Real Estate Investing Blog

There are plenty of people out there who are going to tell you that getting started in real estate investing during the current market is something that you should be wary of. While they may be right if you’re not willing to really take the time to look into your options, to evaluate whether or not the deal is going to help you to reach your overall goals or to make sure that everything is in order, if you’re committed to getting started and being successful, you shouldn’t let anything stop you from moving forward and going after your dreams.

Simply put, when you’re thinking about getting started in real estate investing, you aren’t just going to want to be thinking about what the market is like right now, you’re going to want to be thinking about the big picture and looking at the fact that markets change. You are also going to want to be sure that you’re looking into markets that aren’t right in your backyard (keep in mind, when you’re getting started, you are able to buy properties outside of your local area if you do your research well.

When prices are low - if you’re willing to do your homework - there are plenty of reasons to get involved in real estate investing. The lower the prices, after all, the better your opportunities for greater returns will be later.

Real estate investors these days - especially those who are just getting started - are finding that, with the mortgage market being what it is, there are a number of properties out there at a bargain. The problem with foreclosures, however, is that often the properties are left in disrepair. That’s where rehabbing comes in.

Rehabbing is basically a matter of taking a property that needs a lot of work and getting it ready either for the sale of for tenants. Of course, rehabbing is also something that can quickly eat away at your real estate investor wealth if you’re not careful.

When you’re going to be rehabbing properties, it’s important to know that there are ways to avoid breaking the bank. First, learn which renovations and upgrades are going to cost the most money and then look to see if they are really necessary. Some kitchens and bathrooms could definitely use a face lift or nicer appliances, but the costs of these changes is often high.

On the other hand, you are also going to want to be sure that when you’re rehabbing properties you are able to identify inexpensive fixes that are going to have a huge, positive impact on the property. Also, when you want to save during rehabbing, look at the work that you may be able to do yourself. While there are some rehabbing jobs that need the attention and expertise of a pro, painting the interior walls isn’t necessarily one of those things.

By knowing what you can do yourself, knowing what can be put off and looking at all of your options, you’ll find that rehabbing doesn’t have to break the bank - which will let you increase your profits as a real estate investor.

When you’re getting started in real estate investing, there’s an underlying excitement. While some people get nervous about getting started in real estate investing and focus only on researching their options and thinking about all of the possibilities that are out there, others just dive right in - and that creates a bit of risk.

You see, when you get started in real estate investing because your focus is on creating and building wealth, it’s important to be aware of the process. It’s essential too to know which pitfalls might come up that others have faced.

In other words, when you’re getting started in real estate investing, one of the the things that you’re going to want to be aware of is that different investments are going to have different returns. You’re going to want to be aware of capital gains taxes and when the right time to pay them will be. Similarly, you’re going to need to keep in mind that closing costs and other fees are going to need to be factored into your profits.

Simply put, when you get started in real estate investing, you’re going to want to recognize that there is work involved and there are plenty of things that you’re going to need to know. Still, with the right guidance, you’ll find that when you get started, you’ll be heading in the right direction.

The following is not a particularly uncommon sentiment when it comes to real estate investors and the first impressions that they have when they read about or talk with their mentors about short sales:

(source)When I first heard the word “short sale” at the beginning of my real estate career, I mistakenly thought it meant the sale was going to be fast. Actually a short sale means the lender will accept *less* for the home than what is owed in the current mortgage, so they’ll be short the loan payoff.

While it is possible to build great relationships with mortgage lenders within your community and while it is possible to know the best real estate professionals to work with when you want to invest in a short sale property, the reality is simple: when it comes to making a short sale, your relationships are going to be the difference in whether or not the banks are willing to take a loss.

Simply put, no one likes losing money - not even the banks. Short sales necessarily mean that they are not going to be repaid for the difference even though it means not having to foreclose on and take ownership of a property. Therefore, it is essential that you are preparing the best possible offer and that you are making every conceivable effort to negotiate the deal.

When you stay on top of the process - and especially when you have strong relationships with the lenders involved - you’ll find that the short sale process is very rewarding. However, don’t expect to just jump in and have everything go well with no effort; short sales just don’t work that way.

RISMEDIA, June 17, 2008-In an effort to stabilize declining home values in certain neighborhoods, the Bush Administration announced a temporary policy that will extend government-backed mortgage insurance and allow for the immediate sale of vacant foreclosed properties.  . . .

. . . The properties, which must purchased by owner-occupants, will no longer be subject to the customary 90-day waiting period.

 Read the Full Story Here

When you’re working as a real estate investor - both when you are getting started and when your business is doing well and growing - you are going to find that there are some necessary tasks that just aren’t your strong points. Working with virtual assistants can help to ensure that you are still getting everything done - even the stuff that you might like to put off until another day.

Now, when I bring up virtual assistants, I’m not necessarily talking about the same kind of services that were lauded in a book a year or so back about getting wealthy with a four hour work week. I’m not saying that the right thing to do is to send all of your blogging responsibilities or the designing of marketing materials and answering your phones to a firm overseas; what I’m suggesting is that it is possible to work with virtual assistants who are within your area (or at least your time zone) who can help you to make sure that you’re covering your bases.

By working with virtual assistants - and especially if you hire a virtual assistant who specializes in providing real estate services - you will find that there are a number of advantages:

• Rather than struggling to create a great blog post for the day, you can let a virtual assistant do the writing and focus on getting a hold of your contact at a real estate office.
• Rather than letting calls go to voice mail when you are out looking at a property, callers can be greeted by someone who understands your business and who can help to answer their questions.
• Rather than taking the time to send out marketing materials and placing online and print advertisements, you can have your virtual assistants get the message out.

When you’re in the real estate investment business, you’re going to discover that you have strengths and weaknesses but that doesn’t mean you should let your weaknesses get in the way of your success. By working with a virtual assistant who gets it and can pick up the slack, you can be sure that you are getting everything done and that you are focused on getting to the next level - whatever that may look like for you.

When you’re looking into getting started in real estate investing, one of the first things that you are likely to recognize is simple: there’s a sense of fear of the unknown. Many who want to get started in the real estate investment business find that they are afraid of losing money, afraid of making the wrong investments and either choosing the wrong homes to buy or the wrong tenants if they make the choice to rent out the properties that they have purchased.

So what can you do to overcome your fears of getting started in real estate investing?

The first thing that you are going to want to do is to recognize that getting started is something that you can do to simplify the process: when you want to get started in real estate investing, the best thing that you can do is to choose a mentor - someone who has been there and can get your started down the right path.

The next thing that you are going to need to do to overcome your fear of getting started in real estate investing is to simply get started. Until you’ve acted on your desire to buy properties and to manage them or turn them around to resell, you aren’t really going to be involved in the process. If you don’t get started, how will you be able to tell whether or not your fear is justified if you never make an effort to act?

Getting started in real estate investing is one of the best decisions that anyone who is committed to generating wealth as an investor can make; ultimately though, it is going to mean taking the first steps. By choosing the right mentors, looking closely at the best process for getting started and learning to evaluate deals, you will find that you are able to overcome the fear - and start wondering why you ever had it in the first place.

When you’re thinking about getting started in real estate investing, chances are good that you’ll hear a lot about short sales - buying a property for less than the value of its mortgage to help a homeowner to prevent foreclosure. After all, short sales can be a great way to save when you’re buying a property, but not everything that you’ll find on the topic of short sales is good news:

(source)“The waiting is torture,” said Mark Shandrow, a Keller Williams Realty agent in Long Beach who specializes in such transactions. “The banks are overwhelmed with short-sale requests, and some make sellers wait five months for an answer.” That answer, in many cases, he added, is “no.”

Yet despite the obstacles to successful short sales — lenders holding the first and second mortgages don’t agree on the terms, buyers often ditch the deal midstream or banks nix the agreement just before escrow closes — they’re on the rise.

While the above is certainly true - at least in some markets and to some extent - there’s a lot more to it than that. For example, when you want to succeed in short sale investing, you’ll find that you are able to find options that do simplify matters some - options like building great relationships at the bank and even with some real estate agents. Similarly, you’ll find that when you are working with the right mentor you can pick up some insider tips that can help you along the way.

In other words, you’ll find that you’re able to do a lot to ensure that the short sale transactions that you choose to pursue are successful; you just need to be willing to take the right steps.

When you’re getting started in real estate investing, one of the things that you’re going to want to be sure of is that you are getting started on the right foot; you need to be sure that you are avoiding those mistakes that many of your competitors make.

Before we talk a bit about what you can do to get started in real estate investing in a way that will help you to better reach your goals, it’s important to look at the common mistakes that new investors often make when they are starting out.

Among the most common mistakes that are made when people are getting started with real estate investing are:

• Simply taking the word of a seller or an agent when they tell you that a property will be easy to turn around and sell for a profit.


• Not taking the time to actually look at and research the property before making the purchase.


• Jumping on the first opportunities that they see without determining whether or not they are good opportunities.


• Hiring a high priced lawyer on reputation alone.


• Going into business with someone who you don’t really work well with.


• Expecting to get help from the agent who sold the house to them when they are ready to sell the property again.


• Thinking that they can work around the agent and somehow get a better deal when they make a purchase.


• Trying to do too much of the physical labor on their own when it comes to renovating a property.


• Waiting too long to jump on a great deal.


• Making assumptions about the process of real estate investing without looking at the big picture.

In other words, there’s a lot to learn while you’re getting started in real estate investing and there are a lot of mistakes that can be made. By taking the time to look at all of your options - and by making an effort to choose a mentor who’s been there to help you get through the early stages and on your way to success - you can be sure that you avoid common mistakes and reach the goals that you’ve set for yourself.

Hello Michelle, 

My wife (as a real estate agent) got a listing to sell a one family house who can longer afford the monthly payments although the homeowner is  current on her monthly payments on her payments. The homeowner is also upside down.  The value is $105,000 and the mortgage is $116,000.

We were thinking about doing a short sale ( as we have a buyer who is interested to buy a lower price) but I thought it would appropriate and ethical to contact the Loss mitigation and try to work out a loan modification as the homeowener wants to stay in her home with a lower affordable monthly payment. She was getting assistance from her daughter but that has stopped. She cannot afford the payments with her only income. The daughter is not on the note.  I had mentioned that my wife is a real estate agent and I am a part time real estate investor.

We live in Pa. I would be preparing the documents necessary to send to the bank. Would attempting a loan modification (considering that she is current on her mortgage payments) the correct thing to do? Do you think the bank will modify the note under these conditions? Should we send the documents as you discussed in your May 8 Coaching calls.  
Al Castro, New ForeclosureMillionaireClub.com member .

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Albert, I’ll get right to it! 

If she is current on her payments – loss mitigation doesn’t even know about her. Why would they do a loan mod if she is current. 

A Loan Modification is when the bank agrees that:

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