Real Estate Investing Financing Truths - Part 1 of 2

Take an inside look at 'traditional' and 'creative' real estate investing methods and discover simple formulas to make the most of your real estate investments in today's marketplace. (Part 1 of 2)
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(p28 - The Lazy Investor's Guide to Real Estate)

Real Estate Investing Financing Truths - Part 1 of 2

Traditional Methods of Real Estate Investing

Through years and years of transactions, the traditional method of buying and selling Real Estate investments has evolved into a market of its own and has grown into a Real Estate ‘machine’ that circulates massive amounts of money through Real Estate Agents, Real Estate appraisals, Title & Escrow Companies, Banks, and Mortgage Companies.

These once-simple real estate investments have grown from a modest fee for a professional to keep the Buyer’s or Seller’s best interest in mind during negotiations, to now, traditionally, 6% (or more) of the total sales price being paid to Real Estate Agents (via Brokers who often take the majority of the money), another 3 – 5% being paid to Title, Mortgage and Escrow Companies for various fees, and then even more is taken for a real estate appraisal.

As if that weren't enough, then a huge amount of money is absorbed by the Bank, through the form of interest payments – usually over 15 – 30 years and totaling 2 – 3 times the original purchase price of the initial Real Estate investment!

Down Payments go to pay a variety of fees.

Now, don’t get me wrong, it certainly is possible to make money through these methods, but the ‘traditional real estate investment system’ is designed to simply ‘break even’ for the home owner in purchasing a home (the first, and perhaps, only real estate investment they will ever make) in this manner. It is really not designed for the investor, who, of course, wants every real estate investment to make money.

Traditional funding only allows the Home Owner to break even.

Example – Home Owner Financing:
(the numbers represented here reflect the methods, not necessarily the price structures of any given real estate investment market.)

List price on property (with Real Estate Agent)
$200,000

Bank loan available (owner-occupied, 100% @ 7% interest)
$200,000

Monthly payments (over 30 years)
~ $1350

Taxes, Insurance, etc. (per month)
~ $250

(This example is for an ‘average’ home in an ‘average’ neighborhood, for the ‘average American’ using an ‘average’ interest rate of 7% – of course, these figures do not apply everywhere.)

Therefore, the payment for this property is approximately $1600 per month for 30 years, to be paid by the home owner living in the property.

Now, the ‘traditional real estate investment system’ allows for this home owner to have a change in their lives and decide to purchase another (usually larger) home. They have the right, and often do, ‘rent out’ the first house and move into the new one with their family.

The owner will be responsible for any additional expenses (repairs, Home Owner's Association fees, etc.) as well as their desire to make a small cash flow from this endeavor.

Their previous home now becomes a true real estate investment where they increase their 'homeonwer's' monthly payment to the ‘renter’ by an additional $200 per month, for a total price to the renter of $1800 per month.

Reasonable enough – until/unless there are repairs to be made – or, the renter leaves and the new ‘landlord’ has to make payments on this vacant house. Then, this $200 positive cash flow per month real estate investment doesn’t look so good….

But, the “rent” has been established for that house – and the ‘comparable rent for the area’ can easily be calculated using this method;

STANDARD RENT CALCULATION - (Simple Method)

Total payment for the property (includes Principle, Interest, Taxes and Insurance – known as PITI at 100% loan at 7% interest)

+ cash flow for the ‘investor’ (usually $200 per month)

= ‘Rent’

Note: With several homes in the area of similar size and style, plus the fact that most homeowners in the area have similar loan structuring, we can estimate that whatever the average loan percentage is will create a ‘standard rental rate for X model real estate investment’ – in this case, $1800.

A simple (and LAZY) way to remember it is;

PITI + $200 = STANDARD RENT

If an ‘investor’ (one that seriously wants to make money from buying/selling Real Estate investments) wishes to purchase the same house in the same area and for the same amount of money, the ‘traditional real estate investment system’ doesn’t allow the investor to really make any money from the transaction.

Example – Investor Financing:

List price on property (with Real Estate Agent)
$200,000

Bank loan available (investor loan, 80% @ 8.4%)
$160,000

Monthly payments (over 30 years)
~ $1250

Taxes, Insurance, etc. (per month)
~ $250

(This example is for an ‘average’ home in an ‘average’ neighborhood, for the ‘average American’ with an ‘average’ investor interest rate of 8.4% – of course, these figures do not apply everywhere, but the formula is very similar.)

Therefore, the monthly payment for this investor-owned real estate investment is approximately $1500.

At first glance, seems very good, as the investor will have a ‘cash flow’ of $300 per month – more cash flow per month than the homeowner-turned-investor.

However, the difference is that the 'Investor’ (the one serious about making a profit from this real estate investment) has brought in cash (out of pocket) of $40,000 – UP FRONT!

Plus, the investor has to pay a higher interest rate (in this example, I have included 1.4%, while a bank may charge several percent for investor loans – those identified as being purchased solely for the purpose of being a real estate investment - check with your lending institution on their policies prior to finalizing your loans)!

Now, I don’t know about you, but I don’t know too many people with that kind of money for 1 property – not to mention the fact that this person expects to make several real estate investments, repeating ‘what works’ several times.

Not only does the investor have to come up with $40,000 up front (every time they decide to make a real estate investment), but how long will it take (at $300 per month) to make enough to purchase a second investment property at this rate?

10 YEARS!! (presuming there are never any repairs, the investor never takes out a penny of the cash flow for their own use, etc)!

Investors and Homeowners get different rates.

Not what I call a ‘wealth path’, not what I teach – and certainly not any way to run a business.

END Part 1 of 2

Steve Majors - The Lazy Investor
Profit from Real Estate Investment articles, real estate investing information and news from one of the most creative investors on the planet ~FREE MEMBERSHIP & real estate training course~ http://SteveMajors.com

The Lazy Investor is back on his feet - well, almost....

GREAT NEWS!

I have now been going to the thearapist (yesterday and today) and he has 'ok'd' me to begin actually STANDING on my foot!

YEAH!

Yes, he pushed, tugged and twisted, and now feels like my foot has healed enough to begin putting some pressure on it ('toe-tap' only...)

But, it is a step (pun intended...)

Now, this guy, I like - he's a 'get it done' kind of guy and believes in making it happen as soon as possible (although he firmly believes in proper precautions and not pushing into something that you aren't ready for - heck, he thinks a lot like me and real estate investing!)

So, I've taken a few steps and actually have been 'walking' around the house as much as possible (walker-assisted, of course...)

I've even been out doing some investing work (one of my mentoring students wanted me to lock in a property for them as part of their one-on-one time) and we be going to a local Real Estate Investing Club tonight (be sure to support yours, too...), so I'm getting around pretty well.

My shoulders are a bit sore, but that will pass soon enough (and, hey, I'll be 'buff' for the Boot Camp.... ;)

The therapist is working on my foot, as well as the left shoulder (it got fractured in the fall as well as my left heel, but I couldn't handle two surgeries on the same side at once.....)

Be sure and get your seat reserved at the Boot Camp - you may never get another chance to see me so trim (and sexy... ;)

Happy Investing

Steve Majors - The Lazy Investor

The Groundhog saw his shadow...

Yeah, even in September, it seems, there is something about
it...

To follow up on my '5 days and counting' email last week, I
went to the doctor and it was obvious that he had gotten up
that morning, stepped out the door - and saw his shadow...

I know that because he told me "6 more weeks before you can
walk on it..."

SIX WEEKS! Now, that certainly wasn't the news I wanted!

Well, he did backtrack a bit on it and told me that I could
work with a therapist 2-3 times a week for that time and
MAYBE (I guess if I was 'good'...), if the therapist
reports progress, I may be allowed to put some pressure on
it in a week or so more.

But, for the time being, it is still wheelchair or walker...

Sure am glad I am a LAZY real estate investor - I've done a
couple deals this last week right from my chair - didn't
even need to get up to make them happen - and still made
more than I ever did at any job I ever had! (I really love
this business!)

So, I guess I'll still be on the walker for the Boot Camp -
so be it...

Heck, I'll still be able to do a full 'brain dump' and teach
everything I know about real estate - folks don't come to
watch me walk around, they come to learn all the secrets of
LAZY investing!

You still have time to get your reservation - and a DISCOUNT
on the package (even though I'm already going to PROVE this
system works by offering you to take the training fee from
DEALS YOU WILL COMPLETE from learning this system)...

For a very limited time, you can get full training
(detailed in full at http://TheLazyWayToBuyRealEstate.com -
including the 100% ~NO~RISK~ ~GUARANTEE~) plus you'll get a
CHECK from me for $200 to offset any expenses you might
have in getting to the Boot Camp (hotel, meals - slot
machine play... - whatever) - it's yours to do with as you
please!

Go, right now and get your seat reserved - before they all
fill up!
http://TheLazyWayToBuyRealEstate.com/TakeAction.html

Seats are limited (I keep it small to keep it personal), so
hurry and get yours before they are all gone.
http://TheLazyWayToBuyRealEstate.com/TakeAction.html

See you at the Boot Camp - Oct. 14-16, 2005
(I'll be there - wheelchair, birthday cake and all... ;)

Happy Investing,

Steve Majors - The Lazy Investor

P.S. If you get your seat reserved for the Boot Camp by
Sept. 19th, I've got an ADDITIONAL BONUS for you - You'll
receive the complete version of 'The Lazy Investor's Guide
to Real Estate' - a $497 value - absolutely F~R~E~E~!
http://TheLazyWayToBuyRealEstate.com/TakeAction.html

5 Steps to Massive Profits - A Business Marketing Tip

A Quick, Informative Business Marketing Tip for Maximizing Your Profits.
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Here's a business marketing tip to gain maximum profit from
any product or service in your business marketing lineup,
and how you will gain extreme profits when you follow these
5 simple, LAZY steps;

1. Look not at what you are offering through your business
marketing efforts - look at WHO WILL BUY your
product/service. Make a picture of your 'typical buyer' -
who they are, their age, what they like to do, etc.

This is often known as the 'target market prospect', yet,
the more detailed you define this 'target' in your business
marketing, the better.

I've even gone to the point of giving this 'target market'
person a name and put a picture up on my computer monitor
(find a 'friendly face' on the Internet somewhere and 'tag'
it as your target market prospect) - get your business
marketing centered around every aspect of your target - the
more you know them, the easier it is to chat about what they
need.

2. Develop a list of your target market prospect's likes and
dislikes as it would relate to a product/service similar to
yours. (You'll get a 'third party' look at your competition,
as well as some inside looks at their business marketing
efforts.)

Consider some questions they would have, or some typical
objections to buying this similar product/service (this may
come from your previous research, or you may have to simply
do some).

One way to personalize the business marketing research of
your 'target market prospect' is to 'role play' - think
about your prospect as a good friend that you are having a
picnic with (or even a co-worker at the water cooler, etc.)
and in passing, your friend brings up that 'similar'
product/service.

What do they say about it?

What are their questions/concerns?

Is there a 'running joke' about the competition's
product/service that defines a hole in their business
marketing? (i.e., "Did you hear about the lady that used
X?")

All these things need to be addressed, and documented.

Let your mind be creative and wander, but keep it to a time
limit - about 15-20 minutes per business marketing 'play'
session. Think of nothing but this 'conversation' during
this creative (often fun) time.

It might even be helpful for you to say everything that
comes to mind out loud during these business marketing
planning sessions(as silly as that sounds, it works...) and
record it, as some of the best business marketing ideas get
overlooked when you are trying to write them down quickly.

Listening back for those 'nuggets' might even trigger other
'bits of business marketing gold' for you to work with.

3. Figure out how your product/service and business
marketing plan is similar, yet different than the
competition. Just how does your solution overcome all the
questions, concerns and yes, even 'jokes' from your target?

If you can't answer these questions for yourself, how would
you expect to answer them from your prospect?

The beautiful part about this business marketing exercise is
that, if you go through it with commitment, you will already
know the answers to the prospect's questions BEFORE they ask
them - which quickly eliminates any fears you might have
about talking with them.

4. Continue this simple exercise - every couple days for a
week or so. Giving 15-20 minutes of serious thought to your
business marketing plan and role playing every couple days
will stimulate your conscious mind, as well as keep your
unconscious mind actively thinking about it.

You'll be surprised at the outcome of taking these steps
seriously.

But be forewarned - you will very likely have a very
different outlook about your prospect after one week of this
simple, yet extremely effective business marketing, 'target
market' finding tool!

You will know them as well as you know yourself, so you will
be able to talk with them about things quickly, simply and
with the best, consistent results of your business marketing
efforts.

5. Now, take a look at your product/service and business
marketing plan - through the prospect's eyes (now that you
can clearly see through them...)

Does it fit your prospect's needs?

Does it answer their questions and eliminate their fears?

Is it priced right for your target prospect?

Is there a market for your product/service other than your
personalized target market prospect? (This step is vital as
a 'reality check" - and one that many business marketing
planners miss)

When you follow these five steps faithfully, you will have
credibility, knowledge and successful long-term
relationships with your customers (who used to be simply
'target market prospects' before you understood the power of
this business marketing tip!).

Steve Majors - To-the-point training and coaching for business and
wealth creation through creative Real Estate investing. Known as
"The Lazy Investor", with courses and training sessions to
slingshot your success. http://SteveMajors.com

Finding, Fixing, Financing and Flipping - The Short Course

Discover a quick system to gain maximum profit from your real estate investments.
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Most people get involved in Real Estate investing to make money.

Pretty self-evident – or, is it?

What would you say if I told you that everything you have been taught about Real Estate investing and making money ‘rehabbing’ your real estate investments is wrong?

Well, at least, much of it… Let’s take a look at something that all too many people don't think about in their real estate investing - something that seems to be a secret formula to bringing in the most cash from your real estate investments…

While it is often true that the total price of a property that has had a lot of work done on it is more than one that hasn’t, what has that ‘price difference’ really cost you, the Real Estate Investor?

With enough time and effort, we could go through dozens of scenarios to figure out just what a loss of time, money and effort it is to go through a house and ‘rehab’ it, but let’s keep it short and talk about some things that really happen in real estate investments – a ‘reality check’ if you will...

I like to be sure to get everything out of a real estate investment that is possible, but, there is a balance between the Time, Money, Effort and Appreciation the customer will get out of what you put in, as opposed to what they would rather do themselves...

And they are willing to pay you for the privilege!

I call this the ‘M-E-A-T’ of a real estate investing deal, and it is a simple equation you can apply to all your real estate investments.

In the table below, look at the M.E.A.T. result for each Function.

____Function____
_M_ _E_ _A_ _T_ _Total_

Painting (full)
_2_ _5_ _5_ _6_ __18__

Kitchen Redo
_7_ _4_ _3_ _6_ __20__

Bath Redo
_6_ _6_ _3_ _4_ __18__

Landscaping (full)
_4_ _6_ _4_ _4_ __18__

Painting (L.A.Z.Y.)
_1_ _2_ _4_ _3_ __10__

Landscaping (L.A.Z.Y.)
_2_ _2_ _4_ _3_ __11__

You can see from these figures, the appreciation factor of the customer is often the same – whether you put lots of time, effort and money into this real estate investment or not.

The reasons for this are as varied as the people looking at any given house, but how many times have you heard of people going into a house – just after it was fully ‘rehabbed’ and they turned right around and put the paint they liked throughout the place?

So, why did you waste your M.E.A.T. on doing it yourself?

Because you thought it would be prettier?

That you would get more money from it?

Because you think that's what real estate investing is all about?

I challenge you to think about this - every time you get involved in any real estate investment...

Just how much more M.E.A.T. did you really get from your real estate investment - your total return? The cash you got was more – maybe - but so was the WORK.

You can sell houses just like you get them – and get 90% or more of the price you will after all that effort, even without ever seeing the place!

When you use the L.A.Z.Y. way, you put very little extra into any given real estate investment, but raise that return by another 5% (which means that it brings in almost the same total as you get otherwise – without the added cost and work!

So, who makes more profit from their real estate investments?

Those that do less work! Plus, there’s more time, energy and money available to put into the next real estate investment – while those other folks are still remodeling their last deal!

In a year’s time, you can do 30-50 houses this way – by yourself!

How many can you rehab in a year – by yourself?

Now, where is the bigger profit?

By now you can see just what I meant by the training you had before being 'wrong'...

You've been taught to ‘fix and flip’ your real estate investments – but, unless you are doing the fixing directly at the request of the end user, you are likely wasting your time, money and effort for no additional appreciation factor, so, overall, you are wasting it for nothing.

You are throwing away the M-E-A-T of the deal!

Just how much did painting that living room in your last real estate investment cost you? Since you missed another deal that might have $20,000, $30,000 or more in it, I would suggest you spent a LOT on it!

Think about this before you start your next real estate investing ‘rehab’ project – just how many other deals will you do if you don’t put all your time in on fixing? Then, add on the energy (effort) that it saves you.

Most people think about the money part of real estate investing, but leave out the rest of the equation when calculating the total value of their real estate investments.

I think that is a big mistake.

When you can get 90% or more of the same price from any given real estate investment, but do 1% or less of the work, keep 95% of the energy for other projects and 95+% of the money it would cost you – why would anyone want to do any ‘rehab’ job – ever - in their real estate investing business?

Now, there may be times you find a house you want to live in that needs some work. That is a fine time to consider doing a ‘rehab’ job - you aren't doing a real estate investment (other than for appreciation), but any time you are working your real estate investment business, take a serious look at the M.E.A.T. of the deal – before committing to spending all your time, money and efforts.

Steve Majors - The Lazy Investor
Profit from Real Estate Investment Articles, Real Estate Investing Information & News from One of The Most Creative Investors On The Planet
~FREE MEMBERSHIP & FREE Real Estate Training Course~ http://SteveMajors.com

Be a Real Estate Investing Expert - In An Instant

Another quick and simple system designed to 'kick-start' your real estate investment business.

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Here's a simple method of getting to know your real estate investing market, which is VITALLY IMPORTANT before you can know if a property/price is worthy of calling a 'deal' or not...

This 'L.A.Z.Y.' method of market research reveals some amazing facts about the real estate investing market in your area and it works for any area there is....

Take a local newspaper (you can get many of them online, for free, nowadays) and simply count the number of 'For Sale' and 'For Rent' ads, keeping track of them for later reference.

Usually, Sunday and Wednesday papers are the 'biggest real estate investing days', so, for now, just watch these.

Keep track of the number of ads for a few weeks and watch what is happening to your market (hold on, now, we're coming to the part about you turning all this research into a really great real estate investment).

Keeping more detailed records (what price for a 3/2/2 in the SW part of town is being offered for sale and rent wise, etc.) will yield tremendous knowledge, but, for now, just to get started in your real estate investing, stick with the basic 'total ads' research.

After a few weeks, you'll start to see 'trends' in the real estate investing potential of your area - maybe the number of For Sale is going way up and the number of For Rent is going way down...

In such a market, what are you doing looking for 'flips' as real estate investments anyway?

Such a trend clearly shows that there are fewer people buying and a high demand for rentals (perhaps a good time for you to pick up some deals for your long-term real estate investments).

You see, the newspaper (and the active market) has shown you what you need to be looking for (or not), and this is certainly a good indication that there are few Buyers (whether for themselves or as real estate investments).

Maybe it is because of some local condition (like the closing of a major employer or something), or it could be more national (like the interest rates rising quickly, etc.) - i.e., it could be something you can control, but most likely it isn't.

However, it doesn't mean you can't make real estate investing money in such a market!

You can certainly make money in a real estate investing market where there are few 'For Rent' and lots of 'For Sale' properties (even if you have poor credit and no money...)

This is a perfect time to be doing Lease Purchase/Options! Yes, it is a great time to simply make CA$H in your real estate investing business.

And, if (and WHEN) the real estate investment market changes again, you will already be on top of it because you'll keep this simple method in mind - just watching the total number of ads in the paper - something anyone can do (but so few will...) and you'll know what the next real estate investing 'trend' will be - maybe back to 'flipping', or maybe something else...

Just one of the major reasons that you need more than one 'tool' in your real estate investing toolbox.....

Here's to your successful (and L.A.Z.Y.) real estate investments...

Steve Majors - The Lazy Investor
Profit from Real Estate Investment Articles, Real Estate Investing Information & News from One of The Most Creative Investors On The Planet ~FREE MEMBERSHIP & a FREE Real Estate Training Course~ http://SteveMajors.com

We are really enjoying this...

The Lazy Investor

Here we are, a couple months into our new home, with things going pretty well...

With so much time on my hands working with the LAZY system of investing, I have time to do the things I want to do, not having someone else control my time.

And, I'm doing it...

One of the greatest rewards about using a system that brings in deals all the time - so many deals that I get to choose the ones I want - is that I get to putter around in my yard (something I really love doing) and build things as/if I want.

The WATERFALL

A tremendous acheivement recently completed is our waterfall. Now, this isn't some 'drip-by-drip', leaky-faucet thing - it is a full-blown, thunderous cascade of a WATERFALL!

At EIGHT THOUSAND FIVE HUNDRED gallons of water an hour, this thing ROARS!

It drops water from about 3 feet and winds around multiple slabs to a 4 foot wide opening, where the water pours over at nearly 1/2 inch! Yes, this is a serious waterfall!

And, as it has an UNDERGRAVEL FILTER system that keeps the water crystal clear without chemicals (something I really like!), it is now a beautiful place to spend some quiet time with almost no maintanence required at all (we do still watch the skimmer filter to keep the leaves down - a 2-minute process easily done while watching the fish eat...)

Now, how did I figure out all that wonderful stuff to make this magnificent creation?

Well, I went searching on the web and found a home-study course that taught me just how to do it.

I also followed the advice of the local pond supply store (actually, they sell the course there, and use it for every one of the waterfalls they build, too...) and went to see just how the experts did it.

You know, I find that following the advice of those that have gone before is the ONLY way to fully leverage your time, money and effort - the 'L' of being LAZY!

Now, did that georgous waterfall get built simply by sitting around, thinking about getting it done, studying everything over and over, making plans and researching for months on end?

NO!

Even though there was some up-front research and plans done (the design of the undergravel filter...), it took ACTION to make it successful.

And, every time we had a stumbling block, we turned to our home-study course and found the answers - or we contacted the 'gurus' we got the book from and got our questions answered.

Of course, when we needed more (like our pump, tubing, fish etc.), we went back to them because they knew just what to do and had worked with us, step-by-step.

So, our first thing was to gather a list of materials;

1. LOTS of sand - 6 TONS of it! - Looking at our pond area, we wanted to build a 'mound' 8' deep, 8' wide (at the pond side) and 3' higher than the pond rim. I left all that calculation to the experts (I gave them my measurements and layout ideas and they told me 5-6 tons would be needed) we looked at the local supply stores and found several versions of 'fill' that we liked, but in the end, we stuck with what our mentors told us to do and chose 'reject' sand (I don't like that word, but that's what they call it and it worked out great....)

2. Retaining wall blocks - When we first started building the base, we thought we could get away from this step, as it was expensive and the sand (when properly wet down and packed) was staying in place very well. But, one day, we went out and discovered that the sprinkler system was 'melting' our structure slowly, but surely... We did what the experts told us to do and put up a retaining wall...

3. The pump - we live right on a 'minor' street - that's one that has a good deal of traffic, but is not a 'major' street (Las Vegas has 'major' streets every mile, and 'minor' ones every 1/2 mile). We get some traffic noise.

So, we wanted to have a waterfall big enough to drown out the noise, but not so big that we couldn't hear ourselves think...

Again, back to the experts, who calculated the rate of flows, the size of the pipes and such, we decided we needed a 5500 gallon per hour pump. But, as we wanted to get rid of noise and build a bigger drop (it is 4 feet wide at the bottom...), we needed to 'upgrade' the pump and the 8500 gph was the only thing they had.

4. The liner - this tough plastic sheeting is certainly one of the major components of any pond. Although it was one of the simplest items to purchase (we went back to those that know and asked their advice...), it is a bit tricky to install, but, again following their advice, we got it installed and leak free - once we 'tweaked' it a bit.

5. Rock - and LOTS of it... - Big boulder things - as much as one man can lift (yeah, I had a helper do most of the heaviest stuff, but I did place them myself) - one for each end of each 'shelf', plus the shelf themselves (made from flagstone - nice big pieces of flat rock, but fragile!).

Of course, as we have an underground filter, we have several tons of gravel-rock (smaller stuff - about 3/4 inch is what we decided on) covering 130 feet of 3/4" PVC with holes drilled all throughout and piped back into the pump input.

Yes, this is a SYSTEM, but doing all the work up front and following the system that works has proven time and time again to be worth all the effort - now, we don't have to struggle with leaves or clean out all the time - it is 98% maintanence free...

So, that's the latest from around here. Hope you enjoy this info as much as we enjoy our waterfall, pond and now, koi and goldfish (getting bigger every day!)

Happy Investing,

Steve

OK, I'm getting into this thing way too much...

The Lazy Investor - But, it IS my own house, now...

This is turning into a project - one that I'm enjoying, yet, not my typical investment, that is for sure!

What I've found is something that is rather typical when investing in and beginning rehabs - the 'onion' problem...

You know what I mean - once you start one thing, you just peel back that 'tiny' layer, and all of a sudden, you find there is yet something else that now needs fixing... and, it is thicker and more solid than the one 'simple' thing!

Oh, yeah, you get the idea...

For instance, our electric stovetop - now, there's an ONION for you!

We started with the simple issue - the stovetop was too high, as well as being electric (neither my wife or I like electric cooktops - just never learned to cook on them).

Oh, we could have learned to cook on it, but as it was built on top of a 30 inch cabinet (and, you'd have to see these cabinets to believe them - they are METAL, right out of the '50s!) and then, with the stove being another 6" higher, it was simply too high - for my 5' 2" tall wife....

So, we decided to take the electric stovetop out and replace it with a gas one (layer '#1'...)

We looked around for a replacement stovetop - something simple that would work in the same place - an 'easy' rehab item, right?

What we found was that,
1. The house has no gas connection (all electric)
2. To get natural gas, we have to get it brought in from down the street (this house is in the 'country' - located in a subdivision established in the county which has yet to be annexed into the city - great for taxes and some other political garbage)
3. It would cost $4995 to get natural gas to the house (the property line only - not into the kitchen!)

So, we fretted with the electric stove again...

Finally, we took it out...

To my amazement, it was pretty simple to remove - a few screws, a couple tugs and it was out - along with the tile border that was holding it in.

Actually, it seemed simple enough...

Well, now we had a hole to fill - - - -

So, it was back to the store, looking for gas tops (still no idea of just how we were going to get gas in the house, but we had already called a couple of propane dealers that said it should be a lot less expensive than the natural gas).

We found one we liked, but it was not a stovetop, it was a full range - with an oven built into the bottom (you know, a 'standard' kitchen appliance...).

OK, we'll simply take out the cabinet - the 30" x 30" x 24" metal box - nothing too strange - just remove that and put the range in the empty hole, right? (layer #2...)

In fact, that is so simple, and with the new range, why not go ahead and get the latest in 'modern day' appliances and install an overhead, matching microwave? Heck, it saves space, and in the tiny kitchen of this 1958 house, space is at a premium! (layer #3)

So, out came the overhead vent and cabinet. Again, simple enough, with a few screws and a yank, viola! it was out!

And, so was the vent pipe - dropping all the way to the floor...
(layer #4...)

Now, I had a 7" hole, and a vent way up in the crawl space (there is no 'attic' in this house, just about 3' of space filled with air ducts and insulation... - a small boy might get around, but this 6' 2", 220 lb. LAZY man won't!) No clue how to get this pipe back into the hole it came from - and hit the vent shaft that hung idly by, so very far away...

Well, that was an issue for another day - we now have a huge hole in the kitchen that needs to be filled!

Back to the store, we went to another store and found (surprise, surprise) another kitchen combo that we really liked. Of course, it was more expensive (aren't they always...?) but, it gives value to the house in appraisals (in fact, the ONLY appliance manufacturer that I know of that does!), it looks great, and is just what we want, so why not?

They'll even install it for us! GREAT!

Now, we just need to get gas to the area and we are set...

We got a couple of quotes for the propane, but only one that would include the install all the way to the kitchen (of course, that's the one we wanted!) So, he began working.

The quote included us 'helping' run the pipe from outside the house to the kitchen - certainly a 2-man job (about a 65' run through drop ceiling tiles and several rafters, around corners and such...). He quoted 2 hours, and, with my help (layer #5), it would cost $950 to get a full propane tank and connections to the kitchen stove, our gas dryer and - he'd even toss in a full-time connection to the BBQ grill!

This work got started - I pulled out the ceiling tiles and ran a rope through to make the pipe job a bit easier, he brought in a huge roll of flex tubing and left it on our freshly cleaned and polished, wooden living room floor...

Then, something happened and he couldn't get back for several days. So, not only did we have the kitchen torn up with all the loose tile, empty hole for the new stove and nowhere to cook, we now had ceiling tiles removed and scattered all over the living room - along with a big roll of flex pipe! Yes, and in the house we are trying to make a home!

OK, remain calm (we are trying to...)

Layer #6 comes when he doesn't show up and I'm doing all the job myself...

Well, he did drop by and bring the drill bit that was needed to run the flex pipe, but he had another job that was pressing and just couldn't stay...

OK, so I did it - all myself. 4 HOURS of drilling, pulling, drilling, pulling, shifting insulation around, drilling, pulling and so on - until, finally, the pipe arrived at the kitchen wall - just above the place it should go (HURRAY!)

But, then, layer #7...

With no access to the attic, and the way this kitchen was made, we are still 2 feet from the back wall where the pipe must go behind the stove. This is from the original kitchen setup of the counters and cabinets. A quick cut into the sheetrock, a bit of drilling and cutting to gain access and it is in (although, now, there is another big hole to patch up later.....)

However, the pipe is in - YEAH!

Well, now that we have a plan for the new stove/oven combo, and since we have found 'the' microwave/oven combo that goes above the stovetop, what do we need that original (from the original house - all electric, turn-knob, very 'retro') double oven for? (layer #8...)

Heck, let's just tear that thing out and put up something else - the tile on it is horrid, it sticks out too far and so on - let's just rip it out and go with some storage cabinets, a worktop or something...

About an hour of pounding, pulling and twisting and it is gone - another 30" hole from floor to ceiling - with the floor tile being cut just a bit larger than everything else (making a noticible 'L' shape in the floor... layer #9...) - it should be nothing to fix....

So, the propane guy shows up, puts in the tank, the connection to the dryer, the BBQ and the kitchen - all is going well...

We go to order the stove and microwave, and something has happened to our credit cards! (layer #10)...

We tried several and none of them would work - still not sure about that, but we went home to figure it out - the store closed anyway (we like to shop just before closing time - it keeps us moving through the store and not buying too much - a LAZY habit that keeps money in your pocket!).

The next day, we simply pulled out cash and went back to the store (we like to buy on credit cards but pay them off every month - keep the 'Yield' as high as possible in your pocket, but use the 'Leverage' of the credit cards to pay for stuff and keep records simple.) and ordered the appliances.

'D-day' is 4 days away - we will get our appliances and can cook again!

The store clerk is great - he even gave us a plan for the installation so everything could be ready for the crew to come in.

OOOPS! The microwave REQUIRES a cabinet to be installed (layer #11) and the power and gas connections for the stove MUST be on the LEFT side, no higher than 12 inches from the floor (layer #12 - we had installed the gas pipe near the old electric panel - on the RIGHT side of the stove and about 18" from the floor!.....)

With some twisting, shoving and several 'choice' words, I moved the power and gas connection to make it work for the stove. So what if it wasted a few hours -what else is a LAZY investor to do??? ;)

On to the microwave. The installer took one look at the area and said "NO WAY" - well, we knew that - there was no cabinet installed and the power was a cord hanging out of the wall...

So, it is off to my dusty tools and woodworking begins. Taking some of the wood from the cabinet we ripped out from the double oven, I hacked and sawed my way into a box cabinet that should fit just right into the hole (is this 'lucky layer #13'?). I put it in and to my shock, I had built it wrong.... Off to the shop again, and about 4 hours after starting this, I had built a 30" x 24" x 8" box to mount as a cabinet insert so the microwave could be installed (now, to my credit, I did have to consider the vent for the microwave, the power to the unit and the house vent connection (still just an empty hole at this point...)

But, first, we must get the power plug installed!

Have you ever been to an older house? Have you checked out the electric outlets? Many of them don't have grounded outlets - nor grounds! Now, I'm not talking about a third hole - I'm talking about the real, safety of a GROUNDED outlet! (layer #14, and it is a thick one!)

We knew there were a lot of two-pronged outlets in the house - certainly in the 'older section' that was built in 1958. The 'addition' that came in 1979 has the three-pronged ones, but several of our things we need to plug in (lamps, notebook computers and such) only need the two prongs, so it hasn't been an issue - until now...

No way was the installer going to allow a two-pronged outlet to be installed, and they use a tester to make sure they have a good socket before doing any work, so we decided to test the outlets in the kitchen (some of them were the three-pronged types, so....)

NONE of them have ground! In fact, we found that the entire 'old' portion of the house has what is called 'open ground' and getting that fixed won't be simply (nor cheap!)

Thank goodness I've got an electronic background - I can at least do some of the work myself (I think you are getting the picture now - yeah, that's another 'layer'.....)

Well, this is turning into a book, and I certainly have my work cut out for me today - more 'tasks' around the house.

Good thing I'm good at making enough deals that I don't have to have a 'job' - I don't know what I'd do if the money wasn't there already....

Just a friendly reminder about rehabs - don't get into them until you are really ready - and can afford to mess with them!!!

In The Lazy Investor's Guide to REAL ESTATE, I go through many scenarios to avoid having to work on rehabs - ways to make CA$H for your pocket, not work for your body!

If you don't have a copy yet, get yours today at http://TheLazyInvestor.com/TLIGTRESL.html

Happy Investing,

Steve

Rehabs take too much time...

The Lazy Investor Yes, rehabs, for me, take just too much time.

And, oddly, here I find myself in the midst of one - again...

Well, this one is for a house that we really like for ourselves, and since we picked it up so cheap (at 70% LTV), it is 'worth' it...

However, don't get me wrong - I'm not doing all that work!

Oh, I have 'dabbled' here and there - taking a couple days and stripping off 50-year old wallpaper last week, and checking in on the painters I hired to put up wallboard in a few spots (to cover the old panelling) and paint the place with 'modern' color (it was GREEN in some rooms, with GOLD and BLACK in others and a variety of wallpaper coverings from BROWN/GREEN to PINK!)

Yes, this house was something to look at before - - -

Now, it will be much more modern.

The whole place is being textured in a MEDIUM pattern (oh, there is a name for it, but I forget...) and we are using SWISS COFFEE paint (a slightly off-white that has just a hint of tan in it - a common color, perhaps - you see it in office buildings and most homes nowadays, but it will be a quick resell...)

There is so much more to do...

The pool - well, it is GONE. The liner was taken completely out and there is no pump. The financial decision is close to simply bringing in a dump truck full of sand....

The fountain - yes, this place is big (1/2 acre) and has plenty of room for a 2888 sq. ft. house, a pool, several mature trees and rose bushes (and other flowers we have yet to identify...) as well as a 'figure-8' fountain.

The fountain leaks, badly. We filled it with water and the next day, it was over half dry, so we obviously have a serious leak. Looking at it, there are a few crack marks, but nothing looks too serious. However, the waterline tells the truth - we have some work to do...

The roof - after getting into this, we found that the roof had a 20 x 20 tarp on it... The lady I got it from told me that all the leaks were 'fixed', but it looks like we have more to do than we thought.

Of course, I'm brining in a roofer - I won't be doing that myself, either...

The roofer is a really interesting fellow - he takes his dog with him everywhere - INCLUDING THE ROOFTOPS!

Yes, he has a 'roofing dog' (I think his name is 'Roofer' - I forget - I had met him a couple years ago on the "last" rehab I did...).

Then, there's the floors...

90% of this big house is HARDWOOD FLOORS.

Wow, did I learn a big lesson yesterday!

Talking with the refinisher, I found that this is an EXPENSIVE thing to get done!

I know it isn't something that I want to do myself, but it is PRICEY!

He quoted me $10,000 just to sand and put some gunk on the floor - WOW!

That wasn't the worst part - he told me it would take UP TO 3 WEEKS to complete the job (perhaps he could finish in 2)!

So much for us moving in next week!

That puts us into paying for both houses for another month - not a fun item on my list!

Overall, we will certainly make out well on this property - after all, I only put down $10 of my own money to lock in the property and we have been in control of it for right at two months now.

We are taking out an 80% loan to pay off the existing 1st (it is too high an interest rate to keep - the old owner had refinanced with poor credit) plus some 'hard money' we borrowed to pay her some equity and move on (which brought us up to the 70% mark), and with the additional 10%, we'll do all the repairs and still have cash in our pocket (at 'worst', we will break even) - plus 20% equity in this $425,000 property.

Not bad for $10 down.... ;)

Plus, we will have a beautiful place to live in for a couple years (bypassing the capital gains taxes) and then resell it for upwards of $500,000 (1/2 acre properties are really hard to find in Las Vegas - the demand is high and people will pay the price).

Is this the greatest deal ever? No. Yet, it is a good one - and with no less than $80,000 in equity (that can be leveraged into another property) in my wealth bank, it is a deal that is certainly worth taking.

However, I would NEVER recommend you take on such a project unless you want to live there!

Rehabs - certainly for beginners, are NOT something you want to do!

They are too much physical work, and quite often, simply too much time. They take away from your thinking process - after all, we only have a certain portion of our brains that we use anyway, and only 100% of what we use is available for thinking/doing.

If you spend your time thinking about the missing screws on the wallplates and the cost of that $.15 item busting your budget, you don't have time to contemplate another deal that could bring you several thousand dollars!

So, watch out for 'time-waster' things like rehabs. Unless you are experienced and/or going to live there (and I would still recommend you stay away from the rehab unless you have a good reserve!) - simply don't do them!

Utilize your time for other things - make deals happen where you get PAID, not where you spend a lot of time.

Once you have a bankroll, then consider a rehab job (we all love to get our hands dirty once in awhile...), but be sure to balance out the costs of materials and workers - as well as the cost of your time!

In my new book, The Lazy Investor's Guide to REAL ESTATE, I've gone through several calculations on how to guarantee you'll never loose money on a deal. One of the CDs I've included even has "The Break Even Calculator" - an Excel spreadsheet that does all this calculation for you.

You can get your copy of the Guide and all 6 CDs at
http://TheLazyInvestor.com/TLIGTRESL.html

I've been so bad.....

The Lazy Investor
After that 'killer' deal a while back, I've been really slow to get back into telling you even more about what's going on in the world of Real Estate around here.

And with the demand for my time teaching my LAZY methods at different events, it seems that my 'blog' hasn't gotten the attention it should.

So, today, I'm going to correct that!

Here's what is happening in our Real Estate world...

The market in Las Vegas has changed - drastically.

You know I like to keep things simple - and one extremely simple way to 'check out the market' is to take a look in the newspaper to see how many 'For Sale' ads are running.

Here's what a quick look at today's paper is telling me...

2 ads for houses < $100,000 (we use 'K' for short...) 3 ads for houses $100K - 150K 16 for $150K - $200K 47 for $200K - $300K 39 for $301K - $400K 92 for $401K - $500K and 92 for homes >$500K

Does that tell you something? It does me!

The prices of property in Las Vegas are HIGH (as if we didn't know that... ;)

On average, the price of 'what is available' (with the LAZY research we just did) is between $200K and $400K (eliminate the >$500K properties - they range all over the place... and I tend to stay away from the 'highest' homes - it is obvious that they aren't selling right now either...)

The issue though is not in the price, it is in the 'debt service'...

From The Lazy Investor's Guide to REAL ESTATE CD of Real Estate Definitions, "Debt Service" is defined as the price you pay every month to cover the mortgage.

Usually, that includes any/all costs, including taxes, insurance, principle and interest (PITI) plus any/all additional costs incurred by the property - like Home Owner's Association fees (HOA) or anything else.

In doing just a bit more research (on mortgage rates and such), I figured out how much the debt service would be on our 'average' property of $300K.

Of course, I could use my (even simpler) method of The Rule of 7 from The Lazy Investor's Guide to REAL ESTATE (page 97), but I'll stick to the more difficult way and look it all up - this time...

A loan on of $300K, at even the 'best' rate of 3.724% (that's on an ARM - may not be what you want to do...), the payment is $1384.92/m...

Now, let's get back to the paper and see what the 'rental market' is brining in...

One of the 'most desired' (if you ask those that own property there...) areas of Las Vegas is Summerlin. It is a newer area, where the Realtors(r) have been raising prices for several years (did I say that.... - well, let's keep the comments to a minimum here... - as you might can tell, the agents and the market they have created in Summerlin are not what I call an "investor's mecca...")

Anyway, here's what my 'at a glance' research tells me...

With 763 ads in the For Rent section, there is a LOT of competition, which keeps the price down.

Many of these ads are for Summerlin properties (I wonder why.... agents driving up prices, 'investors' that don't have a clue are buying in the frenzy and now, are holding overly-inflated property values dear to their hearts....)

Here's some real data - - -

summerlin - 4bd 3ba,1900sf W/D/R, $1195/m - this is 'high dollar' as we can also see in the same paper that >2000 sf properties are only slightly higher (I found a 2550 sf for $1450/m...)

So, depending on the exact house we are talking about, the 'rent' in the area (I didn't take the time to average 700+ properties!) is about $1300/m.

NO MATTER WHAT, anyone that buys a property at 'market price' in that area CANNOT service the debt - causing NEGATIVE CASH FLOW!

Does that stop investors - are we doomed to never have any more deals in Las Vegas?

I think not.

But, we have to be creative about it. Building 'win-win' scenarios isn't as simple as it was in the other marketplace, but it is still possible.

That's part of why I've been 'quiet' for awhile - I've been researching and determining what my next steps are to be for the market in Las Vegas, as well as seeking out other markets that do still cover the debt service and are on the rise.

When will you learn more about all this research? Drop in to The Lazy Investor's Real Estate Boot Camp (http://TheLazyWayToBuyRealEstate.com) and I'll discuss everything I've been doing!

Happy Investing,

Steve

And, sometimes, they are easy.....

The Lazy Investor - Just got a call from a Seller that saw my ad, heard my message and left their number. Sounded excited to have me call back, so, (of course), I did...

The husband had left the message to speak with either of them, and as his wife answered the phone, I began to discuss what we could do with her.

All was going great - she understood the fact that buying their house was not an option in today's market in Las Vegas - payments don't meet rental rates and therefore we would get into a negative cash flow situation, which would not be a winner for me.

I explained that we could do some creative stuff, leaving their loan in place, taking their payments, etc.... She was interested in that idea.

As they didn't want Realtors shuttling through dozens of 'lookers' and also since they could not set an exact move-out date ("moving to Tennessee 'sometime in the summer' - June or July" was all they know right now), they were looking for a more calm solution.

She told me a bit about the property (I explained why it didn't really matter to me what it looked like if the numbers were right - she understood...) and we got to the particulars of how the deal would come together - that's when she put her husband on the phone...

Now, I had to go through the whole 'pitch' again - although he, too, was open to the idea and interested in putting something together quickly.

So, here's how the deal came out...

Value - $335,000 (appraisal 2 months ago, when they did a re-fi to an interest-only loan)
Owe - $210,000 (re-fi)
Payments - $1285/m
Area - Silverado Ranch and Las Vegas Blvd (newer subdivision)
House - 3 bed + loft, 2048 sq. ft.
Lot - .12 A (kinda small...)

The deal...

We'll take over their payments, as-is. Do a LP for $10 down (the legal minimum in Nevada) and give them their $335,000 at the end of 5 years.

That allows for about $150/m cashflow.

It also allows me to pick up $10,000 or so up-front when a new tenant/buyer moves in.

And, when it is sold in a few years (not likely to happen until I've picked up at least another $10,000 from a 2nd tenant/buyer - maybe more...), I'll pick up another $20,000 minimum.

Not bad for running an ad in the paper....

Happy Investing,

Steve


To learn more about the methods used in this deal, be sure to visit www.TheLazyInvestor.com. Everything used to make this deal, including the contracts, ads, even the recording that makes Sellers anticipate your call is available in The Lazy Investor's Guide to REAL ESTATE and The Lazy Investor's Guide to LEASE PURCHASE, both availabe now at www.CashFlowProducts.com

Screamin' hot deals - they don't last long...

The Lazy Investor
Well, today was a perfect example...

A hot deal came across my desk at 10:40 AM - something that one of my Deal Finders sent to me - a 1000+ sq. ft. house in a 'less than perfect' neighborhood for $62,000.

The comps they pulled were showing around $112,000 value, and as is common with these deals, the house would likely need some work.

We were told that the place had a renter in it - nothing more on the deal at all....

Now, this deal alert went out to others on the list of this Deal Finder. To be sure, they have put together their list of buyers to make short work of such deals - that's just good business.

I sent the message out to the Club Members of LVREIC (Members get priority notifications of all such deals) as soon as I read the message, which, today, was just after lunch (I was at the bank cashing a $124,630.85 check from another deal I did recently - you can read more about that in another story...).

Members of LVREIC received the DEAL ALERT at 1:57 PM

One of the members contacted me around 3:45 PM and I followed up on the deal...

It was GONE already!

You see, deals like this are out there. Oh, not everyday, but they are there.

And, when they come along, you have to be READY. Not only ready to "look at it", but ready to BUY it.

People that get deals like this are those that are "decisive in nature" - they say "I'll take it, and then work out the details", not the other way around.

Now, would this be a screamin' deal if it needs tons of repairs? Well, it could take $20,000 and still be a good one - if you wanted to do that much work (that's actually one of the main reasons I didn't take it, BTW...)

Looking into the deal further, we found that the 'renter' was someone that wasn't paying anything to the owner of the property (maybe even a dead-beat family member) and they didn't want to go through the hassle of eviction (and the trouble of family issues, no doubt...) - that is one of the reasons they were selling so quickly and cheaply.

So, the deal isn't 'clean'... It will take some work to get the property into shape after going through an eviction (about 30 days in this state). But, there is still a good amount of equity sitting there and a deal is to be had - - -

IF you are READY!

Are you ready? What can you do, right now, that will put you in a position to get such deals like this one? Who do you need on your team to make things like this a reality in your life?

Or, maybe you just aren't interested in getting screamin' hot deals like this...

If you'd like to get these DEAL ALERTS quickly, get on the LVREIC Member's list. You can do that at www.LVREIC.com.

Happy Investing,

Steve

"I need to sell this house - FAST!"

The Lazy Investor

Here's a message I got from a reader:

=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
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.
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=

My reply;
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=

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

=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
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
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=

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

Webinars - a great tool for every Real Estate Investor, Agent and Realtor!

The Lazy Investor
Last week, I held my first ever 'webinar' - and I'm HOOKED! Two weeks ago, I had barely heard of this word, but I gotta tell you, it is the greatest thing going...

I mean, where else can you have;
- dozens of people listening to you, talking live, back and forth, from anywhere in the world
- all viewing the same webpage at the same moment
- all with absolutely NO TELEPHONE CHARGES!

Yes, there are teleconferences, and you can tell everyone to 'go to my webpage at such and such, but then you have to spell it a dozen times and still, some people don't get it.

With a webinar, YOU control the pages viewed, so you can make sure you are all looking at the same thing - every time.

Now, while it is the "cat's meow" for me, teaching regular sessions and such, why did I say that it is for EVERY Real Estate Investor, Agent and Realtor(r)?

Well, how about this - You want to show off your properties, right? And you want the person you are showing to see them as quickly as possible, without you having to go to the property, right?

The web lets you do that, of course. But, what if the person has a question? What if they don't like that property and want to see something different?

Traditional methods only put them back to a search page - a lonely place for someone that isn't used to poking around your site. This is a person looking to buy, not spend time searching.

But with the 'webinar' technology I'm using, you can have a button on your main page and every other page to let the BUYER contact you RIGHT NOW, LIVE. You can speak with them, answer any questions, and even show them other properties - all without leaving your desk!

And, if you aren't available at the moment, they can contact you for an appointment so you can show them all the properties, then set the time to meet them at the property for final viewing and signing the contracts!

It is a 'perfect' addition to the LAZY method!

Another great thing about having this service is that you can keep in touch with friends and family in far-off places - all without long distance charges!

The cost for this service depends on how many people you will have in your 'room' (the term for the meeting place of your webinar), but it certainly rivals the cost of a telephone line and those pricey teleconferences.

And, the service I'm using costs MUCH less than anything else out there that I know of - like hundreds of dollars per month less!

Plus it gives you features you will never get from teleconferences. The benefit of everyone 'being on the same page' sold me right away. Then, I used it for a live event...

Just once, and I'm convinced that teleconferences are headed for dinosaur status...

Check it out for yourself - I think you'll be convinced, too.

Go to www.TTCGlobaltalk.com and talk with Tim (he's one of the owners). You can usually find him hanging out at the Public Demo Room (there's a link on the main page to get there).

Be sure to tell him that I sent you!

Happy Investing,

Steve

Doing what you say you are going to do...

Don't you just hate it when people don't do what they say they are going to do?

I mean, what use is it to someone that tells you they will be somewhere - and then, they don't show up?

It wastes time for you (making you angry in the process) and also is a waste for them- the one that didn't show up - actually, in two ways. One, they have just wasted their breath (yeah, not much of an inconvenience), but the other, they have wasted their time in creating a friend with you, as a few times of this and you can't/won't take any more of it.

To me, it is simple - do what you say you are going to do. If you can't do it, don't promise it.

If you find that you have been late and/or not shown up for something more than once, you need to reevaluate your own time management morals.

Of course, not being precicely on time for everything happens to everyone, on occassion, but the thing is - if you are never on time, you are "overpromising and (certainly) underdelivering".

Strive to be on time. In my opinion, being 15 minutes late for something is almost inexcusible. I mean, your car had better have blown up or something. And, you should have at least called to tell the other person you have had some catastrophic issue - it is only common courtesy.

Do what you say you are going to do - not just in being on time, but doing deals that you promise. Other people are relying on you being truthful to them. If you say you are going to call them back, CALL THEM BACK! If you say you are going to make the deal work - MAKE IT SO!

Don't lead people on, just tell them the truth - what you can/cannot do, and move on.

Overall, you will have many more people happy with you because you were truthful than you will ever have happy about your 'stories'.

And, your business will reap the rewards, too. Doing what you say is a rare quality that, when found, you want to stick around that person as much as you can - but, be sure you respect their position and do what you say you will with them, too!

Happy Investing,

Steve

Getting things done - NOW

The Lazy Investor
Several days ago, I told you about Appraisers and such.

Well, we have been struggling with our appraiser - not getting the thing done, making what we felt are excuses, not actions and generally winding up almost losing three deals (worth almost $200,000 in my pocket) over it.

Not what I call a 'happy' time!

Well, yesterday, we had enough. I turned my wife loose on the appraiser! If you know Irena, you may be surprised at that statement. She is one of the sweetest, kindest, most patient people you could want to meet. But, when she gets going, watch it!

I've only seen her like that twice in the almost 12 years we've been together and let me tell you, I learned a lesson the first time that I didn't want it to be pointed at me again! ;)

Well, she let loose on the appraiser, got his bosses phone number and started letting loose on him. I was on the phone to the Real Estate Commission - first to the local chapter, then I found the state level person to call.

Presenting my case in detail - how we have been told for weeks now that the appraisal was 'an hour away', often times told 'it was already sent' and issues of 'computer problems', 'health problems' and a variety of this, that and something else (once, it was a 'car accident' that was keeping us away from closing), the Commissioner was concerned about how this was being handled, too.

Now, don't get me wrong - some things do come up, like health and car accidents, and cannot be avoided. But, dozens of them, all in a row, happening to the same fellow that was doing our appraisal? Seemed just too much.

Well, the Commissioner told me that she would check into it. My wife was done with the appraiser's boss (we knew the guy we were dealing with was an apprentice and that the real appraiser had to sign off on everything - another issue we were told was a problem - "The appraiser doesn't like my reports and we have to change a thing or two - the appraisal will be finished in an hour..." - how many times can we listen to that one??) The appraiser told Irena that he would have the report out by the end of the day. At one point, I spoke with him and he told me the same thing.

To shorten the story a bit, we had called around 3:15 in the afternoon. From the previous experiences, we felt that we would have the appraisal early this morning.

But, the happy part of the story is that we did, in fact, get it before 5 yesterday!

Amazing what people can do when they get motivated, isn't it?

It is a shame we had to go to that level - reporting them to the commission and such, but sometimes you have to do what you have to do. Our backs were against the wall as well - heck, I'm not loosing a couple hundred grand over incompetence!

So, what's it going to take for YOU to get motivated? To get up off your back side and make it happen in your life?

If it is time for you, and you want to talk about your steps, consider me 'the commissioner'.... We can put a plan of action in place and hold you accountable to make sure it is getting done.

It works - and is certainly one of the most successful ways to make things happen NOW.

Happy Investing,

Steve Majors - The Lazy Investor

Another exciting update...

The Lazy Investor

WOW! I just got off the phone with my CPA and we have come up with something that is totally blowing my mind!

This is one of those DUH! moments in life where you just can't believe what is happening - one where it seems that everything about it must be wrong, illegal or at least fattening!

I mean, how is it possible to actually have a method of picking up a check for just over $200,000 - and not pay tax on it - EVER!?!?!?

That's what we just came up with - and, it looks like we are going to have several properties coming our way that fit into the same category - a true 'niche market'!

I'm excited (I'm sure you can't tell....) - this could be really HUGE!

Of course, I need a bit of time to go through it, but it looks legal, moral, and most of all - PROFITABLE!

More on this as it develops!

The Lazy Investor - an update

The Lazy Investor
Still no calls from the constable's office..... Guess I should ask for my $45 back???

Well, at least the tenants are gone. They even left the property in 'broom clean' condition. After what we saw a couple days before - I thought for sure it would take a week to clean it, but they got it done quickly.

Of course, the place still needs a good cleaning. It looks like they didn't ever wash dishes or clean the bathroom sinks (we have pictures, but I don't think you want to see them!).

The appraiser did come though and gave me a 'thumbs up' on getting the price I wanted. So, that is something good.

I put up a sign on the garage and in the front window, and have already had a couple interested calls. Also put an ad in the paper - have yet to see anything from that.

Ok, more on deals and things later. Have a good weekend!

Appraisals and appraisers....

The Lazy Investor

Appraisers are funny people.

We can't live without them, but who can understand them?

Property values are based on comparable sales, right?
Comparable sales (comps) come from the MLS, right?

Well, then, just why is it that we need appraisers?

We need them because they bring us a 'neutral third party' - someone that is not involved in the transaction. Since the MLS is a Realtor(r) thing, it is possible that if we relied solely on the agent, they might want to 'skew' the results to a slightly higher mark - resulting in their higher commission.

If the seller would have a representative looking into the MLS for the comps, they, too, would most likely take the highest prices - to get the highest price.

Just as likely is the fact that, if the buyer's side of the transaction would be the one to give the final evaluation, the price would be on the lowest sales in the area.

Appraisers are there to give us a 'non-biased' opinion - something based on facts and figures only, and are suppossed to be totally neutral.

What seems to be the practice of 'neutrality', though, often gets swayed back to the side of 'who paid for the appraisal'... If the seller paid for it, the appraiser is inclined to work hard to 'bring in' the property value where the seller wants it. If the buyer pays for it, the same thing is true - bring it in no higher than the offer is made.

I guess there is really no '100% fair' way to get an appraisal. After all, we are all human. Even if it were a state-run thing, where some state agency would send the appraiser out to do the job, there would still be some influence from the person that let them in the house. Maybe we should let the state agency open the place for us, too? Heck, why don't we just have the state take care of everything for us - including sending us food, money and clothing? Maybe they would even send someone out to wipe our noses for us too?

I think I'd rather take my chances with an Appraiser!

Happy Investing!