Online Investing Daily

Wow, so many investors who started in Real Estate with the goal of buying and selling houses ended up being landlords, and they hated it. Now, I personally love rental houses and own quite a bunch of them, but listening to these sad stories all the time led me to focus on finding buyers.

This same experience happened to me where I ended up having to get a loan to buy a house I put under contract and was not able to sell.

Luckily, I had a mentor who told me to forget everything I ever learned about real estate and who took me through the ropes on a new way of investing - and that is finding what people wanted and not what I thought they should have.

Real Estate investing, if you do it full time, is not a hobby that you get in and do on the side like you see on TV where people flip houses and make a bunch of money. Yes you can do it but the TV shows are dramatized crap that does more harm than good in my opinion. They make people think they can go out and get a junker property, put a bunch of money in it, and sell it really fast and make a killing.

Well, wake up and lets get real. In the real world you will find out quick the majority of the time it does not work like that. You have to really know what is going to sell before you make a big purchase and sink time and money in the deal.

To find the buyers and ask them what they want is the only way to do it. If you know how to set up a system that does it automatically, it becomes a very easy process. Learn the secret that most of the gurus don’t tell you: how to find out what will sell before you buy.

To be successful in the rental properties business I have a few tips for you. First, you need to do some research and find out where rental homes are needed.

You need to get educated. Find out what areas are in need of housing. Areas that need housing are ones that have a lot of businesses in that city or town. Make sure it is a booming area, not an area that many manufacturing companies are closing and people are losing their jobs. Otherwise, you will find families wanting to move out of that area and looking elsewhere, where the employment is. Make sure you are looking in a safe area for people to raise their family. No one wants to move into an area where risks are involved. The next step is to make sure that the area is getting a high deal on rent. You don’t want to be paying for a house that is only going to generate low rent. That does not make sense when you are trying to make money. The area has to have inexpensive houses to buy with higher rent.

In order to accomplish the above, the best you can do is to find someone who can direct you in the right market. Find a person who can teach you and put you on the items you need to focus on, just the right person who is successful in the business and knows what he or she is doing. Do not depend solely on a television ad or an online ad - you will read a lot of different information on rental housing and wholesaling real estate. Some information is good to know and some is fluff. You need to be taught by a mentor who can show you each step you need to take in the correct manner.

There is a lot of money to be made in rental houses. Once you have done the above-mentioned steps, purchase the house. Next you will need a contractor to check the house to make sure everything is up to par. Replace and fix things as inexpensively as you can. Yet you want to establish a good relationship with people and keep a good business reputation. If you are renting out homes that are unsafe or not kept up that will bring your reputation down in an instant. Keep a good reputation and you will see the advantages. One example is if a renter has to move out he or she may even find a new renter to fill the house.

By buying your first rental property based on this kind of research, you will be making extra income. With that income you can purchase more rental properties. The idea is to keep repeating the step over and over again. At first the work is hard, but if you stay determined with time the steps get easier and easier. In no time you will find yourself very successful in dealing with rental houses.

Have you ever heard about this concept?

You can’t do it, you say. Well, I have a different opinion. I sold quite a few properties before I even had a contract on the deal.

In order to do it you have to have a huge buyers list. I have actually done this on a deal a few day ago. A seller pitched the deal to me. It looked like he was desperate to sell, but at the time I had already 4 properties picked up, so I told him I would think about it.

At home that night I pitched the property (with my mark up in it) to my buyers list. It ended up sold the next morning.

When I called the seller back, I told him I was thinking about taking it but for a lower price - because I already had 4. By letting him know that I made an extra 3 grand. Anyway, only then I put it under contract.

You see, it can be done. But I only could do it because I had a huge buyers list to offer the deal to.

Boy I love doing that, talk about no risk. Hahahhaha

In the first place you have to get around the non-assignment clause that most banks have in their contract. When I buy foreclosures, I either double close or I make sure I have the money (from multiple hard money lenders) to wholesale my deals even if I have to close on them before I actually found a buyer.

Another important thing I do, I focus on foreclosures that have been on the market for quite a long time - 100 days or even more. You will be at an advantage making offers when the banks are ready to negotiate.

I also always get thirty days before I have to close. I start marketing the property before I sign the papers, just a habit I have. Meaning, once the realtor tells me I have the property I immediately start marketing.

In a large city there will be a lot of REO agents but only a few of them move most of the deals in the area. You definitely want to build a relationship with these people. You will know you are talking to a big REO dealer when you make a low ball offer and they don’t even blink. They want you to do it because they know that the more low offers they will submit, the faster the bank will negotiate, the lower the price will get and ultimately the property will sell faster.

Many small time realtors don’t understand this. They act as if they were the bank and they are reluctant to submit your offer telling you the bank wont accept it. I simply explain to them that they just need to do their job and let the banks decide. Most of the time I am nice to them, but every now and then I get pissed and have to verbally smack them around. You can get away with it when they know you close all your deals and that you do a bunch of them. But I don’t recommend this approach if you are just starting out.

Another thing I do when dealing with REO’s is I make a bunch of offers. I will tell you that right now 99% of the deals I pick up are foreclosures. You just can’t beat the discounts the banks are willing to give because there are so many foreclosures out there. Most homeowners just can’t or won’t come down like the banks.