The life and times of an Arizona Investor

mind2money.com LINK TO MY NEW SITE!

2006-08-16T18:43:00.000-07:00

All,

I'm officially leaving blogger forever! I've gone over to a hosting site where I am launching "mind2money.com". I decided to take a different turn in blogging and will be providing more of an education site.

www.mind2money.com

I will be providing :

REI news feeds
Education articles
Free downloads
REI products to purchase
Case studies
General postings

I'm excited, please stop by and excuse some of the bugs until I get things rollin!

New Comments about Zillow.com

2006-08-05T21:18:00.000-07:00

If you've been in real estate for awhile, I'm sure you've heard of www.zillow.com.

I critically analyzed this site again for several hours and am happy to report that www.Zillow.com is getting much better in predicting real estate comps.

Early this year, I checked this site and it was apparent that their algorithms were not accurate in Pima county (Tucson). The root cause for their errors may have been coming from the projection of values based on super high appreciation rates. Last year, Tucson appreciated over 20%.

The values have come down approximately 40% in the last 6 months and am very surprised that values are spot on for all of my properties. Of course real estate did not come down 40% , but its probably zillow's best way to correct the graphs. For some properties, I needed to update the proper square footage because the values in the assessor's records are not accurate.

This site is good because you can find comps that sold only a month ago. Thats fabulous, last year, I paid www.dataquick.com several dollars for one search for the same service.

Good investing,

Bginvestor

Arizona markets slowing down!

2006-07-29T21:24:00.000-07:00

Based on CNN's latest money article, my market in Tucson is 25% over priced. Although the company did not post their algorithms in calculating these values, they may be right on the money. I believe it.

Its anyone's guess how the markets will equalize, but it should be a heads up for investors or anyone pursuing real estate. If I was in a very high price market like L.A. , I would get on the side lines quicker than you can say "watchout its a bubble".

Although this is the first time I will going through a market correction (I am still on the young side), I have been waiting for this and trying to plan my next moves. Its pretty obvious that houses cannot sustain such appreciation year after year.

As far as I'm concerned, you can make money in real estate any time, just like the stock market. I feel pre-foreclosures will still be a great avenue for picking up properties. Last year was tough, no one wanted to make deals when they were confident they could sell their house by themselves in two days. However, the seller's confidence is changing. The word is out, and it really is harder to sell houses. Rental rates are going up, however, interest rates are going higher so cash flow is still a challenge.

For my investor friends, its just a pain because it means less profit. They are smart, and when they sell a house, they sell it in 30 days, which means its lower price than anyone on the block. Thats what you have do.

It is interesting that real estate is not that liquid, if I did some deals that I almost closed on this year, I would have not been in great shape. Boy, am I glad that I did not lose focus on my buy criteria, "Make money when you buy".

The near future will be interesting. I will be focusing on foreclosures. I have been getting pretty good at marketing, so I am going to stick with what I'm good at. Besides, I get better deals than any of my friends, because I buy from motivated sellers.

I'm going to stay on the side lines until fall time frame.

Vacancy of only two days..

2006-07-22T19:30:00.000-07:00

I have heard a lot of horror stories of trusting property managers with your rental properties. However, they are a necessary evil, and when I start accumulating more properties there will be a time when I will transfer everything to them.

But for now, I am happy doing it myself. It is pain to get a new tenant , and I realize why a min one year leases are so desirable. I have one tenant moving out on the 31st, and today, I have a new lease with a year lease starting August 2nd! Only a vacancy of two days is great!

I must of got at least 30 calls for this unit. Here's a secret. Use Craigslist.com Its free and its very, very effective. I've filled three tenants using this alone. Its amazing, its more effective than paying a $75 a week ad in the local paper.

Good investing.

Bginvestor

Taking a breather and lovin it..

2006-07-15T19:14:00.000-07:00

I have to be honest, I am completely enjoying my break from real estate. I miss it though and think about it often (don't tell my wife), but its been good to spend more time w/ my son and working on my personal relationships.

There just doesn't seem to be enough time to do everything.. I don't think I'm a person that is over zealous, I just want a happy life, be able to do outdoor activities everyother weekend, and be a millionaire. That shouldn't be so difficult, right?

I now realize that my successful friends in real estate are sacrificing a lot to become weathly. It occurred to me that about half don't have any kids, which allows them to work harder. I do have one friend that has three kids, and he must not be spending any time with them based on the time he puts in.

In August, I plan to re-evaluate my finances to give me a update in my performance (everyone should do this). I have an excel spread sheet that does the following: 1) breaks down out salaries, and calculates pie charts on how much goes to 401k, taxes, insurances, take home, etc... This is very useful. 2) Income and expense sheet. This is very simple and I used the exact format as one of Kiyosaki's books. From there, I have a few charts that tracks net worth per year, and others.

I have other friends that are getting the burnout big time. They have followed in my foot steps and have rehab most of their properties. The last project has kicked their butts! If you remember, I birddogged a house next to my tri-plex. Its a 1930's house and they have owned it since October. They bought it for 75k and plan to sell it for around 250k-280k? They added two new rooms w/ a new bath, wood floors, succo on the outside, a/c, the whole works! She was the general contractor and they have done a lot of work themselves. They are getting the classic burnout from working with contractors.

We were talking that we need to go to lunch and brain storm ideas on working less and making more!

Bginvestor

Pics of latest acquisition.

2006-06-24T12:05:00.001-07:00

Hi Everyone,

Its been a long time since I've posted! I've been enjoying retirement from REI for over a month now. I plan to take a break for another 5 months. This is in part to my wife's request to spend more time w/ family. Kinda of hard to argue that one, you know? Realistically, this hurts my financial goals , but I will try to make up for it w/ more excellent acquisitions later this year.

I plan to continue the blog, however, I may stop posting for several months. I'm not sure. I may get bored and want to post my ideas and document latest observations in the markets.

Anyway, I am posting the townhouse that I completed in early May. Check it out, I posted a before pic, I can't believe I forgot to take "after" pics. Overall, this was an awesome project, I bought subto from a motivated seller for 85k. The property is curently worth 130k. I spent about 6k in rehab. It looks excellent and will be a strong rental.

I just closed on a re-fi last week. It was pretty cool to re-fi after a month and half of ownership. My broker is awesome! I got a re-fi for 92k, which essentially made this a NO MONEY DOWN DEAL!

Cash flow is negative $75 a month. This ok with me since I have plenty of equity and will be benefiting from taxes, mortgage pay downs, future appreciation, and rental increases in the future.

If I could do 5 of these every year, would be in great shape in no time!

Take care,

Bginvestor

..

2006-06-24T12:05:00.000-07:00

Summer heat makes me lazy..

2006-05-24T13:04:00.000-07:00

We hit 100 degree weather recently and I 'm just not used to it!

I got the townhouse completed just in time, I have a signed lease, and everything is going well. I've decided to re-finance because loan servicing is a pain in the a$$. Besides, I've decided that this is a long term rental anyway, so I need fixed financing.

I want to post pics soon.

Status on latest purchase..

2006-05-04T12:03:00.000-07:00

I had a great start in this renovation project, but I have not had good luck in the last couple of weeks. I had a tenant change her mind at the last minute, and I had another one qualified, but his boss now wants him to move to Phoenix. So, back to square one in finding a tenant.

My tiler has streched himself too thin with too many jobs, so its taken him over two weeks to complete my floor! He still needs to tile the vanities and it will be be done. Actually, its not a big deal because I don't have anyone making the rent payment anyway. My goal was not to make the May mortgage payment.

Another road block was not finding the correct help to complete the rehab. I didn't want to spend my time on this project, however, I have found myself working on this house to do it right. I have spent probably 4-5 solid days working on the place with another day at home depot or Lowes. I need another 2 days to complete.

So, is a week's work worth over 30k? Absolutely!

The drama starts...

2006-04-24T20:37:00.000-07:00

It was just a matter of time! The next door neighbor two house down got his bike cover stolen yesterday and his next door neighbor said he was 100% sure it was one of the Hispanics that was working in my house! The cops showed up (when I was not around) at my house and question one of my guys. Turns out that he had video and cops checked it out. They decided it was not him..

I had a meeting at 12:00 AM to sign the lease and they gave me a call back saying that the girlfriend got cold feet and does want it anymore. Probably because she got a good look at my neighbor, he looks like white trailer trash. Oh well, back to advertising!

I have someone from back east interested in the townhouse.

Good investing,

Bginvestor

Too good to be true..

2006-04-22T19:23:00.000-07:00

My latest project is going so smooth, its scarying me!

I bought this property almost two weeks ago and I am signing up a lease for May 1st tomorrow. I will not need to pay a mortgage payment.

In addition, the rehab is going great. Interior painting done, kitchen cabinets will be completed tomorrow and my tile guy has 1/2 complete in the living room. I should have the bulk completed by the end of the week.

So, life is good! I have some good guys working for me from 8-15 hour. They are doing a great job.

Good investing,

Bginvestor

Offer #6 - Closed!

2006-04-13T19:55:00.000-07:00

I am very excited, I just closed on another property this week!

Here's my story..

I got a call from a gal in foreclosure that said she wanted to sell her house fast. After talking with her, I automatically knew that she was very " motivated". The property was a townhouse in the Northwest which is in my farm area. At the time, I didn't know when her trustee sales date was, but I automatically set up a meeting with her. When I got there, it was only the wife and she showed me around the place. It was a fixer, but it appeared to only need carpet and paint. There was a few cosmetics like a broken end cap of the counter, and plastic pieces missing from the swinging doors, etc It looked terrible, but I knew it would clean up nicely.

I immediately liked the floorplan, it was a 2/1 with one bedroom as a loft. What is interesting is the bathroom is bigger than in my 2000 sqft house! Its huge.

I asked for paper work and she could only bring up a few old statements and the trustee notice. My jaw dropped when I saw that the trustee sale was in only a week!

I already did due diligence so I made her my offer. She basically said "well, at least I'll get something for it and save my credit."

The only way to do this one is private money or buying it subto. Option #1 would be subto , but my private lender was primed to do the deal. I signed up for 85k. What was interesting, was there was a comps at 85k, 100k, 120, and 123k. I couldn't figure out why there was such a big spread. I concluded that investors must of purchased the lower ones. This helped me, because I could show her some real numbers. Since I didn't know exactly what the arrears are, I told her that her profit would be 85k less all liens and arrears.

We signed up and I went to work. I hired a title company to help out, actually, she did a wrap on the existing mortage. Its the title companys way of doing a subto. I setup loan servicing so I will pay the title company and they will pay the bank directly. Its 5% fixed interest for another year or so.

I spent $400 dollars to do an appraisal. After doing more research, I decided to put this one in my long term portfolio so I decided to make it a rental. I wanted to raise some cash before buying a rental, but this one will work. I did my own home inspection.

So, exit strategy is to fix up (5k) and do a re-fi. The tricky part is that the title needs to be seasoned for a certain time before qualifying for a re-fi. My broker said that I can do this in about 30 days. This could be a no money down deal!

Fortunately, we were able to get the payment to bank the day before the sale and closed! It took about 6 days and everything had to be perfect.

The deal is awesome because I 'm finding out the comps are 10k more than I thought. After cleaning it up, this could sell for about 130k! This is how crazy some sellers can get. There was a townhouse across the street from this one that had a sold sign on it. I called it the other day and the agent said that it was listed for 135k and sold in about a week! I don't know the sale amount , but you know its going to be high! How could these guys not do their research? I just bought a subto for 70 LTV.

The sellers are moving out tomorrow and got a new apartment. I had to give them some advice on getting qualified. Turns out the foreclosure was already on their record.

I'm going to get my guys to fix the place up starting this weekend.

Good investing,

Bginvestor

Doom and gloom?

2006-04-11T19:45:00.000-07:00

One of the bloggers posted, "What are your feelings with all the doom and gloom talk about the RE bubble bursting?I think there will always be a good market to move money to, so I'm not as worried as many other are. Plus I didn't do any ARM's when things were crazy!"

The real estate market is always changing, and we are starting to see the end of one cycle and a start of another. Since I live in Arizona, I have nothing to worry about right now. Neither should you, the markets are driven by GROWTH rates and jobs, and we are strong right now in Arizona. This means more years of appreciation. The best advice I have for beginner investors is to study the markets to gain confidence in whats going on. Once you find out, you can use leverage.

I don't see gloom and doom in Arizona. However, if I owned a houses in California , I would be nervous if I don't have sufficient equity.

Yes, foreclosures are going to rise and ARMs will cause a lot of people trouble in the near future, but its going to bring opportunities for investors.

Real Estate is by far the best investing method for me. For example, I closed on a property today. I am bringing it out of foreclosure , I needed to spend 9k. I got an appraisal and I already have 31k in equity (without repairs)! I bought it 70 LTV on a subto. Absolutely fabulous!

Good investing,

Bginvestor

Under contract again!

2006-04-06T21:30:00.000-07:00

I signed up a foreclosure on Wednesday. I am buying it subto and the trustee sale is next Thursday! This one is interesting. It looks like we'll get the "loan curement amount" the day before the trustee sale. This one is too close. I'm crossing my fingers. By next week, I'll have $1000 dollars (title insurance/appraisal) into the deal so I hope it doesn't fall through. We need to pay the arrears so the foreclosure will stop.

I'm setting it up so I can re-fi in just a few months. If it works, I won't have to put any money down for the loan.

Wish me luck. I'll provide more details when I have some time this weekend.

Good investing,

Bginvestor

Increased marketing! Yeah!

2006-03-20T14:43:00.000-08:00

Ok, its about freakin time. I will be increasing my marketing starting this week. First, I have subscribed for 6 months to a local paper using the following ad. The ad actually is bolded and has stars, but I couldn't get the formatting to work in html.

I like this ad. It does a good job screening folks, it just doesn't say, we buy houses. We buy houses is your behind in payments, etc.. I look forward to track results on this one.

I also selected a smaller paper for this ad. The paper is equilvalent to the "thifty nickel". This smaller paper covers a lot of area and is better bang for the buck.

*WE BUY HOUSES*
Are you making payments
on a home you can't afford
or don't want?
Is your house in need of repairs,
in foreclosure, behind on
payments or vacant?
We buy houses from
people just like you!
Call 272-8893

This will be placed in two sections, the "house for sale" and the "real estate wanted" sections. I don't have high hopes for using classified ads. I tried this several years ago and well, it was ok, but I got a lot of tire kickers. I'll be tracking the results.

At this point, I just want my phone to ring!! Please ring!

P.S. On my pre-foreclosure letters, I've sent approximately 500 letters and I have only received 1 call. It was a good one, but didn't work out. This illustrates how much of a seller's market it is right now in Tucson. The sellers don't feel that they need to call a investor to sell their property. If I was single, I would be moving into a emerging real estate market. My buddy is moving to Austin in the next couple of weeks for this reason.

Details on previous offer!

2006-03-19T11:59:00.000-08:00

As promised from one of the bloggers, here's the details on my fourplex offer. This was actually printed out and attached to my offer to the seller. Why did I do this? For several reasons.

1) I have to prove to the seller that a property is "valued" at what the property can take in and I will only buy a property if the numbers work.

2) On this deal, I am asking the seller to carry back his equity in the amount of 168k. I figure that the seller will feel more comfortable with the carry back when he relaizes that I don't have huge amounts of negative cash flow.

For creative offers like this , keep in mind that you can get lower mortgages by reducing the SALES PRICE or TERMS OF THE LOAN. In this case, I am offering only 3% to the seller for the carry back. This allowed me to increase my offer price so I didn't have to be low balling him.

Good investing!

.

Offer #5 Another Fourplex..

2006-03-16T19:27:00.000-08:00

I made another offer on a fourplex last night. The lead came in from a birddog!

Stay tuned..

Philosophy of break even investments..

2006-03-13T20:00:00.000-08:00

Ok, some of you guys must be thinking, damn, why do an investment when it only breaks even?

First of all in this market, if your breaking even its because you either had a huge downpayment, got it for a great price, or terms are great.

The rental rates in Tucson have been real soft for many years. Based on my research, I think rents are going to go up real soon! So, a drip of water will turn into a stream and than a river in the future. Thats the plan.

In 2004, I only looked for bargain, bargain properties and I lost many great opportunities because I read books that said , "I passed on properties with $10 dollars negative cashflow!".

Good investing..

Offer #4 Fourplex..

2006-03-13T19:55:00.000-08:00

Made an offer on a fourplex that I found on craigslist. I saw the units tonight and the guy is quite motivated.

He owes 212k on a 400k building. He has five of these fourplexes.

I offered a 5% down payment with a carry back for the difference of what he owes. I will bring in new financing since he has an ARM. The terms are good for me, so if he accepts it will break even assuming all costs (including management!)

Good investing..

My precious..

2006-03-08T18:16:00.000-08:00

I have to tell you, my thoughts on time has changed drastically in the last few months. I consider my "time" very precious right now. Since my promotion at the JOB and my new son, my life has changed.

I am trying not to work over 40 hours, but its been tough. In addition, I have a 50 minute commute each way.

Spending time with my son has been great and I do it everyday. In addition, my wife and I decided to take one day out of the weekend to just "chill out" with the family. Without allocating time to do this, we end up filling out schedules doing chores and work. We have actually forgot how long its been that we went out on a date. ;-(

So, I have accepted these changes, but where does this leave me with real estate? I no longer want to scan listings at lunch, and can't do much one day of the weekend. I estimate I can only do 5-10 hours a week at most.

This includes: finding deals, creating lists, talking w/ sellers, education, checking out houses, writing offers, closing deals, working on houses, renting them out, quick books, selling, marketing, advertising, rehab, networking, education, etc...

Not much time when you want to buy many houses, huh? And if I want to have any fun, real estate will be zero for the week. I'm still trying to figure this out, but my time will have to be focused like a laser. I need people to find me deals, enter and exit criteria need to be easier.

I have read time management books, and I have ideas, but I'm going to have to trade money for time.

Good investing!

I dumped this one like sack of potatoes..

2006-03-07T18:58:00.000-08:00

I have mixed feelings about this one, but I ultimately went under contract and ended up walking away from this one. Here's the story..

I got a call from a seller in foreclosure last week. He had a house in Vail, and said it recently appraised for 505k! Anyway, he showed me the house, it was built in 2004 and was on the GOLF COURSE on the 18th hole! Below shows the numbers, he owed just over 350k so I thought that he had a lot of equity. At the time, the banks wouldn't let him re-finance and he had some financial trouble so wasn't making his $3150 a month payment! (Yes, I know, thats lot). He was a real nice guy and treated me like a professional.

After he showed me the house, I told him about my plan. I would buy the house subto and give him his money back on either a re-finance or until the house sells. The only exit criteria was a flip, I did not want to rent it out , although a lease option could have worked. Surprisely, he accepted the deal, and would go under contract for $374.

At this point, I had 90% due diligence done, but it was the weekend and I did not talk with my realtor. The next day, I got a market analysis from her, and the story unfolded quickly. There were over 50 houses in this neighborhood. There was high competition with the builders. The days on market were long (as I discovered), however, there were two properties that I missed from my research. The square footage and build dates were the same and were selling for 415 and 435k respectively. If selling using a realtor 6%, my breakeven point (no profit) would be 425-430k. This was very alarming. Do I want to invest nearly 40k to make 5k-10k at most if the market is weak? What sucks is that if the comps were stronger, and I could sell it at 475k, I could make nearly 40k easily! I was hoping that 445k would be on the low side, but unfortunately, it was not. :-(

I decided this was not good, so I called him to renegotiate. I told that I would give him 5k at closing and buy it subto. This was essentially 10k lower. After several days, he told me that he would pass. He ended up contacting a bank that said he can do a re-fi.

What a shame, I decided that I did not want to take the chance even if my numbers were on the conservative side. Secondly, my mortgage broker told me originally that I could not do the re-fi. He found a loop hole with a fixed interest to get it done later in the week. The problem is that most banks will give you 80 LTV of the purchase price or appraisal which ever is lower. Since my purchase price was so low, this would not work. However, there was a way if I got a appraisal when I bought and get another at time of re-fi and they would take which ever is lower.

My wife was a good sport for this deal. She supported me through the analysis and inspection of the property. She told me that she was relieved when I told her that I had re-negotiated. And I was too!

Until the next one..

Good investing!

Another article on foreclosure investing..

2006-03-05T18:30:00.000-08:00

For those of you interested in foreclosure investing, check this out...

I agree with the article completely, however its not stopping me from investing in this area...

http://money.cnn.com/2006/02/07/real_estate/foreclosures_money_0603/index.htm

Good investing..

Offer #3 Finally working a deal!

2006-02-27T19:25:00.000-08:00

Ok, so my dry spell is finally over!

Last weekend, I got a call from a seller in foreclosure. The house is in Vail which is on the outskirts of Tucson. This is a up and coming area.

Basically, I'm under contract right now. The plan is to purchase subto and flip it using the MLS. Not a common strategy , but if you get in low enough, you can make your profit and not work hard!

The purchase price is around a whopping $370,000 dollars! This deal already has plenty of twists and turns... I promise to post all the steamy details after the deal is handled....

Book review of "52 houses in 52 weeks" by Dolf

2006-02-23T10:42:00.000-08:00

Dolf gave out his latest book during the expo last weekend. The book basically tells the story of how this investor (Gene Burns) pulled off purchasing 52 houses in actually 8 months.

Actually, this is Gene's book, its obvious that Dolf didn't do much of the work. It appeared that he talked with him alot and maybe came over to Vegas once or twice.

For those of you into "distressed" home buying, this should be an interesting book for you. The stories remind me of some of the weird situations I've been through dealing with these types of people. Although he doesn't step into all 52 purchases, he goes through many. He discloses what he did to get the property, how he did it, and what he did with it.

The "gold nuggets" from this book how he changed his business to meet his goals. He started with distressed only, by the time he was done , he was buying new construction and tax liens.

The book tries to insert wisdoms when ever it can , but is not a detailed book. Its more of a story than a course, which is just fine by me. I've read enough of those.

You should know the basics before reading this book, and that includes understanding subtos, and seller carry backs.

I recommend it because it reminds you that real estate investing is hard work, ever changing, and you constantly need to think. What works now, does not have to work today.

Good investing!

Dolf de Roos is awesome!!

2006-02-19T18:47:00.000-08:00

I saw Dolf De Roos last night at the AZREIA expo in Phoenix. He's considered a world known investor and does deals in many countries. What blew my mind is how he was structuring the deals. He looks for a twist , an opportunity that others don't see. He's a very creative guy, and make serious money.

I was blown away with his current deals in Phoenix! He is is truly inspiring. He gave us one of his books, "52 homes in 52 weeks" basically he was doing the subto techniques when the Vegas market was heating up...

Thats what I needed right now, some encouragement to move forward!

Good investing..

Marketing to Arizona Foreclosures Challenging..

2006-02-12T13:52:00.000-08:00

If you read my blog frequently, I've shown my disappointment in not getting a single call from my foreclosure marketing this year. I'm was getting to the point of wondering if there are any distressed sellers out there! Of course there is , however, are there fewer than years past? The foreclosure numbers are increasing, that means that there should be more distressed sellers, right? Actually, the answer is yes and no.

Last week I've been questioning the approach on my marketing plan. Two years ago, I was getting reliable responses. So what's going on right now? I initiated some research and this is what I'm finding out.

My marketing is based on established successes from previous investors. My letters should be fine, the sellers are reading them , but they are not calling. This is the reason why. In 2005 , Tucson's real estate market has appreciated a solid 32%. This is huge. For a seller that has bought two or even one year ago, there is instant equity in these properties.

In an article from the Arizona Republic, the attorney general states that " Right now, there are bad loans out there, which have not gone to foreclosure because the value of the underlying property has gone up so when people have gotten in trouble they could sell it and pay off their loan. When this problem is going to become most acute is if our market levels out or dips. . ."

The perfect example of the this is the house I currently have a bid on. It was bought several years ago for the low 200's. Now they have it listed for 300k! I have found others as well. Last year, I had several sellers contact me to explore their options. They ended up listing the property or selling as FSBO. It seems that sellers don't even feel the urge to contact a investor right now.

Its still too early to drop the marketing strategy. But I am smart enough to know that if this is my only marketing, I am going to starve. There needs to be other motivation.. Out of state buyers, divorces, probate, evictions, undesirable loans, etc..

Competition is higher as well, I know of a big real estate agent that is going to start marketing to foreclosures because of the estimated higher foreclosure rate. They actually give these lists out to investors as a benefit to work w/ them. I know several mortgage companies that are doing this. So competition is factor. I wouldn't be surprised to have owners receive over 10 letters from investors. This actually may be a small number.

In times like this, door knocking looks more attractive. If I'm still looking for houses, I will probably cherry pick properties to knock on some doors.

Offer #3 - Another house in my neighborhood..

2006-02-12T11:17:00.000-08:00

Well, I placed an offer on a foreclosure in my neighborhood! I am working through an agent since its on the MLS. We did not tell the listing agent about the forelcosure, but hopefully, the seller is as motivated as I hope.

Actually , its not in good condition. The listing shows it as minor TLC, but it needs at least 15k worth of fixing! We don't think this one is going to sell quickly based on the listing agent's experience. She doesn't know anything about the property!

I asked my wife if she would be interested in moving into it, and she said that she wouldn't because of the way the staircase is built! Women!

Anyway, we should get a response in about a day or so..

Good investing!

Zillow.com

2006-02-09T11:51:00.000-08:00

Ok, so Shaun http://shaunsre.blogspot.com/ was talking about Zillow http://www.zillow.com/ and actually, its a neat site where you can get comps.

However, the comps on the properties I checked are completely off. The site told me that comps on one of my properties should be 360k which is an average of their estimated range. I know that I would not be able to sell it for more than 280k! Its way off..

They extrapolate older comps to get to today's values. The comps were ok, but the problem may be the appreciation factor.

Anyway, I wouldn't trust it for a second...

bginvestor

Its been a slow REI week...

2006-02-07T19:16:00.000-08:00

The new job is taking its toll on me.. I've been working longer hours and my brain is fried by the time I get home. I love engineering, but its been tougher to find time for REI.

This is the time when its easy to let the workouts cease, the letters from going in the mail, and the motivation to lessen.

However, I just got done reading some of my favorite blogs and it reminded me to keep going!!

I did meet a broker yesterday that is an expert in new construction. There's too much money being created in this type of investing to ignore. The conversation was interesting, but I need to be careful. If I could get in low and in a beginning phase of a project, I would consider. I am trying to find investment techniques to maximize my time, and this is one of them.

I'm looking forward to going to the REI seminar in the next couple of weeks.

Take care..

Weekly Status..

2006-01-31T19:17:00.000-08:00

Well, I just created my weekly forelcosure list. I'm still surprised that I haven't received a phone call yet from my letters... I paid special attention to the content, format, and how it is delivered. I expect to get some calls from sellers right before the trustee's sale.

This weekend, I plan to check some houses that I can do a twist on to create some equity. For example, there's a rehabed 1/1 house in the central area for sale. If I can add a room, I can create quite a bit of equity.

There is a local broker that is offering a short seminar on buying investment properties in Tucson. I am going to check it out this Thursday night. I don't plan on learning a lot, however, I want to get more educated on the new construction market.

By this weekend, I want to have my spreadsheets setup for calculating profits with developing. Actually, I did this last year, but I need to update the building and permit costs. Once I get comfortable with the numbers, I will know the approximate buying price I will need to reach my goals. This is a very competitive market for these type of investments right now, so I will need to act fast..

Good investing,

Bginvestor

Not much action this week..

2006-01-25T05:44:00.000-08:00

REI hasn't been too exciting this week because my marketing is weak. I only got one call so far which was from an old bandit sign.

My sign guy hasn't called me back yet, so I hope he is still available. He was good and relatively dependable.

Anyway, I've been researching developing projects and if I find the right lot opportunity, I'm jumping on it!

I generated my weekly foreclosure list last night and noticed there is a house just down my street. That would be nice for that one to work out. With foreclosures, just because they hit the list doesn't mean that they are going through the process. A lot of them sell, get money from family, or work out deals w/ banks so its not a good idea to market to just foreclosures.

Investing in foreclosures must be very popular right now. Every course I come across suggests this, in the Arizona investing magazines, there are several companies popping up that sell foreclosure leads. The competition is fierce thats for sure.

I will commit to marketing for 6 months at least.. My follow up letters haven't hit yet, so I want to see if I get better responses..

Lumpy mail is also an option...

In addition, to foreclosures, I now have letters being sent out in other distressed situations. I will also send letters to owners (motivation unknown) that have lots conducive to splitting & developing.

Good investing,

Bginvestor

Wow!

2006-01-20T11:41:00.000-08:00

Last night, I noticed a "foreclosure notice" that turns out to be one of five properties that a gal from out of state sold last September. One of five was the tri-plex so I knew this gal. All of them were in foreclosure..

I sent her a note, and turns out that she had no idea that she was in FORELCOSURE!!!

These investors bought subto and never made a payment! Wow!

At least one of the properties appears to be in her name, however, there's a guy in the house living there and she has no idea who it is.. Amazing..

So, she going to keep me in the loop.. I see a offer (from me) coming her way ;-)

I love foreclosures...

status on latest offer..

2006-01-19T05:55:00.000-08:00

Owners wanted full market value, so its not a deal at over $300k. Oh well..

I have got to do something with my marketing right now! I haven't receive one call yet in Jan. This is depressing..

Time to call my sign guy and get some leads!

Bginvestor

Made an offer down my street..

2006-01-16T11:29:00.000-08:00

We were walking the dog yesterday and noticed an open house. We walked through and decided we like it better than our house so we made an offer on it today.

They are kinda of motivated so we'll see what happens!

Bginvestor

I've hit the mother load!

2006-01-14T21:00:00.000-08:00

Talk about getting information over load. I decided to try and find some realtor sites that post basic MLS information so I can graph data to better understand the market trends.

Turns out the the Tucson association of realtors have monthly reviews. Check this out..

http://www.tucsonrealtors.org/public/ressalesstats.html

There over ten pages of graphs comparing data back to 1996. This is awesome!

How to get "Free" comps

2006-01-14T14:11:00.000-08:00

I posted this about a year ago, but there's easy ways to get comparables for real estate and alot of times its free. Tom, from his blog http://dbreakfast.com// mentioned that realtors are useful because of their comps on the MLS.

I never use realtors because its too much of a pain... The easiest way to get free comparables is to work through a title company. They provided me with a free account that basically uses http://dataquick.com . To some, this is a little known secret.

So, now realtors are completing useless! ;-)

Good investing

Thoughts on mailing campaign..

2006-01-13T06:09:00.000-08:00

One of the bloggers recently commented that my marketing is labor intensive. Yes, it sure is. Than why I am "sticking it to myself"? Why not do something easier like postcards?

Here's the reason. My audience is focused and my letters capture the emotions of that audience. The postcards won't be read as much because my letters are labeled such that they will be curious to who its from. Once they open the letter, they will be committed to reading some or all of it. Pre-foreclosures don't have much patience, so they could just throw away the postcard without reading the punch line.

In my opinion, postcards are better to "shot gun" hundreds of owners to stir up interest in buying houses. Many times you don't know their motivation level.

In my market there are about 50-60 foreclosures a week, so its do able to send well written and professional looking letters to these folks.

Still its labor intensive. However, I just hired one of the neighbor kids to stuff and label envelopes for me. I should have done this a year ago! The added cost is totally worth it and I plan to double my mailings spreading over more zip codes.

I will send 3 letters to each address. I should do 4, but I want to first test 3.

I will also send more letters to other motivated people. i.e., quit claim deeds, divorces, evictions, or probate. I will choose one of these and hit them with 4 iterations.

I network with several investors and I have to admit, I am the one that usually gets the best deals! However, I don't find them often. This has to change, for my business to grow, my leads need to increase.

This will help...

Offer #1 = No Deal..

2006-01-09T06:44:00.000-08:00

She called me last night to tell me that she is now under contract with someone else!

I think I figured this one out... During the first conversation , she told me that someone had offered her 50k cash for the property, but she felt that was too low so she invited me to take a look at the property.

The next day I looked at the property in the morning (Sat.) and than made the final offer in the evening . I had already setup the seller financing idea, I just didn't commit to solid numbers. My offer was made 5:00 pm (Sat.) and she needed to talk it over with the husband.

She called me back at 8:00 pm and told me we had a deal. I setup an appointment for 12:00 pm (Sun.) to sign.

She called me up in the morning to postpone the meeting until 2:00 pm because she need to do something (Now I know what she was doing).

1:45 pm she tells me that another guy in interested and needs to call me back later in the day to tell me what she decided.

I got the call last night around 7:30 pm that she signed w/ someone else.

Ok, so I think I understand what happen.. The guy that who made the original offer probably is the one that is closing with her. So I forced him to buy the property at a 10k higher price. I thought my offer was solid because she commited to the deal Sat. night and she was leaving the state on Monday so she didn't have time to find another investor!

However, my mistake was that I forgotten about the original 50k offer so time was still the essence. And I didn't give her the "ok we have a deal no more investor speech"..

As properties goes, this was so-so because it was a mobile home affixed to a lot w/ a 1000 sqft addition. It was a pure fixer-upper. As a fix and flip the numbers are poor, however, the financing made a a excellent deal long term. Shit, after 5 years as a rental the loan would have been paid down to 35k!

Comps was non existent so I had to go off of two MLS offerings, and one comp from last summer. The confidence in the comp value was not high, however, the addition and covered garage showed a lot of potential.

Clearly a long term stategy is a no brainer. I was going for lease option w/ no rental hadaches. However, the tenant -buyer financing was going to be a huge issue. There would have been very FEW banks willing to finance a 80k property w/ a 1963 mobile home.

Profits would have been at least 25k-30k.

Until the next one!

Lead#1 = Offer #1 = Deal??

2006-01-08T14:21:00.000-08:00

I can't believe this shit... I had negotiated an awesome deal yesterday where I was going to buy a property via seller's financing 60k w/ 8k down. Unfortunately, she calls me up 15 minutes before going over there to sign paper work and she tells me that a neighbor caught wind of her moving and they may be interested in offering 60 k cash for the property!!

I did all this work to negotiate her down from 80k and this guy may reap the benefit from my efforts. Here's the kicker, she AGREED to carry back at ZERO percent interest rate because she was extremely motivated (she's leaving the state tomorrow).

She rather have 60k cash now than financing which I can understand. Although she'll do better tax wise w/ financing.

She told me the guy needs to look inside and its definitely a fixer-upper!

She is going to call me tonight to tell me status. I can't wait.. ;-(

My 2006 Financial Goals

2006-01-03T17:57:00.000-08:00

Here it goes.... These are my financial Goals for 2006. I won't mentioned my family and health goals. I have high expectations this year because I know that I've learned the tools to invest, I can and will find more awesome real estate deals, and I have more of a drive than ever to close!

Before I start, I heard a segment from "Dr. Phil" on goals which I agreed on. He mentions that people make goals based on emotions and that is why most fail. Don't make this mistake! Create procedures to make the goals a reality. As Gerald Romine states, "There's two things in life, excuses and results!"

1) Determine how much borrowing power and/or other people's money you have access to investing.

I have enough liquid capital/credit to keep purchasing some properties. Not many and this does not make me happy. If my land deal hits this year (we are working hard to get it sold), than I will be in a even better position to buy several investment properties in CASH.

Private money is setup and ready for the right investments.

Goals for 2006, find other people's money. Right now, I do not have partners w/ CASH or anyone willing to loan me money out of a IRA, etc.. I am working alone, which I would rather not do. I have a friend my age that partnered w/ his agent and they have built up 2 million dollars of investor money to do deals. This is the way go.

However, my best friend who lives in Palo Alto is interested in investing w/ me. This is a possibility if a big project comes up and I need more capital support. This is a deal by deal basis so there's no formal partnership right now.

Hindsight is a wonderful exercise, if I had more access to cash, I would have bought more property (before the huge appreciation in the last 3 years) and would have been much better off. This should be one of my top priorities. My best bet is going to my local REI meetings. I am searching , buy have not found the right investors yet.

I will also consider signing deals and finding the money! If its good deal, the money will come. (Thanks Trisha)

2) What is the current state of YOUR Real Estate market and what techiques are best suited to maximize profits in your local market?

The other day, I realized that I didn't REALLY understood my local REI market until July of this year! Thats amazing... If I knew the numbers and the story , I would have done many deals that I gave away! (Yes, I gave more than a few deals away) At the time, I didn't want a negative cashflow of $75, or maybe a slim margin of 10k flip, if I knew the market correctly, I would have made $75k of equity on the rental property and 30k on that flip! It was my choice and I lost the profits.

So, how do you know your market? I learned the market by taking a REI class w/ a realtor (investor) that is the real thing! He needs to know the market because he's growing his business. He publishes a real estate letter that contains tons of graphs w/ solid numbers in Tucson. Graphs on appreciation in the last 5 years, monthly inventory levels, affordability indexes, etc.. You need to see the numbers and the story becomes clear. Research your county recorders, talk to investor agents, and/or go to real estate club meetings and understand what other investors know!

Goal for 2006, track the local RE market on a monthly basis. Especially now.

3) How risk adverse are you?

From a scale of 1 to 10 w/ 10 being high, I would say that I'm a 9-10 in taking risks this year. I haven't done development yet, however, I am ready to do it in 2006. Why? Because I've talked to too many people that are successfully doing it right now! Of course the numbers need to work.

Goals for 2006, make an offer on every property that I analyze from my marketing campaign (Caller screened of course).

Overall 2006 Strategy: Pretty simple, first, generate cash via wholesale or fix/flip. Secondly, buy a rental property! Repeat again! The goal is for the business to generate enough capital to buy the rental properties for me. I expect to do at least 4 projects this year. I am looking for two properties w/ huge lots that can be developed. And two rental properties that will cashflow (need to be bought at around 70 LTV). These types of deals are getting harder to find in Tucson, but I'm up for the challenge.

Getting the developments complete in the summer is perfect for maximum profits and buying properties in November/December is best because inventory is at its highest.

To summarize, I want to raise around 40k-80k and spend it on long term investments.

I'm a firm believer that 80% of the effort is in the marketing, so if I'm successful, I should easily make the goals.

In addition, now that I understand my goals, I can tailor my marketing efforts.

Additional goals:

Spend less time working on properties
Do marketing more efficiently (time factor) --> Direct mail
Market to produce enough leads to make many offers to close a deal
Make offers on every property that I analyze
Touch bases with seller after you make an offer that was rejected

Good Real Estate Investing (REI) articles.

2006-01-02T15:36:00.000-08:00

Gerald Romine was a small time investor in the mid 90's in Phoenix, Arizona. He then formed a real estate club in Phoenix which became relatively successful. He promotes his wholesaling techniques and he's getting quite popular now. I went to one of his "seminars" last year bringing in national speakers and I actually learned a lot.

I stumbled on one his websites where he posted a summary of his personal articles. I agree w/ all of them and states the facts clearly! I would him to be my mentor!

http://www.geraldrominearticles.com/

Good investing!

Real Estate forecasts in 2006 & 2007 Check it out!

2005-12-30T14:14:00.000-08:00

I've tracked CNN money's appreciation reports for several years and I have found them to be accurate based on tracking the Reno, Las Vegas, Phoenix, and Tucson markets.

This article was quite interesting. A firm estimated the forecasts for 2006 & 2007. I don't read into these 100% because they never explain their numbers , however, its another data point.

http://money.cnn.com/pf/features/lists/re_growth_forecast/

http://money.cnn.com/2005/12/29/real_estate/buying_selling/handicapping_housing_markets/index.htm

The biggest observation was that Texas may be the next emerging market. Steve, better get ready!

Check your city out! Also, I would recommend going back to CNN money from time to time because they make a good effort to track the national market.

Good investing!

Ideas for Goals in 2006..

2005-12-25T10:06:00.000-08:00

In a recent previous post, I've recommended that an investor should reflect on some key items before setting 2006 goals. I'll post my goals based on answering these questions soon.

1) Determine how much borrowing power and/or other people's money you have access to investing.

I've had a mentor tell me, "If you can't afford to buy a house at XX price, don't look at them!" For time management, know how much your working capital is and work within the limits. This will help your marketing efforts immensely by focusing like a laser instead of a fog light!

Also, this is a good time to get ambitous and create goals to access more capital.

2) What is the current state of YOUR Real Estate market and what techiques are best suited to maximize profits in your local market?

Ok, for those of you who don't know, the real estate market generally runs in cycles (I need to write a post on a "guru's" explanation of the cycles). Understanding the cycle , will make you more money, period.

3) How risk adverse are you?

Are you ready to take the plunge into developing or re-habbing properties. Go above your comfort level and set goals, however, don't get crazy and expect to do over the top things like do a condo conversion on the New York Plaza and make millions off of your first transaction!

By being honest with yourself, you will narrow down the paths to which REI is right for you.

Good investing,

Bginvestor

Check out the added blog links!

2005-12-24T10:25:00.000-08:00

I've added some additional blog links! Check them out..

Its real interesting to compare the Real Estate Inevesting (REI) experiences in different parts of the country. If you read the blogs carefully, you can learn alot about the current real estate market and you'll see that investing techniques depend heavily on the type of real estate market.

One observation that I noticed was that margins (in percentages) appear to be similar for high prices houses (California) and median and lower priced houses (Arizona, Texas). More specifically, the percent of purchase is the similar, however, the profits are higher in California. This makes me think about investing in Tucson in some of the nicer neighborhoods (250k-350k)should be considered immediately. Instead of doing 2-3 fix-ups, I can make the same profits in just one!! Hmmm..

Good investing,
Bginvestor

Recommended REI books..

2005-12-21T17:57:00.000-08:00

There was a gentleman that asked me for recommended books to read for the beginner so I thought I would post some of my favorites.

These books are cheap (around $10) and are worth every penny. In my opinion, the beginner should read up on all the different ways to purchase realestate and pick one or two and go for it! Become an expert even if you have to go to a seminar (sometimes).

If you want to be a buy and hold guy, this is a must read. This is one of the books I buy for my friends.

"The weekend millionaires secrets to investing in real estate" by Mike Summey and Roger Dawson

Great book on how to get started , analysis, and build your portfolio in rentals. If you understand and follow this book, you will become a millionaire. Depending on your market , it can take awhile though!

"Making big money investin in Foreclosures w/o cash or credit" By Peter Conti & David Finkel

This is a great book to learn the many ways to buy foreclosure properties. This is not a step by step book, however, its a great summary on the many different ways to acquire. You can't be an expert from reading one book you know!

"The pre-foreclosure property investor's kit" by Thomas Lucier

If you want to be serious about chasing seller's in pre-foreclosure, this book summarizes it nicely. If I had to write a book to summarize what I do, it would closely resemble this one.

There's more, but they are on loan with friends so I don't know the complete titles.

The hardest thing to do sometimes is figure out "how" to invest. Its taking me years to fully realize where I want to go. If your this way, I would suggest you take time to understand your "borrowing" potential , what the market conditions are, and how much risk you want to take. This will guide you to what techniques are best. If you don't have any money, do wholesaling! If you got loads of money, build a subdivision!

Good investing,

Bginvestor

A quick way to analyze income property..

2005-12-19T06:10:00.000-08:00

I had a few hours to re-think on how to analyze income property on the MLS quickly. I want an approach that I could complete in a few seconds to assess the potential "bargain" of the listing.

The best approach is using gross rent multiples. I have been using capitalization rates, but there's too many varying parameters that skew the data. The capitalization rate is simply:

CAP Rate = NOI (annual) / value of property

NOI (annual) = The operating income on yearly basis (Gross rents - expenses).
value of property = The true worth of the property

So, If you know the going cap rate in your area, you take the NOI and complete the math to calculate the "value". Pretty simple. I've gone through scenarios taking certain type of financing and interest rates to back out a pseudo cap rate. I than take the NOI thats listed in MLS and calculate value. For example, MLS rates in my neighborhoods are 5-7 percent. My goals are 10 percent for positive cashflow. You can do some cals to quickly determine how far Tucson's rental market is from the highly appreciated properties.

The problems: The NOI calculation is not consistent w/ how I personally calculate NOI. On the MLS, they almost never use manager salaries and maintenance in their NOI numbers. So, thats an issue. You also have to assume that all the numbers are pretty accurate or else your value is not correct. Guess what side (seller of buyer) the numbers fall to?

Gross rent multiples is a great way.

Gross rent multiples: The number of years that the gross rents (yearly) to get to the purchase price.

Example: Yearly rent 12,000 Price of house 100000 Gross rent Multiple =8.33 So , it would take 8.33 years to get to your money back (get to the purchase price).

There's only two parameters in this equation! If you know know the rents in your area ( and you should) than you can calculate good numbers all day!

I used some of my properties to back out what the gross multiples are. Its roughly about 10-10.5. Let's compare to the average gross multiples in different areas.

Gross rent multiples on MLS

Houses, duplexes, tri-plexes, four-plex, -> 13 - 17
Income property by the university -> 16-19
mulit-unit one bed rooms -> 11.75-13
Properties in much less desirable areas -> 11-15

Ok, this is why I don't buy properties every mnoth. You cannot buy a property and get break even cash flow with mulipliers this high! The cool thing about using this equation is that the "bargain" should not be a function of location. Because some areas have lower or higher rent, this equation normalizes the value to the selling price. You want to pay off your properties as soon as possible, so if you buy a university house, sure you'll get a higher rent, but it'll take longer to pay off the house than in a different area!

So, by scanning the MLS entries, you can cherry pick the lower muliples and ask for a lower price and you may get one at break even cash flow.

I still hate the MLS, but its the best way to find a property that can be split for new construction.

Good investing!

Another offer submitted.

2005-12-13T07:44:00.000-08:00

Ok, so I was going to take a break in December, but this lead popped up!

I found a guy that trying to sell quickly. He bought a house a year ago and started fixing it up for his family. Unfortunately, he got divorced, and now has $2000 a month child support payments and needs to sell the house. He has put himself in a bad situation because he is currently completely remodeling the house and he is only 60% complete. He's a plumber , so he has pretty much redone everything. He has moved rooms, and added bathrooms, and gutted the kitchen!

He can't re-fi it because its not livable. Actually, there's no water to the property right now. Anyway, the numbers are not great, but assuming a repair of 20k, I can make 15k without doing any work myself. This is not bad since I used slightly conservative numbers.

To make this deal work, I needed to assume his loan which he was willing to do. He wanted 5k now, and 15k on the back end.

I was only willing to give him 5k to make the numbers work. He was pissed when I was talking with him about my offer. I shut him down quickly, stating that this is an offer, don't take it personally, its an offer that only makes my numbers work. I'm not forcing you to take it.

He calmed down in a few seconds, but didn't seem interested. I didn't push him hard like, you were saying that you could go into foreclosing, I can make sure you don't!

This is the type of lead that he may call back in a month or so to re-negotiate.

Good investing

The "polished" technique for analyzing a deal

2005-12-06T13:34:00.000-08:00

I'm about to share my techniques in analyzing properties. I 've analyzed over 100 properties in the last several years and I've learned several critical lessons.

I created a system that has been working well for me. Its probably not the quickest , however, when you have the knowledge to buy properties using sub-to, l/o, seller financing, wraps, conventional , hardmoney, and partner ships, you need to spend some time, you know?

In my marketing, I usually have people call me, so I have a finely tuned script that works very well for me. Its natural now, and I speak w/ confidence that makes the conversation go better. My favorite questions to ask are, "Sounds like a wonder property, why would you ever consider selling it? and "What's more important to you , getting a quick sale or getting top price?" When your in the business of motivation, these are critical questions.

Ok, when I determine that a call does not qualify, I hang up quickly. However, if its a deal (motivation in one form or another) I get more information and schedule a meeting at that time. Before I meet with this person, I do the following:

1) I have a form that I put all of the information that I have gathered. I list motivation level, and all the facts that the seller has given me. It helps to look at all the facts to tell the seller's story. I also document which piece of marketing he/she called on. I get loan info as well.

2) I go to the assesor's office to gather more information. I get info like names on title, purchase amount, purchase date, tax assesses value, and much more. This is a great check to see if the seller is telling the truth in his facts (Actually, I never caught anyone lying to me)

3) In my county, they have aerial photos of the complete city. Its awesome. I can see the neighborhood, where the house is located on the streer, calculate exact lot sizes, and position the property on the lot. This is very useful especially when verify lot size for new construction. In dumpy neighborhoods, you can actually see the trash in the back yards, and run down cars.

If your county doesn't have this, I suggest you use the new goggle software that pretty much does the same thing. I still need to check this software out.

4) Spreadsheet - I plug in all the numbers for the potential scenarios and project profits. Usually the unknowns are repair costs, because I know how much the lenders charge for different loan types. I run the numbers under two scenarios. 1) Rental or 2) fix and flip I never take a property with significant negative cashflow so if this scenario doesn't work , its a fix and flip. Actually, in my market, to make a rental work you need to be in the 70-73LTV.

There are exceptions: If its single-wide, I run the numbers for cashflow. If its a property that a new house can be built on, than the numbers are run for the existing property and new property under a rental or re-sale scenario.

So, there you have it! After doing this, usually 15 - 20 minutes, I decide if I still want to go the the house. If its questionable, I will call to dig into motivation. I NEVER talk numbers over the phone. Here is a critical lesson learned. In all of my deals, the numbers initially didn't look great. After establishing a relationship, negotiations turned into a deal. That is why if motivation is high and numbers are so-so, I go anyway. Don't expect to have a seller call you up and say, "Hey, I want to sell my house to you for 60 cents on the dollar, can you please come by now?'"

Also, if I go to the house, I always make a offer! Always! The offer is a price that works for me, not the seller. After spending this much time, you don't just walk away. Remember, its a numbers game, even if the seller doesn't accept your offer today, maybe tomorrow. That reminds me of the other critical lesson, always touch base with these people in a few weeks. You will be more sucessful if you do.

Good investing,

Bginvestor

My life has changed forever!!

2005-12-04T09:22:00.000-08:00

My life has changed forever, I just had my first kid last week! What an awesome experience! My son has totally taken over my life since he has been born. Its amazing how much time is necessary to take care of him. I've been off the main job for the last week and am already dreading going back so soon. I never knew that I would be so attached to the little man.. He's cute! Check him out..

Anyway, I think my son will have a positive experience on my real estate investing. Now, I am investing for him as well, this will motivate me to take it to the next level.

The trick is, I need to find the time... I told my wife I am going to hit it hard again this January. I did have enough time to update my financials which puts another smile on my face. Holding real estate has been a great move for me.. Even in Arizona's hot market, when you buy right, you will not lose.

My tri-plex project is completed and I am very happy with how it turned out. The units are beautiful and will provide solid tenants for years to come. I plan on posting a summary of the "tri-plex experience." I met all of schedule milestones which included tenant vacany and rehab budgets. Based on current tri-plex prices on MLS, I project that I have earned at least a 45k-65k equity. Not bad!

Good investing,

Bginvestor

.

This is going to be a long weekend..

2005-11-12T18:17:00.000-08:00

Hey, I haven't fallen off the face of the earth, I'm just busy... My blog entries have definitely slowed and I will honestly say now I am taking the month off from the blog in December. But don't forget me! I'll be back January on my new house hunting adventures with new marketing ideas..

I enjoy many of the blogs that I have links to , but I have to admit I'm really impress with trisha!

http://trishasblogsite.blogspot.com//

She started from zero and in one year (I think) she indeed is building her empire! Go Trisha! If she keeps this up in 3-4 years she will be a millionaire.. Its cool to see the wealth growing.. If any of you guys are on the fence on starting REI, this has got to motivate you!

Ok, so on my stuff, I had a property that I bird dogged to a friend. This has turned out to be a big mistake on my part because I should have buoght it, but live and learn. This property is right next door to my tri-plex. She told me today that she would be putting brick walls up all around her property line. This is cool because its going to cost around 7-8k and I pay zero! So, that's a nice bonus...

I'm working on unit number three and I already have a tenant for it! Just two months ago this property had holes in the ceiling and two units vacant. At the end of the month, it will be a completely rehabbed property with three HAPPY tenants! I have to say, one of my tenants thinks I'm the best guy in the world. I turned this place around and she moved into the new rehabbed unit. She loves it and thanks me whenever I see her. I have to admit, its a nice feeling that I am providing good housing and they appreciate it..

I am going to do things differently in 2006. I am going to work less on houses.. This will allow me to buy more houses. I calculated the costs of the work that I am doing on the houses right now and I have to say it won't kill my profits to just hire it out. However, I do have more equity to show for it and the quality is what I want!

Good investing,

Bginvestor

Updates...

2005-11-03T11:49:00.000-08:00

I got a call from the original gal that owned the double wide. She was upset because she got a gas bill for coverage that exceeded her ownership. I was at fault because I thought my wife switched it over. However, I let her know that I had paid a full months's water bill that was actually hers(utility bill was one month behind). Since my bill was twice as much as hers, I said let's call it even or you can pay the residual..

So, I got another tenant for the tri-plex. I have two of three filled now! I will be finishing up the third unit this weekend, so that makes two units completely rehabbed. This was a huge milestone for me. I need to concentrate this weekend and make sure it gets done. The tenants from the second unit are moving into the third and I will finish up on the second.

The third unit has a side yard, and these guys are already fixing it up. So far it looks nice!!

The second unit will take a lot less work than the rest. Replace flooring, dry wall in halls, and a little painting. After that, my project will be COMPLETE!! Yahoo..

I am planning on taking December off for REI. I have a feeling that its going to be like last year and I will crank back up in February. This will also include my blog.

Its hard to believe that I've been writing in my blog for almost a year now. Amazing! I enjoy re-reading some of the posts to remember what I was thinking during those times.

I'm afraid that I made the same mistake this year as I have done on years pasts. Once I find a project, my business shuts down because all of my time is taken up. This is why I passed on the property next door. This was a huge mistake. I should have bought, held it til next year for my REI goals. Now, I may have to spend months to find another worthy project. Oh well. I several options moving forward.

Dude looks like a lady..

2005-10-24T16:06:00.000-07:00

Ok, a few days ago, I got a letter from a 26 year old model from the UK that wants my 2B/1B. Just a few days later, I got an email from Nick, a 26 year old grad student from fine art in the UK wanting to rent my place. Coincidence? I think not..

Here's his email below:

"Hello , Thanks for the details provided. I will really apprreciate you sending me more pics for properview also i ll gladly like to inform you that my organiserafter much deliberation have agreed to pay the requested amount of $595.00 PAYMENT FOR THE FIRST MONTH RENT PLUS DEPOSIT STARTING FROM MY MOVING INDATE WHICH WILL BE ON THE 5TH OF NOV} also ill bestaying for 1 yr which will also be paid monthly.So here is the amount for the month ..you offered for the rent and will be making payment via a cashier check. Also it might interest you to know that the cashier check will be issued to you in an excess amount, in which the excess fund'after you might have deducted your original amount' will be sent to me via western union transfer.The excees amount is meant for my traveling allowance,feeding and other expenses.However i will like to state here that the i will be needing the underlisted information where the payment cashier check will be issued to......NAME ON CASHIER CHECKFULL CONTACT ADDRESSHOME PHONE NUMBERMOBILE PHONE NUMBER Also i will be arriving on the 4th and moving in on the 5th of nov and will be very honoured ifyou could furnish me with the details required above so that payment will commence.I am coming from the uk,england to be precise. am 26yrs and a graduate of fine and creative art from the university of Hull. im a very friendly person,i do not drink nor smoke.i looking forward to meeting you.all paper works will be treated when i arrive and set to move in .i awaits thedetails soonest"

Loser...

This is hilarious...

2005-10-24T11:59:00.000-07:00

I put my rental ad on craigslist.com in hopes to get some interest for the tri-plex.

I got an email from a girl that is living in Europe right now, but is moving to Tucson in the next few weeks.

I'll para-phrase the letter, but it basically says:" Hi, I'm a 26 year old international bikini model and I would LOVE to rent your 2B/1B from you!"

What? A bikini model is coming into Tucson from a designer shoot in Europe and wants to move into my place immediately? Ok, whatever! I was thinking of all my friends that could be messing with me.

I wrote her back stating that she needs to fill out an application and background and credit checks need to be done before moving in. She wrote back stating that she wants to send me a deposit to hold the unit. She seems serious! However, its a week before my first mortgage payment and I just received an application from another gal last night, so she may not be able to get this one, however, I told her that I could hold the other unit IF she sends me app and money right away.

Since my wife does the screening, it will be interesting to see if she let's her in ;-)

Good investing,

Bginvestor

Holy cow.. I've been busy!

2005-10-20T19:17:00.000-07:00

I've been so busy, its been hard to keep up with the blog! I got promoted at work, I'm now a deputy to a manager so my work has gone through the roof.

I need to sit down and summarize my REI work , I'm sure a few of you are a little curious. ;-)

Basically, the double wide is done and all my efforts are focusing on the tri-plex. Tomorrow, the first unit will be completely done! The third unit is half way done. The tenants from unit #2 are moving into #3 so the goal is to have 2 of the three units rented in November.

Good investing,

Bginvestor

House #1 - Park manager approved!

2005-10-05T12:44:00.000-07:00

Yes! Park manager approved the buyer! We're set to close tomorrow.

Good investing,

Bginvestor

Offer on House #1

2005-10-04T07:40:00.000-07:00

I got an offer on the double wide pending park manager approval. She's giving me a 4k down payment and carrying $9900 at 13% interest. Not bad!

Hopefully, we'll sign paper work in the next couple of days.

On another topic I helped my friend put a contract on a house next to my tri-plex. Since I was busy with the tri-plex, I decided to birddog it out to her. She got a screaming deal. She's buying it for 70k and with 30 k repairs, it WILL be worth at least 175k or more!

Open house for House #1

2005-09-29T20:49:00.000-07:00

Wow! Getting some good responses form my marketing. I decided to have a open house this Saturday from 10:00 to 11:00AM I have about 7 people that say they want to see the mobile not including the gal from last week thats interested. I expect at least 4 families to show up.

I'm doing this for two reasons. 1) Save time! 2) Generate competition and get this thing sold!

Actually, I've pulled more calls off my street signs than my ad that ran Wednesday. I'll be interested to see the responses on Sunday. I decided to spend the $106 to get the snow birds with cash!

So far, I've had over 20 people call me. We'll see what shakes out.

Good investing

House #1 Double wide waiting to be sold..

2005-09-28T06:56:00.000-07:00

Even though I was getting some responses to my signs, I think I should have started my marketing more aggresively.

Its been sitting there waiting to be sold for several days now. In my calculations, I have given a month to sell, so I need my marketing to be in place.

Right now, I have custom made directional signs, signs on the mobile, listing on craigs site, listing on retirement website, and will have a ad running in the paper starting this morning. In Tucson, it costs $106 dollars to run an ad for only 3 days. Damn!

I have been getting calls which is a good sign, however, most have been mexicans that have been tire kickers. Nothing wrong with mexicans, however, some will have a hard time qualifying for the park.

I do have a nice lady that is seriously interest. This Saturday will be her third time looking at it. We'll talk details, and hopefully she'll be the one.

Good investing!

Rehab on House#1 Complete!

2005-09-25T18:08:00.000-07:00

Today I finished the double wide. It took a week longer than expected, but turned out nice! I spent approximately 8 solid days from start to finish, however, the project started Sept 1st. It took almost a month since I have a full time job.

I invited a local mobile home broker to check out the place. He liked it, and said it should pull in about 14k-18k. I'm asking 14k cash or 15k w/ seller financing. I hope I sell it through seller financing because my profit will double and it will give me a chance to work out the details of carry back a note.

I think my market will be 80% snow birds. I timed this right because they are now getting interested in a winter home. Unfortinately, I will probably need to spend $$ to place a ad. Its real expensive in Tucson.

Anyway, I'm tired. I worked on the double wide 3 days straight. I did a lot of new things this time around like installing valve stops, sticky tile, painting with a sprayer, painting cement, replacing subflooring, and making my own directional signs.

I need to post some updated pictures. Anyway, if anybody is looking for a sharp 24X41 double-wide, I've got one!

Problems with the residents already! Hosue #2

2005-09-20T17:15:00.000-07:00

I got a call from my resident ( a local attorney said its better to call them residents versus tenants) and he told me the water was turned off today! What!

Turns out the previous owner never made a water bill payment and owes over $600!

To make a long story short, I transfer my name to the property, no I don't take ownership of her bill, and the resident may not get his water turned on until tomorrow. So I left 10 gallons of water for toilets and showers at his house.. What else can I do!

The water/sewer fell through the cracks on the closing.. It just occurred to me that I didn't account for water in the cash flow calculations, so take off $100-$150 a month for the tri-plex. Ouch!

Before and After for House#1

2005-09-18T21:24:00.000-07:00

Here's a good before and after picture of the living room of the double-wide!

..

Continuation..

2005-09-18T20:24:00.000-07:00

What a difference! The place cleaned up nicely. There's still more work needed to complete the flooring. To make it look much cleaner, I should install the trim molding. I power washed the curtains which made a huge difference in appearance.

I have scheduled the cleaning lady to come in and do her thing. Get this, she is only going to charge me $50 to clean the whole house!

I'm 70% done with the vinyl tiling. I got a little off track when I noticed that there was a hole next to the toilet flange. Since I dodn't want anybody to fall through the floor when sitting on the thrown, I cut out a section of flooring and replaced it. Stuff to do is: install electrical sockets, molding for the floors, power washing (outside), and painting the covered porch. I see light at the end of the tunnel.

Maybe I'll take a PTO day and get everything done by this weekend.

On the tri-plex, I worked a 12 hour day that included: Removing an old toilet flange, removing drywall in three rooms, removed counter tops (both units), removed all the carpet wood strips where tile is being installed, got two more bids, pulled out some appliances, measuring doors to order, relocated trash, install new R-19 insulation in a bedroom where the guys installed the new roof, removed some popcorn ceilings at certain locations, and sweep every room for two units.

Its been a long weekend! Time to go to the J.O.B. and get some rest.

..

It was a good day for House #2

2005-09-14T20:43:00.000-07:00

First thing I did today was put on the new locks! What a great feeling feeling..

My three contractors came in today to finalize the game plan. The roofer turned out to be a good plumber and he replaced a valve stop for me for FREE. This was really convenient because this valve stop did not work so I couldn't take off the toilet to inspect. He will also replace the toilet flange which I was really concerned about. This is the one with the roots coming out! Its not a big deal anymore! He won't charge me much to replace the flange.

I got the drywall torn out in the hallway and bedroom so its now ready for my roofer and dry wall guy.

One contractor is going to put up the dry wall , texture every wall, and paint including materials for two units for $2500.00 This also includes the ceilings that are being replaced and he will spray the doors for free!

I have a roof guy replacing 3 or 4 sheets of wood and re-roofing and coating a large section for $600.

I have a great guy that will put in new ductwork and install new coolers for a good price as well. If I could give advice, I would spend a lot of time making sure you get good quotes! The guys I went with are by far the cheapest, however, they come recommended and I used these guys before so the risk is low. Using these guys, I will save thousands of dollars!

Based on all the work being done, I estimate it will take a solid month. This is longer than I wanted, however, it will be just in time for November 1st tenants. My goal is to have all three units filled by Nov 1st!

My tri-plex is in a area which is over 50 percent rentals. Unfortunately, almost every street has for rent signs, this makes me nervous!

House #2 is closing today!!!

2005-09-13T14:50:00.000-07:00

The deed is being filed as we speak. I think its safe to say that I own this property!

I'm excited and nervous at the same time. I need to do a full rehab and make sure I have three tenants by Nov 1st! I need to post pictures.

I will take PTO tomorrow and start working on it. I have 4 contractors coming out to either start work or give me quotes. I found a guy that will do my dry wall, texture, and paint for $2500 for both units. Thats a good deal..

I've been so busy that I haven't been able to post as much as I want. The double wide is over half done already. I have an offer of 15k with 6k down. There's a few issues with qualifying with the park manager, but maybe this one will work. It would be great to get this sold before even completing the work!

Good investing!

Can you paint a kitchen in 5 hours?

2005-09-09T21:26:00.000-07:00

I painted the kitchen in the double wide today. It looks ok, I used the left over taupe paint from another project. It was nice because it was a darker taupe so it covers the ugly wall paper in one coating. The yellowish counter tops don't make a great combination, however, the park manager and my wife thought it looked good. You have to listen to women when it comes to kitchens!

It was hard getting work done today! A lot of people came by, my sign guy, the carpet guys, the park manager, and a couple of interested parties that wanted to look at the house.

To my amazement, there was a couple that wanted to talk serious numbers with me this weekend. They said they were interested in giving me 5k down, and take a 10k carry back! Cool! They were concerned with the interest rate, so we will talk this weekend. They walked through when there are no floors and junk everywhere, but they seemed very interested.

In addition, the park manager said that there's three people interested in my double wide. I told her that I would give her $100 referral, and shes doing a good job. Theres one guy that spent the $40 bucks to get park approval. So, I have a feeling that things are going to work well with this investment!

House #2 Tri-plex set to close next week!

2005-09-08T11:33:00.000-07:00

Besides a small issue that needs a addendum, we are set to close next week! I've talked to both title and lender yesterday and theres no issues.

I've got most of my bids in, so I'm ready and set to get things going!

Status on double wide

2005-09-07T08:02:00.000-07:00

I had a solid 4 days during the labor day weekend to work on the mobile to get it done, but turned out that my best friend came in from Cali and my wife's friends came from Phoenix so I only had about two days of work! Thats ok, it was fun to play golf!

I will send pics soon, but there's a quite a few things to do. So, far its working out. I'll summarize the work done and things need to be done.

Work done last weekend:

Replaced a 7'X4' panel in the hallway. Added trim molding in several areas.
Ripped out carpet.
The walls were about 80% textured. I finished texturing two walls and the new panel. We used a "hawk and drowel" texture hopefully will look appealing to buyers. The existing panels were definitely out dated. This will give it updated look. This is done only in the hall way, and living room. Not the bedrooms
Spray painted the Evap vent and cleaned up the others. I need to buy a few floor heater vents.
Masked off the entire rooms including 5 windows.
I got the living room, hallway, ceilings, and dining room completely painted! I bought a wagner spray painter for $200. THIS was a life saver.. This saved me hours and hours of priming and painting. The doors came out excellent.

Work to do: (Sigh..)

Need to paint the kitchen. I should have sprayed it, but I will need to roll it. I will take advantage and try and use some left over paint.
The carpet guy will put in new carpet in the bed rooms. I wasn't planning on doing this, but I'm glad my wife insisted. This was the right move..
Replace 6 electrical plugs
Install laminate flooring in living room and dining room. I dimensioned this such that it will install easy. Instead of running the laminate in the hallway (time consuming), I'll use sticky tile.
Install trim for flooring.
Install sticky tile in the bathroom, kitchen, and hallway.
Paint the patio cement gray.
Power wash the outside walls.
Power wash the curtains ;-)
Paint a spot of the evap cooler.

I think thats it!? I will run over budget since the carpet is being installed now, but the numbers still look good. I will say I need at least 4 solid days of work to get this done. I will have to focus and work hard.

This double wide has made my life more complex because of the tri-plex. Its difficult to hire the work out on the double wide because my profit margins would drop significantly, but I need to get it done since I HAVE to do some work on the tri-plex. I estimate I will be doing about 20% on the tri-plex, but things need to get done before the contractors start.

House #1 Double wide..

2005-09-01T15:35:00.000-07:00

Ok, house #1 is officially here! I bought the double wide today. Sometimes I make the right decisions. Asking the seller to come with me to the DMV was a good one. Turns out that the title has a couple of issues (no liens) and it took over 2 hours to straighten them out. They almost made us get another signature from the husband that lives in Texas! After talking to the manager, we were able to get it done.

They said just because you get a signed title doesn't mean you automatically own it.

This is great because I now have 3 days to work on it. I hope to finish it and get it sold in two to three weeks.

I plan to paint the living kitchen and do the flooring.

I 've had the for sign on the mobile only 4 hours and already got a call.

The bummer part is I need more laminate flooring and the wharehouse is out, so my project will be incomplete up to two weeks.

I'll send pictures soon so you guys can check it out.

Good investing!

Everything is falling into place. Offer #14

2005-08-31T19:36:00.000-07:00

Today was awesome! Everything is falling into place....

I got a very good roof quote of $600 that covers a lot of work. In addition, I received a notorized "estoppel certificate" from my neighbor tonight. I sent it to him last night! What a quick turnaround. This document will protect me from anybody claiming the part of the lot. I do need the original to record it, but I have a faxed one right now. Jackie even contacted me today and answered some questions. Its been tough getting ahold of her.

The guy was cleaning up the 5 toms of trash today as well.

I called Jessica with the mobile home and she said she's ready to close tomorrow! She has the titles notorized and is willing to go to the DMV with me. Its funny, you go to the DMV to get title to a mobile home!! So I will do a final walk through and get it done.

Good investing!

Offer #14 The trash comes for free!

2005-08-29T20:41:00.001-07:00

One day, some mexicans dumped trash in the front yard. Came from one of the other properties that an investor is buying from the same owner. Apparently it was a misunderstanding. Its never easy!

..

Offer #14 in all its glory!

2005-08-29T20:41:00.000-07:00

Bids galore!!!

2005-08-29T20:24:00.000-07:00

I got several bids on the tri-plex today. The tri-plex will be quite a job. I should have known this, but the job is much biggger than I anticipated. The will be developing a budget and keeping to it.

The biggest issues is the roof, duct work, painting, and flooring. There was a guy working on a NICE house across the street and he gave me a quote on flooring. To do 450 sqft of tile, its about $575 in labor per unit. His work is awesome.

It was a big relief to see that the duct work is much less than I had anticipated. I will replace two coolers , roof jacks, and some duck work. Will be around $1500. So far, I think the bids have been great. I used this guy before, he's the cheapest and does excellent work.

He suggested that the painter should trowel the walls before painting. The texture will look like the new homes. What a good idea, I thought it was cost prohibited, but this guy says the painter he knows could do one unit in four hours!

This guy also has a roofer that he works a lot with. He's cheap and does good work. Hopefully, his quote won't be much on the roof work.

So, if I hire out the major portion of the work, I will do the small jobs like installing toilets, counter tops, appliances, caulking, etc.. This should work well , and if the work goes as planned, I can have tenants in by October 1st. Of course, this assumes I can get the contractors to agree on a tight schedule!

So, things are going quite well besides the seller not returning my calls.

The main issues now are:

1) POA is faxed to title company. They are saying they need to see the trust that the property is held in. Crossing my fingers..

2) I need to let her know the results of the inspection

3) I need a copy and pay history from the current tenants

4) When is the house going to be re-keyed!

I got a call that the junk in front of the house should be taken away tomorrow (hopefully).

Good investing!

Double Wide closes September 1st!

2005-08-29T20:12:00.000-07:00

I'm scheduled to close the double wide September 1st. I need both notarized signatures from the husband and wife.

A couple of issues have been brought up. First, the husband lives in Texas and will not be coming to Tucson to help the wife moved as originally planned. I told her if this transaction is going to close, she needs to get him to notarize the titles before the first. So she is going to over night the titles.

Secondly, she asked if she cold store her stuff in the outside storage shed for a week until she gets her apartment on the 8th. I said that would be ok, but she needs to have all personal belongings moved from the double wide.

It's critical that I close on the 1st or I loose several good working days. All I need to do is paint and floor the living room, and I could have the double wide ready for sale. Since the tri-plex is closing soon, I need this done!

For the triplex, the escrow officer didn't know how to deal with my lot issue? Is this inexperience? She said she would talk to the regional manager. I need to know if this is a big deal and how the title company suggests dealing with it. I need to know if it should be recorded, and who needs to notorize it.

Appraisal and Inspections are completed!

2005-08-27T16:44:00.000-07:00

We'll the good news is I don't have polybutyl piping. Its copper. The bad news is one of the ducts is completely rusted out (unit#2) and another one should be replaced immediately. All of the roof jacks should be replaced. AND there's one part of the roof that is very soft due to the evap cooler. I'm talking a 10' X 15' section! The roof is not in great condition, but I know part of it needs to be replaced.

So, I estimate I have an additional 8-10k worth of unexpected repairs. Damn..

Issue w/ Lot on Offer #14

2005-08-27T16:37:00.000-07:00

There's a small piece of land that is part of the legal description of the tri-plex that is adjacent to the east side lot. Physically, when you look at the piece of land, it looks like its part of the neighbor's backyard! I do not have access to it because there's a fence.

If the neighbor tries to claim this land and gets it, I'm in trouble. I need to PROTECT my rights to this property, since without it, I don't have the necessary square footage to be legal for a 3-plex. Our attorney recommended an "estoppel certificate". I will contact my title company on Monday to make arrangements.

Fortunately, the owner of the adjacent pience of land is a nice guy and understands the situation. He is willing to cooperate and sign any necessary documents.

Having trouble making up your mind, ask an expert!

2005-08-25T18:25:00.000-07:00

I was talking with one of REI buddies and he offered to come over and do an "rehab" analysis with me. I consider him an expert, he's been doing this for several years owning four plexes and duplexes.

The key things that he was saying was:

1) He was expecting me to turn these units over quick.. He was talking days, not weeks.. He's going to push my comfort level for sure!

2) He suggested carpet in the bed rooms and tile everywhere else.

3) He suggested putting out my rental sign soon.

4) He said he would try and get tenants in on the first of October which would allow for an extra $1875 to go to my pocket since my first mortgage payment is not due to Nov 1st. Great idea! However, if I have to pay more than $2000 dollars in labor to make it happen, it may not be the best choice. I have to mull it over.

5) He said the common mistake for landlords is not lining things up quickly. He feels putting out the rental sign after closing is losing several weeks!

To work or not to work, that is the question..

2005-08-24T12:41:00.000-07:00

Turns out that I'm quite the handy man, I have done full rehabs so I know I can do all of the work necessary. Not just floors and paint, but dry wall, texturing, plumbing, and whatever needs to be fixed. However, I need to assess how much work I want to do with this project. This is a weakness, because I know I can save tons of money doing it myself. And the work will be good. I don't have to worry about contractors not showing up or messing up the project. However, sweat equity is VERY time consuming or relatively slow. I already know that I cannot do everything.

For painting, I think its a no brainer to hire someone to come in and spray (Not brush) both units. They can do this in a matter of hours. However, should I hire them to mask off everything, or should I spend my time to do it and lower my costs? It will depend on schedule and budget! I think I can get a good deal with a guy I hired last year.

The units are dirty, so I will be hiring out help to clean them up. I have some good contacts with very good rates.

The floors are going to be a tough call. Do I do them myself or hire?? I just got done completing saltillo tiles in my bathrooms. It was the first time doing it, I and did everything myself. My wife thought they came out fabulous! These tiles are very time consuming because there's many extra steps from ceramic.

These units are going to be a long, long term investment, do you think I should tile every room or everything except the bedrooms?? I have to decide if I want to do this myself. This will take some time because I'll have to tile about 2000 sqft. Holy cow!

I plan on writing out my plan in detail in hopes of more experienced investors that do rehabs like Trisha or whoever can make suggestions. After my inspections this week, I'll know where I'm at.

Holding costs are steep on this one, so I need to work fast. Although, if I have a solid plan going forward, I can get these units up and running and get this non-performing asset performing.

Good investing!

Offer #14 - Foreclosure is stopped!!

2005-08-23T12:35:00.000-07:00

Ok, she left me a message saying that the foreclosure has been stopped and the loan has been re-instated! This is a huge relief!

This was the biggest obstacle in this deal, the second will be any title issues from the POA.

I've haven't had much time to write about this deal because I'm so busy.. In this deal alone, I had over two pages of checklists trying to get everything done. Even though I'm the buyer, I need to make sure everything gets taken cared of for closing. This is when a realtor would be nice, however, I don't mind because I like to know exactly whats going on. We have only a 3 week escrow period, so if its going smoothly, I need to make sure everything gets done on time.

We're set for an inspection this Friday. I'm crossing my fingers that there is no polybutyl piping and rusted out duct work. This is my nightmare folks...

Unit #1 is vacant and it was trashed. Unfortunately, it looked worse yesterday than the first time. Its ok though.

I was hoping that unit#2 would be a regular unit with normal wear and tear, but nope, I saw through the window that the bed room ceiling had a 2 foot hole in the white board in the ceiling. Damn!! Now I'll have to replace white board and texture the ceiling in that room. Although I didn't walk inside unit #2 , the kitchen and living room looks ok so far.

The sellers did me a favor (I think) and ripped out the carpeting in both units. I didn't ask for this, and don't know if they thought they were doing me a favor? Actually, its for the best, I plan to tile both units.

Who's doing all this work?? I'm on a tight budget, so I will have to be careful. The interesting thing about this deal is everything is 3 times. 3 times the flooring, 3 times the paint!

I didn't want to put in more than 5k for all three units. This will cover flooring, paint, and cleanup for all three units. However, if there's more, the costs will go up..

I saw the property a little differently today than before. It was a bright sunny day and I could see everything clearly and for some reason the property didn't look as nice?? Maybe its the reality that I'm in escrow and now its time to do some elbow grease. Or maybe its because the front yard looks like sh*t because theres about a ton of carpet and junk by the sidewalk.

I saw a lot more work that could be done like exterior painting and new fences... I'll take pics later this week and post them and see what you guys think.

Oh yeah, I looked at my lot size and it appears that I have a sizable 17 foot section in the neighbors back yard. The lot dimensions shows that this is MY land, but it looks like the neighbors back YARD! What's going on? I'll have to go to the county and check it out.

Its never easy!

Is tomorrow going to be a bad day?

2005-08-22T11:52:00.000-07:00

Well, tomorrow is the trustee sale for the 3-plex. Did the lender accept my contract and stop the foreclosure? Or are the sellers going to pay the arrears today?

I have no clue what's going on. I'm in the dark because she has not called me back and given me status. Argghh!

I doubt she will let it go because she'll loose over 30 or 40k in equity. However, you never know what to expect with pre-foreclosures.

Good investing!

The others are sold!

2005-08-19T07:38:00.000-07:00

The out of state gal had other properties for sale. She told me yesterday that her cell phone betteries went out so I couldn't contact her (umm..)

By the time, she called my back, the others were under contract.

Too bad, since I had some friends that checked out the properties and were chopping at the bit to make offers..

We're going to LA today for a mini-vacation. Hope you guys have a great weekend!!!

P.S. You if you want to buy a property, just plan a vacation, and the leads will come right before you have to go. ;-)

Miracles do happen! Offer #14 Accepted!

2005-08-18T12:12:00.000-07:00

Guess who calls me yesterday? The out of state gal who had four properties! She told me that a friend in the family had passed away and she had been completely focus on that.

So, I am now under contract on the 3-plex! This is exciting, but I'm nervous because its a preforeclosure and you never know the twists involved. This one has two: a Power of attorney, and a trustee sale next week. Talk about cutting it close!

I actually did a walk through on one of the units. Talk about trashed!! It has spray paint on the walls and the floors are completely trashed. The worst part is the frig has been turned off with food in it for months!!! :-(;) It should be the worst unit, the other two (although I haven't checked it out) should be much better. Its all cosmetic!! The walls, dry wall, cabinets, fixtures are all good.

I screwed up the second offer on the other house, I started too low and didn't push to my walk away value. Now, I can't get ahold of her (again) and she had a deadline this noon from another investor . So I'm afraid that she went with him. It would have been a good one too with 30k equity if my numbers were correct.

So, with the double wide and tri-plex closing in the next month, I should have plenty to talk about!

Good investing!

And you wonder why I'm having a hard time finding a rental??

2005-08-15T19:25:00.000-07:00

Oh my god, I never thought this would happen. Arizona out performs California!!!

Check this article out.. Look up your city to see how the madness effects you..

http://money.cnn.com/2005/08/15/real_estate/historic_home_price_gains/index.htm

NEW YORK (CNN/Money) - Single-home price growth over the 12 months ending June 30 was the strongest in history, according to the National Association of Realtors.
In its quarterly survey, NAR found that U.S. home prices rose at an annual rate of 13.6 percent, to a median price of $208,300.
Of the 149 metro areas surveyed, 67 showed gains of more than 10 percent. See table tracking all 149 markets.
David Lereah, NAR's chief economist, called the increases unprecedented. "When you look at appreciation of home prices relative to the overall rate of inflation, these are the strongest increases on record," he said.
The Phoenix market, up 47 percent since the second quarter of 2004, led all metro areas. The median home price there is $243,400.
Right behind Phoenix came several south Florida metro areas, including Cape Coral/Fort Myers, with growth of 45.2 percent.
Seven metro areas posted price declines; the most severe was in the Kalamazoo/Portage area of Michigan, where home prices have declined 3.7 percent, to $122,600.
The lowest priced market was Danville, Illinois. There, the average home is $73,400. Though that's up 16.9 percent from the second quarter a year ago.
The West beat all other regions, averaging an annual gain of 19.5 percent, to $312,600. The South had the slowest growth, just 5.7 percent to $179,400. The Midwest climbed 12.1 percent to $167,800 and the median home in the East is up to $243,100, 13.1 percent higher than a year ago.
Top 5 markets
1) Phoenix, AZ
Median price: $243,400
Growth: 47.0 percent
2) Cape Coral/Fort Myers, FL
Median price: $266,800
Growth: 45.2 percent
3) Palm Bay/Melbourne/Titusville, FL
Median price: $204,000
Growth:40.0 percent
4) Orlando, FL
Median price: $232,200
Growth: 36.5 percent
5) Sarasota/Bradenton/Venice, FL
Median price: $367,800
Growth: 34.3 percent
149 markets tracked. See which areas had the fastest growth in the second quarter and which have the highest priced homes. See the table here.

Business is not on auto pilot..

2005-08-14T15:56:00.000-07:00

It would be nice to have the business on auto pilot. Whenever, I go on vacation or get taken away for a month working on a property, its hard keep the leads coming in..

I've reviewed my business plan this weekend and looked at the past/present performance, and boy, I'm pretty disappointed with the results. The leads dripple in and once in a while and I get close to hooking something.

This reminds me alot about fishing, you've got the right GEAR, you know the fishing TECHNIQUES, and you fish ALL day, but you don't catch nothing. They call that fishing , but a alot of times its called you don't know what your doing!

Of course I know what I'm doing, but I need to find the holes where the fish are..

Rough as they come..

2005-08-14T15:47:00.000-07:00

I just got back from checking out a 1980 single wide 14X70. Boy, this is as rough as they come..

As I was introducing myself, the TRAIN started rolling by about 100 yeards away!! I couldn't even hear him..

I started to walk through the property and every room has water damage, the carpet is trashed, and no pride of ownership.. It was in rough shape..

And the guy wanted 5k for it! Ouch.. Turns out he bought it w/ seller's financing (neighbor) and wants to make some money.

I didn't even make him an offer, I wouldn't come close to his asking price and didn't want to piss hom off or ruin his day.

Next!

Bummer!!

2005-08-12T11:33:00.000-07:00

Unfortunately, I will have to move on and forget about the outstanding offers. Its weird not to get a response from an offer of only 97% of the asking price! Jeesh..

So far the double wide is still on track...

I'm going to see another single wide this weekend. This guy bought one for 6k, and is asking 5k. I'm glad I'm getting my feet wet in the mobile home market. Its not glamorious, thats for sure. You won't be able to impress your friends by doing drive byes, but nonetheless, if your getting cashflow, than thats all that matters.

Status on offers..

2005-08-11T08:09:00.000-07:00

I put in an offer on Monday and she told me that she needed to discuss with her husband. She has still not called me back! This really does suck.. Either she is very busy with life or may be blowing me off...

I don't get it, this property is going into foreclosure on the 22nd of this month and she doesn't seem to want to get it resolved?

Although this is an excellent opportunity, I haven't lost any sleep over it. I've learned with working with preforeclosure sellers for the last several years that you never get excited until you close the deal and get the keys.

Two years ago, I would have gone crazy waiting for this gal to call me back. I've put in voice messages once a day, we'll see if touch bases today or not..

Offers #11,#12,#13,#14

2005-08-09T08:07:00.000-07:00

Wow, just what I've been waiting for. A gal calls me up (from my forelcosure letter) that has two houses , a 3 plex, and a four plex.

She lives out of state and two of the four properties are in foreclosure. I don't exactly understand her thinking, but she's selling these properties to investors only. My buddies are confused that she doesn't put them on the market w/ a realtor because these are in some of the hottest neighborhoods in town.

Obviously, she doesn't realize this. She has power of attorney and has done a poor job managing these.

Her asking price is approx. 80% market value. This is exciting, I've put in an offer on the 3 plex and am waiting for an answer. If I get that one, I'll try for one more.

Crossing my fingers that I don't get out bid by another investor. We'll see what shakes out..

More details - House #1

2005-08-03T12:33:00.000-07:00

What a mess..

I found out from the personal property tax department that someone else (besides the owners) has been paying their property taxes for the mobile home!! Strange, this person lives in the park with a different lot. I guess that means his taxes haven't been paid. Boy, he's going to be surprised when he sells his place.

So, the question is, if I buy the mobile, do I have a chance that the city will reverse the payment and charge me the back taxes?? That would be around $400 dollars. Ummm...

The city was going to contact the park manager to clear this up.

In addition, I decided to send the contract to the husband to sign.

Its never easy...

Ball is rollin - House#1

2005-08-01T17:19:00.000-07:00

I've switched offer #10 to house #1 since I am now officially under contract.

Today went surprisingly smooth. I signed the contract today and I gave her a $50 dollar deposit.

There are a few issues. First, the title does not state the correct lot #. She knows about this. Secondly, she said that she has authority to sell the place, but on the two titles (one for each side lol) it has her husband's name and her name on one, and the other has only the husband's name.

So technically, she owns half as far as I can tell. Good thing that he will be coming in to help her move, so he will need to straighten this out.

Secondly, she has not paid her property taxes and does not know how much she owes. She thinks they are about $200 a year, so she might owe $400 total . At least she expected this and said she will pay this off before closing. I will assist her in finding out how much.

One thing that kinda of sucked was I felt I needed to put the husband's name on the contract as well so technically its not completely official because he did not sign it. I should fax it over to him this week.

On the flip side, the hardest part of this deal (the property manager) turned out to be the easiest. She reminds me of a tired government official. I got in before she opened the office and I waited for her on the couch. She open the door and just stared at me for 10 seconds like I broke in to the place. I finally asked, "Are you the property manager". She responded abruptly. I told her my business and she immediately copied and handed me some forms. Her only concern was getting the lot rent. She didn't care if I rented or resold it. Interesting. She will have to qualify the tenant and does back ground checks. As far as I'm concerned this is fine with me. I don't want to put a criminal in my mobile either.

After a few minutes, she warmed up to me and she explained that the one mobile that I wrote previously, sold for 15k and the owner is taking back paper of about $200 a month. He gave them 3-4k down as well. This is going to be just like my deal! I looked at that mobile today, and it is in better condition right now. The new carpet does look good. When I get done though, it will be nice, I have left over laminate flooring that I plan to use for the living room. It should look just as nice.

Another issue that I completely forgot about is having a dealer's license in Arizona. Technically, if you buy, and resell mobile homes you are a dealer. I found out today that it costs $570 dollars , w/ $270 maintenance each year! I have to take the test in Phoenix and pass a back ground check and finger prints. Holy crap...

I called the mobile home housing and asked the question but I got conflicting answers. The dept in Phoenix said if I only do one this year, its not necessary. However, I thought the Tucson office said if you do one or more , you need it. Since I'm puchasing this under my LLC, I hope they won't give me grief if I don't have one. I'm pretty sure I'll be alright, but I will ask some of my investor friends' opinions. I need better definition between "dealer" and "purchaser". If I do more than one, I'll have to spring for the license.

Another nice surprise is that she had a washer /dryer that I did not even know about. Everything is staying!

Good investing,

Bginvestor

Details on Offer #10

2005-07-31T09:10:00.000-07:00

Here's the details of Offer #10. Its a double wide mobile home in a decent part of town. The gal is not really motivated, she's still in school and wants to move soon. Her husband is in Texas. I don't know if they are getting divorced or not. The plan is to go under contract tomorrow and we will close in about a month. By understanding her needs, I helped seal the deal by offering to close when she's ready.

I hope this deal will be a text book Lonnie Scrugg's deal. He's made mobile home investing glamorous. Here's how it works. You buy a mobile home cheap and re-sell to a buyer that is looking for seller financing. Leverage is the key here, you can charge 10, 15, even 20 percent interest when you resell to these guys. When you run the numbers its apparent that yields can be pretty high. The buyer only really cares about monthly payment.

I don't know why the gal hasn't looked at the prices of other mobiles in this park. If she looked on the other side of the park, she would find that one is selling for $14k which is smaller than hers!!

Let's look at the numbers. Below, I ran two scenarios. The first is a simple fee sale which I would make $6100. The second is if I resold on seller financing which I would make $10,476. Not bad considering I would have only $7900 into it.

The monthly cash flow is $273 dollars a month. Shoot, I could buy a house for 100k and put way over 20% down and may not get that much cash flow. This is an important oberservation. I am not getting appreciation but I am getting cash flow.

With older mobiles, the depreciation has hit a threshold, so in 5 years, your mobile is still worth about the same.. So, I stay away from the new ones. They depreciate faster than a car.

There is a little concern on the total monthly payment to the buyer. This park has a lot rent of $307 so the buyers monthly payment will be close to $600 w/ utilities. This seems a little high, so I may need to be flexible.

Another interesting point is I got this one from a birddog. I am going to give him a $500 dollar commision. Unfortunately, he was not happy that he was getting his money only when I close the deal (the first week of September).

So a yield of 33% is not bad at all. If I did just 7 more of these, I would have over 2k in passive income for several years. That would be cool..

I decided to talk to the park manager about this transaction when I've got it under contract. I know some parks are catching on to this investing strategy, so I wanted to make sure the park did not make her an offer. The biggest unknown in this deal is the park manager. I hope I can do what I want and she will work with me. If I can't work with her, and need to back out, I will let the seller know in a week. I have a cancellation clause that takes care of this.

.

An eye opening experience...

2005-07-28T15:08:00.000-07:00

Last weekend, I completed my financial statement from top to bottom. What an eye opening experience! The numbers do tell a story, and I highly recommend everyone to do this.

I went the extra mile and created a bunch of pie and bar graphs showing many variables.

I answered the following questions.

How much do I keep?
Did my money work for me?
What's my income after taxes?
How much did I spend on housing?
How much did I spend on junk?

We have a long way to go, but I see we're on the right path.

Good investing,

Bginvestor

Offer #10 Double wide offer accepted!!

2005-07-27T13:13:00.000-07:00

Cool! My offer was accepted today.

I don't have this under contract yet, but hopefully tonight. I'll write more on the details.

I talked to a broker last night that had a 20X40 under contract for 14,000 in the same park. (Actually, directly across from this one)

Mine is bigger and got it for $5750, so this should work out well. I'll break the numbers down later.

Good investing!!

Offer #10 - A double wide..

2005-07-25T12:26:00.000-07:00

In this type of market, I'm trying to be flexible in finding deals so I'm looking at everything. I have mix reservations about this, because in general its better to focus on a certain type of REI instead of being a fog light looking at everything. Right now, I'm running numbers on apartments, single family, lot splitting, and now mobile homes.. I am making an effort to run the numbers because ultimately this tells me the story if its a deal or not.

So, I got a lead from my birddog, a young gal got a double wide. She was asking 7k for it. Didn't seem to be a bad price. I looked at it yesterday and its funny, because I felt out of place looking at it. I am use to looking at houses, not mobile homes. Sure the fixtures are similar, but I was still thrown off, so I didn't ask enough questions.

Basically, its in ok shape. The walls need to be painted, but if I can live with the dark brown carpet, its almost turn key. The price of 7k is not bad.., but you know me, I need a great deal so I pushed for lower.

I told her that the mobile home market is saturated, and holding costs are long, so based on fixup costs, I told I would give her 5k for it! She told me that her husband (soon to be divorced) didn't want to go lower than 6k. So, I may be close to a agreement. This gal did not do any market research and doesn't really know the value of it. Hoenestly, I didn't know either til last week.

So I played with some numbers to tell me the story. I came up with a graph that tells the cost of the mobile home based on area and year built. The data points are based on recent listing prices from websites and newspapers. These prices assume retail and are in good condition. In general, these numbers are considered only an average using the interpreted line, so I need to be careful not to be unconservative or too conservative. I plan to inlcude more points to make it more accurate, but the trend line is very useful when comps are not available.

Anyway, it should sell for 13k-14k. I expect some holding costs and I need to fix it up so buying it for 5k plus birddog fee seems like a good deal. I could sell it fee simple or do a Lonnie schrugg's deal by creating a note and making twice as much. I'll pay cash for it.

The gal needs to talk to the exhusband and her father. Hopefully, she wants out bad enough. She doesn't seem to be in a hurry since she needs to finish school.

Good investing,

Bginvestor

.

Offer #9 - Never go on vacation during a deal!

2005-07-23T11:52:00.000-07:00

Ok, so a guy calls me up from my bandit sign and says he is selling his house which is not listed yet. After getting the basic information, he told me that the lot was big. Interesting... I immediately went to the geo-website and saw a sky view of the property and boy was it big. Its over .3 acres and the existing house is placed well.

I went to the city and they confirm that is not in the flood plane and the lot could be split. Good..

I went to see the house and he remodeled it from the bottom up. Its basically a turn key investment. Nice.. He wanted 162k which is full market value. I convinced him that if he sold with an agent and closing costs he would net no more than 93% of 162k, so 150 k. He needed 25k profit which would have brought him to about 155k.

I was negotiating for 150k, but he was confident that if he took it ot the market, he could get what he wanted. And he was probably right. At this point, if I got 150-152k, I could rent out the existing unit with a interest only ARM and get over $100 cashflow. The key to this investment would be to split the lot and build another house and make the real profit on the back side. So, I could buy it for almost market value and still make money.

This is risky for me, because of several factors.

Its difficult to estimate the appraisal of the house with the lot split.
I have to estimate the cost of the new build. This was estimated using my buddies construction company that they use. Will they give me the same price for the same floor plan?
Financing would be difficult when splitting the lot and I would have to add in re-fi closing costs.
Holding costs are estimated.
I haven't seen any owners splitting lots in this neighborhood.
Its not in my farm area.

Ok, at this point, its almost impossible for me to line everything up so I needed a backup plan if the splitting of the lots would not work. The plan would be to rent out the house or better yet sell it on a lease option. IF appreciation stays the same, I would do ok in a year or two. If not, I would break even confidently if I needed to get out. The deal is really predicated on getting the twist (new build) completed. This is essentially buying the property under value because I see the opportunity.

The night before I went on vacation, I offered to put the house under contract for 152k. He told me that its probably better to wait til I get back because he didn't get his official job offer to move out of state yet. Damn!

I called him back yesterday. Guess what? His neighbor bought it for 162k! Turns out he had plans for the land. While I was gone, the seller must of been working it over with his neighbor. I could just imagine the seller saying to the neighbor, " Man, this investor was trying to get me under contract just a few days ago! If you want this property, you better act now, or its going to be gone!!"

The morale of the story is, don't do deals before you go on vacation!

Back from vacation!!

2005-07-22T14:29:00.000-07:00

Well, its back to the grind. I went to the JOB yesterday and man was it painful! At least there's some REI deals that I'm working on right now thats keeping me busy..

I was going to write a little bit about our trip, but my wife had already wrote a nice summary, so here it is! I highly recommend Kauai!! It was awesome!

"We just got back to the mainland today. Boy, words do no justice to the beauty and essence of Kauai. So far, in the 30 years that I've walked this earth, I haven't had as much fun in any place than the Garden Isle (Kauai).

It's summer time there and the temperatures stayed inthe 80's. The humidity was also in the 80's but sinceI'm used to humidity in the Philippines, it did notfaze me at all. Surprisingly, Brian wasn't bothered bythe high humidity either. Try viewing the slideshow from the link below...http://travel.yahoo.com/p-travelguide-191501919-kauai_vacations-i

We got to Kauai on Tuesday, the 12th and the very nextday we spent Marlin fishing. We decided to go onBrian's birthday hoping for some luck. Kauai's watersare rough. We had 4 to 8 ft waves during the entireday of fishing. Needless to say, the dramamine did nothelp out in the morning and we felt queasy not havingbeen raised with "sea legs." We got skunked in themorning (zero fish for all 5 tourists), so Brian and I braved it into the afternoon seas. We did not want to give up. The afternoon fishing was more fun. We did not get sick this time and even though we did not landa Marlin, Brian hooked into a 30+ lb Ono (Wahoo). Itwas beautiful and pretty heavy when I picked it up. Ithad razor sharped teeth. The link below has a goodpicture.http://www.state.hi.us/dbedt/seafood/ono.html

Thursday we drove up to Waimea Canyon, the "GrandCanyon" of the Pacific. It was GORGEOUS up there. We also saw one feralpig (wild) and wild chickens everywhere. Thehens/roosters were very entertaining. They wereEVERYWHERE!! Check out the chickens and Waimea Canyonbelow. We also stopped by at Jojo\'s Shave Ice on theway to Waimea. Excellent shave ice at Jojo\'s---one ofthe popular tourist stops.http://www.hawaiiweb.com/kauai/html/sites/waimea_canyon.html

On Friday we took a helicopter tour of the wholeisland. This activity is a triple must!!!!!!!!!!!!! WE were in awe. Neither of us has ridden on a heli andit was one of the best views of the island. We saw NaPali Coast (can only be accessed via foot or catamaranor seen from a helicopter). You can't drive to Na Palicoast but for the serious hikers, it\'s definitely awonderful trek. Check out Na Pali....http://www.hawaiiweb.com/kauai/hiking_and_camping/NapaliCoast.htm

Saturday we went to the Marriott north of CoconutMarket to experience our first Luau. It was a greatexperience. Luau is definitely worth doing at leastonce. Good entertainment and great food.Sunday we went to the Kauai Coffee Plantation andsampled a LOT of different coffee varieties. They\'recoffee is definitely on the strong side. We also sawone of the falls (Opeaka\'a) and the Wailua River. Wedid not go to the Fern Grotto since there was so muchto see....maybe next time...From the website below, not only will you see thefalls but also a photo gallery of Kauai worthchecking out...

If I was gonna retire and had mychoice, Kauai would be up there. We also saw one feralpig (wild) and wild chickens everywhere. Thehens/roosters were very entertaining. They wereEVERYWHERE!! Check out the chickens and Waimea Canyonbelow. We also stopped by at Jojo's Shave Ice on theway to Waimea. Excellent shave ice at Jojo's---one ofthe popular tourist stops.http://www.hawaiiweb.com/kauai/html/sites/waimea_canyon.html

On Monday, we got to see one of my most favoritebeaches in Kauai --- Ke\'e beach. At Ke\'e, we snorkeledand swam with the sea turtles. It was scary at firstsince they were huge but the turtles were so friendlyand was not bothered by all the tourist attention. Sowe got to touch them and they did not even bat aneyelash.http://www.hawaiiweb.com/kauai/beaches/default.htm

We also went to the north side of the island andvisited Princeville. This is a haven for golfers andyuppies. Definitely the more affluent side of town...http://www.hawaiiweb.com/kauai/html/sites/princeville.html

Good food in Kauai:

Keoki - fresh fish/seafood
Brick Oven - Pizza
Bubbas-Hamburgers
Ono Charboil Brugers - Brugers

On Tuesday we packed, drove to Wailua Falls, and started our red eye flight back to the mainland. Mahalo!"

Off to vacation!!

2005-07-11T20:25:00.000-07:00

I'll be marlin fishing at Kauai this week!! So there will be no posts in the next 9 days, however, check back next week because I've got lots to tell..

Almost went under contract on a deal that I'm putting together where I'm buying it with a 3 year fixed ARM (thanks steve) and splitting the lot in the future to build a new house.

Even if the lot splitting doesn't work out , I should be able to make 20k in one year.

The city has given me thumbs up for the lot split. Handling the financing will be might be real tricky.

Anyway, I'm only a few thousand dollars off from agreeing on a price with the homeowner. Stay tuned..

About Kiyosaki's Cashflow 101..

2005-07-10T06:30:00.000-07:00

I played this game for the first time last night. What can say, it was awesome! My friends started playing about 3 years ago, and its helped them think about how to get out of the rat race.

To get out of the "rate race" your passive income needs to exceed your liabilities. The game is played mostly on a ballance sheet. You roll dice and get or lose opportunities. Very cool..

Remember in my long term goals , I stated that I wanted to test my strategy with this game. Because I was learning the game, I didn't quite follow my strategy, however, I think it would have helped me get out of the rat race to minimize by liabilities.

Anyway, I was surprised that my wife enjoyed the game so much. She's kinda of competitive so she enjoyed kicking my butt. ;-) She said, that's the most fun I've done with real estate yet.

If your into real estate, I recommend this game. I checked ebay and you can get decent deals on the game.

So, goals today are:

Write a letter to the gal who has the big lot to express my interest in purchasing it. I need more details before making her an offer.
I have another guy who called me that has a big lot. This might be better than the first one.
I will do a walk through w/ a double wide today. Apparently she's asking a pretty fair price.

Good investing,

Bginvestor

No grass growing under my feet..

2005-07-07T15:09:00.000-07:00

Ok, so I sent a letter to gal that has a huge lot... She called me back and told me that she would be interested in selling if the price was right. This is good..

I showed this lead to my buddy and we drove by the property. He was interested in pursuing this with me. My job now is to create a business plan and run some numbers. We'll do a peer review (analysis) of this plan and make adjustments. At the end of the week, we will go down to the city and verify the possibilities of handling the property.

This is excellent.

IF everything works out, I will call this gal up and negotiate a deal. With some help, we will make a lot of money!

This is a huge break for me because its difficult for one person (me) to acquire a property and in 6 months make 60k from new construction. It takes a team of people and it takes knowledge and time to acquire this team. My buddy is willing to help me and I am very grateful.

Wish me luck!

Good news..

2005-07-07T08:31:00.000-07:00

I did get a call from a gal that was selling two houses, a duplex, and a fourplex (Out of state owner). I am looking forward to running the numbers on these!

Good investing

Unbelievable!

2005-07-07T08:21:00.000-07:00

A got a second call back from a guy in foreclosure. The first time was almost two months ago and he wanted to stay in the house. I said, ok, and talked about some solutions. He was interested at first and than he suddenly didn't return my phone calls. I was in the neighborhood and and knocked on his door one day. He told me that he was working with the banks and he was not interested in working with me. I said ok, and left him alone.

Well, he called back last night and wanted to sell his house to me. The trustee sale is August 1st!! So I need to handle this property in 3 weeks..

We discussed the numbers again (didn't look pretty) and told him that I need to see the house. We made an appointment for 7:30 this morning. He was very excited about the meeting because he did not want to ruin his credit.

So, did he answer the door? Nope.. I knocked at 7:30 and no one answered. I left a message on his cell phone. This amazes me because if I was this guy, I would have had the coffee ready and hoping that he would show up. This guy probably heard the door knock but was too lazy to get out of bed to answer.

I just don't get it!