I started investing before I got my license.  I worked with another agent that specialized in investment properties and basically mentored me in the process.  So far I have only purchased rental properties.  Having a license can help in finding properties, such as having direct access to the MLS.  It also reduces costs since I pay myself the buying agent fee (or use it to reduce price).  However, it can also be a bit of a hinderance in that you are held to a higher standard in transacations. You must disclose that you are an agent and basically any pertainent information that otherwise you might not.

In this business we need multiple sources of income.  Real Estate investing this the best way to invest.  God is not making any more land, so I don't foresee having a real estate crash like the stock market can do.  This is a very tangible asset.

I buy homes to fix and resell.  I have done very well doing so and I enjoy doing the work.  I will hire some out and do some myself.  Depends on my time/money.  

I do not own any rentals but plan on buying some.  I like the quick turn around on a flip.  Rentals don't offer that.  They are a long term investment.

I sell a lot of Foreclosures to clients and when I am looking for myself, I have built up a good relationship with a lot of the agents who have these listings.  When I write an offer on a repo for myself, they know it will be a smooth and easy transaction, so they will usually push the bank to accept my offers.  Being engulfed in this daily, I really know how to spot the good deals.

One word of caution.  Don't ever forget where your paychecks come from.  First and foremost I am a REALTOR.  My investing is put underneath that.  I do not ever want to get in a position where one of my clients is upset I bought a repo out from under them.  

Also on the resale side you need to make sure your finished product is something of high standards.  You are putting your Name on it.  The way you fix up a house will reflect in the way people value your real estate business.

When I first started lurking in the Message Board about a year ago, someone gave what I consider to be great advice. This advice is especially pertinent to the younger agents.

He said that when he was just a rookie agent, his Broker advised him to purchase one house per year. Whether it was a fixer upper to "flip" or a rental property, he was to use that money as an investment for his retirement.

And. you both are so right when you say that you have to be careful. For instance, I have a home listed right now that I would buy if I had not been the listing agent. However, I have private info that I believe precludes me from purchasing the home AND sleeping like a baby at night!

I just started last year, buy to rehab and flip. I work with alot of REOs but I cannot buy them since I am the LA. I just watch my market, we have tax sales once in a while. I would never buy to rent, I am way too soft hearted and would get walked on big time. We are trying to rehab at least one property a year. I would never buy a property someone called me to list though.

Hi Russ,

I was investing and did several successful flips on easy rehabs but stopped when I started training agents how to sparkle at the closing table.

I just spoke at Jim Fleck's Foreclosure Seminar in Las Vegas about that and had a few other guests there who short sales, lease options and deeds to trusts. I can do them all, as my business model is to find the solution to the foreclosure.

I'd rather train agents, investors and bird dog (I like property locators) to help the foreclosed on customer make decisions. I know, and you do too, one of the reasons they are still be foreclosed on is because they froze...somewhere...or are still in denial about it. Your job is to go figure out what IS stopping them. I teach that, plus some other "across the table" techniques including when to ask as yes/no question vs. an alternate of choice question. I still doorknock my own sellers and love it!

The others can teach you paperwork, what foreclosure is and means and they can show you a package all day long, but what do you SAY? What do you SAY NEXT? That's what I teach. I'm out to help you close more effectively because I know it's all blah blah without the customer being plugged in and moving forward. AND STAYING LOCKED IN.

If anyone would like specialized coaching and mentoring on your table presence and I'll be glad to help you to your next level. It would be one on one training and customized for you and your area. Call me and I'll discuss this more.

Thank you for your time, too!

Dan Nolan

http://DanNolan.Point2Agent.com

847-508-0652 (cell)

Occasionally you'll find a house underpriced on the MLS.  Fixer uppers we buy if there is a profit threshold around 16-20k.  My wife and I used to look for homes in the $40 per square foot range and acted immediately.  Now we are looking at neighborhoods and buy places that we can rent to families or flip. Establish an equity line at your favorite bank and after you have cleaned it up go for financing.  I'm sticking with the MLS and word of mouth.

A couple of national companies and a regional company scour the classifieds and sends letters to recent widows and divorced couples.  They state up front that they expect to buy the property at a discount. So far they have bought nothing but older homes in all price ranges.

Realtor, Columbus Ga

I don't know what a lease option "sandwich" is but in my opinion, if you are trying to negotiate terms (lease option) then you are not going to get as good of a price.  

I think you are better off to do a straight forward offer.  If you can't get a loan for the house, you need to find a money partner to front the purchase.

I recently attended a seminar intitled "How to Build Wealth by investing in Real Estate".  The teacher was awesome.  He was funny and smart.  His name is Tom Lundstedt.  The has several books and Cd's I thought were very useful.  Visit his website at www.tomlundstedt.com

Good Luck!

www.calgriffin.com

Edisto Beach-Now That's Heaven!

Russell,

I know 2 investors that have fallen FLAT on thier face doing a "Lease Option Sandwich".  

The one was a young guy went to every FSBO he could find and gave them what they wanted for the house and promised to take over their payments.  Then he turned around and leased optioned the home to every dead beat that could give him a couple grand and promise to make payments that would cover what he owed the owner plus a little.  Needless to say, he screwed a lot of homeowners when he stopped making payments because the people he put into the homes stopped making payments.  The owners had their properties foreclosed on and he ended up with a LOT of lawsuits!

The other investor did the same thing soliciting the FSBO's and would give them what they needed to get out of their home and promised to make their payments for them.  Then he turned around and lease optioned them to other people.  The stopped making the payments and he was stuck with a house and making the payments.  He was more responsible than the other and kept making payments to the sellers until he could sell the homes outright.  I listed a few of them for him.  He overpaid on all of them and ended up having to bring THOUSANDS of dollars to closing to get rid of these properties.

I would stay away from this.  In a market like we are in, it does not work well.  If there is a LOT of appreciation in your market, this might be an effective tool, but you have to look at the big picture and how long you will be keeping these homes.  

Good Luck

I would never pay $500 for a PLAN about RE investing.

If the plans being sold really worked, would the guy selling them need to make money selling the plan?

Use your head and your calculator.  

C'mon guys, n gals.  We see the best listings first, and can buy them for 3% less than the public.  Then we can sell them for less than it costs the public to sell.    

Buy an undervalued, distressed property, fix it up and sell it, or lease option it...  Look for cash flow or profit.  

I plan to start investing this fall.