It’s easy to fix up your properties if you have unlimited cash. However, you need to keep your repairs to a Related Information: “Flipping Properties Course” minimum to stay profitable. You also need to keep your properties in good shape to attract tenants or buyers. There are the basic improvements, such as carpet and paint, but these can still costs thousands of dollars. The following are some inexpensive ways to improve your properties with very little cash.

New switch plates cost about 50 cents each. You can replace the entire house with new switch plates for about $20. For the foyer, living room and other obvious areas, spring for nice brass plates. They run about $5 each – not much for added class.

The basic hollow-core door is about $20. It comes pre-primed and pre-hung. For about $10 more, you can buy stylish six-panel doors. If you are doing a rehab, the extra $10 per door is well worth-it. For rentals, consider at least changing the downstairs doors.

If the floor trim is worn, cracked or just plain ugly, replace it! Home Depot carries a new foam trim that is pre-painted in several finishes and costs less than 50 cents per linear foot. Create a great first impression by adding crown molding in the entry way and living room.

Americans spend 99% of their time in the kitchen (when they are not watching TV). A fancy modern faucet looks great in the kitchen. They can run as much as $150, but not to worry – most retailers (Home Depot, Home Base, etc) often run clearance sales on overstocked and discontinued models. I have found nice Delta and Price Pfister faucets for about $60 on sale.

Read Full Article Here: http://www.reiclub.com/articles/10-ways-spruce-property

You’re a Real Estate Entrepreneur or Investor, and you’re out there in the market place looking for deals. I have a question for you.

Are you doing a bit of advertising and just hoping that a deal will fall in your lap, or are you operating in a way that makes certain it will happen. If you don’t have a process for making sure deals happen, you don’t yet understand the importance of having a marketing plan.

The sad fact is that even after all their training, less than one percent of all real estate entrepreneurs and investors actually have a marketing plan. Even though it’s very simple, don’t underestimate its power.

More people fail in real estate because they simply do not have a plan or goals. You should have a detailed marketing plan of what you want to accomplish and how you are going to accomplish it.

And, don’t be vague, either. Things like, I want to make more money than I can ever spend, and I want to be rich, and I want to make $10,000 a month, are not plans. They are too vague, and they won’t help you get there. Be as specific as you can possibly be.

In planning for monthly revenue, try to put your money goals in cash income, not gross revenue. I know gross revenue is what you’re used to thinking in, but cash is obviously more important. It’s what you take to the bank, and it’s what pays bills.

First, examine your current numbers. More than 80 percent of all real estate entrepreneurs know how many houses they are buying each month, but they don’t know where those houses came from and how many leads they had to process to develop them into the single deal. And, this is a deadly sin.

1) The total leads that call each month (each week is more manageable),
2) Where those leads come from,
3) How many “qualified” seller prospects (i.e. those that you are willing to invest follow-up in if they don’t sell now; they have motivation, you are interested in the house.) you get each
month,
4) The ratio of total to qualified,
5) The number of deals you close,
6) The ratio of closed deals to qualified leads – for each lead source
7) How much you make from each seller,
How much it cost you to acquire a new seller.

With this information you can look at your current resources, look ahead, and then plan out what you want to have happen. The number of deals you want to do, the amount of money you want to make.

For example, let’s say you are bringing in around $10,000 a month and your average deal gives you $5,000. Yes, I know that’s low, but for the sake of example. That’s two deals a month. These are cash proceeds and after expenses you net 50 percent of your gross or $5,000 a month. And let’s say that you want to double your net income next month.

You will have to get twice as many deals to double your business. Goal? Four deals a month, or one a week.

Let’s say you currently get one deal a month from a classified ad, and one deal a month for mailing expired listings. But, you get ten qualified calls a month from his classified ad and 10 qualified prospects calling a month as a result of mailing expired listings. So, you currently close ten percent of your prospects.

First, you can improve on this situation by improving that twenty percent closing ratio. By improving your closing ratio by things like more precise targeting, the present lead-flow would stay the same, you’ll get your same twenty real prospects and achieve your goal of doing four deals next month.

But assuming that’s not something you have control over right now, the other way to double your income in the next month is to double the number of qualified prospects you talk to and make offers to. So instead of getting 20 qualified leads to call, you would need 40.

Your plan to get forty qualified prospects would need 10 to come from expired listing mailings, 16 to come from flyers in target neighborhoods, 4 from business cards handed out everywhere, 6 to come from signs placed in the ground at high traffic count intersections, 10 to com from classified ads that drive people to the website. Total: 46 prospects. Cool! That’s six to spare.

With this number of leads coming in you have what is needed closed four deals and reach your goal of doubling your net income. Actually, it’s more than doubling because your fixed expenses don’t increase with the income.

You should have a monthly plan. Schedule thirty or forty minutes out of one day to make up your monthly plan and see how you did last month. Schedule this time and keep to it. Don’t do any work or take any calls during this time. Keep it strictly for planning. If you do this and you allow yourself to get into the whole spirit of planning, and making things happen on purpose, you will easily double your income in twelve months.

A detailed plan to generate the number of prospects you need. Your plan doesn’t have to be typed out or put into a computer. It can be handwritten on paper. It doesn’t have to be pretty.

Scratch pad plans are good enough. The important part is that you do a plan every single week and keep on top of things.

This is a simple thing to do, but it is just as easy to not do. Blowing it off is the equivalent of you absolving yourself of responsibility for your business. On the other hand, taking the time to think through your goals each month, both for income, and marketing activity, then committing them to paper will make things start happening by plan and put you in control of your business.

Read Full Articles: http://www.reiclub.com/articles/makes-deals-happen

Looking for an “in” to real estate investing? Working a nine to five job swapping time for money can be incredibly dispiriting. After the futility of it all hits home, it’s all you can do to limit the number of home business opportunities you investigate to twenty per week. One of the more compelling home business opportunities is real estate investing. Real estate investing is the perennial wealth builder, and the transition from working a job to achieving wealth through real estate investing is becoming increasingly well documented. You’ve probably thought about investing in real state yourself but you’ve not gone for it because you thought you needed tens of thousands in savings for a down payment, and perfect credit along with strong banking relationships.

Well, you can get all that together if you want. It doesn’t hurt to have those resources. But it’s not necessary to have a huge pile of cash and perfect credit to buy a house cheap and resell it for a profit. It’s especially not necessary in the preforeclosure market. Preforeclosures are houses in the default phase of foreclosure; where the bank has filed initial foreclosure papers but the sheriff sale or trustee sale where the bank auctions off the property, or repossesses it if no-one buys at the auction, hasn’t occurred yet. Buying during the preforeclosure period is one of the best ways for anyone to get involved in real estate investing. With little more than a few hundred dollars and some specialized knowledge you can buy a house at a substantial discount and resell it retail picking up a five figure profit check in the process.

1.) When people are in default on their mortgage they have stopped making payments to the bank. So when you are negotiating with the seller, and the bank, right up until the point where you buy, no-one is making the payments. For novice investors worried about holding costs this is a huge advantage.

2.) Preforeclosures are a very well defined niche market. One of the most deadly mistakes rookie investors make is trying to be a jack-of-all-trades, going after any and everything they can lay their eyes on. The result of this lack of focus is they are soon back at their jobs. By being a very defined market, preforeclosures allow you to develop focused marketing campaigns and standardized processes to get deals completed and closed.

3.) One of the fundamentals of real estate investing is contacting and talking “only” to motivated sellers, and avoiding all the rest. Sellers in preforeclosure are some of the most motivated sellers you will find. Their world has been turned upside-down, they are about to lose their house, and their motivation is such that they just want out of the house and the bank off their back. By buying houses from people in preforeclosure, creating 30%+ equity spreads on houses often in good condition is not a difficult thing to do.

4.) Buying houses in preforeclosure enables you to create unusually large equity spreads. Recent economic uncertainty has caused a lot of foreclosures, and rising rates will cause more in coming years. If banks had to take back all of the properties that went into foreclosure the FDIC would shut them down. They know this, so they try not to take properties back they don’t have to. By requesting the lender discount what is owed on their payoff, large spreads of equity can be created on houses that are totally “maxed out” with loans. This can’t be done on loans not in default.

5.) Because lenders are under pressure to liquidate bad loans rather than take the property back, large discounts can be negotiated. After becoming familiar with the issues that cause lenders to discount, larger and larger discounts can be achieved as you hone your negotiating skills.

6.) If your plan is to buy and hold the property, having good enough credit and financials to get bank financing excludes a great many people from getting into real estate. On top of that, if you do get a bank loan, your financial exposure is at it’s maximum when everything is in your own name and personally guaranteed. Buying houses in preforeclosure allows you to simply take over the existing financing already in place. No qualifying needed. You can take title to the property in a land trust, begin making payments on the existing mortgage(s), and still get all the tax advantages, appreciation, depreciation without any of the risk of being personally liable for the mortgage and the property.

7.) If you have ever bid at auction for property at the courthouse steps, you are only too aware of the competition breathing down your neck. Lots of mind games. The 40 thieves are talking trash to you trying to get you not to bid. If you are Larry Bird, no problem. Make sure you have $500K on your credit line though. However if you are not the ‘Bird’ and you don’t pack half a mil’ of credit, you can sneak in and avoid this NBA showdown by buying the house during the preforeclosure period… before the auction.

Make no mistake about it, there are many ways to make healthy profits in real estate investing. But when you look at how easy preforeclosure makes it to buy houses cheap and resell for five figure profit checks, all the while helping people out of agonizing life circumstances, it makes little sense to pursue real estate investing any other way.

Read Full Article Here: http://www.reiclub.com/articles/seven-reasons-invest-preforeclosures

That’s probably one of the most common questions asked by people wanting to begin real estate investing. Another common question is, “How do I find a mentor to work with?” Of course there is no one perfect answer for everyone. It depends on a number of factors including; money available, goals and current skill level. But, for my money the answer to both questions is bird dogging or as I call it Real Estate Jobbing.

A Real Estate Jobber is a person who finds qualified leads for professional Investors, through a variety of sources using a systematic process.

• You can start in your spare time.
• There is absolutely zero financial risk.
• There is practically no start up costs.
• You don’t need money or credit.
• You can gain hands on experience without risk.
• You can find out if real estate investing is really for you, before spending hundreds or thousands on books, courses and other learning aids.

Your job is simply to supply quality leads and it’s the Investor’s job to handle the rest of the process.

• A flat rate.
• A percent of the purchase price rate.
• A net profit rate.

• Rates that combine more than one method.

The skills you develop will carry over. As you gain experience you will work closer and closer with your Investors, and learn the business first hand. When you are ready to take the next step, you will know how to find profitable leads. As an Investor you must be able to find motivated sellers, that’s one thing that will never change.

You must be (or learn to be) organized. Jobbers use a systematic approach for generating and qualifying leads. If you are disorganized it will be very difficult to stay on top of your business. Anyone can learn to be organized. It all boils down to providing good, quality information, which saves the Investor time and helps them to make money, that’s the goal of a Real Estate Jobber. If you achieve this goal, then your Investors will be more than happy to help you learn the business, and pay you very well for your efforts.

Real Estate Investing is not for everyone. Jobbing is an inexpensive way to find out if it’s for you, before you spend hundreds or thousands of dollars on courses, books and other materials. Find out what’s involved first hand, experience the challenges as well as the rewards. You get paid to find motivated sellers while saving Real Estate Investors time and money, all while learning the business; it sure sounds like a win-win situation to me.

Read Full Articles Here: http://www.reiclub.com/articles/best-way-get-started

We all know that real estate investing is a great way to take control of your life. With “downsizings”, “rightsizings”, “off shoring” and layoffs at an all time high, job security is simply a thing of the past.

According to the Bureau of Labor Statistics millions of people lost their jobs in mass layoffs last year, and the same is expected this year. So why don’t more people actually embark to take control of their life? One common answer is a four-letter word, F-E-A-R. Fear is one of the biggest success killers there is. It not only stops people from becoming successful, it stops many people from even trying!

• “A feeling of agitation and anxiety caused by the presence or imminence of danger, a state or condition marked by this feeling: living in fear”.

• “A feeling of disquiet or apprehension: a fear of looking foolish”.

• “Extreme reverence or awe, as toward a supreme power”.

• “A reason for dread or apprehension: Being alone is my greatest fear”.

Let’s look at fear from a business prospective. The first definition really does not apply. There is no real imminent danger in real estate investing, and it’s certainly not life threatening. The last three definitions are where we usually run into problems getting starting.

Fear is really about unfamiliarity and apprehension. Fear is a real emotion, but you can conquer it. If you really think about it we’ve been doing so our entire lives. Didn’t you once have apprehension about riding a bike, or going on a roller coaster, or learning to drive? Yet most of us were able to overcome these fears. I know these are basic fears, but moving forward to take control of your life really is no different.

F Figure it out.

E Evaluate it.

A Action plan it.

R Repeat it.

Step 1 – Figuring out what we are really afraid of. Let’s use the common fear of public speaking as an example. Are you really afraid of speaking in public? Probably not, we do it all the time. The fear is more likely the act of speaking in front of a captive audience. To make it worse the audience is composed of strangers, so they are unfamiliar to us. Also we will most likely have to stand up and be on display during the speech. You have to think through the surface fear and figure out what is really causing the apprehension.

Step 2 – Evaluation. Why are we afraid of speaking to a captive audience? I know fear is an emotion, but try approaching it analytically. Are we afraid of misspeaking? Are we afraid of being embarrassed? Are we afraid of being asked a question? Are we afraid of what people will think? Are we afraid of our pants falling down? It’s probably a combination of all of these possibilities, plus some others.

Now we’re making some progress and getting to the root cause of our fear. When evaluating your fear ask yourself, “What’s the worst that could happen?” Make a list of these things and you have a good start on your evaluation. After reviewing your list you’ll probably see it’s really not so bad.

Step 3 is to action plan to overcome the fear. If we are afraid of misspeaking, being embarrassed, or being asked a question, then we can practice our speech over and over again, and even have notes available during the speech.

Will this guarantee that we won’t trip over a word do to nervousness? Of course not, but we also realize that all great speakers stumble over words do to nervousness or excitement. Do you really think any less of a person who corrects himself or herself while talking?

We need to practice in front of a live audience, but you should crawl before you walk. Let’s start by standing up and speaking in front of a few of our friends. There will be some initial nervousness and embarrassment, but it will soon pass. Then we might volunteer to give a presentation at a group we’re involved with, such as the homeowners association, the kid’s school, the office etc.

There will now be a combination of people we know and people we don’t know. Again there will be some initial nervousness, but it passes quickly. Now maybe we move up to the local toastmaster’s club and follow the same routine. Soon we realize that there is always some initial nervousness, but it always passes and we are able to complete the speech and answer questions.

Step 4 is to simply repeat the actions that you determined would help you overcome the fear. Repetition breeds familiarity, and once you become familiar with something there is no need to fear it.

So what are you really afraid of?

Learning something new?
Networking with people?
Looking for leads?
Talking with Investors?
Possible failure?

You’re probably not really afraid of any of these things. Figure out your fear and conquer it! There is no way to be successful without stepping outside of your comfort zone. Use real estate jobbing to help beat your fear of real estate investing. Don’t let fear stop you from succeeding.

Read Full Article Here: http://www.reiclub.com/articles/really-afraid-of

I named my company “Integrity Home Buyers” because the word Integrity has meaning for me. It is the way I run my business and my life. The people around me know this. When I decided to take my business to the next level, I was in a situation where people didn’t know me. My challenge with “Credibility Building” was to convey my philosophy to those people. What I was asking those people to do was give me large sums of money and trust me to do what I said I would.

My credibility building strategy consisted of using these tools:
a.) Newspaper article
b.) Credibility kit
c.) Better Business Bureau

Let’s look at each of these in more detail.

Newspaper article
About a year ago the Springfield Sun interviewed me. They did a long article with lots of great information about what my company has done and it also had some information about our lender program. Recently the reporter came back and did an article focusing on the lender program. Talk about credibility! The whole city saw the article. That is powerful!

At my lender luncheons I always made sure my prospective lenders had a copy of the first article. Now I am adding the second article to my packets as well.

To grow your business, you want your name out there. You want the prospective lender to say, “Hey, I’ve heard of you.” or ” I’ve seen the t-shirts on the Little League team you sponsored “or” you’re the ‘I Buy Houses’ guy. That familiarity makes an impact. And, this recognition conveys credibility.

Credibility Kit
My Credibility Kit is a 30 page, spiral bound book. It has a nice cover with colored pictures of over a dozen houses that I have bought and rehabbed. Right from the start before they even open the book they see the before-and-after pictures that show I have a seasoned real estate business. This is evidence of my work that they can go drive by.

Inside the book they see an introduction that tells them about me, the company philosophy, pages of testimonials, certificates from training I have completed and special reports.

They see page after page of information that sends the strong message that I know my business.

Better Business Bureau
Since this is a serious, responsible business, I joined the Better Business Bureau. I am authorized to use their logo on my material, which further conveys my credibility.

People frequently check with the BBB before making a major decision. To be a member of the BBB you have to agree to “follow the highest principles of business ethics and voluntary self-regulation” and “have a proven record of marketplace honesty and integrity.”

When finding private lenders I believe one of the main keys to success is to build credibility.

Read Full Articles Here: http://www.reiclub.com/articles/credibility-building

I named my company “Integrity Home Buyers” because the word Integrity has meaning for me. It is the way I run my business and my life. The people around me know this. When I decided to take my business to the next level, I was in a situation where people didn’t know me. My challenge with “Credibility Building” was to convey my philosophy to those people. What I was asking those people to do was give me large sums of money and trust me to do what I said I would.

My credibility building strategy consisted of using these tools:
a.) Newspaper article
b.) Credibility kit
c.) Better Business Bureau

Let’s look at each of these in more detail.

Newspaper article
About a year ago the Springfield Sun interviewed me. They did a long article with lots of great information about what my company has done and it also had some information about our lender program. Recently the reporter came back and did an article focusing on the lender program. Talk about credibility! The whole city saw the article. That is powerful!

At my lender luncheons I always made sure my prospective lenders had a copy of the first article. Now I am adding the second article to my packets as well.

To grow your business, you want your name out there. You want the prospective lender to say, “Hey, I’ve heard of you.” or ” I’ve seen the t-shirts on the Little League team you sponsored “or” you’re the ‘I Buy Houses’ guy. That familiarity makes an impact. And, this recognition conveys credibility.

Credibility Kit
My Credibility Kit is a 30 page, spiral bound book. It has a nice cover with colored pictures of over a dozen houses that I have bought and rehabbed. Right from the start before they even open the book they see the before-and-after pictures that show I have a seasoned real estate business. This is evidence of my work that they can go drive by.

Inside the book they see an introduction that tells them about me, the company philosophy, pages of testimonials, certificates from training I have completed and special reports.

They see page after page of information that sends the strong message that I know my business.

Better Business Bureau
Since this is a serious, responsible business, I joined the Better Business Bureau. I am authorized to use their logo on my material, which further conveys my credibility.

People frequently check with the BBB before making a major decision. To be a member of the BBB you have to agree to “follow the highest principles of business ethics and voluntary self-regulation” and “have a proven record of marketplace honesty and integrity.”

When finding private lenders I believe one of the main keys to success is to build credibility.

Let’s face it, the reason most investors don’t have any private lenders is fear. It’s as basic as that. It’s a fear of the unknown. How do I know that? I’ve been there too. I was comfortable doing things the way I had always done them. I went to the bank, I jumped through their hoops of proving I was qualified for their loan, they gave me the money, and I paid them back the way they said. It was a familiar routine in my business of buying and selling homes.

However, when I became a full-time investor and wanted tons of quickly accessible cash, the bank’s painstakingly slow process was no longer acceptable.

Even when I knew for certain what I wanted, I procrastinated. I was not able to do nearly as many deals as I wanted because I waited so long to take action. The thing is if there is something you are afraid to do, you can always find a reason to not do it.

Sometimes we won’t even admit to ourselves that we are afraid. We just can’t get to it because we are too busy, too tired, or focused on other “more important” issues.

But then, that didn’t solve the whole problem. I was still too shy to approach people who I knew would benefit from my program.

I remember sitting in my doctor’s office and being too uncertain of myself to tell him about my program. I didn’t have the nerve to ask for the money. That day, we both lost. I wanted money to run my business and he missed out on earning a tremendous interest rate.

Once I recognized what was holding me back, I became educated in learning how to get what I wanted and how to handle private funds once I got them. That gave me the foundation of knowledge.

I am so grateful today that I got a solid real estate education so I can now confidently let potential private lenders know that I have a great opportunity for both of us

Read Full Article Here: http://www.reiclub.com/articles/dealing-with-fear-monster

Say you have some issues with your credit. You might think there is no hope to ever buy an investment property. Well I come around and tell you that it can happen when using private money or maybe your own IRA money. Either way it’s like Christmas in July! Say I buy a $100,000 home and sell it for $150,000 after repairs. Using seller financing, I charge eight percent interest. I put a thirty year amortized loan on this thing.

If I buy with private money, I’ll put a short term balloon on the deal so I can get the private lender paid back. But if it’s my own IRA money, I don’t want a balloon because I want the monthly payments to go on for 30 years. Wealth is built slowly over time. I am spending $100,000 of my IRA money and if you do the match on a thirty year amortized loan, you will see that I am making some good money.

Say my buyer is making the $1,000 payments on this $150,000 home in monthly mortgage. I get that money and often I set it up so it goes right into my IRA. Now if I go the IRA route, it will take time to get the money back on my $100,000 investment. But IRAs are retirement plans. So, by the time I retire, I have had this money pumped into my account. I can live on a beach somewhere.

This is also the type of idea that you can share with potential private lenders. This is a very cool investment. They might want to see some sort of visual aid. So be it, if you’ve taken them out to lunch, use the napkin and a pen. They use their IRA to purchase one of your properties. You make some quick cash and they get a long term investment.

Now there is a fear with this for the private lender. It is a healthy fear. They wonder about what happens if the homeowner stops paying. Well, that just means the property is foreclosed and you can start all over again. i.e. you make more money!

So there you have it. Three basic options to make you money.

Option 1: Buy with a private lender, and sell with owner financing with a short term balloon.

Option 2: Buy in your IRA, then sell but you are the bank and the monthly payments go to your IRA for 30 years.

Option 3: Find a private lender that wants to be a real estate investor and use their IRA to buy your property and you make a couple bucks.

To Your Wealth,
Alan

Read Full Article Here: http://www.reiclub.com/articles/3-techniques-using-private-money

The good old days of doing business on a handshake have gone so far away that the Hubble telescope couldn’t find them. Even at my tender age, I have witnessed enough legal action resulting from deals gone awry, sellers-turned-psycho, and downright skullduggery to make even the most hardened investor’s blood curdle. And the heat of the battle takes place, unfortunately, in one of the best arenas to make an honest living in: real estate—pre-foreclosure investing.

Who is to blame? Sometimes the seller, sometimes the investor. If I had to make a guess as to who causes the most problems, it would be sellers. Over the years, I have only heard of a handful of unscrupulous investors who tricked homeowners who thought they were getting a loan into signing a deed, forged documents, took over a loan and pocketed the rent payments, or something equally evil. Of course, these are the only incidents you hear about on the news. My guess is because “Fair and Honest Investor Buys House, Makes Profit” isn’t a very sexy headline.

The real concern, and the focus of this article, is sellers in default who either:
A) Lie about their property, its condition, their hardship story, etc, in a deliberate attempt to defraud an investor, or
B) Experience seller’s remorse after their problem is solved, and use false accusations that they actually believe in an attempt to undo what they agreed to.

Which do you think is the more common scenario? I don’t believe it’s A. Although the old expression “buyers are liars and sellers are worse” has some truth to it, I think that most sellers in default are honestly seeking a way to solve their problem through ethical means. And any untruths they do tell can be uncovered with the proper due diligence prior to purchase.

Therefore, I think that B is the more common scenario in which fraud is committed. And by “committed,” I mean “frantically slung as a weapon by the seller in a misguided attempt to undo a transaction that is perfectly legal by making you the scapegoat for their own selfishness, irrationality, and/or situational ethics.” This doesn’t make headlines, but it does make a frequent topic of conversation at local REIA meetings, where I have heard similar stories told ad nauseum.

Scenario B is far too common, but even more so when a pre-foreclosure investor does things that make them more likely to be accused of fraud. I have listed three unsafe scenarios below. I will preface them with a golden nugget of wisdom that I have gleaned from years of networking, news-watching, and personal experience, and then voice my opinion on the subject with more passion than Basic Instinct, Don Juan Demarco, and The Notebook combined.

“No matter how many times you explain how the deal will take place, how slowly you go over it, how many times they tell you they understand, or sign and initial a document that spells everything out in excruciating detail in 4th-grade English using size 16 font, sellers in pre-foreclosure will immediately create and believe their own memories of what they agreed to the very second that their payments are caught up.”

If you are not familiar with the concept of implanted memories, just remember the movie Total Recall and you’ll know exactly what I’m talking about (but with a little less violence). The unavoidable fact above must always be remembered, dealt with head-on, and used to guide your decisions when working with sellers who are behind in payments. And now for those three unsafe pre-foreclosure scenarios:

1) Asking them to sign blank documents – I think the wild, wild, western days of showing up at the seller’s house with a mobile notary and getting them to sign a deed and blank documents for any and every conceivable type of transaction (short sale,cash offer,subject-to, note, deed of trust, etc.) on their kitchen table are over. This shoot-first-ask-questions-later style of getting a deal done has “Six o’clock evening news scandal” written all over it.

While it may certainly be more convenient for the investor to get everything signed in advance and then figure out what kind of deal is possible later, and though the investor may truly have the seller’s best interests at heart, think of how it will appear to a judge when the seller says later in court, “He had me sign all these blank documents, and told me he’d take care of everything, and I didn’t know what I was doing…”

I don’t think we can afford to be so cavalier in our dealings — at least until pre-foreclosure investors cease to be perceived as vultures, guilty until proven innocent, which I calculate will happen approximately three times the length of time from now that hell will take to freeze over.

2) Letting the seller stay in the house – I cannot think of any kind of transaction so generous, so humane, so… hazardous. For starters, leasing the house back to the seller is a risky gamble (since, in my experience, 9 out of 10 of them will miss at least 2-3 rent payments per year, which, unless you have a money bin as bounteous and deep as Scrooge McDuck, will cause considerable damage to your cash flow).

If you give them an option to buy it back, you’re walking on thin ice. Because, if for some reason they are not able to buy it back again (missed payments, worsened credit, stricter lending environment, decreased property values, etc.), you will become the bad guy for daring to ask them to move out so you can finally recoup your investment, free up your funds, and thus avoid becoming broke, busted, and disgusted.

And if you lease back to a seller whose house you bought subject-to, put on your headgear and get ready to rumble. You might as well drive to the nearest courtroom and have a seat, because you’re going to go there soon anyway — ask me how I know this. It’s just too easy for a seller to wish they hadn’t sold their house so badly that they actually believe they still own it, or should own it. And, because so few attorneys know anything about subject-to deals, it won’t be hard for them to find one to put you in the hot seat.

3) Advancing funds prior to closing – Imagine meeting the kindest, sweetest, most innocent seller you’ve ever met. They’re in foreclosure through no fault of their own (illness, tragic accident, etc.) and have tried everything to fix their situation, with no success. You finally get in touch with them a day or two before the auction, and agree to save them from their pending disaster. But there is one problem — you won’t be able to close on time.

Maybe the title company can’t get the title search done fast enough, schedule you soon enough, your private lender is on vacation, or something. If you could just delay the auction one more day, you could conduct the closing and be the hero. But, of course, the only thing that will buy you the time to close is to reinstate the loan now, before the closing. The helpless seller’s credit, dignity, and financial future is in your hands. Do you do it?

Although it goes against every altruistic bone in my body, I would not advance any funds before closing even if it means they lose their house and I lose a deal. I promise you that if you do, you will, in all likelihood, witness a formerly sweet, rational, and grateful seller transform before your eyes faster than you can say Bilbo Baggins. Your funds will be tied up with no legal recourse other than to enforce your contract to buy, which will take more money and several months, in which time they may fall behind again and lose the house (and your money) to foreclosure.

Or, you could be sued after all you’ve done and be accused of taking advantage of the seller, even though your funds are being held hostage at their mercy. And even if you have them sign a note and deed of trust as security before reinstating their loan, you may be going into dangerous territory by breaking lending, licensing, and possibly usury laws. The potential downside makes it not worth the risk.

So the moral of the story is this — given the current legal climate, the fallen nature of sellers once their problems are solved, and the inherent financial risks, it is wise to avoid the three types of pre-foreclosure investment methods mentioned above. It’s not enough to be honest and do what you promise. It’s also not enough to have excellent documentation and CYA agreements. They can certainly help your case in a lawsuit, but don’t think for a minute they will actually prevent suits from arising to begin with. Instead, you have to avoid the very appearance of fraud, even if it means losing a few deals (which is infinitesimally better than losing a few lawsuits — or even winning them, for that matter).

Nothing is worse than a lawsuit, even when you win. It will cost you a teacher’s salary in legal fees (not to mention the legal fees of your private lender, if you used one and they are named in the suit) as well as tying up your invested funds and hostage profit for 1-2 years. That’s a 1-2-3 combination of knockout blows to your cash flow, and could put you out of business. And in bad economic times, litigation only increases because everybody needs money. Therefore, when it comes to protecting yourself from false accusation while investing in pre-foreclosures, an ounce of prevention is worth 60 megatons of cure.

Read Full Article Here: http://www.reiclub.com/articles/cries-of-fraud

Having an assistant is one of the best investments you’ll make as a real estate entrepreneur. Like all parts of your business (and yes, buying, leasing, and selling houses is a business), they require an investment of your money and also your time. You’ll need to invest a little money in order to hire, train, and compensate them for their services. And, you’ll need to invest some time to help them get the job done right — more in the beginning and much less as time goes on.

In exchange for your investment in them, a good assistant will help you to generate much more money than you are paying (bringing you a rate of return that would make any investor jealous). And, they will save you countless hours for every extra hour you spend developing them.

Although many investors are hell-bent on trying to do it all themselves, or think they can’t afford one, here is a partial list of reasons why you absolutely can’t live without an assistant:

You will do more deals. Marketing is probably the best thing to hire an assistant to do. They will help you to execute advertising campaigns that you just would not have gotten around to doing on your own. They can compile lists, print letters, make calls, stuff envelopes, buy supplies, shop around for pricing, and do plenty of other things that generate leads for you that you would not have had the time or inclination to do otherwise.

You will look more professional. When people receive a call from your assistant, they will know that you are a real player. It makes you look successful, organized, and trustworthy. Your credibility with sellers will increase, which will put them at ease and help you to get more offers accepted. Private lender prospects will acknowledge you as a legitimate business and will feel safer sending money to you knowing that you are not a fly-by-night operation.

You will have less stress in your life. No one likes drowning in work. One of the worst feelings on earth is to have more work due than you can possibly hope to accomplish in the time available. Having an assistant will take a huge burden off of your back, especially when they do tasks that you don’t like doing or are not good at.

You will be able to build a team. Having an assistant will help you to practice your skills at hiring, training, and managing team members. They are the ideal “starter employee” because they are not difficult to find and can immediately begin doing simple tasks for you. And, there is almost always an immediate use for their help. They will help prepare you to hire other team members when the time comes, if you so desire, such as a salesperson, renovations supervisor, or a purchasing representative.

You will have a better lifestyle. Isn’t this one of the reasons why you got into real estate to begin with? When I started my real estate investment company, I had visions of lying around on the beach somewhere, living the good life while the rent money poured in. Then, I found out there’s actually a lot of work involved. A good assistant will give you your life back so you can spend it with your family, working on hobbies, or working on your business (which is always more fun than working in it).

I have hired, trained, and managed personal assistants for years. I would never have experienced all of the benefits above if I had been stuck trying to do it all myself (and failing). A good personal assistant will not only help you to grow your business — they will give you your life back.

Full Article Here: http://www.reiclub.com/articles/real-estate-investor-assistant