Oct. 2012 Newsletter: Case Study, Market Updates, Expo, Meetings, Questions You Should & More
October 22, 2012
Blog, Dallas, Economics, Event, Fix and Flip, Florida, Foreclosures, General Investing, Home Brew, Investment Properties, Properties, Single Family, US Real Estate
SPEAKING IN LOS ANGELES:
“Learn to Net $10,000 Per Month in Just 12 Years”
Join me and other educators and investors for a Halloween special real estate expo.
Saturday 10/27 9 AM – 4 PM, Woodland Hills CA
REGISTER for your free attendance (http://bit.ly/REIExpoLA)
You may have noticed that many markets around the country are heating up. This is no surprise. When you have: low inventory (Builders have not built new homes for few years!), low interest rate, a strong recovery feeling, and low housing-prices; there’s only one thing that can happen: Demand is going up.
With demand going up; prices will, and are following as we can see in many markets around the country.
How is this situation affecting you?
If you are trying to decide whether to invest or not, maybe you should stop thinking and start doing. Properties in many markets are not getting cheaper.
If you are looking for properties but HAVE NOT made offers, you better start making them. In many markets, every month that you are not making offers is like losing several hundreds of dollars, if not MORE.
Do you have your Investment criteria set?
Why is it so important to have investment criteria? Investors see investment properties every day, or at least several times a week. When you see a property, how can you really tell if this is a relevant one for you or not?
If you have you investment criteria set; in a matter of minutes, you will be able to say: “Great, Good, OK or nay” and then make the required action as a result.
What are investment criteria? You can decide on your own, but in general: price, total purchase cost, rent/purchase price ratio, minimum and maximum square foot, minimum bedrooms and bath room, property age, location, school rating, ROI, IRR, and so on.
Setting your Investment criteria will help you act faster when a good property presents itself.
If you are not sure about how to set them up, email me and I will help create ones that are relevant to you.
Are you “stuck” on one investment factor and cannot see the bigger picture? This week I have spoken to an individual that I will refer to as Kelli for privacy’s sake. Kelli asked me about my property in one of my markets and how much a manager was charging for this particular property market as a management fee. My answer was 9%. Kelli was shocked and said “9%!!! Wow! That’s very high!” When I asked how much she was quoted, she said 7-8%. My next question was: “How many properties do you own?” and the answer was “ZERO.” When I asked “How many offers have you placed?”, I received the same answer.
Why? Why do you waste your time trying to figure out if an 8% management fee is better than a 9% fee? Obviously, there are other factors involved than just the fee. Over the years, I have gladly paid a 6.5% to 10% management fee.
Let’s do the math. Let’s say that the rent is $1250 per month. At 10%, it would be a $125 fee. At 9%, it would be $112.5 for a $12.5 saving!
It told “Kelli” that “you are wasting your time (and mine). 8%, 9%, or 10% is important but insignificant at the position you are in right now. Forget about the fee for now and focus on making offers.”
It has been my experience when working with many investors that we have a tendency to get “stuck” in a “box.” This box is, many times, an insignificant one to get stuck in! You should focus on investing and not on the 1% difference in management fees.
ONE-ON-ONE INVESTING STRATEGY SESSION IN LOS ANGELES
Let’s meet in-person and talk about you. Your real estate investment wants, concerns, and obstacles. We know we all have them. The key is realism, not pessimism OR even optimism.
Let’s create your investment road map together! This will help us address any concerns that you may have as well as hurdle any obstacle that may be keeping you from your goals and dreams.
This session will help you move forward with real estate investing. In the meeting, we should be able to accomplish the following:
- Define your goals
- Create an action-items list
- Define pre-requisites for getting started – are you ready?
- Identifying and find ways to overcome obstacles – don’t let anything stop you.
- Put together ideas and thoughts into actions – take charge, take action!
When: Friday 10/26 and Sunday 10/28 in Woodland Hills, CA
Meetings are free and 30 minutes long.
RSVP to setup your meeting.
QUESTIONS YOU SHOULD BE ASKING YOURSELF
Use these questions to help you determine what the right investment path is for you and if you are ready to invest in real estate:
- How much funds do I have ready?
- What’s the source of the funds?
- Do I have a rainy-day fund?
- How free/busy am I?
- Do I want to be actively or passively involved?
- Can I get a loan?
- What am I trying to accomplish?
- Have I listed down my concerns (vacancy, mortgage, will it go up or down, will it rent, can I trust the property manager, etc.)?
- Can I analyze a property?
- Do I understand the risks that are involved?
- Do I have an exit strategy(-ies) in place should things not play out as planned?
- Am I a doer – will I be able to pull the trigger when the time is right?
- Have I created investment criteria?
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