If you can’t seem to find any properties to buy, you have to stop looking where everybody else is looking. In today’s episode of the Real Deal Real Estate Show, Larry talks about where to find the best properties to buy and how to identify them.
Larry talks to people all the time that don’t even have the money to survive, that think they’re going to find a half million dollar property and that will solve all their problems. You have to cut your teeth with smaller properties first to establish the foundation that will get you started. Especially when it comes to contractors, experience is key. Without the experience to know what needs to be done you’re essentially giving the contractor free reign on what to charge.
There are hundreds of ways to make money on real estate, you have to use whatever you can to put a deal together. Every offer you make has four components parts and each one can be adjusted to make sure the deal makes sense for you and the seller. Being able to make your deals work is real power. If you want to change the way you make offers forever, check out the four day Never Step Into A Bank event to learn how.
There are only four kinds of single family houses: houses in foreclosure, houses you don’t want but could make money from, houses you can fix and sell, and long term income properties. Every house you look at will fall into one of those four types and if you can make offers on each type, you will make money.
If you want to make money from the properties around you, you have to realize that opportunities are everywhere if you know how to make the right offers on them.
Too many people are talking about the housing market going into another correction. The last market correction created a lot of havoc for lots of people but even if the market goes down it will come back. If you’re in it for the long haul you’ll be ok. If the housing market crashes again it’s not going to hamper the knowledgeable investors.
Since Larry structured his deals creatively, he could have reduced his rents and still kept his properties. When you’re doing seller financing it’s the only constant, everything else can be adjusted. None of the institutional requirements apply.
When housing prices go up they eventually have to go down, but we’re not at that point yet. When you are dealing with sellers, you don’t have the same problems and issues you have when dealing with a bank. The investors that are buying income properties to hold over a long period of time aren’t going to be as affected by changes in the market.
Remember, every income property is a business unto itself. If it doesn’t pay for itself when you do the numbers accurately, you do not want that property. Price isn’t as important as getting terms that allow the property to pay for itself.
Too many people do things that later on they wish they hadn’t done. Learn about the key things to remember if you want to be a successful investor. You’re never going to be successful as a real estate investor going to real estate meetings. You have to get in the streets and have conversations. Be smart and get yourself a good mentor, they aren’t going to be teaching forever.
On today's episode, Anthony Green, owner of Evictions Plus, shares important tips for dealing with the inevitable drama that comes from renting to tenants. According to Anthony, the background check is probably the most important step to mitigating your losses before they hit you. Tenants lie and you will be surprised at the stories you will hear.
The lease is also very important to protecting yourself, it doesn’t matter what state you’re in. Maintenance can be extremely expensive so having an indemnity clause that puts the maintenance expenses laid out as a tenant responsibility can prevent unscrupulous tenants from taking advantage of you. One of the tricks that Larry likes to use is walking the prospective tenant through the property and recording them confirming the condition of the property.
You have to vet your tenant before you rent to them. The credit report only shows that the person is capable of paying off their credit cards, the important thing you want to know is whether the person is keeping a roof over their heads or if they have a history of being evicted. When it comes to asking questions, there is a lot you can’t ask, but there are ways to find out what you need to know specifically things like full legal name and birthday. Anthony won’t run a background check without the tenant’s drivers license.
In addition to the lease and the background check, Anthony also talks about pet regulations, service animals and emotional support animals, as well as the issues you may face in starting the eviction process. For more info and lease templates, you can check out Anthony’s website at https://evictionsplus.com.
In this episode of the Real Deal Real Estate Show, Larry Harbolt talks about the four major components in putting a deal together and gives you a warning. There are always signs that a market is too hot, whether that’s real estate or housing, and you never want to buy at the top of the market. Learn about what signs you should look out for when investing in real estate.
When interests rates go up fewer people can buy houses and that means that interest rates going up can work against you. Higher interest rates mean that people can’t afford to make the same payments.
The same people who buy at the top of the stock market will make the same mistakes in real estate. If it’s too good to be true, it probably is. Real estate investors that didn’t have the fever in 2007 were the ones that didn’t get hit when the market crashed in 2008. Slow down when the market is too hot, you don’t want to find yourself on the end of the bed feeling like you’re going to throw up because you’ve overextended yourself.
The deals you put together should allow you to endure market conditions. Institutional lenders can make that somewhat difficult because they dictate the terms.
When you are negotiating with the seller you have to realize that every offer is made up with four components.The four components are price, payment, the length of the payback period, and the interest rate. Working directly with the seller to get what they want while you get what you want is very important. Any of those four components can be adjusted to make the numbers work for both parties. Pay attention to the interest rate because it’s one of the tools you can use to create a great deal. Get yourself a financial calculator or download the app on your phone.
One of the most important things that Larry has learned over the years is to look for the sweet spot in every deal. Not all properties are created equal, and in order to find the sweet spot for your deal you have to know what terms you are looking for and how much you can afford to pay every month to make the deal work.
Several of my students are in the middle of rehab projects. So I’ve been doing in-depth training on tips for rehabbing that can help generate a lot more profit. It’s a way to get a lot more money from the properties that you sell. I feel it’s important to share this information with all of you on today’s episode cause all real estate investors can benefit from these tips.
The theme of today’s episode is keep it simple. Instead of just wanting to buy a house, you have to start simple and learn all of the aspects of this business first. If you don’t do diligence, you’ll wind up in trouble financially. Start out in real estate investing where you have less to lose.
Most of the time when I initially talk to a seller, they ask for cash. However, many times I can use negotiating techniques I’ve learned to show them they really are open to other forms of payment.
First, I ask them what they plan on doing with the money. If they tell me they want to put the money in the bank, then I know they are looking for security because the money is guaranteed. However, they aren’t going to gain anything.
I attended a real estate clinic recently, and everyone I talked to said that every seller they approach only wanted cash for their house. But I want to debunk that myth because it is absolutely not true. This is one of the greatest fallacies that real estate investors believe. I’ve learned getting all the money at closing is what sellers might think they need but many times it’s really not the case.
There are so many different ways to make offers based on the property and the seller’s needs. You have to learn how to think through deals and learn something new in each situation. For example, a real estate investor wanted to buy a condo as a rental property but the complex had a rule that a buyer must live in the property or it must be vacant for a year before they can rent it out.
One of the critical points in real estate investing success is negotiating the best deals. If you don’t know how to negotiate, you won’t be able to buy income properties where you have to talk to sellers. There are certain techniques you can use when negotiating a deal.