All Forum Posts by: Jackie Lange

If this is a wholesale deal, why do you need a hard money lender?  Usually, with a wholesale deal you are selling to an investor buyer who will either have cash or already have a relationship with a private lender or hard money lender.  You buyer will bring money to the table at closing so you don't need to.  

There are several ways you can get paid.

1.  Assign your contract to your buyer

2. Get paid to release your option by the seller

3. do a simultaneous close so the seller and the buyer don't know what your profit is.

You are making it WAY too complicated and costly by using a hard money lender to close the deal first, then selling to someone else.  The hard money lender will likely make more money than you will on the deal because their rates, points, prepayment penalties are so darn high.

did you mean 

There will beABSOLUTELY NO pitching of products, services or properties at this event!?

I can't imagine Peter would be involved with a PITCH FEST

My rentals are only in quality areas.  Average tenant stays 9 years.  But I did just have one move out after 7 years because she bought a house.  

You'd have a hard time getting a tenant to stay that long in a low income area.  

Tenant turn over costs a lot of money in both lost rents and usually extensive repairs too.

DUMP the agent.  They are working for you and should make the offers you want to make.  If they won't do that, get rid of them.   If an agent is afraid to make low ball offers they have no business being an agent. 

The Millionaire Maker topics are:

BUYING… AT A PROFIT

The Deal After the Deal
Five Buying Mistakes That Rob Profits
Six Buying Secrets That “Beat the Street”
Finding Cash With Which to Close Fast
Activating Goals That Help You Win
Using Multiple Skills to Multiply Profits

FINANCING

Fly Now, Pay Less Later.. Or Never
Six Choices Created by Financing
Using Stock Price Collapse To Finance Transactions
Using Institutional Lines of Credit To Buy and Sell
Buying and Holding to Save Taxes and Stabilize Income
Tailoring Transactions to Attract Private Investors
Trading Time, Cash, and Pay-Down For Zero Interest
Avoiding Due-On-Sale to Use the Other Guy’s Credit
Five Buyer Financing Techniques That Sellers Reverse

NEGOTIATION

Using Garage Sales to Hone Skills
Cooperative Versus Competitive Negotiation
Discovering and Satisfying “Needs” Instead of Wants
Negotiating with “Letters of Intent”
Give Negotiated Benefits People Will Trade Off
Making Multiple Forced Offers to Get Results

SELLING

Sales: A Key Factor in Creating Real Estate Wealth
Four Ways to Use Equity to Create Cash
Ads, Signs, and Flyers Motivate Buyers to Buy
Creative “Open House” Approaches to Selling
Preparing a House So It Can Sell Itself
Five Ways Appliances Help Sell The House
Sell the Sizzle, Not the Steak
Closing the Contract So You Can Close the Sale
Assembling Your “All-Pro” Selling Team
Carrying Back Financing to Build Bigger Profits

see details at

http://www.cashflowdepot.com/store/e-book-products/millionaire-maker-book.aspx

Keep in mind, when you get ready to sell houses in low-income, el cheapo areas, your only buyer will be another investors who will want a deep discount.  In these "quantity" areas, you'll have a very hard time finding a buyer who has a down payment and can qualify for a loan .

This is an article Jack Miller wrote about the topic.

Making money from the earnings of poor people is like getting orange juice from an orange tree without any oranges on it. The same can be said of investment houses that are bought in blighted zones. Usually, only through the intervention of government in the form of low-income property improvement grants and rental subsidies can marginal properties in marginal areas be made profitable. This places a would-be investor into the same food chain as the hapless tenant who depends on both rent and government subsidies for financial survival.

Those who buy subsidized properties are gambling their financial independence upon the good will of the taxpayer who has just about reached the limits of his willingness to support these social programs. They also run the risks of high levels of regulatory pressure and litigation by virtue of their renting to legal wards who have access to free lawyers and zealous bureaucrats who see independent investors as a crop to be harvested. Thus, it does little good to garner high cash flow from these rentals only to spend it in higher maintenance, management, and legal costs.

Low income subsidized rentals may return a high gross cash flow, but their total investment value in a growing portfolio is more glitter than gold. One should look at the total return of an investment, not merely the cash flow. These factors would include the numbers of properties that can be managed efficiently; the amount of capital their acquisition consumes (which is function of their down payment and financing terms), the quality and durability of the income stream they produce both in times of inflation and recession, their fiscal independence from government subsidies, and the time one must spend puffing out fires in order to continue to function.

Last, but not least, one should consider the 'burn out' factor. When you've reached your limits in handling these properties, you'll find it difficult to sell them. There's a dearth of people with the money and inclination to cash out your investment in 'high adventure' properties. Moreover, those to whom you might sell on installment terms may not have the perseverance or skills to manage them. Ultimately you may find yourself giving back a lot of your profits just to escape

Definitely go with quality properties vs. quantity.

If you buy the low income properties, you will attract low income people at tenants.  No one else will want to live there. YOu'll have high turn over with a lot of repairs each time.  And you'll probably be chasing rents all the time unless you go with Section 8 tenants.

Contrast that with a nice house in a nice neighborhood which is filled with mostly owner occupants.  You'll get high quality tenants who can pay their own rent and they pay on time. These tenants will stay for many many years so you will have little turn over.  And when they do move out, often the property is in better condition than when they moved in.

To buy nice houses in nice neighborhoods, look for opportunities to buy with seller financing or subject to the mortgage.   You could also start with a Master Lease  to get your cash flow going.  Once you prove to the owner that you are reliable they are very likely to convert to seller financing.

You don't need a real estate agent and you don't need to use bank financing to buy your rental portfolio.  

Double close 99% of the time.  This is so the seller does not know what my profit is and the buyer does not know how much I'm making.   

Forgot to mention I also have an import/export business.  I import products from Ecuador and China to sell on Amazon.

It is good to diversify.  But initially I just focused on my real estate business.  Once I had it where it needed to be I added other income streams.

It is good to diversify!

I have a couple of other companies.

1.  one company does online training for real estate investors including complete 3-day online seminars.  I started this company in 2006.  I do an annual convention at a tropical resort next to the Pacific Ocean.  

2.  I have 15 really good lead generation web sites.  I license an exclusive use of the web sites on a per county basis.  I have offices in hundreds of areas worldwide.  I started this company in 1999

3.  I have a relocation tour company in Panama.  I moved to Panama several years ago. Once a month we do a 6-day all inclusive tour throughout Panama for those who are invested in relocating or retiring in Panama.

4.  I grow organic coffee in the highlands of Panama.