New And Interesting

0

Know Your Exit Strategy Before You Buy That House

With the current state of the real estate market around the country it is important to be a little more cautious when you are looking at potential deals. I don’t know about you, but I have been getting leads from motivated sellers. They are putting their houses on the market as well as trying to sell my house quick or their properties themselves. In this market it is more important than ever to do your due diligence by knowing the value of selling a home as well as understanding what your exit strategies can be on an individual basis. Here is a little primer on exit strategies and when to use them. I typically use 5 types of exit strategies when I am investing. When I buy into a deal I want to have as many exit strategies as I can possibly have that will be profitable to me. When I do, I have much more flexibility with the deal.

1. Wholesaling – I would get a property at a discount from the seller, put it under contract and then depending on how much profit there is in a deal I would then wholesale the deal to another investor on my buyers list or if the deal was slim would wholesale it to an end buyer for a finders fee

2. Rehabbing and Retailing– The deal would have to have an upside potential. Being able to get it at a discount or buying it creatively is a good start. Depending on how much of a fixer it was I would do to the property what I could balancing time and cost to maximize the sales price.Typically I don’t like to do ugly houses where I would need to do a major remodeling job. I like to get in and out in a hurry putting my predefined minimum profits to see if the deal is truly a deal.

3. Long Term Buy and Hold– When I am ready to hold houses for long term appreciation and the tax advantages I look at everything combined. The status of my company, do I need immediate cash to run my company?I look at the deal itself, only buying in those areas where the value will either maintain or increase. I also look for the manageability of the property, how much effort is it going to be to find a tenant and to maintain the property long term.

4. Lease Option– This tactic gives me a lot of the advantages of both rehabbing and buying and holding. I can take a property and rehab a profit into it as well as sell it for the same price it will sell for in 12 to 24 months.Tenants can be a challenge finding but they are much less of a management headache. I don’t recommend this as an emergency exit strategy like I have seen so much in the past. You must understand this technique so you don’t put yourself in jeopardy by giving equitable title to the tenant. Do your research and use the proper forms.

5. Last is Seller Financing– Some investors are hesitant to offer this as a solution when selling a house. I like it because I can sell at a higher price to more people. In this tight sub-prime mortgage market it is a great technique as long as you use the right contract and work with the right buyers.You do not have to offer 100% financing but you can carry back a second mortgage to cover some of the buyers down payment. Just make sure that you can get out of all the underlying loans properly so you will not have to make up the deficit with your financing. I want to work with a buyer who can get at least an 80% first mortgage if not more and then I will carry back a not for the difference. This way I am clean of my costs and earning interest on my profits.

This is the first step that I look at when I buy the property. Following this rule I have yet to be burned because I have had at least 2 backup plans. You know what they say about having a good backup plan; it can be the difference between working on your own business or working for your old BOSS. Go out and review your deals in this light and make some good money for yourself.

Alameda County • Contra Costa County • Marin County • Napa County • San Francisco County • San Mateo County • Santa Clara County • Solano County • Sonoma County

0

Are You Able To Think On Your Feet

As a real estate investor, many things can come up during a deal. You have a choice, you can let it throw you for a loop or you can roll with the punches. There have been several times that during a closing the seller revealed something that I should have found out earlier in the process. It stood a chance of blowing the deal out of the water. When I first started investing it did screw up the deal. After learning more about investing I was able to figure things out and recover quickly from these situations. I talked about the cost of education a couple of weeks ago. These are the reasons that I spend so much on education. I quickly remembered tidbits from these workshops and bootcamps that have stood me well over time. I was able to recall how other investors were able to deal with these. I also developed a relationship with other investors around the country that I could call to see if they had ran into this before. With all of this I have been able to overcome almost everything that has been thrown at me. The more you know about investing the more you can deal with the nuances of the transaction. Also, by choosing the right best expert professional to help you, the better off you will be. Obviously you can not know everything about everything. But you can choose to work with those that know a lot about their main job. Take for example a mortgage broker. By working with someone who knows a lot about their trade they can help your client, whether buyer or seller, understand the issues that have cropped up since the sub-prime headaches have come into existence. This can save you from buying a piece of property that may not live up to your expectations. Using the proper home inspector can help you track down trouble when you buy my house rather than when you sell my house, allowing you to take proactive measures in your deal rather than reacting to issues that crop up. Knowing more than one technique will help you when the industry changes. Take for example lease options and the new laws that are being proposed nationally and locally that will hinder these types of transactions. What are you doing now that will help you if that eventuality comes to pass? Start thinking now so that you can survive anything that is going to block your way tomorrow. Alameda County • Contra Costa County • Marin County • Napa County • San Francisco County • San Mateo County • Santa Clara County • Solano County • Sonoma County

0

Choosing the Right Target Market Part 2

A couple of weeks ago I talked about choosing to market for houses in areas that were more likely selling a home  creatively. I also went into the fact that I want the price of the house to be around the median for the area because that sells the fastest. Also I don't want to market to houses that are old and would require extensive remodeling before I sell them.

So I first go about looking for neighborhoods that have seen a historical abundance of foreclosures or at least foreclosure notices. Why, because if there have been a number of notices it stands within reason that there will be a number of them in the future as well. Neighborhoods don't change their makeup very quickly.

I like to do a little bit of work narrowing the area where I market, so that I am more efficient and can spend more money per lead. I want to be able to get a higher response rate and be able to hit the leads more often. By doing this I get the chance to know my market and neighborhoods and become the expert while doing so. I narrow my competition at the same time so I am not being compared to another investor by price and how I buy my house.

Being a techie I take things one step farther than most other investors. I upload into Microsoft MapPoint or Microsoft Streets and Maps the excel spreadsheet file of all of the foreclosure addresses in the last several years. I then visually map these out on the screen so that I can view the foreclosure density of neighborhoods. This way I can choose these specific neighborhoods and mail to those houses in the neighborhood that meets my investing criteria.

If I spend fifty cents per address getting a more likely prospect I consider it well worth it. The nice thing is you can buy a mailing list that meets your criteria such as the age of the house, what type of mortgage the owner has, how long the owner has lived in the house and many other demographics you could possibly think of. And then you just bump these up against those neighborhoods and mail only to those houses.

Most of you already know that I am a big believer in sequential mailings. The more times that you hit a prospect with your message the more likely they are to respond to you when they are ready to respond. I heard that it was called front of the mind awareness. This is what brand advertisers are going for. I have even had sellers tell me that they had seen my signs all over and then responded when they got my letter because they hadn't gotten the number off the signs. What I didn't tell them is that I had not put a sign in their neighborhood for over a year. I was getting credit for other peoples advertising money. You gotta love that.

Yes I know this sounds a little complicated. Yes I know that it is easier to send a postcard to those people in pre-foreclosure that to do what I am talking about. The problem is you are going head to head with most other investors when you are mailing postcards to the pre-foreclosure market. I know that most of the National speakers won't tell you that, they will tell you to mail a postcard because it is cheap and easy and that is what most people want to hear.

I guarantee that I get a better response from my mailing campaigns in a tough west coast market than another investor who is just sending a single postcard. So invest the time to define your target market and you will become the expert in your area and be able to buy more houses that you ever though possible.

Alameda County • Contra Costa County • Marin County • Napa County • San Francisco County • San Mateo County • Santa Clara County • Solano County • Sonoma County

0

Choosing the Right Target Market Part 1

When investors approach me about where they should look for houses they are looking for me to tell them a general rule of thumb in distance from their house. I remember when I first decided to become a real estate investor I was looking for the same answer. I read Robert Kiyosaki’s book Rich Dad Poor Dad and was looking for the magic bullet. He said to look for properties that were within an easy drive from your house when starting. You know 30 – 60 minutes or less than 30 miles. That made my decision even tougher because there were so many different types of areas in that range. I could go to one of the highest valued neighborhoods in the country or go somewhere where I could buy drugs easier that finding a house. That really didn’t help narrow down my choices at all. I have since gone to many different boot camps by many educators and each one said something similar. Others at least specified demographics as well as geographic areas. That helped somewhat, but really not enough. It was still a large area with nothing that was really helping me choose the best area to farm. I dug in my heals and decided to do my home work. First based upon the type of investing I was doing I knew that I needed motivated sellers, someone who would sell me their house creatively. That narrowed it down somewhat. I knew that I wanted to be able to sell my house quickly once I was ready so I new that it would have to be in that sweet spot of price. I new that I would have to buy it for less that median price and so that helped me choose an area had a preponderance of houses in that price range. I know that I didn’t want to do a major renovation so I knew that I wanted pretty neighborhoods with newer houses rather than a house that was 50 years old and badly outdated. I wanted people who were more inclined to me motivated to sell creatively so I decided to target people who were behind in payments or about to be behind. I knew that with the sub-prime meltdown the people who had mortgages that had adjustable rates were more likely to be in need of selling my house quickly.

0

Economic Recovery in a Pigs Eye

If you turn on your television, pick up your paper or listen to the radio you will see mixed headlines. One person says that the recession is over. The TV talking head says that the worst is yet to come. You listen to the politicians and depending upon which party you hear they are making the same types of predictions. Just which way is up? The problem is as a person that has some money in your retirement account and maybe some savings waiting to figure out what you can do with the money? You can put it into the rollercoaster that is the stock market and panic everyday that you see what the market is doing. You can buy T-Bills or government bonds because they are safe, oh wait a minute what about the downgrade from Wall Street? Right now what are you earning on your savings? Wherever it is I would say that unless you are a stock market genius you are not earning much if anything at all when you take into account inflation. What is a person to do? I can tell you that for people like you there is always a way to make money. There are programs available where you can earn good rates of return on your capital no matter whether it is in your retirement account like an IRA, or just sitting in the back bedroom under the mattress. We will sometimes use private capital that is a loan secured by real estate that for the right person could earn a rate of return that will allow you to retire the way that you want to. If you rely on social security you will be in trouble. The same can be true if you rely on your 401K that just a couple of years ago turned into a 201K. You need to look at all your options and consider putting your money into something that earns a better rate of return than most of its counterparts. We always close with professionals and always purchase property under market value as well as where we can put in sweat equity to increase the value in this down market. We always ensure that you the investor is in a strong position. Private investing with us allows you to take worry free, hands off approach to investing in real estate. Take a look at some of our case studies so you can see how private lending may work for you. If you turn on your television, pick up your paper or listen to the radio you will see mixed headlines. One person says that the recession is over. The TV talking head says that the worst is yet to come. You listen to the politicians and depending upon which party you hear they are making the same types of predictions. Just which way is up? The problem is as a person that has some money in your retirement account and maybe some savings waiting to figure out what you can do with the money? You can put it into the rollercoaster that is the stock market and panic everyday that you see what the market is doing. You can buy T-Bills or government bonds because they are safe, oh wait a minute what about the downgrade from Wall Street? Right now what are you earning on your savings? Wherever it is I would say that unless you are a stock market genius you are not earning much if anything at all when you take into account inflation. What is a person to do? I can tell you that for people like you there is always a way to make money. There are programs available where you can earn good rates of return on your capital no matter whether it is in your retirement account like an IRA, or just sitting in the back bedroom under the mattress. We will sometimes use private capital that is a loan secured by real estate that for the right person could earn a rate of return that will allow you to retire the way that you want to. If you rely on social security you will be in trouble. The same can be true if you rely on your 401K that just a couple of years ago turned into a 201K. You need to look at all your options and consider putting your money into something that earns a better rate of return than most of its counterparts. We always close with professionals and always purchase property under market value as well as where we can put in sweat equity to increase the value in this down market. We always ensure that you the investor is in a strong position. How to get a good return on your money? Private investing with us allows you to take worry free, hands off approach to investing in real estate. Take a look at some of our case studies so you can see how private lending may work for you.

0

The Best Way to De Stress a Distressed Homeowner

What could possibly more stressful? Imagine that you are behind in your mortgage as well as some of your other bills. As a matter of fact you are only so far behind in your other bills because you put paying your mortgage first over everything else. Creditors are calling. Your mail box is full of late notices. Your mind is working overtime trying to figure out what you could do get out of the situation you find yourself in. Nothing comes to mind… Of course this is stressful. It’s embarrassing and you feel like you want to just crawl into a hole and pull it in after you just like that coyote in the cartoons. You’re stressed when you go home and you’re stressed at work (if you have work). You’re stressed when you get up in the morning and when you go to bed at night. They money problems are also causing issues with your relationships. Life Sucks… What can you do? Just walking away will only get you so far. There are always consequences. The nice thing is in the Bay Area there is a way that you can get rid of your house with no fuss or muss. Selling a home? Calling us at Ascent Property Solutions will meet your need of a hassle free sale. We buy houses and properties no matter the condition, mortgage and location. It’s easy as pie. We will make an appointment and come to you. We have many ways that we can help you. We have done everything from buying properties with cash, to negotiating with the bank all the way to going out and getting a mortgage ourselves. Many times the only thing you have to do is to come to the closing attorney’s office and sign the paperwork and then it is over. At least that part of your stressful life will be taken care of. You can count on Ascent Property Solutions to be the resolution to your property stresses. It doesn’t matter if you live in San Francisco, Alameda, San Mateo and all other counties around the San Francisco Bay Area. Don’t just list your house with a real estate agent hoping that it will sell my house. Call us so that we can buy your house so you can walk away from your troubles so that you can get on with your life and get cash for houses.