Nooby Real-Estate question(s)

[Michael Raphael]

I am starting to look at real estate a lot more recently. I wanted to accumulate at least 50k in savings before touching it, and I have done that. It took me about a year/half to do it, and now with some consistent passive income of at least 3k-5k I am confident I can get this adventure going; but I have some questions.

1. How does one determine whether a market (the present) is doing well or crashing, and furthermore how can one tell when a market (the future) will do well (in 2 years) or do terribly.

2. Do I need any legal/certificates to purchase property and then sell it to some other owner? ie. I buy a 50k house for 35k with 3.5k down payment rest on loan (% is determined at that date). Market then begins to go up 2 years later and I sell the house for 65k. To do this process do I need any license, anything? Or just bankers and lawyers to do stuff.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[CashFlowDepot]

The best indicator if the market is doing well, is the population count and jobs reports. If the area is losing population it is not good. If the area is gaining population it is good. If unemployment is high, it is not good. If a lot of new jobs have been added - which will attract more people to the area - that is excellent.

If you sell that property with seller finanancing, you need to be aware of the Dodd-Frank rules. After a few transactions a year, you will be required to use a licensed mortgage broker to qualify your buyers. Really, even if you only sell one house with seller financing it would be better to use the mortgage broker to qualify your buyer so you have less liability. There are a lot of rules and regulations about what interest rate you can charge and how the loan has to be structured. Failure to get this right could result in repaying everything the buyer has paid you for THREE years - plus attorney fees.

If you sell it to someone who gets new financing, then you do not need a license or to be concerned with Dodd-Frank rules. And you'd do better not to use a real estate agent - instead OWN the sale - see the post about First Solo Flip for more detai.s

 

[Red]

Yes, as a rookie to all of this, make sure you never ever use a qualified professional to sell your house. Not even your first one. Understanding & complying with seller disclosure laws in your state is not really that important & not worth paying a professional to cut your learning curve the first few times. Disclosure laws are for sissies & no-fun Nancies. You know who likes disclosure? Hitler. That's who.

As a newbie, paying a good professional for industry insight is beneath you & should be avoided. It merely cuts into your profits. Which you totally deserve & are entitle to as a noob. Google is free & that's really all you need! amiright? Don't worry about that guy who died in the house you just bought to flip. Or the fact that a sex offender lives 3 houses down. You don't need to disclose that. Or do you?

Remember kiddies, when looking to make money in an industry that you have absolutely zero experience, paying for the services of a qualified professional is akin to cooking up illegal drugs.

Just like meth: not even once.

 

[CashFlowDepot]

I agree. Pay a local real estate attorney to help with the contracts, disclosures, rules, regulations, etc.
You will get much better results (at a better price) than most real estate agents who I would not consider "qualified professionals"

Sure there are a few good real estate agents out there I'm sure. I have just never met one yet.

Most want to list your house then sit back and wait wait wait while someone else finds a buyer so they can get 50% of the commission for getting their assistant to stick your listing information on MLS (often with incorrect information - which they are not liable for of course). Oh yea, they will usually get around to sticking a sign in front of the house within a few days of the listing agreement. And they will be very slow about taking it down because it is free advertising.

When selling a house, you need an aggressive approach, not a 6 month listing agreement.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[JAWS]

You can find determinants for an area on popular RE websites (Trulia, Redfin, etc). There you will find School rankings and more.

It is important to note what types of jobs are in certain areas - the world moves quick (ask the newspapers).

 

[Michael Raphael]

Thank you for all the responses, I am going to learn as much as I could and do what I can to gain as much insight from key people. I also was curious about getting into real estate regarding trailer parks in Florida. Have any of you or anyone you know worked in this field, that being trailer park real estate.

 

[CashFlowDepot]

A mobile home park would be a great investment anywhere - not just Florida. For smaller parks, they need to be closer to where you live. There is not enough profit margin to have onsite management.

In one of my last interviews with Lonnie Scruggs he said if he were starting all over again today, it would focus on buying mobile home parks WITH SELLER FINANCING. I will see if I can find that interview and post it next week.

There are a lot of parks owned by people ready to retire. They like/need the cash flow but don't want the management anymore. You should make offers to buy those parks with seller financing or even a master lease. With a master lease you will need very little, if any, down payment. There is a big upside potential both from a cash flow and an equity stand point. Note -- this should be an IN PERSON proposal and only after establishing a good relationship with the park owners. It is not an offer you can send out in a form letter to every park owner. You need to take time to listen to their needs and concerns.

Google Maps will help you find all the parks. Just type ... mobile home parks the city and state... and they will be populated on a map. When you click on the red dot, it will take you to a page with an address, phone number, web site if there is one, and directions. Plus you can see a street view of the park.

Meanwhile, here's an audio lesson from the late, great Lonnie Scruggs called Create Your Own Economy

http://www.cashflowdepot.com/home/create-your-own-economy-by-lonnie-scruggs.aspx

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Michael Raphael]

First and foremost, what an amazing detailed post. So much information and knowledge, even more so I can gain some confirmation on this decision. Would you mind PM me to discuss this in more detail? If you are not comfortable or to busy I understand.

 

[CashFlowDepot]

First and foremost, what an amazing detailed post. So much information and knowledge, even more so I can gain some confirmation on this decision. Would you mind PM me to discuss this in more detail? If you are not comfortable or to busy I understand.

You are welcome to send a PM. I will be out of the country June 10th - June 30th so don't be upset if I don't reply quickly.

 

[Determined2012]

http://www.cashflowdepot.com/home/create-your-own-economy-by-lonnie-scruggs.aspx

This was an awesome recording. Thanks for posting it.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[CashFlowDepot]

This was an awesome recording. Thanks for posting it.

you are welcome.

 

[CashFlowDepot]

I've tried it both ways too. With a real estate agent I waited and waited for even a showing let alone a sale. No results. The "listing" agent is too busy out getting more listings to take any interest in the sales process.

By taking charge of the sales process, using a real estate attorney for the correct paperwork, getting a creative mortgage broker at the house when you do an two day open house with an aggressive marketing campaign you will usually get a sales contact within 7 days of starting the marketing processs and close within 30 days.

Since many buyers go to a mortgage broker to get pre-approved before they start the buying process, it also helps to contact mortgage brokers in your area and send fliers of your property to their email or fax. Often just doing this has resulted in a contract within a few days.

The worst thing you can do is turn the sales process over to someone else. You need to be proactive and aggressive if you want to get your house sold quickly. I have not found any real estate agents who are either proactive or aggressive about getting my houses sold.

You might make your profit when you buy, but you get paid when you sell.

I remember at one of my highest bidder sale open houses, I had 500 potential buyers come through the house in 2 days. A real estate agent was doing an open house down the street. She came to my open house to ask how I got so many people at my open house because she only had one couple all weekend. Her only marketing was an open house sign in front of the house.

 

[CashFlowDepot]

My DOM is 7 days to contract, not more than 30 days to close at full price. Don't know any real estate agent who can do that unless it is a hot market with multiple offers coming in.

It takes a full 4 hours of my time to sell a house because I use VAs for most of the work.

Though most of the houses I sell are houses I just have a pure option on so I don't have months of holding costs, no loans, no construction costs, no contractor costs, no utility costs, and there is no rehab involved so it saves a lot of time.

Even the properties I have bought then rehabbed it only take 7 days to sell.

It is great that you found a real estate agent who knows how to sell a house.

Why not give suggestions on how to find a good agent, what do they do besides stick it on MLS, and explain how long it takes them to sell

I read someplace recently that 85% of listings are sold by a different real estate office. That means that only 15% of listings have an agent in the same office who is working to find buyers. Pretty sad statistics.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Michael Raphael]

Claws are out. Cashflow I would really like to know more about what you do and how you do it. Would you be interested in mentoring me? I would be honored. Perhaps even a few minutes on Skype?

 

[CashFlowDepot]

He

Claws are out. Cashflow I would really like to know more about what you do and how you do it. Would you be interested in mentoring me? I would be honored. Perhaps even a few minutes on Skype?

Hi Michael

I'm still playing catch up from my two week trip to Ecuador so this week is packed. On Thursday I leave for another trip out of the country. Send an email with your questions and I will be glad to answer when I can but I will be kind of busy until August.

The answer to many of your questions are probably available for free at my web site www.CashFlowDepot.com See the links on the left side of the page.

 

[CashFlowDepot]

I'm sure glad I was able to stop doing 30+ houses a year a long long time ago and enjoy life in the mountains of Central America or the Pacific Ocean near my house.

If you target the right kind of deals and avoid rehabbing anything, you can make as much or more with 3-4 deals a year than you would with 30 houses a year in a lot less time.

Less work. More profit. More free time to do what you want, where you want, when you want. That's success.

The real financial freedom comes from free and clear cash flow producing properties instead of chasing the next deal or the next rehab.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Determined2012]

real estate regarding trailer parks in Florida

Please tag me to your progress thread when you get started!