Real Estate Investing Blog

On Mon, May 12, 2008 at 1:07 PM,
Don R. Long, Member ForeclosureMillionaireClub.com wrote:

I did contact other investors and lawyers to find a lawyer who was updated on all the new laws.
In addition this particular lawyer asked if wanted to get involved with estates before they were listed with realtors..Imagine my response. 

Last week my son was told about an REO on water in Annapolis, Md reduced $100,000. I did not know what to tell what to offer. Do you have any experience with REO\’s and what to offer? Don
_________________________________________

Don, This sounds “interesting”.

First, Your basic principal initially, is to approach an REO the same way you would have had you been working on it before it was an REO - - minus the info on the owner/seller (the bank statements, tax returns, hardship letter, etc. and having to explain and get them to sign a mountain of paperwork.

Second, Have you done your due diligence?
(I)Reduced $100,000 from what?
(a)  Current Market Value
(b) What it was listed for by the owners when they were trying to sell it conventionally? 
(c) The total balance owed by the previous owners, and (i) does that balance include the late fees, attorneys fees and realtor commission?
  Or (ii) just what the balance on the loan was before they took it back.               
        (II)What is the property really worth at this point?
        (III)Is this an attractive offer to and ‘end-user’ or an ‘investor’?
        AND – Most Importantly
        (IV) What would be your ‘exit strategy’? 
In other words – what is your Plan A for getting your profit and then, what is your Plan B?
Knowing exactly what your exit strategy would be is what is important to know - - - otherwise - - - how can you evaluate a deal to be a ‘viable’ and/or ‘profitable’ deal.

Best of Success,
Michelle Odessey
Off: 770-338-2797   10:00am - 5:00pm Eastern Time
Fax: 770-338-9208

Sometimes, it’s easy to make the choice to start a family business. You know that you get along well and you’ve already learned what it takes to connect and work well together. You know that there are some members of the family who are hands on, some who are take charge, some who are fantastic with money, some who are good at networking and that there are advantages to working with those who you know whose skills complement your own.

Real estate investing is one of those opportunities that works well for those who are looking into starting a family business. There are a number of great reasons why:

1. Real estate investing is the type of field where being able to network is essential; if someone else in your family does it well, even if you don’t, you’ll be able to find success.
2. Real estate investing is the sort of field where those who are great with money are going to count on those who are willing to get their hands dirty.
3. Real estate investing is ideal for those who are good at staying on top of dates and appointments, but it’s also great for those who love researching.

Those three reasons aren’t the only things that make real estate investment something that’s a great family business; there are countless other reasons as well. Of course, the best thing that you can do if you are thinking about a family business in real estate investment is to learn more about the field and about what it takes to be successful. The more that you know, the more that you will be able to determine whether or not it’s the right choice for you.

Divorce isn’t something that many people think of as a good thing - for the most part, even when parents stay close to one another and co-parent, there’s always someone who gets hurt. For that matter, when it comes to talking about divorce, in most cases, the only people who ever seem to really benefit from it are the divorce lawyers.

However, what you’re likely to discover after you’ve been involved in real estate investment for a while is that divorce creates opportunities. While you may not feel good about divorce in general, when you’re able to keep an eye on legal notes that include divorce filings, in many cases you will find something that’s beneficial to you as a real estate investor: motivated sellers.

When homeowners file for divorce, there are going to be some cases in which everything is amicable and one party gets the house and the other takes the car and the boat. More often than not, however, when homeowners file for divorce there is going to be a point in time in the not too distant future when they decide to act quickly and to liquidate their shared assets - and that’s when the real estate investors start to benefit.

Keep in mind that the best deals that you will find as a real estate investor happen when the sellers are motivated. If the parties looking into a divorce are focused on splitting everything or they simply need to liquidate the property to cover the expenses associated with the divorce, it’s possible for you to jump in.

One of the most common questions about buying multiple properties is relatively simple: is it a good idea for me to invest in multiple properties?

The reality is that there isn’t one single answer to questions about buying multiple properties. Those who are just getting started in real estate investment, for example, may not benefit from buying multiple properties right away - at least not until they have started getting into a groove - buying properties, after all, is only a part of the real estate investment process, selling homes is also a part of it.

Similarly, those who have only worked through a couple of transactions as a real estate investor may want to think things through before buying multiple properties. Even seasoned investors who rent out the properties that they buy will think twice between buying multiple properties.

The reality is that when you buy multiple properties it’s possible to overextend yourself: it’s important to really have a strong sense of what you’re doing and to evaluate each deal independently if you want to be sure that you succeed.

Of course, if every purchase is a good idea and you’re in a position that makes it possible, then go for it. Just be sure to take a closer look at all of the risks and benefits of buying multiple properties before you act.

The most successful real estate investors know something that you might not: gathering leads is an essential component of the investment wealth equation. Unless you are able to get great leads for sellers and buyers, it’s going to be difficult to reach the level of success that you hope to obtain.

Part of gathering the leads that you need to succeed is going to come down to marketing. If you are clear on the signs that you put up - saying “Avoid foreclosure” or “I’ll take over your mortgage” rather than “I buy houses” - you’ll find that you’re able to get leads for the individuals who you want to reach.

Part of gathering the right leads - and ensuring your real estate investment success - is also about making sure that you are advertising in the right places. In order to succeed, you can’t just market yourself in one part of town or at one major intersection and expect it to be enough; you need to be sure that you’re getting leads for every opportunity that comes along. Simply by knowing that you need to reach out and making an effort to do so can help you to increase your business (and chances of success).

In other words, when you make an effort to gather all of the right leads - when you do all that you can to get sellers and buyers coming to you - you’ll find that success comes with a lot less stress attached to it.

When you’re just getting started in real estate investing, you might find yourself anxious to get out there and jump right in. The challenge is that, when you get started without really looking at the detailed information, not having the information can trip you up.

While the following excerpt talks about the importance of getting the details before you get started with investing in real estate overseas, the same information is true for those who are planning to get started by investing in real estate in their own area:

(source)One of the biggest risks of investing directly overseas is marching in with a blind eye. “It’s easy to lose your shirt when you’re investing in a foreign real estate market and you don’t really know what’s going on,” says Brad Case, vice president of research and industry information at the National Association of Real Estate Investment Trusts.

Not having the information that you need is one of the biggest risks that you can take when you’re getting started in real estate investing (for that matter, not getting all of the facts is a challenge even after you’ve been investing for a while; it’s possible for a deal that seems great on the surface to not really be so good after all).

Information is everything. Whether you’re talking about information about real estate investment in general or you’re talking about an individual property that you’re looking at or even a financing option, you need to be sure that you have all of the details you need - it will be the key to your success.

When you are marketing yourself as a real estate investor, your goal is - in no uncertain terms - to grow your business. Whether your goals include attracting sellers or attracting buyers, it’s important to look at the big picture. Even before you focus on individual marketing campaigns, it’s important to look at your priorities.

For example, let’s take a quick look at internet marketing. Pay per click campaigns with the right keywords are a great way to get traffic to your website, but they are not something that you should be focusing on learning a great deal about before you even have a website for your real estate investment business. The same is true for video marketing, however there is an extent to which marketing with articles, particularly if you include a phone number and contact information in the resource box, could benefit you.

The same holds true for print marketing efforts: one of the things that you’re going to want to do is to get people to contact you; if you’re focused on the pitch more than the end result, you might find that you’re missing a key step - something like your phone number.

When you prioritize your marketing efforts, when you look at the different steps that need to be taken and you do things in order, you’ll find that marketing is more enjoyable, easier and - most importantly - more effective.

When you are new to the field of real estate investing, you’re going to find that there’s a lot of work that needs to be done. Between marketing, finding financing, finding the right properties, making connections: there’s enough to be done that, well, that some real estate investors never get to a place where they can take advantage of business automation.

Now that isn’t to say that business automation is something that you should look into before you have done the groundwork and learned as much about the field as possible - it’s not; it’s extremely important to have an understanding about all of the little things.

However, once you’re established in your real estate investment business, you’ll find that there are some things that you’ll be able to put on autopilot. For example, you’ll find that you’re able to hire someone who updates your website or even someone who can take care of other marketing tasks (like writing your blog or the articles that you submit to directories). You can bring on an administrative assistant who can answer calls and keep all of your documents filed and in order.

It’s the little things about business automation that can make your day go far more smoothly. When you’ve got tasks that you don’t really enjoy but that need to be done, there are people out there who can help. By automating your business, you’ll find that it’s a lot easier to get everything done - and that you enjoy your business more.

There’s an extent to which everyone who makes the choice to get started in real estate investing has something in common: they all want the opportunity to get ahead. However, that doesn’t mean that those who look into getting started in real estate investing are all in if for the same reason.

So just why do people decide to get started in real estate investing?

• People make the choice to get started in real estate investing because they’ve looked at people like Donald Trump who have created empires by investing in real estate.
• People make the choice to get started in real estate investing because they discovered that the process of buying their home paid off and they were able to build equity quickly.
• People think about getting started in real estate investing because they spend a lot of time watching shows about flippong houses on TV and think that they could do it themselves.
• People make the choice to get involved in real estate investing because they see their landlord - or property management companies - getting ahead while they seem to be standing still and not getting any closer to the goals that they have.

What’s interesting is that, no matter why people make the choice to get started in real estate investing, many find themselves in similar situations. Some have success right away. Some end up creating a full time career after part time successes. Some people just get really lucky; however, the people who get started in real estate investing that are the most successful are those who do their research, work with a mentor and make sure that every deal they make is a great deal.

Investing in pre-foreclosures is one of the most effective ways to get started in real estate investing and to begin accumulating real wealth; however, when you’re going to be investing in pre-foreclosures, it’s important to take a look at what you can do to identify the best opportunities available.

(source). . .investing in pre-foreclosures can provide excellent profits but it’s always important to remember to do your homework before buying. Finding the right property is the right way to get started. It’s important to understand that even in a distressed market like today, motivated sellers are aren’t going to magically appear and speak directly saying, “I need to sell my house to you and you only.”

In order to ensure that you’re finding the right opportunities to invest in pre-foreclosures, you’re going to want to do a number of things:

1. Get your name out there. In order for you to benefit from pre-foreclosure investments, you need to make sure that your business has a presence; while the best opportunities still won’t come to you, you’ll still be in a position to learn of them faster.
2. Network with bankers. After establishing your real estate investment business, it’s a great idea to look at the connections that you can make. By networking and establishing relationships with those at the banks, you’ll be in a position in which they are more willing to work with you - which can help you to get ahead with future pre-foreclosure properties.
3. Market yourself as an investor. Will motivated sellers start seeking you out? Not right away, but over time you’ll find that there may be some who approach you.

In addition to establishing your real estate investment business, you’ll find that by keeping an eye out for great properties to become available, you’ll be in an increasingly better position; a position that ensures your success.