Upon returning from the college I elected to take on a business partner. Short Sales are one of the most intricate real estate transactions that exist and, while I could have done it on my own, it would have taken much longer than if I had someone partnering with me. RS, therefore, came on board and we began masterminding ways to find short sales, which, in this market, isn't terribly difficult since so many people are in loans they can no longer afford.
We began by contacting a real estate agent friend of mine, Greg, who has been invaluable in sending us properties in our area that are in pre-foreclosure. Our deal with him is if we find a property through him, and negotiate with the bank to buy it at a discount, when we fix it up and prepare to resell it we use Greg as our realtor. This might sound like it took a lot to make it happen but it was actually quite simple. Having already established a relationship with him it took very little convincing for him to meet with us, plus he's getting something out of it.
I would guess that almost everyone knows at least one real estate agent either directly or through a friend; I would encourage you to start with someone you know because it feels more comfortable. As you gain experience you'll want to contact Realtors who work specifically in the area you are buying and build relationships with others who have an excellent performance record i.e. they're selling a lot of homes! A tip a friend in the NR community gave me was to drive around a neighborhood/area in which you are considering buying and look to see which agent's name appears on the most signs. Odds are that person is getting a lot of deals done and thus a valuable asset for your exit strategy.
Another connection I made was with a mortgage broker, Mike, who I actually met in a bar several years ago. A rather drunk woman decided we made a good-looking couple and tried to play Yenta for us. We got along fine but there were no sparks, however we learned we both had an interest in investing so we exchanged information. RS and I met Mike for coffee, explained what we were dong and he agreed to refer clients to us whom he cannot re-finance or do a loan-modification for. In return we agreed to make him our preferred lender to prospective buyers on our fix and flips.
Buildling mutually beneficial relationships is my favorite way to find deals especially because the person referring the short sale to you has likely had contact with the home owner and therefore has put in a good word for you as someone who can a) educate them on their options and b) might be able to buy their house and c) isn't a scheister!
For more info on how I became such a freakin' genius visit: www.newrichbdg.com
Another option, although we have not yet gone down this road, is to hit the courthouse, which has public records of distressed properties. There are also on-line services from which you can buy lists of pre-foreclosure homes in your area. One that my friend Mick likes is www.public-record.com
From that point you can mail letters or go door to door and speak to the home owners in person. I do not recommend talking to the home owners, however, unless you know what the heck you are doing. First, if you are not educated in the different option home owners have before doing a short sale, then you are doing them a diservice. Secondly, if they choose to work with you they are putting a lot of faith in you to provide them a solution. If the bank will not accept a price that make the numbers work on your end, that's one thing, but to work with a homeowner and fail simply becasue you didn't know what you were doing is an entirely different matter.
If you are interested in getting the same education I got visit: www.newrichbdg.com
Monday, June 29, 2009
Friday, June 26, 2009
My Major or Let's Learn Something Useful Shall We?
In selecting classes I had a wide variety of investing strategies on which I could focus. Based on where the market is I chose to study the short sale strategy. For those of you wondering, “what is a short sale?” let me first say I’m a little surprised you’re reading this blog! However, to clarify, a short sale is when a homeowner is behind in their payments, for whatever reason, and a third party, either a Realtor or a private investor like myself, negotiates with the bank to buy the property at a discount. In other words the bank is shorted some of the money owed, hence the name.
This strategy allows the homeowner to avoid a foreclosure on his/her credit report and usually completely absolves them of the debt owed; it gets the property off the banks hands (they do not want to take properties back!) and gives me, the investor, a property that I can either cash flow by renting to tenants or, if it needs repairs, fix and flip it for a profit. NR taught me every step of the process in intricate, and legal, detail. From finding distressed properties and how to speak with the owners, to what kind of paperwork is needed and how to fill it out, to negotiating with the bank and handling a BPO, to building a team to handling a closing: they covered it all.
In addition to short sales I took a class on legal strategies as well as tax strategies, both of which were invaluable in showing me how to protect my assets and mitigate my tax liability (within the boundaries of the law people!). Armed and enthusiastic, which is just as good as dangerous, I returned to Chicago ready to track down a distressed property!
This strategy allows the homeowner to avoid a foreclosure on his/her credit report and usually completely absolves them of the debt owed; it gets the property off the banks hands (they do not want to take properties back!) and gives me, the investor, a property that I can either cash flow by renting to tenants or, if it needs repairs, fix and flip it for a profit. NR taught me every step of the process in intricate, and legal, detail. From finding distressed properties and how to speak with the owners, to what kind of paperwork is needed and how to fill it out, to negotiating with the bank and handling a BPO, to building a team to handling a closing: they covered it all.
In addition to short sales I took a class on legal strategies as well as tax strategies, both of which were invaluable in showing me how to protect my assets and mitigate my tax liability (within the boundaries of the law people!). Armed and enthusiastic, which is just as good as dangerous, I returned to Chicago ready to track down a distressed property!
Friday, June 19, 2009
College of Wish I'd Done This the First Time Around
I had signed up for classes in February and was eager to see what my money had bought come April. Prior to attending the college, other investors I met through Brandon crowed about the amazing experience and said I would be blown away. They kept saying this even after I paid for my tuition so my hopes were high that I had not just dumped a bunch of money on some weekend-hotel seminar. I was not disappointed.
Another comment I heard repeatedly was that words cannot describe how great the college experience is: it turns out they were correct. I sit here pondering an accurate description and all my attempts fall short of the vivid picture I’d like to paint, so bear with me as I make an attempt.
Let me first say my expectation was somewhat low. I imagined sitting in an overly air conditioned and seldom vacuumed conference room in the basement of a Motel 6 taking notes from an overhead projector in a room populated with bald, pocket-protector wearing accountants. The thought of sitting in class for 8 hr/day for the bulk of my spring break vacation was not a comforting thought. I tried to focus on the education aspect and told myself this enormous sacrifice was what I had to do in order to accomplish my future dreams, which is what any self-sacrificing parent would do for their children; only instead of a child I had a hamster with a voracious appetite and large testicles. That part about the education turned out to be true: this was what I needed to do to make my dreams come true and not lose a fortune in the process. Fortunately that part about the accountants was a needless worry.
The first benefit to the college is that it's located in AZ. For anyone living in Chicago, you know April is not exactly a balmy time of year so heading south was not without its advantages. Flip-flops and sunglasses were the order of the day, although most our time was spent in conference rooms, but they were really really nice conference rooms and not the seedy, roach-infested slums of my overactive imagination.
The second benefit was the energy of being surrounded by people who are totally jazzed about the same things as you. Their enthusiasm was infectious and their stories of success were inspiring since I was so new to the game. Meeting and networking with hundreds of individuals who are learning and actually investing successfully across the country was quite a rush.
The third perk was the organization of the event, It was precise as the finest of Swiss engineered timepieces, despite the thousands of students attending. I was always able to find a free bathroom stall, get coffee or a snack without waiting in endless lines, and park conveniently. Everything started and ended on time, including the breaks, which, for an OCD time freak like myself, was soothing and impressive.
These three components lent to an excellent first impression, but paled in comparison to the actual classes, all of which were taught by dynamic, energetic, knowledgeable and successful investors. They say that it’s not what people say, but how they make you feel, but in the case of real estate education I think the, “what they say” , part is pretty damned important! However, each instructor covered their material so thoroughly and efficiently that I left each class feeling confident that I could go home and apply what I had learned. I also felt enthused and inspired to start using my education, a feeling I rarely experienced at my alma mater, Loyola.
As I scan back over what I wrote the description seems woefully lacking, but then saying “The David” is an elegant sculpture doesn’t really do it justice either does it? All I can say is that prior to attending NR's college, my friends and family warned of the dire experience they, or people they knew, had suffered at other weekend real estate conferences. This week long extravaganza was nothing like what the naysayers said; no one tried to up-sell me and I left feeling empowered. I can honestly say that if that one week was all my money had bought it would have been worth it….but I get to go again! I get to go 7 more times! Wahoo!
To see what I'm doing with what I learned keep reading or visit: www.newrichbdg.com
Another comment I heard repeatedly was that words cannot describe how great the college experience is: it turns out they were correct. I sit here pondering an accurate description and all my attempts fall short of the vivid picture I’d like to paint, so bear with me as I make an attempt.
Let me first say my expectation was somewhat low. I imagined sitting in an overly air conditioned and seldom vacuumed conference room in the basement of a Motel 6 taking notes from an overhead projector in a room populated with bald, pocket-protector wearing accountants. The thought of sitting in class for 8 hr/day for the bulk of my spring break vacation was not a comforting thought. I tried to focus on the education aspect and told myself this enormous sacrifice was what I had to do in order to accomplish my future dreams, which is what any self-sacrificing parent would do for their children; only instead of a child I had a hamster with a voracious appetite and large testicles. That part about the education turned out to be true: this was what I needed to do to make my dreams come true and not lose a fortune in the process. Fortunately that part about the accountants was a needless worry.
The first benefit to the college is that it's located in AZ. For anyone living in Chicago, you know April is not exactly a balmy time of year so heading south was not without its advantages. Flip-flops and sunglasses were the order of the day, although most our time was spent in conference rooms, but they were really really nice conference rooms and not the seedy, roach-infested slums of my overactive imagination.
The second benefit was the energy of being surrounded by people who are totally jazzed about the same things as you. Their enthusiasm was infectious and their stories of success were inspiring since I was so new to the game. Meeting and networking with hundreds of individuals who are learning and actually investing successfully across the country was quite a rush.
The third perk was the organization of the event, It was precise as the finest of Swiss engineered timepieces, despite the thousands of students attending. I was always able to find a free bathroom stall, get coffee or a snack without waiting in endless lines, and park conveniently. Everything started and ended on time, including the breaks, which, for an OCD time freak like myself, was soothing and impressive.
These three components lent to an excellent first impression, but paled in comparison to the actual classes, all of which were taught by dynamic, energetic, knowledgeable and successful investors. They say that it’s not what people say, but how they make you feel, but in the case of real estate education I think the, “what they say” , part is pretty damned important! However, each instructor covered their material so thoroughly and efficiently that I left each class feeling confident that I could go home and apply what I had learned. I also felt enthused and inspired to start using my education, a feeling I rarely experienced at my alma mater, Loyola.
As I scan back over what I wrote the description seems woefully lacking, but then saying “The David” is an elegant sculpture doesn’t really do it justice either does it? All I can say is that prior to attending NR's college, my friends and family warned of the dire experience they, or people they knew, had suffered at other weekend real estate conferences. This week long extravaganza was nothing like what the naysayers said; no one tried to up-sell me and I left feeling empowered. I can honestly say that if that one week was all my money had bought it would have been worth it….but I get to go again! I get to go 7 more times! Wahoo!
To see what I'm doing with what I learned keep reading or visit: www.newrichbdg.com
Friday, June 12, 2009
Nouveau Riche or A Better Approach then the Library
The meeting with Brandon, who was a real estate investor, eventually led me to Arizona for an amazing education on real estate investment strategies. In earlier posts I mentioned the naïveté with which I first endeavored to invest and, fortunately, I met Brandon who steered me in the right direction before I had too many blond moments and really hurt myself financially.
His story of struggling to invest on his own, learning by experience and losing a lot of money in the process, inspired me to get involved with a real estate education company called Nouveau Riche. NR uses a collegiate based system to educate investors over a two year period (what? you thought you could learn it all in a weekend?!). The information you get, however, can be immediately applied and comes with a plethora of on-line resources as well as personal access to the millionaire investors who teach each class. It's kind of like college, only the students actually want to learn, the teachers actually knows what they're talking about and eveyrone is actually applying the information in the real world and creating success. I'm short on time today as I have a waxing and wine appointment with my gf so I'll go into the college experience details next time.
In the meantime live abundantly and do something to better yourself other than reading this blog!
His story of struggling to invest on his own, learning by experience and losing a lot of money in the process, inspired me to get involved with a real estate education company called Nouveau Riche. NR uses a collegiate based system to educate investors over a two year period (what? you thought you could learn it all in a weekend?!). The information you get, however, can be immediately applied and comes with a plethora of on-line resources as well as personal access to the millionaire investors who teach each class. It's kind of like college, only the students actually want to learn, the teachers actually knows what they're talking about and eveyrone is actually applying the information in the real world and creating success. I'm short on time today as I have a waxing and wine appointment with my gf so I'll go into the college experience details next time.
In the meantime live abundantly and do something to better yourself other than reading this blog!
Friday, June 5, 2009
More Serendipity or The Power of Your RAS
While I met MO in August it took until December for her to connect me with her contact in Chicago. I am still not sure why it took so long, but the timing perfect, as I will illustrate shortly.
While waiting on MO I had been poking through Dean Graziosi’s book. He was far more detailed than Kiyosaky in the “how to” of real estate investing but I still lacked the confidence to go out on my own and actually DO a deal. I longed for a mentor; someone who could show me the ropes, warn me of the pitfalls and hold my hand a bit on the first deal. I was thinking about a mentor one day while en route to the gym when, to my great surprise, passed a van parked in the office complex that said, “Real estate investor seeks apprentice”. That was me! I could hardly believe my eyes! Was this a sign? I was so shocked I made a deal with God: if the van was still there after my workout I would stop and take the number.
An hour later it was still there so I stopped and took the number. As with buying the Graziosi book, it took me a week to finally call and, when I finally got the balls up to do it, the line was disconnected. Curses. I took this as another sign.
Two months later MO finally gaves me the contact number for her guy, Brandon, and we set a meeting. Imagine my surprise when I pull into the same office complex as where the real estate van had been parked! The van belonged to Brandno's business partner, Scott, I had input Scott's number incorrectly by ONE digit! How’s that for ser-en-freakin-dipitiy?!
In my title I mention the RAS, which stand for reticular activating system and it’s your brain’s “sort” feature. Your RAS is what causes you to notice the new car you bought being driven all over the place or helps you scan a page lfor a particular name or fact. Your RAS, in other words, is designed to give you what you want. On that drive to the gym I wanted a real estate mentor. The seed of real estate investing had taken root months ago with Kiyosaki's book but I felt paralyzed in moving forward. I knew I needed assistance to get started but didn't know where to find it so my RAS sorted found a mentor for me! Your RAS is intricately related to the Law of Attraction that Oprah and others are all of a dither over as of late.
I highly recommend “The Secret” or "The Answer" by John Assaraf and Murray Smith as an excellent source for understanding the workings of your subconscious mind. You will find it useful in pursuing any avenue or life or business.
To see how it helped me visit: http://www.newrichbdg.com/
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