Real Estate Investing TipsReal Estate Investing Tips http://reitips.com Real Estate Investing, Undressed: Tips, ideas and news real estate investors can use. Tue, 22 Apr 2014 22:56:36 +0000 en-US hourly 1 http://wordpress.org/?v=291 http://reitips.com http://reitips.com/wp-content/plugins/maxblogpress-favicon/icons/reitips.ico Real Estate Investing Tips Copyright © 2014 moseskjp@gmail.com (Real Estate Investing Tips) moseskjp@gmail.com (Real Estate Investing Tips) 1440 /wp-content/plugins/podpress/images/powered_by_podpress.jpg Real Estate Investing Tips http://reitips.com 144 144 Real Estate Investing, Undressed: Tips, ideas and news real estate investors can use. Real Estate Investing Tips Real Estate Investing Tips moseskjp@gmail.com no no Top 10 Fair Housing Mistakes Investors Make (#8 Blows My Mind) http://reitips.com/top-10-fair-housing-mistakes/?utm_source=rss&utm_medium=rss&utm_campaign=top-10-fair-housing-mistakes http://reitips.com/top-10-fair-housing-mistakes/#comments Tue, 22 Apr 2014 22:43:21 +0000 http://reitips.com/?p=3900 Check this out…  Did you know that April is National Fair Housing Month?

Neither did I really. And side note, who the heck even decides this stuff, anyway?

Well a colleague (and friend) of mine Jimmy Moncrief just sent me this nifty infographic he whipped up giving you a visual snapshot of the top 10 biggest, most common, fair housing-related mistakes investors tend to make.

Jimmy MoncriefAnd he should know I guess, since he’s a (i) banker, (ii) banking underwriter, (iii) credit officer, and (iv) real estate investor all rolled into one.

Oh, and he’s got some sweet, horn-rimmed glasses.

Oh, and he’s also one of the champions of helping guys and gals like us (fellow investors) discover how to tap into portfolio lenders for deal funding opportunities you probably never even knew still existed…

…Just perfect for that 11th  or 37th rental you’ve got under contract, or maybe the mythical “C.O.R.” Beast you’ve been dreaming of (Cash-Out Refi).

But I digress...  A topic for another time perhaps.

So here, take a quick look at Jimmy’s top 10 and see where you stand. Maybe you’ll learn a little something like I did. I may know how to legally get out of accepting a Section 8 tenant if you don’t want to, but personally I had no earthly idea #2 was a problem, and #8 flat-out blew my ever loving mind…

Fair Housing Mistakes Infographic

So…Thoughts?

Had you ever heard about accommodating a hoarder for their “disease” instead of just evicting them?

Ever run up against the Fair Housing beast before yourself?

Do tell. Talk to me in the comments below.

-JP out.

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4 Essential Traits of SUPERinvestors http://reitips.com/4-essential-traits/?utm_source=rss&utm_medium=rss&utm_campaign=4-essential-traits http://reitips.com/4-essential-traits/#comments Thu, 13 Feb 2014 22:50:24 +0000 http://reitips.com/?p=3871 super investor“Do I Have What it Takes?”

Do you have what it takes to be a SUPERinvestor?

What’s that? A Superinvestor?

Yep — think about it like this…

Super: (adjective) very good; first-rate; excellent; of the highest degree or power

So… kind of like a spin on Superman… Do you have what it takes to be a very good, first rate, excellent real estate investor of the highest degree or power?

Roll with me here for a minute…

What are the traits of Superinvestors? Do you know any? If so, what is it that defines them and gives them their “super-ness” and sets the apart from the masses of mere mortal investors out there?

It can be a tough question to answer. It’s like wondering if you have what it takes to swim the English Channel. A few traits might be obvious. Of course you’d have to know how to swim — and swim well. You would also have to be highly motivated. Beyond that, what might the necessary traits be? You really wouldn’t know until you committed to the event and stepped into training mode, right?

Your Short List

Regarding RE investing you might first think of all the obvious traits. Your short like might look something like this:

  • A working knowledge of the world of real estate
  • Tactical training on how to craft deals
  • Some insights/training into marketing (for motivated sellers, selling your properties, etc.)
  • A certain ability to crunch the numbers of a deal
  • Yadda, yadda, yadda…

Yes, these are all valid points, but today I want to challenge you with four specific traits I’ve been pondering lately that I firmly believe should be right up towards top of your list. I’ve known literally hundreds of investors around the country, and from that experience coupled with my own, I can testify that these 4 things really matter.

Trait #1 – Know Your WHY

whyBack to my swimming the English Channel example from earlier…

Once a swimmer is out in the middle of that great expanse of water and the cold, the hunger, and the weariness begins to take its toll, he must be fully convinced that there’s a very good and compelling reason for attempting this demanding feat, or he’s toast.

To put it more simply, the swimmer must have a big why. “Why am I doing this?” “Why am I out here in this cold, dangerous place?” That question must be answered before the challenge is ever attempted. And if the why is not big enough, or strong enough, or gut-level compelling enough, that athlete’s probably going to throw in the towel long before he reaches his goal (the other side of the channel).

Likewise, you must have a strong and compelling why to keep you moving forward toward your goal of creating the most amazingly successful and wildly profitable real estate investing business you possibly can. Your why is the fire in your belly – it’s what drives you to get up a little earlier and stay up a little later, pressing on. It’ll keep you from quitting when the going gets tough.

So let me just ask you…what’s your why? Do you even know?

If your why is simply to “make money” or “purchase more things”, chances are it’s not enough – your why probably won’t be strong enough to sustain you when the waves come crashing over your head.

If your why is not compelling – if you lack a strong sense of purpose – your business will look more like a roller coaster ride than an out-and-out fight to win the battle.

Bottom line: Invest the necessary time to identify your clear why. What’s your compelling reason to keep pressing on in this business, even when it’s really hard? Your why must carry you through the tough times.

Make it crystal clear, then write it down and keep it someplace you can see it, like tacked to your wall beside your computer or beside your bathroom mirror. Look at it every day, several times a day, and let it fuel you.

“When you know what you want, and want it bad enough, you will find a way to get it.”
- Jim Rohn

Trait #2 – Know Where You’re Going

whereNow that you know why you’re starting this journey, the next step is to clearly identify just exactly where it is that you are journeying to. Right?

If you don’t know where you’re going, how will you know when you get there?

Without a clear sense of direction, not only is it impossible to know when you get there, but it’s also impossible to know how to get there. I see this so often. Somebody jumps into the world of real estate and tries this niche, then tries that one, and then tries yet another one over there.

Floundering about like this wastes time and energy, to say nothing of the discouragement it can generate. If you’ve ever spent any time with me at all, then you know I’m a believer in the power of being a focused “specialist” and not a “generalist” all over the map.

Here are three worthwhile to help you uncover the right direction / destination for you:

  1. Are you looking to replace your current income?
  2. Are you just looking for cash flow?
  3. Are you looking to build long-term assets?

If #1 is your answer, then wholesaling, lease-options, and seller financing might be the route to pursue.

The best strategies for #2 could be lease-options and seller financing.

If #3 best describes your plan, seller financing and rehabbing are worth serious consideration.

But that just scratches the surface – you’ve got to do the work here of asking yourself good questions, and then forcing yourself to come up with clear, specific answers that you can then turn into an actual destination to fix your eyes and really focus on.

Do you have a business destination? Do you know what kind of business you’re crafting? Is it specific, clear and able to be summarized in a paragraph and understood by someone who’s not already entrenched in the business? You should.

Trait #3 – Know How to Get There

good luck

After you know why you’re in this business and you know where you’re headed, the third essential trait will be to map out the journey. Said another way, you need a map to follow, which is done by creating a series of strategic, workable, doable goals that lead you down a defined path towards your destination (see trait #2 for that ;- )

If you’ve never been a goal-setting person, now’s the time to begin. Your ongoing, working goals list will become your detailed road map to get you to your intended destination.

Ideally your goals list will be divided into three sections:

(1) Short-term goals – this month
(2) Mid-term goals – this year
(3) Long-term goals – 5 years out

In my view, this is as far out as I want to go with business goals. A lot can happen in 5 years.

You can make up your own rules here if you want – these are mine.

Where do you want to be at the end of your first six months of being in the business? How about in two years? Or in ten or fifteen years? What’s the most important goal for you to have accomplished this week?

If you aren’t sure, then you’ll be floundering about trying to make things happen on the fly. It’s much better to be purposeful about each step you take in building a business, right?

Side Note: Two of the best ever business books I’ve ever read on the topic of creating a vision and goals are (1) Lifeonaire and (ii) The ONE Thing. Highly recommended!

As you write out specific goals here are some key guidelines to consider:

  • Be specific and detailed
  • Write them down (create your own goal-setting notebook)
  • Give each goal a deadline in which to be completed – or achieved
  • Break down the goals into manageable steps
  • Each goal must be measurable
  • Make your goals are action-oriented (each action should take you closer to your goal)
  • Celebrate each achievement (use a reward system that will keep you motivated)
  • Follow the “One Thing” concept – see book recommendation above.

Trait #4 – Know What Motivates You

motivatedWhat is it about the world of real estate investing that gets you excited? What makes you want to jump out of bed each day and get your day going? What motivational techniques work best for you? What lights your fire or revs your engine? If you’re not sure, it’s high time to find out.

  • Do you get motivated by reading books about RE investing?
  • How about listening to instructional audios or podcasts or watching videos?
  • Are you best motivated by hanging out with other successful investors and listening to their experiences?
  • Is it a caring mentor that propels you forward?
  • Or does your motivation come from maintaining a list of affirmations that are spoken aloud each day.
  • Or is it a combination of any of the above?

No method used for motivation is right or wrong—but rather what’s right for you. Determine what it is that keeps you on track and then use the heck out of that method (or methods) consistently.

You might be wondering why something as obvious as “knowledge of real estate” doesn’t show up in this traits list. Well the truth is if you possess and maintain these 4 essential traits listed here, you’ll be one of the super-est SUPERinvestors around. Not even kidding.

Here’s a fact: The most wildly successful investors you’ve ever met (or ever will meet) didn’t get that way because of their exceptional knowledge of real estate. Sure, it can help… but it was far more about how they ran their brains. It’s about being dedicated to the inner disciplines and higher-level thinking that made them Superinvestors.

Know this: Your mindset…your inner game…it plays a far bigger role in your super success (or lack thereof) than anything else. Just try and prove me wrong. That’s why these 4 Superinvestor traits are in no way tactical in nature.

Ponder that a while.

Action Steps

If any of this resonates with you, here’s some stuff you can do:

  1. Write down the basic reasons you have chosen to launch out into real estate investing. (This is your why.)
  2. Write down what is it that you want to achieve in this business.
  3. Purchase a special notebook to be used as your goals notebook.
  4. In your goals notebook create specific lists which include short-term goals, mid-term goals, and long-term goals
  5. Learn what motivational methods work best for your personality and use them consistently.
  6. Buy Lifeonaire and The One Thing and devour them ;-)

Thoughts?

Strike any nerves here? Please leave a comment. I’d love to hear ‘em!

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Critical 1099 Info for Investors – Ignore at Your Own Risk http://reitips.com/1099-for-real-estate/?utm_source=rss&utm_medium=rss&utm_campaign=1099-for-real-estate http://reitips.com/1099-for-real-estate/#comments Wed, 22 Jan 2014 17:39:28 +0000 http://reitips.com/?p=3856 IRSIf you’re in business for yourself but not actively sending out 1099s to your non-employee contractors like you should, then you need to read every single word of this blog post. Just do it…you’ll see why, and you’ll likely buy me something frosty next time you see me to say thanks (hypnotic command…boom ; -)

Just this past week I was sitting in a closed-door mastermind (our thrice yearly Flip VIPs meeting) when one of my esteemed colleagues – a guy who makes a nice pile of cash flipping short sales and lending hard money – announced that he wasn’t really into the whole idea of sending out 1099s – too much hassle, plus one of his guys (a general handyman I think) had told him that if he started handing out 1099s, then he’d have to raise his rates beyond $15 to install a toilet to offset paying taxes.

So he went for no 1099s, and just figured if he gets called to the mat in an audit at some point, he’d just pay some small penalty and move on.

Red Alert

The room quickly erupted with all manner of friendly-but-stern warning (one of my favorite parts of these kinds of masterminds is when the guys and gals around you aren’t afraid to tell you when you’re flat out wrong).

Turns out that once upon a time the IRS didn’t spend too much time or effort chasing missing 1099s…but those days are apparently gone. Now they see missing 1099s as an easy way to make money…lots of money…from you, should you get caught in their scanning crosshairs.

To make the point, another guy in the group forwarded an email alert about this very topic that John Hyre had just sent out to all his clients.

Who’s John Hyre?

JP Moses & John HyreJohn Hyre is a tax attorney, accountant and real estate investor.  In fact, I’d call him the nation’s leading tax attorney and CPA for real estate investors specifically. I’ve had the good fortune of knowing John for the last 10-ish years or so, and I can tell you he’s one of the smartest, wittiest, sharpest and savviest guys on the planet.

Nearly all of his clients are real estate investors, and his operation is second to none in terms of bookkeeping, tax returns, tax planning, and audit and asset-protection related services for real estate investors.

John has also written the definitive book on using QuickBooks for Real Estate Investors, and creating Entities (LLC’s, etc.) for Real Estate Investors – both of which I’ve been through personally and have dramatically shaped how I run  my business.

In short, John is someone you want in your corner, and his advice on something like this is worth paying attention to.

So what follows is the full email John recently sent out to his clients about 1099s. Some of it may only relate specifically to his clients, but I’m leaving it intact anyway. If you paid any non-employee more than $600 last year, then you owe it to yourself to read the whole thing.

About Form 1099-Misc for Real Estate

The purpose here is to give you a basic idea of 1099 filing requirements. The discussion below is both basic and incomplete. This topic involves far more rules than we can discuss in a short newsletter.  And if we were to discuss those rules in all of their glorious and painful detail, few of you would read that discussion. This PDF spreadsheet contains fields that can be filled out online and saved to your computer. Please use this form or another typed form.   We will not accept any handwritten submissions, due to the possibility of errors.

Basic Summary:  If you have a trade or business, you are almost certainly required to file various sorts of 1099′s, 1098′s and other similar forms.  Penalties for flawed or missed filings have increased.  Penalties for incorrect or missing Tax ID Numbers are very high (up to 40% of the 1099 itself!) – getting a W-9 from each contractor can help shield you from such liability – we strongly recommend getting a W-9 from contractors.  The IRS has not enforced such requirements in the past.  That has changed and they are now actively looking to “raise revenue” from 1099-related penalties.  You should file this paperwork yourself, have us file it for you, or budget for the resulting penalties.

LAST MINUTE PROCRASTINATORS:  If we receive ANY of your 1099 information after 1/24/14, we WILL charge double.  Last year we had a lot of last minute 1099′s create havoc in the office.  No more.[1]

Who Must File Form 1099-Misc:  Your must file if your trade or business[2] pays someone a total of $600 or more during the year for:[3]

  • Rents
  • Services (including parts & materials)
  • “other income payments”[4]
  • Services from attorneys.[5]
  • 1099-Misc is also used to report payments of $10 or more in royalties.
  • Form 1099-Int is used to report interest paid to others.

Software Generated Forms and Electronic Filing:  Filings must be generated with approved software and most must be filed electronically.  Non-compliant forms (e.g. – hand-written) & filings may give rise to audits and penalties.  NOTE:  We are required to notify the IRS of such non-compliant forms on your income tax return.  In order to keep our license, we are required to the play the part of informant on certain issues such as this one.  We do not like that role.  We like the prospect of unlicensed unemployment even less.  Given the government’s growing power and lust for revenue, we should expect to see more such paperwork, intrusions upon your privacy and overall heavy-handedness.

When You Must File:  You must send the form to each person you paid in 2013 by the end of January 2014.  You must send the government their copy and a Form 1096[6] by April 1, 2014 (if filing electronically, sooner if filing on paper).

Or Else What?  There are four basic kinds of penalties:

  • Failure to make electronic filing:  $50 per Form 1099.
  • Failure to File or Erroneous 1099:  $30 to $250 per form, depending on a number of factors.  The IRS has become increasingly aggressive and prone to arguing that any failure to file was intentional and therefore subject to the maximum penalty.
  • The Grand Slam:  If you fail to report someone’s income and they are audited and unable to pay taxes on that income, the government can come after you for the taxes if you failed to 1099 the person in question.  This approach had been rare until about a year ago.  We saw a noticeable uptick in 2013.  One taxpayer had to pay 40% of the amount on the 1099′s due to missing/incorrect TIN’s – that was withholding of about 28% and penalties of about 50% on that amount.
  • IRS Disallows Deductions:  We have seen auditors become aggressive on disallowing deductions in audits when related 1099′s were not issued.  We can sometimes get such decisions reversed on appeal, but the cost and hassle are not trivial.

1099More Big Brother

Please note that the IRS now asks probing questions on your income tax return.  In particular, they now ask whether you were required to file 1099′s, and if so, whether you in fact filed them.  We are required to truthfully answer those questions.  If the answers indicate a problem (i.e. – did not file 1099′s), you should expect an audit and penalties.

Worse yet, if the answers are inaccurate (i.e. – you state that you filed when you in fact did not), the IRS can assess very painful penalties (much worse than those we described above) for civil fraud.  In short:  The IRS is now very serious about 1099 requirements and very interested in assessing penalties for failure to comply with increasingly complex laws.

What Information Do We Need?  Name, Address & a correct Social Security Number or a correct Tax ID Number of payee, and amount paid to them.  We normally send an Excel spreadsheet for you to enter that information.  We strongly advise that your vendors fill out a W-9 before you pay them.  If the TIN you receive is wrong (i.e. – you did not receive a W-9), then YOU are on the hook for the contractor’s taxes at very high rates!  If you obtain a W-9 and the information on it is wrong, then you are not on the hook for the contractor’s taxes if & until the IRS sends you a letter telling you to withhold on payments made to them.  Get a W-9!

How Much Do We Charge? $10 per 1099 + $20 for report to IRS (also known as a Form 1096).  We charge more in certain states where the locals add to the federal requirements.  Note:  The IRS has aggressively regulated preparers, which in turn leads to an increase in the fees we charge.[7]

Other 1099′s

  • 1099-A:  Required if you repossessed real property from a buyer but did not necessarily write off the underlying debt.  Such a form is often issued when a bank forecloses on a property.
  • 1099-C:  Required if you forgave debt.  This form is normally issued in conjunction with short sales, deed in lieu and bankruptcies.
  • 1099-Int:  Essentially the same requirements as a 1099-Misc, but applies when interest is paid to another in the course of a trade or business.

About Form 1098

Who Must File: You must file if your trade or business received $600 or more of mortgage interest (including points) during the year from an individual (including a sole proprietor).  You must file a 1098 for each mortgage, so you may have file multiple 1098′s for the same person.  You do not have to file a 1098 for mortgage interest received from entities.

Or Else What?  Penalties are similar to those for 1099′s.  Note:  People who expect a 1098 and do not receive one tend to get loud about it.  They will call you.  Eventually, they will call the IRS.  Did I mention that the IRS is quite keen to uncover errors and collect penalties?

What Information Do We Need?  Name, Address & Social Security Number or Tax ID Number of payee, and amount of interest paid to them.

How Much Do We Charge?   $10 per 1098 + $20 for report to IRS (also known as a Form 1096).

Memos Numbered Above

[1] Like the first delicate shoots of late winter, telling us you should be exempt because you have been a client since <insert number> shall cut no ice.  We will charge the extra amount or decline the work.  The disruption costs us, plain & simple.

[2] If you pay a contractor to work on your personal residence, you need not issue a 1099 because the payment presumably did not come from your “trade or business”.  If you pay a contractor to work on your rental property, you need to issue a 1099 because the rental property is part of a trade or business.

[3] This list is not exhaustive.  I only included things that are likely to be relevant to REI and small businesses, which is why you won’t see “cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish” on my list.  Out of curiosity how the heck would you tell if your provider of aquatic life (does that include Sports Illustrated models?) is engaged in the trade or business of catching fish?  Don’t the idiots who write this stuff think we have something better to do than inquire after the professional habits of our sushi guy?  <sigh>

[4] I’m not making that up, it’s straight from the IRS instructions for Form 1099-Misc.  Pretty darned broad if you ask me, pretty much allows them to “get you” for most anything.  Talk about an out-of-control bureaucracy.

[5] Again, not made up.  The 1099-Misc instructions specifically say that payments to attorneys need to be reported.  I guess that even the IRS thinks that attorneys are slippery and perhaps likely to “forget” about certain niceties such as reporting income on their 1040.

[6] Form 1096 is basically a summary of all the Form 1099′s sent to the IRS.

[7] Google “Circular 230″ for more information.  I am responsible to you AND the IRS for negligence, etc.  Seemingly simple tasks carry heavy consequences in an environment of over-regulation, massive, complex rules (go ahead and read the full instructions for Form 1099-Misc, be near a bed when you do) and a zealous, “burn the witch” mentality on the part of regulators and the public alike.  Voting for bigger government has consequences, including higher taxes, too many bureaucratic requirements, too much paperwork, and too many compliance costs (such as our bill for preparing increasingly complex tax returns).  As the IRS becomes more punitive with licensed preparers, the higher our fee to compensate us for such risks.

Thoughts?

So what say you? Got anything to add? Extra tips? Questions? IRS jokes? Leave a comment…

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How to Make Awesome Sauce (Top 47 MLS Keywords for Investors) http://reitips.com/top-mls-keywords-investors/?utm_source=rss&utm_medium=rss&utm_campaign=top-mls-keywords-investors http://reitips.com/top-mls-keywords-investors/#comments Tue, 10 Sep 2013 17:17:01 +0000 http://reitips.com/?p=3825 A while back I posted an article about how investors can get access to the MLS without a license.

I was quite surprised, honestly, by how much buzz that post generated at the time. Judging by the extensive and saucy comments, some folks absolutely loved it, while others got their feathers more than a little ruffled.

Today I want to follow up with a little more tasty MLS goodness for investors…but this time we’ll share a recipe on how to make your own batch of Awesome Sauce, using some of the best, locally grown, organic MLS keywords an investor can find.

Recipe for Awesome Sauce

What You Need:

mls access and keywords

(If you’re clever, you will notice the symbolism of bread and butter. Bah- ha- ha!!!)

MIX:
MLS ACCESS + customization and key words = Awesome Sauce.

DIRECTIONS:
We’re looking for properties listed in the MLS that kind of smell like they might be a deal for an investors like us. To do this, we’ll be looking for key ingredients (keywords) in the listing that will give you clues. Please note that your MLS may differ slightly from mine, depending on the platform your local board of Realtors uses. But the principles should be the same.

  1. Open your local MLS.
  2. Go to the search page, where you can input whatever criteria you might need or want.
  3. Enter your basic search criteria for whatever type(s) of deals you’re focusing on (area, price range, beds/baths, etc.)
  4. Make sure you’ve got search fields for listing remarks, like “Public Remarks”, “Realtor Remarks” etc. If not, then you may need to “add more search criteria”.
  5. Make sure that you’ve got the search criteria set to search for “contains (keyword)” and not “equals” or “contains all”.
  6. Input your top MLS investor keywords in the search fields for”Public Remarks” and “Realtor Remarks”. (see ingredients below)
  7. Save this search and setup a automatic daily search to run for you based on these parameters.

INGREDIENTS:
I asked a handful of my investor friends to send me their top MLS keywords to search for, then I mashed them up with my own, and here’s the compiled list of what we came up with…

  • probate
  • inheritedbest mls keywords for investors
  • foreclosure
  • short sale
  • preforeclosure
  • estate
  • bring all offers
  • junker
  • must sell
  • investor special
  • special warranty deed
  • quit claim deed
  • heir
  • heirs
  • TLC
  • motivated
  • fixer
  • fixer upper
  • fixer-upper
  • repairs
  • as-is
  • as is
  • relocation
  • rented
  • tenant
  • do not disturb tenant
  • owner will carry
  • owner will carry 2nd
  • owner finance
  • owner will finance
  • personal rep
  • personal representative
  • estate
  • trustee
  • basement issues
  • basement repairs
  • basement problems
  • foundation issues
  • foundation repairs
  • foundation problems
  • structural issues
  • structural repairs
  • structural problems
  • no FHA
  • lease option
  • engineer report
  • price change

FOOTNOTE:
Depending on the type of deal you’re focusing on, many of these may not make sense for you to include. Just pick and choose those that do, and keep trying until you get the right results. Awesome sauce takes some practice to perfect, but once you do it is spicy and well worth it!

Serve and Enjoy!

Any thoughts on this? Got any tasty keywords my Alpha team and I missed? Leave a comment below…

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For Pete’s Sake! Debunking the “Easy” Button Myth http://reitips.com/easy-button/?utm_source=rss&utm_medium=rss&utm_campaign=easy-button http://reitips.com/easy-button/#comments Mon, 05 Aug 2013 20:49:12 +0000 http://reitips.com/?p=3811 Easy Button MythOK, I need to get something off my chest. If you’ve ever struggled with reaching your REI goals, or wrestled through “bright shiny object” syndrome, then this may sting a little…but it’s for your own good…

Ah, the Easy Button…

Everyone wants an easy button. Just press it and get-rich-quick.

To be honest, it is everyone’s dream to some extent (mine too).

But sorry (chuckles) rarely does real life ever really work that way. Reality is, most anything worth pursuing always involves some level of trial and error…

Some level of pain before gain…

Some confusion, scraped knees and more than just a little blood, sweat and tears along the way.

Welcome to Real Life…

In your business, yes, there is actually work, effort, and focus involved make money and make it consistently. At least at first, until you’re able to crack the code on systematizing and running things like a CEO rather than a technician (but that’s another conversation entirely).

But some people paint a different picture for you, don’t they?

An alluring, seductive picture of fast riches, instant success…

WAKE UP – You’re Not Being Given the Whole Picture!

And yet people constantly continue to buy more and more products and services that promise push-button riches.

Why?

First off, because people are inherently lazy. There, I said it.

Also, the fact is, it’s easier to just go along to get along, and suffer through the status-quo, than to apply yourself and put in the effort needed for accomplishing a proper goal.

So the dream of easy riches just won’t die. It lives on and bleeds good money out of your wallet for product after product and seminar after seminar, that so many of us are being seduced into buying because you won’t let that Easy Button dream die.

My Real Thoughts on REI Education…

Now let me be very clear here: I firmly, unequivocally believe that your education in this business is hugely important.

I’m also not one of those people who thinks it shouldn’t cost you anything. You should always be willing to wisely invest in your education, and committed to actively doing so on an ongoing basis.

Consider this, from one of the late, great minds of our day…

“Formal Education (school) will make you a living; self-education will make you a fortune.”

Wow. And this has been proven over and over again, hasn’t it?

For this reason I’m always self-educating….

  • I’m always sharpening my mindset (inner game)…
  • and my real estate skills and strategies…
  • and my business building skills.

And so should you!

So you may be asking quizzically, “How in the world are the two things you just said congruent with each other?”

Well they are, and here’s why…

The Art of Always Extracting Value

First of all, make no mistake, I’m not slamming all guru products, or even most of them.

Some of them are really exceptional and yes, some of them are crap, and there’s a lot in the middle.

But the truth is, you can almost always learn something worthwhile from anything you’ve ever invested your education dollars in…and frankly that should be the way you look at it.

If you’ve heard my back story, then you probably remember me describing the first real estate investing course I ever purchased as basically a box of garbage.  But I also always share that, at that point, I had two choices:

(1) To play the victim, have a pity party, and throw up my hands in disillusionment to the entire REI industry who must be trying to scam me, or

(2) Let my disappointment strengthen my resolve to not fail at this, and to get my $600 dollar’s worth out of the material by extracting what I could of value from it (even if most of it was poorly done).

I’m so very grateful that I chose option 2.

Bright Shiny Objects Galore

brighty shiny objectBut here’s the deal: A commitment to sharpening yourself with ongoing self-education does not mean you have to be constantly moving towards whatever bright, shiny object happens to be in front of you at the moment.

And let’s be honest: That’s exactly what a lot of compulsive, nervous self-education addicts do… you constantly stay tuned into whatever’s new and zingy…

…and you drop cash like a crack addict on whatever hit someone offers you…

…all with no real plan or vision for your business, other than to make piles of money and retire on the beach with umbrella drinks.

Ask me how I know about this?

(A) My own story from years past,

(B) And literally hundreds and hundreds of newer investors I’ve been able to interact with personally in the last 13+ years.

So many people are now addicted to the easy-button concept and dialed into a steady drink of guru kool-aid, and just keep buying more and more products (without implementing any of them) because they’re convinced they just haven’t bought the right one yet.

Sorry to burst your bubble…

But no course will grow arms and legs and start implementing itself on its own — YOU are the one that has to actually DO it.

And by far, the best way to do this…the only prudent way to do it, is to first admit you have a problem with education gluttony…no let’s call it addiction.  Admit that under the surface you’re constantly jonesing for the next course or seminar that’ll make that easy button feel only one more step away.

Then, make yourself actually craft a plan. And I mean a real vision for your business.

What kind of real estate investor are you?  This is where a little trial and error might come into play actually… No one says you have to nail it the first time you stick your flag in one particular type of REI biz model. In fact, I’d say few actually do get it right the first time.

After devouring Rich Dad, Poor Dad back in the day, I was convinced that landlording was the way to “passive income” and wealth for me. No one could have convinced me otherwise… I had to experience it for myself before I finally realized how (and exactly why) it’s not at all an ideal fit for me.

Planning Makes Perfect

But even if/while you’re trying to figure it all out, ultimately you need some kind of plan in place, so you have something to filter information up against.

And whenever you’re looking to consider investing in another bit of education, be brutally honest with yourself for a minute…get an accountability partner to hold your feet to the fire on this if you have to, but ask yourself honest,

“Is this congruent with my current REI business plan? Will this take me closer to it, faster, or possibly run a risk of sabotaging it or slowing me down?”

Also, are you making this decision based on fear, scarcity or fear of loss primarily? Or sound due-diligence and consideration of your goals, overall strategy and plan.

Then…force yourself to TAKE ACTION. Take the steps. Make it happen. And follow-through relentlessly. Then, and only then, you’ll finally start earning the big bucks. Not before.

Look, here’s a fact: You’ll never 100% know everything you feel like you need to know in order to execute perfectly…successful people don’t

Consider this powerful quote from a truly great and legendary leader:

"A good plan violently executed  now is better than a perfect plan  executed next week." - Gen. George S. Patton

BOOM! Now stop dreaming of the Easy Button. Get real. And then get movin’.

And keep educating yourself, but not in a bright shiny object kind of way. Instead focus on a proven system for success, and only go for things that are congruent with that plan that I know you’re going to be crafting for your business now …right?  ; -)

Did I Strike a Raw Nerve?

Let’s hear about it. Whether you agree or disagree, if this gets your goat in any way, please leave a comment. Let’s talk…

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Do I Have to Accept Section 8? (Hint: Yes and No) http://reitips.com/do-i-have-to-accept-section-8/?utm_source=rss&utm_medium=rss&utm_campaign=do-i-have-to-accept-section-8 http://reitips.com/do-i-have-to-accept-section-8/#comments Thu, 01 Aug 2013 23:18:16 +0000 http://reitips.com/?p=3796 Do I have to accept Section 8Ah Section 8. If you’re a landlord, chances are you either love ‘em or hate ‘em.

Personally, I love to hate ‘em.

But the question is…do you have to rent to Section 8 tenants if you don’t want to?

I hear this one a lot, and my answer may surprise you. But first…

Why I Hate Section 8

Don’t get me wrong, I like the idea of Section 8 in its purest original form – a temporary subsidy for underprivileged, low-income folks to help with their housing while they get back on their feet.

And for landlords…basically guaranteed rent from the government. And who wouldn’t want that, right?

Me. I don’t want it.

Because after many very frustrating (to say the least) experience with Section 8, I’m convinced the system is flat out broken.

  • I’d say for every person who legitimately needs the program, there’s a dozen or more who are basically deadbeats, working the system, living off my taxpayer dollars for as long as humanly possible. Sorry if that offends you, but that’s what I’ve seen.
  • The Section 8 inspectors I’ve dealt with are notorious for always failing you at least once, no matter how nice your property is. It’s like they feel it’s their job to always fail you the first time.
  • And their nit-pickiness is flat-out mind blowing at times.

As an example of the last two points, I had one inspector pull out his pen, and tell me that if he was able to stick it under a single fleck of paint (on my freshly painted window sill) and pull it up, then he’d have to fail me for “peeling paint”.

I’ve also had one inspection result in a laundry list of silly items to “repair”, then after painstakingly tending to all of them, failed again on the second inspection due to a whole different set of “repairs” that weren’t even mentioned or noted on the last inspection.

Bottom line, I’m out. Section 8 can have their guaranteed rent – I’ll take my chances with regular tenants and common sense.

Why People Say You Can’t NOT Rent to Section 8

Whether you love or hate Section 8, you’d at least think that it should be the property owner’s right to make the decision on whether or not to participate in the program, right?

Well as you may have heard, there’s a disturbing trend emerging of municipalities across the country changing the ground rules to keep you from being able to say “No” to Section 8 tenants. One way they’re doing it is by amending laws to now prohibit landlords from discriminating based on a person’s source of income.  In short, this means that if someone has a housing voucher and can make the rental amount requested, the landlord must accept the voucher.

I say this is a gross violation of our property rights. But nobody in charge cares what I think.

How to Legally NOT Rent to Section 8 Tenants

Quickie disclaimer: I’m not giving legal advice here. Please use or don’t use this at your own risk, consult your attorney first and all that good stuff, OK?

That said, here’s my clever trick for getting around this…

Yes, we already have a “source of income” discrimination clause around here. So when I get a call from a prospective tenant, I can’t simply tell them, “Sorry, no, I don’t take Section 8”, or I’d be discriminating based on their source of income.

But remember those ridiculous inspections I mentioned earlier? Well I’m not aware of any law that requires me to have our houses 100% passable by the stringent Section 8 standards.

So basically whenever someone asks me if I take Section 8, my response is,

“Well, we always accept applications and application fees from anyone, Section 8 or otherwise. However in my experience, Section 8 tends to have a hyper-stringent property inspection that borders on the ridiculous. We’ve had properties in the past fail for a single fleck of peeling paint on one window sill, even though the entire house is freshly renovated and in excellent condition. So with this in mind, we’ll gladly accept your application. But we cannot promise you that our house will pass that level of inspection from Section 8. In fact, I’d be really surprised if it did.”

Problem poetically solved.

That’s always been enough to send them on their way, and also keep me in safe territory legally, since I didn’t turn them away – I just gave them fair warning of the likely outcome. Once I say this, they just move on.

So there you go. If, like me, you’d rather stick a hot poker in your eye than work with Section 8, this could be a way to let you have your cake, while keeping you out of hot water.

So what are your thoughts and feelings with Section 8?

I’m all ears, so leave a comment below and let’s hear it.

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Real Estate Mogul Review: Is Real Estate Investing Really Dead? http://reitips.com/real-estate-mogul-review/?utm_source=rss&utm_medium=rss&utm_campaign=real-estate-mogul-review http://reitips.com/real-estate-mogul-review/#comments Mon, 10 Dec 2012 19:43:46 +0000 http://reitips.com/?p=3719
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So…the few days have seen quite the hubbub about a controversial new webinar that’s hit the interwebs. Seen all the saucy emails about it? I’ve heard some alarming claims like… “…real estate investing as we know it is dead!” –and– “…investors are in danger of becoming extinct!” So…what do you think? Me? Look, I’m always gonna shoot straight with you. […]]]>
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real estate mogul reviewSo…the few days have seen quite the hubbub about a controversial new webinar that’s hit the interwebs. Seen all the saucy emails about it?

I’ve heard some alarming claims like…

“…real estate investing as we know it is dead!”
–and–
“…investors are in danger of becoming extinct!”

So…what do you think?

Me?

Look, I’m always gonna shoot straight with you. So I’ll gladly share my full, candid response to all this with you, right here, right now. I’ll even tell you exactly what I think about this new Real Estate Mogul thing.

And as you read every word of this with an open mind and a critical eye, I think you’ll feel enlightened and really glad you did. <–not NLP, I swear 

First, I Have Something to Disclose and Declare

Truth be told, I cannot be entirely unbiased here.

Why? Because several months ago I was politely asked to provide some input on the real estate mogul project as it was being shaped. I obliged. One thing led to another and I was eventually asked to help shape the entire content side of things for members, to ensure quality and general awesomeness from the training end of things.

I’ll explain that more in a second, but essentially it means that, even though I’ll be nothing less than completely honest in sharing my personal feelings on Real Estate Mogul (both product and message), this is one rare case where it’s simply impossible for me to be 100% unbiased.

However…

Please know that I consider it a high honor to be asked to share my candid view on products and services like this, and I’m lucky enough to have readers who actually want to know my frank perspective, as you weigh something like this to see if it’s right for you. I take this very seriously, and would never do anything to compromise that.

So rest assured that, even though I can’t be totally unbiased due to my involvement on the training side, I give you my personal promise that I’m being completely honest in my feelings on this, good and bad (and yes, there are some bad). Ultimately I consider myself your advocate, and my sincere goal is to to provide some authentic value in the conversation.

Fair enough?

Now…On the “Death of Real Estate”

And I realize this may rub some people the wrong way, but I just can’t go along with that. I’m not trying to be a jerk, but I just know too much to agree with that.

Just to be crystal clear: No, I do not believe that real estate investing is dead.

But Here’s What I DO Believe…

I DO know that in 2008 real estate changed. Big time and at lightning speed… We all felt it.

  • Many investors kept trying to force their square peg into a now round hole, and sadly died trying. We all know at least a few of them…
  • Others tweaked their approach to a new market, and survived to deal another day…
  • A few of us even found brand new opportunities created by the shift — little sub-pockets of profit, and have thrived better than ever before as a result…

I also DO know that 2012 started another major shift in real estate investing…

  • Like big hedge funds quietly buying billions in real estate in major markets all across the U.S. (Blackstone is only one of them)…
  • Like some flat-out scary gov’t rules and regs coming down the pipeline (I know the lobbyist fighting them personally)

I DO know that in the last 2 months I’ve been personally connecting with legit insiders on all this, and there’s some truly scary stuff going on in many places right now, and it seems to be increasing at a startling pace.

And I DO personally know folks who’ve been flat out blindsided by some of these threats lately, and been left bruised and confused as all get out about what the heck even happened. Truth be told, it’s happening more and more.

Maybe you’ve sniffed some of it in the news lately?

“The era of mom-and-pop real estate investors is quickly coming to an end.”
Wall Street Journal

“Landlords have always tended to be mom-and-pop outfits. That appears to be changing. Fast.”
Fortune Magazine

“The business of buying foreclosed homes, renovating and renting them out is morphing from a largely mom-and-pop business into the next big thing on Wall Street.”
CNN

“Large Wall Street investors rushing into the foreclosure market have raised between $6 billion and $8 billion, with the intent to acquire between 40,000 and 80,000 foreclosed homes nationwide in the months ahead.”
Housing Wire

But What Does All This Really Mean to Us?

Look, I’m not a doom and gloom guy. Not my style. No, this is not the end of the world as we know it.

But it’s noteworthy.

I.E. it’s worth clearly understanding, and then asking ourselves the only two responsible questions:

1) How will this effect me and my business when it comes down to it?
2) How should I adjust what I”m doing in response to it?

 Think about that for a second. An honest, open-minded asking and critical-thinking answering of these two questions is the only thing that saved many investors back in 2008. Smart investors “move with the cheese”. Those who don’t, typically starve.

How One Guy Puts It

My buddy Rob and I have both been investing full time for around a dozen years ago now, and we share the same perspective on this. But I like how I recently heard him put it:

I’ve watched a lot of “smart” people come in AND succeed in the short term only to ultimately FAIL. Why? Simple. Because most people simply don’t pay attention to the world around them. Are you paying attention? You don’t need to get scared by the “doom and gloom” — you’re more intelligent than that. What you need to do is be in the loop and aware of all the changes, the shifts and the OPPORTUNITIES all around you.

Well said, Rob!

Behind the Doom and Gloom

I believe the folks behind the controversial webinar actually have very good intentions, even if their approach is a bit over the top…

I truly believe their aim is to help people wake up and smell the coffee, start paying attention to how things are shifting in the arena, and start winning from these shifts, rather than perishing from them.

And hey, that’s what I want too! Unfortunately I think that for many, their message is being obscured by their delivery.

I mean, you get that real estate is not really dead, right? It’s weird, you’ve either understood the intent of the message or you completely missed the point. I’ll open your eyes here.

All this talk about panic, death and a cataclysmic shift are designed to get your attention.  It’s 100% to help you “win”.

They’re using a super strong message, to open your eyes and motivate you towards some real and current solutions to the big real estate problems facing tour industry right now.

  • For example, one of the problems is the aforementioned hedge funds competing against investors in major markets, and blowing them out of the water. This is literally putting some investors I know flat out of business.
  • And among the solutions they’re offering is learning how to actually play ball where the hedge funds aren’t …and also, finding ways to actually flip deals to the hedge funds that they aren’t already going after (if you can’t beat ‘em, join ‘em).

That’s just one angle among many, but it’s a biggie.

So What About This “Real Estate Mogul” Thing?

Well basically what they’ve put together is a hybrid educational platform, listing service, and social network, topped off with some choice daily “lessons” across multiple real estate investing categories. Each lesson is designed to truly teach and equip. These aren’t ezine articles or blog posts – they’re LESSONS.

Briefly here are some key summary bullet points directly from their website:

  • The Learn Module for on-demand access to the step-by-step real estate investing lessons you need to succeed today
  • The Interact Module for access to our team plus thousands of other active investors
  • The Deal-Making Module for all the buyers, sellers, lenders, & partners you’ll ever need
  • Your own Mogul Profile Page to act as your virtual business card
  • The Daily “Mogul Insider” e-Newsletter for real-time tips, tricks, & updates
  • The “101 Guide” to Real Estate Investing to provide the blueprint to your first (or next) deal
  • Premium Passive Cashflow Deals for hands-free $200-$850/month rent checks
  • On-Demand Deal Funding for instant access to hundreds of private & hard money lenders
  • LIVE Bi-Weekly Mentoring Calls for expert advice & answers to all your questions
  • The Mogul Publishing Program for your chance to be the expert and receive $50-$500 “quick hits” of cash
  • An Instant Internet Marketing Cashflow Stream to provide a “safety net” during your inevitable down months in real estate

My Honest Personal Assessment

Well first I’ll tell ya, I’ve not only seen the whole shebang myself, but I’ve explored it in depth, inside out. I’ve test driven each and every piece of this thing, and did so with a critical eye.

And scare tactics aside, I actually DO recommend Real Estate Mogul.

“Wait…WHAT???”

I know, I know… Anyone who knows me, knows that I do not endorse things lightly, and I’ve done so very carefully here.

I think it might be best to continue with a short, personal video. If you’ll indulge me for a moment longer, I’ll share with you:

1) My personal, candid thoughts on Real Estate Mogul (education, interaction and deal-doing)
2) The one piece that really intrigues me the most
3) A look at who all’s behind the curtain (the faces may surprise you)
4) Who this is best suited for (and who not)
5) A revealing look under the hood (I’ll show you exactly what’s inside)
6) A shocker: Got a little something to share that no one else has yet. A fun surprise. :-)

Watch My Personal Review…

So what do you think? Well My sincere aim is to be a helpful voice of reason for you n the conversation, so I hope you enjoyed that and found it helpful.

From here, if this thing intrigues or resonates with you at all, then finish sizing it up to see if it’s a good fit for you. Start by reviewing the controversial “Real Estate Investing is Dead” video. And if do you jump in, please drop me a line once you get inside. As you can tell from the video above, I’m not hard to find. :-)

Watch the controversial webinar here…
real estate mogul preston ely

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How to Notarize Documents Online…Kapow! http://reitips.com/notarize-online/?utm_source=rss&utm_medium=rss&utm_campaign=notarize-online http://reitips.com/notarize-online/#comments Wed, 29 Aug 2012 18:53:55 +0000 http://reitips.com/?p=3701 Notarize OnlineRecently I found myself pulling my hair out with an important real estate closing that nearly fell apart entirely.

It was thanks in part to the fact that one of our sellers lived out of state (in a multi-heir estate situation) and apparently couldn’t seem locate a stinking notary within 200 miles to help get her part of the closing docs consummated.

In the end we were able to coax her to make the drive for the sake the $34,000 she had coming to her. But truth be told, things were hairy for a bit and it would have royally bitten to have lost the deal simply because she couldn’t get to a notary to get the dang docs signed.

And here’s where the light bulb turns on. In a recent conversation with my friend and colleague Justin, he illuminated me to the fact that…

Apparently we can now legally notarize documents online

Not only that, but it’s reasonably priced and accepted in all 50 states.

Ha, who knew?!?

Justin stumbled upon this himself when he found himself faced with a similar situation to me, but in reverse – He couldn’t seem to find a notary within hours of himself.

You see, for the last 4 months or so Justin’s been actively buying and flipping deals in San Diego and Phoenix, all while lounging beachside with his family in Panama. (If you want to hear more about how Justin’s been winning at investing remotely, you can listen to our entire podcast interview here.)

While long distance dealmaking is nothing new to Justin, his time in Central America has presented him with the notary conundrum first hand. And that’s when he discovered Sign Now and their crazy, awesome eNotary service.

e-Signing Vs. e-Notarizing

eSignatures aren’t anything new really. Documents executed using eSignatures have the same legal validity and enforceability as pen-and-paper contracts and have been recognized in every state for years now. But actually notarizing docs online is a whole different thing and hasn’t been a viable option up to now.

The Sign Now guys are apparently competitors to Docusign in the eSignature space, but are the first to delve into groundbreaking new territory of actually being an online notary.

Kapow! Ya gotta love a juicy opportunity seized!

Why It Works

Sign NowBasically this can happen now thanks to two things:

1) As of July 1, 2012 Virginia is the first state to authorize a signer to be in a remote location and have a document notarized electronically by an e-notary using audio-visual conference technology.

2) While many states do not yet have a specific allowance for online notarization, out of state notarizations are valid and must be accepted in all 50 states. This has actually been the case for hundreds of years, and has been tested in courts.

So these guys saw the opportunity and jumped right into offering online notarizations remotely from Virginia, which then must be legally recognized in all 50 states. Kapow! (yes, again)

It’s quick, easy and cheap. The entire process takes only minutes, costs only $14.95 and comes with a money back guarantee (totally unnecessary, but makes a great point).

According to Sign Now, Deron Williams of the NBA recently signed his $98M contract with the Brooklyn Nets using their  iPad app. Pretty nifty, eh?

So take note of this – I’m sure it’ll come in handy the next time an online notary would make your real estate closing a little easier. And a hearty hat tip to Justin for the uncovering and sharing this with me.

What are your thoughts on eSignatures and eNotary? Please rate and share a comment below!

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Viewer Discretion: Landlord Discovers Crazy, Pizza-Loving, Cat Lady Hoarder Hideout http://reitips.com/hoarder-hideout/?utm_source=rss&utm_medium=rss&utm_campaign=hoarder-hideout http://reitips.com/hoarder-hideout/#comments Fri, 03 Aug 2012 21:52:23 +0000 http://reitips.com/?p=3652
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This is just too good not to share. Or too bad. Depends on your perspective, I guess. When my long-time friend and local turnkey rental guy Chris Wark finally had to evict a school teacher he’d been renting to for seven years, he had no idea the disturbing mess he’d uncover after she moved out. And trust me, […]]]>
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Hoarders!This is just too good not to share. Or too bad. Depends on your perspective, I guess.

When my long-time friend and local turnkey rental guy Chris Wark finally had to evict a school teacher he’d been renting to for seven years, he had no idea the disturbing mess he’d uncover after she moved out. And trust me, that’s an understatement.

After removing 3 trailers full of garbage, it took a hazmat trained team two more days to decontaminate, plus $10,000 to renovate.

So when Chris went for a walk-through, he posted the video below on YouTube and it went viral with over 200K views so far. He’s since been interviewed about it by local news, various news websites and even Inside Edition did a story on him, dubbing Chris’ house “The Dirtiest House in America.” Ha, wow!

Imagine spending your life wading through mounds of garbage, drowning in a sea of trash everywhere you turn. It is hard to believe that someone could live like that on a street where neighbors had no idea what was going on in the house next door.

Before you behold the unbelievable…

Here’s the Quick Back-Story From Chris

Chris WarkThis tenant rented from me for 7 years. She was not a hoarder when she moved in. The first five years everything was fine. She was a “cat lady” and the house smelled like a litter box, but still no hoarder.

But apparently sometime in the last 2 years she lost it.

Every time we arranged to make an inspection this lady would cancel at the last minute with a different excuse, “I’m sick”, “I didn’t have time to clean up”, “It’s not a good time can we reschedule?” etc. Since she paid rent on time every month and never submitted any maintenance requests, inspecting her house was not an urgent priority. Now we know why she was putting us off!

Note to all landlords/managers, if a tenant keeps putting off inspection, something may be very very wrong. Get in there quick!

Why am I so calm in the video?

  1. I’ve seen a lot of disgusting things in my 10 years as a property manager.
  2. As a cancer survivor I have a different perspective on life than most. I can find the silver lining and humor in almost any situation.

One final note:

My commentary may come across as a bit mean or unsympathetic, but that is just my way of turning something horrifying into something funny. Remember I’m the one who has to deal with this unbelievable situation and it cost me over TEN THOUSAND dollars to renovate. The least I can do is get some laughs out of it.

And no, I don’t feel bad about making fun of this woman anonymously. She practically destroyed my house, then walked away. I have every right to broadcast her identity to the world and ruin her reputation. She remains anonymous because I do truly feel sorry for her and choose not to reveal her identity. The Judge Joe Brown show even asked me to sue her on their show! I have not sued her for damages. After seeing this video, her family actually contacted me, apologized, and thanked me for not revealing her identity.

Fair Warning

If you have a weak stomach, you may not want to watch this video. This is a super nasty, gag-reflex inducing video. So if you throw up on your keyboard, don’t say I didn’t warn you.


Ha, this is the video you share with your Facebook friends, to show ‘em what you really do for a living!

Another Funny Bit

One of the many interviews Chris did about this experience with with an web show called “Right This Minute”. Watching it made me giggle-snort, and it’s pretty short, so I thought you might enjoy it also…


Thoughts?

I know, right??? Crazy! I’d love to hear your thoughts in the comments below. What would you do in Chris’ shoes? Anyone else out there got a hoarder story to share?  Please…do tell!

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How a Wholesaling CEO Hires His Crazy Awesome Team http://reitips.com/crazy-awesome-team/?utm_source=rss&utm_medium=rss&utm_campaign=crazy-awesome-team http://reitips.com/crazy-awesome-team/#comments Sun, 24 Jun 2012 19:58:41 +0000 http://reitips.com/?p=3589 By far one of my most popular podcast episodes recently was my candid conversation with Rob Swanson in Denver. And for good reason: He’s a freakin’ machine…

Rob’s a good friend, one of the smartest guys I know and is basically the e-Myth personified.

  • He knows how to build a thriving business that actually runs like a business,
  • How to leverage the heck out of people, technology and tools,
  • And how to do it all without it running (or ruining) is life.

Let’s just say the guy’s designed a rather awesome life, and gets plenty of skiing and fly fishing in with his wife and kiddies.

So our little podcast chat was a really good, long, compelling look under the hood of a “Wholesaling CEO’s” real estate investing business. We obviously struck a chord (with more comments than any other podcast to date). And for me, one of the coolest parts was when I got dig around inside how he hired “his team”.

So here’s a brief slice from our conversation where Rob talks about who he hired, why, what they do and what he pays them. I found it enlightening and I think you will too. Enjoy…

Anatomy of Wholesaling CEO’s Team

JP:  You’ve referenced your “team” a number of times now. How many people do you have on your team at this point? And how many did you start with at first? And I guess the trailing question to that would be, how do you leverage your team so that you can run such a powerhouse business, but not have to work 80 hour days to pull it off?

Rob:  Right. Well, I started with just one person on my team, and that was me, myself, and I. Or maybe that’s three people (smirk) but my team started with just me. I did everything when I got started in this business. I ran the marketing, I followed up on leads, I made the offers, I sold the property, signed the closing paperwork…I did absolutely everything.

Then as my business evolved and I got to a point where I wanted to start doing other things to continue to grow and scale the business, I brought team members in.

The first person I brought in was a receptionist/office manager, because despite being an engineer, I’m just not a paperwork guy. My desk is a mess, and I hate paperwork, so I needed to have somebody come in and just help me manage, organize, and coordinate the paperwork side of it. And you know, real estate is a paperwork business. So that was a first person I brought on – an administrative assistant.

Then, I brought on a project manager, and she still works with me to this day. My project manager’s job was to help manage and run the marketing efforts. So when it comes to getting a postcard put together, getting a list organized and uploaded into Click2Mail (which is the online mailer system we use) she handles that for me. She also follows up, makes sure we have stuff for seller leads and buyer leads, managed our web systems and that kind of thing.

The next person I brought on was an acquisitions manager, and my acquisitions manager was originally brought on when in 2008 when the real estate markets collapsed and everybody was running for the hills, but I put a $10 million real estate fund together. Remember, I told you I zig when everybody else zags?

JP:  Yep.

Rob:  So I put a $10 million fund together to go out and buy as much real estate as we could for that $10 million, fix it, and flip it. And so I brought an acquisitions manager on to help me, you know, do the construction estimating, do the paperwork management of each deal, manage the money inflow and outflow of the fund, basically kind of be an out-in-the-field eyes and ears guy for me on all of our deals, and interact with our contractors and everything else.

The fourth person I brought on was a wholesaling manager, and her job was to expand our wholesaling operation into other markets beyond just Denver. So she spent a lot of time building relationships with cash buyers in local markets that we were wholesaling in.

And so that’s really the team that I assembled and built when we had 22 fix and flips going in one month and wholesaling in a couple of different cities.

How Do You Compensate?

JP:  Rob, if somebody wanted to follow in your footsteps and start building their own in house dream team, how would you suggest they structure the compensation?

Rob:  Right. So for me, my administrative assistant is a full-time salaried person.

My project manager was a full-time salaried person, which about a year ago we converted her to an independent contractor. It was better tax-wise and some different things for her and her family for some things that we made a transition from full-time employee, W-2, to a 1099 contractor. She still pretty much still works full-time for me, but she gets the flexibility to work a little bit more on her own schedule. So she is paid hourly, but she does it on her schedule.

The reason I was able to do that with her was she had been with me for over four years. She knew our business inside and out and was looking for some flexibility with her little kids and some different things, not to have to come into the office all the time. So we made that transition.

My acquisitions manager was paid a base monthly salary, and then he was paid on a performance base for every deal that closed. Anywhere from $500 to $1,000 per deal that closed is what his compensation base was based on. And then, very similar with my wholesale manager, she was paid a low base, and then she was paid on a performance basis for every deal that closed.

You certainly don’t have to pay a base, like I’m saying that I paid a base salary. I did that because my business had grown to a point where I was looking for a body. I wanted a person in here. I needed some help, so I was willing to entice with a base salary or a base commission, minimum commission, and then a performance on top of that. So the harder they worked, and the more effort, the better results they got, the more money they were able to make, and there was no cap on the amount of money they could make.

What Does Rob Focus On?

JP:  Okay. So I understand your teams responsibilities and duties and how you compensate them. What are the specific pieces of the business that you reserve only for yourself? The aspects that are the most important for only you to be doing? Now that you’ve got these people handling various aspects of the day-to-day, and you’ve got the morning filters that you run through with the questions, and you coach them into time blocking to get everything done and prioritizing it, what are the things that Rob Swanson still does when he’s not goofing off fishing?

Rob: Well, even when Rob Swanson is goofing off fishing, Rob Swanson still has a business to run, so Rob Swanson still looks at do we have leads coming in and do we have offers going out. So just because I’m goofing off doesn’t mean that I’m not paying attention to my business and running it. So I pay attention to that stuff every single day, because if I see a dip, a lull, or anything funky with it, I’m going to ask questions. I want to know what we’re doing, why we’re doing it, and how it’s happening.

The next piece that I do a lot is what I’ll call the market research side of it, because I’m a big believer, JP, in working smarter not harder. I’ll give you a perfect example…

Denver right now is at a 20-year low in inventory, and the competition for investor deals in Denver is at almost an all-time high. It’s as competitive as I’ve ever seen it, and inventory is as low as I’ve ever seen it. I mean it’s just a tough market for a real estate investor right now to go do 2, 5, 10 or 15 deals, if you were going to try to do all those deals in one particular city. It’s the “going deep syndrome” that most real estate investors have. Most real estate investors tend to want to go deep in their business. They want to do ten of the same kind of deals in the same city every single month.

What I do is focus on market research and ask myself the questions, “What’s the low-hanging fruit?” In other words, if I can only do one or two deals a month in Denver that I consider are good enough deals – just because the market is competitive – what am I going to do?

Well, I may just decide to scale my business in a new area – into a different location. I’m going to look for the lowest hanging fruit in the arena, and I might just launch my wholesaling operation in another city.

Now, why would I launch a wholesaling operation? Because I never have to buy the house, so I never have to fix up the house, so I don’t have to become an expert at evaluating a house. All I need to do is get good at making offers. So getting leads, making offers, building a buyer’s list, and letting my buyers evaluate the deal and tell me if they want it or not.

So that’s what Rob does today. Rob looks at the scalability and the market research to say where should we be running our operation to be flipping as many houses as we possibly can with as little effort as possible.

JP:  It’s the e-myth. You have truly crafted a situation that allows you to be able to work mostly on your business and not in it. It’s almost cliché at this point, that that’s what everybody is going for, but you have cracked that code.

So what do you think about Rob’s team building approach? Would you do it the same way? Leave a comment below and share your thoughts! We’d love to hear ‘em.

And if you missed our original podcast interview, you can catch the whole thing here.

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