Saturday, February 28, 2009

Hooray Orangeburg is Leased

You need a strong constitution for real estate because of the roller coaster rider. But I can definitely tell you today is an up day (see next paragraph). You buy a property and you do repairs on it and you assume (right or wrong) that you will move the property in one day. OK maybe that is mostly wrong. But I can dream. Realistically you need 60 days from the time you offer the property until it is sold or leased. Why? Because it is a big purchase and people need time to think and ponder on the purchase before they can say yes. Even if it is a great deal.

That brings us to Orangeburg. A property we purchased last December 08. We spent several weeks getting it repairs and in livable shape. We held an open house and very few people came. We offered the house at a great deal but the people were not ready. We continued to market the property in the newspaper as a Rent-To-Own in the rental section. The calls came in and in less than a week we have leased the property to a great family.

The woman is a single mother with three kids who is renting in a not so good part of town. One of her daughters commented when she entered the house "...that it was a castle". Maybe not a castle to me but that is why I love this business. We were able to take a property that was ripped up, rehab it and lease it to someone who would not have gotten a second look from a bank. Another person who feels more secure now that she has a home of her own. Truly the American dream even in this economy.

So lessons learned: 1)It takes more time than you thnk to move a propery; 2) Boy it is fun to help people; 3) We need to do more of this.

I have been getting questions about what is Rent-To-Own and how our program works. I am going to put together a video and post it here on the blog tomorrow explainig our program ad how you can use it to gain home ownership. Even if you can not buy a home today, you can lock in today's prices for a future purchase.

See Ya,

Wednesday, February 25, 2009

Ouch That Hurts!!

Wow, sorry guys and gals! I just reviewed the last couple of posting I have done on this blog and I see that I have fallen into the same trap everyone else is in. As Eor would say "'ll never work". That is where we are in the economy but we do not have to participate. In fact I am standing up right now and going to my window and shouting - "I'll mad as hell and I am not going to take it any more."

OK, so the I borrowed the line for the movie "Network" but it still applies. We are looking down and thinking how can we reach the stars. Well the first way is to look up. I do not want you to think that I am down on Real Estate - I'm not. Real Estate is the ultimate wealth building business in the world. It is simple but not easy. So life will throw all kinds of curve balls at you and you just have to hang in there. You will get your pitch to hit. (Sorry baseball season is coming).

So don't let the news of the day bring you down. In fact throw the paper away and turn off the TV (well maybe leave it on for Life and Lost) and work on your action plan. Send out letters to motivated sellers; return seller calls; talk to buyers. Talk to positive people and remember the incredible buying opportunity we have today. People will be talking about this time for decades to come and you will be able to say... "I bought several income properties for my retirement in Maui" (or any other exotic place you choose). Because that is what we are doing ;-)

See Ya,

Tuesday, February 24, 2009

Follow-up, follow-up, follow-up!!!

Follow-up is the word when it comes to selling properties. In fact follow-up is the word in buying properties also. You must not rest on your leads. Even if you get tons and tons of leads (I actually don't know how many tons and tons of leads are but it sounds like a lot) you can not wait for them to call back. As my mother says "He who hesitates is lost" and that can not be more true. The buyer or renter has too many options for you to sit back and wait.

Do not count the property sold or rented until you have cash and a contract in hand. Otherwise the property is still available. Let me tell you a tough example on that note. Our first property we purchased, and I will admit we purchased it wrong. We paid too much and were optimistic about selling it quickly. We poured all kinds of money in the home. We took it from a REO nightmare to a beautiful home. We had our open house and we got a few people through it. We were priced to high for the market. We continued to market the property to avail. Then a woman came by and said the house was perfect for a program she was putting together. In fact she wanted buy it with owner financing and pay it off in 7 years. That worked out to $3300 per month. Well we got the agreement drawn up and she sign with a earnest money deposit. We found out later that the check she gave for the earnest money bounced. We asked her and she said that an investor pulled his money early but she would have the money in there soon. Meanwhile she paraded interior designers, furniture reps, etc through the house to begin to get the house ready. Well many months passed and no closing. Finally we told her to put up or shut up. We canceled the escrow and realized that we lost 3 months of marketing for the house. We lost all the momentum. We never recovered. We gave the house back to our private lender and learned a very expensive lesson.

The deal is not closed until we have the money and the contract in hand. Otherwise the property is always available.

Monday, February 23, 2009

Weekend Happenings

Well as you can see I have changed my blog layout. That is the problem when you have an architect writing a blog. I am still looking for that perfect layout but in the meantime this layout looks good.

The Open House over the weekend went pretty well. We had more people show-up on Sunday than Saturday which goes to show that I do not know how the market will react. I would have thought the it would have been the other way. We got a few people who are interested in the property. We did discover that the flat fee listing we had done did not display in the local MLS. We are still learning things everyday. We have corrected that problem and we got a bunch of calls from realtors asking if the property was still available.

So the house maybe sold by the end of the week. That would certainly be good news. Once we have this sold we will concentrate on the next property. Hey anyone want a fixer in Tracy $165k all fixed up make offer as is, owner will carry.

See Ya,

Sunday, February 22, 2009

Open House Reality

Open Houses are boring. You prepare very hard for the flood of people that will come through the house and very few come. That is just the way the market is right now. We spent a lot of time on clean and fixing and prepping to show the house to 8 people. For a four hour open house that is one person every 30 minutes. Let me tell you that is a lot of sitting around. I find that I look over all the things maybe I should have fixed. By the end of the day it is a long list and can be discouraging.

But in the end we did get one or two people who were interested in the house. Managing expectation is key. I always think we will sell the house in one day. A house is just too big a purchase for someone to walk-in and say "YES, I'll take it" There are just too many houses on the market. The prospective buyers need to see it, usually more than once, and compare it against other houses on the market. So I am preparing mentally for day two of our open house and we will be looking for those people who came through on Saturday to return and start talking price.

I will let you know how it goes.

See Ya,

Friday, February 20, 2009

Real Estate: Retail Selling Today

Can you sell retail today? Yes, of course you can. We are working on a property today for an Open House that starts in a few hours. Go to our website JM2 Sells Houses and click on 303 Duke, Livermore, CA for more information. We purchased this house right (50% on the dollar) but to get a retail buyer I am selling at 80% of market value.

You can not today sell at 95 -100% of market value if you want to sell the property in 60 days. There are just to many properties out there for buyers to look at and they can be picky about the property. So if your property is not perfect you have to be ready to discount the price to the buyer. Also you need to position the property better. A Home Stager is a must. A stager comes in and dresses the house up to accentuate the positives and help the buyer see how their life could be in the home. We have done it twice and it has helps.

So I am off to finish prep for our Open House I will let you know how we did.

See Ya,

Wednesday, February 18, 2009

The Real Estate Market Waits for No One

Hi everyone,
I am just getting back on my feet after being sick all weekend and I still have the same problem I had last week. Being sick did not make it go away. In fact today is my cut off day. I will either find a source of funding for our latest property or I will end escrow and work out getting my deposit back. That could be a fight. I still working with several private lenders but the problem is timing. I may not have enough time to get the funds here without paying a penalty (which I do not like to do).

The market - any market is running scared right now. There is so much uncertainty that people would rather do nothing for the time being then lose money. I can't say I blame them if you read the paper or listen to the news. My job is to help them to look beyond that and look at the long term return they will get from a investment that is secured by real estate. Property values are down in California but they will not remain there for long. Too many people like to live in this state and there are too many jobs for them not to. That means housing demand will grow sooner rather than later. It will take time for people to realize that they have a job and can spend money again before we see any recovery. But that means we have an opportunity to increase our investment portfolio. I don't know about you but we are buying houses that cash flow in California. Something that was unheard of only 12 months ago.

Meanwhile we are doing what everyone else is doing in this economy. We are cutting expenses and limiting spending to only what we have to do on the properties. That is the new model. You need to hold properties for a longer period and have them cash flow. I see holding the properties for many years. Though some we will hold forever as a great source of cash flow. Ultimately reaching our goal of 15 to 20 houses that are free and clear with a great positive cash flow.

Let me know what your model is and how it is working.

See Ya,

Friday, February 13, 2009

New Valentine's Day Tradition

Happy Valentine's Day!!! Now I know it may be tough to be happy and uplifting with the way the economy is today but I say we start a new tradition. They say: "Home is where the heart is.." but I want to revise that to "The Heart is where the home is". So with that theme I am starting a new tradition: Forget the flowers but a house.

Yes, don't waste your money on flowers that will die; buy something that your spouse, partner, significant other will remember forever: A House. With prices so low, now is the best time to be buying. You say you can't qualify for a loan for the house, that's OK I hear only the bank presidents can qualify. Don't let that stop you. When it is tough to sell houses sellers become motivated and will deal. Ask for owner finance; we do and you would be surprised how many people say yes. We offer owner financing on all our available properties with no bank qualifying. If you do not have the down payment, then do a Lease Purchase Option ( also known as Rent-To-Own) the house. You do not own the house but you lock in the price of the house in today's value and you can get credit towards a down payment to purchase the house in the future.

So don't wait go out today make that offer on a house and get it gifted wrapped for your loved one. You say you do not have a loved one well then buy it for the most important person in your life - YOU!! An additional benefit from National Buy A House Day (trademark pending) is it will give one hell of a boost to the economy. Way better than any bail out that will come and a lot cheaper in the long run.

Happy Valentine's Day: now go get that house and then buy the flowers. If you need one just visit

See Ya,

Thursday, February 12, 2009

Working under the gun in real estate is stressful

Wow the days have gone by since the last time I posted on my blog. Monday I told you about our setback on our latest deal. Well today I still have that challenge. I have been talking to all kinds of people about private money. That is why I spent so much time on it in the 30 Day Action Plan (see previous blog posts). It is vital because once you have it and can keep a constant flow of it you can make real estate deals with confidence. If you have to find the money after you have a deal signed then you live in the land of stress and that is not fun.

We continue to talk to people about the possibility of earning 8 - 12% on their money secured by real estate. But what we are finding is while people like the interest rate they are fearful of the economy and do not want to make any changes until it settles out. So we keep talking and meeting until we have what we need.

So I will keep at it and let you know more tomorrow.

See Ya,

Monday, February 9, 2009

Real Estate - One Step Forward & Three Back

Wow what a weekend. I am glad to be back to work (like I take the weekend off). One of the many things I have learned in running our real estate company is that things change on a dime and you just have to be ready for them. Some days it is "One step forward and two or three steps back" That is what happen this past weekend.

We have a great property we have an offer in on that we are buying with private money cash. We have everything all set to close this coming week. Well I heard over the weekend from him that his money is not available for 2 to 3 months. Why? it really does not matter. That happens and you have to move quickly. All my plans last week for the property and what we were going to do to it are gone or at least in jeopardy. I did not get much sleep last night as I formulated what I would do this morning to resolve this challenge. That is how you need to look at it. It is a challenge that I need to over. You will get a lot of them in this business and you either fight or run. Well I have too much on the line to run so I am fighting as hard as I can. Do I need this challenge? - probably as much I need a hit in the head but I will learn from it.

So I have my plan for the day to fill this gap and I will be talking to a lot of people today to try and save this deal. This is the life of a real estate entrepreneur and I need to always be ready. This does show me that I do not have my business model completely set. If I had all the private money I needed then this would not be a big deal. That is why you need to talk to everyone you know more than once and then expand out form there.

Well I am off. I will let you know how I did tomorrow.

See Ya,

Friday, February 6, 2009

Real Estate Nightmares

You are sleeping soundly when it happens: you find yourself sitting straight up in bed, your heart beating fast and sweat breaking out all over your body. Congratulation you are officially a real estate investor with properties for sale or rent. It happens suddenly. One night the world is in order and peaceful and the next you are awake at 3:00am in the morning. I know because it happens often for me. Mike what does it mean?

It means you own more than the house you live in. It is that simple. You can't prevent it because once you own more than one house that asset now needs an occupied (preferably one that is paying a monthly rent), maintained, rehabbed and it will generate bills (electrical, water, gas, sewer, insurance & taxes). You start this business with big dreams about buying and selling houses and making big money but it is the details that will drag you down each and everyday. You can over come this - in fact if you are still reading this blog you probably already know this- with commitment and persistence. Because there are days that the crap hits the fans and usual ends up on you. You have to wipe yourself off and keep going. My motto is "Keep moving forward". It's like walking in mud if you stop it takes twice the effort to get moving again.

Another valuable asset for you will be your support team. This maybe a spouse, friends, family or employees. I am fortunate that I have all of these and I use them. I have a very supportive wife who listens and challenges me everyday. I work with my brother to bounce ideas or just dump on him if I need to and lastly I have a great staff. My staff take care of a lot of the details so I can focus on the big pictures items like private money and buying properties.

So when you wake up in the middle of the night - remember to be grateful for the challenge of the day to come and welcome to the club. Also I find it helps to have a pad by the bed to write down what is on my mind to get it out so I can go back to sleep. Have a god night sleep.

See Ya,

Thursday, February 5, 2009

In Real Estate it's about Implementation

Implementation. A key word in real estate; actually in any business but very important in real estate. Why? Because there are so many great programs in the market to buy and sell real estate but it does not do any good if you do not implement. That is one thing no one really talks about. Sure you can watch the shows on TV - buy a house for $50,000 - fix it up for $15,000 and sell it for $125,000. That sounds fantastic, right? And it is possible to do, but what they do not say is that the real estate investors saw over 100 houses and made 15 offers and talked to countless people before they got the deal. Not to mention that it took four months of effort. Yes, you can get lucky and get a deal right off the bat, but that has never been my business model.

Typically my model is based on the longest time it takes to do something and that is after some dead ends on the bumpy road. Hey, don't get me wrong, I love real estate. It is fun to take something that no one wants and turn it into the pride of the neighborhood. Just be prepared to work like a business that is if you want to do more than one a month.

So dust off the program you have on your shelf (I have them also) and commit to implementing the strategy for a period of time longer than 7 days. You have to give it six months and see if you results are not better.

Hey drop me a comment and let me know what programs you have and what's working for you.

See Ya,

Tuesday, February 3, 2009

Real Estate Course: Day Thirty of 30 Day Action Plan

Day 30
  1. Review last 30 days

Day Thirty: The last day of the 30-Day Action Plan and now you are asking yourself what do I do next? You start all over again. By now you should have at least one property under contract. You have seen many properties and written over 20 to 30 offers. So the numbers say that you should have at least one if not more and with the number of people you have talked to about private money you should have the money to purchase the property.

Once that is done what next? Do the same all over again – but this time enjoy the process. This is a can be a frustrating business, but it can also be fun. Like I said at the beginning of this action plan I said it was simple but not easy. You have to do the steps everyday. So commit to doing the steps that are required to successful in this business. Look at property , make offers & talk about private money. There are many steps in between from rehab to exit strategy. Keep learning – network with other investors share information. The pie is very big and there is enough to go around. I believe in the BNI motto “Givers Gain”. So help others and it will come back to you.

Good luck! Please let me know of your questions or successes. Let me know how I can help you in your business.

Monday, February 2, 2009

Real Estate Course: Day Twenty-Nine of 30 Day Action Plan

Day 29
  1. Private Money
  2. Next batch of mailing
  3. Talk to sellers

Day Twenty-nine: Private money! I promise this will be the last time I bring it up. If you have done it over the past 29 days you should have had some successes. Go back to those that liked the idea. If they has lent to you thank them. They are helping your business grow. See if they have any additional funds they would like to lend. Ask them if they know anyone who they think would be interested in the same program. Above all, take care of this person.

If you purchased a large list last week (Day 5), you should be preparing a second mailing or a third if you did one earlier. Why do you want to break-up a large list into two mailings? Simple logistics is the answer. You or someone else has to answer the phone and if you sent a large mailing in one batch you could get a bunch of calls all at once (over several days). You may miss some calls. Dividing it over two mailings will make it easier to take the calls. You will repeat this mailing next month following the market rule of multiple mailings.

Go look at five property leads from the realtors you have met. You are evaluating them for equity (market value – repairs – loans = equity).

Sunday, February 1, 2009

Real Estate Course: Day Twenty-Eight of 30 Day Action Plan

Day 28
  1. Day of Rest
  2. Make note of accomplishments
  3. Enjoy your accomplishments
  4. Read real estate section of the paper
  5. Review action plan for coming week
  6. Spend time with your family

Day Twenty-eight: Sunday, a day of rest for you. If you have followed the plan up until now you have established your business and talked to several people about your business and about your private money program. So look back and pat yourself on the back. You have taken the preliminary step to starting your career in real estate. Look at what has gone right and what has gone wrong. What can you change to make the next week better? What can you delegate to others (staff or virtual assistance)? You want to spend your time on items that make you money.

Spend some leisure time reading the paper. Look at the real estate section, read the articles and the real estate for sale ads. Review what you will do the coming week, and most important, spend time with your family because that is why you are doing all of this work.