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Real Estate Investing Lessons Learned!

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No matter how long you are in real estate, you will continue to learn – ALWAYS!

This week, I had two such learning experiences that have changed our in house procedures. I want to share these with you because I do believe that they will help you in your business – and keep you from running into the same challenges!

Always include a clause in your contracts (when you’re selling) that holds the buyer accountable

Whenever you are selling a piece of property, include in the “Additional Terms” the following:

  • “Should the buyer not close on or before the closing date – and the seller agrees to extend the closing – buyer agrees to pay $_____ day until closing occurs”

It seems that the media has given the buyers the impression they hold all the cards, and somewhere along the way – with lenders changing requirements – contract dates are “written in sand”. Truth is, in many markets, buyers ARE farther and fewer between, but that doesn’t mean when we sell a property, that we have no recourse. Know what your daily holding costs are charge the buyer if his/her lender takes too long! But, add it to you contract because if you don’t, you’ll lose the money!

A few hundred dollars is still a few hundred dollars, right? (Yes, this did just happen to us! AND the buyer had the nerve call our broker and complain that we were trying to get her to pay for the additional days! – even though the deal didn’t even go through our real estate sales team!)

2nd Lesson Learned This Week…

Even if you have a property manager, you have to lay down the law! My previous property manager transferred 4 of our single family rentals to a new property manager all of a sudden! I knew about one tenant that we had to evict and was on my way to working on that one… But what I didn’t know was that the another didn’t pay for April (just found out today ~ 45 days later). I also found out that when a tenant moved out from a 3rd unit, that they had turned the water on and it ran constantly for 2 months ($1100 in water bills!) So, after a heart to heart with the NEW property manager, we’re laying out specific terms and my contract… with very clear policies and proecedures for screening, evicting, maintenance, etc. They have been put on notice that there is a zero tolerance for late pays and that we will go after them to the fullest extent that the law permits, and will keep the judgment on their credit report until it’s paid off! INCLUDING all late fees, attorneys fees, back rent, etc.! Needless to say, it’s been a hectic week on the real estate front.

I wanted to share these stories with you to let you know that I’m still in the field with you, going through the same old stuff you are and two, to give you a few nuggets of wisdom I picked up along the way.

Pay Per Click: Google Adwords

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My top 2 questions used to be:

  1. How do you find motivated sellers?
  2. How do you get started with no money or credit?

    Now… my single biggest question – hands down – is “How do I find buyers?” Whether you’re looking for wholesale buyers for your quick flips or you’re looking for retail buyers (or renters) for your existing properties.

    My partner, Brandon, is working on a comprehensive book with all the tactics and strategies we use to find buyers (we were actually out today with 2: one for a million dollar property and another for a $300,000 property) And they were “end” buyers.

    So, how do you go about finding these people? We do all sorts of things like: Craigslist, Bandit signs, MLS, open houses, etc. However, there is one tactic that very few people know about, let alone talk about. And that is individual property websites. Continue reading →

    What Are You Thankful For?

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    It’s easy to get caught up in the “stuff” of day to day life. It’s easy to get overwhelmed, fed up, frustrated and scared from time to time. But every now and then, it’s great to stop yourself and think about what you are thankful for in life.

    I remember – it must have been 10 years ago now – I got a journal-type book from Barnes and Noble and began to use Oprah’s idea of “The Gratitude Journal” and every single day, I would force myself to come up with 5 things that I was thankful for. It sounds easy enough, but after about day 5, you run out of the obvious. You start REALLY digging deep for things that you are thankful for.

    But beyond that, something happened internally! I began to really BE thankful for everything and I stopped taking things for granted. I started looking at all the people that were important in my life and rather than going from generic statements like, “I’m thankful for my mother,” I started getting specific. “I am thankful for the encouragement my mother gave me to get started in real estate”. That’s when I really began to appreciate everything on a deeper level.

    So… in the spirit of Thanksgiving, I encourage you to post your comments to this post and write 5 things that you are thankful for in your life. Then… share them with the people that you are thankful for when you’re sitting around the table with family and friends! Continue reading →

    Capturing Your Web Visitors

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    By now you know that you need a website, blog or some sort of web presence, I hope!

    But, it’s simply not enough to have a website if you’re not getting visitors and/or not getting visitors to leave their information so that you can follow up with them. So… how do you capture their info?

    Nowadays, it’s easier said than done. You see, several years ago, you could pop a page on the web, tell someone they couldn’t go anywhere until they gave you their information and that was it. But now, people are tired of spam and junk mail and don’t want to give out their email address if they don’t “know” what’s on the other side. Not to mention, just about everybody I know has an entirely separate email account for forced opt ins

    So… how do you get your visitor to give you their PRIMARY name and email?
    You’ve got to give them something SO irresistible or so unique, that they’d be stupid to say no to your offer.

    Here are a couple of unique ideas for things you can offer to your niche market: Continue reading →

    Real Estate Investing: The Three Levels of Success

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    If you’ve been investing in real estate for any length of time (or even if you’re just getting started), then you have undoubtedly faced frustration, hit some highs and then crashed into some lows! Ultimately, your goal as a real estate investor is most likely to generate immediate cash flow and long term wealth and increased net worth.

    True financial success is achieved by combining these two elements – cash flow and wealth creation, or net worth. Cash flow is considered as the monetary profit that is earned every month to support your lifestyle. This can also be used to invest in assets that may later appreciate in value.

    Three levels of real estate investors are as follows:

    Level one Real Estate Investors – In this level, the investors learn the basic tricks of the real estate investment business, and they use it to make real estate investment a profitable venture. They learn this by making their initial deals profitable. Thus, Level One investors ensure that real estate is the path to economic success. They are aware that there is much to learn from this vast field, and they try to understand it.Real estate investors at this stage should spend time learning the business, evaluating the details of the deals, and make sound decisions. Often
    Continue reading →

    Landlording: What Would You Do?

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    For more tips and tricks like those mentioned on this blog, register for your trial subscription of the Real Estate Rant: http://www.RealEstateRant.net. Each month, you’ll receive tips, tricks, tactics and real world challenges (and how to overcome them) that investors face each and every day!

    The following article comes from a situation that recently occurred with one of our own tenants. How would you have handled it? And really think about it as if you were in our shoes because it’s easy to say “Evict ’em” when you’re on the outside looking in, but put yourself in our shoes and think about how you’d handle it and how you could prevent the situation from recurring in the future!

    Here’s the Scenario:

    08/01/2007 – Rent is due

    08/06/2007 – Rent is officially late. When you finally reach the tenant, you get the sob story: “I had surgery. My mom went to the hospital. My dad panicked. My son’s trying to get me the money and I’m out of work. I promise to have the rent to you by Wednesday… Thursday at the latest”

    08/09/2007 –

    Guess what? No rent check. The tenant’s willing to drive it up, but the funds aren’t in the bank anyways! Tenant promises AGAIN to call you right after ‘therapy’ tomorrow morning and get it straightened out. VERY, VERY SORRY! Continue reading →

    Why Bankruptcy?

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    by Mark Klee & Caryn McKinney

    Answer #1: Niche Marketing = Less Competition and Greater Profits. As a real estate investor, perhaps you’ve figured out how easy it is to be unfocused in the real estate investment business. That being the case, my partner, Mark Klee, and I want to help you understand the incredible profits available to you by doing business in a NICHE market – particularly one that MOST investors are afraid to go after – bankruptcies. It’s not brain surgery to realize that any market with less competition will also offer you greater opportunities for amazing profits!

    You should also realize that if you’re NOT in a niche market, you’re fighting all the other investors for the same FSBOs, MLS listings, and wholesale deals from whatever resources you have. So why not at least check out this bankruptcy niche that most investors are, indeed, afraid to tackle?

    Answer #2: Market conditions are ideal Check out the following basic facts on our current market conditions and you’ll start to see how ideally the stage is set to work with quality bankruptcy leads.

    • In many areas of the country, investors are finding greater competition for fewer deals.
      Continue reading →

    Real Estate Going Green?

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    When we were putting together the latest issue of the Real Estate Rant (www.RealEstateRant.net), Brandon recommended an article on “Going Green”!

    I didn’t pay much attention to it because I didn’t realize just how much momentum the topic had gained! (So, with my tail between my legs, I must concede that he was on to something…) And because of that, I decided to write a little something on the topic with the Live Earth concert on 7-7-07.

    Last night, I was watching the Live Earth concert and I was blown away by the magnitude of the event.

    Plus, I learned lots of little tips that allow me to contribute my own small part towards helping the environment. These tidbits piqued my interest so I started to doing some research just to get a grasp on how big the “green” movement is.

    Just go to Google.com and type in “green real estate”. There are 81,700,000 results at the time I’m typing this email… WOW!

    So, why the sudden interest? Perhaps it was fueled by Al Gore’s inconvenient truth. Or maybe the rising costs of energy. Or possibly… that residents of planet earth realize that our resources are limited. Continue reading →

    History of the 4th of July

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    I grew up in a small town in New England. I had no choice other than to be patriotic and proud! We took field trips down the path of Paul Revere and visited the cemeteries of our forefathers. We walked on battleships that served in wars and stood in the same buildings that history was made.

    Yet now… more than 230 years later, it’s as if we’ve forgotten. We’re so busy fighting wars in foreign lands, closing down our borders and trying to save the world from famine, we’ve lost what it means to be American.

    To be an American means so much more than just to be born here, it means freedom: freedom of speech, freedom of religion, freedom of choice. America means capitalism, competition, a free market and democracy. To be an American means to have a dream, a goal, a desire, the American Dream.

    So, if you are going to pursue the American Dream, then do it passionately and be proud that you are an American. Know that because of where you live, you have opportunities that others don’t. Define your dream and go after it with the same passion that our Founding Fathers had when laying the foundation for our country. Know that in achieving your dreams, you will have sacrifice and you will have loss along the way. Stick with it when it seems like you’re losing ground. Remember… wars are won battle by battle! And wars are lost one battle at a time!

    My advice to you is to get in and stay in. The rewards will be worth it in the end and the financial freedom will be yours to enjoy and pass on to your children and your children’s children.

     

    And … no matter what your opinion is on the war(s), take a moment to honor those that have fought for this country and those that have made the ultimate sacrifice so that you can be an American and enjoy our freedom. Happy 4th of July! Take a moment to post your comments about what you’re doing to create your own American Dream!

    And now for you history buffs… A friend of mine forwarded this to me and I thought I’d share it with you! Continue reading →