All Forum Posts by: Tom Goans

@Chukwudi Motanya,

Would you buy a $50,000 automobile without first physically seeing the auto?

Internet information is not accurate. Every property is unique with its own unique problems and assets. Every target market is unique.

History is not reliable predictor of the future. For example, when a military base closes, just to give one example.

My methods may be too thorough for some, but they have never failed me.

@Ratho R.,

In years gone by, top producing real estate agents walked the neighborhood. They rang doorbells and introduced themselves. They became acquainted with everyone and everyone became acquainted with them. When someone wanted to sell their property, who do you suppose they called? When someone wanted to buy, once again they called the neighborhood expert and friend.

Junk mail is called junk for a reason.

If you are concerned, or seeking greater success, why not try the old proven methods. They may not to sell today ... but you may get a call in the future just by taking the time to work the business.

Just a suggestion for an old real estate investor who is also extremely tired of all that junk mail. No matter what, I would never do business with someone who sent me junk mail and promised me the moon.

@Nick Frankus,

Please reconsider your purchase.

Does it seem alarming to you that the seller would offer such a finance deal?

Make a call to the IRS to learn if loans that do not charge an interest rate are legal and what the IRS will do if this is attempted.

In my opinion, all loans that call for a balloon payment should become immediately illegal. Such financing can set the borrower up for failure.

I would never recommend intentionally accepting a negative cash flow at any point. If the investment is not producing a positive cash flow, it is not an asset. It is a liability.

I would advise against assumptions, especially future financing. There are too many variables and too much time in your illustration.

Please reconsider your purchase. There are many others out there that are far better opportunities just waiting to be discovered.

Importance of Understanding Your Target Market

While many real estate investors and landlords have very optimistic viewpoints, the underlying fundamentals may be weakening. Ignore the possible problems for the target market for your real estate investments may be a fatal mistake.

From an article released today, August 16, 2013:

Real weekly earnings fell a half percent in July alone, according to the Bureau of Labor Statistics, as hourly wages dropped 0.2 percent and the average workweek shrank by 0.3 percent. Wages dropped on an annualized basis as well.

As a real estate investor or landlord, you may want to review your numbers and approach to investing. If you were planning to increase rents, you may want to analyze your target market's income and spending power.

@Michael Smith,

Excellent question and one that everyone should ponder on a weekly, if not daily basis. Thank you for the reminder.

One of my strengths is eating BBQ ... it is Friday and I have visions of BBQ on the mind.

@Dan R.,

Seek Legal Professional Advice

There are many, many laws for either option you must follow.

A Contract for Deed can be very complex and the considerations lengthy. Each state has unique laws. There is no one set of laws or rules that apply nationwide. Three things you need to be aware of are: 1) the redemption period; 2) how to terminate a contract for deed; and 3) the proper construction for the legal agreements to comply with federal and the state laws where the property is located.

Seeking advice from an attorney in the area where the property is located can be a wise and very economical decision considering the alternative. An attorney will assure you are abiding by the federal and state laws. Every state has unique laws. The attorney will also provide the best advice and options for your specific needs with a consideration for your future. The results will be legally drawn up agreements for your use.

Thank you @Dion DePaoli for the reply.

I know of a fellow real estate investor and developer who lost her huge real estate empire to foreclosure. I only occasionally followed the process. About all I have learned is bankruptcy process goes by a new set of rules that do not necessarily make logical sense.

In her case, the Trustee with the permission of the court, order the entire real estate holdings that included hundreds of residential rentals and about a dozen of very large commercial holdings and even her personal home to be sold at auction. The Trustee spread the proceeds to the many creditors - her debt was around $45 Million.

It would appear that just like every other court proceeding, it is next to impossible to predict the outcome or the steps to get to a resolution.

@Chris M.,

I think it is great you are researching to understand your options.

Debt can be similar to a shiny object. It looks so appealing. You must have it.

Yet, the shiny object may present problems, if not today, later on.

There are many ways to invest in real estate. The possibilities are only limited to your mind. Therefore, there are many opinions of the best way to invest in real estate.

Every person is unique with his or her own unique comfort levels and goals. Not every person is a gambler, nor is every person a cowboy.

There is no one set of correct rules, mathematical formulas, or theory. Just as there is no one correct political viewpoint, there is no one correct method for investing in real estate.

- It is up to each individual to understand their own comfort level as it applies to themselves and their family.

-It is up to each individual to set their goals as it relates to the individual, which may include a family and planning for the children’s future.

- It is up to each individual to determine the risks they are willing to take to achieve their goals.

-It is up to each individual to determine the rewards they desire from the risks they are taking and from the work they must do.

@Ben Nahir,

Search for “Party Wall” on the Internet for information of the wall between townhomes.

If there is not a property owners association for the townhome building as a whole, I would not recommend investing in the townhome. Here is why.

- Who is going to maintain the exterior of the building?

-Who is going to maintain the landscape?

-Who is going to make sure there is consistency with the exterior and landscape?

-Who is going to make and pay for roof repairs?

-Who is responsible for the utilities to the buildings?

The list goes on.

If you still plan to acquire the townhome, please have a conversation with an attorney before you sign or commit to anything. The attorney will shed more light on the subject and then can give you legal considerations and options.

Have you checked with the county clerk and recorder office to see if there a Covenants, Conditions, and Restrictions (CCRs) have been recorded? I would also check to see if By-Laws for a property association have been recorded. This lets you know if one exists, but just has not been activated.

If you do not find any record of the existence of the possibility of a property association for the building, the county building department will confirm the developer’s name. Contact the developer to see if a property association is planned. If the develop still owns some of the townhomes, the developer may be delaying making it active until the developer is out of the picture. If this is the case, this too is a big red flag.

My issue is you are rolling the dice by spending and putting so much money at risk before you have legal title to the property.

I am fully aware and understand the risks, yet, this is an additional risk above and beyond common methods of investing in real estate.

Many years ago I purchased tax liens and stopped several years later. The redemption rate was too high for me. It would appear just one redemption could really affect your financial well-being.