Nursing Home Bird Dogs

Building a team of bird dogs is a great way to get deals done quickly and with more ease. One market I found that has been overlooked is adult dare facilities, such as nursing homes, assisted living facilities and active adult communities. Do a quick google search for these senior living properties in your area.
The way I see it is this, when a senior citizen needs to make changes to their living situation, they will talk to the executive director of a facility to get information about the specific facility’s cost, amenities, services and so forth. They will then budget because Medicare and Medicaid do not cover these costs for them. These administrators will know if the possible client has a property to sell off to help pay for the cost of the facility. This is where you would come in.
I would encourage you to talk face to face with the executive director in charge of admissions and let them know that you are a real estate investor who can buy properties quickly and with cash from their possible clients. You’ll want to ask them for leads to anyone who has a property to sell. This way you can go to the homeowner, or their heirs directly, and work out a deal. If you make a deal happen, then offer the administrator a referral fee, cash at closing. I usually give $1,000 referral fees, but the price is totally up to you. If your offer does not conflict with their business interest, they should be willing to work with you.
Now you are building a captive audience as your bird dogs. Seek out as many of these types of facilities and market to them all. Build your business with leverage — and this is a good type of leverage.

A Couple of No-Down Financing Options

Typically, when you buy a home you must have some sort of down payment.  When you use a FHA loan (which usually requires the smallest down payment) you will need to have a down payment of 3.5 percent of the amount you offer on the property.  There are less known options available to homebuyers that will allow you to get into a home without having to have any down payment at all.
The first option to look at is an USDA loan.  USDA loans will give you 102% of the appraised value of the home, which will cover your closing costs. This loan will be a 30-year fixed rate loan, with an interest rate based on what the market is currently at.  You will need to have a 640 minimum credit score unless you have been through a short sale, then you will need a 660 credit score.  The draw back with this type of loan is that it is only available for specific areas, which are mostly rural communities.  There are income limits as well, which means if you make over a certain amount of money you will not qualify.  This loan is only for a personal home that you plan on living in, but most existing single-family homes and new construction single-family homes will qualify. Some condominiums and modular homes will qualify for this loan as well.  It will work for both first time homeowners and those that would like to move to a different home.   To find out more about this type of loan and to see if you qualify you will need to call mortgage lenders in your area and ask them if they do USDA loans and what the qualifications are.
There are also local banks and credit unions you can work with where you can get into a property without a lot of money out of pocket.  To find these banks, start calling local banks and ask to speak to their mortgage department.  Ask them if they have a low cost, or no down payment option loan to get into a home.  There are a lot of options for first time homebuyers in this area.  My son went through this experience last year.  He found a bank with a no down payment option and got prequalified (Getting pre-qualified is a must to know how much they will loan you to buy a home).  As he went through the process, he had to pay for the appraisal out of pocket which was around $500.  He chose to pay for a professional inspection on the property about $250-$350.   At closing he had to bring in $200-$300 for some closing costs.  All in all, he got into a $150,000 home for around $1,000 out of pocket, of which $250 was optional.
Lending rules have relaxed a little so there are now options to get into a home with little out of pocket money. If you want to buy a home and you do not have a lot of money saved up, consider these options, as there may be a way to get you into a home.

A Unique Way to Invest in Commercial Properties

One way to invest in real estate is by investing in commercial properties.  Commercial properties consist of retail, office and industrial buildings with a subcategory of industrial buildings that include multiple storage units.  Storage units are a great investment because they are easy to build and easy to maintain.  Storage units are usually block buildings with metal partitions that can have either exterior roll up door entrances or interior hallway entrances.  The units can vary in size from 5’x5’ to 10’x30’ and rent from $50.00 to $175.00 per month.  These would be non-heated units; heated units would rent for a premium of $25.00 per month more.
A great way to create these units is to find one-story industrial buildings that are vacant, outdated and need a lot of work.  Purchase the industrial building for 70% of the ARV (price per square feet of an industrial building in good shape) minus the rehab cost to convert the building into storage units.  Once owned, gut the building and install simple partitions to create a hallway and individual storage units with 4’ to 6’ wide roll up doors on each unit depending on the size of the unit.  Put an electronic security lock on the exterior door and allow each individual renter to put a padlock on their unit.  Put security cameras on the inside hallways and security lights on the exterior of the building.
It is very easy to get a 20+ cap rate on storage units bought this way.  Taxes and insurance are low and maintenance is minimal.  Utilities are paid for by the landlord, but they are minimal also; one light bulb per unit and no gas or water.  You can hire a manager or manage the storage unit yourself.
These industrial buildings should be located near residential communities on a commercial corridor so they are easy to access by renters needing to store furniture and other items.  The industrial building should be a minimum of 4000 sf and 10’ tall on the inside.  The partitions can be built with wood studs and one sheet of plywood or metal studs with corrugated aluminum panels.  The hallways should be a least 5’ wide and have doors at each end for easy access.   You can create 40 units of varying size in a 4000 sf shell and lease them for approximately $1.00 /sf. Smaller units go for more per square foot than larger units.
This is just one more way to make a great return on your money by investing in real estate.

Benefits of Using a Real Estate Agent

Though DIY is a very popular trend for all things home décor, one thing that should not be DIY-ed is buying or selling a home.
Real estate agents help homebuyers and sellers every day by putting all their experience into helping you secure your next real estate transaction.  Let’s go over some of the benefits of hiring a real estate agent.
Your Realtor Comes with a Team
Purchasing a home isn’t as simple as signing on the dotted line.  As a homebuyer or seller, there is a whole team of professionals involved in the sale. When you are buying or selling a home these are just some of the professionals you will need to work with:
Home Inspectors
Real Estate Lawyers
Mortgage Brokers
Contractors
Home Stagers
Photographer
When you hire a real estate agent, they bring a team of real estate professionals to your transaction.
Buyer Benefits
As a homebuyer, there are benefits to working with a real estate agent.  They are a partner for all negotiations and have early and sometimes exclusive access to listings.  When hunting for a home, information is key. Work with a realtor to make sure you have access to all the information available.
Seller Benefits
How many homes have you sold in the last year?  There is nearly a 100% chance that you sold fewer homes than a real estate agent, if you sold any at all.  Real estate agents sell homes for a living — take advantage of all that experience.  Real estate agents know how to showcase your home in its best light through photography and staging, so take advantage of the latest digital marketing and ensure that you get the best price for your home.
How to Interview Your Real Estate Agent
There are so many benefits to hiring a real estate agent for both buyers and sellers.  To have a successful partnership, you will have to pick the right agent for your needs.  Some questions to ask when you are interviewing a real estate agent are:
How many homes like mine have you represented buyers or sellers for in the past year?
How long have you been a real estate agent?
Do you offer any exclusive marketing opportunities?
Can you advise on how I can make my home more marketable?
These questions will tell you how well you and your agent will be able to work together.  It is as important to find a real estate agent you can work well with as it is to find a real estate agent at all.  Finding the right real estate agent will make your next real estate transaction a successful one.

3 Financial Benefits of Owning a Rental

There are several financial benefits that come along with owning a rental property.  A lot of investors focus solely on the rental income itself, however, there are other financial benefits to consider.

Rental Income
Owning a rental property, with a tenant occupying the property, enables you to receive rental income.  Let’s suppose that you have one tenant.  Your tenant pays you a monthly rent amount of $1,100 a month.  Your PITI (principal, interest, taxes, insurance) mortgage payment is $700 a month.  By subtracting $700 from $1,100 it will leave you with $400 cash to go into your pocket each month, right?  NO not exactly, there are 2 more costs to consider.

From the $1,100, you will want to assume about 5% a month for vacancy costs, and 5% for maintenance costs.  These are costs that you do not want to ignore.  After deducting these additional costs, you will now have about $290 a month that will count as your cashflow income.

Tax Write Offs
There are huge tax deductions for rental property owners.  For example, you can write-off interest on your mortgage and credit cards used to make purchases for your property.  Other write-offs included; insurance, travel expenses, legal fees, maintenance repairs and property taxes.  You can find a more extensive deduction list on www.Nolo.com.

Appreciation
Appreciation is when your property increases in value over a period of time.  It could also depreciate and experience a decrease in value.  However, real estate is a relatively safe long-term investment because of increasing value or “appreciation” that occurs over time.  Most appreciation happens because of increased demand for properties or a change in interest rates or inflation.

Let’s assume you purchase a property for $100,000.  This property appreciates 5% in value every year for 10 years.  After 10 years, your property will have increased in value by almost $63,000.

Owning a rental property brings immediate financial benefits along with long-term financial benefits, making rental properties a top investment option for investors.  With careful planning, rental properties can be a significant piece of your investment income portfolio.

5 Mistakes Buyers and Sellers Make with Home Inspections

What is a Home Inspection?
A home inspection is a mainly visual evaluation of a home’s condition.  Home inspectors typically provide inspection services to determine the performance of the home.  The inspection isn’t just about identifying problems with the house.  A thorough inspector considers the appointment of a master class in your new home. (1)
Not Researching the Inspector
Too many buyers and sellers take whatever name is recommended without doing research.  The inspection is only as good as the inspector doing it.
A few questions to ask:
How long have you been inspecting homes?
How many inspections have you done?
What are your qualifications, certifications and training?
What was your job before you were a home inspector?  (Ideally, your professional was in contracting or building.)
You want a certified professional who stays current.  “There’s a lot of stuff you have to know, and you want someone who’s keeping up with ongoing education.”
You’re looking for an inspector who can analyze the home’s strengths and weaknesses—then explain them. (1)
Not Attending the Inspection
Attendance may not be mandatory, but it’s a good idea.
Just reading the inspection report isn’t enough for most homeowners to get the full picture, so it’s very important for the homeowner to see it so they can understand it.
The inspection will take 2-3 hours to complete, so set aside enough time for the whole thing.
Many inspectors don’t want to give you advice on whether to buy the home, but a good inspector can give you an estimate of how much money you’ll need to put into repairs and upgrades and talk about how well that fits your budget. (1)
Not Reading the Inspection Report
Too many buyers and sellers just glance at the inspection report.
You need someone who uses “clear, concise” language in person and in the report.
One Clue:  Scan a few inspection reports.  Either check the website or ask for a sample.
A knowledgeable profesional will state simply what’s wrong with the house and what it will take to fix.
Reports are often in digital format, with photos to illustrate the home’s strengths and weaknesses. (1)
Not Getting a Presale Inspection
Many sellers elect to leave the presale inspection to the buyers, but that’s a mistake.
When the buyers get an inspection (and if they’re smart, they will), the sellers will have little time to complete repairs and keep the sale on track.
If the sellers have the home inspected before putting it on the market, they have more time to get repairs done and with the extra time, they can shop around and control costs.
Both buyers and sellers often wait too long to engage an inspector.  You should find an inspector long before you have (or make) an offer.  Some buyers and sellers will wait for the second-to-last day before they even call.  “Any good inspector will be booked out.” (1)
Not Prepping the Home
Inspectors are upset when homeowners don’t prepare the house.
“Don’t force the home inspector to empty the closet to get into the attic.”  If you have a crawl-space hatch, move anything sitting on top of it.
Have a lock on a utility closet, basement or shed?  The inspector needs access, so open it or provide keys.
For a seller, the best tactic is to be at home to meet the inspector, introduce yourself, provide your cell number – and then you can take off.
To reduce the need for repeat inspections, hire professionals to do repairs.
Too many times, when faced with a list of needed repairs, a seller will DIY or try to get them done cheap, but that shows up during the re-inspection and could mean another round of repairs – and a 3rd or 4th inspection. (1)

(1)= Dana Dratch (Bankrate.com) January 2016

How to Get a Realtor to Write Offers

Below is an example of a simple email you can send to a real estate agent that should trigger them into writing your offer so it will protect you from potential loss while giving you the best possible chance to do a deal that makes you money.

Dear (Enter Agent Name Here),

Thank you for your work with me on: 413 Buckthorn Drive Lexington SC 29072.

I would like to offer $70,900.00 on this property under the name (ABC, LLC.). Further I will need the contact info for the title company so I can arrange to wire funds to them. I will give the seller or their “Title Company” a $1,000.00 deposit as soon as they accept my offer or put a check in escrow with my attorney. This offer is subject only to the following 15-day due diligence clause (or your equivalent):
Commencing upon receipt by Buyer’s Agent of a mutually executed Agreement of Sale, a Fifteen (15) day period shall begin (the “Due Diligence Period”) during which the Buyer shall have the right to carry out and perform all reviews and investigations deemed necessary by Buyers, including, without limitation, a physical review and inspection of the conditions of the buildings (if any) and the soil, environmental inspections, review of title, review of zoning, review of any permits and approvals for property deemed necessary by Buyer. In the event Buyer, in its sole discretion, is not satisfied with the review, evaluation or investigation during the Due Diligence Period, Buyer may terminate this Agreement by written notice to Agent for the Seller prior to the expiration of the Due Diligence Period, and at such time, shall receive back deposit(s) if any, and neither party shall have any further obligation hereunder. If such notice is not given, this Agreement shall continue in full force and effect in accordance with its remaining terms.
(Enter Agent Name Here), I would like this offer presented in writing to the seller! Further, I will want you to resubmit the offer every two weeks until the property is under contract. Should the property end up under contract with someone else, could you please ask if we can submit this offer as a back-up offer?

All the best,

(Your Name Here)

The email above is designed to help you get your agent to properly fill out an official “written” offer form. By using this as a template, you can quickly initiate a lot of offers.  Please remember, it is critical that you get your agent to present your offer in writing, as verbal offers almost never result in a “done deal.” Agents have a fiduciary responsibility to submit your offer in writing if you request that they do so.

It does you no good to let real estate agents teach you how to buy at retail so they can make a bigger commission when your business revolves around closing deals that are profitable to you and/or your buyers if you are wholesaling.

Once your agent writes the offer, you should go over it with your agent to make certain that the contract says what you want said.   Many states that approved Real Estate Purchase Contracts (REPC) have a built-in, often even state mandated, “due diligence clause” to protect you as the buyer. However, many agents check the box that says you don’t want this protection because the agent is looking for a quick deal.

Recently, many state contracts have been rewritten to force buyers to use a licensed inspector and continue through with the purchase if the seller is willing to make the changes indicated by the licensed inspector. You or your buyer will want to choose your own inspector, perhaps yourself or one of your contractors.

While you won’t want to mention to the agent that you are using the “Due Diligence Period” to find a buyer, it is obviously paramount that you be able get out of the contract and get back your deposit back if you can’t find a buyer.

This letter is written to help you make your deposits to the title company as opposed to the agent’s brokerage. The reasons for this are that:
The title company has no reason to keep your deposit if the deal falls through.
The title company is unlikely to cash your check unless/until the deal closes.
The deposit in most cases is not due until 3 days after your offer is accepted.

Writing a deposit check to the agent’s brokerage will please the agent. They will almost always deposit the check to their escrow account. Further, they will most certainly keep the money if they can. Expect no mercy if you miss a deadline or make a mistake.

Obviously, this email offer and accompanying explanation is designed to protect your resources and get you only deals that will make you money. Perhaps the most important thing of all to learn is that the listing agent and the buyer’s agent are both paid by the seller. Hence, they will take the sellers side every time. Good luck and may your next deal come quickly and be a big one.

Benefits of Owning a Home

Benefits of Homeownership
You get married, buy a house, have 2.5 kids; people are less and less likely to follow these traditional rites of passages in any particular order, let alone the one listed.  “So why are people still buying houses? Why did the National Association of Realtors report that 5,250,000 homes sold in 2015”?
Buying a house is much more than a symbolic step in your life. It offers long term financial and lifestyle advantages whether you are single, purchasing the home with your partner or buying the home for your family.
Equity and Homeowners
A term that gets thrown around a lot when discussing the benefits of owning a home is equity.  Equity is a financial term that describes the money that results from selling your home after you pay the balance of your mortgage.  “Over the course of a standard 30-year mortgage, each monthly payment goes towards building that equity.”  Instead of throwing money away on rent, your monthly payments go towards building equity.  Also, any improvements, commonly referred to as “sweat equity,” work towards increasing the eventual sale price of your home.  Through hard work and monthly payments, homeowners receive a cash-out when they sell their home and liquidate their equity.
Tax Benefits for Homeowners
As a homeowner, you can receive many tax benefits.  The money you would already be spending on rent is now a tax deduction.  The interest and property tax portion of your mortgage are tax deductible.
Lifestyle Benefits for Homeowners
Communities are built on the collective pride of the ownership of its homeowners.  As a result, some of the best neighborhoods have very high owner occupancy. This leaves very few options on the rental market.  By buying a home, you will have easier access to communities with the best schools, amenities, and other opportunities.
Benefits of Homeownership
To review, buying a home isn’t something that you do because you should, it is a solid financial and lifestyle investment.
“You Build Cash Equity
Are Eligible for Tax Deductions
Contribute to a Forced Savings Plan
Experience Pride of Ownership
Opportunity for Sweat Equity

Overcoming Objections

A natural part of working as a real estate investor is dealing with objections. This might include an objection to an initial offer, an objection during the negotiation process or an objection when making a counter offer.
For example, if your buyer offers you an objection that they are not interested in a property (because of the location) or don’t want to be north or south of a certain street, you have the opportunity to help them by meeting their request and finding a better location or property.
How you handle the objection shows your strength and ability to deal with everyday life as a real estate investor. It also demonstrates your professionalism by simply listening and acknowledging the concern.
Most confusion or conflict can best be avoided all together by simply asking good questions – where specifically are they buying properties and what type of properties do they wish to purchase? Clarify, is it a core item or is it a wish list? For which items might there be some compromise? Let your cash buyers tell you.
Once you get the home under contract, that is usually when the objections will start. If you can’t overcome the objections and you find yourself stuck with a home that no one wants, both you and your buyers are frustrated!
Not all objections are the same. Some are deal-breakers, but most aren’t. And with enough experience, you’ll know that even a deal-breaker objection can be overcome under the right circumstances. Instead of dwelling on what they don’t want, suggest another solution.
As you start any business relationship with a buyer, clarity and good communication throughout the process will help you better navigate and overcome objections.