Re: Mortgage Note Investing

How many of your real estate industry friends have ever done a “note” deal?

When I hear about note opportunities, it is music to my ears.

I’ve been waiting all week to use that line. I couldn’t resist.

Mortgage notes are everywhere around you. Most people think that only banks create mortgages. The reality is, a lot of wealthy people own “paper” on all types of property.

When wealthy people want to sell, well, just about anything, they know that they have a lot of options. Creating paper is simply one of the options.

Especially these days. The interest rates are so low at banks, if you have a chance to create “paper” (industry slang for a mortgage on a property) you can often get a much higher rate of return vs. a savings account. If they don’t need more cash, owner financing can be a great option.

But it doesn’t stop at houses.

Friends of mine have bought and sold cars, boats, land, apartment buildings, and even businesses and small companies – all using a wide variety of “owner financing.”

This creative process of owner financing will open your eyes to a whole new world of opportunity.

Our guest speaker this month at WREIA is a real go-getter. He is somebody who took a note class years ago and actually walked out the door and implemented what he had just learned.

You will be shocked to learn just how much of an opportunity there is in the note market. Some of his recent stories are nothing short of impressive.

It’s not just “mom and pop” that want to buy or sell notes. Banks, mortgage companies, hedge funds and private persons all are out here in the note markets – buying and selling every day. It’s a huge market.

Why are there so many people out here? Because it can be terrifically lucrative.

But – be aware. There are plenty of chances to make a mistake and you can screw up in this market. BIG time.

When you are out and about this weekend, maybe hanging out with friends or family – ask around and see if anyone has ever bought or sold something by creating a note for it.

Lots of us have done it. We are talking about the purchase of anything that allowed a buyer to pay over time versus paying all cash right now. Once you find someone, ask how the process worked for them.

Most people are surprised by how positive (and easy) the experience can be.

If you have been beating your head against a wall trying to make a deal work – having some additional knowledge could help you figure out a solution.

“It’s a pretty strong reflection of the housing market condition,” Nino Sitchinava, principal economist at Houzz, told CNBC. “The home renovation market has mostly recovered, and is in line with the prerecession peak.”

Still, those 55 and older continue to outspend millennials, nearly three times as much. Overall, homeowners who renovated last year spent an average of $60,400, about in line with the $59,800 on average in 2015, showed the survey from Houzz, an online platform for home renovation and design.

More at http://www.cnbc.com/2017/05/04/millennials-and-first-time-homebuyers-spend-lots-more-on-renovations-survey.html

Let’s agree that the last two weeks of the year not much work gets done unless you are working in retail.

Most of us are out shopping, visiting with family & friends or even headed out of town for a quick vacation.

Let’s say you were handed a check for $75,000.00 on December 15th, 2017.

What would you do?

Would you take a nice vacation or donate to your favorite charity?

Pay down some debt, or put down a deposit on a rental property?

Maybe all of the above?

Whatever your plans, an extra 75k will come in handy – especially at the end of the year.

Let me let you in on a little secret. A 75k check doesn’t have to exist in your imagination. It’s very possible and can be a reality in our business.

Real estate is one of the few professions that will allow you to make “chunks” of money. Sometimes those chunks can be life changing.

Very few people can work overtime between now and the end of the year and have it add up to an extra 75k. Not without sacrificing time with family and friends and maybe even killing themselves in the process.

But in our business, with a little bit of extra work, 75k is very much within your grasp.

No matter where you are in your career, you can probably make a few tweaks here and there and have them add up to some nice extra checks by the end of the year.

It doesn’t have to stop at 75k either. You are allowed to go much higher. Or lower I suppose. Choose an amount that would make a difference to you.

After nearly two decades in this business I know one thing – WE ALL HAVE OUR NUMBER.

Write your number down and bring it with you to the May WREIA meeting tomorrow night.  Then listen for the tactics that you can put into action.

Tomorrow at our May WREIA meeting in Bethesda we are going to go over tactics that you can act upon immediately so you can “bank some extra coin” by the end of the year.

Excited?

I am SUPER excited for tomorrow night.

I hope you join us tomorrow night (May 8th) at WREIA. We will open the doors for you at 6:30.

Bring your friends, your wholesale deals, and join us for some networking, education and expand your belief that other people are out here in the DC area making money in real estate.

*********

Interested in a seat or a WREIA Membership?

Save a few dollars and reserve your seat early.

Tremendous Savings and Additional
“Members Only” Perks for WREIA Members

*********

FOCUS and make 2017 a great year for your business!

Let me know how I can help you,

John Peterson
301-881-5541
Washington REIA Network, President
Profitable Property, Founder

P.S. If you missed it you can find more details and a video about the May WREIA meeting inside the Mickey Mouse article posted here.

Two of the 10 most expensive homes sold in the D.C. area in March were condos.

Does that surprise you?

Not long ago, when I thought of luxury condos, it was just over 2,000 square feet of “feels like a home” with some additional amenities all maintained by someone else.  They sold well to the D.C. weekenders, or their counterparts, the DC work-weekers.

Today – that has all flipped around.  The luxury condo market in DC today has an opening and some out of town condo developers are moving in to provide the product.   Some of these condos are 5,000 square feet or more, and may include 5 or more bedrooms.

These are hardly your college age condos.  These are for the “entertainers” who want a place to mingle with their contemporaries.

Have you noticed a change going on in the DC area over the last few years?

We have always had an Embassy Row, and our local universities attract more international students than ever before.

Some of those international students have decided to stay.  And so have their deep pockets.  Many are opting for the condo life, and perhaps we see their relatives joining them.

You will find an interesting few facts about the recent luxury sales taking place in the DC area on WTOP here.

Just don’t be surprised when you see the 6,100 square foot condo priced at just under $10 million.  It could be yours for a monthly payment of $41,854/mo according to Trulia.

DC’s demand for multi-million-dollar condos grows

Re: “Small business optimism is soaring.”

As a small business owner, we all know it’s important to keep an eye on the little things.

In our last article, we pointed out how Walt Disney kept an eye on his bottom line by looking at his new mouse character who went on to become Mickey Mouse. He noticed that if he cut the number of fingers to only three, it would save him millions over time in saved animation expense.

To produce a short 6 and a half minute film took over 45,000 separate drawings. Disney was on to something when he paid attention to the small “two finger” details.

In our business of renovating homes, the small details will add up as well.

In a recent article posted on USA Today there was an interesting comment:

“Despite the generally favorable environment, small businesses face new hurdles that are increasing their costs. Fifty-one percent of those surveyed said the prices they pay for materials and equipment are higher than last year because of rising commodity costs.”

It got me to thinking.

If costs are increasing, where can we save money on a renovation and still maintain a great product when we attempt to list or lease the property?

Here are three money saving tips on renovating a home.

1. Keep the pipes where they are whenever possible.  Moving water, sewer and gas pipes is an expensive process. You have to patch the old holes, create new access points. Many times, “easy” moves creates other change orders that will never return to your bottom line.
2. Bigger is not always better. Unless your project was built before 1970, many times the size of a kitchen or bathroom is just fine. Additional counter space is useful, but when you buy the extra granite, you realize another additional expense that may not have been included in your initial budget.
3. Instead of opening up an entire room, create a pass through instead. The small room will suddenly seem larger and most of the time structural issues will remain a non-issue. A good contractor can help keep you within local building guidelines when it comes to opening walls.
   These three simple tips could save you anywhere from 10-30 thousand dollars in additional contractor and material expenses on a single project.

Keep in mind, every home is different. Know your markets.

A row house in DC built in 1937 is very different from a townhouse in Fairfax built in 1987.

The DC row house probably needs everything opened up – maybe even down to the studs – and completely rebuilt.

The townhouse in Fairfax probably just needs new appliances, carpet and paint. It’s probably time to look at the roof and other exterior items. At the end of the day, the expense of opening walls and taking a 1987 townhouse “down to the studs” is unlikely to ever find its way to your bottom line.

There is a fine line between being cheap and being thrifty. Cheap can get you into trouble. Thrifty on the other hand, can put a few more dollars in your pocket at the end of your project.

As our economy continues to improve keep an eye on your bottom line.

Never stop learning.

Re-build safe.

If you want more tips like these, make plans to join us at our WREIA meeting this coming Monday, May 8th.

We are going to show you not only how to save money – no matter where you are in your career – but also how you can bring in income of 75k (or more) by the end of the year.

Some of our seasoned members will bring in 75k or more in May. But they also know if they can uncover another 75k in “side hustle”, it comes in handy at the end of the year.

Aspiring renovators might like to know how to make their first 75k over the next 7 months. We have you covered too.

Make plans to join us on May 8th. You will walk away with a personalized game plan and strategies you can pick and choose from that most appeal to you and your business.

Bring your questions, bring your wholesale deals and bring a friend.

See you on Monday May 8th!

*********

Interested in a seat or a WREIA Membership?

Save a few dollars and reserve your seat early.

Tremendous Savings and Additional
“Members Only” Perks for WREIA Members

*********

FOCUS and make 2017 a great year for your business!

Let me know how I can help you,
John Peterson
301-881-5541
Washington REIA Network, President
Profitable Property, Founder

P.S.  Are you interested in a lender or construction partner for your project? Yes, we do partnerships! We lend to and partner with people all over the DC area. Call the office and lets set up a time to talk through or walk through your project.