Palm Beach Gardens Homes for Sale – The Present Character of Palm Beach Gardens Real Estate

If you risk upon an ideal opportunity to find about the pleasant and recently extending urban communities in South Florida, you will discover that Palm Beach Gardens is one of the quickly prospering ones in the Palm Beach County of South Florida. It is a standout amongst the most very esteemed urban communities in this a player in Florida for the reason that it could win the extraordinarily pined for a title “All America City” two times. Not all urban areas in the whole United States had the opportunity to get this title once thus getting it twice certainly mean the spot is truly something to take pride of. With saying this, numerous comprehend why Palm Beach Gardens homes available to be purchased keep on selling like hotcakes regardless of the present decay of home deal inside the USA.

Palm Beach Gardens Housing Market that keeps on selling at an accurate estimated rate. Properties those are situated in favorably gainful ranges of this city which is a piece of the Palm Beach County in the Southern piece of Florida. At present, homes that are available to be purchased are offered in appealing sticker prices in light of a noteworthy 40% drop in the quantity of properties sold in contrast with a year ago’s sale records. The positive risk that it gave is that purchasers were again given their energy to command the land market in this a player in Florida. Here are a few realities that clarify the current state of Palm Beach Gardens homes available to be purchased market:

The constant land advancements made ready for more decisions of homes accessible in various Palm Beach Gardens MLS. It comes about to the detectable winding down of various home costs. It is a decent risk for those homebuyers who are on a quest for new and sensibly estimated homes. Furthermore, land speculators welcome this as a decent event and opportunity in their craving to get hold of properties awesome for long haul venture interests.

Home developed engineers worked their earnest attempts to build up and advance the Atlantic Avenue as another fantasy place for shopping, eating and those people who adore the nightlife. It is one of the cases of activities that add to the appeal of Palm Beach Gardens Housing Market.

At present, insights uncovered that homes are more youthful at 21.7% contrasted with the national normal of 27.2. It additionally runs the same route with land gratefulness achieving 25.82% contrasted with 13.62% concerning the national normal. However, if you suspected this would mean higher costs for most properties in this spot, you are incorrect in your suspicion. It is because even with these appealing figures, land properties keep on becoming estimated according to property purchasers when you contrast it and different properties in the entire condition of Florida.

Private properties that used to be expensive are presently beginning to end up a practical decision for some home buyers. It appears like the value diminish in these properties serve as an enchanting pendant that keeps on being seen legitimately and impartially that won’t in any rate influence adversely the land-atmosphere of the condition of Florida.

Condo In Palm Beach Gardens

You will discover many lofts beneath R$350,000 in Palm Beach Gardens Housing Market

or in the town. These lofts which could be up to 100 SQ. Meters in developed range more often than not have a few rooms. In a few flats, one room will be a suite.

The apartment suite, for the most part, gives basic offices like a swimming pool, a little garden or green zone, stopping office, grill, a gathering zone and now and again offices for indoor and open-air amusements. All apartment suites give round the clock security.

If you go for a more costly loft valued above R$350,000, you will discover these in gated groups or upmarket apartment suites pleasantly situated on the ocean side or near the shoreline. You may likewise discover duplex lofts to this extent. The apartment suites give a lot of relaxation offices.

These condos are typically above 75 SQ. Meters in developed territory and have two to four rooms with suites. You can expect an expansive swimming pool, all around composed greenery enclosure, jacuzzi, grill, party range, assembly hall, and clothing region as a significant aspect of the regular offices. While each apartment suite may not give every one of these offices, they all give 24 hours security.

How to Decrease the Value of Your Own House

How to Decrease the Value of Your Own HouseOwning a house is part of the American Dream. Depending on where you live in the US – home ownership can be around 70%. That means that 70% of people own their own home. That is very high compared to other countries. Owning a home is usually a nice piece of independence and also part of building a nest egg for retirement. Home ownership is considered an investment. But then it is surprising how many home owners treat their own home as if it would be something they don’t own.

Imagine the case of a lady in Highlands Ranch, Colorado. She bought a ranch-style home in late 2004 for $265,000.00 – mainly financed through a mortgage. She owes about 95% of the house value to a mortgage company. Highlands Ranch, Colorado is a covenant controlled neighborhood. Strict rules are in place of how to maintain a certain level of landscaping and to keep the property in shape (+ many more things). The covenant rules give a development a more standard appearance, and control some of the activities that take place within its boundaries. When enforced, covenants protect property values. When buying a house in Highlands Ranch the new owner agrees to obey the covenant rules by contract.

The lady from our example above decided to let maintenance of her landscaping slip. The grass was growing out of control. Then summer came along and as she did not have an automated sprinkler system for her yard no watering was done at all. This took care of the fast growing grass in a certain way. The grass started dying in the dry Colorado summer. The outside appearance of the former $265,000 home took a toll. Currently a real estate agent estimates the value of this house in question at $250,000.

The lady from our example took her home and did not treat it as an investment. If she would have to sell her home now she will have difficulties to receive her invested money back. If she would continue to treat her home not as an investment she will eventually turn the investment into a liability and risk her credit history. Especially as her home is in a covenant controlled area she faces extra cost associated with her house. The covenant community association can even put a lien on her home and enforce the covenant rules by sending in a landscaping company to fix the problem – at the owners expense.

In our example the Highlands Ranch Community Association has started the initial process of getting the property back on track. A dated notification has been send to the home owner to bring the property back into compliance with the rules.

Overall – if investing money and letting interest in maintaining the investment slip, means the person involved is throwing money out of the window. If you have enough cash this is not a problem but who has enough cash to do this? Buying a house means to take on the burden to maintain it. Failing to do basic maintenance means to lower the value of the property.

How to Choose the Proper Entity for Your Business

How to Choose the Proper Entity for Your BusinessFirst, let me state that I’m not an attorney and the rest of this article is just based on my experiences so I’d advise you to contact John Hyre at realestatetaxlaw.com to get some solid, specific advice on your particular situation.

Also, this article is not going to discuss land trusts, which some of you may have just stumbled upon. A land trust is not an entity. Although it is frequently used in conjunction with entities, it is merely a paper device used to shield property ownership from the public.

When I first got going, the recurring wisdom was that an investor should use a C corp for cash deals. By cash deals, I mean anything that throws off cash quickly. It might be a wholesale flip, retail assignment, rehab and retail, option, etc.

There were numerous reasons why this was and is recommended. First, the C corp offers great liability protection and allows the owner to take advantage of fringe benefits, thus draining the corp of excess profits through legitimate expenses.

What I’ve learned the hard way is that this entity is not necessarily better for cash deals than other entities unless you’re doing serious cash numbers. By this I mean that the added benefits that a C corp offers are not available to you without a ton of cash coming in.

Stop and think about it for a moment. Are you going to generate enough cash to pay normal operating expenses like salary, marketing, funding, overhead, etc. and still have cash remaining to set up company programs for retirement, medical, insurance, education, etc.?

Typically, the answer’s going to be “No”, at least during the formative years. The primary downside to a C corp is that any losses, paper or otherwise, do not flow through to your personal tax return. You don’t get to use them anytime soon.

When I started, the secondary recommendation for cash deals was an S corp because it did offer many of the same benefits as a C corp, yet allowed the owner to flow losses through to the personal tax return. Once the business was thriving then converting to a C corp was not difficult.

When I went through this research again about a year ago, the majority of responses I received was that I should use a Limited Partnership (LP) for cash deals with a Limited Liability Company (LLC) as the General Partner (GP). I’ve also heard others suggest using an S corp as the GP. Other recommendations included using an LLC by itself as the cash deal entity.

What about entities for the keepers? By that I mean any property that hangs around for a while and doesn’t cash out soon. It could be a rental, lease option, or any property with owner financing, including subject to (Sub2). What I was told there was the same; that an LP with an LLC as the GP was currently best.

The point here is that if you do spend the necessary time to research this issue (and you should), you are likely to get each of these responses and possibly more.

My experience is that any of these suggested entities is better than starting with a C corp as I did. Factors that should play into your decision process include setup costs and any state-specific laws for each of the entities. For example, in my state, Texas, the LLC is much cheaper to set up than an LP. However, the LLC is also subject to franchise taxes on gross receipts over 150k and the LP is not.

Confused? I agree it’s not easy to know what the right course of action is. Do you need an entity or multiple entities established before you do some deals? Absolutely not. Why go to the trouble of setting up companies for a business that you may decide to discontinue? How do you know if you’ll even like real estate investing until after you’ve done some deals? Why do you need to set up serious asset protection until you have something worth protecting?

My recommendation would be to begin to research the various entities for your state as you continue to work your investing business. In my opinion there’s no need to make things complicated in the initial stages. If there’s no obvious negatives to an LLC in your state, then perhaps that would be a good start.

I would not rush out and set up a separate entity for cash deals and a separate entity for keepers as I did. I would not set up an LP as my first entity as it involves at least two partners, one limited partner and one general partner. Entities are not set in stone. With the proper guidance and counsel from good attorneys and CPA’s, you can make changes to your business plans as the business grows.

Again, this is not something you have to figure out when just starting. Find someone very knowledgeable about real estate investing, like John Hyre mentioned above, and begin to ask the tough questions so you can make informed decisions. As your business grows, your asset protection can grow with it.

Thanks for reading. Until next time, good investing.

Is There Risk in Real Estate Investing

Is There Risk in Real Estate InvestingI have learned that investing is all about research. So many people express how risky real estate investing can be, however there can be no risk when you know what you are doing. Risk comes from being unsure.

Thorough research provides knowledge about your market or area of investment. In real estate investing knowing your market is the key. Know the population, employment, good locations, supply and demand for housing and other characteristics about your market. This is better than just assuming that property will go up in value or that you will get someone to rent your investment property.

There are a few ways that you can go about getting this type of information:

1) Speak to your city officials to find out the population projection for your desired investment market.

2) Use the Internet to do as much research as possible.

3) Put together a team of professionals. Realtors, lawyers, mortgage brokers, appraisers, property managers etc.

4) Read your local paper.

5) Tour the area and pretend as though you were a resident there.

There are other ways to find information. This may seem like too much work but would you rather put in less work and create more risk?

No Money Down Real Estate Investing

No Money Down Real Estate InvestingIf you really want to make a wealth of money in real estate you must learn to leverage a small amount of your resources to control a lot of property. One of the techniques I like to use is Subject To financing.

Although some states are attempting to pass legislation to regulate or ban this practice, it is still one of the best ways to easily finance a purchase. My advice is to check with a local attorney to verify if laws have been passed in your state relative to purchasing Subject To the existing mortgage.

What makes Subject To financing so powerful is the ability to take title (ownership) to a piece of property while leaving the existing financing in place. In other words, ownership passes to the Buyer, but the loan remains in the name of the Seller, or more precisely, in the name of the original Borrower. You can easily see why this is such a powerful tool: you can fund most or all of the purchase price of a home with the loan that is already in place! The buyer simply makes up the past due payments to bring the loan current, and commits to the Seller to make on time payments in the future, but does not need to secure new financing.

What about the due-on-sale clause that most mortgages contain today? It’s true. The lender does have the right to call the loan due – but NOT the obligation to do so. In fact, it doesn’t make sense for a bank, an institution that is in the money business, to call a performing loan due and risk forcing it into foreclosure. After all, a bank would rather have the on-time payments than the real estate.

What about the Seller? Why would they agree to placing their credit at risk? Since the loan remains in their name, they remain financially responsible. A motivated Seller however, is desperate to eliminate the responsibility for payments. They’re usually facing foreclosure. You’re offering the opportunity to remove the burden, AND at the same time improve their credit rating with on-time payments made in their name.

Are you currently using this powerful technique in your real estate business? Unless your state prohibits it, Subject To financing should become one of your first options for the purchase of investment properties. The bank benefits by having the loan payments caught up and current. The Seller benefits from debt relief and credit improvement. And best of all, you benefit by leveraging a small amount of money to finance your real estate transactions.

Understanding Opportunity Cost When Investing In Property

Understanding Opportunity Cost When Investing In PropertyWhile most investors have got involved in property investing because they understand the opportunities to make money through leverage and capital growth or high yields, I still see and hear of many who do not fully understand opportunity cost.

Remember anyone that gets into property is usually in it to generate money or income – how many deals/properties you own is insignificant.

So what does opportunity cost mean?

Well according to the encyclopedia, “Opportunity cost is a term used in economics, to mean the cost of something in terms of an opportunity foregone (and the benefits that could be received from that opportunity), or the most valuable foregone alternative. For example, if a city decides to build a hospital on vacant land that it owns, the opportunity cost is some other thing that might have been done with the land and construction funds instead. In building the hospital, the city has forgone the opportunity to build a sporting center on that land, or a parking lot, or the ability to sell the land to reduce the city’s debt, and so on.”

So in property investing terms, if an investor decides to invest £50k in a property in for example Wales, the opportunity cost would be what he could have made by investing in Spain, Ireland or Dubai. Or similarly if an investor decides to keep equity of 50k in a property, the opportunity cost is what he/she could alternatively have invested this money in and the resultant value.

Now again this will depend on your specific strategy – and many people are not too concerned about opportunity cost, they are just keen to buy 1-2 properties that can hold onto for 15-25 years to use as a pension. That is fine if that is your strategy – but for me that is too broad a strategy, carries risks and is not maximising the opportunities available.

For me I have always had a philosophy, rightly or wrongly, that I should always be working my money hard. What does this mean? Well as soon as I feel my money has made a significant return and the returns are likely to drop off, compared to other possibilities, then I will look at realising my profits and investing elsewhere ie when I feel the opportunity elsewhere is greater than the current opportunity.

The great thing with property is this does not necessarily mean selling, as you can refinance, and invest money elsewhere.

This is no different to any other type of investing, such as buying stocks and shares – you make/lose your money depending on what price you paid, and what price you sold at – although clearly with property is good opportunity to earn a regular income as well – if hold onto for 15-25 years you should make money, but most likely will be a few scares along the way!

To be a successful investor, must know when to enter the market, and leave the market. And the people that do best buy low, and sell high!

I’ll give an example – while buying off plan has now got a bit of stick in the UK – I have done it successfully over the last few years – but the key is having a clear strategy.

For example, by doing all my due diligence I have managed to buy property at the right price in right location, but then sold on within a year of completion as I felt that was the period I would see the maximum returns in – and opportunities would be greater elsewhere over the next 3 years.

So to go through the numbers, I have just sold one that I bought off plan last year 12 months before completion. I bought at a price that was already £10k below market value based on my research in an area that had little buy to let competition. This was secured with only a £5k deposit. On completion, I put another £28k into deposit – so tied up £33k of my own money. There was no stamp duty in this area.

I then put on market on completion, now even with things slowing down in the area, I have just sold it for a £23k profit. So I tied up £5k for 1 year, and a further £28k for 6 months, to get back £56k.

Why did I sell? Did I consider refinancing?

My first choice would have been to refinance and let out, but the rental would not have stacked up. So while the rental would have stacked up at the price I paid for the property, I would have had 56k in equity sat not doing very much for me. So as I do not forecast huge capital growth in the area over the next 3-5 years, and the yield was not attractive enough for me it was best for me to release this equity and find another investment – ie I felt there were better opportunities for me to spend my £56,000 on, to generate more money.

Now clearly when are looking into the future is element of risk and speculation and are no definite answers – so you are having to forecast as well as you can with the data currently available ie how you forecast interest rates, buying/selling costs, supply and demand, employment, the overall economy and market sentiment over the next time period in the markets/regions you are investing/looking to invest in.

Although opportunity cost can be hard to quantify, its effect is universal and very real on the individual level. The principle behind the economic concept of opportunity cost applies to all decisions, not just economic ones, for example when Steven Gerrard decided to stay with Liverpool last summer, his home club and where he is captain, the opportunity cost was what he could have achieved if he had moved to Chelsea. It will be interesting to see what he decides this summer- he may now feel the opportunity cost is too great to turn down.

Cashflow is Key

Cashflow is KeyI spoke to an investor 6 months ago who told me he was asset rich but cash poor.

What did he mean? He had bought several investments off plan, and several low yielding deals which he hoped would have good capital growth. Therefore while he had several good assets on paper, these assets were actually costing him money each month, meaning he had a negative cashflow.

This can be ok, if some areas of your life, or investments, are making a positive cashflow to balance this. However this investor did not have this, and he ended up being forced to go back to work, and selling a couple of these low yielding assets for a loss – as he was put in the position of being a desperate seller – that is, desperate for cash.

It is crucial to always be aware of how important cash is when running a business – which property investing is.

The reality is that without cash, you won’t last very long. This may seem obvious, however it is very easy to buy assets, and then realize you do not have enough money coming in each month – which can leave you in a very difficult position. Property investors must try and plan and prepare for all potential future events and market changes. This can include interest rate changes, economic changes or market sentiment changing, as well as changes in your personal life which you may not immediately associate with your property investing – such as promotion at work, or worse, being made redundant, or having children which can all make big changes to your cashflow as a whole.

So I would suggest, the most important aspect of planning, for a property investor, is not expected capital growth, historic data, cost of borrowing, or yields but is effective cash flow management.

Failure to properly plan cash flow is one of the leading causes for failure. I know how tempting it can be to overstretch yourself and put all your liquid cash into assets – and then due to an unexpected, or more likely unplanned for, poorly performing asset, find yourself over budget and desperate for cash short term. You then are looking to borrow cash, either through loans, or overdrafts at less acceptable interest rates. However if this runs out you can be left with difficult decisions that are forced onto you by poor planning. This usually involves selling an asset, at a price below its value, as you are desperate for cash short term to support your property investing business overall.

Cash flow serves several purposes.

Firstly it is used for meeting normal cash obligations such as paying mortgages, buying costs, development costs and covering voids.

Secondly, it is held as a precautionary measure for unanticipated problems. This is the area that usually is forgotten by investors. A cash reserve should be available for these unforeseen problems – this can be actual cash, or a flexible mortgage or overdraft, but must be available.

Thirdly it is held for potential investment purposes. The term “cash” refers to those assets that are liquid and have immediate cash redemption value.

There is not a problem with buying a property or land that costs money in the short term ie a plot of land to develop on, or a property off plan, indeed this can be very profitable – but it is clear that this will not generate cash in the short term – and therefore you must make sure this is properly planned into your overall strategy.

I always think it is important to have a good level of cash generating assets – ie generating more money than the costs involved with borrowing and maintaining the asset.

This gives you a positive cashflow which can help balance out less well performing assets, or can be held in reserve for emergencies or future investments.

The other attraction of holding cash positive assets is that if you are ever forced to sell an asset due to an unexpected change in your professional or personal life, there should always be demand for cash positive assets, and therefore you should be able to sell this on relatively easily.

For example, if a property development you are carrying out goes wrong or over budget, and you need extra cash – if you own a buy to let in the UK which is generating a gross yield of over 8% – or a net yield, ie after all costs, in any country of at least 2% – then this should be attractive to other investors and you should find a buyer relatively easily or be able to refinance this asset, which should generate cash quickly.

It is no surprise that when you go to the banks requesting more money, they want to know your monthly cashflow – they need to see from your projected monthly cash flow if you will have the capacity to repay the loans or mortgages.

So when you are forming your property investing strategy – ask yourself the following questions,

How much cash will my assets generate? How much cash is required each month? How much cash do other areas of my life require? And how much do they generate?

Ie. if you have a high paid job which you enjoy, which generates a high positive cash flow, or you already have assets generating extra cash on a monthly basis – you may be able to buy assets that will not generate money in the short term, as you can cover any short term costs, or unforeseen circumstances. You may therefore want to look at a longer timescale, and may go into property development, buy into a property fund, buy a plot of land – where you are comfortable tying up this money for a period of time, confident that it will rise in value, and you will have no short term need for this asset which could compromise the value.

If on the other hand you are pretty stretched already for cash on a monthly basis ie say cashflow neutral, you may well want to buy an asset that immediately will generate cash, or at least as soon as the mortgage, borrowing costs start ie a more traditional buy to let.

There are many ways to make money as a property investor – but financial planning is always key to ensure your cashflow stays positive to allow you to grow your property investment business.

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Rental Property Investments

Rental Property InvestmentsWhen talking about Rental Property Investments, the term ‘working capital’ has to be understood. There are two concepts of working capital: gross working capital and net working capital. Gross working capital is the total of all current assets. Net working capital is the difference between current assets and current liabilities. It may be mentioned here that though this concept of working capital is commonly used, it is an accounting concept with little economic meaning. It makes little sense to say that a firm manages its net working capital. What a firm really does is to take decisions with respect to various current assets and current liabilities.

The management of working capital refers to the management of current assets as well as current liabilities. The major thrust, of course, is on the management of current assets. This is understandable because current liabilities arise in the context of current assets. Working capital is a significant facet of rental property investments because investment in current assets represents a substantial portion of total investment. Moreover, investment in current assets and the level of current liabilities have to be geared quickly to changes in sales. To be sure, fixed asset investment and long-term financing are also responsive to variation in sales. However, this relationship is not as close and direct as it is in the case of working capital components.

The importance of working capital management is reflected in the fact that financial managers spend a great deal of time in managing current assets and current liabilities. Arranging short-term financing, negotiating favorable credit terms, controlling the movement of cash, administering accounts receivable and monitoring the investment in inventories consume a great deal of time for financial managers.

In the management of working capital two characteristics of current assets must be borne in mind. Firstly, short life span and secondly, swift transformation into other asset forms. Current assets have a short life span. The life span of current assets depends upon the time required in the activities of procurement, production, sales and the degree of synchronization among them.

Directionals Move Properties

Directionals Move PropertiesOne of the most effective and frequently overlooked methods of filling or selling a property is the use of directional arrow signs. I’m guilty of it myself, although usually I’m merely lazy instead of overlooking this great marketing technique. Being lazy usually costs me in terms of holding costs, especially if you happen to be in a buyer’s market as I currently am. Even if you’re in a hot market where everything is moving quickly, directionals will move your property that much quicker.

Yes, there are numerous other methods you can use such as: flyers in the neighborhood and large stores and shopping malls, ads in the large and small papers, listings on the internet, listing with a real estate agent, calling real estate agents to inform them, mailouts to apartment complexes, yard signs with flyer boxes, open houses, calling loan officers, emailing your buyer list, etc., etc. (I have one friend use advertises her properties on the cable preview channel and she says it works great. Unfortunately, that option isn’t available in my area.)

Why Do Directionals Work So Well?

Directional arrow signs work well for a number of reasons. First, they are targeted to the neighborhood where the property is located so the folks who will actually see them are the buyers or tenants who are already driving the neighborhood looking for properties. The second group of people who will see the signs are the residents who already live there. Many times the nearby residents will have family or friends who want to move into the neighborhood.

Flyers delivered to the neighborhood will also accomplish the notification aspect that there’s an available property, but what flyers don’t do is lead the prospect or prospect’s friend straight to the front door.

Why Not Just Use Typical Bandit Signs?

For those that don’t know, bandit signs are the road-side signs that many people utilize to advertise their business, favorite politician, and/or properties for sale or lease. The signs come in many colors and sizes, some professionally done and some hand-written. The nickname bandit signs stems from the fact that many municipalities have sign ordinances that prohibit their use or restrict use in the public domain or right of way.

The primary weakness of typical bandit signs for marketing a property for sale or lease is that the sign provides a little information (often impossible to read while driving by) and a phone number. If I’m out looking for properties today, I don’t want to leave a message or turn around to go see what the sign said. I want to drive by NOW, not tomorrow, not later today, right now.

How is a Directional Arrow Sign Different?

Who said anything about one directional sign? I’m talking an entire series of signs that leads the prospect from the main thoroughfare all the way through the neighborhood to the driveway of your property. There’s no thinking, major squinting, turning around, or phone calls involved here. “Oh, honey, turn there quick.” Then it’s “look, there’s another sign, turn there.” etc., all the way to the property. Then, of course, there’s more information including contact numbers available at the property.

Okay, So How Do I Implement This Technique?

Here’s the way I do it and you should tweak it and improve to suit you. When a property becomes available, I study the neighborhood and determine the “best” ways to lead prospects to my property. By “best”, I take into consideration ease of navigation, neighborhood amenities like parks and schools, and surrounding properties. If there’s a back way into the subdivision or location, I map out both paths.

My target locations are every single corner that my prospects will need to turn in order to get to the property. If there’s a really long stretch without a turn, then I might need a directional arrow in the middle of that stretch to keep them coming. My experience has been that I will have to replace signs within the neighborhood only a few times, but I have to monitor the signs on the major roads and replace them fairly frequently. However, these signs tend to stay put much longer than a traditional bandit sign.

Then I simply go door-knocking and ask people if I can place a small directional sign in their yard. I intentionally do this during the day to miss folks because I’d rather not get involved in lengthy discussions about the property and I’ve got many doors to get to. Once I’m sure no one’s home, I leave a letter in the screen door or someplace where it will be easily seen. I drop this letter at all four houses on each corner on the route.

What Does the Letter Say?

I’ve found it’s important to NOT come across as a real estate investor or a company. I use an informal style and simply ask for help in finding someone to buy or lease my property. Points that I include in the letter are:

  • It’s just a small directional arrow sign
  • I’ll put it right by the corner and not really in their yard
  • I’ll make sure I don’t damage any sprinkler systems
  • They get a $20 gift certificate once the process is done
  • They get to choose the store, restaurant, etc.
  • Please call me to replace the sign if it gets removed
  • The first person who calls me wins

This technique has never failed. Frequently, I’ll have two or more people from each corner call me, but I’ve always had at least one person call to agree to the arrangement. Some of them have even taken serious offense to do-gooder neighbors who remove the signs as the property owner is concerned they might not get their gift certificate. I’ll describe the signs in more detail below, but I started adding “Placed With Permission of Owner” on the top of the signs and this reduced my losses.

The end result of this effort is that perhaps I pay out $160 to $200 in referral fees, but I have to run my $50 to $150 worth of weekly newspaper ads many, many fewer weeks. It definitely pays off from a monetary standpoint. The other benefit is that I now have a list of folks near each property (whom I’ve never even met) who think I’m great. Every single person will call me back after receiving their gift to thank me and the large majority volunteer that I’m more than welcome to do this anytime I need.

What Do the Signs Look Like?

The signs I use are basically the standard bandit signs cut in half. A normal size bandit sign is 18″ x 24″ and I use 9″ x 12″ signs for my directional arrows. I have a red directional arrow that takes up about 5 inches of the sign, leaving the bottom 4 inches blank. Within the red arrow I ask the sign company to put my message which could be “Owner Finance” or “Lease Purchase” or whatever you prefer. The message is easy to read.

In the blank space I use a large marker to write the property address. It’s important to leave enough blank space below the arrow to write the address in large numbers and letters. Also, as I mentioned above, I include the “owner permission” tag line on top of the arrow. I buy 36″ wooden stakes from Home Depot and attach an arrow sign to each side of the stake so the information can be seen coming and going.

If you don’t have a source for these signs, please contact BanditSigns.com to get some. They’re inexpensive and well worth the cost.

Reasons Real Estate Investors Should Beware

Reasons Real Estate Investors Should BewareCan you really make money in real estate? You bet you can, but you better beware of what you’re getting yourself into. I have been investing in real estate for years now and I can’t tell you how many properties I have bought from burnt out landlords or young couples that really started too soon.

Like anything the key to being successful in RE investing is education and practice. I have had some really good deals and others I thought were going to drag me down to the deepest of money pits. So for what it’s worth here’s a few observations I think will be helpful to investors just starting out.

Beware of the late night infomercial real estate gurus when they say you can build wealth in RE with only five or ten hours a week. To be successful you need to be on all the time. It’s all about marketing and following through and networking and did I mention marketing. I am astounded every time I meet a so-called investor and ask them for a card and they don’t have one. How is anyone supposed to know you buy houses or invest in real estate if you don’t tell them every chance you get?

Beware of rentals. Land lording is a pain. I don’t care if you have a management company in place or not you are always going to get calls about something being broken or some inspection the city wants to run you through. New investors should especially be aware that almost all of the tenant/landlord laws favor the tenants. If you want a taste of what can happen rent the movie “Pacific Heights” with Michael Keaton sometime. You may never buy another rental again. Remember peace of mind could cost you more than great cash flow.

Beware of contractors who want to be paid by the hour and not the job. Unless you are constantly there with them, they will take you for a ride every time. Make them sign a must be completed by clause and if they don’t complete the job by the said date, your cost should be discounted.

Beware of homes sold at sheriff sales or on the courthouse steps. Yes you can find some great deals there, but make sure you do your due diligence and always try to inspect the house first. Judgments and out of this world repair costs could chomp away at your potential profit quickly. I like buying the foreclosure properties after the bank gets them back. They are still “As Is,” but you can always inspect them and have an out if you use a realtor. Better safe than sorry right.

Beware of taking advice from someone who doesn’t own any investment property, rents or swears he knows of the next big market if only he had the money. I have learned and still believe you can never learn too much about something so when it comes to building wealth though real estate education really is the key.

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