Real Estate Genius Investment Software Blog

By Joe Ponce

Of course, none of us can be everywhere at the same time (at least no one I have ever met). So many people see Real Estate through their own single portal and only those deals that they see come by can they act on. This is very limiting and restricts many investors. The message in this article is a bit mixed. You have to see enough promise or profits to choose the path you like and therefore are more likely to learn and stick with.

I once heard someone speak of stepping over thousand dollar bills as an analogy to people who could not see a deal staring them in the face. At least that is what I thought he meant. At the time, I didn’t think too much of it other than it was a cute way to look at the inexperience of many investors. As my investing career grew, I realized just how right this was. The ground, so to speak, is littered with thousand dollar bills and the dilemma becomes just which bills to pick up.

If you are new to the business, you probably cannot wait to see more thousand dollar bills than you can pick up, but they are out there. Ask anyone who is really looking.

Early in my investing career I tried just about every type of real estate investment you could buy a book or a course on. I tried each one once or twice and tried to make as few mistakes as possible. I did a few foreclosures, short sales, rehabs, flips, rentals, waterfront condos, mobile homes, commercial and residential land, and an RV Park. I even tried to buy a golf course one time but couldn’t raise the capital in time. There was a lot of frustration as I worked through many of the unique issues to each strategy.

Man, I figured there had to be one of these strategies that appealed to me. The thing was, I liked them all a little bit, but not one a lot. So what to do? Keep trying other deals until you figure something out right? Well, let me just say that I spent a whole lot of time stepping over thousand dollar bills.

If I had actually sat down and listed some of the skills I had and matched them up to some of the things I liked doing, I probably could have had a 5 year head start on myself. I am cursed with being as curious as a cat and interested in nearly everything. My wife of 15 years has long since given up on some of the conversations in which I try to engage her. I can’t really blame her. If our roles were reversed, she would constantly be telling me how a new type of thread was made especially for wedding dresses in the color of purple. She would go on and on about the number of twists in the thread per inch and how that affected the strength when a particularly stressful moment for the dress occurred such as laughing or pumping iron. I probably sound that crazy to her.

Today I work toward another model entirely. I am a visual person and realize that it is impossible to be good at everything and you will usually end up being just plain dangerous if you try.

So I pick a few lanes that interest me and try not to leave them. Here is what happens visually. The field is littered with thousand dollar bills. One row seems to have a few more on it and you head down that row. You find that the farther you go, the more bills you see in the distance until you focus completely on vacuuming up everyone in sight. As your skills in this lane or row expand, so does your ability to “see” these bills that are there for the taking. In short, you are no longer stepping over what you cannot see.

I suppose I could have abandoned all the chit chat in this article and stated “don’t get too spread out, stay focused on what you like and are good at.”

That is a bit cliché though. I prefer my visual model. I remember the days when every course or book I read was the next great path to financial freedom. People will attempt to lure you down these paths with promises and do you know what? Most of them are true! If you really became engrossed and took action in the niche you were studying, you would very likely be very successful.

So what is my favorite type of investment? Well let’s see what I like and don’t like.

I like the technical, mechanical, and creative side to investing.
I dislike the repetition, doing the books, filling out forms, and the tedious stuff.

Others folks are just the exact opposite.

Well, I threw all my efforts at mobile homes…surprised? I used my technical skills to develop a database that made investing very simple. It is very rare that a contractor pulls the wool over my eyes especially with air conditioning or electricity. I was able to structure deals creatively using only 20% and usually less of my own money.

Like any business it has its ups and downs but I am in my comfort zone and can do many more deals in a shorter period of time. I collect most of my leads over the Internet, there is little competition, and I can spend time outdoors.

I “see” the thousand dollar bills in my niche because I am good at it. I don’t see the thousand dollar bills in tax lien certificates for example although I am sure they are there.

This business has hundreds of niches and sub-niches that are growing all the time with some of the great creative minds out there. Do yourself a favor and learn a little about yourself while you are attacking that latest course. It will pay huge dividends down the road and put you on the right track. Don’t forget to come back from time to time and re-examine some of the niches that you thought you would not like. Above all do not be intimidated by people who are really cranking it up in their own niches. It does not mean it is a right fit for you as well.

Only you can choose the path that fits with your personality and style. Once you find it, watch those bills start to appear right before your eyes!

Joe Ponce is a master real estate investor and full-time Chief Information Officer in the U.S. Army. He has purchased or controlled over 500 properties and is largely considered to be one of the area’s foremost experts on manufactured home investing and internet marketing. His latest ventures, http://www.WealthAddress.com and http://www.Homes2Go.Com educate new investors about the power of successful internet marketing.

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By Preston Guyton

The world of investing in real estate is simply a highly lucrative one. With more people making more money on real estate than ever before, everyone wants to try their hand at making the big bucks. However, so many people jump into this world without proper preparation and find themselves floundering and not being able to afford the upkeep of their properties. As with any form of investment the first thing you need before making a run at it is a good, solid foundation and the knowledge of what is going to work and what isn’t. It’s kind of like buying stocks blindly. you would not dream of buying stocks without first researching them and the companies. find out what they stand for and how they have performed over time. The same holds true with real estate.

There is really no point in investing in something if you don’t know what you want from it and what hurdles you have to jump along the way. Investing in real estate is a bit more difficult than simply mortgaging or purchasing a property and renting it out or flipping it. Television is a main culprit in the mindset that investing is just that simple. What you don’t see on those investing shows is all the legwork and planning that go into a typical purchase. Trust me, there is a lot more that goes into an investment than can be covered in 1 hour minus commercials.

Investing is all about having a game plan with failsafe’s built right in. Let’s look at a couple of things that you may want to consider in making a real estate investment.

Location - This is incredibly important. If you are planning on making a long-term investment then you will be looking for an area that offers a lot to residents. Areas with schools, shopping centers, recreation facilities etc. It is more difficult to rent a home in the boonies than it is to rent a home in an urban area. If flipping a home is your plan then look for areas that are hot. New developments, condos and town homes are great places to look for this kind of thing. Talk to your realtor and find out which area of the city is selling fast, that is the kind of area you want for a flip.

Cleanliness- The key factor of almost any real estate transaction. Nobody wants to rent or buy a dirty home. renting will be dependant on keeping the property in good condition for some time so as to be appealing to renters. Also being attentive to the needs of said renters is important. An ignorant or careless landlord attracts tenants of the same caliber. Bad tenants can be a nightmare that no landlord wants to deal with so be sure to get to know people before they rent your property.

Finances - An investment should never have the ability to break you financially. This is where the failsafe’s come in. Make sure you have the funds to look after the property if you cannot immediately find renters or if the home take longer than anticipated to sell. If you build yourself a financial buffer then you can be properly insulated from taking a loss if things do not go according to plan.

Invest smart and don’t rush into things. You are making a big play for your financial future so it is not something to be taken lightly. Make sure you make the right decisions and always be prepared in case you make a mistake.

Preston Guyton is a professional Realtor® serving the Myrtle Beach real estate market. For more information on Myrtle Beach homes & properties, contact Preston today or visit http://www.prestonguyton.com.

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By Tom Wood

Real Estate Auctions have been used to sell properties successfully for many years. Do they always work? No, but if done in the right way, they ALWAYS attract attention. They ALWAYS make a property stand out from other properties on the market.

There isn’t a magic formula that will always sell a property, except price. An auction gives you the ability to use price as a way to attract buyers. However, the majority of buyers that you attract are expecting a deal. So, unless your property is in a hot real estate market or is unique and highly desired, you need to expect to sell at a discount. You should expect to discount at least 10% and many times more.

If you’re considering selling by auction, you need to realize that you will probably be giving up some equity for the convenience of selling fast. However, time is money, and it still makes sense for many sellers to use this method. Not to mention, there have been many auctions that have received bids right at, or higher than market value.

When should you use an auction?

1. On any property that you are willing to take at least a 10% discount. The bigger the discount the better chance for success.

2. On any property in a hot market. If you’re in a market where multiple offers are common for any listed property, take advantage of that excitement and let buyers bid against each other in an open format.

3. On any good investment deal. If you have a property that needs to be rehabbed, income producing property with good cash flow, or any other type of good investment property. Investors buy based on numbers, show them the numbers!

Up until a few years ago, seller’s who wanted to sell by auction usually held a “live” auction on the property. This process requires hiring an auction company and paying hundreds and sometimes thousands of dollars in fees regardless of whether the property sold or not.

Along came the Internet, and then Internet auctions for “stuff”. Now Internet Real Estate auctions are starting to take hold. One of the advantages of using the Internet is that it doesn’t require people to be on-site to bid. Bids can be placed anywhere a person has access to the Internet.

It’s understandable why real estate Internet auctions are becoming popular. They make this successful method of selling real estate accessible to many more sellers and investors.

Written by Tom Wood - Real Estate Internet & Investor Auctions http://www.reiauctions.info based in St. Louis, MO. (877) 234-6706.

Tom Wood is a real estate broker & auctioneer in St. Louis, MO. He owns and operates REI Auctions an internet auction site for real estate investors. For a copy of a FREE Report on 6-ways to benefit from auctions visit http://www.reiauctions.info

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By Tom Dunn

If you’re an aspiring real estate investor, or even an experienced one, and you would like to learn to market for motivated sellers and get them calling you, read on!

There are lots of ways to market for motivated sellers, and get them calling you on the telephone. Some cost lots of money, like classified ads. Others are virtually free. Your budget will determine which marketing methods you start out with, but the important thing to remember is, if you’re not doing some form of marketing, your business is dead in the water.

If you have little or no budget, one of the first things you SHOULD spend a little money on is business cards. You can get a box of a thousand simple cards with your contact information and “I Buy Houses” emblazoned on them for under thirty dollars. If you pass them out, they’ll bring you contacts and business.

The sad thing about business cards is, many people never take them out of the box, or they hand them only to people they already know. What good does that do? Each card is like a little salesperson, waiting to introduce you to the world. Leaving them in the box is like telling your salesman he can stay home in bed.

Pass your cards out everywhere, and leave them places where people will see them. Leave them with tips at restaurants, on the gas pump after you’re finished, hang them on community bulletin boards and in local businesses. In short, get them out there doing there job. Slowly but surely, people will find out about you, and they will call you when the need to sell a house.

Real estate investors also use things like hats, key rings, mugs, pens, and even t-shirts with their “I Buy Houses” message printed on them. These are great, but can get pretty expensive. Use them after you have a couple of deals under your belt, so they won’t break your budget.

Classified ads are probably the most often used method for attracting business. Unfortunately, in my market at least, they are overused and therefore it’s hard to stand out. Try ad copy that’s a little different. My ad reads, “I Buy Houses – Sell Your House Today, Move On With Your Life Tomorrow.” It stands out a little from the rest, and it’s been effective for me.

Where you put your ad can make a big difference, too. In my area, we have one major daily newspaper, which is widely read, but very expensive. I have had good success with a couple of the small, weekly “Pennysaver” type classified ad papers. My suggestion is to test your results and keep careful track of where your calls are coming from. You’ll soon find out what works and what doesn’t.

I’ve got more on how real estate investors can find motivated sellers, including two kick-butt methods that few investors have ever thought about. You’ll find it at Marketing For Real Estate Investors.

Crush The Biggest Obstacle to Your Success in Real Estate… or Anything Else! Download my FREE report and Start Investing In Real Estate! Tom Dunn is a successful real estate investor and author of the popular DealFiles Real Estate Investor Stories free newsletter. You are welcome to share this report, unedited and in it’s entirety, with anyone you like. This text, and all live text links, must remain intact. © 2007 by Tom Dunn.

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By Alexander Tran

Through every cycle, many real estate investors forget why they invested in real estate in the first place.  When the market appreciates, we all come to expect that real estate prices will rise forever.  Why not pay full asking price for a property when it will appreciate 20% in one year?

If you put 10% down on a $200,000 house, for example, you could earn 200% return on your money.  Never mind that the house could only rent for $900 a month.  Assuming a 7% interest rate, the interest only payment is $1050 per month.  Add taxes and insurance into the mix, and you’re looking at a negative cash flow of $250 a month.  Ouch!

The logic of the last few years was that the appreciation would wipe out all negative cash flow sins.  The reality of today is very different as many wannabe real estate investors are experiencing.

Ask any grizzled real estate investor and he would tell you that positive cash flow from a single family rental house is an elusive beast.

But what about all those other investors who live off their income properties?  First of all, notice how it’s always “other investors” who are finding success?  Those “other investors” paid down their mortgage to the point where their payments are less than their rental income.  So if they own a house that is worth $200,000 but they only owe $50,000 to the bank, their payment would be $333 a month, fully amortized.  Since we assumed that the rental rate is $900 per month, their net income is $900 - $333 = $567.

That’s positive cash flow, is it not?

The answer is yes, but at what price?  If they only owe $50,000 to the bank, they have $150,000 of their money in the property.  What is their return on investment?

Let’s work it out.  $567 per month in net profit equals $6,804 per year.  Divide $6,804 by $150,000 and you’ll get 4.54%.  That’s right folks.  The “other investor” is getting a whopping 4.54% return on their investment.  Can you think of another investment vehicle that can beat 4.54% returns?  Stop when you get to 100.

Did I mention that being a landlord is hard work, yet?  You’ve heard of collecting rents and clogged toilets, haven’t you?  Nuff said.

So why the heck would anyone want to invest in real estate?

That’s a really good question.  In fact, it should be the first question that any wannabe real estate investor should ask.  The second question should also be the same as the first question.  Wannabes should ask themselves this question at least three times.

If they pass this preliminary screening process, they will see that the true answer to why they or anyone else would invest in anything is…cash flow.

What?!?

We all invest for cash flow.  I don’t care if it’s a stream of cash flows or one big cash flow (cash chunk?) in the end when we sell; we all invest for the cash flow.  And this cash flow has a price.  Find the right price and the cash flow becomes that much sweeter.

For example, let’s say that we bought the rental house mentioned above for $110,000 instead of $200,000.  Our interest payment would be $578 per month based on 10% down.  Add taxes, insurance and property management fees, and we’ll be looking at $853 per month.  All of a sudden, we’d be looking at $900 - $853 = $47 per month.  Yippee!!

Not only that, but our return on investment is ($47 x 12) / $11,000 = 5.13%.  The number is not stellar but it took a lot less money to earn that return.  By the way, $97 a month in positive cash flow on a single family house based on 10% down is nirvana in real estate investing land.  Don’t believe me?  Go ask your local grizzled investor.

All right, so how do you find the $110,000 house?  That is a question for another article.

Like I said, “Positive cash flow in real estate is an elusive beast.”

Alex Tran is the publisher of http://www.ezsuggestions.com/blog
For many years, Alex worked very hard so that he could become a lazy bum some day. Then he realized — why wait until he turns 65 to become a lazy bum? Why not find ways to invest for time today? That question was the genesis for http://www.EZSuggestions.com, where Alex shares ways to invest and not have to work so hard.  Go read his often irreverent, but insightful, writing on how to invest for time instead of money. After all, what good is money if you haven’t got the time to spend it?

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