Don’t Make Too Much Money

Sep 1st, 20109 Comments

Addicted to real estate

I just met a woman last night at a real estate meeting who wants to become a real estate investor. She said that she had to do it without the support of her husband. When I asked her what kind of real estate investing she would like to do, she told me she wants to flip a home. This of course sent me right into my opinion that flipping is not real estate investing, and as I dug further into her story, I found many more things that she needed to be corrected on. She had a well-paying job and so did her husband and they also have $400,000 in equity in their primary residence and home equity line of credit on that residence already set up. She also has $65,000 in cash to work with if she found the right real estate investment to put the money into.

Flipping homes can be difficult work with very labor-intensive tasks involved, and it takes a confident aggressive person to see one through successfully. If you plan on running one with various contractors without actually picking up a hammer, your chances of issues increase. But considering she’s in a situation where she has all the money she needs right now, why does she need to do a flip?

I quickly told her my theory on buying an inexpensive investment property for a buy-and-hold strategy and see if she likes the business. She has enough cash to go out and buy the home for cash followed by doing the repairs and renting the place out and then setting it up for a cash-out refinance. If she bought this book and followed that technique, she might end up owning that home for no money down and completely replenishing the home-equity line of credit allowing her to turn around and do the whole thing again. Her biggest problem with that strategy is my book isn’t finished yet. Everything else I laid out in that strategy will be easily accomplished with the help of an experienced person like me, and she already knows me and has my business card.

Sell the People Who Are Trying to Sell You

Aug 31st, 2010548 Comments

Addicted to Real Estate

We all have seen signs in the front of office buildings that say no soliciting. The front of my office building has no sign, but I say yes to solicitation because I am going to sell the people who are trying to sell me. I almost always take time to meet the sales people who stop into my office building, and I tell them they have ten minutes to give me their story. Then I turn the tables on them and take ten minutes to tell them about my business and my story. You never know how planting a seed in someone’s mind can lead to a deal for an answering service client, a mailbox, or an office rental. I call it selling the people who are trying to sell you or turning the tables on the salesman.

You have got to have a little fun when you’re out in the business world working, and I have to admit that this is not only smart but it’s very fun. Some of these guys don’t know what hit them when they walk into my building and I give them the ten minutes and immediately take them for a tour and show them what I’ve got to sell. I also offer them commission so they can earn money by telling other people about my building.

The Greatest Investment of your life

Aug 31st, 2010408 Comments

Addicted to Real Estate .

You want your quality of life to be improved from the intelligent decisions that you made in real estate, so that as the years go on, instead of beating yourself up, you’ll be patting yourself on the back. It’s an amazing feeling of accomplishment when you’ve reached a point where all you’ll have to do for a living is manage your portfolio. Your intelligent commercial real estate purchases along with your management of those properties will allow you to be in a position of comfort in life. I put a great deal of brain power into this manuscript so the reader may one day be able to be in that exact position.

Never lower the rent – Addicted to Real Estate TV

Aug 30th, 2010376 Comments

Addicted to Real Estate TV Show

In this video I share with the viewer my strategy for negotiating with new tenants to make sure you never lower the rent. This system will pay big rewards when its used properly so pay attention and lets get busy. Remember Da rent stays like a before.

Addicted to Real Estate

Everything is always for sale all the time

Aug 30th, 2010448 Comments

Addicted 2 Real Estate - Everything is always for sale

When you practice what I preach about calling all the signs from the commercial buildings that you will find, you begin to learn a funny thing. Many people own these buildings won’t talk to you but rather have you put an official bid in through the realtor. If you’re really trying to sell a building, that makes absolutely no sense to me. Everything I have is always for sale all of the time. There is always a number that I would sell a building for; if you don’t have that attitude, I don’t understand where your head is. Don’t fall in love with real estate, and don’t fall in love with a business that you’re running out of a piece of real estate. Everything should always be for sale because what you have could be worth a lot more money to somebody else who has another reason you’re not interested in. I would never turn down a meeting with a prospective buyer as my door is always open to have a conversation with people like that. Talking to people and making contacts in this business is critical to being successful.

In 2007 I looked at a property that was for sale for $1.5 million that was a mixed-use property with thirty-something units. It was a little bit of retail, industrial, and office space all put together in one property. I offered the guy $1,350,000 and expected him to carry a $250,000 second mortgage making the sale price for the property $1.1 million. I would put the appropriate down money on a $1.1 million purchase and get a mortgage for as much as I could while asking him to carry a $250,000 second mortgage. He treated me like I was an undercapitalized buyer who had no right to even bid on his building, and I told him he was right but that didn’t mean I couldn’t get the deal done. He gave me one meeting and then told me he wasn’t interested in carrying any paper or having any more meetings with me.

I recently noticed that the property was for sale for $1.1 million some two years after I looked at. I called him up to tell him I was still interested, and he said that the only change he had in his mind was the price of the property and now he was looking for cash offer. What kind of jackass would even say anything like that to a prospective buyer? Why did he care where the money came from, whether it’s my own cash or some of my cash and an 80 percent mortgage? If the owner had just taken my deal that I originally offered him, he would be up $250,000 today in a second note with a full-price offer as it stands now. Knowing I was out there for the last two years, he could have easily called me up before he even lowered the price to try to open up the negotiations with me again, but no phone call ever came.

It amazes me that a person with no business skills could have ever acquired the property in the first place. Maybe he has a superiority complex or maybe he thinks I’m crazy. I frankly don’t understand at all what he could’ve been thinking. I told the guy two years ago I owned buildings of larger value than this particular piece and that alone should have qualified me as a person capable of buying it, but he apparently wasn’t impressed. This is why I always say everything is for sale all the time because you just never know what kind of deal you can make and what’s going to happen.

Addicted to Real Estate

Don’t fall in Love

Jul 30th, 201035 Comments

Falling in love with a real estate deal can be the kiss of death. When you work on some of these long hard commercial properties and the deal seems to take forever, you tend to get attached to the building. You work on something so long it tends to become somewhat of an obsession, and the longer you’re involved in it, the harder it is to walk away. I found myself in this situation more than once where I wanted the deal so bad I was thinking of making concessions I maybe should not think of offer- ing. That’s why I suggest you be aware not to fall in love with the real estate deals you are working on.

When I chase residential buildings to purchase, the success rate of closing these deals is very good, but the commercial arena is completely different. I don’t know if it’s me or the deals I am chasing or if its commercial real estate in general, but I have had four deals fall through for every one that went through. It can weigh on you over the years as you write contracts and incur lawyer fees and spend tons of time working on deals that don’t come to fruition. If you find yourself in a situation where the smartest thing for you to do is walk away from the deal, you can feel good about the fact that at least you gained some knowledge while working on the one that didn’t go through. Sometimes you win and some- times you learn is a good way to look at a deal that doesn’t make it to settlement.

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