ABC Transactions
On the front page of the Arizona Republic their was a article talking about ABC type transaction. Not to summarize too much, it talked about how upset the real estate community is over these types of transactions. They felt how should an investor be able to negotiate a deal with a bank, via short sale, and then resale the property within a couple of weeks if not sooner and make a profit. I find that very troubling. It’s called capitalism. It’s what America is known for. As an investor who does these types of transactions with full disclosure, I feel that once again the investor is getting a bad rap. Not that I really care what people think, but this reporter really got it wrong. In the article it talks about how the ABC transaction hurts comps. Here’s the truth…..The asset was probably going to become either a bank owned property or go to sale at the auction. It’s going to hurt comps regardless. But there’s hope. As a fix-n-flipper, I buy these bank owned homes and rehab them and sell them for top market price. So a new comp is established. Thus raising home values. A distressed property is just that, distressed. I find it curious that everyone wants to beat up the investor. Most people I work with doing a ABC deals are very happy. I write up an offer immediately for them and start working the process of a short sale. Unlike Realtors, who list the property in hopes of getting an offer. Because I can close for cash, banks want to work with me. CASH is KING….It allows me to buy for cheap. At the same time I’m negotiating the short sale, I’m marketing the property to a end user. I’m able to do this because I take an option on the property and record it with the County Recorder. This gives me an equitable interest in the property. I disclose my whole process to the people I’m helping and the banks. I also make it very clear that I intend to make a profit. People really don’t care, they just want to get it done. ABC deals are a great way for investors to make a profit and help people at the same time. Go out and help some people today.
Finding Private Money
Finding great real estate deals is a critical part of being an investor. It requires great skills and knowledge to be able to smoke out those big fat hogs that pay you a lot of money….I see new investors spend all there time learning this one thing and it ends up crippling them. Why? They don’t have the money to close. You see, here’s what I know about real estate deals. A great deal comes along about once or twice a week. The only difference between a successful real estate investor and someone who’s not usually comes to this. MONEY….He he can find and produce it wins. Wouldn’t it make since to work on your skills to raise private money at the same time you are learning to source deals? I know some who will read this blog will say, but Corey, I have my own money…..I’m telling you, you will run out of it. That is if you are actively doing real estate. How do I know this? It’s happened to me. I wish I would have taken this advise earlier on in my career. I would be even farther ahead than I am now. Check out my video talking about private money.
Finding a Good Realtor
As a active investor in real estate I have come across quite a few Realtors. In fact, I’m amazed how many realtor are really out their. Now I’ve heard many a horror story from investors about Realtors and why they hate them, but I have quite a different opinion. I LOVE Realtors. Why? They make me money….Lots of it…Here’s why, I have a system thatI use to educate Realtors how I do business and the types of deals I’m interested in. I show them exactly how I find deals and even show them a lot of my secrets about how to find hidden profits. So why would I tell an agent who could possibly steal a deal from me or use my strategy to benefit himself and I get no love? The truth is, most Realtors are happy being a realtor. Now don’t get me wrong almost all of them dream about being an investor and doing their own deals. But what I’ve found is most of them just want to earn a quick commission. They didn’t recieve the training in realtor school how to lock up and control a property for a profit. What they were taught was how to find clients and get a deal closed. They reason I know this is because my wife is obtaining her real estate license. For me, I have no interest in having a license and being heavily regulated but, my wife is a fine complement. I can use her as my buyers agent and listing agent to obtain at least 6% of a deal when I’m flipping. This make a big difference when your buying 200k plus homes. That equates to 12k in realtor fees. So how do you find a good listing agent? One way I have done it is to find realtors who are listing fix-n-flip homes. If they have a lot of listings in an area, chances are they are a market expert. This could make you lots of money. It means he/she has street cred. They will probably know the market better than you. For buyers agents, I like to call busy short-sale teams and ask for their buyers agent. These people are used to writing up deals. I take them to lunch explain my program and tell them instead of waiting for things to happen, they can have control and makes things happen by sourcing me REO and Shortsale deals that come up on MLS.
Real Estate is a great business to be in. If your just starting out I recommend you try to find a mentor. Then, start writing offers. Your not in the game until you do this….And it is the place where most people chicken out. Be bold, realize you have an inspection period to blow out of a deal. Who knows, you could maybe lock up a deal and sell it to an investor like me, who will pay you a fee for doing so. All is possible with real estate. It takes a dream and bold action to win in this game, go out and do it.
Private Money
One way to get private money in your real estate business is to show people you know what your doing and to look professional. Here’s a little video I did that shows a home I have locked up in contract and I show comps providing insight as to how much that home is worth. What I don’t tell you is how much I paid for it. But I will tell you in this blog….I’m buying the home in the video for 65k. If I sell it at 100k that is a 65% LTV. That is the kind of spread you need to have when dealing with private money. All the lender wants to know is how am I going to get my money back and what happens if $@&* happpens. With a home leveraged at 60-65% most private money lenders will feel comfortable giving you their hard earned money. Please watch my video and give feedback if you like it or not. Also, if you are looking to lend private money go to http://www.privatemoneyphoenix.com I have a free ebook explaining how it works and how I can utilize your funds with deals like the one below.
Real Estate Dreams
I find that a lot of people in real estate stop doing it right about the time they are 3 feet away from gold. Watch this video and let me encourage you to stick it out. If I can do it, you can too.