I had an interesting conversation a few days ago that ended with this comment:

“Share my story with the other members, and let’s hope they don’t make the same mistake I did when I got started.”

I hung up the phone a few days ago and was reminded of something….

Our WREIA members are an amazing group of people.

This long-time WREIA member read our post a few days ago and gave me a call at the office. He wanted to share his story with me, and pass some of the details on to you.

This member “finally got serious” about real estate and had spent a little more than a decade accumulating a decent net worth of a little over $3 Million dollars. He was definitely the “millionaire next door”.  You never would have known his net worth by the car he drove or his modest background.  He was never flashy, and never heard bragging about his business success.

But, he lost nearly all of his net worth over the last few years mostly to some bad advice when he was first getting started.  The attorney he used when he got started as a real estate investor was a great real estate transaction attorney – but he knew next to nothing about asset protection.

My friend went on to tell me exactly how he could have kept the majority of his net worth in tact.  He could have structured his entire business just a little differently, and most of his losses could have been avoided.

Knowing how to find, fix and flip a house is important.  But it doesn’t matter how much you make if you leave yourself and your assets exposed to lawsuits.  Just one bad mistake can take down your entire net worth, and leave you penny-less trying to defend yourself.

After spending so much time and working so hard, losing so much is a terrible story. But the conversation really hit home with his final point:  It put an enormous amount of pressure on his family.

That is why I am passionate about our topic at WREIA this month.  Helping you avoid future problems and keeping you in business is something I am passionate about.  You have heard us say it frequently at WREIA – sometimes not doing a deal can be the best decision of your year.

There have been a few times in the history of WREIA when I really wanted everyone to hear our guest speaker.  Next Monday, April 15th 2013 is one of those months when I wish I could reach out and invite everyone in the DC area personally who has anything to do with   real estate investing.

Keeping what you accumulate is just as difficult and important these days as earning it.  And that is why we will be discussing Asset Protection and Tax Reduction next Monday at WREIA.

We have an amazing membership at WREIA.

Come out on Monday night, increase your knowledge and network with a fantastic community of DC area investors.

Let me know if there is anything I can do to help your business.

John Peterson

The market here in the DC area is heating up again, and I am starting to see people make mistakes.  They are paying too much for properties and not leaving enough room to make a profit.

Edwin Land, the guy who invested the Polaroid camera, described a mistake best when he said : ‘A mistake is a future benefit, the full value of which is yet to be realized.”

How can paying too much provide a future benefit?  Because when the project is finished –  now you have learned something.  Many people walk away from their first real estate “deal” and say “I’m never gonna do that again.”

How quickly the tide has changed.  18 months ago, talking about real estate made people uneasy.  Fast forward to the spring of 2013, and you would think we have a real estate gold rush going on.

But let me show you something…..

This is a chart I pulled from Trulia.com showing prices in the Rockville, MD area over the last 10 years.

Notice that every spring – even in a recession –  we have upward price bumps?  Spring is a great time to sell property – but not the best time to be buying.

Have some patience – and don’t start making mistakes.  We may be out of the lowest point when it comes to prices – but don’t go making mistakes by being to eager to get in the game.

This is a terrific business to be in if you treat it like a business.  You also need to surround yourself with good people that will help you avoid mistakes.  Many times, avoiding mistakes and not doing a deal can be as important to your career as hitting the occasional home run.  I suggest you stay disciplined and also come out and join us at WREIA on Monday.

Keeping what you accumulate is just as difficult and important these days as earning it.  And that is why we will be discussing Asset Protection and Tax Reduction next Monday at WREIA.

Let me know if there is anything I can do to help your business here in the DC area,

John Peterson

If you have been making offers in the DC area lately, you will want to read this…..

We just posted a few comments on Highest and Best offers over on ProfitableProperty.com.

Click Here and we will magically take you across the Interweb for the full article.

Enjoy!

The current owner, a recent widow, is placing her home on the market to move back to McLean and spend more time with her family.

If the 6 BR aren’t quite enough for you, there is a 3 Bedroom 2 Bathroom stone cottage for guests.

At 21M, the price may be a little high, but don’t let that stop you – that’s just the asking price.  If you would like to place an offer on the property, I would be happy to help. Perhaps you could request the property be approved for section 8 housing….. though I’m not sure the rental vouchers would cover your mortgage payment – and doubtful they would even cover your property taxes.

You can find more photos and the entire article at
http://online.wsj.com/article/SB10001424127887323826704578356692293784034.html

As for our topic at WREIA on Monday – we are talking about Section 8 Housing. Unless you currently have rentals in the area and already know a lot about Section 8, this is one WREIA meeting you will definitely want to attend.

There are nearly 100 different apartment complexes that have been approved for the Section 8 Program in DC.  However, there are hundreds of other private residences which also house people through the Section 8 housing choice voucher program.

We are going to talk about some of the myths and mysteries of Section 8 this month, and I am sure you have some questions…..

When we bring up discussions about Section 8 programs, we sometimes hear questions like;

• Are Section 8 tenants going to wreck my property? (We hear this a lot.)
• Is Section 8 going bankrupt, or will it lose funding?
• Who actually pays me each month?
• Are the tenants paying anything toward rent, or is it all paid for by the government?
• Will my tenants have a job, or is everyone in Section 8 housing unemployed?
• How much will I collect, and will it be near what I can expect as a “regular” rental?
• Will I have to chase down my tenants for their rent money each month?
• …. and more.

Join us this Monday at WREIA and learn from people who are current landlords and provide housing via the Section 8 housing program in the DC area and beyond.

Make plans to join us before it’s too late.  You can find the registration page at http://wreia-march2013-wreia.eventbrite.com

John Peterson

As a landlord in the DC area you get to meet all types of families from around the world.  Providing housing to people can at times be entertaining, and reminds me of an old joke we have been telling for years.

I was showing a unit to prospective tenants and asking the usual questions:

“Professionally employed?” “We’re a military family,” the wife answered.

“Children?” “Yes, nine and twelve,” she told me proudly.

“Animals?” “Oh, no,” she said earnestly. “They’re very well behaved.”

The great thing about being a landlord in the DC area is the strong rental market.  On the flip side, DC seems to be a very transient market with people moving in or out of the area on a regular basis.

Interviewing new tenants can be nerve-wracking when you are first getting started.  Join us on March 18th and learn about the various things DC area landlords are doing to make the application process easier, and creating more profitable tenant relationships.

You can register for the March WREIA meeting at http://wreia-march2013-wreia.eventbrite.com

Let me know if there is anything I can do to help you in your real estate success,

John Peterson

301-881-5541
Washington REIA Network, President

Are you worried someone is going to find out how much success you are having and “steal” your secrets?

I’m certainly not.

Or maybe you are NOT having success, and you are wondering what “secrets” people are keeping from you that is stopping you from moving forward in your business.

Stealing trade secrets have become such a big part of business that China is devoting entire divisions of their armed forces to corporate espionage.  Corporate espionage and all the harm that it is causing US companies made the front page of the Wall Street Journal today.

But, do you want to hear the truth about success?  This is going to be a shocker to some of you.

Your competition and even those secret divisions of the Chinese army cannot steal their way to success.  It takes hard work to succeed today.  No one will convince me otherwise.

If you are sitting at home, watching Facebook for the next great real estate deal let me take you by the shoulders, shake you and let you in on a little secret.  Get away from your computer for a bit, and go out and actually SEE some neighborhoods.  Drive by a few houses, and see if you can find someone who could use your help.

The odds are pretty good that within just a few miles of where you are sitting right now, someone is DESPERATE to find someone like you to help them get out of the huge problem that is keeping them awake at night.

No one is keeping secrets from you.  Geez, on Monday night you are going to hear a few things that keep our business profitable year after year when it comes to dealing with contractors.  For that matter, you are going to hear directly FROM a successful licensed contractor about what they are doing to keep their clients happy and keep their business operating at a profit.

No one is keeping secrets from you – you have to go find your success.  Get up, get moving and go find yours.  Claim it.

I hope I see you on Monday night – I will be happy to SHARE as many of my secrets as possible.

This Monday at WREIA we are going to be talking about and talking to contractors.  Come out and learn when to hire them, and when you absolutely MUST fire them. Learn first hand what it takes to get a General Contractors (GC) license, and why continuing education is such a big part of holding a professional GC license.

Please make plans to join us.  You can find the registration page at http://wreia-feb2013-wreia.eventbrite.com

Come join us Monday, Feb. 25th and listen in as we discuss contractors.  You will be glad you did.

John Peterson

Did you catch the news yesterday?  Eight thieves made off with $50 Million worth of diamonds as they were being loaded onto a plane.

Theft is awful when it happens – and $50 Million is certainly a headline making event. But theft can be even more devastating when it happens to a small business person.

I just finished reading another article about a contractor who had 20 thousand dollars worth of equipment stolen from his job site – overnight.

Sometimes the tools and equipment that a thief walks away with are crucial to the work day.  Without some of those tools – nothing gets done.  It can be demoralizing to your crew to have everyone there, and no one is working because materials were stolen.

It’s part of business.  Things will get stolen.  When it’s a missing ladder, it can be easily replaced at the nearest hardware store. But when it’s custom cabinets or tile, it can sometimes set your schedule back weeks at a time.

Very often physical theft comes as a shock to new renovators. Other times, theft can be much more subtle and involve the theft of time.  Sometimes our employees are taking long, out of the way personal trips while they are “on the clock”.  I once had an employee who went home for a three hour lunch – because he needed a “nap”.

As a small business owner, theft can be extremely frustrating. Believe me – I know. I have been in the same situation.

It’s a nice sunny morning, when you pull up to a home you are working on and immediately notice that the front door is cracked open.  Unless you are the second person to the house that day, this is definitely a sign that you are off to a rough start to the day.  Through the years and after 800 renovations, we have had this happen too many times.

We have lost complete appliance sets from the kitchen.  The refrigerator, the microwave, even the stove.  Gone.  And get this –  in one situation, we even lost all the counter tops – AFTER they had been installed!

Luckily things have changed a bit.  Thanks to GPS tracking, we can keep track of some of those higher ticket items now.  But theft doesn’t always show up where you expect to find it and sometimes even the best workers will surprise you.

Some GPS tracking programs now cost less than $20 a month.  This is a great tool for the small business who has a small fleet of trucks doing business across the area.

In 2011 a friend of mine installed a GPS system on the dashboard of each of his business vans.  His contractors drive these vans all around town.  His first month – the fuel charges went down 20%, and he had more jobs completed than any previous month.

He was stunned.  He thought he could trust his employees to work as hard as he did, only to find out very differently. His initial outrage has now led to him having the most profitable year he has ever had.

Rest assured – theft doesn’t occur on every job, and certainly not every employee is skimming the clock.  Most of the time, our work day goes by without a hiccup – but every once in a while something unexpected will pop up.  You should be prepared for those instances and not let them get the best of you.  Realize that it is part of the renovation process, and learn from it.

Better yet – learn those lessons from others who have been through it already. It’s much cheaper that way.

Next Monday at WREIA we are going to be talking about contractors.  Come out and learn when to hire them, and when you absolutely MUST fire them. Learn first hand what it takes to get a General Contractors (GC) license, and why continuing education is such a big part of holding a professional GC license.

Please make plans to join us.  You can find the registration page at http://wreia-feb2013-wreia.eventbrite.com

Come join us Monday, Feb. 25th and listen in as we discuss contractors.  You will be glad you did.

John Peterson

The colors we choose in the renovation process can have a huge impact on the first impression of a potential home buyer.

I have been in some homes where the homeowner obviously wanted to “make a statement” about their individuality.  It’s one of the joys of owning a home – you get to make the choices of how you decorate, including the colors you choose.  But let’s be honest – some people go to extremes and then wonder why “everyone” doesn’t just love their artistic splashes of color.  A few extreme examples are posted here.

One of the major trends we see going on right now in the renovation process is the move back to white and more neutral colors.  It seems that people have grown tired of the exciting and bold “make a statement” color choices and instead just want a warm and inviting place to rest in the evenings.

Appliances play a major part in this color cycle.

I stopped in one of the big box stores a few days ago and talked for a few minutes with one of the kitchen designers about what she is experiencing lately.  I walked away with three points to share with you.

1 – People love Chrome, but hate the finger-prints that come with this option.

2 – Renovations are trending to white and off white color patterns in the kitchens, but the white appliances are just too white next to the neutral paint tones, so people are choosing black.  Again – fingerprints are the major complaint with Chrome.

3 – Companies have been trying to get a good fingerprint free Chrome, but so far they have fallen drastically short.

Above is a photo of a recent project we completed in NW DC a few months ago.  These colors are much more muted than what we were using just a few years ago.

Our goal at WREIA is to keep you updated on the most current trends that affect us nationally, regionally, and most important – locally.  In 2013 we will continue down the path we started last year of introducing you to local professionals who are active in our local DC/Baltimore area markets.

On Monday, Feb. 25th we will talk about Contracting, including painting and color choices and how it factors into the success of your business. For most of us, having the right team – at the right price – will make a huge difference when it comes to putting together a good profitable deal.

One thing makes our WREIA group great – and it starts with the leaders in our group.  ALL of our most successful members want to help you succeed.  They have realized that if you have success, they in turn will find success too.  Let us help you set up your business for success in 2013.

Come join us Monday, Feb. 25th and listen in as we discuss the world of contracting.  You will be glad you joined us.

John Peterson

We had a good meeting last month at Washington REIA Network.  For over an hour we discussed some of the advantages and disadvantages of getting a Realtor license.

Earlier this week, one of our members sent me some research she found doing some follow-up homework after the January meeting.

Let me give you some background.  After our January meeting she called me and was complaining about how much competition there is in the DC area.  So after a few questions, I gave her a little homework.

In that process, she found that the site she was using to find her “deals” was being updated 7-9 days after properties hit the market.  She also found that the same website was also listing 30% or more properties that were actually off the market.  Between discovering the deals late, and spending time researching properties that were no longer for sale, she was getting very frustrated. She discovered, it wasn’t really the competition, it was her investor “toolbox” that needed some help.

It got me to thinking – How much time and money are most people wasting by trying to use free tools? Most new investors are using “free” sources of information for their research – but they are ultimately paying for it.  When you first get started in this business, free may be all you can afford – and that’s fine.  But if you have some initial success, I have always suggested putting money back into your business, either through good solid education, or through new tools you can use in your business.

We have moved to an information based economy, whether we like it or not.  Nearly everyone has access to all the information you need to be successful.  The trick is how you gather that information and how quickly you put it to use.

It’s true that in today’s economy, the people who are being rewarded with good deals are the people who made their decisions quickly.  BUT – they also gathered the information quickly as well.

You see, a lot of people when they get started as a “real estate investor” can only choose free tools – and that’s fine.  They also have to rely on contractors to come and give them a bid on their project.

This month at WREIA we will talk to a couple of General Contractors who work in the DC area. They are going to give you some insight into their work, and how they use their contracting tools and knowledge as an advantage when it comes to their investing business.

Let’s use our WREIA member above as an example.  She is getting data on properties 7 days after most people because she loves the tools that come with her “free” account at Zillow.com.  Then she takes another week to get a bid from a contractor.  FINALLY, she calls her agent (who is also her cousin) to submit an offer.  The next day, everyone is excited when they meet at the office to write up the offer – and guess what happens?  Her agent/cousin calls to submit the offer – only to find out it went under contract 10 days ago.

Do you know who has the property under contract?  Me.

Actually, it’s under contract through one of my general contractor partners.

I get calls all the time from a few of my contractors.  We joint venture a lot on properties together.  They know that I have a lot of experience funding and solving problems with properties and – together –  we can move through these properties a lot faster than just one of us doing it alone. I hope you are on track to make 2013 the best year you have ever had.  This month and every month we plan to keep sharing with our WREIA members what we learn out “on the street” in the Washington DC and Baltimore area.

Don’t let yourself get frustrated.

Even on a snowy Friday in February – I’m here.  Let me know if you need some help,

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

I wanted to write an article that would shed light on the renovation side of the business. Understanding the renovation process enables you to tap the full profit potential of this business.

The quicker you get up to speed on this process, the sooner you can make the lucrative
leap from the wholesale to retail side of real estate investing. You don’t have to know
how to swing a hammer but you do have to know where to find contractors, what types
of materials to use, and how to estimate costs.

FIVE FAST TIPS

Five Fast Tips are practical suggestions covering topics related to real estate investment. * If you have a topic you would like us to cover in the future, please let us know. *

Five Fast Tips: Finding Renovation Contractors

• Real Estate Investors

Some of the most affordable and reliable contractors are referred to me by other real estate investors.  Often, we do not have enough work to keep all of them busy 40 hours a week.  Sharing contacts allows everyone to win.  The contractors keep busy and the investor has a reliable source of workers.

• Investment Club Meetings

There are investment club meetings scheduled regularly around the Beltway.  Although the clubs are structured differently and have different agendas, they offer the opportunity to meet contractors.  Attend a meeting with the intent of meeting new contractors. Networking at club meetings can help you find a contractor or subcontractor to meet your particular project needs.

• Supply Houses

Visit local electrical, plumbing and paint stores in the area. Ask the people behind the
counter which contractors they would recommend.  Explain the project and generally they will have a list of suitable tradesman to tackle your job.

• Realtors

Every local real estate office maintains a list of contractors used for punch out, painting and other renovation projects. Network with realtors in your area and you soon will have a reliable list of contractors for all your projects.

• Trade Shows

Attend trade shows in the area and begin to network with the vendors.  Ask for reliable contractors in your area. You can also network at local business meetings ( Chamber of Commerce) with the intent of meeting contractors.

If you are interested in digging a little deeper into the mind of a local General Contractor, or just want to learn more about the contracting business, join us on Feb. 18th at the next WREIA meeting.  You can find out more at http://wreia-feb2013-wreia.eventbrite.com

Let me know how I can help you,

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