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Are You Considering Investing In Real Estate Remotely? You Need to Have These People On Your Power Team

Are you considering investing in real estate remotely?  If you are, you should have the following people on your power team:

  • Local Real Estate Agents
  • Local Real Estate Wholesalers
  • Local Bird Dogs
  • Local Contractors
  • Local Real Estate Attorney’s
  • List of Local Cash Buyers
  • Local Property Managers
  • Local Title Companies
  • Local Hard Money Lenders
  • Local Small Banks

You can obtain referrals from local Real Estate Investnent Clubs & Landlord Associations.  I usually reach out to the meeting or club organizer and the board members asking for referrals.  Then, I will usually start locating local investor friendly real estate agents using the techniques I have mentioned in this blog as well as in my book “Surefire Techniques to Find Investor Friendly Agents” .  They will normally have a few referrals for you too.  Next, I will build up my local Cash Buyers List using the techniques I have already taught in quite a few places on this blog.  I will ask them for referrals too.  Usually, I will have quite a few referrals that I can then screen and start working with right away. 

 

August 27, 2015 / 1 Comment / by / in , , , ,
2 Different Types of Real Estate Agents: Cash Buyers Should Choose the Right One

Over the last 13 years, I have found that a lot of real estate investors settle for a Real Estate Agent that is okay.  Many of these real estate investors do not understand the different types of Real Estate Agents available in residential real estate.  Here are a few categories of real estate agent that you will find in any residential real estate market:

  1. Retail –  The majority of the real estate agents in any real estate market are these.  They focus on helping owner occupants find homes that meet their needs as consumers and they plan on living in for a few years.  They will usually work with people who are buying based on emotion.  Consumers will pay retail or market value for a move in ready home.  Real estate agents who work with these clients are use to making full price offers on properties with little to no repairs needed and qualify for traditional financing.
  2. Investor – The smallest group of real estate agents are investor friendly real estate agents.  They focus on working with a select few real estate investors, who are buying properties on a regular basis with them.  They like the steady income and the consistency of having a few select investors that have the same investment criteria month after month.  They appreciate that their cash buyers are paying cash and can close quickly on each property.  In cases where they are working with Rehabbers, they are re selling the same house just rehabbed to retail buyers.  So they are essentially making two commissions within a very short period of time on the same property.  If they are working with Landlords, they are helping them buy a property and then they might help them manage the property for many years after the purchase and then help them resell the same rental property.  As you can see, it is a good way for these agents to have a more consistent income.

You need to ask any real estate agent you are considering working with if they work with real estate investors.  If they state they do, you will want to follow that up with whether they work with Rehabbers or Landlords.  Why is this a necessary question to ask?  Well, it is crucial to make sure that your investment approach and criteria is matched with the right real estate agent.

If they work with Rehabbers, they are use to making aggressive offers considerably below the current market value.  Additionally, they are use to going after properties that need considerable amounts of repairs and have definite condition issues.  Also, they are use to making many offers at a time to get one accepted.  They will know the fast moving areas and the areas where the best profit spreads are and where retail buyers are looking to live.

If they work with Landlords, they are use to making offers closer to market value and they are use to minimal repairs needed on these properties.  They know where the best rents are and the expenses associated with holding onto a property.  They can answer questions about Section 8 and other questions associated with holding onto a property for a few years.  They usually do property management themselves or they have a business associate who is offering that service.

As you can see, if you are looking for properties to flip, you need a real estate agent who works with Rehabbers, so you have someone who is on board with your approach to business and making offers.  Likewise, if you are buying and holding properties, you will need a real estate agent who specialize in rental properties.  They will be willing to make the offers that meet your criteria and who can provide the information you need to make effective offers on future rental properties to add to your portfolio.  You do not want a bunch of resistance to your investment approach, thus you need to match your approach up with the best investor friendly real estate agent.

January 20, 2015 / by / in , , ,
Real Estate Wholesalers Learn The Indicators Of A None Investor Friendly Real Estate Agent
None Investor Friendly Real Estate Agents

None Investor Friendly Real Estate Agents

What often happens to new investors and real estate wholesalers is that they find a real estate agent who talks a good talk and appears to send good properties to make offers on; however, when the real estate investor or real estate wholesaler really starts learning about the market they find that what the real estate agent is recommending is not entirely true or is not really in line with the real estate investor’s investment criteria.  Real estate investor need to find an investor friendly real estate agent, who understands how real estate investing works and how to help real estate investors accomplish their investment goals.  The items listed below are limitations that some real estate agents might have; you don’t want to work with these limited real estate agents.

  • The none investor friendly real estate agent might have a limited understanding of the market, or their experience may be limited to a small area. If such is the case, the  investor friendly real estateagent might constantly bring you back to the area they are comfortable with.
  • The  none investor friendly real estate agent might limit him or herself based on price point or property type. They might not like going into a lower income area or working with a property that needs major repairs.
  • The none investor friendly real estate  agent might be eager and willing, but they might have limited experience and understanding for the market you need.
  • The  none investor friendly real estate agent might be limited in their ability to listen to you or to respond to your requests quickly.
  • The  none investor friendly real estate agent might be limited with their time and be too busy (or lazy) to show you enough properties or to perform the detailed searches and reports you need.
  • The  none investor friendly agent might place a limit on the amount they are willing to work for and be unwilling to work for lower commission amounts. In fact, some none investor friendly agent might even have commission caps.
  • The  none investor friendly real estate agent might only send you their, or their office’s, property listings. If these properties are good deals, certainly take advantage of them, but be aware that such a relationship severely limits your opportunity to find good deals.  The none investor friendly real estate agents that approach it like this are acting as an employer and not an employee and are probably not your best option.
  • The  none investor friendly real estate agent might simply give you access to the Multiple Listing Service (MLS) or key codes to get into properties, but if that’s all they’re doing, you need to ask yourself if they are making you work too much for what you’re paying them.
  • The  none investor friendly real estate agent might consistently send you the Client Summary version of the MLS listings for the properties. These limited listings don’t have the details you need to make a sound investing decision based on value, condition, and overall quality of the deal.

Your investor friendly real estate agent will be an important part of your power team; they must be on board with you and your business plan or you’ll need to find a different agent. Always remember: you are paying them, so they are working for you, not the other way around. You dictate where you’re going to spend your money and what investment criteria you’re focusing on, not them. It’s great to be open minded to new areas and opportunities, but if you lose sleep at the thought of investing in a particular area, or property, you’re being untrue to yourself and you won’t find comfort in that investment. You need to invest where, when and in what you feel comfortable investing in, after all, the real estate agent isn’t investing their money into the property, you are.

If you want to learn more about finding investor friendly real estate agents, I recommend that you read a book titled “Surefire Techniques to Find Investor Friendly Agents.”  It discusses the characteristics any real estate investor should look for in a real estate agent too.  It is a great read.

January 13, 2013 / by / in , , ,
2 Simple Ways to Quickly Learn About a New Real Estate Investment Market
Know Your Target Area

Know Your Target Area

Many newbie real estate investors who want to get into wholesaling or seasoned real estate investors looking to invest in a new real estate market look for sources that will provide details about that target investment area.

Many people will start looking at the following sources: census, building & zoning department, department of transportation, police department, board of realtors, and chamber of commerce. Essentially, these sources will help determine job growth, crime rates,appreciation, job growth, and path of development or redevelopment.

There are even quite a few websites that help with gathering and offering real estate market data such as www.trulia.com, www.realtytimes.com, www.city-data.com, www.realtor.com, and a variety of different paid online services and paid software programs.

The fact is you don’t need those services or the other resources to learn what is going on in a real estate market, because it takes a lot of time to do this research and some of the sources are not based on current information. You can keep it really simple and very accurate by doing one or both of these things to learn about your real estate market.

Here are two simple ways to know what is going on in your real estate market no matter if you are a cash buyer buying properties or a wholesaler looking to wholesale property to cash buyers.

  • When you build your cash buyers list and qualify them, you will learn where the hot markets are, what the typical profit margins can be in those areas, what property types work in that area, and types of repairs needed to resale a property in that area too.
  • When you have a real estate agent run a 90 day sold property report for a given area.  You will want to gather the address, property characteristics, list price, sold price, CDOM, and terms.  When you look at this report you will start to see market trends in these real estate market area that you target.  If you do this every 90 days, you will start to see trends and identify the sweet spots in that area and the trends starting before they hit hard and are on everyone’s radar.  Most real estate agents don’t even know to do this type of report to identify or stay on top oftrends in their local farm areas.

You will start to see how effective and quickly you can see trends  and stay on top of them. Obviously, the other resources I mentioned can be great additional sources for information about the local real estate market, but they are not the fastest or  the clearest and most complete way to gather this information.  You must understand the indicators of a real estate market that is changing and what the indicators really mean and how they impacchange illicit change in a real estate market.  Keep it simple and keep it accurate focusing on the 2 techniques I mentioned above and you will save a lot of time and guess work, thus reduce risk and making mistakes that could cost you time and money.

February 25, 2012 / by / in , , , , , ,
Wholesale Properties Successfully & Consistently With This One Tip to Determing Retail Value

Where most wholesalers make mistakes is when they are running the numbers.  When you go to evaluate a wholesale deal, you must make sure that you are starting with the most accurate numbers for your retail value.  Some people will take short cuts by trying to determine a properties retail value using online sources such as Zillow, Eppraisal, ZipRealty,Trulia  or any other online source.  These online sources have a tendency to be old or not an exact comparable for your prospective property, thus they will produce a retail value that is drastically off.

The most reliable source for comparables is always going to be those that you acquire from your real estate agent.  Your real estate agent has access to the Multiple Listing Service (MLS) where they can set very specific parameters to obtain the most accurate sold comparables for each of your wholesale properties.  The only problem is that some real estate agents do not run sales comparables the way we need them, so we might need to help them hone in on the right comparables for our offers. 

Here are the criteria that your comparables should meet:

  • Sold comparables only
  • Sold within the last 90 days  – maybe out as far as 6 months if in a rural area
  • At least 3-5 sold comparables
  • Within a 1/2 mile radius – 1 mile radius if in a rural area
  • Same number of beds and baths as prospective property
  • Stay within +/- 500 sq ft of living space
  • Age of comparable properties should be +/- 5 years for newer properties, but +/- 20 years on older homes (80 and older)
  • Same style
  • Same type
  • Properties need to be in a similar type area

It is crucial that all of the sold comparables be in move in condition, recently rehabbed or remodeled, or sold using FHA financing.  These types of sold comparables will help you get an accurate value fo the property in move in condition in todays market.  It is the most accurate determiner of after repair value today.  Due to the shifts in values and changes in the market, you need to keep on top of these values and make sure they are the most accurate numbers for the current market.  You do not want to taint your after repair value with foreclosures and short sales that have sold in the area.  We need to have an accurate after repair value to start with so we can deduct our costs to close, hold, repair and our profit and end up with a number that will get accepted.  You will have more success getting your wholeale property offers accepted using this technique than any other.

February 6, 2012 / 1 Comment / by / in , , ,
Is Wholesaling Property Illegal?

I am in North New Jersey this week looking at wholesale properties.  I have a few new clients I am working with this weekend too.  One of them asked me ” I was told by my real estate agent friend that it is illegal to Assign Contracts in New Jersey”. I find that interesting since, I was up in the same general area 3 times last year and we did assigning of contracts just fine. 

The point I am trying to make here is this, if you talk with the wrong people you will get the wrong answer.  What do I mean by wrong people?  You need to work with people who are actively investing or people who are working with real estate investors today. Upon further investigation, the real estate agent that my cient was working with focuses on retail buyers only.  She has never bought an income property, fixed and sold property, or even worked with cash buyers ever.  If this is the case, how is she going to know if it is illegal or not.  The real estate agent didn’t know and wasn’t interested in checking into it, so she said it was illegal to my client.  In some cases, they will just say it can’t be done. 

There are many real estate brokerages who do not like working with real estate investors.  They have a bad opinion and distorted view of what we do.  In addition to this, they view real estate investors as people whom they have to work hard for without getting paid.  Also they obviously are not doing research on the MLS to see who is buying the bulk of the properties nationwide for cash.  In a recent article I wrote titled  “Amount of Cash Sales Continue to Increase Nationwide – Proof Cash Buyers Are Out & Actively Buying Wholesale Deals“, I have identified the high percentage of properties that cash buyers are buying wholesale properties nationwide.   If they have a brain in their head and are excited by money, they will be willing to work with real estate investors. 

If you really want to catch the uneducated real estate agent in their lie, you will ask them to show you the state law that makes doing these types of deals illegal.  They will not be able to produce the law for you, because it does not exist. 

Assignment of contract and other techniques used to wholesale properties is very legal an used everyday to profit in real estate.  I know that if you talk to a realtor who is currently wholesaling properties or working with cash buyers who are wholesaling properties, they will tell you that assigning a contract and other wholesale techniques are very legal.  You can do the same thing with a title company or an attorney who works with real estate investors and they will say the same as the savvy realtors above.  People who are currently wholesaling roperties will know what you can do and can’t do in any area to wholesale your deals.  It is crucial to speak with the right people to get the right answers and find great success in real estate investing.

January 5, 2012 / by / in , , , ,
Get to Know the Power Team Members Essential to Your Wholesale Real Estate Career

Some possible people included in your wholesale real estate power team should be real estate agents,  mortgage brokers, title or escrow officers, private lenders, hard money lenders, appraisers, handymen, contractors, licensed property inspectors, property managers, accountants, other real estate investors, family members, friends, and real estate lawyers, all of whom should have experience in wholesaling real estate and real estate investing.

In many cases, it is in your best interest to have as much information about a wholesale property/deal as quickly as possible.  If you have a great power team, you will be able to accomplish this much more effectively and quickly than if you were relying on yourself to do all of the work.  Why?  One person can only know and do so much at any given time.  A team can divide and conquer essentially.  At any one given time, you can have a number of people working together to gather and evaluate the wholesale deals that you are looking to venture into.  An experienced and knowledgeable power team  will provide the information you need to adequately determine if this wholesale deal meets your investment criteria or not. 

With this information, you should be able to move from wholesale deal to wholesale deal that much faster and stand to make that much more profit too.  The information they gather can help you see problems early and move onto a new wholesale deal, or see a strategic position or opportunity that you can jump on that much faster and structure that much more favorably for you and to appeal to the seller.  A power team might have ins or connections that can offer you information about wholesale properties coming available or events soon taking place that could help you buy at the right time and place.  Your power team might help you develop a great market niche or unique position in your target areas.  They might help you save money at tax time or reduce your liability if a wholesale deal goes bad.  In some cases, you might have team members that can help salvage deals that go a rye or move the process along that much faster to help the wholesale deal remain profitable.  They may be able to refer sellers, hard money lenders, private lenders, cash buyers, retail buyers or renters to you too.  In essence, you will save a lot of time and effort learning things that your wholesale real estate power team is already well versed in and gain access to many more wholesale deals than you could find on your own.  They will help you make more money faster wholesaling real estate and avoid obstacles along the way.

December 6, 2011 / 1 Comment / by / in , , ,
Finding Investor Friendly Real Estate Agents
Investor Friendly Real Estate AgentsIf you are attending Real Estate Investment Clubs, you should ask those people who they work with or could recommend. In fact, you will find investor friendly agents at these meetings all the time.If you don’t want to go that direction, look in the newspaper, on craigslist, and other onlien sources for agents that are currently listing properties with seller financing or lease options. In addition to that, you will look for tha agents that state the property would be a great property for an investor, income property, etc. Also, those agents who have duplex, triplex, and fourplexes for sale are probably a good place to start as they are definitely working with investors too.One other thing to note, you will state you are a cash buyer who is looking to buy properties for wholesale. You want to know if they are an investor or they work with investors. Do they feel comfortable making multiple offers a week on properties that you are trying to pick up for wholesale prices. 

June 29, 2011 / 2 Comments / by / in ,
4 Ways to Find Real Estate Investor Friendly Real Estate Agents in Any Market

I travel nationwide looking for wholesale properties.  In each of these markets, I have used these techniques to find real estate investor friendly agents. There are alot of different ways to find real estate agents, but I will focus on the top four ways to find them quickly in this article:

  • When you attend a real estate investment club, you will find many real estate agents who are investor friendly or real estate investors themselves.  It is a great way to quickly find these agents.
  • You will find real estate agents who have duplexes, triplexes, fourplexes and income or investment properties listed for sale.  They will advertise these properties in the free real estate magazines in grocery store hallways, on the public version of the MLS, and posted on craigslist and other free clasified ad listing services.
  • Do a search on craigslist and search for the keywords “fixer upper”, “handyman special”, Investment property”, “income property”, “investors dream”, “cash buyers”, or “cashflow property”.  In the search results, you will find that there will be listings with the words “owner” or “broker” after the headline.  You want the listings with one of these keywrods in the heading and the word “broker” after it.  These are real estate agents who more readily than others are working with real estate investors.  It is a great place to start. 
  • You can go to www.realtor.com, go to the “find a realtor or real estate office” link and click.  Once you are in there, you will select “companies only” and enter the area you want to find a real estate agent in.  You wil find a list of the office in that area.  You will call the main office number during business hours.  You will need to state something like this ” Hi, my name is__________, I am a real estate investor who is new to this area, I was wondering if you could refer me to an agent who specializes in working with real estate investors”.  They should put you in contact with the person in the office who is the most well versed in working with real estate investors in that area.  In some cases, it will be a person who has no clue, because they are the “floor agent”, but you will learn quickly through a series of questions that I will go through in another article if they are or aren’t a well versed and experienced real estate agent who works with real estate investors. 

If you implement some of these techniqus, you will find that you will find plenty of real estate investor friendly agents to work with in any area and any real estate market.  Please come check out my post that discusses the way you can approach real estate agents.  It wil help you learn quickly how to narrow down whether you found the right real estate agent or not.  After all, time is money, so why waste time and effort on someone who will not be able to help you make money in real estate.  In some cases, the wrong agent will discourage you and hinder you from making those amazing wholesale deals happen.  We need our real estate agents to be working with us.  A great real estate agent for our business will know where investors can find great deals, what a great deal is in that area, how to structure those deals, have contacts in the local area to help close those deals, and provide us with all the information and resources we need to make the most profitable and reasonable offer on our investment properties. 

 

June 29, 2011 / by / in , ,
Agent Version of MLS Listings Saves Real Estate Investors Time and Effort

There are different versions of MLS listings.  You will receive the client version of the MLS active properties if you do not specifiy that you want the agent version or you are dealing with a retail buyer agent.   The agent version will give you a lot more details about the property.  There are a lot of different things on this listing that could give you enough information to make offers without seeing the properties.  You will make multiple offers this way with contigencies, so you can get the ball rolling. 

On these listings, you will want to make sure you see the days on market (DOM) and the cummulative days on market (CDOM). You should have the real estate agent search for a certain number of days on the market or DOM.  In most cases, the best and truest guage of time the property has been listed on the market are going to be the cummulative days on market or CDOM.   You will want them to take the average days on market for that property in that area and tack on an additional 60 to 90 days on the market for the amount of days on the market that they search for on the MLS.  These are the listings that have been on the market the longest and have motivated sellers tied to these properties.  We will make low ball offers on these properties. 

You will want to note the financing portion of the MLS sheet for the listing you are looking at to see what it has listed there.  In many cases, it will state cash, conventional and fha.  If it does not state FHA it coud be a realtor oversight or mistake.  In most cases it is deliberate, they know there are items associated with the property that will not allow it to qualify for FHA financing.  The bonus for real estate investors is that most of the owner occupant or retail buyers are not going to qualify to buy this property without FHA financing in this real estate market.  We then han have less competition for these properties.  Our offers for cash are more appealing to the bank due to the fact that they know they will either have to sit on this property longer for a buyer or spend the money to make the repairs so that it could qualify for FHA financing. 

You will look for multiple price changes over the DOM and CDOM too.  These properties indicate a motivated seller who will likely accept our wholesale offers.  It will give us a feel for how much they have come down with each price reduction.  If we can get the agent to pull the property history on the MLS, we will see how many times the property has been listed, when and for how much.  It will show when an offer was pending and when it was cancelled and put back on the market.  It gives you a good guage of how much activity has been going on with the property and for how long. 

The agent remarks section can give you information about offers accepted (offer pending, back up offers okay, etc.), seller motivation(submit any and all offers, seller motivated, etc) , price reduction, property disclosures about condition (meth contamination, illegal addition, foundation issues, etc) ), seller information ( lender owned, short sale, 3rd party approval), property condition(TLC needed, AS-IS, no repairs, etc) , and more.  It can help you gauge what is going on with the property quite a bit better. 

You will find that you will consistently find distressed properties that will have motivated sellers tied to them, so you can submit your wholesale offers and have a greater chance of these offers being accepted.

 

June 23, 2011 / by / in , ,