YellowMustang Real Estate Investment Club

Myth – You will get rich overnight

If you listen to the late night gurus on tv, read their books, go to their seminars, you might believe that one form of real estate investing or another will make you a millionaire over night – or at least by the end of the week.  Reality is, real estate investing is no different in terms of effort and energy than any other means of producing real wealth.

It takes time to find the right investments of any kind.  It takes time to learn the ropes.  It takes time for assets to appreciate (either by waiting, fixing up, getting a deal someone else will pay more for, etc).  It takes time for real estate transactions to close.  It takes time to build a network of people to facilitate your own endeavors.

Myth – That late-night TV stuff doesn’t work

It is a fact that very few people who purchase guru products make money.  This does not mean that the methods taught by the gurus don’t work – most do.  The key word is work, and the potential investor must do the work.  You can convince yourself that anything won’t work and you will be right.  If you take to heart what is taught and adapt it to your own situation (remember, no one thing works for everyone) and put forth the effort, you can succeed.  Probably not as fast as advertised and don’t expect checks as big as shown in the testimonials; but that does not mean the system does not work.

Myth – Real estate investing is easy

Let’s face it; if it were easy everyone would be a real estate millionaire!  There have been many people who have lost everything because they went in blindly thinking anyone can do it without effort.  The reality is it takes effort to acquire the know-how to succeed.  Real estate investing is definitely something almost everyone can learn, but it is like anything else new, there is a learning period.  Once a method is learned well, the real estate investor can make a very good living with it, but can be quite an uphill road full of potholes in the beginning.

Myth – Money is not needed to invest in real estate

Another often touted “benefit” of real estate investing is “No money needed!”  Let’s be real here.  Nobody is going to give you his or her home just because you make a phone call.  It takes money for education. It takes money to drive out to look at properties.  It takes money to print fliers.  It takes money to acquire real estate, even if it is only $10.  it takes money to mail out fliers.  I once signed up for a no money needed tutorial and one of the first questions we were asked was could we commit $300 a month to advertising!  So much for no money.

Myth – You need money to make money

Though it was just said you do need money, you do not need a lot of money.  The reality is, in the real estate world, if you have taken the time and effort to find a truly good real estate deal, the money will appear.  Remember, in the first myth, it takes time to find others.  Money is where those “others” can be a tremendous asset to you.

Myth – With a full time job, a spouse, and children, there is no time.

In this day and age with sports and school and all the other things that claim out time, finding time for one more thing may seem daunting.  For most of us, however, if we really want something, somehow the time materializes.  Spend a week or two and keep an accurate record of how you have spent every minute of each day.  Things like watching TV or reading entertainment magazines might take more time than you realize.  What about having the children take over some of the day to day chores.  There is nothing wrong with teaching a 10 year old how to do laundry, load a dishwasher, and vacuum a room.  Might even help them break the TV habit.  Use the time saved to learn about real estate investing, research, etc.  If you are looking to flip or wholesale, have the family go on ugly house drives.  Let the kids know what you are looking for and you might get leads from their friends who live next door to an ugly house.

Myth – There is too much competition.

What sounds like competition is often wishful thinking.  Two investors in the same neighborhood, investor #1 finds deals and the investor #2 feels there are no deals because investor #1 is getting them all.  Now investor #3 comes along and sees 2 others working the territory and leaves due to competition.  Reality is, he who makes the first BEST offer gets the deal.  If investor #2 and #3 were to act instead of just look, they would have deals too.  Investor #1 cannot be on top of all deal at the same time.  Deal density varies from location to location, but reality is there are more deals than people who know what to do with them.

Myth – Real estate agents will not cooperate with investor

Like anything else, some will, some won’t.  There are a lot of agents out there who rely on investors for their commissions.  It can be a really sweet deal for agents that understand investing.  They are in the position of helping you find a property and helping you find a buyer.  Sure, they need to be paid, but that is what having a team is about.  What’s it worth to you to have properties and buyers brought to you?

The internet is a great place to find information, AND misinformation.  There is a lot of stir about HR 2454 – the American Clean Energy and Security Act of 2009 (Cap and Trade Bill)– and the impact it will have on real estate investors.  The claim being made is that for every home sale, there will need to be an inspections and the house cannot sell until it meets certain energy criteria. We are still doing our own research at this time, but have not found anything in the bill to support these claims.  The full text of the bill, a summary, and myths and facts can be downloaded here

BLOOMFIELD, SAN DIEGO 92114

PRICE: $185,000
ARV: $260,000 – 265,000 remodeled
1176 Sq ft (tax records) – 4 bed/ 2.5 bath / has additional sunroom addition
5700 sq ft Lot
Built 1962
single family

Rents ~$1800-2000
Rehab ~$15K for rental / $35K for rehab
*Actual estimate depends on contractor and exit strategy used

Buyer is advised to get their own estimate.
Reply for lockbox code and pictures.

Need quick close. Cash only. Reply to Scott if you are interested.

Webinar available here

Tired of paying more than your share of Federal income taxes?  Wish you could find a way to legally reduce your taxes?  You may have found your answer!  What if you could purchase a property with $10,000, $15,000 or more in tax incentives and guaranteed income from a corporate tenant?

Let’s look at the tax incentives:

After hurricanes Ike, Katrina, and Wilma; the federal government instituted the Gulf Opportunity Zone (Go-Zone) Act

As a tax incentive to the private sector, tax benefits were created to encourage rebuilding. This tax incentive includes a property depreciation deduction up to 50% in the first year.

A little background for those not familiar with real estate.  Any property held as part of a business has a limited life.  The IRS has set up criteria for determining the annual amount deductible as depreciation.  This value is deducted as an expense of doing business and therefore, tax deductible.  (Those wanting more information may go to the IRS.gov site)

The Go Zone Act allows a taxpayer to an additional depreciation deduction of 50% on the first year’s expenses on the property.  Suppose a property is purchased for $250,000 in the qualified Go Zone region.  If the land is worth 15%, the depreciable amount is $212,500. The standard annual depreciation is. $8,283.  Assuming a 30% tax bracket, the deduction nets the taxpayer a tax benefit of  $2,455.  This is true no matter where the property is located.  Property in a qualified Go Zone area has the option of 50% bonus depreciation the first year.   The taxpayer is eligible for a depreciation deduction of $106,250.  Again using the 30% tax bracket, a tax reduction of $31,875 is realized.

Why would the government reduce taxes?  For one thing, the tax deduction is less than what would be spent if the government rebuilt the residences itself.  $31,875 is a lot less than the $250,000.  This is the government’s incentive for private parties to participate in the rebuilding.

Secondly, many taxpayers may need to spreads the deduction out over time.  Due to IRS rules, it may not be possible to use the tax benefit in the current year.  Therefore, the allowable tax benefit amount may be carried back 5 years or forward 20, offsetting those taxes owed.  In this way, the government is paying over time, reducing current year liabilities.

Third, Depreciation may be recaptured when the property is sold.  That means the tax benefit may turn out to be an interest free loan from the government.

Some of you may be aware that the tax benefits were to end on December 31, 2009.  The IRS has extended this program for another year.

Webinar available here

Don’t foreclose on our home until you look at selling your house on eBay!  This is not for everyone and does take effort to do it right.

“There are now over 4,364 real estate properties sold on eBay Real Estate every month and thousands more are listed using our ad format! eBay is particularly popular for those selling unique homes, vacation homes, or homes for investors. Let yours be next!” – Ebay web site

With the exposure eBay has, you drastically expand your audience.  As with any other internet method, home buyers have 24/7 access to the listings and can respond immediately.  You do not need to be an agent or broker to sell a house on eBay.

Home sellers have the choice of selling through the auction or the classified sections.  eBay has the templates and suggestions.  I have looked through real estate listings and find it amazing how poorly done some are.  To stand out, you want your “for sale” post to stand out and shout buy me.

Use pictures and videos.  As in using real estate marketing sites, spend time creating a description that will make the potential home buyer feel at home in your house.  Just because eBay it used like classifieds doesn’t mean you need to keep it short.  Just be professional.

eBay real estate auctions are not binding.  Essentially, buyer and seller get together after the close of the auction and work out the details, which vary from state to state.  Click here for a short article in the Wall Street Journal you should read if you are thinking about selling or buying real estate on eBay. There is some very good advice here.

Would it be better to know how to use eBay real estate from someone who has figured it out, or would you prefer to stumble through and hope for success?

“Sell Your House On EBay In Less Than 17 Days!” gives step-by-step instructions to optimize your eBay real estate experience.

Real Estate agents in particular and home sellers in general, often don’t think about the fact that many buyers use the internet to find their new home. It is amazing how many real estate agents have not updated their thinking and don’t market properties on the Internet.   It is vital to you, whether you’re selling your house yourself or using an agent that you know and use your internet options.

You do not need your own website to advertise your house for sale.  You do not even need to be particularly internet savvy.  Sellers are guided through a simple fill in the blank template for all the information on the property.  Then there are instructions for uploading photos.  It is easy and fast.

The advantage of using one or more of these sites is exposure.  They already come up on top in Google and other search engines, so you do not need to worry about optimization and all the other search stuff.

Make you title specific for your location and type of property.  Putting “House for Sale” will not draw the same response and putting “3 Bed, 2 Bath in City, State”  Include as many good pictures as the site allows.  Include in the description area as much information as you can think of to make a prospective buyer get a good feel for your house. If you read the previous post, you will remember to call your house a home when communicating with a prospect.

I have included a few sites where you may want to post your house.  Check them out.  They often have information to help you market your property.

http://www.forsalebyowner.com/

http://www.fsbo.com/

http://www.owners.com/

http://www.homesbyowner.com/

http://byowner.com/index.html

http://www.salebyowner.com/

http://www.virtualfsbo.com/

Also Google  “for sale by owner” or some similar keywords to find more sites.  Explore them to see which may be most beneficial.  Of course, you are not limited to the number of sites you use.  The more exposure, the better your chances of selling.

Good luck.

Are you looking to sell your house in today’s market? It doesn’t matter whether you’re selling it yourself or using a Realtor; research is necessary.  A couple years ago selling your home was a simple thing.  In the current market, extra steps by the owner are needed to get the house sold quickly today.   With bank foreclosures bringing down prices, you do not want compete on price.  What can an owner do to have a buyer like his house better?

To start with, it is essential for owners to look at a house as a house, not at a home. Preparing a house to sell requires looking at it with an objective eye. Sellers need to look at the house as if they were a buyer.

How would a new buyer view your house? Is it neat and clean, or is the bath tub/shower dirty? Does your kitchen look like it would be a great place to fix a meal, or are there dishes in the sink and drips down the dishwasher and stove? Does the paint look clean, or are there dirt marks on the walls?   Remove all unnecessary furniture and clutter.  Rent a storage unit if need be.  This includes basements and garages.  The key is to keep the house looking like it’s ready for company.

Exploring staging techniques could be well worth the time.  It does not need to be expensive to add some really nice touches.  Remember, first impressions are important, and staging can make a tremendous difference.

How about the outside? What is the current appeal?  Is the grass neat and tidy and the bushes trimmed well? One thing many people don’t realize is the importance of a clean fresh front door. The same goes for the garage door. Not only our first impressions are important when you meet other people, they are also important when people view your house. Are your gutters clean? Trash cans neatly put away with lids on? All pet deposits are kept cleaned up? Look around, what do people see and smell one walking around your house inside or out? With these things and entice you to purchase this house?

Once you have these all cleaned up and ready for company, now have the pictures taken to advertise your property. You want to be sure that any photos or videos use show your house in the best light. That means you may have to use extra lighting inside or outside to put the best face on your house.

When you know someone will be coming to view the house, make sure it is in the best possible condition. Having the aroma of fresh baked cookies or bread or even some subtle potpourri, without being overpowering, can help the house feel like a home to a prospective buyer. Playing relaxing and quiet music can also help give the house a cozy feel.

Remember, when you’re selling your house you need to think of it as selling a house, not selling your home. You will be taking home with you when you move so change your mindset and start calling this your house not your home.

There are numerous guides available to help you.  Here are just a sample:

How To Sell Your Home In 21 Days Or Less – With Or Without A Realtor. – The Secret To Selling Your Home In Just 3 Weeks Or Less In A Down Market. Easy Step-by-Step Real Estate Program Is The Perfect Solution For Hard-To-Sell Homes. Used By Both Realtors & Fsbo Homesellers

For Sale By Owner Help. The Secrets To Selling Your Home Yourself In 1-6 Weeks Without An Agent And Saving Thousands In Real Estate Commissions.

Help Sell House Guide. Are You Fed Up Because You Need To Sell Your House? Do You Urgently Need To Stop A Pending Foreclosure? Are You Sick & Tired of Your House Still Sitting on The Market (While Rarely Being Shown)?

How To Sell Your House Faster. Irresistible Open Houses Is A Motherload Of Good, Common Sense Advice About Things You Can Do To Help Make Sure Your House Will Be One Of The First Ones To Sell In Your Neighborhood.

Home Staging Handbook – Prepare Property To Sell Faster For More. Learn Essential Home Staging Techniques. Quickly Get Properties Presented And Ready For Viewing. Declutter, Redecorate, Accessorize And Organize.

Effective today, December 1, 2009 – FTC publishes final guides governing endorsements and testimonials on blogs, affiliate sites, web sites etc.   Not knowing is not considered an excuse by the FTC.

exerpts:

1 ….advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect.

2…add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed.

3….the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers.

Text at http://ftc.gov/opa/2009/10/endortest.shtm