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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Let a Rental Property Pay For It

As you probably know, December 15th was the last day to sign up for a 2015 medical insurance plan – a plan that must now comply will all the requirements of Obamacare.

For the past ten years, Kim and I have used an HSA (Health Savings Account). This is a savings account used in conjunction with a high-deductible health insurance policy.

Our 2014 policy cost $544 per month ($6,528 per year). Several weeks ago, I got a bill for our 2015 policy. The new price for our same policy skyrocketed by 113% to a whopping $1,160 per month ($13,920 per year)! WHAT?!?

Thank you President Obama – and all the members of Congress – who made Obamacare the law of the land…and then put the IRS in charge of enforcing it! What can possibly go wrong?

This column is NOT about politicians. It’s about how Kim and I will pay for our health insurance – insurance that we can no longer afford.

First, starting in 2015, we’re dropping down from the plan we have (and like) to a cheaper, lesser…

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It’s So Easy to Quit!

When we got home from last night’s North Georgia Real Estate Investors Association meeting, I said to Kim, “That was our last meeting. Only 63 people cared enough to show up. To heck with the REIA; I have better things to do with my time than to teach folks how to become successful real estate investors!”

Kim, to her credit, just let me rant and rave for a few minutes to blow off steam. As we went to bed she said, “Of the people who did attend tonight, how many do you think you helped to become better, smarter, wiser real estate investors?”

Next she asked: “Do you think your teachers – Jack Miller, Pete Fortunato and Dyches Boddiford – have always taught to a packed house?”

Finally: “Bill, by teaching folks how to achieve financial freedom by investing in real estate, if you make a difference in just one person’s life, is it worth it?”

After a good night’s sleep, I awoke this morning thinking about how easy it is to quit something when you get discouraged or the going gets tough. A few years back, I made 297 written purchase offers in a row without getting a…

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What is the December 11 Meeting About?

At December’s meeting, we’ll discuss two topics. The first is an incredible deal structure called a 121 Deal. This is a simple way to structure your next deal so that you’re able to earn up to $500,000 TAX FREE every two years! This is about to become the primary way Kim and I structure our primary-residence deals!

Next, we’ll look at notes. Few people read a note before signing it. For those who do, most don’t understand what they just read – and yet they still signed!

Notes are an incredible deal-structuring tool that allows you to make the impossible deals not only possible, but also very profitable!

Here are two examples of creative deals we’ve done using notes – one buying, the other selling a property.

In 2012, we wanted to buy a 4/2 brick ranch to keep as a rental. The seller wanted $85,000. We didn’t have $85,000. The seller agreed to accept our $83,000 note (we gave him $2,000 down), with 360 monthly payments of $417 at 4.43% fixed interest. We picked up a great rental with payments we could afford, and the seller got…

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The Creative Power of Notes

Most folks have signed a note at some point in their lives. Maybe it was to borrow money to buy a car, or to pay for college, or to buy a home. Of the notes you’ve signed, how many have you read – word for word – before putting your signature on the dotted line? Did you understand 100% of what the note said before giving it your blue-ink OK?

I’m very embarrassed to say this: I was almost 40 years old before I began reading – and attempting to understand – the notes lenders placed in front of me. Sadly, up until then, my John Hancock went wherever they pointed.

When I was 39, I met Pete Fortunato (PeterFortunato.com). When it comes to using notes as a conduit for creatively constructing deals – for making the impossible deals not only possible, but also profitable – there’s no one better, or more experienced than Pete!

Let’s begin with note basics. A note is a written…

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Pete Fortunato’s Paper Course

Next weekend I’ll be attending Pete Fortunato’s Paper Course in Tampa, Florida. I’ve taken Pete’s two-day class more than ten times. I always come away with pages and pages of handwritten notes. To see examples of some of the best and most creative paperwork in real estate investing, Pete’s is THE place to be!

What kind of paperwork does Pete cover? Purchase agreements, sale agreements, leases, master leases, notes, mortgages, assignments, options, etc. Best of all, you learn by watching Pete go through the paperwork he has used over the past 50 years to creatively construct deals.

When getting started as a real estate investor, I didn’t think I needed any help with paperwork. After all, I knew how to fill out a GAR (Georgia Association of Realtors) Purchase and Sale Agreement. No need to know more than that – or so I thought!

The point of today’s column is to show you that if you know how to creatively construct an offer, then you have the ability to make the impossible deals possible.

You find a nice three-bedroom, two-bath house in a good neighborhood. It’s worth $100,000. It needs $8,000 in fix-up work. It will rent for $1,000 per month with monthly expenses (taxes, insurance, repairs, vacancies and management) running 40% ($400 per month) of gross rents. You can buy the property for $45,000. One thing more:…

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Starters, Estate Builders and Enders

There are three types of real estate investors: Starters, Estate Builders and Enders. Do you know which stage you’re in? Many flippers and wholesalers think they’re Estate Builders when, in fact, they’re actually running a highly taxed retail business – they’re not real estate investors! (Saying this is sure to ruffle some feathers, but read on before you call me a liar!)

As the name implies, a Starter is someone who’s just getting started in real estate. He usually knows little about contracts, rehabbing, landlording or how to creatively structure and fund a deal. He’s been to the closing table less than six times. We’re talking about someone who’s wet behind the ears!

An Estate Builder may still be new to real estate, but his focus is different from a Starter’s. Many of the Estate Builder’s deals are structured to increase the investor’s monthly mailbox money! Mailbox money is money made when your capital assets are working for you instead of you working for your capital assets. Examples of capital assets are rental property and notes.

An Ender has been investing in real estate for more than a decade. He’s very experienced at creatively constructing deals. Many Enders cut back on the number of rentals they own in exchange for…

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Speed, Greed + Ignorance = A Real Estate Investing Train Wreck

The new real estate investor asked, “Bill, can you help me put together a deal?”

“Sure,” I answered. “What kind of creative deal do you need help putting together?”

“It needs to be one of those subject-to deal thingamajigs, combined with a land-trust doohickey,” she replied.

I paused to consider what she had just said. I asked, “A doohickey? Have you ever done a subject-to deal or worked with a land trust before?”

“Not yet. This will be my first time to use either technique,” she explained.

It reminded me of something Jack Miller (God rest his wise soul) once said: Speed, greed and ignorance equals a real estate investing train wreck. So true – especially in this case!

Why is it that new investors think they can take one or two classes and then know all there is to know about real estate investing? Sure, we’re morphing into an impatient society that wants instant gratification, but most things still take a lot of time to master – about 10,000 hours! There’s no single class to take or computer app to get that will allow you to know all there is to know about…

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What is November’s Meeting About?

What is the best way to build real estate investing experience while making fast, nearly-risk-free cash? Easy answer: By bird-dogging and wholesaling properties. If you’re a seasoned pro, what is the easiest way to keep your hand in the game without doing any heavy lifting? Same answer: By bird-dogging and wholesaling properties.

Example: This past August, Kim and I bought a house in Woodstock for $91,000. We wholesaled it 25 days later for $123,000. Our net profit on this wholesale deal was more than $25,000!

Two months before that, we bird-dogged another Woodstock property to an investor. This little transaction netted us a bit over $13,000 in less than 30 days.

Folks, that’s nearly $40,000 in net earnings from just two deals in three months! One was a bird-dog deal, the other a wholesale deal. Are you getting these kinds of results from your real estate investing efforts? Are you interested in learning how…

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How to Make $25,000 in Twenty-five days

Lexington Ave Wholesale Deal

There are many reasons why you should become a real estate investor; one is to gain financial freedom by owning paid-for rental homes that provide you with monthly mailbox money. Another is the opportunity to make big chunks of cash by bird-dogging, wholesaling and flipping properties.

Whether you’re a seasoned real estate investor or one who is just getting started, bird-dogging and wholesaling homes to other investors should be part of your business plan.

For example, (and I don’t write this to say “Boy, look at us; aren’t we something!”) a couple of months ago, Kim and I bought a house for $91,000, and then wholesaled it twenty-five days later (without doing any repairs) for $123,000. Our net profit on this wholesale deal was more than $25,000.

Want to know how we did it? Read on, my friend, read on!

What is bird-dogging? A bird dog is someone who…

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