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,
Mike
Saturday, February 28, 2009
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 "...it'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,
Mike
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,
Mike
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.
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,
Mike
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,
Mike
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,
Mike
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,
Mike
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,
Mike
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,
Mike
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,
Mike
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,
Mike
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