Marcus Maloney

Expertise: Real Estate Wholesaling, Personal Development, Real Estate Investing Basics
86 Articles Written
Marcus Maloney is a value investor and portfolio holder of residential and commercial units. He has completed over $3.3 million in wholesale transactions. Currently, Marcus is a licensed agent who ...
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Marcus Maloney is a value investor and portfolio holder of residential and commercial units. He has completed over $3.3 million in wholesale transactions. Currently, Marcus is a licensed agent who wholesales virtually in multiple states while building his investment portfolio. He has also converted some of his deals into cash-flowing rentals. Marcus holds seven rentals, two of which are commercial units. He’s even purchased a school, which was converted into a daycare center. His overall goal is to turn what is a marginal profit into a significant equity position. He leverages the equity by using the BRRRR (buy, rehab, rent, refinance, repeat) strategy to increase his portfolio without any money out-of-pocket. Marcus has been featured in numerous podcast such as the Louisville Gal Podcast, The Best Deal Ever Podcast, The Flipping Junkie, and many others. He contributes content regularly to his YouTube channel and blog.
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Business Management

How to Write a Business Plan for a Real Estate Investment Company

There are numerous clichés about planning—especially if you read a ton on leadership and business development. Here’s one: “If you fail to plan, you plan to fail.” You’ve probably heard that one and several others. The reason I bring this up is because there are some novice investors who do not have a written plan, yet they expect to be successful. Writing your plan down is imperative. Many can tell you their plan aloud; others will try to say they have it in their head. But a plan is of little use if it cannot be evaluated or referenced. Being successful is not as difficult as it seems when there’s a written plan and a way to measure the efforts. That said, let’s quickly review the key elements needed in a business plan for a real estate investor. Related: The 5-Step Process for Writing a Simple Business Plan (That You Will Actually Use!) How to Develop a Business Plan Industry Information Industry information refers to the dynamics of the industry. For real estate, it’s important to be aware of general market trends, as well as specific market data. In the Phoenix market, I use two tools that keep me abreast of specific market trends: The Cromford Report: This provides detailed information to track the history and current status of the greater Phoenix residential resale market and offers unique insight into its future direction. Arizona Multiple Listing Service (ARMLS): This provides industry information regarding real estate activity, such as number of units sold, active listings, days on market, etc. Gathering industry data is not difficult—but too many people do not actively monitor trends. As part of your business plan, some key data points to monitor include: What is the average selling price in an area? Have any drastic changes to the job and population growth occurred? How have days on market for resale units fluctuated, if at all? Again, these and other trends reflect back to how the market is moving. To an investor, this information indicates if it’s a seller’s market or buyer’s market. Point being, the difference in market trends could help save thousands on purchases. Current trends are of course important. But as investors, we also need to be progressive, and knowing where the industry is headed is essential. For example, in the residential market, we are looking at how to compete with hedge fund iBuyers like Opendoor, Offerpad, and—soon enough—Zillow. How will this shift in strategy affect margins and deal flow? I’m sure most of you feel that effect already. With more institutional buyers entering markets, how does your business need to pivot? Related: Think Your Business Plan is Flawless? Don’t Forget This Key Element! Business Model Identifying the appropriate business model is critical. The model will inform which strategies to deploy and how to get things accomplished. If the business is incorporating a fix and flip model, then focus should be on ways to leverage that strategy. In this industry, there are so many different methods of investing—it’s easy to get distracted. So, take a look at this quick outline of a business model: Strategic Vision: Ideas for the direction and activities of business development. Guiding Principles & Values: A broad philosophy that encompass your personal beliefs and values and guides an organization throughout its life in all circumstances, irrespective of changes in its goals, strategies, or type of work. Mission: This describes the company’s function, markets, and competitive advantages. It also includes business goals and philosophies. Financials: This specifies start-up costs, projected revenue, and pro forma. Goals: This describes what the business expects to accomplish. These all are easily identifiable but somewhat difficult to incorporate in a business plan. It takes thought and plenty of self-awareness. If done correctly and integrated fluidly, success is only a matter of persistence. Strategy Implementation & Evaluation The business strategy always looks amazing on paper, but implementation is where the rubber meets the road. During the implementation process, it becomes easy to identify whether the strategy is too aggressive or the financials are below expectations or vice versa. So, how do you pivot once an analysis is done? Herein lies the delta between theory and practice. All business plans are constructed on theory, but implementation and evaluation is practice. The theory of the business was perfect, but market changes, financial changes, team structure changes, and so on can either create opportunity or adversity. How a business handles both and keeps in line with its model is crucial. The Bottom Line If you’ve read this far, then there are likely some things you may need to re-evaluate. Or if you’re lucky, maybe you now feel you’re right on track. Either way, a brief review of your business plan can reinvigorate you. Honestly, I don’t do this as often as I used to. The daily grind of trying to get deals done, or in my case, working with property managers and contractors, can tie up the day. Since noticing this, I am making a conscious effort to review my business practices and goals weekly. Is there something I may have missed? I would love your comments so those planning or re-evaluating their business plan have an in-depth rubric to use.   Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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Business Management

How Charitable Giving Will Make Your Business More Successful

As a real estate investor, I understand the importance of pro forma, income statements, balance sheets, cap rates, and other financial concerns. Although these are key metrics to evaluate, one thing that shouldn’t be left out for investors is the importance of community. Community engagement and transformation is difficult to quantify, but people notice when you’re making a difference. So let’s discuss charity as a key indicator of real estate success. Service Before you decide this post is not for you, please hear me out. Yes, I’m talking about giving, but there are some benefits for you. I was recently listening to Earl Nightingale, and he was discussing the importance of service. He was introducing it to some and reiterating to others, explaining what you give you will then receive. The more we offer service to others, the more we will be in high demand. This also correlates to real estate investing. No matter the community, no matter the class of unit, the service you render is the service you will receive. Real-World Example of Serving Others A landlord investing in a working class neighborhood (C or D class) should try to remodel the property to the lowest level of the class above. No, I’m not telling you to over-improve the property, but I am saying add something desirable that will appeal to the tenant. By keeping service in mind, you can maintain tenants longer and have a healthier tenant-landlord relationship. Service can be something as small as faster response time to maintenance requests. Related: My Journey Out of $2.5MM in Debt Inspired Me to Live a Charity-Focused Life Contribution I am a huge advocate for community. One of my goals is to ensure that my rentals improve the quality of the neighborhood. This includes the type of tenants placed in units. By making simple contributions to the community, the community makes a contribution to me. Sure, this doesn’t occur in every single instance, but it does the majority of the time. The reciprocated contribution often happens in the form of neighbors maintaining their property. A well-maintained rental can inspire the neighbors, which creates a change in the neighborhood for the better. Real-World Example of Contributing to the Community Recently, we completed a rehab on a duplex that was in a neighborhood that had not quite turned the corner. The property was a few blocks away from a hospital. The duplex wasn’t in terrible condition, but it had some deferred maintenance. The problem was a few of the neighbors’ houses had some deferred maintenance, as well. As we began to rehab our property, we noticed the neighbor started painting. Then another neighbor put up new shutters and began doing some landscaping. Then an investor bought a house to flip. These small activities start to create a closer sense of community and pride of ownership. With all of the recent activity, the home values increased, and now we are all in a stronger equity position. Small contributions can make a world of difference to a community. Those contributions can directly impact your bottom line, as it did with my duplex. The Responsibility of Real Estate Investors The word “investor,” to some, has a negative connotation. People think greedy, selfish, con-artist, and other negative associations. But we can change this depiction of investors by banding together to change communities. When working in some blue collar neighborhoods, outsiders are not always welcomed. It is challenging to change others’ perceptions, but if you are able to do so in a positive way, then you will have greater success. Sure, this does not always happen and we do have a job to do first and foremost, but a little effort goes a long way. Related: 3 Ways Investors Can Give Back to Their Communities (& the Larger World) Here are a few ways we try to start off on the right foot when tackling projects in challenging neighborhoods:  Introduce ourselves and our company to the neighbors. Inform them we will be rehabbing a house, and if our noise becomes a bother, please let us know. If the ice cream truck comes around, we take the opportunity to treat the neighborhood kids. Ensure contractors are aware the job site is to remain as clean as possible. Let all of our people know to not park in spots designated to the neighbors. For community projects (like when we bought a school), we have an open house and serve visitors hot dogs and chips. I’m sure this may be a slightly different approach than most, but we’ve been successful in some challenging neighborhoods by operating this way. The Bottom Line It’s great to have some community service projects in your portfolio or partner with a service organization to help foster change in the communities we rehab. In my opinion, charity should undoubtedly be incorporated into your business plan. What are some of the service projects you or your company have fostered or aligned with, and how did it help the community and your business? Share in a comment below! Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! 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Business Management

Hire a Virtual Assistant for These 21 Tasks (& Supercharge Your Productivity!)

Everyone likes to win, but only the top performers position themselves to be victorious. How do they do this? Top performers have a plan, remain focused, and are determined. In doing research on top performers in a variety of industries, I noticed a common thread that binds them together: they delegate menial tasks. For entrepreneurs, this is often challenging. Some entrepreneurs believe no one is going to care about the project as much as him or her, which is true. Or he or she may mistakenly believe no one can do it like it should be done. These beliefs have damaged the growth of many potential businesses. I found myself aligning with this faulty belief system. I was taught at an early age to always learn how to do things yourself so you never have to call a professional. It took many years to learn this was the opposite of what I was trying to accomplish. Time is the most precious resource, and many of us trade time for money, which is a terrible philosophy. Trying to save a buck can cost you more than what you’re trying to save. So how can we accomplish our goals, be extremely productive, and maintain efficiency? The answer is to leverage others. To keep costs low, you don’t even need to hire someone locally anymore. Instead, find a virtual assistant, or VA. This is a mutually beneficial agreement. Pay for services rendered while you work on tasks that are more profitable. That said, let’s break down the 21 most effective ways to leverage virtual assistants. 21 Ways to Use Virtual Assistants in Real Estate Marketing Using VAs in your marketing department is highly effective. If you have multiple marketing tasks like I do—be it seller marketing, buyer marketing, agent marketing, graphics, video editing, podcast editing, website design—there are many ways to leverage virtual assistance in this area. It’s good to be able to assign a task and see what you envisioned come to life while exerting little time, effort, and money. Related: How to Find the Correct Virtual Assistant for Your Real Estate Marketing Needs Administrative Tasks Administrative tasks are always important, but you have to ask yourself if sending mailers or following up with a tenant is this the best use of your time. I would think not. As an investor, or entrepreneur your most profitable task is closing deals. So this is the area of focus that needs to be a priority. Never could I have imagined the small tasks that were taking me away from completing things far more important. But I was challenged to write down all the activities I do on a daily basis, and I was shocked. Although I was doing important things that needed to be completed, I didn’t need to be the one completing those tasks. One area I am currently looking to utilize a VA is to handle inbound calls. When I have something pressing to do, the calls will be routed to this individual. Someone else may not see the need for this, but personally I can’t help but to answer a call or email when I receive a notification. I just have to. I know it’s simple enough to turn notifications off, but when I do, I feel like I’m missing something. Knowing I have someone taking care of these tasks in my absence will ease my mind. Here are 10 additional administrative tasks a VA can accomplish for you: Data entry Accounting Bookkeeping Transaction coordinating Social media management Scheduling Database management Proofreading Photo editing Content writing Automation How could we ever live without automation? In the 21st century, if it’s not automated in some capacity, it’s often not efficient enough. We have automation for emails, database management, lead mining, and so much more. Automation is another area where a VA can propel your business forward. Here are a few tasks VAs can help you automate:  Coding Customer relationship management (CRM) development and integration Web site and social media updating I highly recommend using automation if you’re not already. Related: Six Helpful Tools Your Virtual Assistant Can Use For Your Real Estate Business Creative/Design Creative/design is another area where numerous investors use VAs. There are a lot of talented VAs in this field. Here’s how to leverage VAs for creative/design: Website development Graphics/art Logos Videography/video production/editing Animation Audio production/editing There are many other creative/design services offered by VAs, too. I’m not the most gifted person when it come to art, so I definitely have to hire someone for these assignments. Where to Find Quality Virtual Assistants Finding a network of VAs is not difficult. There are many services offered online. I actually hired a new VA recently for database management. Here’s where to look: Upwork.com MyOutDesk.com Freelancer.com TimeEtc.com ReferralExchange.com Fiverr.com Zirtual.com Clearly, there are many sites to find VAs. There are even some exclusively for real estate investors! The Bottom Line I do want to caution you: you get what you pay for. If you always hire the most affordable assistant, you will be disappointed. Also, be aware that there are instances where managing assistants can create more work. To avoid this, have a clearly defined job description that outlines the roles, responsibilities, performance measures, outcomes, and deadlines you require. I could go on and on about the tasks VAs can do to make your life a little easier. The possibilities are endless. If you’re looking to streamline certain processes or need a little help with day-to-day assignments, make VAs a go-to resource. Have you used virtual assistants yet? How so? Share your experiences—the good and the bad—in a comment below.    Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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Real Estate Wholesaling

Contract Assignment 101: The Beginner’s Guide to Wholesaling Real Estate

If you’re new to real estate investing, there is a term called “contract assignment.” If you have not come across this term or you are unsure of the intricate parts of contract assignment, I am going to spell it out. If need be, re-read this article again and again. Also do not be afraid to ask questions in the comment section below. We are in the prime selling season in most markets. During this time, investors are normally busy trying to lock down as many properties as possible. In our market, Phoenix, we are seeing an influx of buyers looking for deals. I recently had a conversation with a group of investors looking to get their hands on almost anything that will generate a profit. It would seem that we have not learned from the previous market crash how the real estate climate can change in an instance. My philosophy is ride the storm and assign as many real estate deals as possible. If you have sat through any get-rich-quick guru pitches, the majority of them will introduce contract assignment wholesaling, but without giving you all the steps involved. Here is what they are referring to when they say “make $5,000 in the next 60-90 days.” What is a Contract Assignment? Short and simple. This is when you first find a property a seller is willing to sell significantly below market value. You then resell that property to another buyer, normally a real estate investor, at a higher price. Can This Be Done? Absolutely, I’ve done numerous transactions in Phoenix, although it is not as easy as it’s normally taught, however it is a proven real estate investment strategy with a very low barrier to entry.  How Exactly Does Contract Assignment Work? 1. Find a motivated seller. First let’s begin with what a motivated seller is. This is an individual who NEEDS to sell a property normally very quickly. There is usually some sort of distress going on in their lives. There is a huge disparity between want to sell and need to sell. Knowing which category your seller falls into is the first step in identifying how to handle the situation. If I want to sell, there is no since of urgency. There’s normally no timeframe in which to finalize the sale. However, “need to sell” sounds like this :”I have to sell this house now because I’m moving to Maryland to take care of my ailing mother, and I have no other family members in the area.” This is a “need to sell” scenario. Meanwhile, “want to sell” sounds a lot different: “I’m curious to see what my house is worth because I may be selling next year.” As you can see, there is a reason behind the need to sell versus the second scenario, where there is just curiosity. There are numerous ways to find motivated sellers, such as driving for dollars, newspaper ads, internet marketing, direct mail marketing, etc. If you begin to research real estate marketing, you will find many forms, but make sure you use a combination of multiple strategies. Related: Wholesalers Get a Bad Rap — But They’re Essential to Investors for These 3 Reasons 2. Get the contract. There are many assignment contract templates on the web; however, I make sure an attorney at least has laid his/her eyes on it and approves the document. There are two reasons this is so critical. First, you will have comfort knowing your document is legally sound. Second, you will be able to utilize that attorney as counsel in the event you find yourself in litigation. There is critical verbiage that need to be added to your assignment contract “and/or assigns.” Why is this so critical? This verbiage authorizes you to re-trade the property to another buyer who is interested in the property. When you receive the signed contract, you now have equitable interest in the property and have some legal standing in what happens to the property. To provide clarity to the seller if asked about the “and/or assigns” clause, I inform them that we buy numerous houses, and we often have funding partners that we work with. These partners ensure we have more than one set of eyes to run the numbers. 3. Submit contract to title. This process may differ in each state, but there is normally either a title company or a closing attorney that will conduct a title search. The title search will check the historical records of the property to make sure there are no liens on the property. It is important not to sell a property with a defective title. The title company or the closing attorney is a independent third party hired to make sure the deal is fair as agreed upon in the contract. 4. Find your buyer and assign the contract assignment. Here is another leg of marketing. Working to find your end buyer can be daunting, but once you have a solid buyer, you can begin the process of closing the transaction. First, when you find your buyer (via Craigslist ads, Zillow, email marketing etc.), you should require a nonrefundable earnest money deposit. Having the buyer furnish an nonrefundable earnest money deposit secures your position in making a profit. This money will become yours whether the transaction closes or not. The earnest money can be as much or as little your require within reason. I’ve seen deposits of hundreds of dollars up to $5,000. When the buyer deposits the earnest money, you then know that your buyer has a real interest in the property and is willing to move forward. This fee is normally held by the title company or the closing attorney. 5. Get Paid! This is what most of us want to hear. We get paid when the end buyer wires in the funds for the deal. This money will cover what you stated you were willing to buy the property from the seller for, as well as your fee for facilitating the transaction. As an example, if you told the seller you would buy the house for $45,000 and you then sold your interest in the property to the buyer for $50,000, then your assignment fee is $5,000. Related: The Harsh Truth About Wholesaling Newbies Need to Know It is important that everything is disclosed because I’ve seen transactions stall at the closing table due to the seller or the buyer does not agreeing with you as the assignor making money. Again, this is why you inform you seller specifically that you are going to make a profit; however, ensure them that they will still receive the amount agreed upon for the price. Other Considerations It is standard practice that assignments are done only on profits of $5,000 or below. But if you are comfortable with the seller and the buyer, it’s possible to assign a contract for a much higher fee. In the event you are not comfortable with all parties in the transaction, a double close or simultaneous close will keep both legs of the transaction anonymous. Be aware not all title companies will agree to conduct a double close, so this needs to be discussed in advance. Contract assignment cannot be done on all transactions. HUD homes, REOs, and listed properties present many barriers when trying to perform this type of transaction. With many REO properties, the lender will ensure there is a seasoning period—normally 90 days—before you can resell the property. As you can see, there are some clear benefits to contract assignment for big paid days. We’re republishing this article to help out our newer readers. Investors: Have you ever assigned a contract? Any questions about this process? Let me know your thoughts with a comment! Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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Commercial Real Estate

I Bought a School (How Did This Happen?!)

Have you ever had a dumb idea that you thought was amazing—until you realized it wasn’t? Those who said yes likely didn’t follow through with the idea. Well, I did. Let me tell you about the most interesting real estate purchase I ever made. It Started With a Story in the Newspaper I can get erratic at times with purchases. This comes from my background in wholesaling. As a wholesaler, you can take chances and then let your end buyer take the risk. Well, this purchase I was the end buyer—and man, was I taking a risk. Before we get started, let me provide the backstory. My wife and I were looking through the local newspaper. On the first page, there was an interesting article detailing how a local school district needed to sell or raze a turn-of-the-century school building. I paid it no mind, but my wife is a property scout when it comes to real estate bargains. Her first comment was, “This is a very attractive-looking building. We should buy it.” Related: The ‘Excitement’ Of Real Estate Investing — Really? No comment on what I was thinking. It’s the wife though, so I said, “Oh,” and didn’t give it much more thought. “Why would she have found the article interesting?” you may be wondering. Our family not only is involved in real estate but we also operate a successful non-profit about 45 minutes south of Chicago. It’s in a midsize, working-class community called Kankakee. She saw the former school building as an opportunity to help with the agency’s expansion into providing daycare services. I have to say my wife, my mom, my brother, and my sister-in-law can always find ways to help people. I, on the other hand, enjoy helping others, of course. But my head is always focused on real estate. Then My Wife Twisted My Arm I figured since the school district had to sell or raze the building, it must be in serious need of repair. See, this is how it always happens. She throws out an idea, and I can’t help but to analyze it. My mind is just wired that way. This was her first step in getting me to show interest. Verrry clever, Mrs. Maloney. She spoke with the school district, inquiring about the building and gauging how they were receiving offers. The whole time she was working on this I had no clue. (Dumb husband…) The school district was going to do a blind auction. But one of the school officials slipped and stated there were no offers on the table (so my wife says). By then, she had pulled me in the building. Just from a walkthrough, it looked solid. Related: The Best Real Estate Deal I’ve Done This Year Then My Whole Family Peer Pressured Me I couldn’t do what I would normally do in this instance—run numbers, create my exit strategy, create a rehab budget. You know, all the typical things a fiscally sound individual would do on a project. This was completely different and out of the box. A day care?! What were we going to do with a day care? The other four (wife, mom, brother, and sister-in-law) said, “Fill it with kids. Let’s continue to help the community but in a different way.” My wife and sister-in-law had experience running a daycare, and they saw the opportunity where I couldn’t see it. Mike (my brother) was on board once he evaluated the potential and did his research. I was still focused on the exit strategy and potential rehab and holding cost. But eventually, they won. I decided to do it. I focused on financing and the building rehab. They followed the pro forma they created for child care equipment, marketing, staff, and other essentials. I Got on Board and Dove In As scared as I was, I went to the blind auction. My wife was right; it was only me there. So then, I really began to panic. “I’m the only one trying to buy this thing?! There has to be something the inspector and I missed.” Suddenly, my investor senses kicked in. I had the thought that since I was the only one there, we could probably get the property cheaper. I submitted the bid, left the auction, and drove straight to my new project—because I knew we were going to get it! And we did. Now We Own a School I’m glad we made this purchase. My sister-in-law runs a very, very profitable daycare. Once we purchased this property, it expanded even more. When I’m in town, I always stop in on school days. I like to see the children playing on the playground and to witness how this place created jobs within the community. The kids are happy, my family is happy, and the property and the business are very profitable. Fortunately, everything worked out. What would you have done in my position? Do you have any crazy real estate stories like this?  I’d love to read them in the comments below!   Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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Landlording & Rental Properties

8 Myths About Section 8, Corrected: Here’s the Profitable Truth

Did you know that there are grants that can help real estate investors with the acquisition of investment property? Did you know there are programs that will pay above market rent for your investment property? Sure, you do—but there are so many misconception about using government funds, they may be deterring you from maximizing your investments. There are numerous government sources to assist you in your real estate endeavors: to name a few, there’s the HOME Investment Partnership Program, local and federal block grants, and the Housing and Urban Development. The governmental assistance program that is most well known is Section 8. Immediately when you think of Section 8 housing what comes to mind might be slums, ghettos, unemployment, substance abuse, and dysfunctional families. This may not be the perception of some, but many do believe this. The association between the above descriptions and Section 8 is so strong that these images immediately come to mind when thinking of government assistance. I would like to inform you that the majority of the time, it is not the individuals on government assistance that diminish a community, but the investor, the property managers, and the slumlord. This article is to inform investors about some of the commonly believed misconceptions about Section 8 housing that are causing you to lose thousands of dollars and diminish your returns. 8 Common Misconceptions About Section 8, Corrected 1. All section 8 recipients are terrible tenants. This is the biggest fallacy. Although there are many Section 8 recipients that are bad tenants, the majority of the tenants are cooperative with the rules given from the landlord. Section 8 tenants must abide by the lease set forth by the landlord, and if they are not abiding by the lease, there are two courses of action that can be taken versus just one in a traditional rental. Related: How to Profit Big & Help Those in Need by Renting to Section 8 Tenants According to Section 8 rules and regulations, if a tenant is not adhering to the lease, you can contact the tenant’s Section 8 social worker. The worker will inform the tenant that if they do not abide by the lease, they can lose the section 8 voucher. Normally in this case, the tenant immediately complies with the lease. The loss of the voucher will result in them paying 100% of the rent versus the difference between the voucher amount and the rent. So this is a big plus because it minimizes the likelihood of evictions. 2. The landlord has to accept anyone. This is not the case; actually, there is another layer of protection similar to lease compliance. The tenants are heavily screened by the Section 8 workers prior to them being awarded the voucher; they cannot have an extensive criminal background or issues of substance abuse, and only the voucher recipient and those named on the voucher can have tenancy in the property. Once the recipient is awarded the voucher, they still can be screened by the landlord. If the individual does not meet your requirements, you do not have to rent the property to them. 3. Tenant turnover is high. I have found this perception to be incorrect as well; there are only a few reasons tenants move — they purchase a home, they find something better or more affordable, a family member moves from the neighborhood, they need to downsize, or they have problems with the landlord. The majority of the time, these are the five reasons a tenant voluntarily moves. In most cases those awarded section 8 have kids, and kids have to go to school, and the kids make friends at school, so they become attached to the neighborhood. This limits the family’s ability to continuously move. 4. The rent is inconsistent. Investors love to talk money, and with Section 8 tenants, you can get a premium for your property. The biggest complaint everyone states about the government is the fiscal policies and how out of touch the bureaucrats are. You are exactly right; the government pays a premium for everything. So why not have them pay the premium for your rental? In most cases Section 8 is willing to pay above the market rent depending on the area. For example I have a small 3-bed, 1-bath SFR, and the market rent is $850. Section 8 is willing to pay a minimum of $1150, and that increases my cap rate on my investment. Again, not only will there be a increase in rental payment, but there will be extra layers of protection per Section 8 policies. 5. It is difficult to get your property approved. This may not be so in every city, but the process to get a property Section 8 approved is simple — the property must not have evidence of mold, heat or running water, and it must be in livable condition. Sounds simple enough, right? There is a check done on the landlord to ensure that there is not a criminal history of theft, drugs, or abuse of any kind. This process is easy, and as long as your property meets county/city code, your home will qualify. 6. Section 8 housing is only in low income neighborhoods. There was an article in Crain’s Chicago Business by Alby Gallun called “Poor Families Use ‘Supervouchers’ to Rent in City’s Priciest Buildings.” This article disproves that notion that Section 8 is only for blighted areas of your city. One individual in the article was paying $3,000 a month for a one-bedroom apartment at 500 N. Lake Shore Drive (yes, if you know Chicago, that’s not too far from the Gold Coast & Mag Mile). I’m pointing this out to say: not all families or rental units that are Section 8 approved have to be in the worst neighborhoods in America. Related: 5 Reasons Why You Should Rent To Section 8 Tenants 7. My property will be destroyed. Again, with the extra layer of protection, it helps if your tenant does damage to the property. In the event the tenant does damage to the property, you can notify the tenant’s worker, and Section 8 will pay for the damages, and the tenant has to reimburse the worker. The tenant can lose the voucher if they destroy the property and do not pay. So this is a benefit to the landlord to ensure the property is maintained. This extra layer of protection limits the possibility of litigation and losses due to damages. As with any rental, you should conduct a walk through with the tenant and document any defects.  8. The rent will not be on time. This happens to be one of the best benefits: not only do you receive higher than market rent, but your payment will come directly from those that administer the program. The rental payment will come on time and without fail. These are the 8 misconceptions about dealing with Section 8 Tenants and the program. Although I have outlined the benefits, there are always downsides when dealing with people. I have been fortunate to have a wonderful experience with Section 8, but I have heard some of the horror stories as well. Remember, you are the landlord, and your tenants can only do what you allow. [Editor’s Note: We are republishing this article to help out our newer readers.] Please feel free to chime in with your experiences dealing with government programs in your real estate investing career. Leave me a comment below, and let’s discuss! Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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Personal Finance

No Credit? Bad Credit? 6 Steps to Fix Your Finances

The other day, I was watching CNN. There was a report stating that 40 percent of Americans do not have $400 saved for emergencies. I can’t say it’s shocking—so many of us are living paycheck to paycheck with no credit—or even bad credit. Having a savings account (and stashing money in it!) is absolutely imperative. But almost equally as important is knowing how to build credit. Most Americans’ Finances Are in Shambles Full disclosure: I am not a finance guru. But I do know the basic concept of finance, that being you have to make more than you spend. If you make $4,000 a month, you need to spend $4,000 or less a month. This is simple mathematics. Yet too many of us know little to nothing when it comes to financial literacy. This lack of education has created a cycle of debt in many of our lives. A lot of us are under the impression that, if only we made more money, we would be happy and we would be able to get back on track financially. But something strange often happens when a person makes more money. They end up spending more money; rarely do they save it instead. This only perpetuates the cycle of debt among Americans. So, what is the solution? I’ll get to that in a moment. Let’s just say it’s easy in theory but difficult in terms of application. Before I get into it, I would like to validate why I’m qualified to write on this topic. I have been there! I’ve lived the life where it seems like you have more month than money. I’ve been through the whole creating a budget at the beginning of the month, and that budget just ends up making things look even more discouraging. It clearly shows you don’t have enough money; you won’t make it through the end of the month. When this happens, we tend to give up and quit instead of making an attempt to remedy the situation. In my late 20s and early 30s, I was broke. I mean dead broke. I was so broke that I was budgeting the amount of overdraw fees I could incur for each pay period. And this was not because I was a massive spender or immature with my money. This was a period of sacrifice I had to go through because I was building a business. It was compounded by a few unfortunate circumstances, too. I was never a big spender on credit cards. And I didn’t write bad checks or anything like that. There were two specific things I needed to do to fix my situation: be more conscientious about my spending and become more disciplined. Related: Why Credit Scores Matter & How to Improve Them How to Get Out of Debt Let’s start by talking a little bit about psychology. First off, some of us are too concerned about money. We take it too seriously. Some of us believe it’s the be-all and end-all, which is simply not true. I used to say all the time, “I gotta go get this money!” See, I was a hustler. I loved to start with something at the beginning of the day and try to increase what I had by the end of the day—a true barter system. This was a challenge for me, but more importantly, it was fun! I loved to see daily progress. But if I could not produce, I would beat myself up. I didn’t have a 9 to 5. I truly lived off the connections I made. If I didn’t make enough connections to produce tangible results, I had an unproductive day, which might lead to an unproductive week. That allowed for the possibility of an unproductive month. A few unproductive months meant discouragement—and depression. The reason I mentioned the psychology behind money is because we let money dictate to us what we can and cannot do. But why? Money is just another resource—albeit a needed resource—but not the most important resource. Those happen to be time and relationships. Once we learn how to leverage time and relationships correctly, and tie it to our purpose, then we will have more than enough money. So, stop working just for money. Instead start building quality relationships and leverage your time correctly. Focus on your passion, your purpose. Then, you will see things start to change in your life. Now, let’s dig into this credit thing. I will explain how to fix or establish your credit plainly and simply, but again, the application is the difficult part. What is Credit Anyway? First off, what is credit?  This is very simple: it’s essentially a good name. Sure, there are technical definitions chock full of jargon. But it boils down to can I trust you? Will you do what you say you will do? I believe that is easy enough to understand, but people don’t look at it that way. It’s just integrity. If you sign a lease for a car, the dealer wants to know if you will honor your agreement. Do you have integrity? In order to establish credit, be honorable. Do what you say you will do. I know I’m making this out to be very elementary, but it really is. A lender—no matter who the lender is, whether a mortgage lender, car dealer, credit card company, family member, or friend—is going to want to evaluate you. That evaluation starts by asking themselves, “Is this person trustworthy enough to pay me back what I’m lending?” They will look at your recent financial history to find out, “Has this person ever not kept their word with someone else?” This is basically what a credit report is telling them. What If You Don’t Have Any Credit? And for the person who doesn’t have any established credit at all, they will have to begin by validating their word. A good (but not the only) place to start is with a credit card. Those who have no credit will not receive very favorable terms or be able to borrow a lot. However, if you show the lender you will honor your agreement to pay on time, you will slowly build up your name as an honorable person. You will then be able to receive credit from others. What If You Have Damaged Credit? Maybe you’re in this camp where you’ve made some horrible mistakes or were uneducated about money matters and now have terrible credit. Don’t worry. You can get back on track. This was me! In college (when I finally decided to go), my financial know-how was so terrible, I believed if I ran up a bill and didn’t pay, it didn’t matter. After all, I’d be moving after college anyway. I had no idea about the importance of my social security number. Yes, I was that stupid. If I was that stupid and able to change things around, I know that with a little education you can, too! So, now we know what credit is and what to do if we’ve never had credit or if we have bad credit. Let’s get this credit thing established. The following practical steps will help. Related: Young, No Money, No Credit? Work for Experience How to Establish Good Credit Pull Your Credit Report The first thing you need to do is pull your credit report in order to get a clear picture of where you’re at. You can access your credit report using free services like Credit Karma or Experian. Many people think by not acknowledging their bad credit, it will somehow go away. No. You have to face those mountains in order to overcome them. Unless you face it, you will not know where to begin. Next, determine if your situation is able to be overcome. You have to be honest with yourself. If you have $200,000 in medical bills, can you honestly pay that? If not, then maybe bankruptcy is a viable alternative for you. Remember, this is about integrity, so if you believe you can pay off a debt, then create a plan and have the discipline to execute it. In doing so, you are not only showing your creditors you have a good name, you’re proving it to yourself, as well. The discipline in doing is creating your plan and sticking with it no matter what. Even if you get side-tracked, be disciplined enough to acknowledge your mistake. Then, get right back on track. Evaluate Your Finances Once you have looked over your credit report, then you need to evaluate your finances. Find out where you’re spending your money. Think back about what I said earlier: it’s not how much money you make, it’s what you do with the money you make. As Rabbi Daniel Lapin wrote in his book Thou Shall Prosper: Ten Commandments for Making Money, “Find the holes in your purse.” What are you wasting money on? I was spending tons of money on fast food, gas, and overdraft fees (nothing to LOL about). My fast food consumption was killing my money—and killing me. Once I slowed down considerably on the drive-thrus, I found that I didn’t incur the overdraft fees anymore. The extra money I had at that point was used to attack my bills. This is an example of the discipline in doing. Just like Dave Ramsey, I would suggest starting with little debts and paying those off first. Once the little debts are cleared, then take the money you were paying on the little debts and move onto the bigger ones. Dave Ramsey calls this the “debt snowball.” I am proof that this works. Consider Why You’re Doing This This could have been mentioned earlier, but you have to have a logical reason why you’re doing this. You can’t seriously get out of debt without a motivating reason why. Clearly identify your why. Put it somewhere that is in front of you daily. If you’re doing this because you want to buy a house, identify the type of house, the location, the price, the number of bedrooms, etc. The more clear your why is, the better it will serve as a driver of success. Reward Yourself Now, don’t be foolish. You need to have some limitations, but you should also reward yourself. This is psychological, as well. Every time you accomplish a goal, reward yourself a little! Take pride in what you’re doing. It’s OK to buy yourself something—as long as it’s within reason. Go Get It It’s as simple as that. GO GET IT! You’ve done the evaluation, you’ve outlined your plan, you know why, and you know what. Now, just go get it. Follow your plan, track your success, and watch yourself earn an amazing credit score. This does take daily work. Try positive affirmations. One affirmation I have and continue to say daily, “I have a good name.” Go Give It In addition, find an avenue to give. You might ask, “How can I give if I’m trying to pay off debt? Wouldn’t that be a waste?” Absolutely not! You want to give because giving is an opportunity to sow seeds. The more seeds you sow, the greater harvest you will receive. To grow almost anything, there is seed time and harvest time. We’re all looking for the harvest, but only those who sowed a seed will actually produce one. And don’t be mistaken, you’re not only sowing to reap the benefits of a harvest. Your sowing is meant to serve as a harvest for someone else, as well. It’s all reciprocal! If you look at some of the greatest earners, they are also the greatest givers. They understand the concept that life is built on an agricultural foundation of sowing and reaping. This is one of the reasons I am enthusiastic about helping aspiring real estate investors. These are seeds I’m sowing for future harvest. Conclusion To wrap up my story, I went from a credit score in the low 400s (the lowest is 350) to 777 (the highest being 850). It took time, but I had to establish my name again. And it feels great to have the confidence of knowing I will get the best interest rates—and I deserve them. Take the steps outlined above, read the articles and books I referenced, have integrity, and give back. By doing so, you will accomplish all that you set out to do. How’s your credit? If you have no credit or bad credit, what steps are you taking to build good credit? What’s working? What’s not? Comment below! Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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Real Estate Investing Basics

Pros & Cons of Entrepreneurship: Is It Right for You?

I can assume since you’re reading this post that you’re interested in being an entrepreneur. But is it right for you? Entrepreneurship is one of the sexiest words being thrown around in many circles today. Everyone thinks they have the next product or service that will revolutionize how we do things. There are tons of posts on social media in this vein. People are doing big things, they’re grinding—or so they think. For some, this is true; for others, they are simply in love with the idea of being a self-sufficient entrepreneur. I want to explore some of the pros and cons of entrepreneurship to dispel some of the fallacies. What Exactly Is an Entrepreneur? Webster’s dictionary defines entrepreneur as “one who organizes, manages, and assumes the risks of a business or enterprise.” At its essence, it’s a person who starts a business. It’s someone who is willing to risk loss in order to make money. This individual should also be a leader, who is innovative, tenacious, and possesses farsightedness. The process of becoming an entrepreneur begins with taking on risk. You have to be willing to embrace this and move beyond what everyone is telling you—and beyond everything you might be telling yourself! Being an entrepreneur has its perks, to be sure, but there are many downfalls, as well. So, let’s take a closer look at some of the pros and cons. (I must disclose that I am slightly biased because I have always worked for myself or my family in some capacity—aside from menial jobs I had during my teen years.) Related: 5 Transformative Productivity Books Every Entrepreneur Should Read [Video] Why is Entrepreneurship so Enticing? I believe it’s the glitz and glamour of working on your own terms that’s super enticing. It’s also the allure of being able to work when you want. It’s being able to choose what you prioritize and focus on based on what you believe is important. And let’s be honest, it’s being your own boss. A Realistic View of Entrepreneurship At an early age, I witnessed the sacrifices that come with being an entrepreneur. Before I could even spell the “e” word, I watched my mom sacrifice. She left a well-paying career as a nurse supervisor to pursue her dream. This change was mind-boggling to so many people. As an adult, I asked what made her take the risk. She told me it was more risky to continue working without being in control of her destiny than it was to leave. But was that transition easy? Absolutely not. It was a burden we all had to bear, and it was a lifestyle change. The sacrifice was real, and my dad, brother, and I did not adjust very well. Things changed. For example, we went from getting groceries at Jewel and Dominick’s to Aldi and food pantries. We got old bread from the bakery at grocery stores. I tell this story because this was reality—even though things did eventually work out for us. Related: 4 Critical Life Lessons from a Serial Real Estate Entrepreneur Pros & Cons of Entrepreneurship From my story above, we know that entrepreneurship is not all lipstick and daisies. There are truly some sacrifices that must be made. However, with tenacity, dedication, and perseverance, you can reap the rewards of those earlier sacrifices. Pros Time Freedom Family Freedom Tax Benefits (for business owners) Life Balance Free Market (free earner, no caps on income) Limitless Creativity Cons Inconsistent Income Time Management (not a 9 to 5) Increased Isolation (less engagement with others at times) Must Be Multifaceted (cannot be one dimensional) Lack of Employment Benefits I mention all of these to call attention to the trade-offs when starting out as an entrepreneur. It’s not for everyone, and please think of your family when making this decision. The great thing about real estate is that there are options. You can be a passive investor and continue to maintain your W2 employment, or you can be full time and push yourself to your greatness. The choice is yours. Do you intend to fully ditch your W2 job? Are you willing to take on all the risks and put in all the hard work associated with being an entrepreneur?  Tell me why or why not in a comment! Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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Real Estate Wholesaling

Top 3 Newbie Wholesaling FAQs—Answered!

Does wholesaling make you feel stupid at times? If you answered yes to this question, you’re not alone. I respond to a lot of comments on my YouTube channel about wholesaling. Many people are confused and feel lost when it comes to starting. The purpose of this writing is not to delve into the intricacies of wholesaling—because I and many others have done this already. I will answer the five questions I’m often asked. The Top 3 Newbie Wholesaling FAQs—Answered! 1. What is the best way to get started? FYI: You’ve started already, but most people stop without taking consistent action. Yes, by reading this article, you’ve shown interest in wholesaling, and that is the first step. Stop believing this will happen overnight. You have to start with education. Education is essential to becoming a successful wholesaler. I am not talking about the quick crash course to $5,000 in 30 days. I’m referring to the education you need about your specific market, trends, and marketing. There are many times I see people buy a course or read a book and try to get started, but they know nothing about their market. These courses try to incorporate a one-size-fits-all approach, but every market is different. 2. What should I get educated on first? Your Market What areas are in high demand? Do you know the average days on market? What is the estimated rehab cost per square foot? What are the buying criteria for a certain area? What are investors in the area looking for—to buy fix and flips, rentals, single family units, or multifamily units? Educating yourself and being able to answer these questions is step one in truly being able to get started. So, if you’re trying to find deals and you cannot answer these questions, you’re going to have a problem. It’s OK to be a newbie, but it’s not OK to not have done your homework. Motivated Sellers First, do you know what a motivated seller is? Honestly, this sounds like a very stupid question, but I have to inform newbies repeatedly that all sellers who respond to a marketing piece are not motivated. For example, if the seller is fixing the property up and they say they will be ready to sell when they are done, this is not a motivated seller. Related: A 60-Day Action Guide to Wholesaling Your First Property Please, I’m writing this so you won’t look stupid. A seller looking to sell $5,000 below market is not motivated. Identifying motivation is an art; it’s like digging for gold. Not every stone you see will be a gem, but by continuing to dig, you will encounter that rare find. So what if you feel uncomfortable asking the seller how much they owe on their mortgage? The art is asking open-ended questions without being intrusive. Learning this technique is only done by building repetition. So if you need to make mock calls with a friend, partner, or spouse, please do so. The key for finding motivated sellers is for you to identify the problem and have them acknowledge it. Some sellers will clearly have a problem but are not willing to admit it. These people may need some coercing before they are ready to be forthcoming. Marketing There are many forms of marketing. You will need to be specific on who you will target and how you will target them. I will not go into depth here because marketing is a blog post in itself. However, I will inform you that whichever form you use, consistency is the key. The number of times you reach out to a seller must be a minimum of six touches. Others may suggest more, but six should be the minimum. Here are some marketing tools: Online: YouTube Videos, Targeted Social Media Ads, Web Page, Blogs Offline: Direct Mail, TV Ads, Radio Ads, Newspaper Ads, Door Knocking, Cold Calling, Bandit Signs Once you’ve identified your marketing strategy, you will need to identify your target population. This will be incorporated with knowing your market like I spoke about above. You will look like a complete idiot and waste money if you do not identify these metrics before starting. Marketing will be expensive, and I’m sure in the beginning most newbies don’t have money to waste by doing something incorrectly. 3. What resources do I need? This is a very valid question. Besides money, the most important resource will be cooperative relationships that help you progress. You will look completely incompetent if you’re trying to do a deal and you don’t have these resources and relations at least initiated. Here are just a few: real estate agent, buyers, title agent, attorney, wholesalers, contract, assignment agreement, conversational skills, positive personality. Related: 5 Ways to Lose Your Wholesale Deal (After Signing the Contract) You will not know everything, and each deal can present different challenges. Having solid resources and relationships will help you a lot. I’ve needed attorneys on some deals, and I’ve needed title agents on all deals. Real estate agents are very useful, as well as other wholesalers to bounce questions off of. I am very appreciative of my resources and relationships and work very hard not to damage or neglect them. I want you to be brutally honest with yourself: Does wholesaling make you feel stupid at times? I can truly say yes. Even though I’ve been doing this for numerous years, I still find myself dumbfounded by some of the deals I’m working on. If you’re a seasoned investor or a newbie and wholesaling, have you felt stupid at one point? Please share. Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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Business Management

How to Use Partnerships to Move Your Real Estate Business Ahead Faster & Further

In wholesaling, there are many components and moving parts, such as marketing, acquisitions, dispositions, transaction coordinating, networking, property inspections, and more. Handling all of these jobs is difficult for any one person. This is where strategic partnerships come into play. This was difficult for me because growing up, I had to know a little about everything in order to be successful. Growing up on a farm, we didn’t hire out — we figured it out. This philosophy was challenging to me, and later in life, I realized the many flaws with this concept. I’ve learned the importance of focusing my attention on my areas of strength, just as we all should. This is not to say we must ignore our weaknesses, but if we can find someone who can do the job better, then we should give that person the latitude to excel in that area. Trust me, it will benefit you both. A Partnership Can Move Your Business Faster & Further Effectively using the power of a partnership will push you along your journey a lot faster, and you can go a lot further. This may be difficult in the beginning because of your limited knowledge of wholesaling, but you have to use everything to your advantage. You have to use what you do know, along with what you don’t know. If you ask any professional, they will stress to you the importance of partnerships and mentorships. One of the most powerful tools to help you along your journey to becoming a successful wholesaler is self awareness. By conducting a self assessment, you will gain a clear picture of what you have and what is needed. Once this is completed, you can use your findings to attract that person who has the knowledge base you seek. I am a firm believer that everything you need is locked in someone else, and you have to ask the right questions to get what you need. If your counterpart is wise, they will seek the same from you. Don’t get me wrong — it is not easy finding this person, but it is not impossible. The laws of attraction will become evident once you know what you need — then you can attract it to you. Related: 4 Key Traits That Define a Good Employee or Business Partner Being Tenacious in Getting What You Need Again, evaluate what you’re good at: If you’re good at talking with sellers, continue to develop that skill and enhance your public speaking and negotiating. If you’re great at marketing, work on this area and let someone else speak with sellers. Or you are very analytical, then you can do all the data mining to provide information for the marketer. It will all come together, but you need to know what parts are needed to make things happen. I still work to focus on my strengths and outsource my weaknesses. I utilize the skills of virtual assistants to help me develop areas I have limited knowledge in. If you know the areas you are limited in, you can then hire VAs who are willing to do what what you’re not good at or things you just don’t like to do. For me, I am not particularly fond of working with a lot of data, so I recently hired a VA to do all the skip tracing for me, a job that if I needed to do, I could have done, but I know my time is best utilized elsewhere. Strategic partnerships are win/wins for all parties if set up correctly. When acquiring a true partner, a written agreement should be in place. This could be in the form of a partnership LLC or some memorandum of agreement. Without this, your success could quickly become a huge failure. There is an old saying that you never need an written agreement until you need a written agreement. Please don’t find yourself like Prince’s heirs — without a written agreement (for those who don’t know, apparently Prince died intestate, but that may be hearsay). If you would like to know more about the power of strong partnerships, I’d recommend the book Power of 2 by Rodd Wagner and Gale Muller. They expose some profound points about partnerships. Don’t Let What You Don’t Have Stop You I was inspired to write this article because the fear of the unknown limits many newbies from jumping into the world of wholesaling. I know this because I was a subject matter expert on letting the fear of the unknown slow me down. Once I shed the fear of embarrassment, there was nothing I was afraid to ask and no one I was afraid to be foolish in front of. I had to acknowledge this, and by doing a self assessment, I knew what I needed — and fear could not stop me from going to get what I needed. Related: 3 Ways to Partner With an Experienced Investor For Your First Multifamily Deal It is very important to focus on your needs — what is needed for you to get your first deal, what is needed for you to get started marketing, what is needed for you to feel comfortable talking with sellers. Evaluate your needs one at a time, and you will be able to source those needs and become successful. Are you aware of what you need but don’t know how to ask or where to find it? Well, Bigger Pockets is a great resource — ask questions in the Forums or leave a comment below, and maybe I can steer you in the right direction. What do YOU need in order for your business to thrive and grow? Let me know with a comment! Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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Personal Development

Why I’ll Never Self-Manage My Rentals Again

The past few years I’ve been getting my hands dirty with rentals. I’m mainly a wholesaler but wanted to branch out. While I live in the Phoenix metro area, I found I was better able to find solid deals in the Chicago market. I discovered this when doing some virtual wholesaling. The numbers on the rentals were seriously ridiculous. Often I’d encounter motivated sellers who were willing to offload their houses for $40K to $50K—despite the fact they were bringing in $1,500 to $1,800 monthly in rent. Amazing right?! That’s the Midwest. I just couldn’t pass up the prices and locations. These were not D and F neighborhoods. So, I took the plunge and figured I would manage the rentals from afar. Going into it, I had minimal knowledge about being a landlord and managing tenants, especially from a distance. But I challenged myself to figure it out. Lots of podcasts (specifically BiggerPockets’ podcasts!) I was listening to at the time talked about other long-distance landlords who were making considerable strides as investors. It sounded like they were able to do so because we live in the age of technology. Related: How I’ve Made Over a Million Dollars Listening to Real Estate Podcasts It seemed like something I could definitely do, too! And so I did. I started with a small 2 bedroom/1 bath turn of the century raised ranch. It was not in the best condition, but I figured I could get between $675 to $750 in rent with a little sweat equity. After a light rehab, I marketed the property. I was going back and forth to Chicago a lot while all of this was going on. That part, I didn’t like. My aim was to create passive income, but I found myself being away from my family for weeks at a time. I knew, however, that once it was fixed up and tenanted I would accomplish my goal. The property turned out to be a success! I managed it for years from 1,500 miles away. Full transparency, I had one bad tenant who ended up breaking her lease, but while she was living there, she did pay her rent consistently. It still equated to success in my book. So, I purchased more and did a seller carry back on another property. I was all in at that point, doing wholesaling in Phoenix and Chicago and earning some passive income on the side. Everything was great—until it wasn’t. As I continued to grow my portfolio, I was traveling more and noticed my wholesaling business began to suffer. I realized that in order for me to scale, I could not manage these properties from a distance anymore. I had to pass on “my girls” (as I affectionately referred to my properties) to a property manager. Related: When To Hire a Property Manager This change is taking some getting used to if I’m being honest. But between the time I was away from home and the money I was spending on travel, I know I’m actually coming out ahead. Also, I could not continue to grow being a one man show. I know there are other investors just as hell-bent as I was on doing it themselves. When starting out, I definitely do think going about it that way is a plus. However, in order to grow—if that’s what you want to do—a great supporting cast is needed. Yes, I once subscribed to the “save a few dollars and do it yourself” philosophy. Not anymore though. I’m refocused on marketing and negotiating these days, the main trades of a wholesaler. And I have my rentals to thank! They taught me a very valuable lesson about the importance of establishing a team. Don’t make the same mistakes as me! Learn to let go, and find quality help. Do you landlord? Or use a property manager? Which do you prefer and why? Let me know in a comment below.  Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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Real Estate Wholesaling

The 8 Most Common Lies Newbies Believe About Wholesaling

In this world of real estate, there are some truths—but there are also many lies. I assume since you’re reading this that you’re interested in real estate wholesaling. Let’s dive into some of the most common real estate lies about wholesaling. Lately, I’ve been doing 30-minute free strategy sessions with aspiring wholesalers. I take this time to introduce newbies to the world of real estate investing. During these sessions, they can ask me anything about real estate and wholesaling more specifically. What I’ve found is that there are a ton of misconceptions out there, and I want present the truth. The 8 Most Common Lies Newbies Believe About Wholesaling 1. Wholesaling is illegal. This is the biggest question I’m asked. My answer, despite what critics might say, is no, wholesaling, at least how I do it, is not illegal. I am here to clarify that brokering a real estate transaction without a license is illegal. There is a small gray area, and although I do not like to operate in the gray area because I consider myself to be somewhat conservative, I tell aspiring wholesalers to get their license to eliminate that gray area. Do not broker deals without a license. As a wholesaler without a license, you need to ensure you clarify with your seller that you are purchasing the property and not finding an end buyer. I know this is small semantics, but it is key that you clarify this. Again, I am an advocate for getting your license to help minimize risk. Plus, having a license may also help open other doors. Related: 5 Ways to Lose Your Wholesale Deal (After Signing the Contract) 2. Wholesaling is dead. Yes, I actually heard this. Although in many markets it’s harder to find deals, this strategy is not dead. I have a deal closing next week in one if the toughest markets in the nation. I agree that it is much more challenging than it was just two years ago. During this time of market saturation, you have to be more creative and liquid to find deals. 3. You absolutely have to have a license to wholesale. As I explain above, this is an advantage but not a necessity. This is just my advice. You can draw your own conclusions, but you do not have to have a license. Is it more beneficial? Yes. 4. You can be successful without money. Let’s be clear: You cannot get something for nothing. Keep this in mind. You definitely cannot sustain a business without money. Can you get started with limited money? Yes, but you will have limited success. 5. There’s no risk involved. This is the most audacious remark I’ve heard. What investment strategy that you know of has no risk and no downside? None. Here is one of the risks: You can be sued. Yes, this is a possibility. I don’t want you to have a false sense of security thinking that you can do this and not face any challenges. I’ve seen and heard of wholesalers being sued by the seller, the buyer, and other wholesalers. Beware and get educated. 6. Wholesaling is for beginners only. I am here to inform you that many seasoned investors still wholesale. Is it their primary strategy? Well, of course not. However, there are times where you have a deal is too sweet to pass up, but the deal does not fit your model. You’re not going to let money run through your fingers. As an entrepreneur, you look at every possibility to leverage your resources. Many non-beginner investors I know personally wholesale a lot of deals. 7. You can virtually wholesale deals by yourself. Now, this is a bunch of crap. Virtual wholesaling is difficult, and you cannot do it alone. It’s actually more important to have a team when virtual wholesaling rather than  wholesaling in your local market. I’ve heard of courses that inform aspiring wholesalers to simply virtually wholesale if the local market is too competitive or saturated. Is virtual wholesaling a possible? Absolutely. I’ve done many virtual deals, but you have to have a strong team in place. This team may consist of a wholesaler in that market, birddogs, attorneys, title agents, etc. This is not a task you want to try and implement independently. Related: A 60-Day Action Guide to Wholesaling Your First Property 8. Real estate agents hate wholesalers. I’ve heard this quite often, and although the real estate agent/wholesaler relationship sometimes may not be the greatest, this isn’t always the case. There are real estate agents who work with investors and who love wholesalers. This is because wholesalers can provide agents’ clients with off-market deals. This helps agents show their clients that they are embedded in the local industry. Agents can make a lot of money from wholesalers. I get that many agents believe wholesalers are taking possible listings. However, if wholesalers hand off below-market deals to agents, that is a benefit for the agent and his/her client. We have many agents on our buyer’s list, and you should too. Remember, when you hear a negative statement, you must evaluate the source. Some of these lies are from those who have ulterior motives. When working to be a wholesaler, you will encounter many things that can skew your perspective. By reading this article, you have the upper hand on your competition. What wholesaling myths and lies have you encountered? Comment below! Free eBook from BiggerPockets! Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks, and techniques delivered straight to your inbox twice weekly! Actionable Advice for Getting Started, Discover the 10 Most Lucrative Real Estate Niches, Learn how to get started with or without money, Explore Real-Life Strategies for Building Wealth, And a LOT more Sign up below to download the eBook for FREE today! Click Here to Download the eBook Now! We hate spam just as much as you

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