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Is There A Right Time to Buy Real Estate?

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Has this happened to you? You just decided to pursue the endeavor of stepping out of your comfort zone to make a better life for yourself. You have listened to the successful stories of others who have made the jump and realized “I can do this!”. What is this life-changing decision? You made the decision to invest in real estate. You are super excited about all the possibilities that are out there. Because of this joyous feeling you want to tell others about your decision that is going to change your life forever! With the anticipation of knowing your friends and family will be happy to hear the news of your decision, you tell them of the future possibilities. However, their response is something unexpected that you were not ready for. You are told this is a bad time to buy real estate.

Your feelings are crushed. How do they not see what I see? you ask yourself. Could they be right? You know your friends and family only want what is best for you. Maybe you remember hearing the news talking about the economy and you begin to second-guess your decision.

Buying real estate is a significant decision, and timing can indeed play a role in making a successful purchase. While the real estate market can be influenced by various factors such as interest rates, location, and economic conditions, determining the “right” time to buy can be challenging.

When is the right time to buy real estate?

This is the biggest question a lot of new investors ask. Is it possible the people you heard tell you about being successful in real estate started their investment journey when the economy was a perfect time to buy? If investing in real estate makes you successful then why isn’t everyone doing it?

The biggest challenge for new investors is their mindset. In order to be successful, one must change the way they think. Although it could be true the economy is bad for everyone else. It doesn’t mean it has to be bad for you too.

Think about how when everyone else is telling you it’s a bad time to buy, you as an investor should realize that this could be an opportunity to negotiate better deals. There are going to be people in good or bad economies who need to move and sell their homes. This should give you a perspective that allows you to think outside the box.

Watching what people do can benefit you. When the news and everyone else is telling you to stay away, there could be an opportunity to turn that into an investment opportunity, especially when the topic is real estate.

The best time to buy real estate is when your own financial readiness and personal circumstances allow you to. Ultimately, the “right” time to buy real estate is when you are financially prepared and find a property that meets your needs and aligns with your goals. When there is a deal and the numbers are able to allow you to cash flow, then it’s a good time to buy. If you are unsure how to do this, then you need to find the right coach who will be able to teach you. Sometimes teaming up with someone else as a Joint Venture (JV) could be the right option for you.

The answer to the question is it depends. It depends on your financial goals and circumstances and whether your mindset is ready to embark on the journey of investing. It also depends on the deals you are looking at.

The Interesting Thing about Taxes

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In one of my earlier posts, The Book That Changed Everything, I mentioned a book that changed how I think, which fueled me with what I needed to chase after investment properties. In this article, I am going to go over the four different tax brackets that are mentioned in detail in the book Rich Dad Poor Dad.

The Overview

The four different tax brackets that are broken up in the book are employee, business owner, self-employed, and investor. Each one pays different amounts in taxes. If this is your first time hearing about this, it is surprising to think about the amount of taxes each category pays in taxes.

Most people are employees who work every day building someone else’s dream and who hope to one day be able to retire with an IRA, or some kind of pension. This is most people in America. The employee pays approximately 40% of their wages in taxes.

Business owner is really for big business. This person has a dream and goes for it, they probably want to build a legacy for their family or not have to rely on someone else to take care of their family. They can leverage other people’s time for money. This group of people only pay 20% of taxes.

Self-employed people are the boss and the employee. They have the freedom to work when they want and take off when they want. An example is a massage therapist or someone who makes their own hours. This group of people pays approximately 60% in taxes.

The last group is the Investor. These people can leverage debt and abide by the tax codes to make their income. The investor pays 0% in taxes.

Employees and self-employed trade their time for money. The business owner trades other people’s time for money, and the investor trades debt for money.

Real Life Example

Here is something to think about…imagine if you are an employee making $100,000 a year according to this bracket, you are only taking home $60,000 a year. The self-employed have it even worse. If they are making $100,000, they are only taking home $40,000. Over half of the population doesn’t even make $100,000 a year. The Business owner and the investor are able to make their money and reinvest it in other assets.

Most people know about State Taxes and Federal Taxes because these are taken out of our pay. Remember the money we are taxed on is also taxed when we go to the grocery store or make purchases. Not to mention there is a death tax, inheritance tax, vehicle registration taxes, property taxes, and the list goes on. Then there is Medicare and Medicaid. It’s also interesting we are paying into social security, which they have been talking about for years that it will become obsolete soon. All of this money we have paid, we will never get back as an employee or self-employed.

When someone decides to start a business, purchases for the business can be written off, and there are tax deductions. Company vehicles, when placed under the company can be depreciated, and properties under the business can be depreciated. There are a lot of opportunities for business owners. You should consult a CPA who helps investors if you have questions.

What makes the investors so unique is they have the skill of leveraging debt. How do they do it? Let’s say for example I see a 17-door apartment building for sale. I decided to buy it and I placed the property under my LLC. I am going to get a 30-year loan. I may use a private money lender for the down payment or I could use my money, but why would I use my money if someone else is willing to give me their money? Before buying the apartment, I am going to want to make sure I can add value to it and the numbers allow me to make a profit. Maybe I can upgrade the rooms by modernizing them and improving the outward appearance to add value to the property, and once updated, I’ll increase the rent.

Once I’m done in 3-5 years, I am going to do a cash-out refinance, pay off my private lender, pay myself a portion, and reinvest the rest. The money that I refinanced cannot be taxed because I am paying myself with debt. Debt cannot be taxed. This is an example of how the investors pay 0% tax.

DISCLAIMER: I am not providing financial or legal advice. Investing when not done properly is risky and only should be done with the proper education and guidance along the way.

networking

Unleashing Success: The Power of Networking in Real Estate

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Many investors I have listened to in the past have all said the same thing, Real Estate investing can not be done without a team. To be successful you must find people to help you get to the next level. Networking is key. If you are just getting started, it’s important to find people to give you understanding in the area you are focusing on. Make sure you find a coach.

When we purchased our first property we found our lending team helped give us step-by-step direction on how the lending process worked. This allowed us to see a little more of a picture of how the process worked and later helped us when we decided to make investing our career. Our Realtor was a great communicator who was constantly giving us updates on the real estate side, such as inspections, explained due diligence to us, and was great at staying up to date with our lender.

If you don’t understand to process you are going to enter into real estate blindly. Although it may teach you some lessons, it’s much less stressful and less discouraging to find people who have already made mistakes to teach you. This is why networking is so important.

Ways To Network

With everyone having access to the internet, it is much easier to find people to help coach you towards your goals. There are many groups on Facebook, you can join your local Real Estate Investor Association (REIA), or go to a meetup with like-minded individuals who will help you excel. Other ways you can get involved include; reading reviews of different coaches in the niche you are in or signing up for one of their programs.

What I like about Facebook is I can find a group in my area of people who have similar goals, some of whom have already made progress in areas I am interested in. I can ask them questions individually or post on the group. The group is great for getting more of an understanding of what I want to know about reliable contractors, cleaners, lenders, or anything else.

The Real Estate Investor Association has a selected time every month when a group of people like you meet in person to discuss different strategies for investing. It’s a great time to meet people exchange business cards, and network.

Although these are fantastic ways to network. If you are interested in investing, but don’t have a clue how to get started. It’s probably a good idea to find a coach who specializes in the strategy you are interested in pursuing. Bigger Pockets has different resources and guests that may help you find someone in your field of interest.

The first coaching group that I joined was Robert Kiyosaki’s Real Estate Cashflow Blueprint. This helped me get a good grasp of what real estate investing was all about. It didn’t go into the different variations of investing, but it provided me with the fuel I needed to go after my first deal.

If you are not ready for your first deal or even your next deal, networking and learning will help you achieve your goals and get you where you need to be.

Need Private Money?

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Over the last several months, Rosie has been working hard with real estate investor Pace Morby to learn about private money lending. He has an online course on a type of lending called the Gator Method that is only available at certain times. Pace has a great community of entrepreneurs who are working together to help other entrepreneurs become successful in real estate through various forms of creative finance.

What is the Gator Method?

The Gator Method was designed to help new investors use other people’s money (OPM). There are lenders whom investors can borrow from, but with the Gator Method investors are not required to have their credit checked (although some lenders do), the interest can be negotiated, and they can borrow small amounts of money quickly.

Let me give you an example of how this can help you. There are a lot of people who are learning about wholesaling. It seems it is the next biggest thing right now in the real estate world. However, if you are just getting started and you don’t have money for escrow or due diligence what are you going to do? You could get a personal loan, but it takes time for the funds to transfer. If you need funds immediately the Gator Method is a great tool for you.

With every hard credit check to get funding, it impacts your credit score. This is why most investors find private money lenders to help them with their deals. According the Credit Karma, hard inquiries stay on your credit report for up to two years. If you are someone who wants to work on multiple deals every year and you are using traditional lenders, you will eventually have your credit affected and the amount banks will give you will decrease.

Some Gators have a set amount of interest depending on the type of deal. However, when you begin working with private money lenders (PML) and build the relationship by paying off the loan as agreed upon can be room for negotiating interest.

If you have a wholesale deal deadline and need to put down money for escrow or due diligence look no further. Funds can be given to you fast once the agreed terms are set. Just like a bank, each Gator has due diligence they must complete on their end to ensure they will get paid back. You will need to fill out an application and once approved you will sign a contract with what the expectations are on each end.

If you are new to the investor world and need funding, reach out to us. We provide funding with no minimum amount. Let us know how we can help.

BRRRR It’s Cold Outside

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With the winter months approaching, it seems appropriate to talk about an investing method in real estate called BRRRR. BRRRR is an acronym for Buy, Rehab, Rent, Refinance, Repeat. It sounds simple, right? If you do not know what you’re doing this could be a catastrophic approach to your real estate journey.

Although BRRRR has nothing to do with the seasons, I think it’s fair to say, that if not done correctly, it can leave you out in the cold. Why do I say that? This approach is best done with experience. If you don’t count the cost of renovating, labor cost, permit cost, and time associated with your project, you can end up spending more than what you were expecting. However, this can also be a rewarding approach when done correctly.

This is probably best done by finding off-market deals, or wholesale deals. It can be done by buying homes on the market, but you need to make sure you are doing your due diligence. It is always recommended to get the home inspected and if you already have a contractor have them walk the property with you and give you an estimate of how much the repair will cost.

If you are looking for an off-market deal or wholesale deal, you can fund this project with a hard money lender. Normally, the interest is higher than a mortgage. The reason for this is that these types of lending are meant to be for short-term projects. A good rule of thumb is the shorter amount of time the loan is needed, the more the interest will be.

Also, hard money lenders normally do not fund the entire deal and expect to need 20% – 30% of the loan amount as a down payment depending on the lender. If you don’t have it or are new to this strategy, it may be a good idea to consider finding a Joint Venture (JV) partner who will fund the needed amount. The positive side of having a JV partner is most likely they will have experience and will help during the process.

As mentioned before, when looking through the house, having a contractor with you could be beneficial. There could be things that need to be repaired that are not seen at first glance. It’s always a good idea to expect to pay more than what the estimate is because there can be hidden costs that are later discovered once the renovation begins. The benefit of having a contractor is you may be able to negotiate costs if they are taking on the entire project.

An example from our personal experience with our first property was when we found out when we wanted to empty our septic tank, we had a little surprise. We found out someone thought it was a genius idea to move the septic tank to the driveway located on the side of the home. During the renovation, we were driving on the septic tank as well as everyone we had working for us. This is not something you can plan for, especially when the County Environmental Health Specialist didn’t have it on the county map.

After the project is completed, the next step is to refinance your project. If this is going to be under an LLC, you could use a DSCR loan and have the property transferred to your LLC. There are other loans you can use too. Make sure you check with different lenders to make sure you are choosing what is best for you.

If you did your due diligence correctly, when the project is finished, you will refinance the deal, pay off all debt associated with the renovation, and have some money left over. With the money left over you can pay yourself, and position yourself to work towards making enough extra income where you may not want or need a JV if you needed one before.

DISCLAIMER: The information on this website is not financial advice but for educational purposes only. There are risks associated with investing in real estate and other investments.

The Book That Changed Everything

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Everyone who wants to begin their life journey to investing has a pivotal life event that occurs that causes them to change the trajectory of their life. For me, it was when I read the book Rich Dad Poor Dad. This author painted a picture that I was able to understand which made it clear to me where I stood in the scope of society.

Prior to this, I had never thought about how much the school system and the phrases I heard growing up impacted my mindset. I was always told to go to college so you can get a good-paying job with benefits and then one day retire. When I was in school, I was told to get good grades so you can get scholarships and go to a University. When you put the University on your resume, your future employer will see it and choose you from others who didn’t have the grades to go to that college.

This was constantly put in my mind that I was told to go to school, get good grades, and then get a good job. You could say this was an indoctrinated view that I grew up with. Think about it, we are taught early on to go to school, get a good job, pay our taxes, and then if we make it to that point, we can retire one day. We have literally been trained to build someone else’s dream.

Although there is nothing wrong with building someone else’s dream, if we are not fulfilling our dream inside of us, I think this is problematic. If our job or our current situation is making us feel stuck from achieving what we have inside we need to reevaluate and make changes. Sometimes the changes we need to make require planning and other times we can make those changes instantly. Every situation is different.

In order for us to switch gears and chase after our goals, we must first change our mindset. This often requires us to unlearn the things we thought we knew or believed to be true. This is much easier said than done. However, in order to grow we must be willing to make change.

As I mentioned at the beginning of this post, everyone who decides to invest at some point comes to a crossroads. That moment for me was when I read the book Rich Dad Poor Dad by Robert Kiyosaki. After reading this book, I decided I was going to take time and learn about investing in real estate. This is not a process that could be done in a day. It’s a process that requires the decision to continue learning daily. This is true for anything we want. The greatest things in life are the things we have to chase after.

If you are interested in learning more about financial literacy, Robert Kiyosaki has a radio show on YouTube called Rich Dad Radio.

Funding A Deal

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One of the most difficult parts of the process of investing is funding a deal. It is true 58% of startups have less than $25,000 at their disposal during the startup phase. This is probably the number one obstacle keeping people from moving forward with their business ideas.

Is there a way to come up with money to help you with your first investment project? Money is everywhere, we just have to position ourselves with the right people or the right information to access it. Before we purchased our first rental, our priority was to get our credit score where it needed to be so creditors would lend money to us.

Since we we didn’t know much about improving our credit score we used the help of a company called Fund & Grow. This company checked our credit history and was able to provide guidance to us to help us improve our score. Once it was in a position they would be able to leverage to work on our behalf, they set up an EIN for our business and were able to negotiate with creditors to build business credit.

If you have never started a business, the EIN is the social security number the IRS gives you for your business. This number allows you to separate taxes from your personal and business.

If you are a new business getting business credit when first starting out is not easy. Many people tell you that you need to allow your business to mature before getting business credit. Our representative from Fund and Grow was able to provide us with funding that we wouldn’t have access to without their help. Not only were they working on the business side, they were also getting credit for us personally.

Soon we began to receive credit cards from various lending companies with 0% interest for the first year.

DISCLAIMER: None of the information on this website is financial advice. This is just a strategy that we utilized to get started. We will not give anyone financial advice. If you need financial advice, seek the counsel of a CPA.

Unveiling Opportunities: How to Find Public Records of Property Owners for Real Estate Wholesaling

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In the world of real estate wholesaling, one of the key skills you need is the ability to find public records of property owners. These records are a goldmine of information that can help you identify potential sellers, negotiate deals, and close profitable transactions. In this article, we’ll guide you through the process of accessing public records for property owners in your pursuit of successful real estate wholesaling.

Understanding Public Records:
Public records related to real estate are documents and information that are accessible to the public. These records are typically maintained by local government agencies and are invaluable for real estate professionals looking to gather information about property owners.

1. County Recorder’s Office:
The county recorder’s office is often the primary repository of real estate-related public records. Here, you can find property deeds, mortgages, liens, and other documents that contain information about property ownership. Visit the office in person or check if they provide online access to these records.

2. Online County Websites:
Many counties have made their public records accessible online. Visit your county’s official website and search for a section dedicated to property records or the county recorder’s office. You may be able to search for property owners by address or parcel number.

3. Property Tax Assessor’s Office:
The property tax assessor’s office is another valuable resource. They maintain records related to property assessments, tax history, and ownership. You can often find information about property owners, including their names and contact details.

4. Online Property Databases:
Several online databases aggregate public records information from various sources. Websites like Zillow, Redfin, and Realtor.com often provide property ownership details, making it easier to find information about homeowners.

5. Title Companies:
Title companies are experts in property records. They can help you access ownership information, title histories, and other pertinent data. Establish relationships with local title companies to streamline your access to these records.

6. Subscription Services:
Some websites and services offer subscription-based access to property records and owner information. While these can be costly, they can provide comprehensive data that is valuable for your wholesaling efforts.

7. Local Newspapers and Legal Notices:
Keep an eye on local newspapers and legal notices. Occasionally, property-related transactions, like foreclosures or estate sales, are published. These notices can lead you to potential wholesale opportunities.

8. Networking with Professionals:
Build relationships with real estate agents, attorneys, and other professionals in your area. They may have access to property records and can share valuable insights or connect you with property owners looking to sell.

9. Public Record Websites:
Websites like PublicRecordsNow and FamilySearch offer access to public records. While primarily used for genealogical research, they can also provide information about property owners.

10. Utilize Freedom of Information Act (FOIA):
In some cases, you can submit a Freedom of Information Act (FOIA) request to government agencies for specific records. This may be necessary for accessing certain types of information.

Conclusion:
Mastering the art of finding public records of property owners is a crucial skill in real estate wholesaling. By leveraging the resources and methods mentioned above, you can access the information you need to identify motivated sellers and negotiate profitable deals. Always be diligent in your research and respect privacy laws and regulations when handling public records. With persistence and the right approach, you can uncover hidden opportunities in the real estate market.

Uncovering Hidden Gems: How to Find Phone Numbers for Cold Calling Homeowners in Wholesale Real Estate

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Cold-calling homeowners is a fundamental strategy in the world of real estate wholesaling. However, finding accurate phone numbers for potential sellers can be a challenging task. In this article, we’ll explore some effective methods to help you discover phone numbers for cold-calling homeowners and pursuing wholesale real estate deals.

  1. Public Records and Property Tax Data:
    Public records and property tax databases are valuable resources for obtaining phone numbers. Visit your county’s tax assessor’s website or local government office to access property records, including owner information and contact details.
  2. Online Property Listing Platforms:
    Real estate listing websites like Zillow, Redfin, and Realtor.com often display homeowner contact information. While not always comprehensive, this can be a starting point for your search.
  3. Skip Tracing Services:
    Skip tracing services are specialized tools that help you locate accurate contact information for homeowners. Companies like BatchSkipTracing, SkipGenie, or Spokeo offer paid services to access phone numbers and email addresses associated with specific properties.
  4. Direct Mail and Marketing Campaigns:
    When you send direct mail or marketing materials to homeowners, include a clear call to action with a request for them to contact you. This can encourage motivated sellers to reach out to you, providing their phone numbers in the process.
  5. Networking and Realtor Connections:
    Build relationships with real estate agents and professionals in your area. They often have access to databases and resources that can help you find contact information for homeowners, especially off-market leads.
  6. Social Media Research:
    Platforms like Facebook, LinkedIn, and even Instagram can provide valuable information about homeowners. Check if the homeowner has a social media presence with contact details listed.
  7. Property Management Companies:
    Contact local property management companies. They may have information about homeowners, especially those with rental properties, and can connect you with potential wholesale deals.
  8. Driving for Dollars:
    As you scout neighborhoods, make note of properties that look distressed or vacant. Knock on doors if you feel comfortable doing so or leave a handwritten note with your contact information, requesting the homeowner to get in touch.
  9. Local Directories and White Pages:
    Explore local business directories or online white pages. While somewhat outdated, they can still provide phone numbers for homeowners.
  10. Cold Calling Companies:
    Some companies specialize in cold-calling services for real estate investors. They can provide lists of homeowners with accurate phone numbers, saving you the time and effort of manual research.

Finding phone numbers for cold-calling homeowners in pursuit of wholesale real estate deals requires resourcefulness and determination. Leveraging a combination of methods, such as public records, skip-tracing services, and networking, can help you build a robust pipeline of potential leads. Remember to always respect privacy laws and regulations when obtaining and using contact information. With persistence and a well-rounded approach, you can uncover hidden gems in the real estate market.

Unlocking Success: How to Find Wholesale Real Estate Deals

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In the dynamic world of real estate investment, finding wholesale real estate deals can be a game-changer. Wholesale deals offer investors the opportunity to purchase properties at significant discounts, creating a path to substantial profits. In this article, we’ll explore some proven strategies and techniques to help you find lucrative wholesale real estate deals.

  1. Network, Network, Network:
    Building a robust network is paramount in real estate investing. Attend local real estate meetups, join online forums, and connect with professionals in the industry. Realtors, other investors, and even local property owners can be valuable sources of leads and information.
  2. Direct Mail Marketing:
    Sending targeted direct mail campaigns to property owners in your chosen market can yield excellent results. Craft compelling letters or postcards highlighting your interest in purchasing properties. Be sure to include your contact information and a clear call to action.
  3. Online Platforms:
    Utilize online resources like real estate websites, forums, and social media platforms. Websites like Zillow, Redfin, and Realtor.com can help you identify potential properties. Additionally, social media groups dedicated to real estate can provide valuable insights and leads.
  4. Real Estate Wholesalers:
    Partnering with experienced real estate wholesalers can be a shortcut to finding great deals. Wholesalers specialize in identifying distressed properties and can connect you with motivated sellers.
  5. Drive for Dollars:
    Get behind the wheel and explore your target neighborhood. Look for properties that appear vacant, neglected, or in disrepair. Take note of the addresses and research the owners. These properties may present wholesale opportunities.
  6. Foreclosures and Auctions:
    Keep an eye on foreclosure listings and attend property auctions. Properties in foreclosure often sell at a discount, making them attractive to wholesale investors. However, thorough research is essential in this strategy.
  7. Bandit Signs:
    Place “We Buy Houses” signs in strategic locations within your target area. These eye-catching signs can capture the attention of motivated sellers who may not have considered selling until they see your sign.
  8. Real Estate Agents:
    Develop relationships with local real estate agents who can notify you of potential off-market deals. Agents often have insights into properties that haven’t hit the market yet.
  9. Online Auctions and Wholesale Marketplaces:
    Explore online platforms and marketplaces specifically designed for wholesale real estate deals. Websites like Hubzu, Auction.com, and BiggerPockets’ Marketplace can be treasure troves of opportunities.
  10. Cold Calling and Direct Outreach:
    Don’t underestimate the power of picking up the phone. Cold-calling property owners can be an effective way to uncover wholesale deals. Be polite, professional, and prepared with your pitch.

Finding wholesale real estate deals requires dedication, persistence, and a well-rounded approach. Combining online resources, networking, and targeted marketing can help you unearth lucrative opportunities. Remember that success in wholesale real estate often hinges on your ability to spot potential deals where others might not. Keep refining your strategies and adapting to your market to stay ahead of the competition.