Real Estate Investment - Real Estate With Gary Wilson

Writing an offer on an investment rental property? Which form should you use?

Forms to Use

My Investment Services

Always use Association of Realtors Forms when making offers. There are plenty of late night gurus out there who preach you should use 1-page “intent to buy” or some other short form for extending what may or may not be an offer. Don’t do this. You are wasting everybody’s time including yours. Aside from the obvious problem of its validity, especially in a court case should that happen, using anything other than pre-approved Association of Realtors sales agreements puts you at a competitive disadvantage. That is not acceptable; you want every competitive advantage possible.

Just for a moment step out of your buyer shoes and step into the seller’s shoes. Now imagine you as the seller receive multiple offers on your property, which often happens when buying investment real estate. One of the offers is this little one-page “intent to offer” with no hand money check but rather a promise of a hand money check should you accept the short and incomplete terms. The other offer is on the Association of Realtors Sales Agreement form, completely filled out, all terms identified and there is a hand money check as well. This is a legally binding agreement. Which offer are you going to take more seriously? Exactly, you will go much further negotiating with a substantial and official looking sales agreement than you will with one that looks like maybe you don’t care much about the deal. Not only are you in a better negotiating position, you are in a better legal position should trouble arise. With a real agreement of sale there is far less ambiguity. Also, you can still put in your contingencies for financing, should you choose to do so, inspections, appraisals, verification of income and expense data for the property, whatever you want to have in your favor.

Always remember that when you are making an offer on a rental property to always make the offer contingent on seeing the current owner’s financials on the property including all income and expense data for the last three years. No exceptions! The only time you can’t do this is when you are buying a foreclosure property (I know, it’s an exception). You also want to see current leases, any contracts the current owner has for services like pest control, property management, laundry, etc. You also want a contingency on seeing every single unit in the building you are buying. This is especially important in case you didn’t get to see all the units before you made the offer.

When you are making your offer and there are multiple offers or there is a “highest and best” scenario, you can use one of my favorite tricks. Let’s say there is a “highest and best” scenario and your intuition tells you to go full price on the property and the full list price is $99,900.00. You may be tempted to offer the list price or even $100,000.00 even. Go ahead and do that but add an additional amount of say $159.00. In other words your offer will be $100,159.00. This way if you are bidding against others and there happens to be another educated investor who sees the merit in offering full price, you will get the property for $159.00 or less because you outsmarted the competition for only $159.00.

On the first round of negotiating (with you as the only offerer), let them respond to your initial offer. Don’t respond right away. Instead, wait until the last minute to make them sweat a little. Then come back with a counter-offer that moves up only a little. You want to create the impression that you want the property but are already at or very close to your magic number. You leave the door open a little but not much. You don’t want to lose a good deal over pennies. Also, in your counter-offer make it an unusual number. For example, instead of coming back with $120,000.00, come back with $118.743.67. They may think you’re weird but your real estate agent will explain that you have done your homework down to the penny; you know your business, and what the property is worth. If it goes another round then you can waive one of your less important items, like the lawnmower you asked for. I always look for a few odds and ends to throw in my offers that I can then use later as throw away to get the deal done at a price acceptable to me. There are many more negotiating strategies I can share with you. You can read Rental Profits Without The Pain or better yet take the course “Rental Profits Without The Pain”.

For more information on writing offers and negotiating tactics please visit www.MyInvestmentServices.com. You can also call the My Investment Services at office at 1-800-931-2605, or email Gary@WinRealtyAdvisors.com

Choose the right form when writing offers

Written by Gary Patrick Wilson. May 7, 2014.

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”

Rent, Sell (Flip), Lease Option ? Which exit strategy is best for you?

Rent, Sell (Flip), Lease Option

There is always more than one way to make money!

I have seen more than a few investors buy and remodel a rental property with the intention of renting. Nothing wrong with that, that’s who I wrote this book for. However, many investors get to this point and wonder if they can just sell the property and cash in big now while it looks so good. I say, yes, maybe you can. If you start out on the rental path and later want to try to sell that is not a problem. If it doesn’t sell, keep it! You bought it as a rental anyway! On the other hand you cannot buy a house that you intend to flip, remodel it and then try to profit by renting it. It may work in certain circumstances, but not very often. If you are remodeling to flip a house you will use better paint, carpet and cabinetry. The ends will not justify the means if you rent. Your property will likely be over improved. You cost basis will likely be higher because you bought in a better neighborhood. Please read my other book on flipping property titled, Flipping for Profit like a Pro.

Generally speaking if you bought a property to eventually rent then you should usually stick with the plan. In that case you can read my book on rentals titled, Rental Profits without the Pain.

There is a hybrid approach to cashing in that works really well in a tight money market. A tight money market is a market in which borrowing money is a little tougher than normal. The basic concept is that of a lease with an option to buy. This is actually two different disciplines. Also, notice I did not say “Rent to Own”. NEVER do a rent to own. When you rent to own, you are earmarking a certain portion of the rent to be counted as part of the purchase price of the house. This gives the tenant an equitable interest in the house which is a loose form of at least one of the seven rights of ownership. What this means to you is that if the tenant stops paying rent or you have to evict them for any reason you will not be able to. The way the law works in these matters is that you will have to foreclose on the tenant because of their equitable interest in the property. An eviction may take about one month. A foreclosure will take at least a year or more in most cases. It depends on the state. What matters is that you put yourself in a very risky position with a rent to own. A lease option is not as risky.

A lease option is really two transactions. One transaction is to rent the property to a tenant. This is strictly a lease standing on its own two feet. The option is really an option document where you, the optioner, are giving the optionee (your tenant) the right to purchase the property at a later date. They have to purchase this option from you for a fee. The option fee is non-refundable. If they don’t exercise their option by a certain date you can either extend the option period for another fee or not extend it and they simply remain as tenants. If they do not pay their rent you can evict them because the option fee they paid you does not count towards the purchase price of the house. They just purchased the right to purchase the house at a later date. The fee they pay you covers the risk you take by taking your property off the market for the option period. The price is usually locked in so you have the risk of not realizing any appreciation in that period of time. You also assume the risk of normal wear and tear on your property. And if that’s not enough, you are doing the tenant the favor of giving them time to get their finances in order enough to secure a loan to pay you off. During this time you will be their biggest creditor. One of the big advantages to this is that if they don’t end up buying, you keep the option fee and can try to lease option again. I have had houses I lease optioned three times before they sold. I came out the winner not just because I got to keep the option fee but also because I charge more rent on a lease option and they generally take good care of the property because their intention is to buy. So even when a sale doesn’t go through, a situation most non-investors see as a failure, you still win!

To learn more about these different techniques please call me at 1-800-931-2605 or email Gary@WinReatyAdvisors.com. You can also learn more by visiting MyInvestmentServices.com. There are books and training courses designed for you to learn how to become an expert and profit in a number of ways with real estate investing. Visit MyInvestmentServices.com for more tools and information. Some books are Free!

Choose the best exit strategy for your real estate investment

Written by Gary Wilson 5/5/14, MyInvestmentServices.com

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”

Buy the most profitable property with the least amount of money and the least amount of time. Here’s how->

This is the exact process I developed when building my own portfolio of 250 rentals. It is also the system I used when representing other investors I taught and did 110 transactions a year with no assistants. Please feel free to use this in your own Real Estate Investing efforts.

Instructions for New Win Realty Advisor Students

Buying Rentals

This is the exact plan I followed when I made all of my investments. It is the plan I use while teaching several hundred students, and it is the plan I follow when I teach real estate agents how to work with investors. It is a good plan, follow it.

1. First we will have a telephone conversation to go over goals. At this point you need to have available cash or credit to continue.

2. Send in an email to me stating your name, email address, and phone number.

3. I will set up your search criteria on the MLS system.

4. Initially you will get an email with a link to the MLS system. The first property matching the search criteria will be shown with a drop-down box at bottom left allowing you to scan forward to other listings. You will be receiving the “FULL” listings. This first email will consist of several hundred listings.

5. Next, you will separate the good from the bad. Your objective is to narrow the list down to about 30 properties. You do this by comparing the list price to the market values for the area. The list price should be below market value. Also, look at the photographs of the property, the lot size, room sizes, and other characteristics of the property. This will take a few passes of the listings. As you narrow the list down also use the county web site for further research. This is a process you will get better at with experience.

– For multi-units my experience shows me that I should get $400-500 for 1-bedroom apartments, $450-650 for 2-bedroom apartments, $600-750 for 3-bedroom apartments. Taxes can be obtained from the listings. Insurance should be 0.5% of value annually ($100,000 property is $500 per year). I try to keep price per unit to $35,000 or less per 3-bedroom unit, $30,000 or less per 2-bedroom units, $25,000 or less per 1-bedroom unit. *NOTE: different areas will have vastly different models. Study your area and make adjustments accordingly*

– There are variables here like the condition of the property (turn-key vs. needing rehab)

– Trust your instincts to focus on what you think are the better deals and eliminate the rest.

– You will get better with experience and I will be guiding you.

6. The resulting list of 30 or so properties is your drive by list. Now you will drive by the properties to further narrow your search down to 10 to 15 properties.

7. At this point you will email to me the MLS #’s, (in a string separated by commas) of these 10 to 15 properties. At this point I will review your homework and narrow the list down further. I will make notes to show you my work. This will typically result in 7 final properties.

8. Now we will schedule an appointment to go see the properties.

9. After viewing the properties you should have a list of 4 to 7 properties that you will fill out the MAO, CASHFLOW and cost sheets for.

10. I will review this work and with my help you will decide which properties to make offers on.

11. We will fill out the sales agreement, make a photocopy of your hand money check, and provide both with your proof of funds to me. I will provide comps to verify your ARV(s).

12. Now we make the offer(s)!

To really grasp this process I recommend you take the accompanying training course for buying rental properties. To learn how, please call me at 1-800-931-2605 or email Gary@WinReatyAdvisors.com. You can also learn more by visiting MyInvestmentServices.com.

Written by Gary Wilson, Owner and CEO,

Buy the most profitable property with the least amount of money and in the least amount of time

My Investment Services

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”

How Do You Get The Best Deal When Buying Real Estate?

Just Say No to Debt:

Use Cash

There are several ways to purchase real estate. If you have ever read any of Carlton Sheets material then you know there are at least 30+ ways to buy real estate. Some are very good and some are not so good, depending upon your circumstances. We teach a number of ways to get cash at MyInvestmentServices.com. The bottom line is that the more money you borrow to buy real estate the more you will be at risk. The absolute best way to buy real estate is to use cash, pure cash, and baby!

Oh, I can hear millions of you now shouting “never use your own money!” Yeah, I hear you; the problem with all the no-money-down gurus is that they never mention what happens when life happens. That would be too scary. The truth is that people die, people have babies, people get married, people get divorced, people get new jobs and people lose jobs. It happens. It’s not a matter of “if” but “when”. So you have to ask yourself what will happen to your highly leveraged empire if the economy turns sour. What if there is a real estate bust like what happened in 2008 – 2010? What happens if the pool of decent renters is raided by lenders who need to loan money so they relax their standards like they did beginning in the 1990’s with the Clinton administration and continued until 2007?

I’ll tell you what happens, all of your good renters become homeowners and you get left with unreliable tenants. That’s what happens and that more than anything else will cripple your real estate empire. If it doesn’t then it will certainly put you in a horrible position when the economy spins into a recession and your properties lose a lot of value. Then you’re stuck with all these bad tenants wrecking your properties and not paying you their rent. Then you can’t get another loan to keep things afloat because the banks won’t lend you money anymore. Get the picture?

I can show you mathematically how you can build a stronger, less risky, and more profitable real estate empire by using all cash and only cash. If you graph it out it will look like it takes a while to get going, because it does. However, when your mega cash cow starts to give milk, look out! You will be a juggernaut that can’t be stopped. You will absolutely make a lot of money. No one can stop you, and you will owe no one. Better yet, the next time there is a recession you will be the one everyone is running to buy their properties. You will be King of the world! Who’s Your Daddy Now? Go ahead; take your best shot you no-money-down gurus.

Sorry, I had to take a break and calm down. Now having said that, I know that because you can borrow money now at around 4% that a lot of you will do it. Go ahead, I did it too. I can promise you though that in the end you will regret it and you will see that it will take you longer to build your massive money producing monster. If you do borrow, promise me that you will put down at least 20%. I recommend 25% or more. This way you will get the best rates and terms. Remember, all you borrower’s out there, to keep your ratios in check. Never owe cumulatively more than 2/3 of what you own and never have debt payments more than 1/3 of your gross rents. If you manage to keep to these ratios the banks will always love you and unless you are a complete moron you should always be making money.

Before borrowing from commercial banks to buy real estate, if you have a 401K, you should check with your employer because you may be able to borrow against your 401k an amount up to 50% of its contents. It gets even better, because you aren’t borrowing from anyone else. You are borrowing from YOU Inc.! And guess what? The interest you pay on what you borrow is paid to YOU too! And guess what else? It isn’t taxed either. You know, maybe our government isn’t so bad after all. The reality though is that our government does suck, maybe not as bad as other governments but it still sucks. In fact I bet there is one good guy in our government who was an entrepreneur at one time and saw this amazing opportunity to do something really good for a lot of people. The cost of borrowing form a 401K is usually a small administration fee. No application fees, no appraisal fees, and no junk fees of any kind.

If you are just starting out and don’t have a lot of cash lying around like us seasoned veterans, take heart. You would be amazed at how easy it is to form a partnership with an individual who does have money lying around. Sometimes a veteran real estate investor will partner with one or more newbies to teach them the ropes, and more importantly have one or more “bird dogs” out there to do the hunting. When they find a suitable prey the investor puts up the money then he and his protégé split the profits. I have seen this work with doctors also. In fact, it could work with anyone who has more time and less money.

Another way to begin acquiring real estate when you are starting out and don’t have a lot of cash is to borrow from a private investor. They usually charge more in interest and fees than a bank but they are also more open-minded and creative. They usually understand the real estate investing game and aren’t interested in forming partnerships or teaching newbies. They will often finance up to 100%. They may also loan you money that you secure with other property you have. They are really not that hard to find either. Some mortgage bankers and brokers keep private investors in their back pockets to keep a deal moving forward rather than watch it die an agonizing death where nobody gets paid. Private investors can be tough, I have used them, but I don’t recommend it although I know some of you will just have to try because you want that sweet deal. I get it, I really do. I ended up being okay but it did cost me a lot of money in interest payments.

Still another way to acquire properties when you don’t have cash is to use hard money lenders. They call them hard money lenders for a reason. It is a hard way to do business. They charge exorbitant interest rates and exorbitant fees to get the money. They usually have a very quick term, sometimes referred to as a balloon payment. In other words, you have three to six months to use their money paying interest only, then at the end of the three or six-month term you have to pay back all of the principle you borrowed. If you can’t pay it back they will take your property, and they will, trust me. Sometimes people use this method to buy a rental property that needs work. They will borrow enough money from the hard money lender to buy the property and rehab it so they can rent it out, then go to a commercial bank to get a traditional mortgage on the property and pay back the hard money lender, and have excess cash from the traditional loan to line their pockets.

For years when money was easy I would pay cash for a property and for the remodeling then borrow from a bank in the form of a traditional first mortgage with easy terms and a low interest rate. This way I would continue to build my rental property empire while at the same time increase the amount of capital I had to work with. Keep in mind that it all has to be paid back and if you are a borrower you have to keep your ratios in check or you will get off and stop growing or borrow from private investors, or worse yet, hard money lenders.

In the end Cash is King. If you use any other method to acquire real estate then you are putting yourself at risk, sometimes grave risk. Life happens and when it does remember the old saying: “The man with the Gold makes the rules”. If you don’t owe the banks and other people you get to make the rules. If you owe the banks and other people they make the rules and they aren’t as nice to you as you are. Don’t be a sucker and fall for all that debt crap. Be a man and pay cash.

Visit MyInvestmentServices.com for information, tools and guidance when investing in Real Estate. Written by Gary Wilson, April 25, 2014.

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”

Finding the right kind of real estate agent

The Investor Realtor

In the world of Real Estate Investing there is no other kind. If you are using your neighbor’s son then you are a loser and you will pay a dreadful price. Every real estate agent on the planet will tell you that he or she is the right agent for you and they are the best at helping you. Make sure you ask them how much real estate they own. How many other investors are they working with? If they have so many other investors then how do they have the time to help you? Keep asking questions. Eventually, they will run out of crap to tell you.

I originally got my real estate license because I was sick and tired of realtors who didn’t know what they were doing. The rules of engagement for real estate investing are 180 degrees different from the rules of engagement of the owner occupied real estate business.

My neighbor was my 1^st realtor. I had to fire her and it pissed off the whole neighborhood. She wouldn’t or couldn’t learn what she needed me to teach her. So I fired her and got my license. I eventually developed a system to teach other realtors how to work with investors. Trust me. It makes a huge difference. Having a traditional real estate agent try to help you with your real estate investing is like having a motorcycle mechanic work on your airplane.

If you invest in real estate the way I am teaching, you will one day own an airplane. Now imagine yourself getting ready to take your plane down to Florida to play golf and you just found out that your regular mechanic was sick and the airport had a motorcycle mechanic, who happens to be the air traffic controllers nephew’s neighbor, who just happened to be a recent graduate of the Acme school of motorcycle mechanics because he got laid off from his last job. How does that make you feel? Well, remember a lot of real estate agents are real estate agents because they got laid off from their last job and getting their real estate license took only 60 hours and cost only a few hundred bucks. Does it sound like they are highly qualified to help you invest your precious, hard earned money? I didn’t think so! Don’t be stupid. If you use one of these imbeciles you will end up losing your money, and wishing you were going down in that plane that the bozo motorcycle mechanic worked on! By the way, I have no problem with motorcycle mechanics in general, only the ones who are foolish enough to work on an airplane.

There are a few things you can do to enhance your relationship with your real estate agent. One of them is to sign a Buyers Agency Agreement. I have taken and have seen material from other real estate gurus who say you should have as many real estate agents working for you as possible. Trust me; they don’t understand agencies from the legal point of view, an ethical point of view, or a business point of view. In this business you need real players on your team. A good real estate agent who really understands the rules of engagement when it comes to real estate investing is worth their weight in gold. You wouldn’t have multiple tax accountants prepare your taxes, you wouldn’t have multiple lenders making you the same loan, you wouldn’t have multiple closing companies working on the same file, and so, why would you have multiple real estate agents sending you properties from the same pool of properties? They all are pulling properties from the same database and they all have the same tools and access. Using multiple agents is only going to piss them off. They won’t stick around and they certainly won’t give you their best work when they don’t have an exclusive agreement with you. Get real, if you were working for commission and a client was using multiple real estate agents how much energy would you put into that effort with little to no assurance of getting paid?

More importantly, you don’t want traditional real estate agents working for you. You want an investor/agent who is themselves an investor and/or has a proven track record of helping other investors profitably grow their portfolios using the rules of engagement I teach when I teach investors how to invest and real estate agents how to correctly work with investors.

The other important factor in using a buyer’s agency agreement is that the agreement affords you certain rights and requires the real estate agent to assume certain responsibilities that would otherwise not be in place and in the end may be to your disadvantage.

Another important piece of information is having Proof of Funds. This tells your real estate agent that you are qualified and it also gives them leverage and power when working with other real estate agents. Proof of Funds can either be a bank statement showing that you have the available cash to make a purchase or a lender pre-qualification, lender pre-approval for a loan or Line of Credit statement showing that you have the funds ready for you to borrow.

Think profitable business, a good Real Estate Agent is a critical member of your team. I strongly encourage you to treat them that way!

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”