Find Your Line!

Continuing on our Olympics of Real Estate Investing. When a Mogul contender heads down the course they are constantly having to choose a line to follow. This is impacted by visual conditions sun, wind, snow, lighting at nights. With each bump they have to be looking forward to what the next line is.

We find so many real estate investors that don’t have a plan before they get started with the property. They find a property that may even be a good deal but they don’t find their line. We have even seen real estate investors that have found a good deal that they really could of made profit with but they end up breaking even or even losing money. Why you ask? Because they never found their line.

When you are doing a rehab and retail before you are done with your due diligence, or even before you make an offer on the property you need to know A. Exactly what work you are going to do to the property B. Exactly how much the work is going to cost C. Who is going to be doing the work D. How long it will take to get the work done to the property.

No Olympic Mogul ski is going to Guess on their line. They are going to have a defined line for the first few turns before they even leave the gate. Don’t guess on repair costs, even if you have experience with repairs get the guys out that are going to be doing the work. Get firm prices from everyone that will be involved. I like to do this once I get a property under contract. We typically ask for a 48 hour time to inspect the property. During this time we set a meeting for every person that will be doing work on the property to meet at the same time. So the Flooring guy, the cabinet guy, the painter, the handyman, electrican or plumber if needed all show up at the house and look at everything and give us a price on the spot. This cuts down on back and forth of conversations and makes everything efficient. The bird dogger we buy properties from likes this as well because they know we don’t drag out the situation forever, they know that in 24 hours or 48 at most my earnest money goes hard.

Find your line by knowing what your cost will be before you leave the gate.

Urgent Action Needed by Today!

I hate to stop our Olympics of Real Estate investing post, but there is need for action to be taken today!

The Government is trying to stop seller finance of any kind unless the property is owner occupied or if the person is a licensed loan officer. I think you can see how this will effect you as a real estate investor.

Let your voice be heard. This has to be done today if you want to help stop this action from being taken. Go to

http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480a6b033

Click on the Submit comment that is below; right above the new proposed HUD Rule. Then you can submit a comment. Some things to consider would be:

• Bank loans are not available on some types of properties
• The tight lending climate has made bank financing “out of reach” for many
• Seller financing is an “age old” tradition based on private property rights
• These rules would prohibit even partial seller financing – i.e. a “seller second”
• According to HUD’s “Residential Finance Survey” in 2001, roughly 40% of all non-farm residential properties in the U.S. are owned free and clear
• An estimated 6 million Americans own a property other than their own primary residence
• An estimated 4.5% of Americans own three or more properties, many purchased solely as investment properties
• 40% of non-owner occupied residences are mobile homes which are more difficult to sell with bank financing
• Approximately 5% of homes in US are for sale or for lease…seller financing may be key to liquidating this inventory

As you know this would have a serious impact on real estate investors. Please Log on today and stop this ridiculous action.

Tomorrow I will be back the Olympic of Real Estate Investing.

The Olympics and Real Estate Investing

I love the Olympics. There is something about watching professionals who have prepared their mind, body and heart to compete against the world for the greatest sport medal of all time – the gold medal. I can only imagine what it would be like to be on that stage to perform for the world. Yesterday I was touched when Alexandre Biodeau won the first ever gold Medal for Canada on their home soil. Don’t get me wrong I am all American and was happy that USA’s Bryon Wilson did not get knocked out of his Bronze Medal seat when the last contender took his place at the top of the run. Every time I watch the Moguls I remember my great friend Burke Alder that was a contender for the 2002 Winter Olympic Games in his home town of Salt Lake City. He was on the US Ski team and was going to be a contender for an Olympic spot. Several months before the Olympics in nationals he blew out his knee and his Olympic hopes where taken over night. As I watched these Amazing Mogul Freestyle Athletes yesterday I also thought about real estate investing and free style skiing. What can we learn from Freestyle Skiers that may help us as real estate investors? If you think I am being too cliche or fake you don’t know me very well. I learn from everything and I mean everything. I also compare anything of value to my life and in doing this I found some very cool parallels of Mogul Free Style Skiing and Real Estate Investing. I look forward to sharing these with you over this week. They include the following:

Be Prepared

Point Your Ski Tips Down

Find Your Line

Choose Your Trick Wisely

Time Counts

Jump To Last Impression

Last Mogul Field

Celebrate

1. Be prepared. You can’t stand at the top of the Olympic Mogul Ski Run without having some serious preparation. The number one problem we see with real estate investors is they have no idea what a property is worth. Over 75% of people we talk to are off on their value of what they think the property is worth and what we KNOW the property is worth. Don’t take the word of one person on what the property will sell for especially if the person is the seller or getting paid as a part of the transition, even if they are representing you. It is interesting when we have our independent evaluators look at a property and determine a value. When we go back to the borrower and let them know what the values came in at, so many borrowers want to “fight the value”. You have to be kidding me. If two independent evaluators go to a property with no judgment and get paid to determine what the home will sale for, that is pretty unbiased. Let me give you an example. Last week we had two evaluations that came in. One was at $145,000 and the other was at $148,000. So the two evaluators that live in the area, that have no motivation other than getting paid to give a value on the property, that do not even know each other, come within $3,000 of each other on the price. We then told the borrower and the borrower thought they were wrong and wanted to challenge the value. Hello, Wake Up! We just saved you from a serious train wreck. We don’t turn down deals because of value we just require the borrower brings in the difference between what we can lend on the property and what they are buying the home for. But don’t get so emotional on a deal that you can’t see reality.

The Truth is that Markets go down and Markets go up. I just want the markets to move, because movement creates opportunity.