It can be argued that a butterfly and a caterpillar are one and the same. OK, maybe they are – but not at the same time! It’s one or the other – but not both! So, which are you?

As real estate investors, we all start off the same – as caterpillars. We just know the basics: how to crawl, eat leaves and poop. Our world is limited to the tiny branch we’re clinging to. We’re not much to look at, and we’re preyed upon by just about every creature in the animal kingdom. Our life expectancy is about 12 seconds.

Now here’s the thing: God didn’t mean for caterpillars to stay caterpillars. He meant for them to grow and develop into beautiful, high-flying, far-traveling butterflies…but only those that are hardworking and resourceful get to complete the journey from caterpillar to butterfly…

Continue reading »

One of the hot topics in real estate investing these days is something called creative deal structuring. This leads to a question that we’re often asked: What exactly is creative deal structuring?

To answer this question, we need to begin by describing what it’s not. One way you can buy a property is to pay cash for it. You won’t find any creativity in that deal structure. You can also find a property you like, apply for a mortgage, and then a month or so later, go to an attorney’s office to sign a big stack of hard-to-understand documents. Not much creativity there either.

Creative deal structuring begins when you find someone with a real estate problem that “normal” solutions can’t resolve. For example: A homeowner owns a nice home that in 2006 was worth $130,000 but today is only worth $70,000. She owes $80,000 on her mortgage – making her upside down by $10,000. Now throw some motivation into the mix – the lady needs to sell immediately so she can move to Tennessee and begin her new life.

Let’s see, a cash buyer wouldn’t be interested in this deal. And you’d be hard-pressed to find a realtor who would list this house – unless it’s a short sale listing. So how would you structure this hopeless situation?

Continue reading »

One of the best real estate investing teachers in the country is Pete Fortunato. What makes him so special? Pete knows how to creatively structure deals in ways that make impossible deals possible.

Before Pete became one of our primary teachers in 1999, Kim and I did all of our deals the same old way. We’d find a house, apply for a mortgage, close with an attorney and then either sell or rent the property. Bottom line: If we couldn’t get a mortgage, we couldn’t do the deal. We felt like we were buying a Model T Ford from Henry Ford. Mr. Ford used to tell his customers, “The Model T comes in whatever color you want – as long as you want black.”

One of our biggest real estate investing ah-hah moments happened at our first Pete seminar…

Continue reading »

Most folks mistakenly think negotiating is a beat-the-other-side-over-the-head-until-they-quit thing. This couldn’t be further from the truth! Over the years, we’ve sat down with thousands of buyers, sellers and tenants and successfully negotiated hundreds of Win-Win deals.

What’s a Win-Win deal? It’s when both parties leave the negotiating table feeling like they ended up in a better place than where they started. They may not be in the exact place they wanted to be, but they are in a better place!

Here’s a nugget I learned from Pete Fortunato: No one is gonna say yes to a deal that puts them in a worse place than where they started. Given a choice between a worse place and the same place, folks will take the same place about every time – in other words, no deal!

Continue reading »

Landlording Math: Tenants + Pitbulls = Eviction

I advise landlords to regularly inspect their rental properties – both inside and out. This will help keep little problems from becoming big problems. Another good piece of advice is to know the neighbors around your rentals and make sure those neighbors have your phone number.

A few weeks back, I inspected a property we manage in Canton, Georgia. The tenants had lived there for about five months. They kept the home spotless, paid on time and were comfortable to work with.

While we allow pets, these folks didn’t have any…or so they told me. As I did a walk-around inspection, I opened the gate to the backyard and suddenly realized three very important things: First, the tenants had acquired a momma Pitbull and her six pups. Second, momma Pitbulls are VERY protective of their babies. Third, I didn’t have a change of underwear – something I suddenly needed DESPERATELY!

Later that evening –

Continue reading »