Teresa Kistner
In all my searches for information on real estate investing, I have not found many articles about what it really takes to become a ‘real estate investor.’ There are lots of ads, and lots of people who want you to attend their classes while taking large chunks of your money, and then of course the personal mentoring, which takes even more of your money. Now that we have jumped into the field, I want to share our observations and lessons learned. It’s important to do your homework: research all the different avenues of education, decide how much money you have to invest (yes, you do need to have some cash, despite what all those ‘teachers’ say), decide how much risk you can tolerate, because investing in real estate is not like purchasing $1000 in stock. You are purchasing a high-ticket asset, with value anywhere from tens of thousands to upwards of millions of dollars. And last but not least, you must be prepared to work hard and be persistent. It is not a part-time gig, no matter what those multi-gazillionaires claim. Following are four basic requirements that you will need in order to be successful.
You must have a desire for learning and continuing education, in whatever form it may take.
It is extremely important to take classes, attend seminars and read, read, read! Lots of people have followed teachers like Robert Kiyosaki, Donald Trump and Carleton Sheets. They all have powerful information to offer. But remember: giving us this ‘education’ is their business. They are making money doing those seminars and boot camps, and making tons of it. You need to know that there are several different methods to make money in real estate (wholesaling, retailing, rehabbing, buying/selling contracts, renting, property management, commercial, etc.) Remember, each teacher has a different angle and each made their money in different manner. You need to decide which avenue is the most comfortable for you and go from there.
The Learning Annex provides good exposure to several different methods of making money in real estate and you can pick and choose whose methods you would like to learn more about. It is much easier to get into the business by focusing and learning one method at a time, and then move on to other avenues if you wish. You will only get overwhelmed trying to do everything at once.
It is also important to look at different types of education, including college courses and the internet. The single best tip you can follow is to join your local Real Estate Investment Club. To find your local club, go to www.creonline.com. This is a low cost way to start your education and also build contacts, which is extremely important in this business.
You need to have some cash to start.
Part of the hype from teachers of real estate investing is saying you can get into this business with ‘zero money down’ or no money out of your pocket. The truth is, you really do need to have some cash in order to begin investing. Not only will you need some kind of down payment (anywhere from $500 to $5000), you will also need seed money for starting up your business. Remember, the days of 100 percent financing of properties is gone. You most certainly will need to come up with a down payment for your first investment property. Additionally, you’ll need money for starting your business. You might need to purchase equipment - both for your office and to do rehabbing. You will need professional consultants, an accountant and a lawyer. If you have left your J-O-B to pursue this business full time, you will need to replace your income until you get another income coming in. And don’t forget the cost of the education, classes seminars etc.
You need to have a comfortable tolerance for the ‘risk’ you are taking on in this investment.
Buying and selling real estate is a risk - make no mistake, and it is a very LARGE risk at that. Part of the problem with the real estate market today is because [mostly novice] ‘real estate investors’ rushed to cash in on rapidly escalating prices of real estate. Econ 101 - supply and demand. They bought recklessly, not intelligently, and now find themselves stuck with properties (whose values are resetting just as quickly) that they can’t unload. You must be aware at all times that any purchase you make, you must be prepared to hold if necessary. This is investing 101. Pay attention to the market.
You must work hard and persevere.
When it is all said and done, real estate investing is work. If you are coming from the corporate world where the work day is very structured and organized, working for yourself as an investor may come as a culture shock. Again, real estate investment teachers will tout ‘work for yourself’ and ‘work your own hours.’ They give the impression that you can come and go as you choose and work when you want. While this is partly true, you must also possess the self-discipline to sit down and perform the work you need to do in order to accomplish your investment goals. It is not as easy as it sounds. There is lots of research, the attention to business details such as book-keeping and stocking your office, searching for, then working the deal, completing the details of the deal (contracts, lawyers, titles, etc.) and then of course rehabbing the property, (or hiring and supervising rehabbers) if you intend to keep it.
Just as Murphy’s Law states, you will inevitably encounter road blocks along the way, some minor and some major. It is important not to give up or allow set backs to derail your progress.
The investing mantra is ‘Buy low. Sell high.’ Current market conditions make it one of the best times ever to invest in real estate. Just remember, nothing is as free or easy as some ‘teachers’ would like you to believe, all while they take your money to the bank. Just do your homework, choose intelligently and spend your money wisely. Learning Real Estate Investing can be overwhelming, but it is worth all your efforts.
Tim and Teresa Kistner are owners of JBT Investments, LLC. They entered the real estate investing field because they realized that, after working full time for corporations more than 15 years, they were never going to achieve the comfortable life-style they wanted unless they worked for themselves. Their website is http://www.jbtwholesaledeals.com
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November 9th, 2007 by 
Admin
Jim Hart
There are two primary issues that generated this article:
1. With almost 10,000 views of our articles since January 2006, numerous changes and advancements at our site and many questions from people in the U.S. and other countries, we decided to do something different to show our appreciation to Ezine articles.com and readers of our articles.
2. We know that buying or selling a home is the single largest investment of a lifetime for most people. Buying or selling a home is a BIG business deal composed of people, emotions, contracts and cash?all the ingredients for legal and financial pain if you don’t know what you are doing (and many people don’t)?
Given these two issues we decided to post a free Ebook on our website called 101Power Tips Real Estate Agents Won’t tell Home Buyers And Sellers?absolutely free. No strings attached no gimmicks, no hype, no up-sells–we don’t even ask you for your name and email?just click it and download. It’s an excellent resource for people whether you are a home buyer, home seller or will be seeking a mortgage loan. There is information in the Ebook that will help you think smarter and protect your legal and financial interests (.) You can download a free copy of the Ebook by clicking on our FREEBIE page at the site. We have a ton of other free information there as well but the real estate EBook will help everybody reading this article (except agents, of course, who will just be upset that you are getting this information).
Actually, good, honest, ethical agents won’t have a problem with you knowing this information because it will make you a more intelligent buyer, seller or money borrower. But the less ethical agents who would rather you remain an ignorant consumer, a lamb among wolves, will not be happy campers. But this is not about agents, it’s about people.
If you read the Ebook and save some time and money let us hear about your success!
Have a great day!
And thanks for reading!
Copyright ? 2006 James W. Hart, IV All Rights reserved
SBS is an online information resource for people. Our focus is real estate and business and we have a number of important books, kits and Ebooks including free downloads and high quality link categories to help you get information fast. SBS has an aggressive link exchange program for anyone with a website?visit us now by clicking this link http://www.smart67.com
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November 7th, 2007 by Admin
Jeff
Many people never buy the home of their dreams simply because they don’t think they have enough money for the down payment.
(PRWEB) March 5, 2004 — Many people never buy the home of their dreams simply because they don’t think they have enough money for the down payment. They’ve been told through the years that they need 10 or 20 percent of the purchase price in order to buy a home. Well, this simply isn’t true.
So why have so many real estate and mortgage companies told them this?
Quite honestly, it’s because selling homes to people with 10 or 20 percent down is easier than selling homes to people who have little or no money for a down payment. Most real estate sales people would rather go after the ‘easy sale’ than try to help people who have special needs.
As a By Referral Only Mortgage Consultant, my mission is clear: To Help People. That’s why we’ve created this special report and sent it to you with no obligation.
This report is designed to let you know if you are currently employed (self employed or wage earner) and you’ve been out of a bankruptcy for at least 2 years, the chances are we have a zero down home loan for you.
107% Loan to Value to $650,000 - This program allows you to finance 100% of the sales price plus allows you to finance your closing costs which are generally close to 3% in most areas. The remaining 4% can go towards paying off debt or making repairs to the property. First time homebuyers are limited to 103%. Home loan amounts go as high as $650,000.
100% Loans to $4 Million - These home loans will finance the full sales price. Closing costs cannot be financed however most programs allow the seller to pay your closing costs of your home loan.
100% Loans with Damaged Credit - We call this our ‘Deal Saver’ program. If you have less than perfect credit we can still finance your home loan up to $1.125 Million. These home loans will focus more on your job strength and previous mortgage or rent verification. Your credit score has a lot to do with what kind of interest rate you will receive. These home loans are to get you into the property and then you will look to refinance after your credit improves. We can do this on investment properties as well up to 4 units.
100% ‘Stated’ Income Loans - These types of home loans are for people that write off most of your income. Typically, this means the self-employed, but W2 employees also have access to these loans. Typically, this type of home loan can go up to $1.125 Million.
97% 3% Silent Second - For those of you that are buying under $322,700, please call for geographic limitations. This home loan is a little stricter than the above loans.
Under $281,749 - FHA is a government program. You can finance up to 102% of the sales price or you can sign up with one of the gift programs that will pay your down payment for you. The 102% program is stricter than most of the above zero down programs. Loan amount reflects San Diego County maximum mortgage. It may be different for your county, please call for more information.
Where To Begin
Now that you have 6 good options for buying a home no money down, where is the best place to begin?
The first step is getting pre-approved. Since buying a home is one of the most important financial decisions you will ever make we’d prefer to speak with you on the phone or in person to make sure we are addressing all of your concerns and financial goals.
Please call us in one of our offices between 9am to 5pm at 866.909.LEND(5363)
If it is after hours or you are not able to reach us during business hours you may also apply online www.zerodownhomemortgages.com and one of our loan consultants will contact you within 24 hours.
We’ll do more than help you get financed!
Financing is only the first step in the home-buying process. We are dedicated to helping you through the entire process, delivering world-class service all along the way.
Our Preferred Real Estate Consultants can help you find the right home, negotiate the right terms, and then make sure that you actually get to the closing table. It’s all part of our Preferred Buyer’s Program, which you can join for FREE! That’s right, it won’t cost you a dime, because the seller pays all of the fees!
If you’d like to know more about your financing options and would like to be
part of our Preferred Buyer’s Program, please call us today. 866.909.LEND(5363).
http://www.zerodownhomemortgages.com
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November 3rd, 2007 by Admin
Dr.Phil Speer
I really believe in getting an education in real estate investing, especially before launching a real estate investing career. I have been investing in real estate for 25 years, but I still spend thousands of dollars each year to learn more about real estate investing. To avoid unnecessary risks, you need to know as much as possible. If you make a wrong move in buying, managing or selling your property, you can lose everything, and your efforts will be flushed down the toilet. On the other hand, if you have what I call know-how savvy, you can weather almost any of the financial storms that will inevitably brew around your real estate investing venture.
Here are some of the critical essentials to make real estate investing pay off.
1.You’ve got to have a solid overview of the business.
You just can’t go out and start making offers - even if you have some money. I guarantee you’ll lose your money if this is your approach.
Don’t think that fixing up houses is a piece of cake. You’ve got to know what you’re doing.
2.You’ve got to have a good contract.
Picking up a crinkled ole contract document from your friendly real estate agent won’t cut it. Most contracts are NOT written to give you the slight edge as a real estate investing professional.
A good contract means the difference in walking away from a closing with money out of your pocket or in your pocket. I have taken home thousands and thousands of dollars from closings - up to $75,000 from my best closing on just a cheap little house. But a fistful of bills at closing is not your only reward for having a good contract. You can get your seller to take care of some or all of your closing costs if you have a good contract. And you can avoid some of the usual buyer costs if you have a good contract. Have a good BUYER’S contract as a real estate investing professional.
3.You’ve gotta have a good working model as a pattern for your fix-up project.
If you have never tackled the job of remodeling or even fixing up a house, you don’t have any idea what needs to be done and what should NOT be done.
Let me tell you from experience, you will be tempted to spend far more than necessary if you want the perfect house to sell. I know, because my wife is always suggesting what we need to do to our houses. Sometimes she is right, but often she wants to dress up a house with items that do not bring return on investment. It’s a very thin line of distinction.
You need a model for your fix-up project to establish a working formula.
Let’s face it. You can spend a bank full of money in fixing up a cheap little house. And it’s easy to over-spend with money you will never get back. But, on the other hand, if you don’t spend the right money on the right things, no one will buy your house. The margin of difference is close.
4.You have got to put on the hat of salesman when you get into this real estate investing business.
Your remodeled house will not sell itself. You have to polish to a spit-shine, and make the finished appearance of your house come off as the most desirable house in the neighborhood.
Don’t fix up a cheap little house if you are unwilling to show it and sell it. You will lose a big chunk of your profit if you have to list it with a real estate agent.
It’s O.K. to sell your makeover house through a real estate agent if you feel deficient as a salesman. But it is important to see your house AS a salesman in order to do your best job.
The key to success in real estate investing is in knowing what you are doing when you sell.
5.Real estate investing is a business.
Real estate investing is not a hobby and it’s not a game. It is, however, a slam-dunk, dead-serious, rock-solid way of making money when you learn the ropes. And it just may be the easiest way you have ever earned a living.
But you have to know what you’re doing.
You can make money investing in real estate,but you must learn how to do it right. http://CashinHouses.com/
Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director. To learn how to profit in real estate investing, even without cash or credit, read his report http://CashinHouses.com/ Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online ?Academy of Advanced Real Estate Investing Techniques’ - http://AAREIT.com/
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November 3rd, 2007 by Admin
Dr.Phil Speer
Real estate investing has become popularized today because of real estate investing TV infomercials and traveling seminar circuits. But real estate investing has not always been so popular.
In the 1960s, William Nickerson wrote, ‘How I Turned $1000 into Three Million in Real Estate’ and ‘How to Make a Fortune Today Starting from Scratch.’ It was one of the first real estate investing books to get national attention. A little later, Al Lowry authored ‘How You Can Become Financially Independent by Investing in Real Estate.’ Al Lowry might be called ‘the father of the modern-day real estate seminars,’ because he was the first to hold seminars as a result of his book sales.
But it was Mark Haroldsen who carried the real estate investing book/seminar thrust to the next level. Haroldsen wrote, ‘How to Wake Up the Financial Genius Inside You.’ If you were tuned in to real estate investing at that time, you remember the newspaper and magazine advertising showing a picture of suave and bald-headed Mark leaning against the front hood of his Mercedes. The picture appeared everywhere in full page ads of major publications. And as Mark began selling his books, he began holding real estate investing seminars. I have had lunch with Mark and Al Lowry as they swapped stories of the advertising blitzes that vaulted them into national prominence for their real estate investing prowess. Mark later wrote ‘The Courage To Be Rich’ and ‘Tax Free.’
But it was Robert Allen who capitalized on the previous groundwork by Lowry and Haroldsen. Robert Allen was reportedly paid $1 million advance royalties for his best-selling book, ‘Nothing Down,’ a compilation of 50 techniques for buying property with no money. Robert had learned these techniques from several years experience with a commercial real estate firm. He later wrote ‘Creating Wealth’ and ‘Getting Started in Real Estate Investing.’ The Robert Allen Real Estate Investing Seminars became a phenomenal marketing bonanza. Conventions were held in the major cities across the country, like Orlando, LA, Dallas, Chicago and Atlanta. The authors of various real estate investing techniques spoke at these seminars, but their spiel focused on selling packages of real estate investing materials that they offered for sale. Millions of dollars of real estate investing materials were sold at these 3 day conventions. The convention frenzy ushered in what has since become known as ‘The Nothing Down Real Estate Movement’ of the early to mid-1980s.
I keep all of these books in my personal library, and you can probably still find them in your public library and book stores. There’s a lot of great information in these books that can make you very knowledgeable, even though some of the ideas are out-dated.
We are now presented a variety of ways for making money in real estate investing in TV infomercials, books and seminars. Which is best? Who can say? Real estate investing is learned through trial and error. Real estate investing skills and techniques are acquired by practice. I don’t think anyone can dogmatically recommend a technique best for another person. Every real estate investor has unique needs and is in a unique situation. Objectives of real estate investing differs.
However, if you are limited with real estate investing educational dollars and need to generate quick return on investment, I think fixing up cheap houses is an ideal beginning point. Real estate investing in makeover properties generates quick, profitable dollars with low risk.
Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. http://www.CashinHouses.com/. He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director.
To learn how to profit in real estate investing, even without cash or credit, read his report at http://www.Real—Estate—Investing.com/information/flipping.html/ Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online ‘Academy of Advanced Real Estate Investing Techniques’ at http://www.AAREIT.com/
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October 27th, 2007 by Admin
Dr.Phil Speer
Please don’t call it ‘flipping.’
Some real estate investors who practice the technique of buying property for immediate fixup and resale call it ‘flipping houses.’ I have never liked this term, for it strikes me as reference to a gimmick. It seems ‘flippant!’ It sounds like crude tagging of a very noble undertaking. Fixing up cheap properties is raising values in America’s housing! It is a profession of dignity. I think the makeover process deserves reverence for providing people with a better place to live.
Without proper maintenance, all housing deteriorates. You can find cheap houses everywhere in dire need of repair because of neglect and abuse. You can buy these depreciated houses inexpensively at a fair market discounted price because of their condition. You can often restore them to very near their original condition or even better with very little investment. And you can sell them at a fair value price that includes generous profits. The seller’s marketplace for those who want and need good housing is always swelling.
You can often take a house that has ‘No Class’ and transform it into ‘First Class’ housing with only paint and carpeting.
And you can take your makeover another step forward with simple, eye-appealing extras to create a ‘Dream House,’ an ‘Ideal House,’ a ‘Doll House,’ and a ‘Model House.’ You will be very proud of your work with this kind of makeover, and the real estate investing process will give you tremendous personal satisfaction, in addition to a good income.
My end-result objective in creating an appealing makeover is to create a finished product that I myself would enjoy as a home. If I can be satisfied with the makeover, I know that buyers will find that same satisfaction. To me, the real estate investing profession is a grand endeavor that extends far beyond the financial rewards. I have owned numerous businesses over the past 50 years, but I know of no other business venture that generates more personal gratification and financial prosperity than real estate investing in makeovers.
Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. http://www.CashinHouses.com/ He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director.
To learn how to profit in real estate investing, even without cash or credit, read his report at http://www.Real-Estate-eBook.com/investing/flipping.html/ Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online ‘Academy of Advanced Real Estate Investing Techniques’ at http://www.AAREIT.com/
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October 27th, 2007 by Admin
Dr.Phil Speer
Even if your real estate contract has been written on toilet paper, it’s valid.
Content of your real estate investing contract is what’s important.
Your financial destiny in real estate investing is sealed BEFORE you walk into a real estate closing as a buyer. You have set in concrete your profit (or loss) before you turn the door knob to enter the office of your attorney or title company at closing. The payoff of the transaction under anticipation is predetermined when the contract is signed between you as the buyer and the other party who is the seller.
The interpretation of these cold, hard words is that you must recognize the importance of the real estate contract that ties together the property transaction. Your contract contains implications for determining profits in advance.
When we strike a deal in real estate investing, we usually just reach for some pre-printed contract form that came from a real estate office or stationary store. We usually forfeit many of our closing rights to some stranger who put together traditional jargon and processes without recognizing that we ourselves have the right to charter this course. Subjecting ourselves to legalese of an attorney who may not even be a real estate investor nor own more than his own home is the pattern followed by most who purchase and sell real estate.
The first order of business in writing contracts is understanding that any sale or purchase of property is negotiable. While the payment of certain closing costs may be customary or traditional for the buyer and the seller, we are not bound by this protocol. Without differing specification in your contract to dictate your personal direction, the closing agent simply resorts to customary convention.
But by understanding your rights as buyer or seller of real estate property, you can actually INCREASE your profits on a transaction by the wording of your contract. However, these settlement terms must be in writing on your contract in advance of the closing. Otherwise, potential profits fly out the window.
One of the most euphoric feelings I have ever experienced in this business of real estate investing was walking out of a closing with a check payable to me for $75,000 on a package of a few cheap real estate properties! As with anyone, I had a use for that cash! But those profits were dictated on my special personal contract in advance of closing.
Much more cash at closing is available to real estate investors who take control of the options available by independently choosing wording in the content of their own purchase contract and sales contract. This choice is readily available to the real estate investing professional who understands these rights and applies them in the construction of a personal contract.
The suggestion in this article is not legal advice but encouragement to take advantage of an opportunity available in real estate investing. This suggestion is not encouragement to become greedy with legal rights but to give notification that negotiation is available over the dictates of closing costs. Sometimes transactions are profitable only when these considerations are understood.
Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. http://www.CashinHouses.com/ He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director.
To learn how to profit in real estate investing, even without cash or credit, read his report at http://www.RealEstate-Investing.net/business/flipping.html/ Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online ‘Academy of Advanced Real Estate Investing Techniques’ at http://www.AAREIT.com/
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October 27th, 2007 by Admin
Dr.Phil Speer
Houses can have lots of problems
Real estate investing requires expertise in recognizing these problems and the costs for repair.
Sometimes you stumble onto a jewel investment by discovering a house where mom was an excellent housekeeper, and all that’s necessary is minor cleanup of the premises to prepare for selling. But the truth is that most people don’t even sweep the floor when they move after the house is sold. And sometimes the house they leave behind is a wreck.
If a yard looks trashy and overgrown, you know how to pick up the garbage and mow.
If the walls look drab and shabby from years of neglect, you know how to replace new wall paneling or repair holes with wallboard mud. If these basics are not understood, you can always get a quick lesson at your neighborhood Home Depot or Loew’s.
But zilch experience is necessary for slinging a paintbrush, unless you are just sloppy. Paint is the easiest of options in giving fresh renewal to property.
Cosmetic repair is simple and easy. You can either do it yourself or hire a handyman.
Houses that really only need some yard work and a few gallons of paint are readily found in the real estate buyer’s market. But these houses tend to be far from deeply-discounted or bargain-priced investments.
Some house problems constitute severe potential pitfalls in real estate investing. The most critical problems are foundation irregularities and mold.
I inspected a house recently that had serious foundation problems. My attention was first called to the entrance steps with broken brick due to shifting of the house on its foundation. As I walked around the inside of the house, I saw that the sheet rock had cracked in several places on the level above the entrance steps. What was obvious to me was obvious to every other buyer who had seen the house, which explains why the property had been on the market for over 200 days. So as this red flag went up about the foundation problem, my curiosity was also raised about the cost of repair. I know nothing about foundation problems, and I would never tackle such a problem on my own. But I knew there were specialists in the area with expertise in foundation repair. So, I got a couple of estimates before deciding if the purchase price was fair.
Mold!!!
One of the most serious problems in buying any house today is mold contamination, especially in the southeast. This is a recent problem that we never experienced in the past with such prevalence. Let me warn you: repairing a mold-infested house can cost you big bucks. Even in excess of $100,000!
An infested house must first be tested by a certified lab to ascertain the extent of damage. A third-party contractor usually takes responsibility for repair after the initial test. Then the testing lab must re-evaluate the premises after repair to confirm whether toxicity levels have been reduced to acceptable standards. Then, and only then, can you re-enter the property to make modifications or paint. You are in a heap ?o trouble, boy, if you buy a house WITH MOLD, unknowingly or knowingly, and if you fail to remedy the problem or try to sell without disclosure. Just write it off as a bad experience and bad investment if you buy without taking remedial costs into consideration. Mold is a serious problem in today’s housing market.
This warning doesn’t mean you should not buy any house with mold infestation. You can obtain firm bids (not estimates) for repair on some situations. However, damage can be so severe and widespread that even mold-removal firms will not even quote a firm bid! Factor the remedial repair into the buying price and the selling price. Be prepared, however, that it just won’t work in some cases.
Mold is damaging to health. Some people are more sensitive to mold than others. Mold replaced the asbestos scare of the ’70s and ’80s when Texas homeowners sued insurance companies for millions of dollars over mold damage. The mold problem has migrated from the South and is moving into northern states. Many Alabama insurance companies went out of business because of the mold problem, and those insurers left usually refuse to insure any house with mold history.
Don’t let mold catch you with your pants down!
Most houses have some kind of problem or problems. Learn to distinguish between the cosmetic and serious problems, and recognize that solutions are usually available for either. You, the real estate investor, must become a problem-solver of house problems.
Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. http://www.CashinHouses.com/ He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director.
To learn how to profit in real estate investing, even without cash or credit, read his report at http://www.BigMoneyinFixerUppers.com/nomoneydown/flipping.html/ Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online ‘Academy of Advanced Real Estate Investing Techniques’ at http://www.AAREIT.com/
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October 25th, 2007 by Admin
Dr.Phil Speer
Is landlording the way to go if you are starting into real estate investing today?
Receiving cash flow from rental residuals is an exciting idea. If the rental housing is congregated in large apartments within a focused area, the costs of management and maintenance are more economical. Rentals are even more appropriate when all of the portfolio is in the ‘path of developmental progress’ with ‘upward mobility’ population of a prime metropolitan city. This results in clustered landlording of an area free of crime, prostitution and drug traffic. However, whether purchasing large quantities of these apartment complex units as fix-up properties or pristine properties, acquisition usually demands deep-pockets and is not within the cash range availability of the beginning real estate investor. Therefore, I suggest such acquisition of these larger apartment properties after some experience in real estate investing has resulted in a big wad of cash in the hip pocket. For the beginning real estate investor, the choice is usually between becoming a near-slumlord or fixing up cheap properties for resale.
I recommend residential fixup for quick return on investment and less hassle from landlording for the beginner.
I bought $10 million dollars in rental properties during my first four years in the business, and it made me a multi-millionaire. I followed the instruction of the books and seminars precisely. It made me rich. But it was a costly mistake. In fact, in my opinion, becoming a landlord in the beginning of my real estate investing career was what I consider my ‘$10 Million Mistake.’
Perhaps an explanation of what I term a serious ‘mistake’ can guide your decision in starting a real estate investing career.
Problem 1. I can clean out toilets pretty well. I’ve cleaned out quite a few. It’s not the most fun activity I’ve ever had. I never thought of it as a party. But I can clean toilets in the maintenance of rental property as well as anyone.
Cleaning toilets is simply symbolic of all the upkeep jobs necessary for being a landlord. But let me assure you, there are many, many other detestable jobs required in landlording, too.
I can clean out one toilet. But cleaning out toilets in $10 million dollars worth of properties is a little beyond me. So, that’s why I had to quickly start an in-house maintenance company.
Problem 2. I can rent one apartment to an applicant. But renting $10 million dollars worth of properties is beyond me. So that’s why I had to start an in-house management company.
Here’s the point. Any person who becomes a landlord can handle a few properties. But a few rental properties seldom make you rich. I ‘became rich’ as a landlord by acquiring a lot of properties which required a lot of renting and a lot of maintenance work.
Eventually, my landlording life became helter-skelter.
I never want to be a landlord again in this same capacity. It is a deterrent to real estate investing success.
Real estate investing has many better opportunities other than landlording.
The easiest and most quickly initiated opportunity is the fixup of cheap housing. With efficiency, the beginning real estate investor can acquire a cheap house with little or no money down, repair it with ’sweat equity,’ and dispose of it through a sale within 30 days for $5000 to $10,000 profit minimally. Several of these cheap houses can quickly replace a job income and can lead to full-time real estate investing.
Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. http://www.CashinHouses.com/ He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director.
To learn how to profit in real estate investing, even without cash or credit, read his report at http://www.BigMoneyinRealEstate.com/nomoneydown/flipping.html/ Subscription is free to his Fix-up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online ‘Academy of Advanced Real Estate Investing Techniques’ at http://www.AAREIT.com/
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