As I mentioned in my last e-mail, I want to share with you two more TRUTHS that I have learned and adopted in my life from running Washington REIA Network for the past 18 years.
Here we GO!!
TRUTH # 2
Spend the majority of your time locating profitable deals and raising capital.
In my opinion, this truth applies to any business, but especially real estate investment.
Take a minute to think about this…
You can be the most skilled craftsmen in the entire DMV.
Your ability to transform an abandoned house or building is unmatched.
You are organized, have an MBA from Wharton School of Business, and you have been voted most outstanding salesperson in your office for two straight quarters.
But… you cannot find a house to renovate or lease.
You can find deals, but you run out of capital to purchase and renovate, which means you are unable to create a sustainable business.
You see where I am going with this narrative? Having extraordinary skills are great, but if you cannot find a deal or raise the investment money, you are FINISHED.
If your goal is to be a long term, successful real estate investor, focus on the following:
Create marketing campaigns to identify consistent opportunities to find real estate deals. Hint…. (Review TRUTH 1 in our last email)
Learn how to raise private and institutional capital to fund your projects and operate your business
Whether you are a full time or part time investor, focus the majority of your time on lead generation and follow-up.
The next important event on your schedule is to meet with potential investors to raise capital. Once you have mastered both elements of lead generation and raising capital, you will see your business take off.
TRUTH # 3
Flipping = Income vs. Holding = Wealth
Real estate investing has come out of the shadows.
The numerous flipping shows on television, hundreds of meet-up groups in the area, and major media exposure on real estate investment has created an enormous interest in our business.
A major misconception is that flipping houses will lead to vast riches. Most people need to not only create income (see Income Suggestions below), but invest their resources into assets that will create passive income and true net worth over time.
STEP 1 Choose a path under the umbrella of real estate investment that will create a majority of your income.
Income Suggestions – Buy, Renovate and Sell Distressed Houses
– Wholesale Real Estate (If this term is unfamiliar, please call me to join our Summer class)
– Generate Real Estate Commissions
– Buy and Sell Notes
– Lease Commercial Property
There are many different income options, and you will need to choose one or more based on your interests. Your decision will be the main driver of your business income, and with hard work each avenue can be very lucrative.
STEP 2
Take a portion of your income generated and invest in long term, income producing assets. You can choose stocks and bonds, income producing real estate, performing notes, or businesses.
There is no wrong decision and your choice is based on your risk tolerance and interests. The main point is to diversify and to think longer term, so your income will not always be solely reliant on your next deal.
Stay tuned for the LAST TWO TRUTHS…
Let me know if I can help you with your real estate needs. My Direct Cell/Text is 301-943-5535 or email at ProfitableProperty@gmail.com
1. Call, text, or email me with questions you might have on real estate, I am a valuable resource and glad to help. 2. If you need funding for a project, we have very competitive rates. 3. If you need a partner on a project to help you leverage your business, I am always looking to expand my partnerships. 4. If you are looking to wholesale a property under contract, I have cash and I can close quickly.
Have a GREAT and PROFITABLE week!!! John
My Direct Cell/Text is 301-943-5535 or email at ProfitableProperty@gmail.com.
I still have room for a few more at our Summer Class. Call or Email me today for details.
So, long term, we will see if this magnitude of losses will continue. I think some of the companies that are getting into our mom and pop flipping business are going to have monumental failures.
The numbers for these IBuyers have never added up for me and the people I work with – we know what goes into flipping a property the right way.
To sum it up – these guys don’t scare me. Especially in the DC area. They just won’t be able to make it work.
Who know. Maybe some of these companies will fail so horribly we will start to see their homes show up at the local courthouse as part of the foreclosure process.
So, there is a reason we started talking about foreclosures last month and will conclude the conversation this Monday at our May WREIA meeting.
More than 20 years in this business has taught me a few things.
One of the major things – this is a cyclical business. Right now, we are in the part of the cycle where it is prudent to be careful and not overextend on projects.
But even more so – this is a great time to put your head down and focus on profits.
The next couple of years could be very interesting in the world of real estate.
Especially here in the DC area.
The DC area is unique and provides an interesting mix of opportunity for us as investors. A lot hinges on the job market and the typical job profile has changed dramatically in the last few years.
When you understand the DC area job market and couple that with a deep understanding of the foreclosure process you can make better decisions on the properties you want to focus on when you go “shopping” for foreclosures.
We will be discussing a few key points for investors in an interactive WREIA meeting this month.
How will the DC area real estate market respond if we do dip into another national recession?
What should you do as homeowners or renters to prepare for a change in trends?
Are online auctions as good as “real life” auctions?
Our friends at Zillow just reported on the first price drop in 7 years.
You can find a quick analysis posted on Curbed.com here.
Keep in mind – this data is only representing one month.
It could be the start of a trend, or it could just be a blip.
That said – there is a reason we started talking about foreclosures last month and will conclude the conversation this Monday at our May WREIA meeting.
More than 20 years in this business has taught me a few things.
One of the major things – this is a cyclical business. Right now, we are in the part of the cycle where it is prudent to be careful and not overextend on projects.
But even more so – this is a great time to put your head down and focus on profits.
The next couple of years could be very interesting in the world of real estate.
Especially here in the DC area.
The DC area is unique and provides an interesting mix of opportunity for us as investors. A lot hinges on the job market and the typical job profile has changed dramatically in the last few years.
When you understand the DC area job market and couple that with a deep understanding of the foreclosure process you can make better decisions on the properties you want to focus on when you go “shopping” for foreclosures.
We will be discussing a few key points for investors in an interactive WREIA meeting this month.
How will the DC area real estate market respond if we do dip into another national recession?
What should you do as homeowners or renters to prepare for a change in trends?
Are online auctions as good as “real life” auctions?
The foreclosure process is lengthy and has many points at which you could step in as an investor and help people who may be facing this tough situation.
We will be discussing a few key points for investors in an interactive WREIA meeting this month.
How will the DC area real estate market respond if we do dip into another national recession?
What should you do as homeowners or renters to prepare?
Are online auctions as good as “real life” auctions?
If you only read the headlines you would have missed the most important piece of the article posted here on the online version of Realtor Magazine.
It’s titled “Foreclosure Filings Went Up Last Month, But…” and the article is fairly positive and lays out the case for why we have such a strong market here in the U.S.
However, wrapping up the article is this little gem:
“Counter to the national trend, there are a handful of markets above prerecession levels, such as Baltimore (189 percent higher); Washington, D.C. (26 percent higher); Philadelphia (20 percent higher); New York (13 percent higher); and Hartford, Conn. (4 percent higher).”
It’s yet another reason we are going to be talking about the entire foreclosure process at WREIA this month.
If you are in real estate here in the DC area you already know that our market is different than the rest of the country.
It’s why some people really struggle with the investing part of our business. National headlines don’t always match what is actually taking place on the ground here locally.
The soup to nuts foreclosure process is lengthy and has many points at which you can step in as an investor and help people who may be facing this tough situation.
We will be discussing a few key points for investors in an interactive WREIA meeting this month.
How will the DC area real estate market respond if we do dip into another national recession?
What should you do as homeowners or renters to prepare?
Are online auctions as good as “real life” auctions?
We have a friend who is absolutely fanatical about Black Friday sales. She and her sister are PASSIONATE about finding the best deals the day after Thanksgiving.
I used to love Fridays too. Nearly every Friday.
Friday was and is PAYDAY for most people.
I was one of the people that would supply checks to all my vendors and contractors on Friday.
But one of my favorite things to do with a check was to buy property at Auctions. As investors we make our money when we buy property at a discount.
Back when I was a regular on the Auction circuit you would never miss me at an auction on Fridays.
It was one of the best days to go to attend an auction – for one reason:
My favorite lender would almost always “give away” at least one property a month.
Let me explain.
In the foreclosure process when a lender gets to the “disposal” or sale portion, they have the option to offer the property at a local auction. Most of the time, this takes place at a county courthouse.
But not for this particular lender that I would follow.
They would often have the auction at the property – immediately following a quick “open house” where the potential buyers could see the inside of the property. (That’s usually not the case – we hardly ever get to see the inside unless we win the bid.)
Usually there was a week every month when only a couple people would show up for this particular lenders auction. Maybe it was a holiday weekend, bad weather, traffic – who knows.
Every once in a while – I would be the ONLY bidder on the property. The other people would simply be there to watch the process.
Long story short – I bought a lot of property at Auctions, and still do.
But times have changed. We seldom go to a property any longer for an auction.
Shoot, we sometimes just stay home and place our bid online – just like the “Fast Money” late night infomercials say we can.
As the foreclosure rates start to pick up, we will find ourselves placing bids on a lot more properties again.
But……
Auctions are just part of the foreclosure machine. There is a lot to learn about the process and a few people I know have a sharp focus on their favorite niche within foreclosures and have carved out a very nice living for themselves.
Now that I think about it, auctions are a lot like Black Friday sales.
There can be some fantastic deals at auctions, but in your research you may come across another property with potential as well. Sort of like an unadvertised special on Black Friday. Those are the fun ones to tell your friends about.
The soup to nuts foreclosure process is lengthy and has many points at which you can step in as an investor and help people who may be facing this tough situation.
We will be discussing a few key points for investors in an interactive WREIA meeting this month.
How will the DC area real estate market respond if we do dip into another national recession?
What should you do as homeowners or renters to prepare?
Are online auctions as good as “real life” auctions?
Let’s cover a few of those questions and more this Monday at our April WREIA meeting.
As always – we will focus on the DC real estate market and how we as investors can best help people and make a profit at the same time.
Come out this Monday, April 15th, and hear what is working (and not working) across the DC area.
