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Saturday, June 27, 2009

An Educational Saturday

Nothing like spending a Saturday in a seminar learning real estate. Today was awesome! I attended the Title Research & Understanding the HUD-1 class taught be Shawn Watkins of Investors Workshops. There were close to 100 investors there and Shawn did an excellent job of explaining the material. It was a lot of work putting that together, but it is in the bag now and I think it was very successful. I really like the fact that many local club owners showed their support and helped us get the word out as well as showed up themselves. I think the information was very useful and it is not something that is presented anywhere else.

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

Sandwich Lease and a Missing Seller

My neighbor approached me in my driveway this afternoon. He recently purchased an REO over in AZ and has been living there all spring. He just came back into town and wanted to talk about why I let his grass die while he was gone. I told him that if I were taking care of the house the grass wouldn't have died, but I am not so it is his responsibility to take care of his own grass. He then asked if I wanted to lease his house from him. I asked what his payments are. (I already knew because I know what everyone of my neighbor's loans are.) He told me about $1,500. I asked if there weren't any reason he wouldn't lease it to me for about $1,500. He said he would. That was that. No paper work, no contracts, no agents. Just two men making a deal and it is as good as our word. Anybody that knows me, knows that as far as I am concerned the deal is as good as done. Of course, I will draw up all the paperwork to make it all legal and so that we each know what to expect from the other.

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

Typical Real Estate Transaction

So I did eventually kick the buyer out of escrow on my Murrieta deal. Well, I attempted to do so, but he refused. I put the property back on as active, found a new buyer for the same price, and put the property back into escrow somewhere else. Today, the old buyer sends me an email that says he is on track to fund by the end of the month. I just ignored his email. What a joke.

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

The Government's Solution

It is the month of June, on the shores of the Black Sea. It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.

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

The Momentum Is Building

I am currently in escrow with 3 properties. One I am wholesaling, one I am buying sub 2 and going to rehab and retail, and one I am selling. We are having difficulties on the last one and it looks like we may kick the buyer out of escrow. This is the Murrieta property. I put it active in the MLS on Friday and already have 2 solid back up offers so we will be putting it into a new escrow possibly tomorrow.

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

One Down


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

Comps:
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:
http://www.advancedhomesales.com/williams.htm

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 Out of 4 Aint Bad - It's Still 25%!

Quick update on the deals I am working on;

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).