Honest Advice for Sellers

Here is a real ad that has run recently in Seattle's Craigslist:

If you have real estate you may be selling, PLEASE:

✜✜ Be aware there will be a line of people who have made jobs for themselves of trying to essentially steal your house from you, wasting your time at best, and scamming you at worst ✜✜

Word of the day: wholesaler. These are people who are trying to get into real estate investing, or are comfortable being bottom feeders. Their competitive edge is often found in deception and dishonesty, and after providing you with (not really) "comparable" sales to convince you that your house is worth nothing, they will sign a contract to buy it for much less than it's worth.

But they won't be buying it - they will ASSIGN (sell) the contract to other investors (for a fee) before the sale closes, making money just off the fact that they hoodwinked you. If they don't find a buyer, they walk, and take months of your time with them. Beware of any contract that says "OR ASSIGNS" after the buyer's name. Further, also beware of any sales contract that isn't the standard NWMLS (Northwest Multiple Listing Service) contract.

Also, watch out for contingency or inspection periods, especially longer than 2-4 weeks. This will tie you up for 1-3+ months and then, GUARANTEED, after that period they will want to renegotiate the price based on some problem they "found."

It really is not easy to go FSBO (For Sale By Owner) and be your own real estate agent. Be prepared for a ton of showings, questions, and potentially costly mistakes. Everyone who is selling a house should at least TALK TO A REAL ESTATE AGENT and get a free "Opinion of Value" from them, so you can know where you are starting.

Now, in terms of where I come in: I am a native Seattleite who fixes up and rents houses...

• Due to my established, long term approach, if you desire flexibility such as continued residence/tenancy or other creative sales terms, we might be a particularly good match.
• Any offer I make will be a fair, reasonable market offer - no wasted time and no funny business (references if desired)
• I am able to make both all-cash offers and "seller financing" offers, which turn your house sale into an interest-bearing investment yielding roughly $182k total for every $100k of value while avoiding 25% capital gains taxes

Please, start off by scheduling a free consultation and opinion of value with a real estate agent. Then, before you sign a listing agreement with them, feel free to drop me a line...

I happen to agree that ALL sellers should talk with a professional real estate sales agent like myself, prior to a sale. I look at houses and prices every day, and I understand the Seattle real estate market. There may be many reasons why an off-market sale will make more sense for some sellers than a listing on the NWMLS. But a competent real estate professional will be able to provide options. And armed with good information, a seller is in a better position to make an intelligent decision.

I am happy to provide a FREE, no-obligation, confidential in-home assessment and evaluation of your real estate portfolio, whether that is one home or multiple income properties.

I do buy homes as well as list them, but only if that makes sense for both the seller and me. If you are interested in learning more, please email me at HomeLandInvestment@gmail.com or call my recorded hotline at 888-621-4999.

Happy Investing!

FREE Investor Training

REAPS ORIENTATION AGENDA

Saturday, October 8, 2016

10 am - 3 pm

Location:

Mercer Island Community Center

8236 SE 24th Street
Mercer Island, WA 98040

·         Doors Open/Social     10 – 10:25 am

·         Welcome/REAPS Overview (Angelique Tinney)   10:30-10:45a

o   --What is REAPS?

o   --History

o   --Non Profit Structure

o   --Board/officers/volunteer structure

o   --Relationship to NaREIA

o   --Opportunities for involvement/Partnership Program    

·         REAPS Education (Steve Kish)       10:45a – 10:40a

o   –Ethics

o   –Professionalism/PHP 

o   --Main meetings and satellite meetings

o   --Speakers/Education/

o   --Library (Steve Kish)

·         BREAK 11:15a—11:25a

·         REAPS website (Sheila Lair)           11:25a – 11:45a

o   --Profile

o   --Membership Directory

o   --Message Boards/Rules of Use

·         Other Membership Benefits

·         --Discounts/Specific Programs

·         Orientation Wrap Up/Evaluations/ Membership Incentives (Mike Sumsky) 11:45a - noon

·         Lunch Break/ Membership sign-ups (12:00p - 1p)

·         Wholesale Workshop (Mike Sumsky) 1-3 pm

o   -- Evaluation

o   --Q & A

Success Lessons Learned

The Real Estate Association of Puget Sound hosted a super Saturday of training last weekend, presented by a variety of local speakers. All of the local speakers are active real estate investors in today's market, and all of the presentations were filled with real world advice, success, failures, tips, ups, downs and humor.

There were many important lessons from the day's presentations, but I would like to share just a few here that really hit home for me. Will Heaton and James Dainard are a couple of our most successful real estate entrepreneurs, who have transitioned their off-market wholesaling business into a company that offers turn-key investment opportunities and access to investor capital. Their presentations for REAPS are always filled with real world case studies that impart great education, and lots of good entertainment.

Will Heaton, who came from a strong sales background, talked about the trials and tribulations of his former housemate, a business major working at the local hamburger joint, as he started knocking on doors to find real estate deals.

"He was really terrible," said Will. Of course, he was referring to James Dainard, who continued to become the successful business partner that he is today.

Lesson #1: Whenever we begin anything new, we will not be good. We may even be bad at what we do. Just like a baby taking his or her first steps, we will stumble and fall. But the more we practice, the better we will get. Every journey begins with a single step. You won't know what you don't know. You just have to keep the faith that you will improve.

James admitted that it took a full year, of knocking on thirty doors a day, before he got his first deal.

Lesson #2: Take the steps that are necessary for success, and eventually you will succeed. Be disciplined about what it takes to succeed. How many of us would continue knocking on doors, day after day, month after month, when doors get slammed in our face, when all of the answers are "no?" That is why James succeeded where others failed. He just kept doing what he knew would lead to success, eventually.

Lesson #3: Do not give up before you get there. What if James had quit knocking on doors on day 364 of his first year?

Great presentation, Will and James! Thanks to REAPS for hosting.

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Happy investing!

Wholesale to Cash Buyers

A “wholesaler” is someone who buys property at a low price and sells it at a low price. Both prices are below typical “retail” prices for a finished product. The wholesaler makes money by finding a property and negotiating a very good price for it. He/she gets paid for assigning the deal to a cash buyer who is able to make the improvements and market the property at a profit on the conventional real estate market.

Typically, a conventional mortgage lender will not finance a purchase transaction where the borrower’s name is not listed on the Purchase and Sale Agreement. Most lenders do not consider the Assignment Contract listing an end buyer as being sufficient to lend on the purchase.

That is why most wholesalers look for cash buyers. They also typically get their assignment fee paid in cash up front.

How does the new real estate investor go about building a cash buyers list?

One of the easiest ways is to network at your local real estate investor association to find out who is buying houses to fix and re-sell. Find out where they are looking to buy properties, and what are their criteria? What price range? What condition? What location? What features? How many bedrooms, baths, square footage? Do they want a garage? Any negatives, such as not being close to power lines or not being on an arterial?

Find out how quickly they could have cash available for purchase if you find what they are looking for. Then target your search for properties that meet your buyer’s criteria. In effect, your property will be sold, as soon as you find it.

Another tactic for the assertive wholesaler is to chat up folks at your local county foreclosure auction, as these buyers must have cash to purchase. Bring a list of whatever properties you may have gotten under contract at that point, or ask them the same questions (above) to find out what they buy. Collect business cards, or give them yours.

Happy Investing!

The Easiest Way to Get Started in Real Estate Investing

The easiest way to get started in real estate investment is by finding properties that more experienced buyers want to buy. Experienced investors are able to handle more complex aspects of the real estate investment, from negotiating with sellers, writing up offers, hiring contractors to rehab the property, doing property management, to marketing the property for sale. Much of the complexity of real estate investing can be overwhelming to the new investor. But by focusing on the first step of the process – that is, by finding a good deal – the new investor can get great practice and even coaching from more experienced investors. Finding a good deal is a time-consuming process. Yet it is critical to a successful deal. If it were easy to find good deals everyone would do it. But often good deals are not the easiest ones to find. They are typically not retail listings found on the Multiple List Service. The best deals are those that have a motivated seller, a distressed property, and/or that of which the competition is unaware. How to find these deals? All investors have heard “it’s a numbers game. “ And it is. Most investors have to look at a hundred or more properties to find one that is suitable for a purchase. Because the process is so time-consuming, most investors will pay “bird dogs” or wholesalers to send them leads. To become a “bird dog,” simply find an investor looking for properties to buy, whether these are residential or commercial. Find out what it is that they are looking to buy, what kind of investing they do. If they answer, “a good deal anywhere in King, Snohomish, Kitsap or Pierce counties,” move on. This response is much too general to provide good direction for a new investor. Look for something more specific. For example, I specialize in Seattle properties. I am looking for 3 bedroom, 2 bath homes in the City of Seattle, below median home price (in Seattle, this is typically under $450K), in any condition, preferably with a garage and not located on a busy arterial. I am looking for motivated sellers, who either have no equity (meaning they probably bought their house between 2004 and 2008), or they own it free and clear (meaning they have probably owned it for more than twenty years). For every qualified lead that a bird dog sends me, I will pay a finder’s fee. The finder does not have to get the property under contract. If the finder is able to negotiate a contract – and has done a good job of negotiating a contract – then I may pay an assignment fee to purchase the contract. I may also purchase a property from a wholesale seller who bought the property at a discount and is selling it to me at a discount. This is known as selling a property wholesale. I often encourage my bird dogs to check “for sale by owner” (FSBO) ads on Craigslist or other FSBO sites. They can search for terms such as “must sell,” “motivated seller,” “medical issues force sale,” “downsizing,” “major fixer,” etc. Bird dogs can then email or call the seller directly to find out how long the seller has owned the house, why they are selling, and most importantly, if we were to pay cash, what is the least amount of money they would accept for their property? Good responses here may signify a possible deal, and I will pay for leads if the investor does not know how to analyze the deal beyond this information.

Not only can a new investor get paid to find good deals, but in the process they are learning about the value of properties in their market. They are learning, with the help of the more experienced investor, what makes a good deal or good value in investing. They get good coaching from the buyer, and see how that investor makes money on a deal. Being a “bird dog” or wholesaling a property is a great way for a new investor to get started in real estate investment.