Real Estate Investing Blog

A Short Sale is when the ‘bank’ (lender) agrees to take less than the amount actually owed by the ‘mortgagee’ (the home owner, the debtor). 

Now there are some disctinctions here you should know - A ‘Short Sale’ is not the same as ‘Buying the Note’ at a discount.  When you are going after the Short Sale, your intention is to either (1) Get the property to hold and rent or lease option, or (2) Do what is called a ‘Quick Turn’ of the property (sell it to a new family OR another investor who will be; rehabbing to sell retail, or renting out).  In other words you will be expecting to realize your profit sooner rather than later.

Discounting the Note, makes you the new ‘bank’.  We can talk in depth about this in another entry here but suffice it to say for now “as the bank” you get the payments over time making ‘allota’ money on your money invested in the note AND/OR continue the foreclosure if that is why you found the note to begin with.  (I promise, more later on this . . .).

If you are interested in learning more about short sales and shifting your focus to this niche specifically, contact Peggy in my office about our mentoring programs.  Our office hours are 10a - 5p Eastern Time and our phone is 770-338-2797. 

A Land Contract is the same as an Agreement For Deed or Contract For Deed.  It is a contract between the buyer and seller of a property, where the “seller” holds the title or deed to the property until all agreed payments have been made in full.  Think of it like a car loan.  You get a loan on your new car. The car dealer (or financing institution) will hold the title on your car until you pay off the loan, then you get the title to the car. 

This is the same thing here with real estate.  The seller of the property will hold the deed to the property until the buyer pays off the “loan”, then the seller will transfer the deed to the buyer. 

Peggy Parks

My answer to that question is “ABSOLUTELY.”  The things I always hear on the negative issues of landlording are calls in the middle of the night and tenants.  When you have good properties in good neighborhoods, you find good tenants who pay on time and take care of your property and don’t call you.  Sure, there may be the occasional ( the hot water tank is leaking or the air conditioner stopped working)  So what!!  You are there to fix your OWN property so fix it.  Sure, it may take an hour of your time ( or not).  You just call the repair person.  They come to fix it and send you a bill.  And it’s over.  Is it really all that big of a deal??  I have never in my 20 years of landlording got a call in the middle of the night. I have a voice mail and I turn my cell phone off at night.  99.9% of the repairs are called in on the voice mail or called to my cell during the day  and not an emergency and can be handled within 24 hours.  
The other issue is tenants that do not pay their rent on time or don’t pay the rent at all.  Like I said before, when you have the right properties, you get the right tenants and don’t have that issue.  Sure , I have tenants that may pay late.  They understand our policy and they lose their rent discount and pays the additional daily rent until we receive their rent payment.  As long as they communicate this to me and pay as agreed, is it really so bad you get MORE MONEY for waiting another week on the rent!  If a tenant doesn’t pay the rent, you don’t wait a month or two before taking action.  This is a business.  If you don’t get the rent, take the action and start the dispossessory. 
The tenants are “working” for you so you don’t have to work for your money.  The rental income is “passive income”  so the tax benefits are better as well as deducting the expenses and the property.  Great tax benefits for owning rental properties!  I love landlording!! 
 

Peggy Parks

Have you started your Multi-Family Properties stream of income yet?

We have - And, for those of you out there who have been with us for a long time, you know I am ‘nervous Nelly’ when it comes to starting anything new. (I’ll have to post an entry here with the ‘first’ real estate investing deal we ever did for those of you who are new to InvestorWealth.com.)

Anyway, here are the stats/specs on our latest multi-family deal that is in the works. (Prop your jaw up before reading this!) (more…)

You know, Michelle & I have been managing tenants in our lease-option houses for a long time.  And I thought I knew “the ropes”.  That is, until I talked to our friend Mike B. 

I’m embarassed to admit this, but I’ve be letting scads of landlording money slip through my fingers.  Why, because I didn’t keep up with late fees, billing tenants for repairs, and when I had to take them to court, I made dumb landlord compromises I didn’t need to because I didn’t have the full history of the tenant in front of me.

Besides, I wasn’t billing the tenant every time I sent them a late notice or sent someone out to the house, etc.  Why? I know when I put it like this, it sounds like I’m just totally careless landlord.  But I’m not, it’s just that I get busy, want to get things handled and then don’t remember to put it in my quickbooks.  In fact up until recently I didn’t even know how to used quickbooks to bill a tenant–heck I didn’t even know I could.

Well, Mike created some templates I can just upload into quickbooks, and start using immediately.  He’s created most all the categories needed and I can create an entry with the push of a single button and create an invoice to be paid with another…and a lot more stuff also.  It is really totally awesome.

Bottomline–for the first time, I really feel in control of lease-option finances.  If you want to find out more about this stuff, just go to this link.

Like most of us, I hate doing the books–I’d rather just go out an make money.  The lesson learned here is that I can increase my net cashflow by 15-30%, just by using these templates–it’s easy and really a no brainer.

Richard Odessey, www.InvestorWealth.com