Moving my blog to WordPress

Hi everyone!

Just wanted to announce that I've moved my blog over to WordPress.

The new URL is http://www.goodfaithinvesting.com/ and all the content has been transferred.

Please visit the new site and update your RSS feed/subscription.

Thanks so much for reading!

Done deal.

We closed on the Ft. Lauderdale property today. It was a roller coaster. The lender and title were working together very closely to try to get this done today...I am yet to see the final HUD but the lender told me the amount and it was less than the initial estimate HUD so I'm pleased. Anyway, because they couldn't pull off the closing by the 2 pm deadline we gave them due to my husband's availability, they actually sent out a notary to his job and -- between massage clients -- he managed to close on this property in 15 minutes. Hilarious.

I just got back home from the Broward Real Estate Investors Association (BREIA) meeting. It was pretty informative. I'll have to try to get to those more often. The good news is that I met a couple investors, contractors, and hard money lenders. I also got a valuable tip on how to determine maximum offer price on a duplex/triplex. I'll explain that in a minute. The bad news is that I had to leave the meeting early since its a school night and I needed to get the kids in bed at a decent hour...which means that I didn't get a chance to take advantage of the post-meeting networking.

Going back to the determination of offer price on a multi plex....here's what David suggested (and he's been investing for 20+ years):

You want to make sure that you are able to get 2% of the purchase price in rental income. So for example, if a duplex is going to cost you $100,000 then you need to be able to make $2,000 gross rental income per month to make it worth your while. If you can't get $1,000 per home in the duplex per month then you shouldn't pay $100K . He said that 2% is actually pretty high and that 1.5% can get you solid deal but he wouldn't go down as far as 1% like he used to do before the market went nuts. Obviously one must account for the costs for financing (if applicable) to ensure cashflow, but this was David's rule of thumb. I'll have to run some numbers and see how it comes out.

We haven't ventured into these types of properties yet, but we very well may...and perhaps we'll work on wholesaling one.

Ta for now.

All set to close #2

Tomorrow we will close on the Ft. Lauderdale property - FINALLY! It's been a long time coming....this was our first signed contract on October 10. We're going to be calling a couple roofers tomorrow to get quotes on a new roof on the Sunrise property and also need to make some calls to get a referral on a good electrician who can change out the old school fuse box to a circuit breaker.

I reached out to one of my husband's massage clients today to set up an appointment to go through a formal presentation on our investing program so hopefully I'll have my first presentation within the next week to 10 days.

Things have been quiet from the last batch of offers we sent out, but there was one agent who came back and said we'd need to close in 10 days and put down a 10% deposit in order for the bank to consider our $32K offer. We're just going to go for it and start making some calls to see if anyone is interested.

Tomorrow night is my first Broward Real Estate Investors Association meeting. Looking forward to making some new contacts. I'll be sure to give an update on that tomorrow.

Black Friday, Online Shopping, and Growing our Buyers List

Today is one of the craziest days of the year....Black Friday. People trample all over each other, wake up at 2 AM, and stand in ridiculous lines to save money on Christmas gifts. I just can't do it. After enjoying a wonderful Thanksgiving dinner with the family, I went through the sales papers to see if there was anything at all worth inconveniencing myself for. Turns out the answer was no. I did go to a couple stores at 8 AM but the 6 AM shoppers had already taken everything - LOL!

So I came back home, turned on the computer and bought a bunch of stuff online. Mission accomplished.

Instead of spending my time on the streets today (and since my hubby is working and daugher is off with her cousins and grandparents at the Cirque de Soleil), I decided to spend some time working on my homework assignment given by our private money mentors. Oh, and on Wednesday I did my first presentation with a close friend of the family (I also consider him a mentor) and he gave me excellent feedback that I will incorporate in the presentation.

Finally, I decided I needed to spend some time working towards growing our buyers list. We need to find more active cash buyers here. I'll be going to the Broward Real Estate Investor meeting this week and I just bought a mailing list of non owner-occupied home owners in my key zip code areas from Listsource.com (people who purchased homes in the last 6 months but are not living in the homes they purchased) and then used Click2mail.com to send off some postcards to these 180 folks. Click2mail.com is very effective and inexpensive. Depending on the results of the mailing, we'll contact these same folks again in early January. We want more buyers to sign up for our mailing list so we can contact them about the deals we're getting.

Deal #1 Closed - woo hoo!

Thank God we closed on the Sunrise property today - it was looking like it may not happen until next week, but its D.O.N.E. Woo hoo!

Now its time to get busy on the repairs.

Looks like the Ft. Lauderdale property will close on Wednesday of next week (assuming the bank accepts our contract extension which they'd be foolish not to since there are no other buyers). The appraisal came back fine (after repair value of 90K) so the lender is happy and we're ready to move forward.

More pics and (maybe even video?) to come soon.

That's all for now. Happy Thanksgiving - gobble, gobble!

Patience is a virtue

Today was a test of my patience and hopefully I passed. Patience with the appraiser who is taking FOREVER to finish his report so that our lender can finalize our loan amount (for the Ft. Lauderdale property). Patience with the closing agent who sends emails out saying:

WE WILL ONLY ACCEPT A WIRE TRANSFER FOR
DEPOSITS AND/OR FUNDS TO CLOSE

ALL  LENDER INSTRUCTIONS/PACKAGES MUST BE RECEIVED
48 HOURS PRIOR TO THE DATE OF CLOSING.

**ABSOLUTELY NO EXCEPTIONS WILL BE MADE TO THESE RULES** 

*****NOTE: Our office will be CLOSED Thursday November 27th
and Friday November 28th for the Thanksgiving Holiday.  
Closings must be scheduled by November 25th
or extensions will be needed. Have a Happy Thanksgiving!!

The closing agent got a little snippy with my pal "Paula" .... they have all these weird policies like they won't pay for insurance the day of closing..we had to have it pre-paid (not typical) and this whole thing about having packages a whole 48 hours prior to close. For what?!? Like Paula said "Um...its just paperwork. It's like they need 48 hours to press the print button" LOL! They still haven't even given Paula the final HUD but whatever..she managed to get the paperwork out anyway.

Anyways, I called up Miss Snippy and covered her with kindness and it sounds as though even though the paperwork got to her at 4:30 pm vs. 2:00 pm, she's going to go ahead and close us on Wednesday. We'd really rather not wait til Monday because we'd require another contract extension and we'll probably have to deal with closing the other house on that day anyway.

Thanks to Mr. Slowpoke Appraiser, we're not going to close on the Ft. Lauderdale property on time -- more on that later. I am praying that he gets that report in tonight or first thing tomorrow morning so we can move forward with a closing date.

Again...a test of my patience. I had to channel Job today...stay steadfast. Focus. The blessing is just around the corner.

Oh, and I did meet my goal of getting offers out over the weekend - a total of 13 offers went out ranging from $32-40K. The listing agent for the Ft. Lauderdale property also told me that she just got a full duplex listing that hasn't sold for 4 months (listing expired with another agent so they gave it to her to try to sell) and asked if we wanted to take a peek. We're going to check it out. There may be a darn good reason it hasn't sold for 4 months ;-).

Looking forward to my second private money recruiting mentoring session tomorrow with Trevor and Pat. I still haven't finished the pitch and I need to get one of my mentors to critique my delivery before the Thanksgiving weekend is over. That's the goal.

Ok, I'm rambling now.

The master rehab plan

So my husband and I spent an hour today discussing our rehab master plan. Looks like we'll be closing on the Sunrise property on Wednesday of this week (yeah!) and then the Ft. Lauderdale property on Monday of the following week (long story).

My dad is a master handyman so we're going to hire him to help us with the properties....he's reliable, does great work, and won't cost an arm and a leg! We'll hire specialists for things like electrical and roofing.

Here's the master plan in a nutshell:

Sunrise property:

• Pay $60K for the property.
• Finance $50K through my new friends "Roger & Paula".
• Spend no more than $12K on repairs -- replace fuse box w/ circuit breaker, replace roof, put new glass in a couple windows, patch up the ceiling in the living room, and some small cosmetic issues (like get rid of that terrible beehive in the back of the house)
• Rehab should be complete in 6 weeks -- ready to go in early January
  
• Call back the landlord/investors and end-buyers who were interested in the property and have them take a look
• Market like crazy
• Sell for highly discounted retail value and pocket up to $20K [we're not looking to do a major updating/rehab and sell at full retail value because of the high amount of inventory out there]
  

Ft. Lauderdale property:

• Pay $56.5K for the property.
• Finance $50K through a high cost hard money lender :-(
• Spend no more than $12K on repairs -- lots and lots of cosmetic work (this is where my dad's genius comes in), modernize kitchen, add kitchen appliances and washer & dryer, do some basic landscaping, paint both interior and exterior of home
• Rehab should be complete in 6 weeks - ready to go in early January
  
• Advertise on gosection8.com and find ourselves a tenant [there are TONS of them]
  
• Rent for $1300/month - nice cashflow for us
• Refinance the property (or get a private investor) as soon as possible so we can lower our monthly cost for hard money financing

As we go along, I'll post more details (and pics!)

First Again: A new day in lending

Today I did business with a company that really made my day....

I was never so happy to incur debt....

This is coming from someone who prides herself in having little to no credit card debt and living debt free. My desire is that we will even have a debt-free real estate investing business within the next 5 years and be a lender for others instead of the borrower. BUT....in the meantime I wanted to finance our rehab costs for our properties with an unsecured loan instead of using our own cash. And boy oh boy did I find the right company thanks to Brian in the Flipping Homes community.

One of my biggest pet peeves is unnecessary paperwork and ineffective processes that don't take advantage of good ol' technology. I absolutely despise the mortgage lending process and the piles of paperwork involved. I've closed on 3 personal residences in the past 9 years and every time I complain endlessly to the people at the mortgage companies regarding their ineffectiveness. I know its not that employee's fault but SHEESH! Can somebody pay attention here and pull us into the 21st century?

The answer is YES... here comes First Again. Their slogan is "A new day in lending"... and it most certainly is. They are backed by Merrill Lynch too....If (and only if) you have excellent and substantial (e.g. 5+ years) credit history, First Again has the single most effective and painless process for obtaining an unsecured loan up to $100K at a competitive rate. It is exactly what I've been asking for the past 10 years.

So here was my experience....

I filled out a very simple online form that asked for the basic info including assets and liabilities, income, etc.

Then within 3 hours of submission (and I think it would've been more like 10 minutes if they were on the East coast time zone), I get a phone call from a rep who wants to grill me a little bit about the purpose of the loan...she was super friendly but asked very specific probing questions.

After the call with the friendly probing woman, I receive an email asking for a few pieces of documentation to support my application ... and get this... they allow you to UPLOAD it through their system. The next morning I simply created a nice PDF document and sent it right over through the site.

After sending the documents, I get another email within a few hours basically saying we can't give you the exact dollar amount and length of loan you want BUT click on this link and we'll show you the terms we can provide. I click on the link and it breaks down the difference between my request and what they'll provide.

Then they tell you that you have a few weeks to accept the loan if you want it. Heck yeah I wanted it...the terms were awesome! So do you think they make you sign and fax a doc back to them? No way...they let you use your mouse and attempt to sign it or you can click a link that will create your name in cursive automatically using a script font...then you check off a couple disclosures after reviewing a very clear loan doc (no small print - no prepayment penalties, etc).

After that you tell them when you want the money...they can do it the same day (depending on the time) or the next business day. Then money is wired to your account.

48 hours from start to finish. That's it.

I cannot wait until the mortgage companies catch up to this too.....oh if the healthcare industry can get it together that would be a bonus (do we have to fill out the same daggone forms a million times at the same office?)

Ok, that's all for today. It's rare to have such a satisfying customer experience so I wanted to publicly applaud First Again for getting this oh so right. Thanks First Again!

My philosophy on business expenses

This has been on my mind so I wanted to write about it quickly.

(SOAPBOX BEGINS)

I am a firm believer in spending money on things we need for our business, including education (carefully selected).

When I was in college I had a good buddy (we'll call him Anthony) who always seemed to be doing something entrepreneurial....his philosophy was that if he didn't spend money on a business, he'd be just handing it over to Uncle Sam with taxes anyway. Even when his business venture fell flat on its face, it didn't matter. It didn't really cost him anything anyway due to the tax deductions. Basically he said that either we can be enterprising American citizens or we can just be tax payers...and relatively big taxpayers at that because we were both software engineers making decent incomes. I've heeded Anthony's advice for 9 years now (since leaving college)...way before we were even thinking much about real estate investing....you don't have to spend money you don't have (although it can be done successfully leveraging other people's money)...but if you have it, start a business - even if its a very small one - and enjoy the tax benefits, and make some extra money while you're at it!!

Yes, there are other ways to get tax deductions...like giving money away (tithing and/or charitable contributions). We give away around 15% of our income now and want to do even more than that in years to come....but don't forget about business too. Even if you don't have big dreams for your own business, you can even turn a hobby into a small business and write off all the things you'd spend personal money on anyway. :-)

If you do your own taxes with TaxCut/TurboTax, you can model this idea in the software very easily and see the difference in taxes you pay and whether you could've benefitted from spending some of that tax money to make a business (no matter how big or small) out of something you love.

(SOAPBOX ENDS)

Smashing roadblocks

Ok, now that I have time to breathe I wanted to write about what's been going on with the funding for our deals. We've had plenty of roadblocks but through prayer and persistence we've overcome several.


(That pic really cracks me up....anywho....)

Let me just say that excellent personal credit seems pretty useful these days due to the credit crunch and fortunately both my husband and I have FICO scores in the high 700s. After SEVERAL calls to hard money lenders over the past week we finally secured two lenders who will provide 90% of funding for our deals. We also negotiated a 8.99% fixed interest rate on a line of credit with BoA to fund the light rehab work and down payment. We were really fortunate to find a local lender that is charging us only 3 points on the loan...that is NOTHING compared to what others were asking for. The lender is a husband & wife business (for the sake of anonymity let's call them Roger & Paula) and they are super nice folks. I think we'll be doing a lot of business with them (or referring others to them) if they keep giving us financing like this.

What we've found is that the hard money lenders definitely care about credit more than they used to...they also only want to fund 65% of the after repair value (and sometimes only 50%)...they want you to have some skin in the game. The terms, rates, etc. that are advertised on the websites aren't the same as what they are offering in the current market conditions. The key is PERSERVERE...you can't give up. Even if you have to call 15-20 different lenders.

Moving on...the numbers look good for the properties -- IF we rent them they will each cashflow a few hundred a month (even with high interest hard money financing) but I don't suspect we'll be holding onto both of them after the rehab is complete. In fact we met with yet another potential buyer today on the Sunrise property.

So here's the current focus (very near term goals)...

Make Offers
7-10 offers out the door by the end of the weekend. Only low end properties that we can wholesale for $40K or less at this point.

Network
There's a Broward Real Estate Investors meeting the first week in December and I will make arrangements to be there. We definitely want to network and find an investor friendly title company that will do simultaneous closes and some landlord/buy & hold investors.

Private Money Recruiting
* Finish powerpoint pitch for private investors (thanks for the template Pat!) this weekend
* Practice pitch and receive critique from at least 2 people before end of next week
* Set up appointment to give formal pitch to our first potential private investor by Dec 6.

Read / Listen to Audiobooks
* Read "Maximum Achievement" by Brian Tracy in December
* Finish Dr. Creflo A. Dollar's audio book entitled "8 Steps to Create the Life You Want"

Hmm....Self-directed IRAs?

I know I haven't written for nearly a week, but we've been really busy working on closing things with these homes. Will have an update on that very soon.

In the meantime I wanted to just make note of something I'm starting to learn more about which is self-directed IRAs. These IRAs allow you to invest in non-traditional vehicles such as private business investments and real estate. It has some restrictions but so far on the surface it seems like a great opportunity considering how things are going in the market right now. I'll be discussing this more with a company that was recommended by Steve Cook over at flippinghomes.com and also will be chatting with our private money mentors to see what ideas they have on this. It can help us with private investors and can also help for our our own retirement planning. More on this soon as we begin to learn more. Gotta run for now -- tonight is my first mentoring session on private money recruiting.

$$The money hunt $$

We've switched gears and focused on finalizing funding to close on these deals. We had a buyer who really wants to the Sunrise property, but his financing source won't close on a property that needs roof work done. Oh well! We've even had realtors calling us trying to show the Sunrise house to their clients too so I really think we can get a retail sale out of that one with VERY little work...just fix the roof and call it a day.

We also have a potential private money lender who is one of my husband's clients. She is reviewing our proposal and wants to have her adviser take a look at it too and will get back to us. Speaking of private money...we've secured a couple mentors (Patrick Riddle and Trevor Mauch) to help us out with these efforts...its a bigger deal now since conventional financing is harder and hard money lenders are very expensive. Plus with the market tanking, people are looking for other ways to generate returns on their money. Anyways, one of our mentors (Patrick) is an expert who has raised $6M in private money for his real estate deals over the past 5 years...and he started when he was a college student! We'll be sure to track our adventures in these efforts as well.

Our free mentoring with The Freedom Equation is over now...it was a pretty good experience. The coach we worked with was definitely knowledgeable, supportive, and responsive. I think mentoring in this business (or any business for that matter) is essential and we're going to continue to seek out mentorship whenever we can.

We may have a buyer.

My husband met with a potential buyer yesterday who is really interested in getting the Sunrise property. He's working on getting his money together so we should know more tomorrow. We also have a second potential buyer who said he was going to drive by the property today so we should know about that tomorrow as well.

I'm pretty sure we'll end up holding onto the Ft. Lauderdale property and then wholesaling the Sunrise property. That's fine with us because they are both really great cashflow properties for renters.

Oh, and not that this is a political blog but hey, I absolutely would be remiss to not acknowledge that history was made in a MAJOR way last night with the American people electing Senator Barack Obama as the first African-American president of the United States. It was an exciting moment that I think even folks who didn't vote for him could appreciate!


So back to real estate - we're still making offers on additional properties for $30-35K a piece. Eventually we're going to find a bank who wants to offload a property for a real steal :-)

Gotta love those bandit signs.

Our phones rang off the hook this weekend due to 30+ bandit signs all over the city this weekend (thanks to Steph in Tampa for giving us a great idea for a compelling ad on our handwritten signs). We're definitely growing the buyers list and its good to have a chance to talk to some of the investors in the area. We have 6 solid leads for our current properties and we'll see what transpires over the next week. Some of the other folks who called were just tire kickers and others ignored the part of the sign that said "CASH ONLY" so we wouldn't be able to do a quick sale with them. They still are potential future buyers but just not on something that we need to move really quick on. In the meantime we're gearing up to line up the funding with the hard money lenders (and potential private lender) for the properties in the event that we rehab them ourselves.

We're also working on establishing business credit for the business. Dustin Mathews has some great training on this topic and we're already putting the plan into action. We applied for a Dun & Bradstreet number so we can establish a credit file for our business. We'll also apply for some trade credit and then some cards. The idea is to establish a good history over the next few months so that we can get some lines of credit available to us to help with funding deals in the future at a lower interest rate.

That's all for now. I'm on pins and needles awaiting the results of this election.

Private money magnets

God is good. Today my husband may have secured our first private money lender. She's actually one of his massage clients and has been looking to invest in real estate. We just worked up a proposal for her to partner with us on the purchase of the Ft. Lauderdale property. It actually is a great property to keep as a rental (Section 8 is paying $1200/mo for a 3 bedroom) and if we can do it through a partnership with a private money lender it will be even sweeter. If we still end up selling it pretty quickly before renting it out (either before or even after the rehab) our investor won't mind anyway since it will be a pretty fast return on investment and then we can use her money again for another deal! It's not set in stone yet, but we'll be reviewing the proposal with her over the next couple days. We basically want to be private money magnets....that will help us do a LOT of great deals.

We're going to make some more offers now. Insanely low offers for $25-30K. We have buyers who are willing to buy rehab properties for $30-50K so if we can snag one we can have an easy flip. Steve over at flippinghomes.com just told us on the forum today that he snagged 3 REOs for 15% of the after repair value. And Steph over in Tampa just got a place for $18K. All I can say is wow.

The phone calls on the properties have been interesting. We have been hearing from a lot of people who want to actually live in the properties (owner occupants) vs. investors. We don't mind selling to owner occupants but we tell them that if we have to do the rehab work the price will obviously be higher when we sell to them.

That's all for now.

Phone is a-ringin'

The ads are definitely resulting in phone calls. Some are tire kickers and some have potential. I'm really looking forward to getting a virtual assistant in place to help us with these phone calls as well as some of the marketing grunt work. We're getting calls from the Craigslist ads as well as the newspaper ad (we're on day 3 of 10 of the ad). The bandit signs have all disappeared now and we'll have to decide whether or not to purchase more. What's really great about this process is that we're meeting investors from across the county and building our buyer's list.

Every week I spend an hour or two focusing on real estate investing education -- there are a lot of folks who do some good training via webinars. Sometimes they are chock full of sales pitches, but there is typically some great content too. I got some good ideas from Tim Mai and Pre$ton Ely on finding motivated sellers and I'm looking forward to trying out some new techniques once we're ready to look for more deals. I know we're supposed to run on all cylinders and do everything at once, but since these are our first two deals I'd really like to focus on these before finding more sellers and securing additional properties. Besides, plenty of banks are motivated sellers right now so even if we don't market to homeowners, there are plenty of REOs to make lowball offers now.

On Saturday morning, my hubby and/or I will go to a wholesale property showcase that is hosted by SoFla Property Solutions. This will be another good opportunity to meet with investors in the Broward and Miami-Dade area.

IndyMac is so slow.

So now I know what some of the other investors mean when they say that banks move as slow as snails. They are overwhelmed with their inventory and don't seem to have adequate staff working in loss mitigation and REO departments. Anyway, I say all of that to say that after a WEEK of waiting we FINALLY have a signed contract from the bank on the Sunrise property. Now its time to get busy marketing. Our classified ad started in the Sun-Sentinel today and we've already had a few calls so hopefully the phones will continue ringing throughout the weekend. As far as the first property, we've had some preliminary interest but nothing solid yet. More to come!

Gaining momentum - Selling time!

Since Saturday our focus has been sell, sell, sell. Our buyer's list is short right now, but we're working all the angles. There are 100 different ways to skin a cat (what a terrible expression...not sure I'll use that one again. LOL!):

1) Called all the people on our buyer's list - these are people who either responded to our bandit signs or people my husband called based on seeing their bandit signs.

2) We'll place a 10 day classified ad in the Sun-Sentinel tomorrow. Will cost about $150 but it will be worth it because even if we don't find our buyer with the ad, we'll be building our buyer's list which is important right now. We should have the property under contract before the ad run is over but we'll just keep talking to local investors and finding out what they are looking for.

3) We're working with another local investor who already has an extensive buyer's list because he's been investing here for a few years. He's sending it out to all his people today and if he brings us a buyer we'll pay him a finder's fee.

4) My husband's uncles invest in Ft. Lauderdale and know folks who are always looking to buy properties, so they are reaching out to a few people on our behalf.

5) Placed an ad via postlets.com which posted our ad on numerous websites

6) Going to a lunch meeting on Thursday with the Broward Real Estate and Business Network and meet others in the local investing community.

We've had interest from two investors so far who will be going to take a peek at the property. My husband may be meeting with one of them tomorrow.

Who would want to be President now?!?!

I shouldn't have turned on CNN. The stock market was a disaster today. Seriously....why would either Obama or McCain actually want to be in the White House in the middle of this terrible economic crisis? It seems like a no win situation. If Obama gets in it will probably be by the skin of his teeth and the pressure will be on for him to do something big in his first term. Not sure he'd get a second chance and not sure he'll be able to put policies in place to right the ship. If McCain gets in and continues to hold up W.'s policies (economy, war, etc), I doubt this ship will get right either. Add to this that there seems to be a lack of creativity in Washington to come up with better solutions to things such as the subprime mortgage meltdown... its just a mess. Nevertheless, I'm going to continue to stay positive, focused, and faithful and keep moving forward. I've heard that when other people are scared, that is the time to push forward and invest wisely but aggressively...and when people are investing aggressively and excited, that's the time you should be more conservative.

I've gotta get busy with this real estate investing to make up for the massive losses in my 401(k) and IRA over the past week.

That's all for now.

Even sweeter. Contract #2 :-)

Wow...I see that some of these lenders are hard up for cash which is good news for us investors. We got another offer accepted from the bank today. The property is located in Sunrise which is an even better neighborhood than our first property. God is good! Check it out:

The property was listed at $87K (reduced from $92K) and we are locking it in for $60K. It is a 3/1 and approx 1000 sq. ft. The after repair value is $120K and I'm not sure about the estimate repairs yet since I haven't seen the inside (in person)...I've seen lots of pics but who knows how long ago those were taken. I'll be checking out the inside tomorrow and if it has less than $20K of damage to it, we'll have ourselves a deal and will sign the addendums tomorrow. Oh, and I found a pretty nifty website that will do repair estimates online (and connect you to local contractors if you'd like). I did a sanity check with my husband's uncle who is a handyman and the estimates given by the website were very much in line with the estimates he gave me when I told him about the work needed on property #1. We still overestimate just in case...so if it says painting the entire exterior will cost $1200, we will add another $100-200 to that to give us a cushion.

We're going to hold off on signing a third contract until we can get a solid buyer for at least one of the properties. Then we'll keep it moving and work to get some more properties.

This weekend is all about getting on those phones and working to find our buyers. I have faith that we're going to get buyers - cash buyers - and we're going to find them fast.

Sweet.

Today's a good day. We got the signed contract from the bank so we're solid now. Now its time to pray for God's favor and market like crazy :-). We have about 15 folks on our buyers list now so we will get busy calling tomorrow. Of course I had a number of questions and this 60 days of free mentoring from Tim Winders is great because we're getting 24 hour or less responses back to all the questions we have. It's incredibly helpful to have someone to bounce ideas off of.

Here's what the property looks like (you can't see the carport that has all the graffiti on it and the windows are all jacked up now and need new glass). We'll have to take some more pics of it tomorrow so when we market it on the web we can have pics of the interior.


Oh, the bank did insist that we use their title company to close. No biggie. I spoke to the attorney at the office today and told her what we're looking to do and she said they can get it done. I'm taking the $1K earnest deposit over to their office tomorrow.

Another cool thing is that the listing agent told me about another REO her brother in law has in one of our target zipcodes. He hasn't even listed it yet because they just got the tenant ("the crazy tenant" as she called her) out of the house. She told me I can drive by it and make an offer through her as soon as I'd like, even before they list it. We'll go take a peek at it tomorrow and if it looks like a winner we'll make another one of our lowball offers...their list price won't mean much to us anyway!

More soon.

Woo hoo! More than a glimmer - its done (almost)!

I just got off the phone with the listing agent and the bank wants to deal! We're getting the property for $56.5K with a $1K earnest money deposit (much better than the typical 3-5% wanted) and it doesn't look like they are going to hassle us about selecting our title company for the closing. Now I just have to get a new contract over right away so we can seal the deal and move on to flip it to an investor with a double closing. I was pretty excited to share with my husband that the bank finally accepted our offer...my husband (in his typical MO) was like "That's good." Wanting more of a reaction, I told him again and he said "I heard you. That's good. But I'm not shocked. I fully expected them to accept it." LOL! Gotta love him.

A glimmer of hope

Today is a busy day on the 9-to-5 so I only have a few minutes, but there seems to be a glimmer of hope on the REO property. At first the bank countered our counter at $69K. $69K!!! A mere $1K less than their first counter offer and only $2K less than their listing price. This does not sound like a motivated bank to me at all. This was yesterday. Anyways, the listing agent asked me if I wanted to counter again and the asset manager also wondered if they could perhaps give us a $5K credit and do some of the repair work needed on the house....I told her no way...offer stands firm at $56.5K and we'll buy it as-is. The listing agent called me back this morning and said she told the asset manager that we're holding firm and that the property has been on the market for a looooong time so he should at least take that offer up to his manager and see if he can get it closed. Apparently the asset manager decided that was a good idea so we'll see what the bank decides to do. Time is ticking.

First counter offer on REO!

Good news! We finally got a counter offer on one of our REO properties that we made an offer on a little over a week ago. The home was listed for $72.5K and we offered $51K. They have countered at $70K which simply isn't going to cut it. The cool thing is though that the listing agent said they've been trying to sell this property for over 120 days now and they are motivated to get rid of it...apparently the asset manager told her not to lose me as a buyer and find out what we want. So we went to inspect the property today and did a quick repair estimate...looks like it needs about $10K worth of work. We believe the ARV is around $100-110K and we want to flip this thing to a rehabber so we aren't going to be willing or able to give them the $70K they want.

The property wasn't in horrible condition but it will need plenty of work...exterior painting (grafitti all over the carport), interior painting, carpeting, tons of cleaning, window glass replacement, and some drywall work. Oh and the bathroom was just plain nasty!!! But nothing that can't be addressed. Anyways, we're going to see exactly how motivated this bank is. If they don't like our counter to their counter ($56k) we'll just wait and see if it sits on the market for another week or two and then we'll resubmit. We'll see how it goes!

Oh...and my husband checked out that home in Hollywood...it needed a LOT of work...not sure we could even offer the woman the amount she owes on the place - $85K. We'll work the numbers but its not looking good for them and unfortunately they may end up in foreclosure. We just have to double check the comps in that area. We have someone who wants to invest in Hollywood or Miramar so hopefully we'll find something that works for him soon.

More offers...waiting...more offers

Ok, so we've made another 8 offers....mostly on REOs. We're also still waiting to hear back from last week's offers. Nothing yet. One bit of progress is that I got a call from a woman in Hollywood who is in pre-foreclosure and wants to sell her 3/2 home for $100K. She owes $85K on the mortgage and based on recent comps the value is likely between $130-150K. We'll check out the home on Friday and see what happens. Meanwhile I've sent out another 30 letters to folks in pre-foreclosure who have equity in their homes and hope to get some calls from that soon. The idea is to send out around 100 or so letters every month to 5 targeted zipcodes in Broward county.

We're still awaiting news on what our "leaders" are going to do with this bailout bill. I'm simply not convinced that there is much creativity in Washington. There has to be a better way to solve this problem than place a $700 billion dollar tax burden on the American people. Seriously. Dave Ramsey sent out an interesting proposal on how to deal with this situation. I think it has real merit and I've sent it along to my House rep and Florida senators for consideration.

Anyways, back to REI. Hoping we'll close our first deal before the end of October so gotta get plugging away.

Wall Street Bailout and impact on REI

The drama in our financial systems is on the news 24/7 this MAJOR $700 billion bailout may be inevitable. If the government buys all these bad debts what happens to all those REO properties out there on the market? I've gotta think that whatever the government does on this, there will be a real opportunity for the creative investor to capitalize. We've been waiting for a week to hear what is going to happen here and hopefully this will close soon. WAMU was seized by the feds and sold off to JP Morgan so things are just nuts.....gotta run. Looking forward to the first presidential debate tonight!

Automating the real estate investing machine

So its already crystal clear to me why real estate investors need to automate their business as soon as humanly possible. It takes quite a bit of time to put up bandit signs, you play phone tag with sellers just to find out that they are a tire kicker or don't have a property worth purchasing, and you can get hand cramps writing out addresses on 25-50 letters each week. All of these activities are necessary BUT having others do them could focus us more on finding properties in the MLS, making offers, and getting deals ONLY. We'll have to get really smart about this sooner rather than later. Having someone answer the phones and do pre-screening will probably be the first thing we need to invest in. Once we solidify our first deal I think it will be easier to make these expenditures. I may sound discouraged, but I'm definitely not. Just thinking about how important it is to work smarter rather than harder. Truth is that my husband and I both work full time jobs and we have two young children so time is precious!

Finally - our first offers!

Today was a good day. We put out our first group of offers! A total of 9 offers. A good friend of mine is a part-time realtor and she was incredibly helpful with finding comps and helping identify properties based on search terms I gave her. The goal was to do 10 offers but it turned out that one of them was a townhouse and not a single family home so we dropped that one at the last minute. We've had issues with HOAs so we're not even trying to deal with those.

I'm really wondering about this major bailout that the government is planning for this week. I'm curious to know what the impact is going to be on all of the homes pending foreclosure as well as the homes that already bank owned. I guess this is why Tim Winders kept saying that you can't be a one trick pony. Things change and your business must be able to adjust.

Meanwhile, we put out bandit signs again this weekend and got a few calls. My husband spoke with 2 potential investors and I spoke with one seller who owes more on mortgage than the property is currently worth. Not much we can do with that.

Now that we got over the hump of getting those first offers done, time to start all over and do it again! I'm also going to price ad space in The Flyer and the Sun-Sentinel classifieds this week. Since we're making offers we need to be ready to have some buyers!

Bingo!

Wow, it's been over a week since my last blog post. We were really fortunate to be spared by Hurricane Ike down here in the South Florida area. Our hearts and prayers go out to those in Haiti, Cuba, Galveston, and Houston who were impacted by the storm. I've dealt with major home damage from hurricanes before and it is a real pain...but nothing compared to what some of the people on the islands have to deal with.

This past weekend was pretty productive. We put out our bandit signs for the first time. I can see this getting old fast though and understand why people pay others to do this. It takes time...and while putting them up isn't so bad, its having to take them down less than 72 hours later that's a real drag! Some of our signs were missing when we came back to pick them up, but we fully expected that to happen. We got 3 calls from the signs so we'll see what comes of that.

On Friday I hit pay dirt. We've been looking for a company that would provide a proof of funds letter so we could make offers on some REOs. The hard money lender didn't want to give the letter unless they actually checked out the property and new it was something they wanted to back. Makes sense but when you're trying to do offers in volume it doesn't help too much. So what I found was companies who do "Dough for a day" loans for back to back settlements -- typically costing about 2 points. Not bad if you have a great deal on your hands don't have a lot of cash laying around or a private money lender. The company will provide our proof of funds letters so we can make cash offers on properties as soon as this week. So we're going to get busy. We have a number of properties that our realtor friend sent us on the MLS. Plus we're going to go through some of the REO properties listed from the banks and contact the listing agents directly.

Goal by Friday of this week? Make 10 offers on properties.

Banks and Hurricane Distractions

So our goal for this week was to establish relationships with small local banks and call some hard money lenders (HML). We want to begin making offers on some REO properties this week. We had to rule out many of the banks for various reasons but we have two potentials to work with. We just need to have meetings with the loan officer next week so that's progress. I spoke with two HML as well. They started sounded a little bit like a regular lending institution which was a surprise to me. They wanted 10-25% cash for a down payment and some want proof of X reserve dollars. I suspect they have to be more selective these days....anyways there was one lender that will loan 100% including rehab costs so I think that one may be a winner depending on how things go with the banks.

We also met with a couple real estate agents this week. We're going to focus on recently expired listings, unsold listings with at least 4 months on the market, and listings that include keywords such as: divorce, distressed, HUD, pre-foreclosure, vacant, handyman special, investor.

We were supposed to get our bandit signs out this weekend but we're going to hold off on that. There's a threat of Hurricane Ike - a nasty category 3 storm - and everyone is running around buying up everything at Target, Wal-Mart, Lowes, and Home Depot. I'm thinking its probably not a good time to be putting the signs out. So we'll do that next weekend once the storm has passed and hopefully the storm doesn't impact us much at all!

Inspirational Words

I thought I'd quickly share the motivational words on my desk that I look at every day :-)

But my God shall supply all your need according to his riches in glory by Christ Jesus.

Philippians 4:19

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Now faith is the substance of things hoped for, the evidence of things not seen.

Hebrews 11:1

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If you can dream it, then you can achieve it.
You will get all you want in life if you help enough other people get what they want.

Zig Ziglar

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Press on: nothing in the world can take the place of perseverance.

Talent will not; nothing is more common than unsuccessful men with talent.

Genius will not; unrewarded genius is almost a proverb.

Education will not; the world is full of educated derelicts.

Persistence and determination alone are omnipotent.

Calvin Coolidge

Labor Day Weekend Fun and Planning

It was a nice Labor Day weekend for the family. We spent most of Saturday with my husband's family -- we almost got rained out thanks to effects from Hurricane Gustav but fortunately the rains let up and the kids could still go swimming. Today we spent the afternoon with friends eating and playing games. We managed to get some work done as well. This week we're going to be focusing primarily on funding. I researched online to find as many local community banks as I could and my husband is going to go into these small local banks and work to establish relationships with them. We will also contact several hard money lenders so that we can begin to understand the terms and know what our options are. I was inspired by a training call from one of my new favorite websites flippinghomes.com by Steve Cook. I've been lurking on the site for a couple weeks, but plan to be an active participant shortly. This site is a wealth of information and has a very supportive community of investors ranging from newbies to pros. If you're interested in the audio from the call, check it out here. Once we know how we're going to fund deals, we're going to get busy and make some offers on REO properties.

We're also going to expand our network by participating in REI clubs. There's a few here in our local area so we just need to make sure to get to some of those meetings. I'm sure we'll meet plenty of other investors, hard money lenders, real estate attorneys, and title companies. That's all good because we could benefit from relationships with all of the above!

Making our first calls

For the past two days, we've started getting on the lines and calling people. Mixed results. Some of the investors we called (we found their info on bandit signs) were very friendly and interested in being on our buyer's list. We exchanged information and hope to do business together some day. A couple people seemed to have the attitude "Why on earth are you calling me?" ... oh well.

We made some calls about a few good looking wholesale properties in our neighborhood of choice...but the properties were already sold. No biggie because we made a contact and will learn of other properties in the future. Plus, this is mostly about getting over any reservations about calling people and also building our buyer's list.

We're also going to be participating in Tim Winder's 'Inner Circle' coaching for the next 60 days which was a benefit we received from the Foreclosures Daily investing system. Looking forward to talking to the experts!

Next up - calling about some REO properties.

Driving for Dollars

On Sunday I spent 40 minutes driving for dollars...in other words, driving to key neighborhoods of interest to see which homes were for sale, looked abandoned, etc.

I went to one neighborhood and was floored by how many empty properties there were...it wasn't a rough neighborhood (or ghetto as some would call it). In fact, this is your typical South Florida middle class neighborhood....but I wrote down about 10 properties of interest. Some were clearly foreclosed properties - a couple had code violation stickers all over the windows so I'll have to make some calls to see what the scoop is on those.

Other homes had For Sale By Owner so we'll definitely give those a call this week. And lastly, there were a few that were for rent supposedly but it looked like the owners didn't care spend too much time caring for the property because the grass was SO high. We'll call them too...perhaps they really just want to get the property off their hands!

I also wrote down the phone numbers on a handful of bandit signs. We're hoping to establish contacts for our buyer's list and this should be a great way for finding them.

Getting organized

This past weekend was all about getting organized. We put together our business plan for the real estate investment business...it really helped my husband and I think through our vision, goals, and approach (structure, resources, marketing plans, buying and selling strategies). This will also be helpful to show to potential private lenders so that they know what we're focused on.


We signed up for a voicemail service with Got Voicemail - it has some great features. We opted for a local number instead of an 800 number and we'll see how that pans out.


We've also purchased our first set of bandit signs from SuperCheapSigns.com. They have some great templates for real estate investors and have good prices. Not sure if they're the absolute cheapest, but I'm yet to find anything for less so if you're reading this and have suggestions, I'm open!

Anyway, we're focusing on signs for attracting investors as well as sellers. We've learned about a lot of different messages that have been successful for other investors so we're not recreating the wheel. We're trying the simple 'We Buy Houses' as well as the 'Handyman Special - 40% below market value' approach. Hoping to have those signs before Friday so we can get them up on Friday evening.

Today I will print out some business cards so that we'll have that on hand whenever we need them.

We've called real estate agents that we've worked with in the past to let them know that we're looking for properties to invest in - mostly pre-foreclosures and bank owned properties...but essentially if there's a motivated seller then we have something to work with. A good friend of mine is a realtor so we're looking forward to working primarily with her.

By the end of the week I'll also have some ads up on Craigslist.org so we can begin getting the phone ringing.

Getting started!

I'm excited about starting this blog...for one, it will really serve as a great journal for my husband & I to see how our real estate investing (REI) business grows. Secondly, I'm hoping it will eventually serve as an inspiration or good resource for others who are interested in REI or are currently investors who are looking for new ideas from others.

Our adventures in real estate started several months ago when my husband & I decided that we wanted financial freedom and that this was one of the best ways to accomplish it. I'm glad to have a partner in this business. We're able to divide and conquer and bounce ideas off each other. Sure there may be some challenges in working together since we're married, but hey there's nothing better than this because we know and have complete trust in each other. We've been married for 9 years and have two young children - a 7 year old and a 4 month old baby....our sincere hope is that our real estate investing venture will secure a solid future for them and even their children. No point of being prosperous if you can't be a blessing to others!



Anyways, we started an LLC for our business and have taken care of the basics such as getting a business checking account so we don't mix funds.

We are highly motivated to get things going ....we just attended a 4-day REI workshop hosted by Foreclosuresdaily.com. It was our second training with them...the first was a Short Sale Boot Camp. We only attended 2 of the days but it was very informative. The key presenter was Tim Winders (TheFreedomEquation.com) and we wrote down tons of great notes to get us going and more importantly made a decision that we were going to get laser focused and stick with it.

Nike had it right when they said 'Just do it!' Success is all about getting started, gaining momentum, and perservering through the challenges.

We're definitely going to need to establish some mentors and a solid coach as we progess. For now, I am finding a lot of great tips and inspiration on the following Real Estate Investing blogs:

FlipThisWholesaler.blogspot.com
TheREIBrain.com
Mustknowinvesting.com
TheFreedomEquation.com/blog (Runnin' Down a Dream)

Ok...let's do it!