Category: DC Real Estate Investing

It’s late on Thursday night, but I thought I would share this article before I head off into an incredibly busy weekend.

Would you sell your home this year if it meant you would save $440,000 in taxes?

Some wealthy people would.

Last April, at our Washington REIA meeting we told you about the top end of the market, and especially with second homes, the mortgage holders were strategically defaulting at a rate more than twice the average across the country.

Wealthy people are still choosing to walk away from homes that are underwater.  This spring we introduced you to the attorneys that are helping them through the process.  (Banks have a habit of negotiating better deals for the homeowner when attorneys are involved.)

Well, what if that same group of wealthy people hold a property without a mortgage?  If they face a capital gain when they sell their property, some members have decided that now is the time to sell.  This article does a great job of explaining why.

You can also find the article at  http://realestate.aol.com/blog/2012/08/07/an-end-to-bush-era-tax-cuts-could-push-high-end-properties-onto/
Saving $400,000 is a pretty good incentive to sell this year, vs. next year.  You see, in 2013 capital gains will jump from 15% to 23.8% once you include the new 3.8% healthcare tax.

Please remember – I am just delivering you the news here.

I see it every year – people make crazy decisions.  Especially when it comes to taxes. For some reason, the word just seems to make some people irrational.

Take advantage of that.

If you don’t know how to connect with this crowd of high end motivated sellers – or any group of motivated sellers, you need to join us on Sept. 17th at our next WREIA meeting.

I am going to share a guest speaker that Monday night.  He just gave me a list of the topics we are going to cover at our meeting.  It includes updates on :

• Email Marketing
• Direct Mail Marketing
• Social Media Marketing
• Mobile Marketing
• Reputation Management

He will also be sharing some insight into topics I don’t completely understand, but he loves to work with every day including:

• Search Engine Optimization,
• Search Engine Marketing,
• Mobile Ads,
• Test Results

When we talked today, he wanted my permission to share some results from some of our recent campaigns.  I approved all of them.

I know most of you are going to be shocked by the results of a few campaigns where the total ad budget was just a hair under $10.

 That’s not a typo – you will see ad campaigns with a budget of less than $10.   

 Don’t forget – At our meeting, I want you to bring in your Smartphones, fire up Twitter, Facebook, and make sure you have a LinkedIn account.

You may not believe in these sites. You may not believe that as a professional they can help bring you more leads than you know what do with.  That’s fine.  I used to think the same thing.   

If you are willing to hustle, work hard – and learn how to help a LOT of people in the next 2  years – join me on Sept. 17th at WREIA.

John Peterson

***

Will you take 90 seconds and complete the survey we originally posted on our Facebook Channel at http://www.facebook.com/ProfitableProperty ?

It is only 10 questions, completely anonymous and doesn’t require logging in or signing up for anything.  We real estate entrepreneurs think a little differently about our marketing, and it will help us understand your opinion on how we use social media.

We will be sharing the results of this survey and a few other real world marketing campaigns at the next WREIA meeting on Sept. 17th.

Click here to take the survey.

Enjoy the last few days of summer and we will see you soon!

Everyone agrees that Conrad Hilton built a successful hotel brand. He owned more than 188 hotels across the country, and the Hilton line of hotels have set the standard for high end hotels around the world.

But did you know early in his career, Conrad lost his best hotels, and was pushed to the edge of bankruptcy?  Through the process, he was actually re-hired to manage his own hotels, and eventually went on to purchase them – again.

Sound familiar?  Have some business owners struggled over the last few years?

A businessman who survived and thrived during a challenging economic time can teach us a few things about our own business in 2012.

• Don’t ever quit. Success seems to be connected with action. Successful people keep moving. They make mistakes, but they don’t quit. -Conrad Hilton

***

The spring bounce numbers are finally rolling in.  Articles about the strength of the housing this time of year always amuse me.

Reporters can usually make a case for a strong market, a weak market, or whatever market they believe is happening.  They compare the housing starts, the number of 30, 60 or 90 day lates, or whatever other metric they like, and then compare them to a year ago, or even 5 years ago.

The problem is, we have had so many issues over the last few years, robo-signing, massive bank settlements, historic foreclosure rates, choppy jobs reports, and the list goes on.  If they compare any report from any period of time, many reporters (and most politicians) will make a case for whatever they believe is happening in the market.

I just read a confusing article on Bloomberg.  It’s posted at http://www.bloomberg.com/news/2012-07-12/housing-rebound-signaled-as-banks-resume-foreclosures-mortgages.html

The title to the article notes a “housing rebound signaled”, however the article made me wonder “What rebound signals are they talking about?”

Let me explain –

“Rebound” Point #1 – Foreclosures up
The article states that repossession of homes are down, but in some states they are up dramatically. “Foreclosure starts — notices of default or scheduled auctions — increased in 31 states in the second quarter from a year earlier.”

“Rebound” Point #2 – Process taking longer
In the next paragraph, we see that the process is also taking longer. “The foreclosure process in the U.S. increased to an average of 378 days in the second quarter, the highest in records dating back to 2007.”

“Rebound” Point #3 – Down, then Up
But here is where I got confused for yet another moment. Mark Zandi, chief economist of Moody’s Analytics Inc., predicts that home prices will decline 1 percent in 2012 and then increase by 1 percent in 2013.

So let me get this straight – default notices are up in 31 states, and the process is taking over a year to complete – on average.  That means that a year from now that house may finally hit the market.  On average.  Mr. Zandi, why will prices go up when these houses finally hit the market?

Since last year, we have been telling you in our emails and at our WREIA meetings, that we still have 3-5 years of this housing quagmire.  I think we still have 2-4 years of this choppy sideways action in the housing markets.  Do you begin to agree when you dig a little deeper than the headlines?

The point I am trying to make is – Market confusion will create opportunity.  And my forecast for the next few years is red hot with opportunity.

Even today, we still have record low interest rates, but very few people have been able to qualify.  For many people, after 5 years of falling prices they are now underwater on their homes!  They want to move up, move down, or move to a new location where they may find a better job – but they can’t.

That is why you need to join us next Monday at WREIA.

You should know more about Wholesale Lease Options. 

That is the topic at WREIA Network in July.  We will be talking about a match-making service that some property owners would like to know more about – because it will help them solve their problems.

Our speaker, Joe McCall knows how to solve these specific problems, and is really good at what he does.  Joe finds people that want to move, but for a variety of reasons, they choose to lease their property instead of sell.  Other people want to move into that same property, but can’t qualify, yet. So, he puts these two parties together, and Shazam!, problem solved.   By the way, Joe makes a nice profit for providing the service – with very little risk.

There it was – A giant billboard on the side of I-95.  But this message was different, and it made me laugh.

On April 6th, 2009 Tom Feltenstein posted a 50 foot billboard near Palm Beach Airport reading “Have Maid, Have Money, Would Love a Honey.”

The sign was effective and by December of 2009, Tom was married.  Tom describes himself as a “lead marketing strategist” so I found something interesting about their story. Tom and his new wife Cindy met while they were both walking their dogs.  She never saw the billboard.

Their story was captured on an Orlando news channel is posted on YouTube here:

There is an important business lesson for us in this story.  When you start to market yourself, your confidence will improve and new opportunities will start to appear from out of nowhere. If you get creative in the process, there is an even better chance that your message will be noticed by your market.

Some people were upset when they saw Tom’s sign. He was called a variety of names (many of which I cannot print here) – but that isn’t what Tom focused on.  Within a few days, he received over 100 letters from women who wanted to meet with him.

The same things happen in our business.  People get upset that we send them letters, or give them a call about selling their property.  I even have people who get upset when I call them back – AFTER THEY CALL ME!

Some of our WREIA members are getting their phone to ring by offering services that home sellers want.  It’s that simple.  You should offer a service to someone and if they want to know more, they should be able to reach you easily and quickly.

That is the topic we are going to be discussing this month at WREIA Network.  We will be talking about a service that some property owners would like to know more about – because it helps them solve their problems.

Our speaker, Joe McCall will be talking about “Wholesale Lease Options”.

Joe McCall has been investing in real estate for over 7 years.  But like a lot of us here in the DC area, he started his career in another field.  His background and education is in Civil Engineering.  Before he started working on his real estate investing business full-time about 5 years ago, he had worked for several large engineering & construction companies all around the country.

Joe admits that he has tried tons of different investing strategies and has made almost every mistake there is to make.  But his favorite two strategies have always been Lease Options & Wholesaling.  A few years ago when he got tired of spending a fortune marketing every month for his traditional wholesaling business, and throwing away many leads from unmotivated sellers, he knew there had to be a better way!

That’s when he discovered the special niche he calls “Wholesaling Lease Options”.  As soon as he started implementing his simple, unique system, within 3 months his part-time income surpassed his full-time income.  Needless to say, he quickly left his cubicle job and has never looked back.

And get this – he’s still working part-time!  Joe has a system where he literally outsources 80% of his business and spends very little money in marketing.  Joe and his team of Virtual Assistants wholesale 2-4 lease options a month, while Joe profits an average of $5,000 on each deal – all while working 10-15 hours a week!

Join us this month at WREIA as Joe covers a variety of topics, including:

• Understanding how Lease Options really are supposed to work.
• How to make money with seller leads that have no equity & are not financially distressed.
• How to “Flip” lease option contracts & make a quick $3,000 – $5,000 each time.
• Why this is probably one of the BEST strategies for this market right now.
• Learn  the  BEST  marketing  practices  working  in  TODAY’s  market  for  finding  Sellers  and Tenant-Buyers.
• Give a seller exactly what they want. Never negotiate with another seller again.
• How  to  truly  “Virtually”  Wholesale  Lease  Options  anywhere  in  the  country  from  your  lap-­top and cell phone.
• How to effectively use Virtual Assistants to run your business.

At WREIA, twice a year we introduce you to a guest speaker from outside our local area.  This is going to be your chance to learn about a simple process – that if you implement properly – can have an enormous impact on your supply of leads.

So, if you need some advice on marrying a millionaire, Tom Feltenstein put up a billboard and literally wrote the book on it.

But if you need a fresh supply of leads, register early for next Monday at WREIA.

Let me know how I can help you,

John Peterson

Why should you join us tonight at WREIA?

“Networking is the energy that turns the wheel of commerce.”  You will hear that tonight at Washington Real Estate Investors Association Network.

Commerce means that transactions are taking place.  People are doing business, and creating a profit.  And in my opinion, profit is good.  I buy, renovate and sell homes across the DC area.  I also help other people learn the same process.  When our homes are renovated, the buyers move into a safe place to live, the neighborhood has improved, and the professionals who performed the renovation work can make a good living too.  Everyone involved received something of value.

Before a profit was made, there was a “sale.”  A transaction took place, right?  But what happened before the sale?  Maybe you discovered the product or service from a referral from a friend, or an ad in a newspaper, or a commercial on TV.  So, before the sale, marketing or advertising took place.

But today, Fortune 500 companies are nervous because of the lack of response they are getting on their big budget TV, radio and print advertising.   These big companies are searching for ways to connect with their customers.

Networking is marketing.  Marketing creates the “sale”. So you have a chance like never before to get ahead of the big companies and capture the “sale”.  But this process is only successful if you know what you are doing, and can meet new people efficiently and effectively.

To be an effective networker today, you have to know how to target and attend the right events, but you should also realize the just living life can be the right event.

Remember – success happens when preparation meets opportunity.  If you are not prepared to meet new people and grow your business, it is unlikely to happen.

Join us tonight and let me know how I can help you,

John Peterson

***Register now for the June WREIA meeting online, save $5, and skip the registration line!

We have a renovation going on right now in College Park, not too far from the University of Maryland campus. You may have seen the unfinished basement in one of our last videos posted here.

In the background, you can see the property is literally how it looked the morning we began the demo and renovation process.  There were many items to be taken out of the house.

Just a few weeks later, that same property is almost finished.  In the updated video below, we are again shooting the video from the basement, because upstairs there is a flurry of activity.  A few of the professional painters actually make a background appearance in the video.

I am showing you the video for two reasons.  One, I want you to see that we really do find, fix, and flip properties for a living.  Two, this is the busy season for renovators, and I want you help you be busy too.

This doesn’t make sense to most new investors.  Why would I want to have you start “competing” with me to find properties?  The reality is, here in the DC area, there is way too much for any one team to do alone.

Many of my deals over the years have involved “partners” of one sort or another.  Sometimes, I buy a property from a wholesaler.  Occasionally I team up and joint venture on a property.  And the rest of the projects we do, we find in house, from our own marketing efforts.

All of these property types  have one thing in common.  Network.

After 18 years, I have a broad network of contacts, and many people I can reach out to when I need help.

I hope you join us this coming Monday at our June WREIA Network meeting.  Our topic will be “Power Networking for the Real Estate Investor.”

This is an overlooked part of the business for most investors.  Over the past few years, if things have slowed down for you,  you have had an opportunity to sharpen your skills.  Networking, in my opinion, should be at the top of your list of items to focus on – every day.

If you work on developing a strong network of contacts who trust you, like you, and want to do business with you, it guarantees one thing.

Success.

Join us at WREIA this month.

You can register at http://wreia-june2012-wreia.eventbrite.com

Once you are finished Monday night, we showed you 8 opportunites to implement what you learn at the WREIA meeting.  Than Merrill and the Fortune Builders team is in the DC area over the next few weeks.  These free preview classes provide a great chance for you to meet and mingle with other people who have a similar interest in real estate investing.   We posted the dates and times for these classes at http://www.dcprivateinvestor.com/2012/06/12/merrills-fortune-builders-washington-dc-area/

Join us Monday Night at WREIA, and start networking your way to Success!

Next Monday at Washington REIA Network we will give you all the tips you need to be successful networking as a real estate investor.  More importantly, these soft skills will translate into any other business as well.

But, for the moment – let’s focus on real estate investors.  Most of us were drawn to this business so we could scratch our entrepreneurial itch.  We wanted a business that depended on us working hard, but allowed us to have a more flexible life.  The problem is, once you cut ties to the corporate world and end your “job” –  you lose a lot of opportunity to meet with people “at work” on a consistent basis.

For most people the first day as a full time real estate investor is fantastic and frightening at the same time.  You wake up without an alarm clock, take your time to read the paper or catch up on news, but pretty soon you realize you need to get busy.  So you fire up some emails, check some listings, do some research etc.

Pretty soon you realize it’s 2PM and you haven’t talked to a single person.

Becoming a real estate investor today is hard work.  But it isn’t limited to just real estate investing.  Becoming a surgeon requires hard work and years of training.  Becoming a nurse requires training, as does a school teacher.  If you want to make $72,000 or more as an occupational therapist, you better be prepared to go through a few years of school and training.

What do all these careers have in common?  Hard work.

The only difference is, most people think that flipping houses is easy.  Buy a house, paint some walls, sell the house and make $100k. Sounds simple, right?  Day one in this business will tell you it’s definitely not that simple.

Now more than ever I see deals getting done behind the scenes. For years, this wholesale market has been active.  Nothing is illegal about wholesaling, but these transactions are not publicly displayed on the MLS.

Experienced investors know that if we want to sell a property to the retail market – then we list it and broadcast the details to the MLS.  If it’s priced well, it will sell.  We pointed out that a properly priced home will sell quickly – even in Cleveland. If you missed it, the article is posted at http://www.dcprivateinvestor.com/2012/06/07/sold-day/

Now, let’s go back to day one as an investor.  It’s 2pm and you realize you haven’t talked to a single person.  What you quickly realize is that all that online training and webinar watching will only get you so far.  Eventually, you have to talk to other people and get some business done.

If you have found that all that time behind a computer has left you a little awkward in a social situation – join us on Monday night at WREIA.  Our speaker is going to give you the “10 Commandments of Networking” for 2012.  Think of Monday night as a guide for the the new etiquette of meeting and growing a network of professional business people.

So, Monday night ends and you are ready to start meeting new people – now what?  Let me give you eight other opportunities to meet other investors around the Metro DC area. None of these events will cost you a dime.

Than Merrill, the TV star from Flip This House has a company called Fortune Builders.  The Fortune Builders team is in the Washington DC area over the next couple of weeks and will be giving free presentations and introducing people to their training.

We have all been to these types of events.  2 or 3 hours, lots of good info, and then a pitch to attend another round of training for a fee.  Nobody twists your arm, but if you want to go on and learn more about the topic the opportunity is there.

Now, I have had dinner with Than, JD and other guys that are part of the Fortune Builders team.  These are good guys, and they truly want you to succeed.  The Fortune Builders training is excellent, and they back it up with experience of their own.  They are actually out in the real world buying and selling properties just like us.

People from all levels of experience attend these free classes – and let me tell you – they are terrific opportunities to meet new people who have a shared common interest.

They have different times and dates and the events are scattered all over the DC area from Arlington to Herndon to Greenbelt and Bethesda.

We posted the times and locations at http://www.dcprivateinvestor.com/2012/06/12/merrills-fortune-builders-washington-dc-area/

If you just want to sign up to attend, click here or visit http://www.dcinvesting.com/fortunebuilders/

It is soooooo important to continue to meet new people in our business.  I cannot emphasize that point strongly enough.

I hope you are participating in our Two Week Challenge and meeting your three new people.  Will you let me know how it is going?  Drop me an email or give me a call.

1. Learn Power Networking at WREIA on Monday night.
2. Join other investors around the DC area over the next two weeks.
3. Rinse and Repeat

Let me know how I can help you,

John Peterson

Remember When…

This is the time of year when we all get a ton of graduation party invitations. It might be graduation from kindergarten, elementary or high school, college or a trade school.The invitation that stuck out to me this year was for a friends son who was graduating from law school.  Quite frankly, I was impressed.  His son never struck me as a real go-getter. When I called to congratulate the father, I asked what the young man’s plans were now.  The answer – “Well, it’s a bit of a soft job market, but he has a few good interviews. I’m sure something will pan out.”

***

Meet Us June 18th At The June WREIA Meeting

“Power Networking As A Real Estate Investor”

Doors will open at 6:30 for refreshments and networking.
Small group discussions will begin at 6:45.  

***

The business rules today are very different from the strict rules you learned in elementary school.  Luckily, there are people who will share the new rules and how you can succeed by using them.  Until recently, I had never heard of the Johari Window. It’s mentioned on page 152 of the current WREIA book club book – Never Eat Alone, by Keith Ferrazzi.

Never Eat Alone: And Other Secrets to Success, One Relationship at a Time

In fact, Keith writes that early in his career, one of his mentors brought the Johari Window concept to his attention.  Today, because of that simple moment of sharing, he says “…I’m forever grateful.”

That’s how it works – one person making just one comment can change your career – forever.  These days you will easily find people online, but make it a point to actually meet the people you find interesting or who you find yourself starting to trust about business.

So this month, let’s learn something new AND update your skill set.

Ready?  Let’s go……

Here is my personal two week challenge for you: 

Make at least 3 new connections over the next two weeks.

There are two simple rulesI want you to follow.

1. These new connections cannot be online.  I want these new contacts to be people you meet in the real world. Over the phone, in person, or at an event.  Maybe it’s at a closing, or calling on a listing.
2. I want you to talk with them for a minimum of three minutes.  Not just standing in line, and casually saying “hi” but actually engaging someone in a good short conversation.

BONUS *** You get bonus points if in those three short minutes you mention that you are a real estate investor looking for your next property.

Some of you are going to be shocked at the outcome.  Out here in the real world, conversations with real people lead to real money. Most of my so-called “competition” is on Facebook looking at cat videos hoping that something will “pan out”.

That is your challenge.  You have two weeks to have a three minute conversation with at least three new people.

It’s time for you to graduate. Make it a point to update your skills and start playing by the rules of business that exist today.

Now get going!!

If you unearth a deal and need some help, call or email and let me know.

John Peterson

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

P.S Yes, we are still lending on great deals.  If you need a finance partner in the Washington DC area, we do have capital available.  You can request a funding letter or share details on your property at http://dchardmoneylender.com/quick-property-submit/ 

 ***

Remember When…

Do you remember your first real estate transaction? How much did you make on your first deal? Almost everyone I talk with that has been in this business for any length of time knows their profit (or loss), to the penny.

Perhaps you “wholesaled” your property and made 3,5 or 10 grand. Or maybe you did a renovation yourself and made 10 or 20k. Or, did you go the buy and hold route and you still own your first investment property?

Did you jump right into small commercial property? If you are into commercial property, there is a great article this morning in the Wall Street Journal. What I found most interesting was the graph inside the article showing the number of the transactions through the last few years. You can see for yourself that 2009 was a really, really, challenging year to be involved in commercial real estate.

You can find the article at http://online.wsj.com/article/SB10001424052970204652904577196822083979222.html

Whether your prefer residential or commercial, tonight at WREIA we are going to be intensely focused on properties in the DC metro area. If you have been struggling to get started and do your first deal in Washington, you will find tonight helpful. On the other hand, if you “sense” that you should be growing your business during this correction, we are going to shed some light on what might be the root cause of your problems.

Oh, and I hope you are not disappointed. There is nothing to buy tonight. We are simply going to show you some trends that are happening on the front lines of this business. Then we will share some insight on where other businesses are focused going forward into 2013.

***
Meet Us Tonight At The May WREIA Meeting
Getting Started or Restarted In 2012
5 Major Challenges Influencing Today’s Market That Didn’t Exist in 2005

Doors will open at 6:30 for refreshments and networking.
Small group discussions will begin at 6:45.
***

Times have changed – pretty dramatically – since 2005. There are many new challenges that you face in 2012.

The commercial property article mentioned above is about flexibility. I hope you aren’t stuck running your business like you did in 2005. Today is intensely competitive and more about moving quickly and making good quick decisions – then implementing your plan.

Plan to join us in Bethesda tonight. We are working hard to give you the skills, tools, and access to the people you need to avoid mistakes and be successful.

How can I help you?

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

P.S. I posted more details about tonight on our Profitable Property Channel at http://www.youtube.com/ProfitableProperty

P.P.S Yes, we are still lending on great deals. If you need a finance partner in the Washington DC area, we have capital available. You can request a funding letter or share details on your property at http://dchardmoneylender.com/quick-property-submit/

***

Register now for tonight’s WREIA meeting online, save $5, and skip the registration line!

You will also find the registration link at http://wreia-may2012-wreia.eventbrite.com