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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 – 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 – Are You Managing Your Own Property?

This is an interesting question?  If you answered YES, then you are learning and growing as a Landlord and also a Real Estate Investor.

Managing your own rental property has many advantages and disadvantages.  The disadvantage is your wasting quit a bite of time managing vs. out making money!  However, I recommend managing properties for one year.  This year experience is more valuable than any book you can read or any seminar you attend on Managing Rental Property.

This program can be purchased for $49.00.  (This program is Worth More than $49.00) 

If your interested click on the link below to view:

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I started to have all of my tenants sign a drug disclosure stating NO drugs allowed on premises.  If they do drugs or anybody on the premises is doing drugs then we have the authority to evict immediately!

I currently have an odd situation on a side by side duplex.  Both tenants are single moms on Section 8 Housing.  They both have many similarities and putting the two together we thought they would get along wonderful since they have much in common.

The one tenant is complaining about the other tenant smoking pot.  I contacted the tenant and instructed her we are getting complaints on smelling pot.  This tenant instructed me she does not do any type of drugs.  We had along discussion on drugs prior to moving into the property. 

She instructed me her and the tenant went out to the bar last night together.  She comes over to her apartment and they drink coffee and chat.

Interesting enough, this same tenant who is complaining about the other tenant doing drugs complained about the previous tenant.  The previous tenants were a husband and wife with a high school student.  Very Nice Family who were well respected in the neighborhood!

When you own multi-units the challenge is getting tenants to get along together. 

Our job as landlords is to be private investigators to figure how who is telling the truth and who is not.

More to follow on who is telling the Truth and who is Lying……..

John Dessaurer has an excellent Management Program on cd’s.  John is a Millionaire who made his fortune buying large Multi-Units.  He is an excellent teacher who sells his information way below other real estate gurus.  He is selling this program at a ridiculous low price.  I took his Multi-Unit Class and own his programs.  His fee is extremely low compared to the other real estate programs on the market.  Don’t equate his low price with quality.  His programs are Quality at a ridiculous low price.

This program can be purchased for $49.00.  (This program is Worth More than $49.00) 

If your interested click on the link below to view:

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

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.

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

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:

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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 – 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

Real Estate Investing:  Property Management is one of the most important aspects of real estate investing and should it be avoided or handled improperly will become a very costly part of your business.  Property Management should be treated like any other business.  It includes accounting, maintenance, inventory (properties), planning, purchasing, personnel, marketing, finance, customer relations, complaints and legal issues.  If your properties are managed poorly so will your real estate investing be doing poorly.

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

When you have bad property management, you will have bad tenant relationships and high management costs.

You will hear many investors say that doing your own property management is like working a low paid job…when you should be putting more of your time and effort into investing where the money is bigger.  While it is true that a property management company would make good money, it is also true that you will have to pay out good money for these services.  Some of the properties you acquire may not have a large profit spread and you will need to save money for cash flow.  Make sure the numbers work on every property before you hire a property management company.  You may want to consider managing the first few long-term properties you buy in your real estate investing.  Doing so well save you some money and will teach you what you should expect from a property management company.  Real Estate investing is not a get rich quick scheme.  It takes time and effort to become a millionaire!

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

 Remember:  Keys to successful Real Estate Investing is a Successful Management Company be it you or a hired out company.