This will be my personal journal to document my failures and successes during my real estate experiences in Arizona. All stories, thoughts, and successes will be documented..
Thursday, January 13, 2005
Join your local Real Estate CLub!!!
Guys and Gals, join your real estate club if you want to prosper in Real estate investing
I'm fortunate to have signed up with one the top real estate clubs in the nation! http://www.azreia.org
It just happens that Alan who runs this club kicks ass and has great speakers. The topic of the night was tax liens. The benefits of the club is simple. Networking! There was about 40 people and you never know who you'll meet that will be able to help you suceed in your business. Actually, we filled out a postcard that described who we are , what we're about, and what we like to invest in, and what we're looking for. Then we meet with someone that we don't know and introduce ourselves. This is really powerful. I'm a intravert by nature so this exercise reminds me that I do need to work harder to get my name out there (note: put in personal goals)!
Example: That night the sellers (investors) had time to present their properties to the audience. This gal had a duplex w/ following requirements.
Rent income: $450 (1 bed) $550 (bed)
Well, I got on the horn to get more information. Location is ok, and not surprisingly she bought it to fix it up and sell. But I was surprised with her answer to this question. "Rachael, this seems like a wonderful property, why would you ever consider selling it? Rachael: "Because I'm in way over my head!"
Humm.. this seems interesting ..After one more question , "Rachael are you looking for a quick sale or are you looking to get top dollar? She opened up and told me the story.
She bought: 105k
Money to fixup: 15k
Sell for: 125k (to make a little profit)
Jeezz.. With just a few questions and I was able to get her down from 139k to 125k!!
I use a rule of thumb to estimate a value of a property and to be able to cashflow. That number was 115k maximum. So we're not too far off. If the property is indeed worth 139, than buying it at 115 would be a 82 LTV. Not too bad.. but she would have to lose 5k w/ no profit.
I told her that her price just didn't fit my cash buy criteria, however, I was going to investigate a better investor loan for rentals (contact I got from that club meeting) that I may be able to get the numbers better.
So I didn't ask her to go lower yet, but if this is going to work for me, she will have to! Stay tuned!!
Bginvestor, 10:37 AM
|| (0) comments
Tuesday, January 11, 2005
Finding motivated sellers via foreclosing leads..
Arizona is both mortgage and deed of trust state, but mostly foreclosers goes through a trustee sale. Its quick and fast. Basically, when the mortage company files a "notice of sale", the seller has 90 days before the trustee sale occurs.
One of my favorite strategies is to find pre-forecloser sellers and try to make a deal before the trustee sale. Honestly, a lot of times its a win/win situation. Some sellers have either given up or have no way of keeping the property and I we can come in and save their credit while giving them some move out money. I can buy the house with built in equity.
Is this easy?? No way.. Its a lot of work. In addition, the sellers have been usually beaten down so hard by the time I get to them that its hard to get them focused on solving their problems..
I've found success in this niche by getting the leads before most people. The last house I bought I was getting business cards months after buying it!! I've had no luck with buying foreclosure leads. Usually they are old and useless by the time you get to them.
Once you get the lead you can CALL, WRITE, and DOOR KNOCK. All takes effort. the best results have been door knocking.
Calling is second best in my opinion. I created a new script that is working very well for me. Its important to me to have a script that I can memorize and use over and over...
"Mr. Seller, my name is Brian. and I was at the court house the other day and realized that you have a pending problem with your property. (Letting them know that understand their situation) I specialize in helping folks like you, solve their problems (letting them know what I do), I was wondering, did you know that the banks have filed a "Notice of Sale" "
Since I get the notice the same week that its published, I usually know before they do. They say, "No! what is that?"
I go into explaining what it is and the consquence of what will happen if nothing is done. This is the utlimate ice breaker and allows me to ask if they are interested in talking about solutions.
Another question you want to ask is, " Seller, are you trying to save the house or do you want to been done with it?
After this critical question, you will know if you can work a deal...
I called a seller last week and the conversation flowed very well. He said he is currently talking to the lender for a forbearance agreement (payment plan to get him caught up). Obviously he's interested in saving the house. And thats fine, I don't want to push him. He found an option and wanted to work through it. UPDATE: I called him last night and he told me that he indeed found a solution with the bank. I told him to make sure to get it in writing and if the situation changes to call me. He told me he had my number and will call me if things change.
I won't be surprised if he calls me back in a month..
Bginvestor, 1:50 PM
|| (0) comments
Friday, January 07, 2005
Why REI will be a great in 2005...
I'm just so damn excited about investing this year.. The opportunities are all over the place, its just a matter of finding them! (mental note: formulate marketing strategy for 2005)
Sure there's talk about the real estate market cooling off some aeas, but you know what? Southern Arizona appears to be going strong... CNN Money projected an 8-9 % appreciation for this year which is an increase of last years.
You might be thinking, well, 8-9 percent is not that great, but you know what, our average price of home is approx. 175k, not like California thats 300-500k. I mean a starter home for a half of mil, give me a break!!
Arizona just may turn into a California.. If so, I want to own at least 10-15 properties.
And the great part of buying right is just that, you can be in a cool or hot market and still make money. Just like purchasing call and put options for stocks, you can make money year around.
There's absolutely no signs of the market slowing down in the prickly pear state. I'm tired of realtors telling me that they just sold their listing to Californians on the same day! I didn't realize that they were flying Californian investors for free to have a hay day on Arizona properties.. Its true..
I'll post my investing philosophy on why real estate IS the investment choice right now.. This thread is to just get me excited because I can't wait to talk to motivated sellers and help them out of their situation and make a little profit while I'm doing it.
The government wants people to own real estate. Do you know that you can sell your house and pay no taxes (if you live in it 2 0f the 5 years)? Holly cow!
I have a friend that sold his house (Cal.) which he owned for 2 years and is now temporarily retired traveling around the world for over a year now. You can do some stuff when you have 250k in your pocket!
Bginvestor, 11:54 AM
|| (10) comments
During my lunch hours, I usually cruise the Real Estate Investing (websites) to pick up on some nuggets of REI knowledge that I don't know about. Well, today, I stumbled on Joe Kelley's blog (reinvestor.blogspot.com) which I found to be fascinating.. What a great way to express ideas, write down thoughts, document successes or failures, or just any in general in regards to investing!
I'm sold.. So, here I am already signed up and starting my first post. I hope this will give me the motivation to keep me honest on my personal goals, since everybody knows (or should know) that writing down your goals is the FIRST step in achieving them..
I'll be publishing my business plans, buying strategies, and documenting my experiences with motivated sellers. Should be interesting!!
Cheers to REI!!
Bginvestor, 11:09 AM
|| (0) comments