Oh, the woe! It seemed so easy, bidding online, perhaps watching the television auctions of properties in a state hundreds of miles away…   Here are five rookie mistakes and some of the real-life consequences that resulted for real buyers”   Not checking the title and lien position prior to bidding. Didn’t know they were bidding on the second lien position and thus still being responsible for the loan/lien in first position.   Not checking if there are any other liens on the property. Didn’t know which lienholder was foreclosing Didn’t know how that affected the the lien in which Read more…

In today’s financial system, cash and credit are two different things, but both are valuable as a source of project financing. You may have one but not the other! A partnership between someone with credit but no cash and someone else with cash but no more credit can be a powerful combination.   It’s possible to have a good credit rating and a generous credit line without having kept cash on hand. On the other hand, someone else may have cash to invest, but their credit lines are already maxed.   Credit is a valuable commodity in real estate investing, Read more…

Are you flush with great ideas and project possibilities but no cash? Find someone with money to invest and create a private equity partnership!   Sometimes even hard-money or seller carryback loans are out of reach because you don’t have the initial down payment they require to do the deal. However, that doesn’t need to stop you in your tracks, because there are cash investors out there who will take an equity position in your project to provide the needed financing.   Private equity differs from a loan primarily because a lender takes their profit in the form of an Read more…

Have you found a project opportunity with a seller who has substantial equity in the property? This is a chance to present a proposal for creative financing that benefits both parties without going through a bank or hard money lender. Seller carryback loans occur when the seller provides the financing for the buyer.   Sellers are most likely to carry back the loan when they don’t need the full purchase price immediately, can use the monthly cash flow, and will benefit from the interest earnings.This is more likely when the seller is older andneeds the monthly payment income,the seller has Read more…

Let’s say a great investment opportunity pops up that you can turn around in just a few months, but you need to move fast to secure it. You don’t have the funds in your bank or your partnership, and, in any case, creditworthiness is a bit short for a traditional bank loan. Where can you get quick financing to seize this project?   Private investment groups known as “hard money lenders” make high-interest, short-term loans based on the asset, not the borrower, so creditworthiness is a minimal factor.These hard money lendersfill the gap created by the cumbersome lending processes of Read more…

Doing due diligence on prospective tenants helps you make sure that you are not moving a landlord’s nightmare into one of your most important assets. Tenant screening can be time-consuming and sometimes troublesome, but you can save thousands of dollars over using professional leasing agents or property management companies.   Here are four essential must-do’s to help you find pleasant, responsible tenants:   Do not be in a hurry to sign a leasewith the first applicant that comes alongsimply to fill a vacancy, unless they fully check out as an excellent prospective tenant. Waiting for the best tenant will be Read more…

So, you’ve decided that property management is the way to go for your investment property. Perhaps this is because you live far from the property, don’t have the time, or lack experience yourself and want a professional on the job. I’ll share my experiencewith a word to be sure every item on this checklist is covered before committing!   Communications   By some reports, the number one complaint that property owners have about property management companies is lack of communication. Make this a top priority, not an afterthought.   How quickly are phone calls returned by someone who can address Read more…

If you feel your real estate investing business is running you, instead of you running it – if you feel you’ll never have time to do even half of your best project ideas – if you feel the endless list of daily tasks is getting in the way of business growth – you need to stop everything you are doing, and read “The E Myth” by Michael E. Gerber. If it is possible for one simple, well-organized book to save your future as a real estate investor business leader, this is the book.   Real estate investors are entrepreneurs of Read more…

My experience with property managers shows that there aregenerally three types. Those types are the good, the bad, and the ugly! Some do an credible job of providing a valuable service for both the property owner and the tenants. But, I have found that some can do more harm than good for a property owner who is paying a considerable sum for their services. Here are six lies to be aware of when you are screening to hire a property manager: 1)    Claims that they can lease the property for more than anyone else.No, they haven’t cornered the market. Anyone Read more…

No one ever enters into a business partnership thinking “this isn’t going to work!” (OK, almost never.) Of course, all parties beginning a partnership believe in sunshine, daisies, and a beautiful waterfall of profits flowing in at just the best timing. What could possibly go wrong?   Savvy investors know only too well there is an endless list of grim possibilities that destroy harmonious relationships, problems no one believes will happen– but sometimes they do. Disagreements over the terms, or over project decisions, or even a clash of personalities may finally come to a head.   In addition, sometimes only Read more…