Category Archive: Articles

Stick With Quality Contractors

Crack Kills!

In the school of hard knocks, we regularly learn new lessons – and are continually reminded of old ones. An example of this is a blow-up we had two days ago with a contractor.

Let’s begin with this scenario: You need some repairs done to your rental property. The deck needs some work, the walls need painting, and ceiling fans need to be replaced. You have a choice between two contractors. The first guy quotes you $2,500, which includes all material. The second guy will do the job for just $500, but you must provide all materials, which will cost $1,000. Which contractor would YOU choose?

Here’s some additional information to help you make your choice. The first contractor is forty years old, experienced, has a stable family life, drives a paid-for pickup truck that’s neat as a pin, and has all the tools he needs to do most any job. The second guy is also forty and experienced. However, he’s going through a divorce – and has girlfriend problems! His truck barely runs, is in danger of being repossessed, and is a cluttered mess. As for tools: Some he has, many others he doesn’t.

Two more things to consider: Both contractors tell you the job will be done in three days. And it looks like you’ll save $1,000 if you go with the second guy.

So which one did YOU…

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In The Land Of The Millionaires

It was just reported that since 2010, the rich got richer and the poor got poorer. In other words, the wealth gap widened. The reporter’s solution: The tax rate on the rich needs to be increased drastically!

The report came out at the perfect time. I’m in Palm Beach Gardens (West Palm Beach, Florida) staying in the BallenIsles Country Club community. This is a very swanky place. Everyone here is a multi-millionaire. You have to be in order to afford to own a home here. (Look up this place on Google Maps.)

How swanky is BallenIsles? Three incredible golf courses and the nicest tennis complex you’ve ever seen. A number of successful PGA pros live here. So do the Williams sisters (Venus and Serena). Homes start at $1 million. And here’s the amazing thing: For most residents of BallenIsles, this is just their winter home!

I’m staying with a friend and spending the week meeting with local real estate investor groups.

So, being square dab in the middle of the land of the millionaires, I decided to ask all these rich people what they thought about the wealth gap and the idea of having their tax rate increased. Here are seven important lessons learned:

Lesson One: Most of the men quickly pointed out that they weren’t…

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A Thinking Man’s Game

Here's Jack with Houston, Phil, Kim and Bill

Jack Miller, who now lives with the angels, taught us that real estate investing is a thinking man’s game – not a running man’s game. He also preached that success requires imagination and persistence.

When most folks think about real estate investing, they only think about flipping homes: buying a house for a certain amount, then quickly reselling it for a higher price and pocketing the difference. Real estate investing is so much more than this!

Flipping is nothing more than a job – a highly taxed job! After flipping a house, the government steals roughly half of what you earned. If you need more money, you’ve got to go out and find another deal. It’s a hamster wheel that flippers never seem to escape.

Under the big tent of things, flipping is just part of real estate investing. But here’s something Dyches Boddiford taught us long ago: Flipping works as long as you aren’t hit by a bus. In other words, for whatever reason, if you’re unable to do another flip, the money machine stops then and there. If this happens, how will your family pay the…

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The Truth Can Run Around Naked!

David is a real estate investor from the Northeast. Many folks don’t know this, but “Northeast” is a Latin word that means: Where’d you get that Yankee accent? Honestly, even though I went to college up north, I only understood half of what came out of David’s mouth. Don’t know about you, but Yankee talk hurts my ears!

He came down to beautiful Dixie because he wanted me to watch him negotiate with sellers. The thing was, even though David has been reading our column, he wasn’t having much success working out win-win deals at sellers’ kitchen tables.

During our time together, we met with six sellers and made six written offers. By any measure, it was a successful day. One other important thing happened: By the time David finished making his second offer, I had discovered his problem…actually his two problems – and boy were they doozies! No wonder he was having trouble getting…

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The Blanket Approach In Action

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Two weeks ago, we wrote a column about the most straightforward of all the door-knocking approaches we use. I call it the blanket approach. If you missed that article in the paper, you can find it on our website at CashFlowREI.com.

When doing the blanket approach, I knock on every homeowner’s door in the subdivision asking if they know of anyone in the neighborhood who is thinking about selling their home.

A good number of investors called asking if this approach really works. Fair question. Before answering, let me ask you three questions. First, yesterday, how many homeowners did you meet with face-to-face? How many this month? This year?

As you know, one of an investor’s primary jobs is to meet with a lot of homeowners on a regular basis. Knowing this, what were your answers to these three questions? Now compare your numbers to the numbers you’re about to…

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Are You Ready For THE Day???

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Are you ready for THE day you meet your Maker? What if THE day was today? Is your paperwork in order? Does your family know where your will is? Heck, do you have a will? Does your family know what you want done? Have you taken the necessary steps to provide for your family when you die?

Talking about death is never a fun subject to discuss. But when – not if – it happens, not being prepared is an awful – and unneeded – burden to place on your family!

Terrah Whitlock has worked with us for many years. She is a daughter to us, and we love her very, very much! Earlier this week, Teah Bramlett, Terrah’s sister, passed away unexpectedly. She was only 33 years old. She went to heaven leaving her two sons, Dexter (15 years old) and Luke (11 months old). Last night in Calhoun, over 200 people came to the viewing. Today is the funeral. It’s a very sad day and our prayers are with Terrah and her family.

At last night’s viewing, I got to thinking: What are the absolute minimum things you need to do for your family before…

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The Blanket Approach

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When it comes to door-knocking, I use three techniques. The first is the targeted approach. I drive through a neighborhood looking for “For Sale” signs. When I see one, I pull to the curb, then get out and knock on the seller’s door. If the owner answers, I ask questions about the property.

One thing: There are a wide variety of signs indicating that a property may be for sale. Other signs to look for are rent signs, uncut yards, blue tarps on roofs, properties getting repaired, etc.

The second technique is the foreclosure approach. When the monthly foreclosure notices come out, Kim and I drive by each house advertised in the paper. If what we see interests us, I knock on the owner’s door. Some of our most profitable deals have come from working foreclosures.

The third technique is the blanket approach – it’s the most straightforward of all the door-knocking approaches. I knock on EVERY homeowner’s door in a neighborhood. And here’s the most important part:

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Subpar Houses Attract Subpar Tenants

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Brad wanted to get into real estate investing a while back so he bought a single-family rental property. A few days ago he called to say that he was desperate to sell. In fact, he told me that he didn’t care if he lost money on the deal, as long as he never had to work with another tenant ever again!

Does this sound like a motivated seller to you?

Over coffee at Waffle House, Brad went into more detail. He had constant turn over – tenants were staying no more than a month or two and then moving out. He got daily complaint calls telling him that this thing wasn’t working or that that thing was broken. The tenants never paid on time. The yard was always a mess. Bottom line: To Brad, tenants were nothing but a big pain in the keister!

From Waffle House I followed Brad to his rental property. The closer we got to his property, the worse the area became: boarded up houses, stray dogs everywhere, broken-down cars, etc. I locked my door and was ready to…

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Making $13,000 With No Money Invested

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Want to see how to make $13,000 in two short weeks with no money invested and without owning the home?

With creative real estate investing, Jack Miller taught us to structure on purpose. Pete Fortunato taught us to use what we want, to get what we need, to get what we want. Let’s take a look at these two all-important lessons in action.

Jonathan and Christie help us maintain some of the rental properties we manage. About a month ago, Christie told Kim that her mom wanted to sell her home in Acworth, Georgia. After meeting with Christie’s mom, Kim determined that the home was worth $90,000 and needed a $10,000 rehab. Kim offered either $63,000 cash or a $90,000 owner-carried note with payments of $300 per month, but the mom turned down both offers.

Kim then asked, “What’s the house of your dreams?” The mom answered, “One out in the country.” Unfortunately, we didn’t have any such property available.

The next day, Kim had an idea. Our friends Joe and Ashley English had a house on the outskirts of Adairsville that had just gone up for rent. Kim called Christie’s mom and asked, “How would you like to trade your house in the city for your dream home in the country?” The mom got so excited at the idea that she loaded up her family and immediately drove to the Adairsville house. She LOVED it! She agreed to a trade.

Two problems:

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Chapter and Verse, Please

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This past week, two people told me that two of the things I do regularly are illegal. One was a realtor who said that it was illegal for me to knock on a seller’s door when there’s a realtor’s sign in the yard. The other was a real estate attorney who said that it was illegal for me to use an Alternate Trustee to sell a property when the Trustee on the Warranty Deed is in town.

When you’re a new real estate investor, being told that what you’re doing is illegal will shake you to your core. You immediately think men with three large initials on the back of their jackets are about to bust through the door and scream at you to get facedown on the ground!

Thank God for Jack Miller. Jack has been one of my primary real estate investing teachers since 1999. He went to heaven about four years ago. Jack taught us a very valuable lesson: When someone tells you that you’re breaking the law, always ask for chapter and verse. In other words…

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