Mentors are for Millionaire Minds

When I first started in real estate, I spent over $250,000 flying all around the world attending boot camp after boot camp, learning all the different ways I could get involved in creatively buying, selling and holding real estate.  It seemed like it was always the same group of people flying around the world with me and taking the same training.  The only difference I noticed was that many of the people who had attended these trainings had never even made an offer on a property.  They never used the knowledge that they received and just kept on going to more and more seminars.  And as we all do, we exchanged business cards with individuals we met at these meetings.  At that time it was my husband, step-son and I attending all of these trainings.  When I got home from many of the meetings, I would get telephone calls from individuals who still didn’t understand the process of the training they received.

What I learned from all of telephone calls and working with a husband and step-son, was that everyone learned a different way.  Some people could pick up a book or listen to a CD and just do it, and let the chips fall where they may.  Other individuals were visual learners and if they didn’t go to the boot camps and physically see the teacher teach, they were just frozen.  A 3rd group of individuals had to totally understand everything from the beginning to the very end, before they would even take action.  Of course, there are also the social butterflies in the group that would do anything, but without having a teacher telling them to do it, they just froze up.  Bottom line, everyone has a different personality and you can always take the DISC test to find out what type of person you are, which is especially helpful when you are working with a spouse, family member or other business partner.

My personality is a “D”….determined, demanding at times, risk taker and able to pick up a book or listen to a CD and immediately take action.  Now my husband and step-son were a “C” personality that needed to know how everything worked from the very beginning all the way to the end.  I was working as a legal secretary for 18 years doing 1,000’s of closings which included all the paperwork, so I already knew much of the documentation.  However, when my husband and I started, it was his idea that we do this together and he was working at Ford Motor Company and we had a two small children and my step-son who was 18 years old.  The first course was Carlton Sheets.  When we both tried to sit down and listen to the cassettes and read the book, there was always, and I mean always, a disruption or simply not enough time.  So, the Course just sat after we tried to work on it together as a team.  I was so mad that we spent the money on this “get rich” book and it was his idea and he just wouldn’t take the time to participate.  One day, I got a call from Carlton Sheets’ staff who asked me how we were coming along with the Book and Tapes and said that they were offering a Mentor Program that would help us work together and change our lives.  So … I decided without the consent of my husband, that I would pay for this service because I thought if I had someone else telling him to read the book and listen to the tapes, then for sure we would start doing real estate.  The cost was thousands and what I thought was going to get my husband going, instead got me going.  Buckle up!  It was then that I learned about the different personalities.  It didn’t make a difference to my husband if we had a Mentor that we talked to once a week or not, he still wasn’t going to read the book or listen to the tapes because he was a VISUAL learner and he needed to be taught in a boot camp atmosphere.

Honestly, I can say some very valuable information I got from the Mentor was just that I needed to take the time to read, listen and then TAKE ACTION, no matter what.  I learned from the Mentor that a Purchase Agreement had many “out” clauses so if I offered too much, I could always back out. Now the next problem came along, where do I get the money to buy the houses?  We became members of six Local Real Estate Investment Clubs that really helped to keep us motivated.  We would listen to the people who were doing the deals and my husband would say “they don’t look as bright as us, why can’t we do it?”  Well, I recognized why we couldn’t work well together because 1) he was scared, 2) he would never talk to sellers unless we were one on one and 3) he could talk the talk but not really walk the walk.  I truly believed that he had what it took, but he refused to learn the paperwork, which if he would have, he would have been great at it.

Our next problem was where do you find the money???  We started buying, fixing, retailing and holding.  I heard many of the speakers say “just flap your lips and the money would come.”  Well, believe it or not, I couldn’t find the money until I went to the Real Estate Investment Clubs and met Private/Hard Money Lenders.  Having great credit, I thought why don’t I just use my credit to get started even though many of the speakers said that you need to be creative.  This is one tip that will hit your credit score but got me $75,000 to help us to get going.  I started collecting all those credit card applications that said I was approved for $5,000, $10,000 etc. and then I pulled out my telephone book.  I called every bank and credit union in the phone book and called on every credit card application.  I did all of this specifically within a 24 hour period.  Whatever money or interest rate they said they would give me, I took it.  By the end of the day I had obtained $75,000 which was about our annual income at that time.  They asked me what was my income for that year and since we were starting real estate I knew we would make at least double what our income was at that time, so that was my income.  Now you might think I was crazy, at least my husband did, but it allowed us to buy houses cash, fix them up, sell them and immediately pay off the credit cards or lines of credit and profit and by the end of the year, my income was higher than I thought!  I ended up with 40 rentals and lots of rehab houses.

The moral of this story is that having my Mentor was key!  I can give them credit for my success.  I was so stubborn and refused to do the real estate on my own, as this was initially my ex-husband’s idea and he said we were going to do it “together” as a team!  But he was frozen in place and not doing any of the work.  My mentor encouraged me and showed me how to keep moving forward on my own to create a successful real estate empire, which I have done.  I have found that my Mentors have always given me back a thousand times worth my investment.  If you are struggling on anything in real estate, I highly recommend a Mentor, and in order to have a successful relationship with your Mentor, you must take action in your business and not be afraid.  The cost of a Mentor is pennies compared to the results of either succeeding or failing in real estate and/or in your relationship with your spouse/business partner.  Learn from others’ mistakes, it’s a small price for you to pay, considering the huge price they have paid to forge through the learning curves that you won’t have to experience.  You do not have to recreate the wheel!

I hope you enjoyed this article and for many husband and wife teams out there, I recommend preparing a “duties” chart and each person pick what they want to do in real estate and just accept it and not get mad.  Women can change and Men can change, but only if they choose to and choose to for their own reasons, not because their spouse wants them to change.  I recommend that you accept each other with each of your own unique qualities and then maximize the benefits accordingly.

Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to move through 2017 with high success and help you bring your Real Estate Dreams to Life this year!  NO MORE DELAYS!

Kimberlee Frank

www.ForeclosuresGoneWild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

www.SellFastRealty.com

Like me on www.facebook.com/foreclosuresgonewild

Like me on www.facebook.com/sellfastrealty

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Becoming a Successful Real Estate Investor

I am writing this article because I mentor so many people who desire to become successful in real estate; however, their life gets in the way of educating themselves. Making offers on the Multiple Listing Service (MLS) is a great way to find Sellers, yet, when you submit an offer to the Seller, the Realtor really doesn’t know the answers to the following questions. Is there a mortgage on the property? Are the Sellers in foreclosure (unless it is a short sale)? Is it a probate matter and how many heirs are in the estate? What permits have been pulled for the property and what dates were items like the roof or A/C installed (this information is sometimes provided in a Sellers Disclosure)?

After talking with a Seller and/or finding a Vacant Home, the research you do is a vital part of your business success. I provide students with over 43 ways to find motivated sellers without using the MLS. Knowing in-depth information about the Seller’s situation, ownership and mortgage balance allows me to negotiate and close more deals than just listening to what a Seller has told me. In fact, Sellers normally tell you what they want and not what they NEED. In order to make a deal work for all parties, we need to find out what they NEED, not what they want, then see how/if we can create a win-win situation.

There are many moving parts to the puzzle. I am recommending saving the following websites as favorites in your computer to be successful in your county, city and state. This allows you easy access to public records that may or may not be free, but are a necessity in order to negotiate and close transactions. Once you find your county, city and state websites, you need to spend at least 1 hour exploring it. Click on all links and call the helpline for each website to understand step by step how to research property. If you don’t understand over the telephone how they are telling you to search, they all have computers in their office that are free to the public. Go down to the county, city or state office and ask them to show you step by step and see if they have handwritten instructions. If not, then make sure you write it down step by step so you have it for future reference.

City/County Treasurer along with Property Appraiser Website – I work in multiple states and have found that each State, County and City are different. What you really need to find out is the following: Information on the taxes, square footage on the house, and permits pulled on the property. Let’s start with the Treasurer’s Office. Google search the name of your City or County Treasurer and look for Tax Information. Enter the Seller’s address and what I am looking for here is to see if the mailing address for the tax bill is different than the home address, if the property is being claimed as a homestead or is it a rental, and if the taxes are paid and the amounts. Some Treasurer’s sites will provide you information about the property and land which includes square footage, permits, purchase amount, dates and comparables.

County Website For Recording Deeds – Google search the name of your county register of deeds and look for official record search. This site is where they record all of the deeds, mortgages, and probate documents. Some websites are known by register of deeds and others are known as county clerk’s office. This allows you to search by the Seller’s name. What I have learned from many of these websites is that the less information you enter in the better. For instance, if your Seller is Jane L. Doe, I would only search by Jane Doe and I would read the instructions as some use last name first and some require commas in between last and first name. This also allows you to pull up other documents that may have been recorded against the property but did not include the Seller’s middle initial. I would sort everything chronologically by clicking on the ‘date’ column header and see if it will sort with the most current year at the top. You will also need to know your legal description of the property in question as this is how the county files official documents based on legal descriptions and not addresses. This information is provided to you by two different websites: Your County/City Treasurer or your Property Appraiser Website.

County Website For Civil and Probate –Google search the name of your county civil court or your county probate court and look for official record search. Let’s start first with the Civil Court. This site is where they record all of the civil actions against the seller such as a foreclosure action, any legal actions (divorce, credit card debts, etc.) The Probate Court may allow you to see that there is a Probate action filed and may name the personal representative; however, since this information is private, you would have to personally go to the court to view the records as to how many heirs and what assets and debts are included in the probate. Both sites allow you to search by the Seller’s name. Again, less is best when searching for a Seller (read above instructions). Sort by date, if possible, and work your way through the information. Civil actions may say ‘closed,’ but you should still open them to view the outcome of each record.

One of the most helpful sites that I like to use is www.RealtyTrac.com which has a program, costing less than $200/year, where I am able to look up hundreds of properties. I can see if they are in foreclosure, how many mortgages are on the property, date of purchase and amount, name and address of owner, comparables and lots more. I do have to say that some of their information is not always current, so you will have to look closely at dates, as with most other programs out there. If you are just looking for foreclosures, I would recommend finding a local list provider for pre-foreclosures, as RealtyTrac is more national. Remember, judicial and non-judicial foreclosure actions are listed differently.

I would recommend that even if you don’t have a property to research, use your own address or your neighbor’s address to explore and learn these websites. Print and keep this article near your computer for future reference. Remember, your success is in your hands, as I have provided you with the tools…now take action and follow through with my instructions!

Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to kick off 2017 with high success and help you bring your Real Estate Dreams to Life!

 

Kimberlee Frank

www.ForeclosuresGoneWild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

www.SellFastRealty.com

Like me on www.facebook.com/foreclosuresgonewild

Like me on www.facebook.com/sellfastrealty

 

 

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Knowing the After Repaired Value on Your Flip House

As an Investor, having a Realtor to work with is important in your business if you are buying or selling houses on the Multiple Listing Services. Many new Investors rely on their Realtor to send them “good deals” to buy, hold, fix and/or flip. However, a Realtor does not know what good deal means to an Investor. A good deal for us could be the cash flow that you receive on a rental property or it could be the profit that you would receive from reselling the home. As Investors, you are taught a MAO “Maximum Allowable Offer” Formula in which you use to make offers on homes for buying, fixing and reselling. The formula varies based on your own situation. The average formula used for Investors who have to get hard money to purchase the home would be: ARV (After repaired Value) x 65% – Repairs = MAO. Let me give you an example: $100,000 (ARV) x 65% = $65,000 – $10,000 Repairs = $55,000 Maximum Allowable Offer. This formula would then leave you with $35,000 for holding costs, cost of money, closing costs of purchase and resale, and then profit. Your MAO formula would be different if you are purchasing the home as a Landlord and/or you have your own money to fund the deal. You may be willing to pay between 70-75% of the After Repaired Value for the home – Repairs = Your MAO.

Determining the After Repaired Value on a property is very important and you should use comparables no more than .5 miles away and no more than 6 months old. I like to stay in the subdivision where your property is, as each subdivision has its own amenities such as gates, pools, and homeowner associations which will make a difference on your comparables. When making an offer on a home, you should always drive AT LEAST 2 streets in front of the house and 2 streets behind the house. Always pay attention if the subdivisions change drastically in the price and the subdivision amenities. I also like to ask for active, active with contracts and pending properties in that area so you will know what comparables are going to close that you are able to use for comparables. Obviously, you can’t use active houses or pending houses until they sell, but knowing that the same square footage house as yours in the same neighborhood is selling for $20,000 more is very important.

Many Realtors are able to set you up with a website for your comparables so that you can take the time to look at each and every one of them. Key factors to look for are the date they sold, what type of sale it was, and all the updates that were completed. I have found that often Investors will either go too high or too low on determining their After Repaired Value. When I first started out as an Investor, I hired an Appraiser to come out and appraise the house in its present condition and also in an after-repaired condition, too. I learned so much from the Appraiser as to what would increase the value on the property and what would not; but this was done after the home passed my home inspection and I had used sold comparables to determine what I thought would be a fair after repaired value. You could also ask your Realtor to provide you with a comparative market analysis (CMA) by either providing them the address and pictures of the house, or taking them to the house and providing them with a list of upgrades. Also, ask them what they what price they would list the house. However, what I did find was that, if you were using the same Realtor to buy the house and then to re-list to sell, sometimes their values would be higher than what you could truly get.

I would suggest that you have a minimum of 6 solid comparables that you can use to determine the after repaired value on your property. The comparables should have almost the same amenities such as: garage, carport, pool, basement, Florida room, same number of bedrooms/bathrooms, no more than 100 square feet difference than your house, and should be all one story or all two stories, if possible. Why six comparables? That is because if you are selling your home to an FHA Buyer, you will need two appraisals when selling after 90 days from your purchase date, as they require that the Seller (You/Investor) has owned the home for a period of 90 days. In addition, the Purchase Agreement cannot be signed between the Seller (You) and your new Buyer until the 91st day that the Seller/Investor has owned the property which is called “seasoning.” You can sell to a cash, conventional or VA buyer; however, before signing a contract with any Buyer, always call the mortgage company and ask if there is a “seasoning” requirement for the Seller as you are selling a flip house. I also like to have sold comparables that are no more than 6 months old so that is why I will look at the active, active with contract and pending properties, too.

Remember, you will need to purchase the property, rehab it, and if you can’t sell it to cash, conventional or VA Buyer, then you will need to wait 91 days to sell to an FHA Buyer. This would mean that if you are counting on your comparables which are already 6 months old from the date of purchase, they are now 9 months old and the appraiser may not use them due to the fact that our market is always changing. Remember though, an appraisal is just an opinion and if you have provide the appraiser with comparables close to all the amenities of your house and a list of all the updates, you should have no problems with the house appraising especially in a Sellers’ market.

I suggest you learn your market and stick to investing in a few select neighborhoods that you really know the market value of houses. I am not saying don’t make offers out of your area, but finding your niche neighborhoods will make you tons of money.

Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to kick off 2017 with high success and bring your Real Estate Dreams to Life!

 

Kimberlee Frank

www.ForeclosuresGoneWild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

www.SellFastRealty.com

Like me on www.facebook.com/foreclosuresgonewild

Like me on www.facebook.com/sellfastrealty

 

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

 Page 3 of 26 « 1  2  3  4  5 » ...  Last »