About March’s North Georgia REIA Meeting

WHAT IS MARCH’S MEETING ABOUT?

With inventory as low as it is, we firmly believe Mobile Homes are one of the most underused and untapped resources in real estate today.

You may have heard of a Lonnie Deal. It’s when you buy a mobile home in a trailer park for $2000 cash, then sell it with terms for $7000. The buyer’s down payment will help you recoup a chunk of your purchase price. Best of all, you’ll get monthly payments of $300 for three years. That’s a yearly yield of 240% – making this a HOT STEAMING DEAL!

What makes Lonnie Deals even better is, after a year or two, you often get the home back because something happens to the BUYER, and he needs to move elsewhere. You then repeat the deal again. That’s an annuity, Baby! And because it paid for itself in the first year, your yearly yield literally becomes infinite!

But we are not stopping at Lonnie Deals. We’re also going to discuss how the lack of mortgage availability for Mobile Homes has created a niche for Cash Buyers. You can pick up Land Home Deals (a mobile home on land) for $8,000 to $20,000. These puppies cash flow for as much – or more – than a single-family home!

Also at March’s meeting:

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Mom’s Best Life Lessons

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This week, Dorothy, my mom, turns eighty! My best life lessons have come from her, and the reason why she was such a great teacher and powerful influence on me, Sam and Jolie (my brother and sister) was that she showed us how to succeed rather than just tell us. Anyone can talk the talk, but walking the walk requires a very determined person!

Dorothy taught us that everyone can succeed – you just have to be willing to work at it, sacrifice for it, and never, ever quit! Too often folks point at things in their past as reasons for their failure. Failure has one father: Quitting!

Dorothy had every reason to fail. She was born dirt poor in Raleigh, Mississippi during the Great Depression. She spent summers at her grandmother’s in White Oak, Mississippi, where there was no indoor plumbing or outdoor well; water was carried in buckets from a nearby creek. There was no electricity…there wasn’t even an outhouse! Her father was a raging, hateful alcoholic who lost his leg in a drunk-driving accident.

Talk about reasons to fail! But she didn’t let these things stop her. She went through college at Mississippi Southern on a music scholarship, and worked three part-time jobs to pay for food.

The second biggest lesson mom taught us is that you can be…

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What is Door-knocking Like?

In 2014, i took 30 + people out door-knocking in Florida!

You’re driving through a subdivision and see a home for sale that you like. You’re curious about the price, the number of bedrooms and bathrooms, and why the seller is selling. What do you do? Do you stay in your car? Do you call the number on the sign and talk to voicemail? Or – gulp – do you knock on the seller’s door?

If you choose to knock on the seller’s door, what do YOU think will happen? Bet the vision in your head goes something like this: The owner throws open the door and screams, “Get out of my yard!” Then, “Sic ‘em Brutus! Honey, get my gun – there’s a varmint on our porch that needs shootin’!”

The truth is, folks are nothing like what you imagine – they couldn’t be nicer! You don’t believe me? After all, what do I know about door-knocking? I’ve only made a living at it for forty-three years!

To help you see what door-knocking is like, let me tell you about yesterday. I took Wendell Strickland and Rodney and Debbie Palmer out with me, and here’s what happened…

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WHAT IS FEBRUARY’S MEETING ABOUT?

A Subject-to Deal, whether you’re doing a flip or keeping the property as a long-term hold, is an incredibly creative way to fund your next real estate investing deal.

So what, exactly, is a Subject-to Deal? Usually, when you buy a property, at the closing table, the property’s title transfers to you and the seller’s mortgage is paid off. With a Subject-to Deal, the title still transfers to you, BUT the seller’s mortgage remains in place and you agree to make the SELLER’S mortgage payments on the SELLER’S mortgage for the SELLER!

Is this the same thing as a loan assumption? Nope! With a loan assumption, the seller’s mortgage transfers into YOUR name. With a Subject-to Deal, the mortgage remains in the SELLER’S name!

Subject-to Deals must be illegal, right? Nope! Look on any HUD-1, lines 203 and 503. What does it say? It says: Existing loan(s) taken subject-to. Did you know that for decades, on every HUD-1, there’s been a pre-printed line for Subject-to Deals?

If you’ve not done a Subject-to Deal, you’re probably saying, “No seller would EVER agree to it!” Are you sure about that? Are you willing to bet the ranch on that? Truth is, Kim and I have been doing Subject-to Deals since 1998 – our ranch is a Subject-to Deal!

At February’s meeting, we’ll show you WHAT a Subject-to Deal is, HOW it works, the RISKS and REWARDS, and most importantly of all, WHY a seller would agree to do a Subject-to Deal! We’ll do this by using real-world examples of deals that we, and a number of other investors, have done.

North Georgia REIA is passionate about your financial freedom. We want you to live your…

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Subject-to Deals: Creative Funding at it’s Best

Our ranch was a Subject-to Deal

Let’s say you find a deal that, as a flip, would produce an immediate $200,000 net profit, or $500 in monthly cash flow if you keep it as a rental. The seller is very motivated and wants to sell yesterday! Only one problem: funding. No bank will loan to you, and you don’t have any private-money lenders lined up. Do you walk away from this big-profit deal? Not if you know how to structure a Subject-to Deal!

What’s a Subject-to Deal? Normally, when real estate is sold, the title (Warranty Deed) is transferred into the buyer’s name and the seller’s mortgage is paid off at the closing table. With a Subject-to Deal, the property is still transferred into the buyer’s name, but – and this is a VERY BIG but – instead of the seller’s mortgage being paid off, it remains in place. You (the buyer) agree to make the seller’s mortgage payments on the seller’s mortgage for the seller. In other words, you’re buying the property “subject-to” the seller’s mortgage.

Right about now you’re probably saying, “No seller would ever agree to this!” You sure about that? Willing to bet the ranch that I’m wrong, are you?

The deal described in the first paragraph is a real deal that Kim and I did in 1999 – and we still own this property today. If the seller hadn’t agreed to a Subject-to Deal, there’s no way we could have…

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Buying at the Foreclosure Auction

Bill & Kim bidding at foreclosure auction

Kim and I have not been the high bidders on a property at the foreclosure auction since the end of 2012. Why the dry spell? The cheese moved. For example, from 2007 through 2009, the best deals were found buying short sales. From 2010 through 2012, the best deals were found buying at the foreclosure auction. From 2013 until now, the best deals have been found by buying pre-foreclosures. Remember, the cheese is always moving. To be successful, you can’t keep going back to where the cheese was. You must go to where it is today!

Here are the basic steps Kim and I follow when bidding at the foreclosure auction. First, before a property can be auctioned for foreclosure, it must be advertised in your county’s paper of record for four consecutive weeks before the auction. Call your county’s Clerk of Court’s office and they will tell you in which paper and on which day(s) the “legals” (this includes the foreclosure notices) run.

On the day the foreclose notices first run for next month’s auction, we buy that paper and transfer the foreclosure info in the paper – which is difficult to read – onto our Foreclosure Sheet – which make it much easier to read!

Second, using a foldout county map, we mark the location of each property that’s advertised for…

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How to Work Foreclosures

Kim and I have been buying foreclosures since 1995. Over time, we’ve built a unique system that’s very effective. It has allowed us to buy tons of properties pre-foreclosure, at the auction and from banks after the auction. Today, I’ll explain how we work the pre-foreclosure market. Next week, we’ll discuss how to buy at the foreclosure auction.

When it comes to foreclosures, our best deals come from buying pre-foreclosure! At the foreclosure auction, there are always investors willing to work on much thinner margins than which we’re comfortable.

On the other hand, when buying pre-foreclosure – that is, before the auction – there’s very little competition. Why? If a homeowner is facing foreclosure, because of unfounded fear, few investors will knock on a homeowner’s door.

There’s another BIG benefit to buying pre-foreclosure. Since you’re buying from the owner, there are many more creative deal-structuring tools you can use to construct a win-win deal. If you buy at the foreclosure auction, there’s only one tool – a big dang hammer…CASH! There’s no creativity, beauty or…

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Sue Stanley’s Barbershop: How to Run a Successful Business

What can you learn about running a successful business from Sue Stanley and her Ye Old Barbershop in Adairsville, Georgia? In a word: Everything!

There are two ways to learn how to run a business: You can go to college and major in business, or you can spend time with someone who’s been running a successful business for decades. I believe the latter is a better, faster, more effective way to learn.

For a business to succeed, the owner must keep his/her net profit as close as possible to his/her gross profit. In other words, don’t let your expenses eat up all your profit. There are thousands of failed business owners who were bringing in money hand over fist, but their bills were flooding in even faster! The result? Because there wasn’t enough profit left after the bills were paid, these businesses went Tango Uniform (a.k.a. toes up)!

Sue is an example of a person who knows how to run a business right. She operates the oldest, continuously-run-by-the-same-person business in Adairsville. This means she has longevity and is a very smart businesswoman to boot!

Want to know some of Sue’s secrets?

When Sue took over the…

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Learn From The Best Real Estate Investing Teachers

Pete Fortunato (on left) & Dyches Boddiford

After last night’s real estate investors meeting, a guy new to investing said, “I’ll never be as good at creative deal structuring as you, Bill.’’

I get this a lot. Here’s the thing: Because I’m VERY dyslexic, in school, my report cards were loaded with C’s, D’s and F’s. In other words, I’m not the brightest bulb in the pack. Most everyone reading this – except for Larry Brunner – is a good bit smarter than me. I’m proof that you don’t have to be smart to succeed at real estate investing. The key is – and always will be – getting face-to-face with sellers on a regular basis!

This new investor is seeing me decades into my real estate investing career. He’d have a whole different opinion if he’d met me twenty years ago!

In 1995, when we first got into real estate investing, Kim had three jobs: She cleaned houses, hung wallpaper and worked at her dad’s pawnshop. I had two jobs: I sold Electrolux vacuums door-to-door and worked at Home Depot. What we knew about real estate would fit in a thimble.

At the beginning of 1998, I became a full-time real estate investor. In the three prior years, Kim and I had done a whopping four deals – not exactly world-beaters, were we? We knew NOTHING about creative deal structuring or funding!

The first big-league real estate investing course I took was Dyches Boddiford’s Advanced Strategies Conference. That January weekend, I understood Dyches when he said, “Let’s get started.” Then, “It’s time for lunch.” And finally, “Thanks for coming.” Everything in between those three statements was a complete…

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January 8th North Georgia REIA Meeting Info

Nothing can drive a real estate investor to the poor house faster than a rehab gone bad…and talk about losing one’s cherub-like demeanor!!!

I know two investors who partnered on a deal in June 2014. They bought the property for $25,000. They estimated the rehab would cost between $25,000 and $50,000, and take about six weeks to complete. That rehab is still going on – 6 months later! Oh, and the rehab expense now sits at a whopping $85,000! Here’s the really sad part: The investors are related – their strife caused the family to cancel Thanksgiving AND Christmas! All because of a rehab gone terribly bad!

Think this can’t happen to you? Think again! A rehab can go south in the blink of an eye! Your rehab is going along just fine – on time and on budget. Then suddenly you find yourself chin deep in a pit of quicksand – and sinking fast! It’s a terrible feeling…but it can be avoided!

Due diligence – before you buy a property – is what keeps your deal safe! Constant tracking and follow-up during the rehab keeps you out of the proverbial quicksand.

A good example of a lack of due diligence is the above deal. When I asked the investors about their estimated cost of rehab, they said, “Between $25,000 and $50,000.” That’s a $25,000 swing! There’s no such thing as a $25,000 swing when estimating a rehab. You’ve got to know your…

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