. Unfortunately, her units rapidly became a slum area in town because of lack of attention, and her children were forced to take over management to avoid catastrophe. They became don’t-wanters when they saw the units’ state of disrepair.

Marriage or divorce. A property owner often changes his or her lifestyle following a marriage or divorce. The owner may be forced to sell for financial reasons, such as splitting an estate with an ex-spouse. Or a new marriage may mean a move to a different part of town or across the country, and the rental building goes on the market.

Check out these Cash Flowing Deal:

http://serene.ewimultiplestreams.com/index.php?base=featured

Transfers. When a property owner who is still employed gets transferred to a new location, he usually must dispose of all his holdings. The time and distance factors make it difficult for him to hold on to the property, giving you an opportunity to buy a good property at a distressed price.

Social activities and status change. Some owners would rather have the cash in hand than the ongoing real estate investment. They sell to buy a better lifestyle for themselves.

Inheritance. When an owner passes away, the heirs frequently decide to sell the income-producing property. A sale may be necessary to pay the taxes, or the attorneys! Or the sale of a large piece of property may be the only way to fairly divide the assets in the estate. Whatever the reason, it usually doesn’t take long for heirs to become don’t-wanters. If you’re a buyer, chances are good that the heirs may not know the real value of the property, or if they do know, they simply don’t care. Since the property was just a gift anyway, they are often inclined to sell for a good price.

Partnership problems. I have discovered more good buys as the result of partnership problems than almost anything else. In such a situation, the property itself isn’t bad, the partnership is bad. The partners disagree about how funds should be spent or dispersed as dividends; one partner wants to sell, while the other partner can’t because of tax problems. A don’t-wanter partner will do almost anything to get out of a bad relationship.

Keep Your Eyes Open

Remember, whenever you get involved with a don’t-wanter, you must be sure that the problems you are buying are solvable; otherwise, you’ll end up being a don’t-wanter for the very same piece of property and for the very same reason.

When you recognize why the owner is a don’t-wanter, ask yourself, “Is this problem real or imaginary?” If the problem is real, try to determine if a new owner can solve it. You have to realize that certain problems are not solvable. Sometimes the neighborhood is bad; sometimes the building has deteriorated too far to repair simply and easily. Use your best judgment, and if the situation looks right for you, jump in!

  Check out these Cash Flowing Deal: