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Real Estate Investing – You Need To Lay Down Your Ground Rules!

Yesterday I knocked on the owners of the mobile home that my partner and I are financing to instruct them they have not held up to their end of the bargain.  The one owner instructed me his friend and he cleaned up the site the best they could and the other owner started on with excuses.

With owning income producing properties over three years, I thought I heard all of the excuses.   Last week the excuse was she broke her foot.   On Sunday the excuse was she has two children (used this excuse multiple of times).

At this point in time I instructed the other male owner to go over and clean up the site and then it turned into a heated discussion and filthy words coming out of her mouth.

The rules were written down and discussed prior to financing the mobile home for this couple.   Now, the mobile home is moved and it seems the only thing they want to do is click, click and more clicks with their big screen TV they purchased about two weeks ago.   (Immediate gratification that gets everybody in trouble today with their finances)

At this point in time I instructed them on the items listed below:

·         Watch your Mouth

·         I took pictures of the mobile home lot showing ALL kinds of trash laying on it.

·         Garbage can by the road needs to be removed since its full of broken up blacktop and concert and disposed on properly.

·         Huge Pile of Trash needs to be removed.

·         All boards and lumber need to be removed

·         Where the shed sat; the spot needs to be raked and put grass seed down on it.

·         The owner of the park called me last week these items need to be done or she will keep my check for $1,500.00

·         I instructed them my partner and I will clean up the mobile home lot today (on a Sunday!)  However the cost will be added onto the promissory note.

·         Read the promissory note (damages incurred will be added)

When I left; I went home and pulled out the promissory note to verify the terminology used on it.   As mentioned to the owners any damage occurred will be added to the promissory note at a 14.9% interest rate.

My partner drove over to the lot in the afternoon to start cleaning it up.   To her surprise they already had 80% of the lot cleaned up.   They brought a trailer to put all of the garbage on it.

Had we not had the agreed terms in writing we would have been cleaning up the mobile home lot on a Sunday.

I can’t stress to you the importance of laying down the ground rules upfront.   Once the rules are agreed upon verbally then you need to put it down in writing.   Once the document is all written up you need to take the document and get it notarized.  Your local bank offers this as a free service to their customers.

I drove past the mobile home lot this morning and it is all cleaned up with the bare spot ranked with grass seed on it.

cashflow Cindy

Real Estate Investing – Raising Section 8 Rents

I started in Real Estate Investing about three years ago.  The first duplex my partner and I purchased together was a foreclosed property in Green Bay, WI. 

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It was in the middle of December.  Yes, it was cold here in Wisconsin.

The place needed quit a bit of work, however, the major work was in the kitchen ceiling.  The owner people thought duck tape would hold a ceiling together.  Well, he was wrong…….

 Through many counter offers we did get the offer accepted.

We did a home inspection and found out the upstairs unit had a fire.  The fire department had punched a hole in the roof in order to come in with their water hoses.   We went back and did get a lower price due to the fire that had occurred earlier.

After months, we finally had the place rent ready.  A Section 8 tenant approached me on renting the upstairs.  At this time: I know little about Section 8; who they were or there rules and regulations.

We filled out the paper work and the upstairs unit did pass the Section 8 inspection after a few minor repairs were needed.  The tenant moved into the property. 

Before long the one year lease was coming up; and Section 8 came back out to inspect the unit.  Again, a few minor repairs was needed in order to get the unit to pass again.  However, this time I requested a rent increase since the rents were low.

I found out; in order to get a rent increase to pass; the request needs to be submitted two months before the lease expires.

This year, I was prepared; the new lease with the rent increase was submitted two months prior to the lease expiration date.

A great product to purchase is John Dessauer’s Property Management course.  Without excellent property management skills you will have a difficult time building wealth with your rental units.

 Find Your Life’s Freedom’s! Take Action Now!!

Keep reading my blog on real estate investing this is free real estate education from a professional real estate investor.   Post any questions or comments.

Cashflow  Cindy

Real Estate investing involves learning the skills of Property Management when you start to build your real estate portfolio.  Sometimes it’s not fun managing rental units as I encountered today.  However, you have to run your real estate investing as a business.  If you don’t your property value will go down due to poor upkeep and you will have difficulty finding quality tenants.

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I wanted to share my experience with you that I had today with a tenant in one of my upper duplexes.

The tenant residing in the upper duplex was instructed two weeks ago to clean up the laundry room in the basement.  She had piles of clothes on the basement floor.  Along with stacks of empty laundry containers (she was instructed to put in her garbage bin a couple of weeks ago).   She also decided to move parts to a bedroom set in the basement that her brother had picked up for her a while back.

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This morning I went to check out the laundry room to see if she had cleaned it up.   She had not nor did it look like she even attempted to clean. 

Now, I have a tenant moving into the lower unit on the 15^th of May who will be using this laundry room.   (embarrassing walking on piles of dirty clothes).

The basement goes with the lower unit.  The upper unit was allowed access about one year ago under the pretense she keeps the laundry room clean.

She failed to keep her end of the bargain so today she was instructed to remove all of her personal belongings from the basement.  She did not have authority to put parts of a bedroom set and store it in the basement.

She was instructed two weeks ago to clean up the laundry room or she would lose access to it.  As the room looked today, she did not clean up her piles of clothes.  She was instructed this morning since she left the laundry room in complete disarray she is losing her privileges to it. 

Managing your rental units is always a learning experience.  I advise each one you to learn the laws in your areas of investing and invest in education classes on Property Management.  This will be the best money spent to protect yourself and your investment.

 For a small investment of $49.00 you can purchase John Dessauer’s Property Management Program.  Comes with CD’s and a work book.  John made his money investing in multi units so he knows the in’s and out’s of property management.
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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 – 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 is where a private investor may step in. The investor may have no knowledge of the management of the proposed real estate investment. But he has faith in the professional promoter and is willing to invest money without any further involvement. When the profits come in, he will get his returns at the predetermined rates and be happy with that. If the profits are not there, the silent real estate investor gets nothing. Additionally, depending on how the investment is structured, the silent investor could also be held liable, in proportion with his investment in the property, for any losses incurred or debts.

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While this may not, on the surface seem like a desirable form of real estate investing, the advantages are that the investor does not have to devote any time or energy towards the management of the property. Presuming that his faith in the professional who is the manager is well founded, all the silent property investor needs to do is collect his dividends.

Another reason that people opt for silent real estate investing is because of a desire to avoid unwanted publicity – say a businessman undergoing financial problems who has other legitimate secure funds to invest but fears the investment would be misunderstood. Often the reason behind the silent investment is a fear of a conflict of interest situation arising – for example a close relation of a leading chef who has independent means may want to invest in another restaurant but does not want any issues of conflict of interest to arise.

Due to the quiet nature of this kind of real estate investing, the number of silent real estate investors is impossible to estimate, but because of the benefits this form of property investment offers, it is safe to assume that the number is large.

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3 Stages of Buying Foreclosures

By Jarad Severe

The strategy of buying pre-foreclosures is to create a situation where everyone wins. This type of strategy involves just you, the homeowner, and in some cases the lender. Because the homeowner has been delinquent on his or her mortgage payments, they are now in a position to entertain offers made by investors. Keep in mind, you may not be the only investor looking at this property. However, when buying pre-foreclosures, you can expect very little competition.

When buying pre-foreclosures like this and in turn make a profit, you must do some research on these types of properties. The following are some basic guidelines:

1. locate loans in default,

2. evaluate each property by comparing and contrasting location, price, and property condition

3. narrow your selections to a few

4. inspect the properties

5. determine the property owner’s needs, his motivation and flexibility

6. determine the market value of the property, fix-up costs, potential sales price and profits

7. arrange default work out by negotiating with the owner and the lender

8. close on the property, fix it up, and flip it quickly

Check out these Cash Flowing Deals:

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

Buying Foreclosures at The Auction

Buying foreclosures at the auction is a great way to purchase a property under market value. Most properties are auctioned on the courthouse steps. The property is auctioned off to the public and the highest bidder walks away with the property. This can be very rewarding to those who are in a position to buy the property within a short amount of time and can be devastating to those who bid without proper financing in place. Most auctions require a small deposit down of the purchase price on the spot and the remaining balance usually within 1-30 days. So make sure You have you deposit ready and your financing is in order before you bid. If you are unable to get financing within the allotted time, you will most likely lose your down payment, and they will auction the property off again. Buying foreclosures at the auction is also the riskiest place to pick up a foreclosure. You are buying the property in “As Is” condition so it’s very important to do your homework before you just go to an auction and bid on a property.

When buying foreclosures at the auction, we recommend you:

1. first visit a local auction to get a feel for the bidding procedure, find out how much is required as a down payment and when the rest is due

2. get proper financing in order

3. research properties and do your homework prior to the auction date

4. calculate potential profits

5. determine the most you will bid for the property

6. follow the property to the auction and participate

Check out these Cash Flowing Deals:

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

Buying Foreclosures that are Real Estate Owned (REO)

Buying foreclosures that are REO primarily involves the lender. REO just means the lender reclaims the property and establishes control over it to minimize its losses. Buying foreclosures that are REO is by far the easiest way to pick up a distressed property. Lender’s are always listing properties that come back from the auction, because they don’t like excess inventory. They are in the lending business, therefore it is quite easy to find these types of properties. Most of the time they will hire a broker or real estate agent to handle the REO’s just because there are so many of them. Lender’s in this situation are very motivated, especially if they have a large number of them. These properties are considered to be a huge expense which need to be eliminated. This gives the investor numerous ways to creatively negotiate with the lender on a purchase price. One disadvantage when buying foreclosures that are REO, is that you will pay close to market value for these properties because the lenders will have paid off any outstanding liens, taxes, and other expenses. This is good for you though, because most of the time you will find these types of foreclosures with clear titles.

 Check out these Cash Flowing Deals:

Real Estate Investing - In order to achieve we must first Believe!

http://prosperityalliance.com/cindyconradt  (FREE Seminar on video)  Enjoy!

Last weekend my sister and I attended Marshal Sylver’s “Turning Point” Seminar in Chicago, Illinois.  What an amazing experience.  Everybody ate Fire!

Yes, Everybody in the audience went up on stage and ate Fire!  My sister didn’t tell me until after it was over with how fearful it was to her in her mind.   

One lady was so scared she ran off stage.  After everybody was done eating fire.  Marshal brought her back up on stage and walked her through the process.  She was extremely emotional afterwards and broke down in tears.

We were a small family cheering everybody on.  An 11 year old boy attended the seminar and had no fear when he went up on stage.

Marshal is called the Millionaire Maker.  After attending the seminar I understand.  He understands how we think and teaches us to think clearly  about our paths to success.  Concentrate on our goals/paths and keep all negative thoughts out.

Click on the link to hear the seminar for FREE!  Excellent Opportunity!  Enjoy!

http://prosperityalliance.com/cindyconradt

To be a successful real estate investor you must keep all negative thought out of your mind and only think positive thoughts.  My family thought I was crazy and wondered what does this have to do with Real Estate Investing.  The answer is, CONFIDENCE.  Real Estate Investing is all about Confidence.

Real Estate Investing – Section 8

Real Estate Investing:  Section 8 is an assistance program through the government to assist low income families with housing.  In many areas there is a long waiting list to get on housing.  In Outagamie County area there is a waiting list of over 1,200 families!

The families have to meet Section 8 guidelines in order to be approved for the program.  Once they are approved then they are given a voucher for a certain dollar amount.  At this time is it there responsibility to find suitable housing that meets housing guidelines as the voucher dollar amount and number of bedrooms.

Each family’s monetary guidelines are structured differently.  Some vouchers pay for the full month’s rent.  Other vouchers pay a percentage toward the rent.  If the family has income as a W-2, Social Security or Disability then they are required to pay a percentage of the rent themselves.

If the tenants are evicted for any reason then they lose their housing for 3-5 years.  It’s in their best interest to follow the rules and guidelines of housing and the landlord’s.

Housing requires children who are the opposite sex to have their own bedrooms.  Example) A family has 2 children.  The boy is 5 years old and the girl is 7 years old.  Each child needs to have their own bedroom.  In this situation their voucher would require them to find a 3 bedroom to meet housing guidelines.

Remember to order Zig Ziglar’s Goal Setting audio.  Its a small investment for you to learn how to write your GOALS for 2009 on Real Estate Investing.  If you don’t have a path or direction for yourself then you will help someone else achieve their dreams and goals.  If this what you want?  Listen to 3 FREE Audio’s

Without clearly defined goals, you simply can’t achieve the success you want! In Goals, world-renowned motivator Zig Ziglar guides you through a clear, beautifully organized ’success trip.’ Along the way, you’ll learn how to recognize and set your goals. You’ll learn techniques for finding extra time you didn’t think you had and for cutting down big goals to easy-to-handle size. Now you can take advantage of this all-important opportunity to write your ‘business plan for life.’

Real Estate Investing:  Landlording does have its pro’s.  First of all being the landlord of your own properties keeps you in complete control.  You know what your tenants are doing, shape of properties, what marketing efforts are effective, cash flows are on each properties. 

Click on link to view Cashflowing Real Estate Properties   http://serene.ewimultiplestreams.com/index.php?base=featured

Complete control of your properties is effective for cash flow since your not paying 8% -10% for management fees.  If you have a 3 unit and it brings in $1,400.00 per month.  $140.00 will go to the property management company at a 10% fee.  This may not sound like a large sum of cash however if you multiply $140.00 x 12 your property management cost per year is $1,680.00.    If you managed your property yourself this money could be used for capital expenses or repairs or updates to the units or placed in a Security Fund for unexpected expenses.

You must realize that when you are a landlord, you are in the tenant business. Your sole purpose is to keep that tenant happy, handle the tenant needs, account for the tenant cash flows and pay the expenses that it costs to keep the tenant in the building. While it is true that you are technically an investor, your main business is serving other people’s needs

Real Estate Investing is a business and needs to be treated like a business.  There are many decisions to be made to keep the real estate investing business running smoothly.  You will have to decide if you want complete control or hire a management company.

Click on link to view Cashflowing Real Estate Properties   http://serene.ewimultiplestreams.com/index.php?base=featured