Created with Sketch.
Cash Flow Guys Podcast
19 minutes | 4 days ago
279 - What Questions Should I Ask Sellers?
This episode was born from a listener question in regard to what sort of questions should you ask when speaking with a seller. For me, this was a struggle in the beginning because I didn’t have any points of reference to keep me on track. Many years in sales taught me to avoid scripts if at all possible so I could better craft the meeting into a more conversational style. I did not want to risk sounding like a robot, instead, I wanted to build rapport and ease into the conversation so that I could learn what I needed about the seller and their pain points without sounding like a lawyer in a cross-examination. As a result of learning to get better at talking with sellers, I created my property information form. I looked at tons of examples I found on the internet and took bits and pieces from each one in order to craft one that best fit my needs. In fact, I still use the form to this day in each and every Seller encounter. To obtain a free copy of the form visit my website at CashFlowGuys.com and click on the resources tab for the download link.
28 minutes | 11 days ago
278 - 40 Year Loans - Crisis or Opportunity?
This topic for me began with a video I watched on YouTube Last night put out by a Youtuber who goes by “Meet Kevin”. In case you’d like to watch the video on YouTube, here’s the Link: https://youtu.be/iepZC3HdS8E The video was about the coming proposed changes to the CFPB’s policies as they relate to mortgage forbearance. The CFPB (Consumer Finance Protection Board) is concerned that in the coming months we could slip into a major foreclosure crisis spawned from the mass number of mortgages that will be exiting forbearance very soon. Here is a link to the proposed ruling: CFPB RUling Currently, there are approximately 3 million Loans in forbearance 1.7 million of those mortgages need to start getting repaid (forbearance expiring) In short, their short-term proposal is to force loan servicers (lenders) to extend a borrower’s mortgage by as much as 40 YEARS. (480 months) That’s 40 years ON TOP of the remaining time you have on the mortgage. It flat out says the borrow if affected by covid has a RIGHT to a 40-year extension. The proposed policy change also suggests no foreclosure filings allowed until Dec 2021. This is a very unique situation, after playing the audio from Meet Kevin’s video I break down what he said and hopefully provide some insight that will help you see the bright side of this situation as it pertains to us real estate investors.
22 minutes | 18 days ago
277 - The $72000 Dumpster Situation
It’s really simple...People can’t buy what they cannot find. Every minute of everyday people incorrectly spell things when listing items for sale. Find those items and you will find motivated sellers. This could be on eBay, Amazon, Facebook Marketplace, Craigslist, Offer Up or other online sales sites. Here are some examples of things I have bought at a huge discount because the ads were misspelled or miscategorized or under-advertised and then sold the items at a huge upside after marketing them properly. By under-advertising, I mean limiting exposure to items for sale, being lazy, not telling the world. This is a common mistake that Realtors and House Flippers make. I bought 6 sets of Halcyon Technical Scuba Gear being sold by a fire department on eBay. All new and unused, no idea why they were selling, frankly don’t care. The seller spelled Halcyon wrong so nobody bid on the auction. The starting bid was $500. I was the only bidder and won the auction for the opening bid amount. ONE set of the gear was worth $1,900 alone. I sold five sets for $1,500 each for a total of $7,500 and kept one set for myself that lasted me 15 years without fail. I once bought an FSBO property back in the old days when buyers and sellers were allowed to communicate and be in the same room..imagine that… In a casual conversation with the seller discussing what was next for her, she stated she now needed to get rid of her other four houses she had inherited. Had I asked this question sooner in the buying process we could have been closing on 5 houses instead of one. It turned out that the day before closing her niece announced that she was getting her real estate license and she promised her the chance to sell the homes on the open market so she could get the experience. Needless to say, I lost out on 4 more listings and my client lost out on a couple more great deals. And YES, I tried everything I could think of to sway her towards selling now instead of waiting to later to no avail. Back in the late 90’s I was walking through a parking lot behind a thrift store and noticed a bunch of golf clubs and bags leaning up against a full dumpster. Inside the dumpster was loaded with baseball equipment, bats, batting helmets, catcher gear, and more golf clubs and bags. I walked back home, got my truck, and unloaded that dumpster by hand into my truck in two trips. My total take on that adventure was $21500 in sales with ZERO inventory costs. It turned out the thrift store manager did not think used sporting goods would sell very well and he did not want to take time to clean the germs from the helmets, pads, and golf club grips (he was a germaphobe). Over the next 6-8 months I went back to that dumpster twice a week at night before the pickup day to restock my inventory. I wound up making an additional $50,000 from that same dumpster for a grand total that exceeded $72,000. Every time you see something that someone else does not want ask yourself this question….How can I make a decent profit from this item in a short amount of time with minimal effort? Who do I know that would value this item or items more than me? What specific steps can I take to find and notify that person that my item is for sale? Here’s the bottom line, there is an opportunity is everywhere around you.
19 minutes | 24 days ago
276 - Price Cowards Are You One Of Them?
Post credit to Alissa Walker and Wade Sutherlin, the lucky husband of Amanda Young who was my guest on episodes 172 and 173 A CONVERSATION ABOUT PERCEIVED VALUE: A customer asked a contractor friend of mine how much it would cost to do this project. My friend gave him a proposal: $4500 The customer responded: That seems really high. My friend asked: What do you think is a reasonable price for this job? The customer answered: $2500 maximum My friend responded: Ok, then I invite you to do it yourself. The customer answered: I don't know how to. My friend responded: Alright, then how about for $2500 I'll teach you how to. So besides saving you $2000, you'll learn valuable skills that will benefit you in the future. The customer answered: Sounds good! Let’s do it! My friend responded: Great! To get started, you are going to need some tools. You will need a chop saw, table saw, cordless drill, bit set, router, skill saw, jigsaw, tool belt, hammer, etc.. The customer answered: But I don't have any of those tools and I can't justify buying all of these for one job. My friend responded: Ok. Well then for an additional $300 I can rent my tools to you to use for this project. The customer answered: Okay. That’s fair. My friend responded: Great! We will start the project on Monday. The customer answered: I work Monday through Friday. I’m only available on the weekends. My friend responded: If you want to learn from me then you will need to work when I work. This project will take 3 days so you will need to take 3 days off work. The customer answered: That means I’m going to have to sacrifice my pay for 3 days or use my vacation time! My friend responded: That’s true. Remember, when you do a job yourself you need to account for unproductive factors. The customer answered: What do you mean by that? My friend responded: Doing a job completely from start to finish includes time spent to plan the project, pick up materials, travel time, gas, set up time, clean up, and waste disposal amongst other things. That’s all in addition to the actual project itself. And speaking of materials, that’s where we will start on Monday so I need you to meet me at the lumberyard at 6:00 am. The customer answered: At 6 am?!! My workday doesn’t usually start until 8 am! My friend responded: Well then you’re in luck! My plan is to start on the deck build by 8 am. But to do so we have to start at 6 am to get materials picked up, loaded, and delivered to your job site. The customer answered: You know, I’m realizing that a lot more goes into a job than what a customer sees in the finished project. Your proposal of $4500 is very reasonable. I would like you to handle the project. CONCLUSION: When you pay for a job, especially a custom job, (whether it’s a physical project or digital project) you pay not only for the material and the work to be completed. You also pay for: ✔️ Knowledge ✔️ Experience ✔️ Custom Skills ✔️ Tools ✔️ Time to plan ✔️ Time to prepare ✔️ Professionalism ✔️ Work Ethic ✔️ Excellence ✔️ Discipline ✔️ Commitment ✔️ Integrity ✔️ Taxes ✔️ Licenses ✔️ Sacrifices ✔️ Liabilities ✔️ Insurance If you request a proposal for custom work to be done, please don’t disrespect a service provider by trying to get them to lower their prices. If their proposal exceeds your budget, there’s nothing wrong with getting other proposals. Just remember.. you get what you pay for. 👉🏼 SERVICE PROVIDERS: Know your worth and be confident in it. 👉🏼 CONSUMERS: Recognize their worth and be respectful of it. Sharing this to support all my friends, family, and clients who are Entrepreneurs, Business Owners, and tradesmen.
19 minutes | a month ago
275 - Top Five Ways To Commit Real Estate Malpractice
The truly successful real estate investors and Realtors are the ones who are most skilled at solving problems. Less successful people focus only on the deal or the potential profits. In this episode, I discuss the five most common examples of Real Estate Malpractice and how to avoid them. If you are able to avoid these pitfalls and learn why they are pitfalls, you will virtually eliminate any competition you might have in the marketplace. Always remember that your beliefs and needs are not identical to the seller’s beliefs and needs which means to understand the seller’s problem, you have to get good at asking questions. How do we get good at asking questions that are easy to answer? We practice and learn by doing. Listen in this week and add another set of tools to your investor toolbox.
23 minutes | a month ago
274 - What Should I Do First?
In this episode, we discuss where to get started. In this case, I am replying to one of our listeners who is just getting started in real estate. He has done a great job so far getting himself lined up well to earn a profit now we will dive in and help guide him through the process. I’ll be brief in the notes this week since I think you’ll get lots of value by simply listening to the episode. Enjoy!
15 minutes | a month ago
273 - Solid Gold Leads
Once you make a decision to put yourself out there by marketing yourself to sellers, the next part (and often the most challenging) is knowing which leads to focus the most time and energy on. When I first started marketing, I quickly learned that leads of any kind don’t come for free, so I had to be careful to be sure I did not waste them. By wasting a lead, I mean underestimating the value of a lead and therefore not putting much (if any) time into reaching them with my message. Honestly, I didn’t think much about the value of one lead over another. I mistakenly thought that all leads were the same and therefore had equal value. Soon, I realized how wrong I was about the lead evaluation process and it was then that I found out that I was throwing money away (literally, in the trash) When using direct mail in your approach it's common to get returned mail back when your mail piece cannot reach the seller. This of course only happens if you a sure to include a return address on your mail piece (using a return address on your mail pieces is a golden nugget, you’re welcome). Over the years I have met thousands of investors from all over the world. I often ask those who use direct mail what they do with the mail that comes back undeliverable. I can honestly say that over 80% of the people I have asked this question to have told me that they remove the bad addresses from their mailing list and discard the mail piece. That’s it, in the trash it goes! Please know that the tougher it is to locate someone the better the lead quality is. That’s because most of any competition you might have will give up at the first sign of difficulty in reaching the hard-to-find seller. Think about the sheer number of people that talk about wanting to invest in real estate, buy the books and courses and never take any further steps. The majority of people who want to be investors simply quit at the first sign of hard work. The same is true for most things that lead to financial success. This reminds me of a situation that is going on right now with one of my students. He just did a mailing to his list of motivated sellers and received a handful of them back as undeliverable. Taking my advice, he decided to skip trace those returned postcards to see if he could find a better address to mail his postcard to. The seller had an uncommon name so he began the search by using good ole’ Google to see what he could find on the person. Low and behold it turns out the seller was arrested for committing a double murder and is currently serving two consecutive life sentences for his crime. Needless to say, my student now knows where this seller can be found literally for the rest of his life. Most investors upon hearing this would turn and run the other direction, but not my student, he is working through the problem until he can have the opportunity to sit down in front of this seller and begin to help him solve his real estate problem. Imagine looking through bulletproof glass sitting face to face with a cold-blooded killer! Worse, imagine negotiating the sale of an apartment building with one! The reality is that he has found a seller with a problem that likely needs a very unique solution. This ladies and gentlemen, THIS is how creative deals are born. So far, he has used his Propstream account to search the property’s public records and recorded documents that the mortgage is current. Further searching on Propstream revealed his lawyer recently filed a Lis pendens on the property which we imagine is a strategy to use the property as collateral towards the payment of legal fees of defending the client who is now in prison. In speaking with the prison officials, he was told that in order to visit the seller in prison he would need the seller’s authorization to accept his visit. The next step is to begin writing letters to the seller in prison so that he helps him see the benefit of accepting such a visit. Stay tuned for updates on this real-world true story.
17 minutes | 2 months ago
272 –How To Kill A Deal in 2021
Recently I listed a property for a client in the Tampa, FL Market. Yes, I am still living in the Florida Keys, however, I have a real estate team in the Tampa, FL, and Key West Markets now. I often find it shocking how easy it is for Realtors to kill deals for their clients and for themselves. I thought I’d bring value this week by educating you on the most popular way Realtors are blowing it this year. For those of you planning to buy in 2021 or ever again this applies to you. If you ever plan to sell any real estate of your own in the future this topic also applies to you. Granted, if I was to discuss every way Realtors, Buyers and Sellers kill deals this would turn into an 80-hour audiobook instead of a podcast. Tons of buyers are shopping before being sure they are fully qualified for a mortgage. Clearly, if you are using 100% cash then this won’t apply to you. This week I have had several instances of this happening. I believe every Realtor should know this already but since this week proves they don’t I’ll share with you what I mean about this. It’s always a bad idea to show houses to people who have not proven they are approved to buy such a house, here is why. The Buyers fall in love with a house and later find out that their lender can’t get them approved for the mortgage due to credit or income issues. Make no mistake, buyers will fight Realtors tooth and nail on this because everyone is eager to go house shopping but your time is being wasted if there is no preapproval. Lenders sometimes give preapprovals that are useless. What do I mean? I mean that the lender hands out a boilerplate approval letter (the same as they give to everyone) without first checking the buyer’s credit and verifying their income. I’m not sure if they do this simply because they are lazy, or maybe they think the buyer is more likely to be loyal to them if they “think” they are approved quickly. When a buyer goes under contract on a home, the next step is usually to get a home inspection and termite inspection (the latter is more common in the south). Next, an appraisal is ordered which means by knowing the buyer has forked over around $700 to $1,000 to have these services performed. There are no takebacks or refunds if they later find out they can’t qualify for a mortgage on the house. If it’s a commercial property the bill is significantly higher. Before you go shopping for any real estate, be clear on how you intend on paying for it. There’s nothing worse for a seller to take their home off the market only to find out a month later that the buyer is not qualified to buy it. Lost market time can crush a seller’s equity and even destroy another deal they might be working on if they needed to sell in order to close on the next purchase. If you are raising private money, you should have more than one financial friend to work within the event the first investor or two flake out. Consider closing on the concept with several financial friends. By closing on the concept bring them up to speed on the particulars of your deal, how you intend to proceed, and then simply probe for their buy-in. Lastly, always offer a seller the option to accept payments for their equity. Notice how I said that, instead of saying “seller financing” which terrifies most sellers, dumb it down to say payments for their equity. This is because technically, the seller is NOT loaning you money, therefore they are NOT financing you. Instead, they are simply accepting payments for their equity.
20 minutes | 2 months ago
271 - Massive Pandemic Opportunity Coming Are You Ready?
According to Hud’s Housing Market Indicators Monthly Update for January 2021, 40.3% of Mortgages in America are reporting as delinquent as compared to 28.1% at the same time last year (Comparing January 2020 to January 2021. 2,056,000 mortgages are considered seriously delinquent (which means over 90 days past due) Only 5% are in forbearance That means that there is a title wave of defaulted assets building up looking for a shoreline to destroy. What does this mean for you? MASSIVE OPPORTUNITY! When the title wave hits it will be epic, beyond imagination and that’s not a conspiracy theory...that’s a fact! The Federal Government will likely extend the foreclosure ban when it’s up for renewal in an effort to plug a leak in the dam that’s only temporarily holding back the water. It doesn’t really matter whether you are for or against the foreclosure ban because it’s already happening, and there is nothing you can do about it, except PROFIT!. The mounting debt that is late mortgage payments won’t simply disappear. There will be no flick of a pen to put cash in the accounts of lenders, especially on privately held mortgages. Big banks will likely get bailed out again but note investors could get wiped out. How does this spell opportunity? For starters, mortgages that originated in the last several years were likely written at very low-interest rates. In the lifetime of any mortgage, the value of the property that secures it will rise and fall and rise again, that’s undeniable. Origination is the most expensive part of a mortgage for the borrower, after that it’s just interest and principal payback provided it’s paid on time. Let’s compare it to buying a new car versus buying a used car. When you buy a new car it’s estimated that it loses 10-20% of its value the very second you pull it off the lot. Much more is lost if your negotiating skills are lacking or you become desperate to sell it. When you buy a home, it’s common to pay thousands of dollars if not tens of thousands of dollars for closings costs and commissions for all the support staff used to find, fund, and close the transaction. That money, once spent, is often considered gone forever unless the buyer waits for the property to appreciate to a level that absorbs those closing fees. As an investor, when you buy a property from a motivated seller you can often secure a significantly discounted price and save a small fortune if you buy with cash or private money. By private money I don’t mean the typical hard money loans you hear about at your local real estate meeting or club, I’m talking about financial friends you assist in funding your purchases for the long term in order for them to capitalize on a much longer-term gain than is typical with other types of structures. You can also “take over” the existing mortgage by buying the property subject to the existing mortgage. Buying a property “subject to” means the underlying mortgage stays attached to the property and in the seller’s name. The deed is transferred into your name which means you own the property but the seller’s lender has a lien against it in the form of a mortgage. Provided you stay current on the loan, it’s likely you can simply make payments until paid in full with no issue. Here’s a great time to hire a Real Estate Attorney that’s well versed in the process to assist you in preparing the contracts and disclosures necessary to inform the seller of how things are going to happen. Here’s an example of what I mean: Jimmy bought a house 4 years ago for $300k and put 20% down resulting in a mortgage in the amount of $240,000 which has a payment of $1,145.80 plus taxes and insurance. He is having a tough time keeping up with his mortgage, in fact, he is 90 days past due. Like most Americans, Jimmy doesn’t have $5,000 laying around to get caught up, and each month it gets worse. Today the payoff would be approximately $222,000 if you bought it today. Assuming the property appreciated 10% per year, that would mean the property is now worth $439,230. This means that over $200k net profit is a reasonable event after paying commissions and fees. The only question that remains is, how much of that $200k are you willing to share with Jimmy and your team?
21 minutes | 2 months ago
270 - The Most Often Overlooked Critical Detail In Buying Real Estate
Today we will uncover the most often overlooked critical detail when it comes to closing on your next deal. Skipping this one detail could cost you thousands of dollars and possibly result in you losing ownership of the property you intend to buy. I am talking about the details found in your title insurance commitment, precisely the info found in section B 2 of the commitment where exceptions to title insurance coverage are listed. Before we dive in, I’d like to briefly explain what title insurance is and why you need it. Title insurance is designed to protect a buyer of real estate if any past issue relating to the marketability of title has been overlooked over the entire history of ownership for that particular property. Title insurance only protects you in the event of PAST title issues, not future ones. It’s designed to protect you from problems that may arise from things that happened before buying the property. By the way, when I say “property,” I mean any real estate where ownership transfers whether it be residential or commercial, vacant land, whatever. What’s an exception? An exception is a specific item set forth that is not covered by the policy, which is excluded from coverage. STANDARD EXCEPTIONS. Every commitment has standard or regional exceptions. The traditional Owner's Policy will not cover any defects in title, losses, or claims, which fall within the standard exceptions. Here are some examples of standard exceptions found on title insurance commitments: Municipal Liens (for things such as water, sewer, garbage service unpaid bills) Assessments for Water, sewer, streetlight, drainage, or other types of improvements arranged for by your local government. Unpaid Property Taxes Federal Tax Liens Court Judgments Foreclosure Proceedings Fines Rights of tenants as about specific unexpired lease backed rights Encroachments Boundary Issues Restrictive covenants such as deed restrictions or other restrictions that pertain to the use of the land Child Support Liens Please note that the actual value of any property, regardless of use, lies in the marketability of its title. To get a copy of a free cheat sheet put out by First American Title, go to cashflowguys.com/title If you buy any real estate piece without first obtaining Title Insurance, you are taking a huge risk! In many cases, if you buy a property from a wholesaler with a double close, you will not receive title insurance for the purchase, meaning you are entirely uninsured against issues from the past cropping up and ripping you off. In a perfect world, your Realtor should be reviewing the title commitment with you if you are buying a property. If you are not working with a Realtor, then understand that the title company or closing Attorney is usually NOT required by any law (per se) to review these items with you or to call your attention to them. However, they must provide a copy to you, often buried in a mountain of other documents. Sometimes these issues will prevent a lender from originating a new loan that uses the property in question as collateral. If issues are found and NOT listed as exceptions to coverage, the title insurance policy will pay for legal expenses and any other related expenses to correct the title issue if it impacts the marketability of the title. When reviewing this document before closing, you can see that the title company and seller clear all the exceptions before closing. Once the issues are corrected, be sure to either have a replacement title commitment created or insist that the one with the problem documented be “marked up” and signed off by the title closing agent/attorney. Once the item has been either removed or marked upon the commitment, you will have insurance protection if it comes up again as it relates to the marketability of the title.
18 minutes | 2 months ago
269 - The 1031 Trap
1031 is a tax savings tool that many Americans take advantage of every year. A benefit to some, a nightmare for others. Allow me to explain Before we get started…. I’m NOT a CPA or Tax Professional; the info herein is my opinion...wait, why do we say that? What has ever happened to a non-CPA giving advice? I have no stories to tell on the topic...if you do, email firstname.lastname@example.org because I’m curious A 1031 exchange is a legal vehicle for deferring capital gains taxes. By electing 1031 exchange status when selling one property and investing in other investment properties, you get spared from capital gains taxes. (temporarily) Why? Because those taxes are deferred, not excused or forgiven… To get the facts on the 1031B program right from the Internal Revenue Service, go to irs.gov and search 1031 for further details. Let’s talk about deferment for a minute... At the time of this recording, the US Debt Clock shows our current debt at almost 28 trillion dollars. Our elected bottom feeders are about to add 1.9 trillion dollars to that in the next 30 days. This means the US debt is spiraling out of control, how will we ever stay afloat as a country? Only one way...TAXATION!! Do you honestly think that taxes will EVER go down in the future? Spoiler Alert, they won’t, in fact, they can’t. So, if taxes are only going to increase over time, why would you want to defer your tax obligation to a future time when taxes are higher? The second thing to think about is the impact of being rushed on your decision-making ability. In order to complete a 1031 exchange, you have to designate the replacement property or properties within 45 days. Do you honestly think 45 days is enough time to find, negotiate and go under contract on a great deal? No.. Likely, because you lack the time to do so, you will wind up buying out of desperation to “just get a deal done” while the clock is ticking. Below we will get into the math.. By the way, “designating the properties” means a notice to the seller of each designated property. The seller will need to sign the notice (according to the IRS.gov website). That’s not much time to put a deal together no matter what the economy is doing. Is it easy to overpay when you feel pressured to make a decision? Yep Head over to IRS.gov and search form 8824 and download the instructions, there is lots of good info here that you should discuss with your tax professional before proceeding. Let’s talk math for a second. Using a capital gains calculator I found online, I entered the following information: Original Purchase Price: $150,000 Sale Price: $250,000 Annual Income of taxpayer $150,000 Filing Status: Single Capital Gains Tax: Approximately $16,900 (married taxpayer would have a slightly lower number) Have you ever lived there? This is what the IRS says about that ”If the property given up was owned and used as your home for at least a total of 2 years during the 5-year period ending on the date of the exchange, you may be able to exclude part or all of any gain figured on Form 8824. For details on the exclusion of gain (including how to figure the amount of the exclusion), see Pub. 523, Selling Your Home.” If You Choose to go the 1031 route… Step 1 – Find a 1031 Qualified Intermediary Like self-directed IRAs, you are required to use a qualified third-party provider to get the break from the IRS. They will help handle everything for you. Step 2 – Identify The Properties You Will Buy Upon the sale of your assets, you have 45 days to identify what properties you will reinvest in. Not that you can locate multiple properties. You don’t have to close on them all. Step 3 – Close On Your New Assets After closing on the sale of the properties you are exiting, you have 180 days actually to close on some of the deals you have identified. Note that you can also use your funds to improve or even build new properties.
20 minutes | 3 months ago
268 - How To Avoid The Fear of Eviction Bans
Currently, there is a Federal Eviction Ban in place until March 31st, there’s talk that will continue until September 30th and possibly beyond that date. If you own income property as I do, such headlines certainly don’t help us sleep well at night, do they? Some of the people I have talked to recently are thinking about dumping their portfolios. Others are talking about allowing leases to expire and just keeping the units vacant until this blows over. Many buyers are beginning to second guess their decision to make a purchase until this blows over. Frankly, I think it's a great time to buy because never before have we had times so uncertain. Uncertainty breeds motivation in sellers. The biggest future challenge for buyers will be in obtaining institutional financing as lenders will likely pull back from lending on income properties. Now is a good time to hone your capital raising skills, you can do that at PrivateMoneyCrashCourse.com The eviction ban only applies to a portion of the population which seems to exclude many tenants who think they may be covered under this ban. Be proactive in open communication with your tenants in the event they fall behind. Yes, there will be a percentage of “Professional Tenants” that will try to use this situation to their advantage, but I feel that percentage will be a minor one. Recently, rental assistance stimulus has been passed and is available in many areas. If you have a tenant falling behind i’d get up to speed on how you can apply on behalf of your tenant to get paid. Getting up to speed begins by calling your local state HUD office to get the ball rolling. Please know that there is TONS of misinformation out there to intentionally worry good people in times of financial crisis. Avoid news websites, or any other non-official government information source when it comes to learning about the programs and how your tenants can qualify. Let’s not forget that this crisis is not impacting everyone equally which means there are still lots of good quality tenants out there that are ready, willing, and able to pay your rent. Now is a great time to access the value you are providing to your tenants. It’s more challenging to intentionally screw over a good person, so be a good person and be sure you are providing more in use value than you are taking back in cash value. When talking to sellers, go ahead and bring the topic of eviction bans up in conversation and discuss it. A polite conversation about this topic can serve to motivate a seller even more than they already are to unload their rental property sooner rather than later.
22 minutes | 3 months ago
267 - Are Turn Key Rentals A Good Investment?
Turn key rentals continue to grow in popularity amongst beginning investors due in part to the belief that they are easier to acquire, manage and control. Although there are differing opinions on what is considered turn-key, it generally means that the purchase, rehab, and management as a rental is done by a third party instead of the individual investor having to do everything. While for many it's a realistic way to get your foot in the door to the world of investing the end results are often less than exciting. Ease of Acquisition: Most people have a tough time putting deals together, they don’t have the time or desire to work their own seller leads. To buy a turnkey rental you simply place a deposit and wait for your turn. The easier something is to buy, the more people are generally willing to pay for it. This means that turnkey providers can often pack a hefty profit into each deal for themselves because people love the done for you model. Such a practice means skinny margins for the end buyer. Proforma Returns: Turnkey providers often use proforma documents to outline the expected profits from owning the property they are advertising. It's important to note that these numbers are rarely ever achieved and the actual returns are often considerably lower. You should do your own independent research to double-check the expected returns as advertised by the provider. Call three property managers and ask them what the rent amount should be based on the specific address you are thinking about buying. Ask them if they would manage it and how much they would charge. Also, ask them if they would feel comfortable replacing tenants if the need arose in a reasonable time frame. Be sure to check each expense to verify its accuracy, often what’s listed is an estimate, sometimes it's just a guess. Repairs and Rehab: Always get a home inspection done, even if the property was freshly renovated. Having a third party licensed home inspector to double-check everything and provide a report is a worthwhile minor investment. Expect to pay between $400 to $600 for a home inspection on a single-family home. Multi families will cost more and are usually priced per unit. The inspector will be able to check and report on the electrical system, plumbing, HVAC, Roof, and overall condition of the property. After receiving the inspection report, be sure to have the provider take care of any needed repairs BEFORE closing, especially safety items such as those that involve electricity, gas, or structural issues. Summary: Turn-Key Rentals can be a good investment for those who lack the desire or skill to go at it themselves. Because more people are involved in the acquisition lower returns should be expected but some return on investment is much better than no return on investment. Doing nothing will lead to your nest egg being consumed by inflation as time move on, don’t get caught up in that.
26 minutes | 3 months ago
266 – How To Get More Deals Without Knowing How To Sell
Knowing the appropriate time to make an offer isn’t something that most folks think about, however it is something that needs not to be overlooked. Putting out an offer too soon can often lead to instant rejection. Putting out an offer too late may cause the seller to think you are a tire kicker. Sellers often want us to make an offer as soon as possible, why is this? The urgency to receive your offer usually is because of one or two reasons, they are nervous about the selling process and want to get it over with as soon as possible OR because they suspect you might just be wasting their time. Have you ever been concerned about saying the wrong thing to the seller and upsetting or offending them? Does the thought of not knowing what to say to a seller make you a bit nervous? Everyone says to build rapport with the sellers, heck, I teach that too, but I realize it’s a huge challenge to build rapport with a stranger these days. Social Media, The Pandemic, and just plain everyday society make it more challenging than ever for many people to build relationships these days. In recent years humans have grown to be far more skeptical than ever of each other. Some gravitate to communicating via text messaging so they can avoid being face to face or having to speak spontaneously. Others use social media as a means to communicate. It is helpful to understand that being shy doesn’t begin and end with buyers, it’s a real issue amongst sellers too. Fear of confrontation and shyness is a huge part of why many homeowners hire Realtors to sell their homes for them. For many, it’s worth paying tens of thousands of dollars to avoid a potentially uncomfortable experience. So how do we overcome these issues? One word….TEAM Sales skill is not inside of each and every human, it’s a rare breed that has the skill and enjoys the process. Some people jump out of airplanes for a thrill, others? (people like me), we SELL! If you are not a Rockstar salesperson and feel you would not enjoy learning how to become that Rockstar, join forces with someone who IS a great salesperson. A great salesperson knows exactly when it is time to make the offer and close the deal. Why waste time learning a skill that you likely will never use and will ultimately make you feel uncomfortable in attempting? By bringing on a salesperson or “acquisition manager” you will garner far better lead conversion results than you could ever expect to achieve on your own. I know you might be thinking but wait! I can’t afford to pay a salesman right now. I have good news for you, a Rockstar salesperson does not expect to get paid until they close a deal. This means you can compensate them for the deal itself. Compensation can come in the form of a cash payment at closing, it can even be financed into the deal sometimes! Wait, what? Rabbit Hole Warning! Financed into the deal? Yes, you can pay out to vendors in a deal at the closing table by simply adding the amount of the payout to the sales price and then having the payout listed as a disbursement at closing. As long as the property appraises for the revised sales price if using a bank loan then everything should work fine. It wouldn’t hurt to keep your loan officer/processor in the loop as to your intent so there are no “gotcha’s” to sneak up in the final hours before closing. You can bring your salesperson in on the deal and pay them a portion of the net monthly cash flow. You could pay them a lump sum amount of future appreciation in a specified time frame. I have paid vendors using a note and mortgage recorded against the property for collateral and then made monthly or annual payments to them. Want to dive deeper into this topic? Then dig in by listening to this week’s episode.
18 minutes | 3 months ago
265 - Who Should You Be Talking To
In this episode of the podcast, I explore the specific criteria that make for a motivated seller lead. Too often we waste time, effort, and money marketing to unmotivated sellers who are not interested in selling to us. Instead, when compiling a list of people to market to, deep dive into the available criteria to come up with a formula that will lead you to discover motivated sellers. As you might imagine, motivated sellers are more receptive to selling at a discount and also are far more likely to seriously consider creative acquisition solutions. Something as simple as choosing to market to vacant properties instead of occupied ones can make all the difference in the outcome of your marketing campaign. I also announce the names of the two winners of the one-year free subscription to Propstream. Don’t miss this episode there is lots of value. If you want to sign up for a 7-day free trial to get motivated seller leads, go to CashFlowGuys.com/Data
19 minutes | 4 months ago
264 - A New Beginning
Today is January 1st, 2021. It’s a new year that also marks the end of 2020. This means 2020 is behind us. Nothing good comes from reflecting back on the drama of 2020. There is no need to look back on your past, instead, let’s get focused on the changes we can make moving forward to better ourselves and those around us. If you have bad credit or low credit as some say, start paying your bills and correct the situation. Call your creditors and work out a resolution. If you can’t work through this one problem I guarantee you will fail as a real estate investor because you will certainly encounter greater challenges as an investor than negotiating with creditors. If you are saddled with credit card debt, stop using them today and begin paying them off as fast as possible. Dave Ramsey teaches Financial Peace University which will make it simple to get out of debt if you are willing to do the work. If you are under-earning, stop overspending and focus on earning what you are worth. If you are not earning what you are worth, change jobs, change careers or work more hours to get out from underneath the grasp of your creditors. You can fix your own problems, that begins with admitting you have a spending and/or earning problem. Please stop lying to yourself. Do not leverage the equity in your home, it’s a trap that could leave you homeless. Learn how to raise private money instead. If you refuse to learn how to raise private money you will most likely fail as a real estate investor because banks only loan money to people who do no need it. Closing costs alone will greatly reduce and profits you hope to make in the first few years. Don’t leave your financial future to be decided by some salaried loan officer making chump change as an annual salary. If you are about to do a deal, will it pay for itself? Are you taking the opinion of those who stand to benefit by you proceeding with the deal? Sellers Lie, Realtors Lie, Wholesalers Lie...facts are facts so verify everything. Embrace the idea that you MUST generate motivated seller leads to survive. Nobody will bring a great deal to your front door ever, instead you will need to go out and seek motivated sellers. There is no such thing as a property that is priced right. Everything is overpriced, always has been always will be so stop looking for a “great deal” to be advertised. Finding a great deal has nothing to do with the asking price. Sellers, Realtors, and Wholesalers are not appraisers. Also, the appraiser’s opinion of value doesn’t really matter either. What matters is knowing if the property will yield the profit margin you believe it will, if not, you are not done negotiating. Don’t guess about anything in 2021. Don’t guess as to why someone is selling, ASK Don’t try to guess what number a seller will say yes to...talk to them instead. Remove as many middlemen from the equation as ethically possible. That doesn’t mean you should go around Realtors or wholesalers who have a written agreement with a seller, instead, market directly to non represented sellers yourself and filter them down such that you only speak to the non-motivated ones. The Bottom line is that 2021 can and will be your best year ever. For that to happen, you have to give yourself permission to fail and continue to fail until you succeed. You know right from wrong, you know what’s logical and what’s not. You don’t need to invest tens of thousands of dollars into education to buy an investment property, instead, apply basic logic and you will far exceed your expectations.
21 minutes | 4 months ago
263 - When Is The RIght Time To Buy?
In this episode, we are going to cover the old question of when is a good time to buy. Aunt Suzy doesn’t know… Social Media Lies... Brokers Lie... Wholesalers Definitely Lie… So who’s opinion do you trust on when is a good time to buy? How about your own? When the numbers make sense and allow for a reasonable profit, then buy! For Rentals: Income minus expenses equals cash flow, if the end result is not acceptable to you, offer less for the property. Yes, you must allow for greater vacancy AND the time it takes to find well-qualified tenants who are financially secure. Yes, you must figure in the cost of management because it’s a legitimate expense, even if you are brave enough to self manage. For Flips: If the After Repaired Value (Verified by an appraisal) does not offer a significant profit after deducting the purchase price, repairs, and holding costs...don’t buy. Make your flip offer subject to an acceptable appraisal. Forget about what “the market” is doing or not doing….do the numbers as you see them today..make sense? Will this property offer a fair and reasonable profit at the current purchase price? Don’t fear getting turned down, it’s part of the process. Hearing “No” is a good thing, it means you are taking action. After enough “No’s” the “Yes’s” will come
19 minutes | 4 months ago
262 - Almost Too Easy
Meanwhile, while many people are spending countless hours lamenting over which catchy LLC Name, Logo style, and color they should choose for their real estate company, I have been busy building my business. How you might ask? By finding motivated sellers and marketing to those sellers right under the noses of any Realtor or Investor competition I might think I had. Here is how my day went...wakeup at 0630, make a cup of coffee, and get outside on the porch to experience the rising sun and calm surroundings. I read the Wall Street Journal so that I can stay up to date on what’s happening in the world as it relates to financial markets and the psychology of the consumer. After all, while many people try to lie to themselves about how they are “not a salesman”, I wear that title as a badge of honor. I am also a savage marketer...embracing it is what made me wealthy beyond my wildest imagination and what allowed me to retire to the paradise of the Florida Keys. And for that, I make no apology. For me to earn any money at all, I first need to find problems to solve...that meant I needed to find two things, motivated sellers and money to invest with. Finding money to invest wound up being much simpler than I originally thought it would be. So simple I made a crash course on the topic to show you how to raise all the money you need the easy way, without a big song and dance. You can grab that course for a whopping $47.00 investment at PrivateMoneyCrashCourse. See what I did there? I make no apology...if you want to watch the sunrise in paradise, spend the $47.00, do the work, and move in next door. Back to my day…. At 10 am I figured I would be productive since my fishing reels won’t be ready at the repair shop until 1pm. I decided to put together a list of motivated sellers to market my services to. As a Realtor, I can either buy their property myself or help them sell it...either way, I make money and get to help them solve their problem. So...I pull a list in my local zip code of pre-foreclosure properties. I click list Automator so that if any of these sellers work out their financial situation and are able to escape foreclosure I don’t waste their time or my money marketing to them. Notice I did not mention the waste of my time? That’s because finding them took me less than five minutes. I then skip trace them within my system (learn more at cashflowguys.com/data where you can get a free trial and possibly win a whole year of the service for free). Now that they are skip traced I have the seller’s mailing info and name, a phone number, and an email address to work with. Next, I invest 15 minutes in creating a landing page for sellers who choose to go online to communicate with me. Now I go over to the campaign section, find a “done for me” postcard from the list of options and send it to 747 contacts in my database. This part took 12 minutes. It’s now 10:27 am and I am literally marketing myself to 747 people as often as I want for less than the cost of a dinner for two. If I want to go crazy and hit them by direct mail, email, AND phone? I can record a one-time voicemail in Propstream and send it off instantly to all 747 people for less than I will spend buying lunch today. This all begins as CashFlowGuys.com/Data what are you waiting for?
18 minutes | 4 months ago
261 - Covid Lawsuit Traps for Investors
Make no mistake, it's a brave new world, new situations come with new consequences. Understand this….Buyers / Sellers / Realtors / Wholesalers / Flippers CAN be sued related to Covid cases impacting those they do business with. There is no catch-all set of laws covering Covid and possible litigation that can come from it, each jurisdiction will be different (so far as we know right now). There is so much unknown it is becoming ever important to start looking at ways to protect yourself from possible liability. Remember, even though you might likely win your case, you will still end up wasting thousands of dollars and too much time defending yourself from such a lawsuit. To begin, let's talk about disclosure…Article 2 of the NAR Code of ethics addresses agents making proper disclosures…if you are an agent, might want to familiarize yourself with this again...what if a seller has or had covid? Do you need to disclose that? could you be sued for not disclosing that? Maybe…is the easy answer What about privacy laws, would you be violating any privacy laws protecting the infected person and therefore subject to lawsuit? I discuss a few different scenarios in this week’s episode that you need to consider and then hopefully take the steps to protect yourself and your business from such hassles. I am doing my first FREE GIVEAWAY, yes, that’s right, I am giving away an entire year of access to Propstream’s nationwide MLS and Public Records software to two lucky listeners. Here’s how you can enter to win... First, type in Cashflowguys.com/data in any web browser and sign up for a 7 day free trial, next, email me at email@example.com telling me why you feel you should win a free YEAR of access to Propstream $1200 value and how you will use the product to change your life. I will pick two luck winners from the list on the first episode that airs after December 31st so don’t delay getting signed up.
16 minutes | 5 months ago
260 - Its Ok To Be Quiet
Have you ever been told "you're not listening to me" Have you ever felt someone you are talking to is not listening to you? I notice this more and more every day in society, so much so that I wonder if anyone is listening. Perhaps social media is to blame... Maybe it's lackluster parenting skills... None the less, not listening to other people is one of the biggest failures in communication that we experience in modern times. I never thought much about this until I joined Toastmasters many years ago. While a member is giving a speech, others in the meeting are specifically assigned to listen to them speak and count the bridge words, audible crutches, and so on. For me, this became a very powerful lesson. When we are interrupted by someone we are speaking with, over time it can become annoying, more importantly, it can become very distracting. I meet people often who I can barely speak with because I am left feeling I cannot get a word in edgewise. When lines of communication are shut down, not much good comes from it. In real estate, it can mean mistakes, misunderstandings, miscalculations, and sometimes it can even kill a potential deal. I have said for many years that the best deals come from solving problems. When we have a tough time paying attention or listening, we will overlook problems altogether and find ourselves having a tough time raising money or putting deals together. How do we fix this? First, join Toastmasters, it's under $100 a year to join and worth every penny. Second, practice listening intently, and practice asking questions to fully understand the situation being explained to you. When talking to a buyer or seller, take time to learn why they are buying or selling, you might be surprised to know that most people have several reasons for buying or selling, knowing these reasons will help you put together great deals. When the other party is talking, become laser-focused on understanding the actual words they are saying, and if you are unclear on what they mean, ask questions for clarity. No matter what, don't try to guess what they mean, ask! Sometimes I will ask the other party if it's ok if I take notes, especially if I am having trouble understanding them. I have yet to have anyone say no, perhaps because I explain to them that I want to be sure I fully understand their situation fully and don't want to forget anything they are saying. Becoming a better listener can completely change your business for the better while bringing you more revenue than you can imagine because people will flock to you when they feel you have something to offer them.
Terms of Service
Do Not Sell My Personal Information
© Stitcher 2021