The Lazy Investor
Here's a message I got from a reader:
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I have been "stuck" with high mortgage payments on the house
I purchased in June 2004 and I coudn't sell it for 6 months.
Now, I can't even afford to have it listed and pay 4-6%
commision without paying from my pocket. The house is vacant
and I must sell it a.s.a.p.! Would you know anybody
interested in buying a nice & clean 4bd/2.5ba/2car 1700sf
home in gated community SW Las Vegas, Spring Mtn/Buffalo
area, with all new appliances? I would appreciate your
suggestions or advice.
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My reply;
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Appraised value?
Asking?
What you owe?
'Bottom dollar' (price and/or terms)?
Without this, no investor will look at it.
Smart investors will not pay top dollar for a property in a
soft market - unless excellent terms are offered.
To find a retail buyer that will pay top dollar for a
property, Realtors(r) and ads in the paper work best.
My favorite way to get rid of any property is via
Lease Purchase/Option - gets higher rental rates,
better tenants and some up-front cash.
FYI, there's a lot of this 'Gotta Sell' stuff going around
right now.
Unfortunately, many didn't hear my report in May, 2004, when
I explained that the market was changing - fast. Hundreds of
'investors' (I say 'speculators') went into Las Vegas and overpaid
for property, to ‘make a fast buck’.
Many speculators in this ‘gold rush' of early 2004 went because
they heard many people were flipping houses for big profits.
Even with many market indicators pointing to a fast
downfall, without reliable counsel they continued to
buy - at full price and above!
They forgot to monitor their surroundings and got
caught up in the emotion of buying – at any cost.
Now, they are stuck with high payments they don't know how
to handle.
Options if you did overpay in a market going soft?
Ride it out as best you can (rent it to minimize
negative cash flows or Lease Option it to 'break even')
or sell it at a loss now.
There is no 'secret' to getting out of a bad deal, now or
ever.
The time to ask the question 'How do I get out of this?' is
BEFORE you buy it.
Tips for staying out of these kinds of situations can be
found in my MEMBER's ONLY Real Estate training course, available
at www.TheLazyInvestor.com
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Steve Majors - The Lazy Investor
Active Real Estate Investor, author of ebooks, training courses and
seminars, provides one-on-one mentoring and coaching.
Articles, news and more at www.TheLazyInvestor.com
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Saturday, December 18, 2004
Sunday, December 12, 2004
When 'overnight' = 30-60 days...
The Lazy Investor
The Mortgage market has changed - again... At least, around buying properties in Las Vegas. This information is useful for anyone that experiences a rapid influx of property buying, as is happening in several areas of the country.
This issue has hit Nevada first, but will likely bloom into the entire country soon.
Getting a loan today for a property in the Vegas Valley is tough, and certainly if it is an investor loan.
This is due to a variety of reasons, but the effect is that new mortgages are taking anywhere from 45-60 days most of the time, and occasionally 30-45 days - if you are 'lucky'.
The result of that causes a difficult situation for Real Estate investors (and has an effect on homebuyers, too).
Investors trying to make a deal with a Seller often must include 'fast close' as one of the terms in the agreement. The Seller will accept the lower offer the Investor must make in exchange for moving quickly. It has been the 'rule' forever...
In today's market, though, the Investor cannot move quickly if (s)he is trying to put a new loan on the property - certainly not when the Investor is looking for a 90%-100% loan.
If the Investor puts a substantial amount of CA$H of their own into the property, there are some considerations and the mortgage companies tend to move more quickly.
Therefore, the 'secret' to moving into properties in such a market is to have a substantial down payment.
But, how do you get a substantial down payment?
That's the rule of investing! You must build that capital from other deals!
Oh, I know - you wanted to get RICH in Real Estate overnight, right? Well, you see, that happens very rarely - it was possible when the 'wave' is first forming, as it is rolling in you can ride it for a short while.
The smart investor remembers to take the CA$H from all these 'easy' deals and put it aside, back into the business - not living off it!
That way, when the market changes (as it will, I assure you...), the investor is ready for the next 'wave'.
The simplest way to keep this money separate? Create a separate business entity where you keep all the big cash in a separate bank account. Of course, this is better for bookkeeping and income tax planning, too.
By keeping your wealth building separate from your living expenses, you can create massive wealth very quickly.
An "INSIDER TIP" - Don't be too quick to become a 'full time' investor! By keeping your current job for a year or two while you are building your business, you maintain your excellent credit rating as an employee while building credit references for being in business for two years or more.
It is the way the 'system' of credit works - live within their guidelines and you'll get your loans done more quickly. This is NOT one of the places you can do a lot of 'creative' things! Sometimes, we have to play by their rules - and when it comes to those that have the money, it is always the 'Golden Rule' - those that have the money MAKE the rules!
Happy Investing,
Steve
The Mortgage market has changed - again... At least, around buying properties in Las Vegas. This information is useful for anyone that experiences a rapid influx of property buying, as is happening in several areas of the country.
This issue has hit Nevada first, but will likely bloom into the entire country soon.
Getting a loan today for a property in the Vegas Valley is tough, and certainly if it is an investor loan.
This is due to a variety of reasons, but the effect is that new mortgages are taking anywhere from 45-60 days most of the time, and occasionally 30-45 days - if you are 'lucky'.
The result of that causes a difficult situation for Real Estate investors (and has an effect on homebuyers, too).
Investors trying to make a deal with a Seller often must include 'fast close' as one of the terms in the agreement. The Seller will accept the lower offer the Investor must make in exchange for moving quickly. It has been the 'rule' forever...
In today's market, though, the Investor cannot move quickly if (s)he is trying to put a new loan on the property - certainly not when the Investor is looking for a 90%-100% loan.
If the Investor puts a substantial amount of CA$H of their own into the property, there are some considerations and the mortgage companies tend to move more quickly.
Therefore, the 'secret' to moving into properties in such a market is to have a substantial down payment.
But, how do you get a substantial down payment?
That's the rule of investing! You must build that capital from other deals!
Oh, I know - you wanted to get RICH in Real Estate overnight, right? Well, you see, that happens very rarely - it was possible when the 'wave' is first forming, as it is rolling in you can ride it for a short while.
The smart investor remembers to take the CA$H from all these 'easy' deals and put it aside, back into the business - not living off it!
That way, when the market changes (as it will, I assure you...), the investor is ready for the next 'wave'.
The simplest way to keep this money separate? Create a separate business entity where you keep all the big cash in a separate bank account. Of course, this is better for bookkeeping and income tax planning, too.
By keeping your wealth building separate from your living expenses, you can create massive wealth very quickly.
An "INSIDER TIP" - Don't be too quick to become a 'full time' investor! By keeping your current job for a year or two while you are building your business, you maintain your excellent credit rating as an employee while building credit references for being in business for two years or more.
It is the way the 'system' of credit works - live within their guidelines and you'll get your loans done more quickly. This is NOT one of the places you can do a lot of 'creative' things! Sometimes, we have to play by their rules - and when it comes to those that have the money, it is always the 'Golden Rule' - those that have the money MAKE the rules!
Happy Investing,
Steve
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