All Forum Posts by: Eric Medemar

I was sitting around my home this evening trying to get some more exact figures on some closings that I just had (im honestly missing $60,000 somewhere, im sure its around but...I just dont know where), and I got to thinking, I make more money investing in real estate than I do selling homes as a realtor and it seems so much eisier. I guess im now a full time investor and part time realtor. Thats not something I would have expected. I have 12 different remodel projects going on right now, and 6 people working for me, yet in my own head im still the same old same old. I didnt even start buying heavily until 2006, which was one of the worst markets in 20 years from what I have heard.

Anywayz I was wondering what other people in the forums do for a living?

How much time each week do you dedicate to investing?

Would you be a full time investor if you could?

If you would want to be a full time investor, what keeps you from taking the plunge?

How many years have you owned the home that you are going to 1031 exchange? Dont you have to own it at least one year and to be safest 2, or have you purchased with the intent of renting, and then decided because of some financial hardships that you need to sell. (wink, wink).
That was my understanding of the 1031 exchange that you can sell faster than 1 year if you bought the property with the intent of renting it, and because of a financial hardship, or relocation you have decided to sell. If you know something that I dont let me know because I am going to be taken to the slaughter house on my gains this year.

I do intend on starting a self directed IRA for the purchase of real estate that I plan on keeping some of my holdings and gains in for the 07 year

I am always curious to find out how the real estate market is in different parts of the country. Where are things HOT? Where are they NOT?

Here in good old West Michigan housing is very slow but picking up. I hope it stays this slow forever. I have been getting properties for as low as 30 cents on the dollar. I figure If I can buy cheap, then I can sell cheap. I have 12 rehabs that I am working on now, so I will keep my fingers crossed. :beer:

Its funny when the market was great, it seems like most deals you could only squeeze 7-12k out in profit, because there were so many investors and so few deals. Now those same investors have stopped buying because the market is "slow". Now that its slow I have been making 15k-20k on 25-40k houses, today I close on 4 and on 1 of them I am making a 100% cash on cash return (i paid cash for the property so were not talking leveraged money) So anyway I hope it stays slow for a very long time.

I had stopped advertising for about 4 months because I couldnt handle anymore buyers, this sunday I decided to run my usual free list ads along with a couple other and picked up 14 new leads, I have only called 3 because of time constraints but just from those have picked up 2 very solid cash buyers. Real estate is now doubt where its at.

"put it in an IRA and you MIGHT earn .15 cents (15%) for every dollar you invest (unlikely)...WITH ABSOLUTELY NO CONTROL OVER THE INVESTMENT...and remember IRA's are for RETIREMENT...if you draw on it, that's defeating the purpose"

Check into self direct IRA's that can be used to purchase real estate, I think you will find it to be one of the most powerful tax free wealth builders that you have ever seen.

A brief overview of my 2007 Goals

I have never understood why 95% of people spend more time putting together a map of how to get to their vacation spot, than they do putting together the map that will shape their lives. Without goals you are essentially trying to put together a puzzle without having a box to look at the picture on.

1. Rehab 20 homes and sell at least 13 of them

Steps I have taken so far
a. I am currently rebabbing 11 properties so I am off to a good start

2. Make at least $200,000 flipping, buying, and wholesaling real estate

Steps I have taken so far
a. I have 6 homes under contract to sell which I will profit very well on

3. Make at least $120,000 selling other real estate as a realtor
Steps I have taken so far
a. Started running ads
b. Started calling leads back again

4. Help at least 40 people turbo charge their investment careers
Steps I have taken so far
a. Have done 11 phone consultations with new investors

5. Develop a 100 person buyers list for wholesale deals
steps I have taken so far
a. Started running ads again
b. Started calling old buyers back

6. Build up to $4,000 net cash flow
steps I have taken so far
a. I have 33 units, Mostly single families, a couple twos and a couple 3's. To be honest I have no idea what I spend or what I take in. These figures would seem somewhat important so I hired an accountant this year.

7. Be more organized
Steps ive taken
Hired an accountant
Hired 4 contractors to do my work

Thats a brief overview of my real estate goals. I have the long version using the steps below but I will save you the reading. I will say this Goals are powerful tools once written, here is what happened to me with my first goal setting attempts.

When I was around 24 years old, I had started reading about the importance of writing down goals. I was sitting at my desk one day (at a job I wasnt overly fond of) and began writing out my goals, I don’t remember all of the details but I do remember the major themes of the goals.
Goal #1 Own a Harley before I was 30 years old
Goal #2 Have at least $30,000 in the bank before I was 30
Goal #3 Make at least $100,000 a year by the time I was 30
Goal #4 Own at least 5 investment properties before I was 30
Goal #5 Have a fun car by the time I was 30

I think I must have been about 29 years old and was working on cleaning out my basement when I discovered my old book of goals. Upon opening the book I realized that I had achieved every single one of these goals without even realizing it. I had a harley in my garage, a convertible corvette in the garage, a jeep wrangler for days I didnt want to drive my vette, a lexus for my winter beater, I had been making 6 figures for a few years already, had over $100k in the bank and had 9 rentals. It was as if once my goals were written down I began to attract all of the tools that the universe could offer. :beer:

1st What is the end result that I would like to have? Be very vivid in your description of your end result. Think of things like how you will feel, what you will look like, and how other will see you.

2nd What time frame would I like to achieve my result in? Does your result need to happen in a week, a month, a year, or a decade.

3rd What am I willing to do, to make these results happen? If I were to pick out the most important step of goal setting it would be this one. Layout every action that will be required in order to achieve your goals. Be sure to include every step that will need to happen in order to make your dreams come true.

4th What will happen if you don’t achieve your result? By answering this question as thoroughly as possible you will be creating your big WHY and building your leverage. Building leverage is important because leverage helps you stay on track when the going gets tough. If your end result was too lose 20 pounds, your leverage might be I will die 5 years earlier, I will continue to feel fat, or I wont be able to play sports with my son.

5th What has caused me to fail in the past when I have tried to achieve the results that I desire? This type of brainstorming can help aid you when roadblocks come up. Identifying what has lead to past failure will help you avoid repeating the same failure again

6th What will my new reaction be when the same roadblocks come up in the future? Having a written plan of action in place can help prevent future failures at your goal attempts.

Here is a sample of using the 6 step method.

1st, Make $20,000 wholesaling 3 homes by June 1, 2007

2nd June 1, 2007

3rd Steps to Getting Homes to Wholesale
1. Put out we buy house signs
a. Get 1800 for signs
b. Hire someone to put out signs

2. Call 5 realtors a week
a. Ask them if they have investors that they work with
b. Offer to take them to breakfast to discuss investing

3. Find buyers
a. Run ads in newspaper
b. Call other wholesalers
c. Ask realtors for buyers

4th List of What will happen if I don’t achieve my results
1. Be 20,000 poorer
2. Wont be able to put my son through school
3. Wont be able to buy that new car I wanted
4. Wont be able to take my dream vacation

5th List of what has caused me to fail in the past.
1. Analysis paralysis
2. Didn’t look at enough properties
3. Didn’t have enough properties to see
4. Didn’t have enough buyers in place

6th List of what I will do to get past the old road blocks
1. I will prevent analysis paralysis by having all the proper contracts, buyers, and market analysis tools in place.
2. I will run ads, put out signs, and network to find properties
3. I will run ads, put out signs, and network to find buyers.

I hope this helps at least 1 person to sit down and write their goals out, then achieve them.

“The Journey is as important as the destination” Keep in mind that real estate is a process that typically does not produce immediate cause and effect outcomes like many things in life. You don’t start to be successful as a realtor or an investor when you do your first deal, you start to be successful the day you start doing. Make your joy in real estate not come from the end sale, but from each successful effort toward the end goal.

There is a story of a climber who ran into another climber who was coming back from the top of a mountain. The hiker who was on his way to the top of the mountain asked “ Do you know the way to the path that will lead me to the top of the mountain” the hiker who was returning from the top said “simply make every step that you take go towards the direction of the mountain top and you will get there”.

If you are unhappy with the direction that your real estate or investment career is going then you need to change things. If you keep doing today what you did yesterday, then you will keep getting what you got yesterday. Take the time to sit down and find out what habits, beliefs, and actions got you to where you are, then change them to the habits, beliefs, and actions of a person who is where you want to be.

Be a super model. If you want to be a successful agent or investor do what other successful agents or investors do. If you want to fail in the real estate business then do what the failures do. Many times the time commitments between the two are exactly the same, what it really comes down to is what you decide to do with your time. When I was just selling real estate, I was making $100,000+ without working more than 15 hours a week. The amazing part to me is that all the agents in the office who “worked” were many times making 1/4 of what I was, yet they were working up to 50 hrs a week. They had essentially become experts at looking and feeling busy rather than experts at making money in real estate.

“Fake it till you make it” When you are talking to potential investors be sure you come off with confidence. People want to deal with successful people, but they don’t know the difference between someone who is successful or someone who acts successful. Imagine in your mind how you will feel when you have done 10-20 deals, how will you talk to people, how will you carry yourself (posture, facial expressions, tonality of voice). Once you can vividly picture in your mind how you will act when you many deals under your belt, then all you need to do is duplicate that picture in your mind.

These are all I have time for, I will shoot to add more later. Im sure the big dogs on the boards can fill in the blanks

I get email virtually every day from people who want to know where to find buyers for their wholesale deals. I see countless posts on here of people asking where to find buyers. So I figured I would put together most of the ideas that I have used or have seen used for finding buyers into a single post.

I am sure there are countless other places and ways to find buyers beyond what I am mentioning, so I will leave it up to other people to fill in the blanks that I have missed.

Keep in mind these are ways that I or my clients have actually used, so I know that they work because I have done it.

1. We Buy Houses Signs I call every single one of these signs that I see, I actually keep a note book full of numbers and info that I find out about these companies when I call.

I usually ask them whether they are still buying, what they are looking for, what percentage up FMV they are typically paying, and what areas of town they want to buy in.

While I have them on the phone I also ask them if they wholesale out any of their homes, if they do then I ask them to call me when they have something good. I tell them that if the deal is right I can close in less than 2 weeks with cash.(I can do this because I have other buyers already in place to buy their deals, sometimes these buyers could be other cash for your house buyers)

Here is a sample of a deal that I put together using this.

1. I called a we buy houses sign
2. Found out where they were looking
3. Put a home under contract for $52k in that area
4. Called them and let them know.
5. I signed a 6 month lease option with them for $64k
6. I closed the home.
7. The lease option started
8. He sold the home
9. We close this week, I make about $12,000 (I also made commission when I bought the house, because im a realtor)
10. He makes around $12k.
11. Were all happy.

2. Call realtors I call realtors and find out if they have any cash buyers that are looking to buy some wholesale deals. It varies on what I offer to pay them but typically I offer 10%-20% of my profit, or a flat 2-3% fee, each time the buyer they have given me buys a home. It creates a win- win, I get a buyer and they get paid whenever their buyer buys a home.

I offer the continuous pay because a realtors worst fear is that they give you a buyer and he buys from you, then when they have a good property to show their buyers they cant buy because they have already purchased from you.

If the realtors dont have cash buyers, I tell them that if they bump into any great deals, they should call me and if the deals good enough we can buy with cash and close in less than 2 weeks.( Often times you can use other realtors buyers to buy another realtors house and you can make money setting the two up)

An example of one of my clients deals that he ran this way.

1. I called my client about a great HUD deal
2. He liked the deal and put the home under contract for $115k (I made a $4800 commission on the home when it closed so I was happy)
3. We had 60 days to close the HUD home so he started calling realtors
4. He found a realtor with a cash buyer that was willing to pay $122,000
5. We assigned the contract (this is a secret)
6. We went to closing and his buyer brought $122,000 cashiers check.
7. My buyer left with a check for $7,000 ( he used none of his own money, and I found him the house so he was happy)
8. I left with my $4800 commission
9. The realtor who brought the buyer took no commission but got a commitment from his buyer that he would list the home with him when he sold it.

3. Newspaper ads I dont personally use this one, I have clients who have had great success with it though. They simply place a small classified ad that reads "Looking for buyers to purchase homes at 50-70% of true value"

I have picked up endless buyers with this ad though "Free List of 45 foreclosed/distressed homes" call or visit www.$$$.com. The reason that I have had so much success with this ad is because anyone thinking of buying real estate would much rather get a free list of 45 then have to call each individual ad. You can have a local realtor put together a list of properties for you and email them to you if you cant find your own. Then take the list that they send you and email it out to people that respond to your ad. Keep in mind you dont really care about the list that you send, you care about getting the name, phone number, and buying qualifications of responding buyers.

A real life example.
1. I placed my free list ad
2. I got about 30 responses for the month
3. Found one buyer who has paid me over $75,000 in commisions over the next 3 years on deals I brought him.

These were realtor commissions, but if you can find a buyer who is taking the kind of action he was you could seriously line your pockets wholesaling to him.

4. HUD homes this is my own technique that I started using to get buyers just for my realtor purposes. Watch for a great deal on a HUD home or any great deal for that matter, then park outside for a few hours and talk to the people going to check out the home. Most of the areas investors will find there way to the property and you can give them your card and be sure to get there info. Tell them that you run into alot of deals and ask them if they would like you to give them a call when you run into something decent.

A personal example.

1. I went to look at a good HUD home that I was going to buy myself.
2. The neighbor came over and wanted to see the home while I was there.
3. I showed him the home and he ended up buying it from me.
4. I ended up making $2500 in commission on it.

If I were not a realtor, I would have simply talked to him and found out what he was willing to pay, then wrote up a wholesale contract, then put the home under contract with HUD, then played the spread.

This was my most recent deal, but I have picked up endless buyers for other homes while parked outside of HUD homes. I call it hunting for buyers. Its kind of like deer hunting with a bait pile. The home is the bait pile and the buyers are all coming to eat.

4. Talk to your current buyers buyer typically know other buyers, ask your buyers if they know of anyone else who is buying (let them know you will only call the referal if they are passing on the property). You also might offer to pay your buyer for a referall fee if one of there people end up buying a house from you. This technique also works great if you have a buyer that only wants to buy in a certain area, then you can call their referall if you have a home outside that area.

Personal example.

1. One of my buyers had too many homes and could not buy.
2. I asked him if he knew anyone else who might be interested.
3. He gave me the number to a cousin who was an even bigger investor
4. I ended up selling 3 homes to his cousin this year, and paid him a referal for each one.

5. Local REI meetings If you have a local investor club join it, if you dont then start one. It kind of speaks for itself that this is where many great buyers will be. Just be sure you know a fair bit about what you are doing before talking to very many people about potential deals. The last thing you want to do is burn alot of bridges by showing your new found buyers a bunch of crap.

6. Birddogs for buyers Outside of having bird dogs look for homes for you, you can also have them look for buyers for you. Give them your cards and have them hand them out to people they might meet that are looking to get into real estate investing.

7. Brochure Boxes Just like realtors use brochure boxes you can use them to. If you have a property to move leave a brochure box that talks minimally about the property that it is left at, always be sure to leave out pertitant info like price, sqft, or bed/baths. If you give all the info away then people will never call you about the property. Focus the brochure mainly on other potential deals in the area or say that you are looking for buyers for properties at 50-70%FMV.

8. Out of towner and landlords Many people sell themselves short when they are dialing for dollars. Typically people call or mail out of town owners and other landlords to see if they want to sell. The funny part is if they dont want to sell then there is a chance that they want to buy, so ask them if they arent selling, then would they like to buy some more, or if your mailing then include buying info on your mailer as well.

I gotta go now, the wifes ready for shopping, I will add to the post with some of my other ways but this should be a start. Hopefully the big dogs can come in and fill in the blanks.

Eric Medemar

Whether you believe you can or cant your right.

I cant think of a better time to start investing that when you have your first child. If you get a good buy, the you have the oppurtunity to pay for a good chunk of your childs education.

Have you ever gotten mad or worried about the thousand that you are not making. Those are the thousands that I would worry about. Too many people take, planning and turn it into paralysis. Dont get me wrong education is important, but its far from rocket science to do real estate.

I cant change oil, I cant change breaks, I cant run a press, in fact there are countless things that I cant do but I can make alot of money in real estate. Everybody knows how to do something well, you might as well make that something, making money.

If you focus on all the ways not to make it in real estate then you will have those things happen and more than likely you will miss alot of oppurtunity on the way.

When considering whether to pay off your home first or invest in some other wealth vehicle for retirement you need to pay close attention to your oppurtunity cost. If you home loan is at 6% interest and you are in the 25% tax bracket then essentially you are paying 4.5% interest. If you can make more that 4.5% after taxes with any other wealth building product then dont pay off your house.

Historic returns on the stock market are between 10-11%, real estate returns blow the stock market out of the water in the risk vs return category.

If I were you I would try to properly leverage myself with some real estate that could benefit you at retirement as well as generate some cashflow that you could apply to accelerate your mortgage or another homes mortgage.