I screwed myself at the grocery store again. I bought 24 cans of Spaghettio’s (no, I don’t care if that’s the correct spelling) because they were on sale two for one. Well, I finally ate a can yesterday and it was terrible. As in, I didn’t even eat it all and I will eat almost anything. I’m not a picky guy at all, but it tasted like cardboard and dead rat. So now I’m stuck with 23 cans of Spaghettio’s. (Would I be a bad person if I donated them to the homeless? I think if I was homeless I would be motivated enough for food, to eat dead rat, cardboard Spaghettio’s…there’s only one way to find out).

Anyway, before I do my good deed for the week and poison the homeless, let’s talk about this excellent market we’re in. Because, as John D. Rockefeller said, “Buy when the blood is running in the streets.” Well, as we all know opportunity is KNOCKING loud and clear for us real estate investors. For people who have been in this game a while (meaning around five years) you remember the hot market when people had 16 contracts on a house by noon. In this market, it’s like shooting fish in a barrel. I think this market is actually making me lazy because it’s so easy to find motivated sellers and deals.

So how do you clean up right now?

As a good friend of mine says, “You can’t be a one trick pony.” You need to wholesale to get cash now. But also, the big money to be made is buying and holding. Pick up 20 properties this year (which isn’t tough if you do lease options and subject-to), hold onto these properties for five years and you will make a life changing amount of money when you sell.

And, if you haven’t learned the subject-to strategy, start learning today. If I had tried going through banks when I first started, I would never have been able to purchase millions of dollars in property (it still boggles my mind the thought of putting 20% or even 10% down on a property).

Please think big and please think positive during this buyer’s real estate market. The size of your thinking determines the size of your bank account (I can’t remember who said that, or else I’d give them credit…adios).

P.S. Next week, I’m going to reveal some of the most important clauses in my
subject-to contract which help CYA and save me a ton of money.

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Tags: real estate, real estate investing, subject to, wholesaling

When I become President and it’s the United States of Jason, I will impose the death penalty on anyone that stops at a yield sign…for heavens’ sake, if you were supposed to stop, there would be a stop sign and not a yield sign. Do you think they put that extra strip of roadway there for the fun of it? So, now you have been warned that unless you want the electric chair, do not come to a complete stop at a yield sign.

Alright, alright, now to show you how to make money. As most people know, I am a FIRM believer in only utilizing investing methods that require very little cash and absolutely none of my own credit. And that the best deals are when you work directly with the homeowner (which is why I don’t do foreclosures). Well, a partner and I just picked up a lease option deal in Baltimore, MD and I want to give you the numbers to show you why this is a must learn technique.

First off, I got this property from a landlord who I had already done a deal with, which is why my favorite group to target is absentee landlords (they usually own multiple properties). Anyway, we signed a five year lease option with a monthly rent of $800 and a purchase price of $80,000 (this means that anytime within the within the five years we can buy the house at $80,000). We put zero money down (yes…..zero, nada,, zilch, zip). My lease option agreement reads that I never put money down and that I make the first rent payment 60 days from the date the paperwork is signed (60 days gives me time to advertise the property and find a tenant/buyer…I always do 60 days).

After we took care of the paperwork with the seller, it was time to find a tenant/buyer. The best ways to find a tenant/buyer are classified ads (Rent to own, bad credit OK, 3br/2ba, only $1,399/mo, Free $300 rent credits, call Lisa 555-555-5555), placing ads on rental property websites and placing signs everywhere. The advertising will generate a ton of calls. Finding a good tenant is just like finding a motivated seller…you will go through about 99 bad leads until you find one quality lead.

Once you get your leads you can either set up appointments or use a lock box. For this property we set appointments on the weekends (you will want to set appointments, do not hold open houses or nobody will show). We ended up getting a couple who gave us $5,200 to move in. This breaks down as $4,150 in option money, $200 security deposit and $850 for the first months rent. Also, they have an option to purchase the house at $110,000.

We spent about $150 on marketing, put zero money down and got $4,150 in non-refundable option money. Now, I am no math genius but I think that’s a profit of $4,000…then of course don’t forget about the big payday when the property sells.

Speaking of big paydays, over the weekend I had a lease option tenant call me and tell me their loan was approved and they were exercising their option, so that’s another $30,000 payday…how can you not love this business?

Here is the million dollar lesson I hope you learned: You need to eliminate the word BANK from your vocabulary. You need to learn wholesaling, lease options and subject-to if you want to purchase millions of dollars worth of property every year. The only people who should be going to banks are your tenants when they buy the house and the people you are wholesaling properties to. I can’t emphasize this enough: You need to think like a “player” and not a “wannabe.” Players become millionaires using creative financing methods and wannabes wait for bank loans to be approved or they wait until they have 20% saved up to buy a property.

So, which one are you? A player or a wannabe?

Tags: creative real estate, crei, financing, lease option, wholesaling

Whenever I attend my local real estate investment club meeting someone using the same pick-up line inevitably approaches me: “I’m going into wholesaling, can I call you when I have a deal?” Most of these people are never seen or heard from again. It seems that most of them attended some guru’s curse on how to make big bucks in real estate even if you have no money. They fall prey to the notion that it’s really easy, just find a deal and flip it to an investor. How hard could it be?

The gurus have these people thinking that there is nothing to it. The reality is that finding deals to wholesale is no easy task. Most of these novices are unprepared to do the work involved. If they do find a deal they have only done half of the work. The other half is having an investor to sell the contract to.

Is It A Deal?

Many of these wanna-be wholesalers have no clue as to what a good deal is. I can’t even begin to count the number of times I’ve been called with a “hot” deal only to find that it is a sure loser. A house selling for 80% of market value is not a deal. The truth is that anyone can find deals like that. If you are going to be a wholesaler you need to find properties that are real deals or you will never be able to make any money.

As a rehabber I use the following formula:

(After Repair Value x 70%) – cost of repairs = Maximum Purchase Price

In the market we have today I look for, and find, better deals than that on my own. For me to pay an assignment fee to a wholesaler he had better be bringing me a smoking-hot deal. In 15 years as a real estate investor I have never bought a contract from a wholesaler. I have nothing against doing so, it’s just that I have never been presented with a deal that was better than I could get on my own.

Do Your Homework

Take the time to learn what a truly good deal is in your market. That means doing a lot of legwork and looking at a lot of properties. Talk to investors and take the time to learn what they are looking for. Seek out that diamond in the rough. If you are looking for deals through real estate agents or by using the MLS, you are wasting your time. You need to find the deals that nobody else knows about.

You also need to build your investor list. That list needs to be pretty large since investors may not always be in buying mode. Some investors may purchase several houses a month, while others may buy one or two in a year. While it is important to stay in touch with your investors, it is also important that you don’t waste their time. If you call someone three or four times to present poor deals it is more likely than not that the investor will stop taking your calls.

Stick With It

Every profession has a learning curve. To learn any business you have to get out there and do it. The reason that so many rookie wholesalers disappear after a short time is that it is much harder than they thought. For many people it is much easier to quit and move on to something else than it is to gain needed experience by doing the work. It can be very discouraging to work day after day without finding a true deal, but imagine how good it will feel once you finally do.

Tags: real estate investing, Rehabbing, wholesaling

It is no secret that the business of buying real estate directly from the bank prior to it being foreclosed on is both in style and highly lucrative. The issue a lot of “Short Sale Specialists” have revolves around making the deal work on the front end. Time is our most valuable asset as Real Estate Investors; we can never get it back once it is lost. A lot of time is being wasted on the pursuit of hopeless short sale opportunities and I would like to take a few moments to share with you exactly how you can avoid wasting time.

In the business of Short Sales, your #1 enemy should be houses or condos that are pretty. I would consider a home to be pretty if the work needed does not exceed paint and carpet. Believe it! When I got started, I wasted several months of my time pursuing every single Short Sale opportunity without a screening process or a system in place for knowing my deal was going to work. Negotiating discounts on pretty houses is not recommended and it is not a viable business model. The lending institutions are stiff as nails on these types of properties and the best an investor would be able to do is 80%+ for the discount. Those numbers don’t work at all unless you’re looking for a personal portfolio of rentals and lease-option properties. The reality is that most investors are wholesaling. Even if you don’t consider yourself a wholesaler, you are still playing the middle man/woman somewhere in this business. A much stronger discount than 20% is needed to make room for your check to be cut. We want to be in the 35%+ discount range and in most cases that will not work with the pretty houses.

So what kinds of homes should you become best friends with?

• Ugly Homes
• Homes with large 2^nd mortgages
• Homes with a lot of equity

Sometimes there are areas that lenders do not discount and a little bit of research is required to determine what subdivisions to stay clear from and which ones to pursue.

We need to know:

1. How many homes are foreclosing?
2. How many homes are ending up at the sale?
3. How many homes have the opening bids at less than what is owed?
4. How many homes are going back to the bank?

With this kind of information about a particular market, you can do two things. You can take what the market will give you or you can move to another market. A big ship takes a long time to turn around, so unless you are going to jump, you are going to have to wait. You really don’t care how many go to the sale per se, but you really are concerned about what percentage of the homes that go to default actually go to the sale and how many of those go back. If see a trend of opening bids starting lower than the payoff on a home, those are super deals.

So it is very important to sift through the big questions. Another point you may want to clarify is the fuse on the properties – meaning the length of time between default and sale. Remember these: Is it really Ugly? Does it have a big second? Does it have a lot of equity? In some cases, you may not want to do a short sale because there is a lot of equity there.

**NEWSFLASH** If you do a forbearance agreement with the bank, they do not charge you interest. The definition of a workout is the ability to stretch out the payments on a home instead of paying the arrears in full.

The objective here is to create more time and resources to chase fewer deals that will actually give you a back end pay day. The key is staying away from the semi to fully blown pretty houses that are pretty much stuck at 80%+.

Blessings to your Real Estate Investment Successes,
Milton B. Yates

Tags: creative pre-foreclosure strategy, foreclosure, learn short sales in dc maryland virginia and dallas, preforeclosure, short sales, wholesaling

Hello Everyone. We wanted to give you an update on a few exciting new things going on here at BiggerPockets®!

New Website Features

1. Meet the Investor
   We’ve begun to interview investors in an attempt to help others learn more about what it takes to be successful. Have a look. Many of our blog readers are already familiar with this feature, but we are looking for more people to interview . . . it’s a great chance to get some free publicity for you and your blog/site!

2. Find County Records
   We’ve assembled a directory of county records offices for every county and parish in the country with a website. Use the directory to locate your local assessor or recorder’s office or to find property records online.

3. Join our National Investor’s Database
   We are building a national real estate investor’s list. The purpose behind the list is to be able to offer exclusive real estate deals to our members that we hear about constantly. Jump on board! It only takes a minute to fill out.

4. Investors Network
   In an attempt at bringing some increased exposure to our members with investor websites and blogs, we’re creating a directory of real estate site. If you’re a wholesaler, rehabber, landlord, or other investor and have a site, let us know and we’ll get you in the directory!

Changes at the Forums

Now With 6,000 Members and Counting!!!
We’ve been adding some new areas to the forums to help organize things a bit. Stop by and check out these new areas:

1. Wholesaling Forum
   Finally! Discuss Wholesaling strategies, learn about different techniques, how to conduct a wholesale deal, making offers, assigning contracts, etc. With some fantastic wholesaling experts on site to help out, this is the place to go for your questions!
   Not sure why we never had one before, but we do now!

2. Ask About a Real Estate Company
   Wondering if a company is a scam or conducting fraud? Heard about a new investment offer?
   Ask about any company doing business in real estate. Discussion topics include: Nouveau Riche, Club Freedom, Pinnacle Development Partners, etc.

3. Home Owner Association (HOA) Issues & Problems Forum
   This area of the site is for the discussion of any questions, issues, or problems that arise with condo or community Home Owner Associations. With little State or Federal governance, these bodies have been a headache for countless investors, realtors, homeowners!

Another small change we recently made on the forums is the addition of birthdays. If you scroll to the bottom of the main forum page, you’ll see members having a birthday (editable on your profile page). Make someone’s day and send them good wishes on their big day!

Ideas & Suggestions for BiggerPockets

We’re always trying to improve the site to better serve you. If you ever have any ideas or suggestions for doing that (no matter how small), please let us know!

We’ve got plenty of other new features coming soon . . . stay tuned!

New Advertising Opportunities

First, I want to thank all of our new sponsors! Our advertisers keep coming back for more . . . a testament to the benefits of sponsoring our site!

We have been testing some new advertising positions around the site and are currently working to fill out ad placements on our forums. You can now sponsor any forum thread category! For as low as $25/month, you can promote your website, company, etc on the forums and focus on your exact target. For more information about this or other advertising opportunities, visit our ad page

Wrap Up

Thanks again to everyone for all of your participation here on BiggerPockets! Our site has really been helpful to so many people and without your participation that wouldn’t be possible. Please keep coming back and share your interest, your knowledge, and your enthusiasm with everyone else!

All my best to everyone and have a great weekend!

Sincerely,

Joshua Reed Dorkin
Founder - BiggerPockets, Inc.

Tags: assessor, bigger pockets, biggerpockets, county-records, HOA, home-owners-association, real estate forums, real estate investing, real estate investing forums, real-estate-scam, recorder, wholesaling

Wholesaling provides an opportunity for someone to build income with little capital or credit. All it requires is ambition and some specialized knowledge. The more ambition you have, the more money you will make. Wholesaling does not require a real estate license. A license is not required to buy or sell any property that you have an equitable interest in. That interest can be a contractual interest (you have the property under contract) or you actually own or have title to the property.

What is Wholesaling?

A wholesaler in a nut shell puts property (normally distressed property) under contract and assigns or resells the property to another investor. The investors a wholesaler sells to either use cash, lines of credit, or hard money loans. This allows quick closings on properties that sometimes need extensive repairs.

A wholesaler lives off of the idea that price overcomes all objections. If you can sell a property for a low enough price it doesn’t matter what’s wrong with it, somebody will buy it. A wholesaler focuses on developing two things. Finding deals and their network of investors to sell to.

Getting Started Wholesaling

Getting started, a wholesaler should normally not ever buy a property. You put properties under contract with a contingency and focus on quickly selling the property for more money to other investors. If you end up not being able to sell the property before you are expected to close then you utilize your contingency and walk from the contract.

A wholesaler is a middle man, and a good wholesaler becomes a very well payed middleman that other investors love. The thing is that if you have a good enough deal under contract, there are other more established investors out there that will be glad to pay cash for it in a matter of days. If you have a house that will sell fixed up for $100,000, it needs $10,000 in remodeling, and you have a contract on it for $55,000, then with a developed investor network you could have an investor buyer for it for $60,000 in a matter of days. You sell it or assign the contract for 60K, you bought it for 55K so you just made $5,000 in a matter of days.

Thanks to Ryan Webber for his insight!

Tags: biggerpockets, cash, estate, house, properties, real, Real Estate Investing, successful, wholesailing, wholesaling