Are You Committed To Your Freedom?

freedomFrom Dave Ludena, Real Estate Rockstar…

As I write this, we recently celebrated the 4th of July and had some fun blowing up fireworks.  Just like Memorial Day a couple months back, these are great holidays not only to celebrate our freedom, but also to appreciate and remember all those who have served and are serving to protect our security and freedom in the good ol’ US of A. I personally want to say how much I appreciate that, and to say thanks to all our guys and gals, past and present, who are defending us.

In our country, we enjoy freedom, but freedom is not “free.” And that includes your business.   A lot of people want freedom in their life, to live on their terms… do what they want, when they want, how they want, without making decisions based on time and money. Great on paper, but in real life, this comes with responsibility and a price.

So you want freedom… what price are YOU willing to pay? What kind of personal sacrifices are you willing to make for your own personal freedom? Today, I want to share a couple points regarding success and freedom.

Commit to the process. 

First, you must commit to the process

Buy, Fix & Stay, Part 4 – 7 Tips to Killing Common Landlords Headaches

become a landlord Hey Clever Investors…

In today’s conclusion of our series, Buy, Fix and Stay, I’m going to give you seven tips to prevent landlord headaches that I learned through the School of Hard Knocks. But first, let’s take a recap on the previous lessons so we can pick up exactly where we left off:

So this brings us to now…let’s jump back in…

Tip #1: Always have an attorney create your legal contracts.

We just discussed this in our last lesson...

If you’re managing your own rentals, then you’re going to need to connect with a local real estate attorney and get some custom contracts and forms created that are designed for investors and abide by your local state laws.

It’s my recommendation that if you download some documents off the internet and plan on using them, at least have a local real estate attorney check them out before you use them.

Buy, Fix & Stay (Part 3): Essential Landlord Docs & How I Manage My Rentals

2014-07-15-260Hey guys, Cody here…

One of the most frequent questions you guys ask me is:

Should I manage my own rental properties or should I hire a professional property manager to do it for me?

But first, if you missed the first two parts in our Buy, Fix and Stay series, How to Create Long-term Wealth and Analyzing and Funding Your Investment Property, then you might want to check those out and head back over here.

Property Management: DIY or Outsource?

My suggestion is to outsource the property management work to a trained professional so you can free up your time to focus on finding your next deal. Fixing toilets or dealing with nonpaying tenants does not produce you any money.

Professional managers only charge around 7% to 10% of the monthly rents, plus they typically charge a marketing fee for finding you a qualified tenant, so it’s really worth it. They handle all the marketing, screening, paperwork, and evictions, and even the repairs allowing you to have a stress-free landlording experience.

Landlord Docs: What Paperwork will you Need to Succeed as a Landlord?

If you list your rental on the MLS with the real estate agent or if you hire a professional property management company to find you a tenant, it’s common practice that they’re going to provide and fill out all the necessary paperwork involved in any of your transactions.

When it comes to landlord documents, there are really only four documents that you must become intimately familiar with:

  1. Rental application
  2. Lease agreement
  3. New tenant checklist
  4. Option agreement

If you’re managing your own rentals, then you’re going to need to connect with a local real estate attorney and get some custom contracts and forms created that are designed for investors and abide by your local state laws. It’s my recommendation that if you download some documents off the internet and you plan on using them, at least have a local real estate attorney check them out before you use them.

background checkPart of the application process is doing background and credit checks to prescreen any potential tenants. I use ACSDataSearch.com , ERenter.com or LandlordStation.com and they pretty much all cost around $25 to $30 per application to check their credit reports, criminal records, any previous bankruptcy judgments or evictions filed against any of your potential tenants.

These services pretty much uncover anything that I need to know to make an informed decision.

Always, always, always (have I said always?) run a background check even if you don’t care about the person’s credit.

Also check for proof of job/income and previous rental experience by calling an older landlord. Keep in mind that the most recent landlord might tell you they are great, even when they’re not, to try to get rid of a problem tenant – go back a landlord or 2 if you can.

I work with a lot of homeowners who previously went through foreclosure. They make great tenants, but I still always run a background and credit check on them. Ask them during the interview process if there’s anything that they need to disclose to you before you run the check.

Allow them to come forward and volunteer any information and let them know that communication is the most important part of the tenant-landlord relationship. Now is their time to open up because if they lie to you and you uncover anything during the background check, then they’re definitely not going to get the house.

So my Overall Advice…

Outsource the property management work to a trained professional so you can free up your time to focus on finding your next deal.

outsourceBecome familiar with these 4 documents that your property management company will use:

  • Rental application
  • Lease agreement
  • New tenant checklist
  • Option agreement

When managing your own rentals, go to your local attorney to acquire customized contracts made for investors.

Always perform tenant background checks, including proof of job and income. Ask tenants to volunteer any information you may find.

Okay gang, tis time for me to go. Keep an eye out for part 3 in this series, 7 Tips to Killing Common Landlord Headaches.

I hope I finally got this question covered for ya. Any other questions and comments are welcome below.

Cody Sperber Real Estate InvestorUntil next time…

Keep it Classy,

 

Wanna Be a Successful Rehabber? Follow This Recipe – Part 4

have a smileFrom Craig Fuhr, The Fix & Flip Artiste …

What’s going on my, Superstar Rehabber? By now, if you’ve been keepin’ up with this series, you should be feeling pretty darn good about your ability to take down a rehab project! You’ve learned all the steps…from demolition to paint.

In this post, I’m going to take you through the majority of your trim items leading up to flooring. If you’re still uncertain, after reading post 1, post 2 and post 3 , we’d love to teach you more. Just click the “Need a Mentor?” link at the end of this post – and we’ll be glad to talk to you about our one-on-one, highly personal real estate mentoring program where you can work directly with me and Cody Sperber.

In Part 3 of this awesome series, I left off with Step 8 in the rehab process, which is paint. Your project will really start to take shape at this point, but again – I must advise you, this is the point in your rehab where you really need to make sure all the materials are at the house ready for your contractors to install – and that you really stay on your contractors to work hard to get the project to the finish line. I don’t know why, but this is the stage where contractors seem to slow down – so ride them hard!

Wanna Be a Successful Rehabber? Follow This Recipe – Part 3

rehab housesFrom Craig Fuhr, The Fix & Flip Artiste …

Well hello there my rehabbing friends! Thanks for tuning into the third installment of my tried-and-true rehabbing recipe for success. Remember, just like making a perfect pot of spaghetti sauce, rehabbing a house requires a precise recipe of steps that you’ve gotta follow.

If you’re coming in late to this series – no worries, you can catch up by checking out PART 1 and PART 2. Regardless of whether you’re a new rehabber, or even a grizzled veteran, I know you’ll find many tasty tidbits in part 1 and part 2 of this series so be sure to check those out before diving back in below.

In part 2, we left off with the completion of Windows & Insulation…

The Exciting Part

From here on, your project will really take shape. This is where the house will go from something that looks like a skeleton to something that looks like a home.

You’re essentially at the ½-way mark of the project. But beware…. if you don’t carefully manage your contractors during this second half of the project, getting to the finish line will take three times as long as it took to get to the ½ way mark!

Are you TRYING to FAIL at Real Estate?

2014-06-24-260From Dave Ludena, Real Estate Rockstar…

I love this Yoda quote. For a little green guy, this dude had some pretty deep lessons. I wonder if he was a real estate investor…I could sure use some Jedi mind tricks with some of these sellers I work with.  

The “Try It” Syndrome

The “Try It” syndrome is something that cripples would-be winners out there, regardless of the arena. It practically ensures defeat. Ever “try” to skydive?  Nope… you do it, or you DIE.

There was a cool movie (well, it was cool when I was younger, circa 1992) called the Cutting Edge where two figure skaters were attempting a never-before-executed move. Check out this clip and specifically what the coach says at about the 1:48 mark. Basically, if they only tried this thing and didn’t give it 100% someone was gonna get hurt

ytplayclick here to watch

Why Having a 5-Year-Old Best Friend is Amazing Business Advice

2014-06-17-260From Franklin Cruz, REI Drill Sergeant and Mentor …

How is my best friend 5 years old? Having a best friend that’s 5 years old is the best thing in the world. Having a best friend at all is a great thing. But sometimes as adults, we move on past our friends and we forget to connect with people like we used to…

So our best friends sometimes become our kids. I am married and have two boys, 12 and 5. I love my 12 year old, but he is starting to think that dad is a little uncool. But my 5 year old still wants to be my best friend. I am his world, his light, his protector. I tell him all this and he says: “Cool daddy, I love you, can I get some chocolate milk?”

But there’s more to my 5-year-old best friend: He has been awesome for my real estate investing business. (Of course, I’m certainly not talking about child labor.) What I mean is that we can learn a lot from children that will help us in our businesses. Kids do some amazing things that sometimes as adults we have forgotten about.

Buy, Fix & Stay Part II: Analyzing and Funding Your Investment Property

2014-06-10-260Hey guys, Cody here, and I’d like to officially welcome you to the second phase of my terrific series, “Buy, Fix & Stay,” which emphasizes my business philosophy that when structured the right way, owning rentals can be a fun and profitable way to build solid wealth.

In Part I we looked at different property types and market segments; I wound it up by providing 6 possible acquisition sources.

Now, In Part II, we’ll dig into the details of how to correctly analyze a deal, and then how to fund those deals.

Here we go…

Conventional Financing 

Conventional lending through a bank is the most common form of financing. This is one that usually comes to mind first simply because it’s the one with which we’re all familiar. The main problem is the number of hoops the average investor has to jump through just to get a loan on an investment property.

Check these out:

  • Good credit is at the top of the list, which not a lot of people have – especially after the recent housing collapse
  • You’ll need proof of income and assets for at least one year – possibly two years in a row
  • The property you’re buying has to pass the lender’s sniff test so don’t even try to buy a major fixer-upper because it’ll never qualify
  • You’ll be required to put 10% to 20% down
  • Even if all these prerequisites are met, you can still qualify for a maximum of only 10 loans in your personal name

Hard Money  

That brings us to hard money. Hard money is another form of financing, but it’s typically a short term solution accompanied by high interest rates and high fees. The main benefit to getting hard money loans is that only the value of the property is taken into account to qualify. In other words, your personal credit score is never an issue. It is considered asset-based lending.

The money is received quickly allowing you, the investor, to be able to make a quick purchasing decision. In my opinion, only, only, only (did I stress only?), only use hard money if you have a fast exit strategy. For instance, you’re flipping a house for a quick profit, or if you’re already prequalified for a rate and term refinance from a conventional lender.

Should I Buy a House in a Bad Neighborhood?

Mr. Rogers memeFrom Tom Nardone, Millionaire Mailman …

Buying in the “hood” is something I’m confronted with on a daily basis. We all know that some neighborhoods are better than others. I used to hate buying houses in bad areas.

If you are considering buying a house in a less than desirable neighborhood, consider these 2 things first:

1. Am I buying to sell it and make a quick profit?

2. Am I buying it for ROI and cash flow?

The older and wiser I get, I realize that if I’m going to GET IN - GET OUT - and GET A CHECK, then I don't mind buying in the hood.

Not Mr. Rodgers Neighborhood

Recently, I bought a run-down 3-bedroom house in a bad neighborhood. 

Right before the closing, I went to the house for a final walk through and realized that someone was living in the house. They peeked out of the bed sheet drapes they had hung up over the windows. All the doors were closed and locked.

Get this… I was at the house just 3 days prior, and it was completely vacant.

So, I called the Sheriff’s office and they sent a police car to the house where I was waiting for them, and that officer, knowing the neighborhood, called for a SWAT team back up.

Here’s How You Can Create Your Own Mortgage!

buy a homeIf you had the opportunity to create a mortgage on YOUR terms, would you know what all your options are?

Few investors and homeowners even understand what the heck a Subject 2 or a Term Deal even is. And what’s the difference between a wholesale and structure deal? And how do you know which one works for you?

Have no fear investors… I’ve made this awesome video to help answer those and other questions. Check it out and then keep on reading…

 

A Case Study in Why Certain Properties are Better than Others

So check this out. A student of ours sent me a question about a deal that is READY TO GO, but he needs some help with it. He wanted to know what to do next. Here’s the deal…

The owner of the property lives in South Dakota and the property is in Greensboro, North Carolina. It’s a single family residence. The owner wants nothing to do with the property anymore and likes the Subject 2 option.

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