Friday, September 25, 2009
The first indicator of the market turning around in this state will be employment. When employment starts to rebound you should carefully watch migration. Once people start to move back to California demand will explode. The reason being is that there are almost no building lots being developed in the state right now. Once migration turns around and builders want to start building again it could take 1-2 years for the approval and permit process. That will drive demand higher and with it affordability will sink. If you can afford to hang on to your home and like it I suggest you grit your teeth and bear it. You made the commitment to purchase the property and signed your name. It is not the bank's fault the market fell out.
Now, why would I say YES! to buying today? Well, interest rates are rediculously low. Do you really think the price of 30 year money should be 5.5%? Would you loan your money out at that rate? With prices so low and interest rates falsely surpressed by the government it is much cheaper to own today than it is to rent. If you have a W-2 and can prove your income you would be crazy not to jump in. Who cares if the prices slide another 20%. I hear many people say they want to buy when it gets to the bottom. Like a roller coaster in the dark, you won't know you were at the bottom until it starts to climb back up again.
What about investing in real estate? Now is one of the best times in the history of California to purchase affordable rental properties that will CASH FLOW! I am purchasing properties myself. This also sets me apart from the many Agents & Brokers out there. I won't tell you it is a good deal just to sell it to you so I can collect a commission. I will tell you it is a good deal because I own many rentals here and know a good deal when it comes across my desk. I truly understand cash flow analysis and can explain what operating expenses are associated with rental property. There is a whole lot more to analyzing a property than mortgage payments and rents.
If you want quality service from an experience Broker, Investor, Buyer and Seller of residential California Real Estate get in touch with me.
I answer my phone and I return calls promptly. This alone puts me ahead of 95% of the pack. I look forward to doing business with you.
Friday, August 7, 2009
Every time I speak I encourage people to get into the real estate game, but before I end, I encourage them to take care of their health. Even if you conquer 1000 houses and the cash flows in faster than you can hope to spend it, no amount of money you could ever dream of earning will prevent a heart attack, aneurysm, stroke, cancer, or whatever other evil disease is out there lurking from taking your precious life.
I spoke at Jack Fullerton's Commonwealth club last night. I had a blast. I think I may have gotten too technical for the amount of time I was allotted, but I can't help it. I like my real estate deals twisted, bent and wrapped around. The more we play with the numbers the funner it gets. I like creative real estate and that is what I want to teach people; how much fun it can be.
I am off to Vegas tomorrow to lecture at a 3 day seminar. I am, to say the least, disappointed that I am only getting 1 hour. I think I have a lot to offer, but I can understand that the promoters do not know me and therefore do not want to put me in front of a room full of people with no idea how things might go. It will be fun, that's for sure!
Quick update: Sold both the mobile home and the Oak Meadows properties. Did quite well on the later. The former...eh, not so good. Looks like I may get 1/2 a condo on Monday. I have a few other things I am working on... Will keep you posted.
Tuesday, July 7, 2009
The next day (today) I attended his Transactioneering class. It was such a great experience. Peter is one of my favorite instructors. Nothing but solid useful information and he truly likes to help people. Afterwards, we went to a dinner, but I decided to take a side trip up into the mountains to see some trees, water, animals and just relax. I did see a rather large owl sleeping up in a telephone pole. I found a great BBQ joint two entrepreneurs from Texas opened up in Huntsville. It is right around the corner from the Shooting Star Saloon which I am told is the oldest bar in Utah. Just don't go on a Tuesday because it is closed!
Tomorrow is the local investors lunch. Thursday is a hang out day and Friday I am driving to Reno, NV hopefully to meet up with Jack Miller before the start of his 3 day options class. Tuesday is another day on the road as I head back to SoCal and home.
I did receive an email today that my next door neighbors have rented their place out to "friends from church". They claim these friends happen to come by just before they left and that they feel really good about it and have a verbal contract. We had an agreement and as far as I am concerned they reneg'ed on it. I guess that makes them liars in my book. My word is as good as a contract and I expect that this goes for the people I do business with as well. Also, my wholesale seller is still MIA so that is two deals that look like they are circling the drain. So it is being a real estate investor.
Saturday, June 27, 2009
I learned a valuable piece of experience yesterday. If you are going to do a sandwhich lease, DO NOT bring your prospective tenants to the house while the owners are still there. I had a very nice family show up to see the house next door that I am sandwhich leasing. The owners are still moving out. I guess it was a little premature. The father was covered in tattoos, had a bandana around his head and a goatee that would make a billy goat envious. As soon as they left, the owners decided they in fact did NOT want to lease their house. I sat down with them and talked to them a while reassuring them that I was not going to rent to those people. I then told them not about the monthly cash flow they would be getting, but the yearly cash flow. $1,550 doesn't sound like much money, but $18,600 is quite a bit to pass up for anybody. They held a yard sale today so hopefully they will be out soon and I can get the place occupied and start collecting some nice rent.
Monday, June 22, 2009
I immediately went inside and started getting together my for rent signs. I figure I can get about $1,800-$1,850 a month out of that house.
My wholesale deal is getting rotten by the minute. He we are in escrow with the seller about to collect $17,000 and she takes off to Pennsylvania! Can't be found nowhere. I emailed her and asked what her exact address is and for two phone numbers. I am going to track down a mobile notary and get those documents sign. Even if I have to fly to Pennsylvania to get it done I am going to close that escrow and collect my fee! Besides, I haven't been to Pennsylvania in quite a few years. Sure would love to get out to Lancaster and get some of that delicious shoo-fly pie.
Friday, June 19, 2009
My wholesale deal is taking longer than the contract states as well. I have found that this is typical these days. Nothing moves as fast as it is supposed to and for some reason there is always less netted at the close of escrow than expected. Just the way the deals close. I will still make my $7,500 share on that deal. Just need the seller to get her act together and close.
I have been throwing around the idea of either starting a new Inland Empire real estate club or putting together a seminar I could teach 2x a year. I am leaning towards the later. I would like to do a 2 day class and I think I am going to start seriously focusing on that aspect of my real estate investing career.
Monday, June 15, 2009
Suddenly, a rich tourist comes to town.
He enters the only hotel, lays a 100 Euro note on the reception counter, and goes to inspect the rooms upstairs in order to pick one.
The hotel proprietor takes the 100 Euro note and runs to pay his debt to the butcher.
The Butcher takes the 100 Euro note, and runs to pay his debt to the pig grower.
The pig grower takes the 100 Euro note, and runs to pay his debt to the supplier of his feed and fuel.
The supplier of feed and fuel takes the 100 Euro note and runs to pay his debt to the town prostitute that in these hard times, gave her services on credit.
The hooker runs to the hotel, and pays off her debt with the 100 Euro note to the hotel proprietor to pay for the rooms that she rented when she brought her clients there.
The hotel proprietor then lays the 100 Euro note back on the counter so that the rich tourist will not suspect anything.
At that moment, the rich tourist comes down after inspecting the rooms, and takes his 100 Euro note, after saying that he did not like any of the rooms, and leaves town.
No one earned anything. However, the whole town is now without debt, and looks to the future with a lot of optimism.
And that, ladies and gentlemen, is how the United States Government is doing business today.
Thursday, June 11, 2009
Now for new news:
It looks like we might be buying two more properties sub 2 and keeping them as rentals. I am also working on in MA. My goal is to purchase it sub 2 and keep it as a rental.
Now for new exciting news:
I have been invited by Jackie Lange of Cash Flow Depot to speak at a Take This Job and Shove It seminar in Las Vegas. I am very excited to be doing this. This is a great opportunity to get out and meet new investors as well as advanced myself as a real estate investing speaker. The seminar is at the Golden Nugget Hotel from Aug 8~10.
Saturday, June 6, 2009
I posted this ad to my private investing group;
My partner and I are offering this contract for sale:
29180 Williams Ave, Moreno Valley
Buyer pays all sales costs
Escrow to be at Rancho Hills
Escrow 14 days from today
Repairs: Needs complete interior detrash & rehab. landscaping, tree fell in back yard needs to be removed. Roof looks good. Basically, if you think cat pee smells like money you're about to know what Fort Knox smells like. I would suggest bringing a bottle of Odorxit.
Price $45,000 Cash
MLS # Status Address Price Bd/Ba Yr Blt Sq/Ft Comments
I08129442 A 13898 Redlands BL $119,000 3/2 1980 1,099 Busy St, S/S
S574101 A 28986 Campbell AV $129,900 3/2 1988 1,202 REO
I09048871 P 29235 Williams AV $130,000 3/2 1977 1,430 REO
I08166268 S 13910 Redlands BL $115,000 3/2 1980 1,099 REO, Busy St
I09019566 S 29190 Williams AV $117,500 3/2 1977 1,330 REO
For more info & pics:
Feel free to contact either of us if you are interested.
I had 4 investors tell me they were interested. One went out to the house, crawled through a window and said "this is the worst house I have ever been in. There is a foot of trash and cat crap on the floor. I'll take it!"
I received the signed contract back on that house at 12:46PM. I went out and cleaned the trash up out of the yard, mowed the front yard, took some pics and posted the ad above. I just got paid $7,500 for mowing a lawn! Actually, we wholesaled it for $15,000 more than the contract purchase price of $30K, but I have to split that with my partner. Not a bad day's work. This is not the first property I have ever wholesaled, but it is the first that I found, negotiated and wholesaled. I celebrated by buying an ice cream sandwich. It was delicious! (And made of soy!)
Friday, June 5, 2009
1. Short sale on a nice Orange County house.
- went and smelled her stinky dog pee house for an hour only to have her tell me she couldn't make any decisions without her son. Who is the adult here?
2. $120K free & clear property. Owner asking $40K
- Owned! In escrow at $30K and already advertising it as a wholesale deal at $45K.
Go to my website for more info: Williams.
3. Updated house with a $96K fixed rate loan.
- sat down at my computer and couldn't bring myself to drive 1.5 hours one way to go see it. Called my partner and said I just couldn't do it after what I went through on the Nicola deal. We talked about it thanks to Pete Fortunato's ideas we decided to bring in a local agent out there as a property manager for 40% of the deal. He is very excited about it. My partner and I did a 3-way with the seller and everything is looking good so far.
4. Offer from a successful REO buyer to do a deal together in my city of Riverside.
- Not sure on this one. I need to follow up. These are basically all cash deals and I don't believe I should have to use my cash to buy real estate.
I also have a short sale that is starting to look like it might pop here soon. The agent called me today and said they were going to open title.
We are also getting ready to close on our Anahiem house. I called a few pool companies today to get estimates for replastering the pool.
On another note; our Murrieta deal fell apart today. The buyer couldn't get financing because of his spotty work history so we are putting it back on the market. At least we get to keep his $5,000 deposit! I am very optimistic though because the market is hot right now and the other houses that are over 3,500 sq/ft are selling over $300K. We are asking only $285K. Since we now own this house I am going down there tomorrow to do some clean up and repairs (replace cabinet knobs & door knobs that were stolen).
Sunday, May 31, 2009
A very stressful week indeed, but I have always had the philosophy that things will work out. They always do. So far this weekend I have lined up some amazing deals;
1 - short sale on a nice Orange County house.
1 - a $120K free & clear property that the owner walked away from 8 years ago and is now asking $40K for, but said she will accept less.
1 - an updated house with a $96K 30 year 5.5% fixed loan that will rent for $1,100 and an owner who can no longer make the payments so she is moving in with mom. She has offered to sell the house to me with all the furniture included.
1 - an offer from a successful REO buyer to do a deal together in my city of Riverside. It is an REO that needs rehab. Looks like it should net between $30-$40K on a retail sale.
If everything works out I will get a nice spread on the short sale and pick up 1 or 2 more rentals & pocket some decent cash on the flip.
Friday, May 29, 2009
There have been many opportunities to purchase such frivolous items. Once, I closed a deal that netted me $40K so on the urgings of my wife, we went down and test drove a nice two-seater at Fletcher Jones. After I finished driving it around the block I handed the keys to my wife and told her to take it for a test drive. She didn't want to because she was afraid of damaging it. I told her she really should take it out because as long as she was with me, it was her last opportunity to ever drive one again. The salesman just looked at me with his jaw hanging open like a trout. I just couldn’t part with that much cash for a hunk of metal that I would drive around in to look at beat up old houses. My Gram trained me wisely. She used to say expensive cars are for every body else to enjoy and I believe she is right. I don’t need to stroke my ego with a car that is going to end up as a piece of junk some day. I would rather parlay that cash into another rental home.
I see my friends in other businesses far exceeding my current position. I know my assets will out live the income from their companies. The day they stop showing up and unlocking the door is the day the checks stop showing up in the mail box for them. I believe this is what drives me to keep rolling my snowball.
I try to live a frugal life. I scan over my credit card statement every month to see where I could have saved money. I don't eat out very often. I don't hardly ever carry cash on me and I am terrified of ATM machines. I give my dogs 1/2 a biscuit each instead of a whole one. I use old jars as cups. I recycle my dental floss. Just kinding. That is way too disgusting. I think I will post to my mastermind group about frugality and see just how cheap we are collectively. You want to talk green? Just hang out with a group of real estate investors. We recycle everything!
However, I am waiting for that Mike C day. Just when I think I have made yet another outrageous decision, the clarity hits me that I am no longer required to play the game. I can stop going in circles and sit on the sidelines if I choose. I can buy that pizza joint if I want or open that bar just for fun.
Real estate investing is an amazing...job?, profession?, life path? I don't know what to actually call it. A hobby that has the potential to pay well I guess. I have seen no other business that can provide you with such sweeping life changing moments the way putting together a fine tuned real estate deal can. I don't know if it is addicting or just the hard driven desire to achieve my goals that keeps me searching for the next deal. I noticed recently during a slow period, that I was actually depressed because I didn't have any deals lined up for escrow. I had a sort of fear about where and when the next deal would come. Sure enough though a deal comes along that is so amazing I can't even believe I am the one that did it! Trying to comprehend the sheer concept of such a great deal leaves me at pause. I have read books about buying such properties and to actually do it is such an awesome feeling. Of course, I have purchased properties sub2 in the past and I will even go so far as saying more than a few. I once bought a house sub2 $700K in loans so $178K is nothing scary. It is the terms that make this such a killer deal. A very good friend of mine said buying a rental property in Orange County is like dancing with the prom queen.
I would rather have 10 such properties in Orange County than 20 better ones in Riverside. Maybe even 30. I truly enjoy living in Riverside, but Orange County is one of those special places to live. There are few places on Earth that provide such an unmatched quality and opportunity in life.
Back to thinking yourself rich for a moment; I can see myself in a place where I will no longer need to raise the capital from private investors to do deals or be overly concerned if I don't have XX amount of income lined up. But I want to enjoy being here today. I don't want to wish my present away. Outside of all the crap that goes on in the World (I try not to watch the news, but can’t help to check out the Drudge Report every so often) just being here in California and having the people that I have surrounded myself with is an absolute paradise every day.
Tuesday, May 26, 2009
Here is the real problem: Sure I could use the $40K profit I will split with my partner ($20K each), but I just bought a house in Anaheim for under $200K!!! If I got the $20K in cash it would just get used up lubricating the corporate machine. This property will rent for $1,800 and if I redo the pool I could probably get closer to $2,000. On a rehab for rent I think I could get it done for under $25K. I would probably cave in the pool and that would save $7~8K alone. The house needs a ton of work, but the roof and water heater are new! I definitely have to gut the bathroom, but I might be able to salvage the kitchen. My retail strategy includes bringing in a private money person I have lined up for $50K. That means at the close of escrow my partner and I will each get checks for about $21K. This money of course is to be used for the rehab, but it is still nice to do a no money down deal AND get paid at the close of escrow. However, I do not believe in pulling out profit before I sell because profit is only realized when the property closes escrow. Everything else is speculation. I think this is a big mistake some investors make. I believe the old saying "you make your profit when you buy" is totally incorrect and actually just plain stupid. How do you make money buying something? The only thing you do when you buy something is spend money. I have reworded this statement and hope you will agree my way makes much more sense; "you establish your profit potential when you buy, you realize your profit when you sell."
If we do not take the private money and instead rehab for rent I think we will each be out of pocket about $15K. We have another deal that we haven't been able to sell yet, but if we get it sold soon we will take the money we recapture from that deal and use it to fund this long term hold. We will have a cash flowing rental in a great location. Decisions, decisions.....
Monday, May 18, 2009
I have Oak Meadows in escrow and we are supposed to close on Wednesday. The buyer’s agent emails me and asks for an extension. Not good. We have already given him 1 extension and now he wants another 2 weeks. I think he is going to have to start paying per diem. My partner and I have $100,000 of private money in that deal plus $100K+ of our own. I don’t like being in this situation and can’t believe I am back here again. Now I have to minimum pay my dang credit card so I have money to pay my mortgage and bills. I hate doing that because I don’t like to pay interest.
My Wallace court property had some serious issues. The septic system failed and sewage started flowing down the street. The city has pulled my water meter because of the mouthy gangster tenants. Now they won’t have water until Wednesday (about 2 days). I could probably get it turned back on if I call which I will do later today. I have a company hooking me up to the public sewage system. The total cost will come in somewhere around $8,000. The permits are about $3,500 and I got a check in the mail today from the state for $3,200 (tax refund). Looks like the state is covering the cost to connect to the system! I have a few other deals going, but nothing amazing. I have a house in Anaheim that I hope to get under contract. Needs about $40K in work and the owner owes about $180K. It should sell somewhere in the range of $300-$320K.
Monday, April 27, 2009
I am speaking Wednesday night at Investor’s Workshops. Seller financing is the topic. Man I love seller financing.
I have also been making offers on REOs. Not a lot of offers, but I have sent out about 5 already.
Tuesday, April 21, 2009
Those who read it really enjoyed it. Thinking was one of the most recognized parts of the books. Many people said they act, but fail to think. We then discussed the theoretical question “Would you rather have $1M cash or the income stream from $1M invested at 12%?” This is a real thinker. I went with the income stream. There is a lot of depth to the saying “Cash in my hand is like an ice cube in my pocket; Gone by the end of the day.” ~ Pete Fortunato.
It was a good meeting. Our next book is Crucial Conversations: Tools for Talking When the Stakes are High.
After lunch I went and looked at houses in Rialto. That is going to be my farm. I found a two that I liked, but one that I am going to make an offer on. I may offer on both, but the one house by the commercial building does not interest me as much as the other. Kids tagged the heck out of the second house, but I think a few security lights up around the outside will stop that. Besides, it is a nice house and I think I can sell it quickly.
Sunday, April 19, 2009
I am working with two mortgage brokers on securing a large pool of private money. It should be a very interesting ride if we get that going. I am also making offers on REO properties now; A minimum of 1 per day. I am shooting for 3.
I attending Financial Freedom taught by Gary Johnston and Clyde Wilson. An excellent seminar. I will definitely be putting some of that knowledge to use. I plan on taking my wife next time it is in town.
Well, not much else to report. State of the economy: BAD. President Obama is in office. Kind of cool to have him as a President. I hope he does a good job. I personally think the things that he is doing as far as bail-out money is a huge mistake. Better to let the free market prevail. But, who am I to make that kind of decision.
Friday, March 13, 2009
I am sitting in SLC airport. I missed my flight. I was stuck in inspection and then I decided to waste time getting a Starbucks. I don’t know why I did that. I could be on a plane sleeping, but instead I am sitting in an airport very tired. I will use this time to my advantage and get my credit card statements entered into Quick Books.
I had a great trip here. I am in escrow on a 4 unit building. It has a garage that is rented out @ $165 a month as well. The units are currently rented at $300-$395 each. I believe they should be about $600 each and will immediately implement my beliefs on the wills of the existing tenants. Based on my projections I should be able to get about $1000 a month cash flow out of this bldg. I am very excited about this. I purchased the property for $162,000 with 10% down. Seller to carry back financing at 6.5% amortized over 30 years due in 10. I have the option of extending for another 5 years if I pay 10% of remaining principal balance which is to be applied to principal balance. Essentially, I get 90% LTV for 10 years and 80% LTV for the last 5. I think this may be the best deal I have ever done as far as negotiating a purchase for long term hold.
Sunday, March 1, 2009
We are still sitting on the Brea mobile home. My partner referred to this as our Pro Bono work for the year. Not the business I was hoping to get into.
Lunch is going great. I think we have developed a great group of people. Everybody seems to be doing business and we have excellent discussions almost every week. I now have a gavel!!
I am speaking at the North San Diego Investment Club. I have been working on something, but not really sure where I am going to take it. So much to talk about. I was reading the earlier part of my notes and see that I started investing with a Mike C deal in Aug 06. This is my 2 ½ year anniversary!!
Oh, I also am in escrow to purchase a duplex in Syracuse, UT. Not much cash flow, but seller financing. It is in a great area and I think once the outside of the building is pimped out it will rent for much higher. I really like UT. Very nice over there. I have also been working on my books. I will try to get something done tonight. I am almost finished and I would like to get my taxes done.
Looking for the next deal!