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Real Estate Investment Failure 101

February 20th, 2008
There are many ways to fail when it comes to investing in real estate. The first one is to just take no action. Sit back and let everyone else find the good deals. Dream about the day you find a property for thousands of dollars below market value. You can only fail in real estate if you do nothing. 
 
Some simple mistakes many new investors make is to complicate things. The formula for real estate investing is very simple. Buy low and sell high. This is the formula used for hundreds of years to make men wealthy. It worked before and it will work again and again and again. If you find a property you can purchase which is below the market value, and you can sell it for market value or above, then you have made a profit. It is that simple. You just need to understand the market.
 
There are many bankruptcies on the market now. Finding one which can yield a profit is not hard. You need to understand certain things. The first one is what laws govern your purchase of real estate. Each state is different when it comes to investing. Sometimes new investors think that what is acceptable in California can also be done in New York. This is not always the case. Determine what you must do to acquire a bankrupt property. Real estate courses at the local community college can educate you on the laws and regulations. It is a good idea, especially if you are a beginner investor to take a real estate course. You will not only benefit from the knowledge, it can save you thousands of dollars in the end. You will know how to put deals together which are legally binding.
 
Forgetting to analyze the market can also lead to failure when it comes to real estate investment. You will want to know which neighborhoods are growing and which ones are on the decline. You do not want to invest in an area where property values are falling. This can only lead to trouble. Just because today’s market says the house is worth X amount of money, does not mean it will sell for that price. This is especially true in a failing market. Choose areas you know are growing. Check local planning boards to become familiar with new plans or new zoning. This is usually a good indication of where to find growing areas. It may be a year or two before the area reaches it’s prime, but this is good for you. You can find properties which are available now that you can turn a profit on when it comes time to sell. 
 
One of the most common ways to fail when it comes to investing in real estate is putting too much money on rehab. There is a phrase which says, “ if it ain’t broke don’t fix it”. This is especially true when it comes to investing in real estate. Put only what you need to in the property to sell it. Do not spend thousands updating the kitchen or gutting the upstairs. The new buyer can do these remodeling jobs. Make sure the properties have great curb appeal, are being offered at a reasonable price, and are clean and well maintained. This is what a buyer is looking for. You can find one repair could lead to hundreds of dollars in other repairs when you get started. Have the property inspected to determine what exactly needs done to get the house ready for market. Other than that, do not invest any more than you have to. There are times when this rule does change, but not very often. If you know your market and understand what the buyers are looking for you will know what to do in these cases. The less money you put out of pocket the more money you will make when it comes time for the sale.
 
Some careful planning and common sense can make investing in real estate a very profitable business venture.

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Where to Find Bankruptcies

February 18th, 2008
There are many places you can look to find bankruptcies. You can get a large list of foreclosures on the Housing and Urban Development (HUD) web site. This association lists many foreclosures. The listing includes how many bedrooms and bathrooms the property has. It also gives a general description of the properties. You will be able to see the address. In some cases there is even a picture of the property. You will find the asking price of the property in these listings. 
 
Another great place to find bankruptcies is the Federal Housing Administration (FHA). The FHA has many foreclosures listed on their web site as well. As a matter of fact when you log on to this web site you can find any properties being offered by the U.S. government. The listings include how long the properties have been on the market and if the price has been reduced.
 
The prices of these properties is not cut in stone. These organizations are not in the real estate business. They do not want to keep these properties because it costs money to allow them to sit vacant. There is insurance to pay and taxes to maintain. This is something their budget does not allow for very much. There are so many bankruptcies being listed it is impossible to keep up with the growing list. The agencies are usually willing to make a deal with the potential buyer.
 
As an investor it is beneficial to find bankruptcies rather than buy homes listed in the conventional way. You can find properties being offered at far below the market value. Sometimes you can find homes which can be purchased for only $500. There are not many out there like this but if you look hard enough you can find them.
 
You can also look in the paper to find bankruptcies. This means finding the local sheriff’s sales listing. This is usually in the local newspaper. At present, there are generally several pages of these listings. The real estate crisis which has hit some parts of the country is generating many foreclosures. This means big money for many investors. These real estate guru’s will go in and buy properties they know will generate a good return. It is not hard to make your money work for you when finding bankruptcies.
 
There will be times when the banks have many Real Estate Owned (REO) properties. Again, this is not good for the finance companies. They too have taxes and insurance which must be paid on the properties. They can only afford to keep these properties a short time. It is best to deal with the lender directly if at all possible. Sometimes there is a certified real estate agent the lender uses to list the properties on the open market. When you decide to buy one of these properties you can do some rather creative things when it comes to the financing. In one case that I know of, the buyer asked the finance company to fore go the 10% down and pay for all the closing costs. The lender actually dropped the price by 10% and paid for everything but the appraisal. The buyer only had to come up with $300 out of pocket expenses to pay for an appraisal. The equity in the property at the time of sale was almost $35,000. The buyer had got the property at almost 50% of the appraised value.
 
These sorts of deals can be had by the new investor as well as the seasoned buyer. All you need to know is where to find bankruptcies. Once you know how to locate them, the financing is basic loan approval. In some cases you can even find homes which you can pay cash for just by offering a little less.

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My Core Values

February 17th, 2008

Bill Wootan - Leader of Team One @ Century 21 H T Brown!

My Core Values:

To ALWAYS:

…Live by the "Get by Giving Philosophy"!
…Make My Client’s #1 Goal, My #1 Goal!
…Live up to my standards, despite temptations to lower them!
…Be willing to work toward a common goal!
…Do what I say I’ll do, sometimes more, just never less!

Posted by Bill Wootan

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Challenging Times

February 17th, 2008
These are very challenging times to be in business as a Realtor.
Never before has it been so important for agents to work together and communicate.
Why then do agents not return phone calls?
Why do we get only 20%  of agents returning phone calls when we request feedback on showings of our listings?
Our sellers thirst to learn what buyers and agents think of the seller’s home.
Let’s work together!!
 Posted By
SARA HOURIHAN-TAYLOR

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Learn to Invest from the Pros

February 17th, 2008
There are many real estate programs on the market for you to learn from when it comes to investing in real estate. The problem is which ones to buy and which ones to let go. You can learn to invest from the pros if you know what to look for in the programs.
 
The first thing you need to do is determine what marketing niche you are going to specialize in when it comes to investing in real estate. You may want to invest in bankruptcies. You might choose to flip properties. Another avenue for investment is buying rental properties. Either one you choose can yield a good profit. The real estate pros who are successful have chosen a marketing niche in which they specialize. You can learn to invest from the pros who have specialized in your market.
 
Find someone who is offering training programs in your area. These are the people who have made money investing in the local market in which you are planning to invest. This is the person you want to listen to. It will do no good to try techniques used by someone in Colorado when you live in Florida. You want to learn from someone who knows the laws governing your area. You want to find out what you can about the real estate investment market for your part of the country. Finding a local investor who has made it work will allow you to learn what you need to in order for your business to become successful.
 
You will also want to invest your money into a program that has a complete training package. Someone who is selling you a book and a few tapes is making their money on the program you are buying. Many of these program authors have not even made a real estate transaction other than to buy their own home. You want to learn to invest from the pros who have been there and done that. You want to find out what worked for them and what mistakes they made. A good investor who is willing to share his or her knowledge will tell you the pitfalls. They are willing to share the mistakes they made so you can avoid them. This is the person you want to learn from when it comes time to invest in real estate.
 
Many of the top investors who have made their living buying and selling real estate also will share other success stories with you. They are willing to let you get to know others who have been taught to use the same system. The true real estate investor is not afraid to hand out references. They know their system works because they use it every day to make good money. You can learn to invest in real estate from the pros who are willing to provide you with a list of names. Speak with these other trainees. Find out what they like about the program and what they do not. Let them tell you of the experiences they have had when it comes to investing in real estate.
 
The one true way to know if the real estate program is right for you is if there is a support line or a team willing to walk you through the system. The last thing you want is for someone to sell you a bunch of books and tapes and just walk away. You want to learn to invest in real estate from the pros who are willing to stand behind you. There are actually a few who will make deals with you. These are legitimate deals where the two of you go together to examine the property and go together for the financing. This type of professional investor is the one who wants to see you succeed. This is the one real estate professional investor who will teach you what you need to know in order to become successful on your own. This is the investor whose package you should buy to learn how to invest in real estate from the pros.

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Know Your Market When Investing in Bankruptcies

February 16th, 2008
The first thing you must do as an investor who is investing in bankruptcies is to know your market. You must be able to recognize what is a good investment and what is a bad one. You must know what areas are on the rise and which ones are declining. You have to know what is in demand. You do not want to put money somewhere it will just vanish.
 
As a real estate investor you must determine what kind of marketing niche you are going to be a part of. Investing in bankruptcies is easy for anyone to do. The hard part is making money. This can only be done with a good marketing plan. Every business has one and your business is investing in bankruptcies so you must create a good marketing plan.
 
You must understand your market when investing in bankruptcies. You first will want to decide whether to become a landlord or just flip the properties you buy. There is a big difference as to what a good investment is between these two strategies. Some properties which might be great for one could spell disaster for the other one.
 
The landlord can look at just about any property on the market. The key to becoming successful as a landlord when investing in bankruptcies is making sure you do not buy more than you can afford. If you must take out a mortgage on the property you take the risk of the property being vacant and you having to come up with the payment out of your own pocket. You also assume the risk of the tenants not paying, or worse yet, damaging the property. Repairs can become costly when dealing with a rental property. Proper screening of your tenants can prevent most of the risks. You still need to make sure you are buying at below market value when you do buy a rental property. Investing in bankruptcies can almost certainly guarantee this happening.
 
You may be the type of person who just wants to buy the properties, fix them up, and sell them. You will need to know what is in demand. You do not want to buy a large family style home in a senior citizens retirement district. You would never be able to sell it for what it is worth because the people who want to live there do not want large homes. Likewise you can not afford the mistake of buying a two bedroom bungalow surrounded by spacious three and four bedroom homes. You must zero in on what the market is asking for. When you determine this then you are on your way to knowing what to look for when investing in bankruptcies.
 
Pricing is another issue. If you are investing in bankruptcies, the lower the price is usually better. However you must also take into consideration what the market is averaging. You might be able to find a great deal on a beautiful home for 60% less than the average selling price of comparable homes in the area. Before jumping into the deal, determine how many days each of the homes which sold was on the market. If it was more than 120 days then you may be stuck making payments you do not want to be liable for. Just because the house sold for such and such a price does not mean the property was in great demand. The law of supply and demand plays an important role when investing in bankruptcies. 
 
When you realize how the market is growing or depreciating then you can better understand how to invest. Certain areas are constantly growing because of the job market. A good, solid job market always generates better real estate opportunities. You just have to know your market when investing in bankruptcies.

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Joint Ventures in Real Estate

February 15th, 2008
How many times have you heard the same story about the guy who was down on his luck. He just lost his job, had no money, and his credit history was shot. Yet somehow he made his fortune by investing in real estate. Believe it or not this can happen. Many success stories are made because of join ventures in real estate.
 
The concept is not new. It is simply a matter of using someone else’s money for profit. There are many people who are really interested in becoming real estate investors. The problem they face is not knowing the first thing about the real estate market. This is where someone like the buy mentioned above can profit.
 
If you have a keen sense of real estate and finance and know what would make a good investment, but have no cash flow, then you are a good candidate for a joint venture in real estate. Your knowledge and someone else’s money can generate a profitable venture for both of you. It just takes some know how to get it all done.
 
There are many people who are willing to use their credit or finances to gain a foothold in the real estate investment world. You will need to find these people. You can do this by either soliciting in the local papers, on the Internet, or by forming a local real estate investment group. This type of group benefits from everyone involved.
 
There are times when an investor has done nothing but buy and flip properties. He or she knows nothing about renting the properties. The typical investor also usually has one niche he or she sticks with. Someone who buys strictly commercial properties may know nothing about residential and vice versa. By forming a real estate investment group in your area, the knowledge from all the investors in the group can be shared.
 
This can also work to your advantage should you come across a property you may want to invest in but lack the where with all to do it. There may be another investor in the group who will want to form a joint venture with you to take advantage of the deal. Many times there may be two or three of the investors who are willing to make the deal happen. This is also a great way to break into commercial investing. The more investors there are on a project the less out of pocket expense each one has. Granted, the less the profits also. However, you may find the odds slightly more in your favor with the lenders when you have a team of investors who are wanting to purchase a large commercial property.
 
Joint ventures in real estate can offer you the ability to obtain properties you once thought were not in your budget. You can gain from the knowledge of a seasoned investor. You can profit from a new investor who is willing to back you financially in a real estate deal. The list is endless when it comes to the benefits of joint ventures in real estate. By forming the real estate investment group in your area, you can open a whole new world of real estate investing.

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The Power of Your Intentions

February 14th, 2008

Hi Friends,

How powerful are your intentions? Well, according to some of the latest research they are very powerful and can have a significant effect on your life and results when you learn the right process for setting your intentions and connecting with the infinite intelligence that governs all of life.

We are finding scientific evidence beyond a shadow of a doubt that we are in fact creating our own reality and results, and the whole process begins with your conscious and unconscious thoughts.

For years I have been studying and applying the best that science has to offer us and here is a great way for you to apply some of what I have learned to manifest whatever you desire.

Upon waking from sleep, sit quietly with your eyes closed. First begin with a few deep breaths to get centered by inhaling in through your nose and exhaling through your nose 5-10 times. As you do this, release all tension and thought as you relax into an alpha brain wave frequency. The alpha frequency is a faster brain wave to send your intension into the quantum field of all possibilities. When we are in an awakened state, we are mostly in a slower brain wave frequency called beta. Beta frequencies are conducive to day to day activities and work but are not the most conducive to manifesting your intentions.

Think of your brain as a radio that can receive and send out signals. When you enter an alpha frequency you are “switching” stations from receiving to sending mode when you focus on a very clear intention. Alpha can also be accessed to receive messages and thoughts from the quantum field, the part of the universe you cannot see with your eyes. If you’ve ever been in the shower and a great idea has popped into your brain, chances are you were in an alpha brain wave state.

Ok, so now that you have the first part down, decide in advance what is your intention. It can be an answer to something you need or a person you want to attract or manifest something like money or a soul mate. Once this choice is made and you are in an alpha state, simply focus on the end result you want and make it as real as possible by imagining that your intention has happened already.

While you are imagining, get totally into the emotional feeling that your intention has already occurred and then let it go. This is the part most people have a hard time with because they want immediate evidence that something is happening. The universe will show you evidence when your belief in the universe’s power matches your intention. In other words, you will see it when you believe it, not the other way around. Believe, and the belief will become your reality.

This is a daily ritual that the best manifestors in the world do everyday and it will change your life.

Here’s to your success. I wish that all your dreams come true!

Posted by Bob Phibbons 

–
"For All Your Real Estate Needs, Go to Phibbons.com"

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Administrative Fees

February 14th, 2008

Clients often ask me "Why do you have an administrative fee? What is it for?" And I am at a loss for words. I can usually stammer something out, but I would be interested in the company (or anyone) providing me and other agents with the correct response. What follows is an excerpt from last Saturday’s Washington Post Real Estate Section:

Lawsuit Takes Aim At ‘Junk’ Fees – Kenneth Harney for The Washington Post
   

Just about anybody who has bought a home or taken out a mortgage in the past five years has run into them in some form: mysterious fees charged by real estate brokers, lenders, builders and title agents — "admin," "processing," "doc-prep" and "regulatory compliance" are among the opaque names — that added $200 to $500 to the bottom line at settlement.

You might have asked a real estate agent to explain why an administrative fee of $450 was needed when you were already paying tens of thousands of dollars in commissions. The answer you might have received: Don’t blame me. My broker requires it. I don’t get a penny of it.

In a lawsuit involving a real estate firm’s $149 mandatory fee and a home buyer who challenged it, the U.S. Circuit Court of Appeals for the 11th Circuit reversed a lower court’s denial of class-action standing. The class action is intended to cover all consumers forced to pay what the brokerage firm termed its ABC fee — an administrative brokerage commission.

Vicki V. Busby of Jefferson, Ala., sued Realty South, a large Birmingham-based broker, charging that in addition to paying a substantial commission to the firm and its sales agent, she was required to pay the ABC fee. In Vicki V. Busby v. JRHBW Realty , Inc., Busby said there was no evidence that the firm had performed any services beyond those covered by commissions. . . .

. . . . In an interview, Phillip L. Schulman, a Washington lawyer and an authority on real estate settlement issues said the court’s ruling "underscores the importance of performing actual services in exchange for" fees charged in connection with real estate and mortgage transactions.

In other words, a brokerage firm cannot simply dream up new fees and force them upon its unwitting clients. Many brokers have imposed extra charges because their sales agents demanded bigger shares of listing and selling commissions.

Laurie Janik, general counsel of the National Association of Realtors, said brokers are fully within their legal rights to receive compensation "for the increasing costs they incur to run their businesses.”…. Janik said brokers should consider moving to a standardized, well-disclosed, flat-fee-plus-commission. For example, listing and sales agreements could specify that a firm charges a base fee, say $500, plus commissions of 4 to 6 percent of the property’s selling price, split between listing and selling agents.

With that approach, Janik said, consumers, agents and brokers would "all know upfront" where the fees will flow. "If the sellers or buyers don’t like that arrangement, they can walk down the street to another broker."

How should consumers handle the issue in light of recent court rulings? Always ask agents upfront whether there are any administrative or processing fees beyond the commissions. If the answer is yes, ask what specific services are rendered to earn them and who pockets the money.

If you don’t like what you hear, shop around for a better deal. In real estate transactions, all compensation is negotiable. If you don’t push for lower fees, you’ll usually pay the max.

Posted by Micki Kirk

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Investing in Real Estate Is More Than a Part Time Job

February 13th, 2008
Many people are under the misconception that by investing in real estate the only thing they have to do is find a property to buy and then resell it. This is far from the truth. In fact, when investing in real estate it is more than a part time job. There are many things you must do in order to make money with real estate.
 
The first thing you must do is determine a plan of action. You will want to know what you are buying the properties for. This means formulating a plan to determine what you are going to do with the properties you purchase. Ask yourself if you just want to buy and resell, or do you want to keep the properties as rental income. This can make a big difference in the properties you look at for investment purposes. Some homes are perfect for buying and putting right back on the market. Others will only be able to be sold to certain other investors. Once you know what you want to do with the properties you plan to purchase, then you can start watching the market.
 
You must get to know your market. Just because the old Victorian down the street is being offered at auction for one third of the appraised value does not mean it is a good investment. There may be many repairs you need to make. Electrical or plumbing services may need to be updated. This could lead to investing more time and money than you really want to put into an investment property. You are also taking a chance if the houses in the surrounding area are occupied by senior citizens. These older people do not want large homes which can cost a fortune to maintain. If this same house were sitting in the middle of one of the best school districts in the area and surrounded by multi-story homes with large families constantly seeking housing, then it may be worth the investment.
 
When you know your market you can determine what is a good investment and what is not. You will know which properties to walk away from. You will also know how long it should take to sell the properties you are looking at as potential investments. A good real estate agent can help with this type of information. He or she can tell you how long the properties in the area have been on the market. The agent can also tell you what the selling price of the other homes were. This can save countless hours of unneeded research. Just ask the agent about the houses in the neighborhood.
 
The real estate agent can also let you know what is selling and what is stagnant. You may be surprised to find a certain home you thought sold for a large price actually sold for $10,000 under market value. When you know what the people in the area are buying you know what properties to look at as a potential investment.
 
When you realize investing in real estate is more than a part time job, you will understand it is important to gain all the knowledge you can. This will help you make informed, intelligent decisions when it comes to choosing what it the right investment for you.

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