I read article after article about how home prices and sale numbers are rising. These numbers are great and encouraging, but do not necessarily mean the Real Estate Market is on the path to recovery. I live in Georgia, and I see no residential construction happening. Companies that built 400-500 homes per year are out of business. Completely out of business. Everywhere I go I see vacant developed lots sitting. I could only guess as to how many there are, the number is staggering though. These lots that were selling for $35-60k are now available for $5-10k. The banks are practically giving them away. If there were ever a time to build it would be now. With lot prices so low and lumber companies begging for business, home builders should be able to build a very affordable product, right? So why aren't they?
Several reasons, first and foremost the banks won't lend the money for the construction loans. Regardless of what President Obama, Tim Geitner or Joe Biden are saying, there is practically no lending going on right now. Why won't they lend? Good question, that leads to reason number two. Banks won't lend because there is still way too much inventory on the market. Foreclosures and distressed properties (Short sales) account for around 30-35% of all current sales. In addition to that inventory, the banks know that they have over 500,ooo foreclosures that they have yet to put on the market. If there was a recovery in sight, the banks would be doing construction loans. When there is an opportunity to make money again, they will be the first to jump back in.
The final obvious reason is that first time homebuyers cashing in on the Homebuyer Tax Credit account for more than half of all sales. What will happen when the Tax Credit goes away? Everyone is sitting on the fence waiting to see what Uncla Sam does. That is the biggest problem when the government gets in the way, they do not realize that these programs do not sustain growth. Look at the Cash for Clunkers program. Auto sales were awesome in August during the program, what were they in September and October? These government programs artificially boost numbers. That's why you cannot let these numbers fool you. The Housing market is going to be in the dumps for several years. We have to clear all the distressed investory out before any consistant level of home appreciation will occur. We also have to start building homes again. That's not going to happen until banks start lending money again. Regardless, we have a long wait in front of us. Bad for the economy, good for Real Estate Investors. Real Estate Investors will continue to have unprecidented opportunity to cash in and get rich for awhile. That's why we are sticking to the Real Estate Investing business for now.
Monday, October 26, 2009
Wednesday, September 30, 2009
Atlanta's Real Estate Market's on Fire!
I've heard so many agents and brokers complain that 2009 was a horrible year in Real Estate. 2009 has been an amazing year in the Atlanta market. If you are flexible, you can always make money in Real Estate. So many agents are too slow to react and too stubborn to change their business models. If you follow the market trends you will always make money. I told agents three years ago to begin developing relationships with banks and to start doing BPO's. The agents that listened are making record commissions this year. The money is in the foreclosures and will be for a couple more years. It's really not too late to start getting a piece of this business. Whether you work for the bank or for the investors, there's plenty of business to go around.
I choose to work with investors. The way I see it, I'm working with the party that is happy and making money, not the one giving their houses away. My investors are from all over. They come from California, New Mexico, Texas, New York, Florida and Georgia. They are successful because they have a couple things in common. The first thing they have in common is that they all pay cash. Cash is king when buying in this market. The banks know it and when you make a cash offer it gets priority over the others. Where they get the cash differs. Some get it from their Self-Directed IRA'S and 401k's. Some get it from Private sources, they borrow it from others in order to invest. Some just have it or get it from equity in other properties they own. The key is that they have it, and are getting amazing deals. They can afford to pay 8-10% to use someone else's money to make these deals.
Another thing they have in common is that they have an open exit strategy. Once they acquire a property, they give me time to do several things with it. We first try and wholesale it to another investor. That's how you can make the quickest money with the least amount invested. We just did this in July, August and even this month in September. We bought small brick ranches and immediately wholesaled them. They were all aquired for between $13,000-$14,300 and all sold for at least $23,000. One sold in 7 days, the longest took 15 days. The investor (actually two different investors) made a total gross profit on these four wholesale deals of $44,000. Not too bad, we turned $55,000 into $99,000 just like that.
Time to get the kids in for the night, I'll pick this up next time. There are several other things my investors have in common that I'll share. Every one of these traits make them successful. The key for you is to copy these traits or find clients that have these traits. There is a ton of money on the table right now, you need to reach out and grab your share.
In the meantime, you can go to www.richandchrista.com and find a plethora of free reports, lists and various other tidbits that will help grow your business.
Continued Success,
Rich Reynolds
Virtual Investor Agent
I choose to work with investors. The way I see it, I'm working with the party that is happy and making money, not the one giving their houses away. My investors are from all over. They come from California, New Mexico, Texas, New York, Florida and Georgia. They are successful because they have a couple things in common. The first thing they have in common is that they all pay cash. Cash is king when buying in this market. The banks know it and when you make a cash offer it gets priority over the others. Where they get the cash differs. Some get it from their Self-Directed IRA'S and 401k's. Some get it from Private sources, they borrow it from others in order to invest. Some just have it or get it from equity in other properties they own. The key is that they have it, and are getting amazing deals. They can afford to pay 8-10% to use someone else's money to make these deals.
Another thing they have in common is that they have an open exit strategy. Once they acquire a property, they give me time to do several things with it. We first try and wholesale it to another investor. That's how you can make the quickest money with the least amount invested. We just did this in July, August and even this month in September. We bought small brick ranches and immediately wholesaled them. They were all aquired for between $13,000-$14,300 and all sold for at least $23,000. One sold in 7 days, the longest took 15 days. The investor (actually two different investors) made a total gross profit on these four wholesale deals of $44,000. Not too bad, we turned $55,000 into $99,000 just like that.
Time to get the kids in for the night, I'll pick this up next time. There are several other things my investors have in common that I'll share. Every one of these traits make them successful. The key for you is to copy these traits or find clients that have these traits. There is a ton of money on the table right now, you need to reach out and grab your share.
In the meantime, you can go to www.richandchrista.com and find a plethora of free reports, lists and various other tidbits that will help grow your business.
Continued Success,
Rich Reynolds
Virtual Investor Agent
Thursday, September 17, 2009
$8000, Going Once, Going Twice, Sold!
I cannot stress enough how quickly 12/1/09 is approaching. It will be here before you know it and just like that, the $8000 Tax Credit will be gone. If you are looking to purchase a home and qualify for this money, act now. Today is 9/17/09. It takes longer than you think to buy a home, unless of course you are paying cash. There are many obstacles that go along with getting financing these days that can drag the whole process out. In my personal experience, the appraisal has been the biggest issue. I have found that once the lender receives the appraisal, they then order a desk review of it, then if any questions arise they require a second appraisal be done, then order a desk review on it. Appraisal issues have delayed closing for more than 30 days. It really is unbelievable.
There is less than 75 days before the program will expire. Interest rates are so low and there are so many amazing deals to choose from. This is the best buyers markets we have ever had, and getting the $8000 is icing on the cake. I would be doing everything in my power to buy a home before 12/1/09 if I qualified for the rebate. Do yourself a favor, contact a lender today and get qualified. Find out what you qualify for and how much your payment will be. Ask for a "Good Faith Estimate" so will will know how much to ask the seller to pay in closing costs. Once you know what you qualify for, find a Realtor and begin the search. There are so many good Realtors out there waiting to find you your dream home. It should take you 2 or 3 weeks to find the home of your dreams and then take 30 days to close. You still have time to get it done so don't delay. It would be horrible to find that dream home and then have something pop up to delay the closing and miss out on the $8000. There are no exceptions, you must own the home by 12/1/09 or you will not be eligible for the money.
Another thing I am doing to help people get the money is offering all my tenants the opportunity to buy the home they are renting. Thats right, if you like the home you are renting now, why don't you ask your landlord if you can buy it from them. We are offering owner financing to our tenants to make it as simple as possible for them to be a home owner and be able to take advantage of the $8000 Tax Credit. You might not even have to move to get the money! How good of a deal is that! You most likely will lower your monthly payment, not move, own a home and get paid $8000 by Uncle Sam. Sounds like a deal of a lifetime to me.
What are you waiitng for?
There is less than 75 days before the program will expire. Interest rates are so low and there are so many amazing deals to choose from. This is the best buyers markets we have ever had, and getting the $8000 is icing on the cake. I would be doing everything in my power to buy a home before 12/1/09 if I qualified for the rebate. Do yourself a favor, contact a lender today and get qualified. Find out what you qualify for and how much your payment will be. Ask for a "Good Faith Estimate" so will will know how much to ask the seller to pay in closing costs. Once you know what you qualify for, find a Realtor and begin the search. There are so many good Realtors out there waiting to find you your dream home. It should take you 2 or 3 weeks to find the home of your dreams and then take 30 days to close. You still have time to get it done so don't delay. It would be horrible to find that dream home and then have something pop up to delay the closing and miss out on the $8000. There are no exceptions, you must own the home by 12/1/09 or you will not be eligible for the money.
Another thing I am doing to help people get the money is offering all my tenants the opportunity to buy the home they are renting. Thats right, if you like the home you are renting now, why don't you ask your landlord if you can buy it from them. We are offering owner financing to our tenants to make it as simple as possible for them to be a home owner and be able to take advantage of the $8000 Tax Credit. You might not even have to move to get the money! How good of a deal is that! You most likely will lower your monthly payment, not move, own a home and get paid $8000 by Uncle Sam. Sounds like a deal of a lifetime to me.
What are you waiitng for?
Tuesday, August 18, 2009
My New 2.5 Million Dollar Retirement Strategy
I don't think most people understand the power of compounding interest. Anyone that has a mortgage or has actually looked at their Truth in Lending Statement should know. Banks make a ton of oney from mortgages. I've decided to become my own bank. I want to use the same strategy the banks use to make all that money. How can I do this? I need to own a home free and clear without a mortgage. I have an IRA. Can I use my IRA funds to buy an investment property? Yes, if you make your IRA self-directed.
There is the key. Most people do not know they can self-direct their own IRA's. Here's what I've decided to do. I am a Real Estate investor, I'm going to find deals that I can invest my IRA into and have my IRA act as the bank. I have 3 children and the fourth due any day. I want to retire in 17 years. How do I get there.
I'm going to take $180,000 of IRA funds ($90,000 from mine, $90,000 from my wife's) and invest in six rental properties. Affordable housing is always in demand, I can find brick 3 bedroom homes in Atlanta for under $20,000, add in the rehab and I can be in ready to rent for right at $30,000. I find deals like this every day. Most people do not believe me, but they are there. These homes will rent Section 8 for around $850 per month. After taxes, insurance, property management and vacancy I will cash flow approximately $600 per month per home. That money goes directly from my property manager back into my IRA. Once in the IRA, I reinvest the money into a growth mutual fund.
How to we get to $2,500,000? We're investing in the homes for $30,000. These homes sold for between $80,000-$120,000 5 years ago. I look 5 years back, because that is before there was any talk of a "bubble." I think it is a fair assumption, that in 17 years from now they will be worth at least that, we'll use $100,000. Six homes 100k each, we'll sell the homes for $600,000. What about the monthly rent we've been investing in the growth mutual fund? Historically these funds average 12% growth per year. I've decided to be a little conservative and go with 10%. We've invested on average $3600 per month ( 6 homes with an average cash flow of $600 per month). Over 17 years, assuming the 10% growth rate, that would be $1,926,684.28. Add the two together and presto, $2,526,684.28. Properly invested with a conservative return of 5%, that would produce around $126,000 of income annually. I would be able to live with that.
Keep in mind, I've assumed rent will stay the same and also assumed the homes will only be worth what they were 5 years ago. Rent typically goes up, and historically home values will rise over time.
For comparison, if I left the $180,000 in the IRA's, assumed a 10% return over the next 17 years, it would grow to be $909,804.65. That is a good amount as well, but I would rather have the 2.5 mil.
Why wouldn't you make this kind of investment? In this scenario, we are taking advantage of the depressed Real Estate market and using the cash flow from it to invest in the stock market. Your retirement will be growing in Real Estate and stocks. Traditionally both have performed very well. There is a great opportunity to to really grow your wealth in today's market. Those who take advantage of these investment opportunities and properly leverage their cash flow will be sittng pretty in years to come.
There is the key. Most people do not know they can self-direct their own IRA's. Here's what I've decided to do. I am a Real Estate investor, I'm going to find deals that I can invest my IRA into and have my IRA act as the bank. I have 3 children and the fourth due any day. I want to retire in 17 years. How do I get there.
I'm going to take $180,000 of IRA funds ($90,000 from mine, $90,000 from my wife's) and invest in six rental properties. Affordable housing is always in demand, I can find brick 3 bedroom homes in Atlanta for under $20,000, add in the rehab and I can be in ready to rent for right at $30,000. I find deals like this every day. Most people do not believe me, but they are there. These homes will rent Section 8 for around $850 per month. After taxes, insurance, property management and vacancy I will cash flow approximately $600 per month per home. That money goes directly from my property manager back into my IRA. Once in the IRA, I reinvest the money into a growth mutual fund.
How to we get to $2,500,000? We're investing in the homes for $30,000. These homes sold for between $80,000-$120,000 5 years ago. I look 5 years back, because that is before there was any talk of a "bubble." I think it is a fair assumption, that in 17 years from now they will be worth at least that, we'll use $100,000. Six homes 100k each, we'll sell the homes for $600,000. What about the monthly rent we've been investing in the growth mutual fund? Historically these funds average 12% growth per year. I've decided to be a little conservative and go with 10%. We've invested on average $3600 per month ( 6 homes with an average cash flow of $600 per month). Over 17 years, assuming the 10% growth rate, that would be $1,926,684.28. Add the two together and presto, $2,526,684.28. Properly invested with a conservative return of 5%, that would produce around $126,000 of income annually. I would be able to live with that.
Keep in mind, I've assumed rent will stay the same and also assumed the homes will only be worth what they were 5 years ago. Rent typically goes up, and historically home values will rise over time.
For comparison, if I left the $180,000 in the IRA's, assumed a 10% return over the next 17 years, it would grow to be $909,804.65. That is a good amount as well, but I would rather have the 2.5 mil.
Why wouldn't you make this kind of investment? In this scenario, we are taking advantage of the depressed Real Estate market and using the cash flow from it to invest in the stock market. Your retirement will be growing in Real Estate and stocks. Traditionally both have performed very well. There is a great opportunity to to really grow your wealth in today's market. Those who take advantage of these investment opportunities and properly leverage their cash flow will be sittng pretty in years to come.
Thursday, August 13, 2009
IRS Tax Code Cracked, Reserve Your Free Sneak Peak
The First time Homebuyer Tax Credit in the Recovery Act is huge. I'm shocked not that many people have explored everything it offers. Buyers can get up to $8000 to buy a house. That 8k opens up so many opportunities for buyers, sellers, agents and investors.
I can show a buyer how to convince a seller to owner finance a deal for them.
I can can show an agent how to get up to 10% more for their listings in a down market.
I can show a seller how to find more buyers for their homes.
I can show investors how they can get deals turned for retail prices in 90 days or less.
I've done extensive research into all the IRS rules and regulations regarding the credit. What I found was so profound, I've decided to team up with another seasoned expert and create an information series on how to take advantage of this amazing opportunity. This Tax Credit creates a win-win for everyone involved in the deal. The buyer wins because they get the home they've been dreaming about and can also get their credit repaired at no cost to them. The agent wins because this opens the door for them to close 10 times the deals they are closing now. The seller wins because they can get a qualified buyer for their home and get up to 10% more for their home in a buyers market. The investor wins because he can leverage his money into a position that turns his money in 90 days or less. These are unheard of opportunities in this market.
If you thought that the only way to make money in today's market was with foreclosures, you're wrong. We discovered ways to get retail buyers into homes at retail prices. This is the first step to stopping the declining home values found across the Country. We cannot do it single handedly, that's why we are working relentlessly to get this information series put together and ready to be put in your hands. If you want to be one of the first to get this amazing information, go to www.virtualinvestoragent.com and opt in now to get on my email list. In the meantime you will receive free information from me on how to make more money, with less risk and no sweat in Real Estate. No obligation, no commitment, no subscription, Nada. Free from me to you.
Make sure you go to www.virtualinvestoragent.com now, do not miss the chance to be one of the first to get this ground breaking information. This information will change the way you buy, sell or invest.This material is time sensitive, do not wait. Once the government pulls the plug on this program it will be gone forever. Don't be one of the ones who regret not being able to take advantage of this once in a lifetime opportunity.
I can show a buyer how to convince a seller to owner finance a deal for them.
I can can show an agent how to get up to 10% more for their listings in a down market.
I can show a seller how to find more buyers for their homes.
I can show investors how they can get deals turned for retail prices in 90 days or less.
I've done extensive research into all the IRS rules and regulations regarding the credit. What I found was so profound, I've decided to team up with another seasoned expert and create an information series on how to take advantage of this amazing opportunity. This Tax Credit creates a win-win for everyone involved in the deal. The buyer wins because they get the home they've been dreaming about and can also get their credit repaired at no cost to them. The agent wins because this opens the door for them to close 10 times the deals they are closing now. The seller wins because they can get a qualified buyer for their home and get up to 10% more for their home in a buyers market. The investor wins because he can leverage his money into a position that turns his money in 90 days or less. These are unheard of opportunities in this market.
If you thought that the only way to make money in today's market was with foreclosures, you're wrong. We discovered ways to get retail buyers into homes at retail prices. This is the first step to stopping the declining home values found across the Country. We cannot do it single handedly, that's why we are working relentlessly to get this information series put together and ready to be put in your hands. If you want to be one of the first to get this amazing information, go to www.virtualinvestoragent.com and opt in now to get on my email list. In the meantime you will receive free information from me on how to make more money, with less risk and no sweat in Real Estate. No obligation, no commitment, no subscription, Nada. Free from me to you.
Make sure you go to www.virtualinvestoragent.com now, do not miss the chance to be one of the first to get this ground breaking information. This information will change the way you buy, sell or invest.This material is time sensitive, do not wait. Once the government pulls the plug on this program it will be gone forever. Don't be one of the ones who regret not being able to take advantage of this once in a lifetime opportunity.
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