When Kim and I were in our thirties, we knew we needed to start preparing for our retirement years.  We both had family and friends who were in their mid-sixties and had to keep working because they couldn’t afford to retire.  (Social Security is no substitute for a retirement plan!) Our big concern was where to invest.  My folks had done well in the stock market.  Kim’s had done well investing in real estate – they owned rental property.  Kim and I decided that real estate was the best way for us to go. OK, we’ve all heard lots of landlord-tenant horror stories.  Sadly, because of these...

Landlords – especially new landlords – often wonder (and worry) whether they are using an effective lease agreement.  Truth is, most landlords use terrible agreements. When we bought our first rental property in 1995, we didn’t know anything about managing rental property or tenants.  Needless to say, we also knew nothing about lease agreements.  The realtor we used gave us a lease written by the Georgia Association of Realtors (GAR).  We thought it was the greatest document ever written! As our experience quickly grew – and after attending several landlording seminars – we realized...

It’s really frustrating when a real estate investor calls to ask for advice, then argues when he doesn’t like the advice I give – especially when the advice is square dead-on. Last July, an investor – we’ll call him David – called asking about a “once-in-a-lifetime” opportunity that he had been told about.  It was a three-bedroom, one-bath home in downtown Atlanta that he could buy for just over $14,000, rehab quickly for $7,000, then sell for $75,000 to pocket a cool $54,000 profit.  Needless to say the investor was hot to trot. A wholesaler brought David the deal.  A wholesaler is someone...

Some days, things go all wrong.  Other days, things happen that are so funny you can’t help but to blow milk out of your nose!  Really interesting days are when both of these things happen at the same time! At April’s foreclosure auction, we bought a property on Autumn Place in White, Georgia.  It’s a very nice 3-bedroom, 2-bath home built in 2005.  It just needs a shave and a haircut (paint and carpet) before we can list it with our realtor. Kim and I have been buying foreclosure properties since 1995.   The first mystery we had to solve was how to bid on a property at the foreclosure...

It can be argued that a butterfly and a caterpillar are one and the same.  OK, maybe they are – but not at the same time!  It’s one or the other – but not both!  So, which are you? As real estate investors, we all start off the same – as caterpillars.  We just know the basics: how to crawl, eat leaves and poop.  Our world is limited to the tiny branch we’re clinging to.  We’re not much to look at, and we’re preyed upon by just about every creature in the animal kingdom.  Our life expectancy is about 12 seconds. Now here’s the thing: God didn’t mean for caterpillars to stay caterpillars.  He...

Never compare yourself with others. You never know what is going on behind the face. We will look at a person who has a job and likes what they do. They don’t plan on leaving their job and living off their investments. They will be able to buy through a realtor and pay a premium. I love to have these individuals in my wholesale stable. The house is three bedroom/ two bath in a lower moderate income area (such as Mableton, Lakewood, Decatur, Norcross.) The price is $80,000, top of the market, with no equity. The buyer will pay 25% as a down payment. The interest rate is 5%. The principal...

 It was 3:30 PM on a Friday afternoon in 1984. I was thinking about the weekend, and my primary goal was to move a new tenant into one of my rental units. The phone rang, and I proceeded to talk to a desperate seller. I went through my property information sheet, and the deal sounded too good to be true. I was excited. Here was an opportunity to purchase a three bedroom, one bath house in Decatur for $15,000. The property was a 1960’s brick ranch in average condition. All three of the mechanical systems were in place, and the roof was 10 years old.  The rent on the property was $700. The...

Driving for dollars. Is this a game show, with the host saying: “Good evening, ladies and gentlemen. In tonight’s edition, we have…” Seriously, you can make a lot of money at this “game”—my favorite source of finding good deals in real estate. Pick a neighborhood that interests you, e.g., in transition, being fixed up, near a river, and so on. Drive around it slowly and write down at least 20 addresses of neglected, vacant, or condemned homes. Often, they’re sporting signs saying For Sale, For Sale by Owner, or For Rent. Next, contact the owners. You may have to be persistent and...

One of the hot topics in real estate investing these days is something called creative deal structuring.  This leads to a question that we’re often asked: What exactly is creative deal structuring?     To answer this question, we need to begin by describing what it’s not.  One way you can buy a property is to pay cash for it.  You won’t find any creativity in that deal structure.  You can also find a property you like, apply for a mortgage, and then a month or so later, go to an attorney’s office to sign a big stack of hard-to-understand documents.  Not much creativity there either. Creative...

One of the best real estate investing teachers in the country is Pete Fortunato.  What makes him so special?  Pete knows how to creatively structure deals in ways that make impossible deals possible. Before Pete became one of our primary teachers in 1999, Kim and I did all of our deals the same old way.  We’d find a house, apply for a mortgage, close with an attorney and then either sell or rent the property.  Bottom line: If we couldn’t get a mortgage, we couldn’t do the deal.  We felt like we were buying a Model T Ford from Henry Ford.  Mr. Ford used to tell his customers, “The Model T...

I advise landlords to regularly inspect their rental properties – both inside and out.  This will help keep little problems from becoming big problems.  Another good piece of advice is to know the neighbors around your rentals and make sure those neighbors have your phone number. A few weeks back, I inspected a property we manage in Canton, Georgia.  The tenants had lived there for about five months.  They kept the home spotless, paid on time and were comfortable to work with. While we allow pets, these folks didn’t have any…or so they told me.  As I did a walk-around inspection, I...

Cruising yard sales and working at a pawn shop are two of the best ways to learn how to negotiate. I’ve spent years doing both, and one of the biggest mistakes I see people make is asking the seller, “What is your asking price?’ Big Mistake – huge! Think about it:  when a seller prices an item for sale – whether it’s a boat, house, or trinket – he has a ‘written’ price in his mind.  Usually, he will ask one price, but will take another.  So when you, as the buyer, ask the seller, “What’s your asking price?” he mentally sees the ‘written’ asking price in his mind and gives you that answer,...

Most folks mistakenly think negotiating is a beat-the-other-side-over-the-head-until-they-quit thing.  This couldn’t be further from the truth!  Over the years, we’ve sat down with thousands of buyers, sellers and tenants and successfully negotiated hundreds of Win-Win deals. What’s a Win-Win deal?  It’s when both parties leave the negotiating table feeling like they ended up in a better place than where they started.  They may not be in the exact place they wanted to be, but they are in a better place! Here’s a nugget I learned from Pete Fortunato: No one is gonna say yes to a deal that puts...

When we’re selling or renting a house, the neighbors can help make it a pleasant experience or a real nightmare.  Bill and I always try to talk with the neighbors and listen to their needs and concerns.  We want the neighbors to like our house and appreciate the improvements we make.  We also want the neighborhood’s values to benefit from our sales price. We recently bought a house in a very nice neighborhood where the values had taken a terrible turn downward.  We did a beautiful rehab to the house and property, spending about $24,000 on improvements.  The neighbors were patient with the...

Last week’s column titled, Will the Number of Foreclosures Increase in 2012, brought in a number of calls and emails.  Several folks in the real estate field accused me of being negative and trying to drive down real estate values. I asked one caller, “Do you really think my weekly real estate investing column influences real estate values?  Seriously?” The truth is, Kim and I are along for the ride just like everyone else.  But in case my column CAN influence values, let me try an experiment: The value of fifteen-year-old, two-bedroom, one-bath mobile homes in Cartersville, Georgia just shot...

Many real estate investors shy away from the ugly house business because they fear hiring contractors. We have all heard the horror stories of rehabbers who lose their shirt because a contractor took them to the cleaners. I am here to tell you that contractors can be your worst enemy or your best friend, depending if you hire a good one or a bad one. So how can the beginning novice real estate investor make the correct choice- the hard working team player that gets the job done on time, on budget and at a high standard of quality?   The answer is by following all eight of the critical...

A couple of months ago, a real estate investor who works the same market we do, told me he wished I’d never write or teach about foreclosures again.  He said all I was doing was creating more competition for him at the monthly foreclosure auction. Over the years, folks have wondered why Kim and I host a monthly real estate investors meeting.  After all, by teaching folks how to be successful investors and landlords, we are creating competition for ourselves, right? That’s one – small-minded – way to look at it.   Here’s another: Kim and I were on the hamster wheel working long hours at...

Where to Get the Money to Do Your Deals Right NOW… Don’t let the “Perfect Storm” Pass You By! Many years ago when I was just getting started in real estate, I went to a Ron LeGrand seminar.  I heard Mr. Ron say that you can open a Roth IRA and buy and sell real estate from it TAX FREE!  I came back from that seminar so excited I could not sleep!  I went over to talk with my older cousin, who is a long-time and well-respected Certified Financial Planner in this area.  I thought, “Surely he will be as excited as I am, because now he can earn his clients much higher returns...