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Global Economic Picture Darkens; Is it a Good or Bad Time To Invest In Real
2008-04-16 16:26:00
The last posting I had last week generated much discussion–I advanced the argument that the real estate mess we find ourselves in, and the resultant global credit crunch, is not likely to end anytime soon. And, that unless one happens to know what one is doing, this is not a very good time to learn the art and science of real estate investing. Since just last week, the economic news had gotten considerably worse. In fact, I think that we are headed for a world-wide economic situation few of us have witnessed in our life times, unless we lived through the Great Depression. Listen to this: “Nothing of this scale has happened since the Great Depression. This is the toughest credit cycle I have seen in my years in the industry.” That is a quote from Kerry K. Killinger, the chief executive of Washington Mutual, the nation’s largest savings and loan. This week, Washington Mutual posted a $1.14 billion loss in the first quarter of 2008–the reason: the growing...
More About: Economy , Commentary , Foreclosures , Time , Housing Bubble

A Realtor?s Road to Baghdad
2008-04-15 22:43:00
Taking responsibility sometimes requires one to find an alternate path in life. I often hear and read stories about people ?walking away? from their financial obligations and responsibilities simply because it?s not in their best interest to honor them, or it?s simply become to stressful. As a Realtor , I?ve certainly not been immune to the mortgage crises and it?s ripple effect. I?ve found it difficult to refinance my homes at terms I find acceptable, and even more difficult to get my clients into homes that banks will loan them sufficient money on. I?ve concluded that banks don?t really want to loan money right now unless they have to. Fair Lending rules do dictate that when all the hoops are properly jumped through, they must make the loan. They do however keep moving those hoops higher and higher for a majority of Americans. Its times like these that we are reminded of our parent?s warnings ?you?ll need to have something to fall back on?. I still believe in the market, and t...
More About: Commentary , Baghdad , Mortgages , Road

Under Analysis?the Latest from the Real Estate Investment Style of Investor
2008-04-15 16:46:00
If I could just take a few moments and vent about my frustrations with real estate investors who do not follow formulas and do not stick with systems. Sheesh! If it isn’t one bad deal working it’s three bad deals working. Are times that bad that you have to reach for a good deal? NO! Are times that bad that you need to cut corners to make the deal favorable? It is never that bad. Have real estate investors forgotten their original high standards? Maybe so. I know one thing though, Investorino has lost its mind this month. For those that don’t know me very well, I like free and clear investment structuring. My mentor has given me more than enough incite on how to creatively purchase free and clear real estate. So I have a very hard time seeing and believing the types of deals that are pieced together as though no rod of measurement is being used at all. Well, the name of the game in free and clear is that if the seller has time you have money and if the se...
More About: Commentary , Estate , Real Estate , Real Estate Investment , Investment

Brave New (Real Estate) World
2008-04-14 13:00:00
When we the real estate market return to normal? When will things go back up? When will I be able to get $0 down loans again? How long will it be before I am able to get a loan I can?t afford? When will I be able to go back to flipping my way to outrageous fortune? The short answer: never! With any luck those days will never come back. Things had been so crazy in the world of real estate investing for so long. People came to accept that insanity as the norm. There were so many novice investors in the market who thought that the mania we were experiencing was the way it was supposed to be. Many of us who had been around awhile, and should have known better, got caught up in the hysteria as well. As with any overheated investment market, when the bubble of speculation burst many people were left holding the bag. A large number of those who lost money will never again invest in real estate. They will blame the real estate market just as those who invest in the stock or commodities mark...
More About: Economy , World , Estate , Credit , Real Estate

Three Factors that Limit Real Estate Appreciation
2008-04-14 00:30:00
Last week, someone posted a question about whether or not geography was a factor to Texas not appreciating like the rest of the country in recent years. It got me to thinking and I recalled a local presentation (Dallas) I had done in 2006 where I addressed that very question. In Texas, there are three main reasons the appreciation never came close to matching most of the country. In fact, Texas didn?t even see double digit appreciation. Here are the three reasons that Limit Appreciation: Lack of Union Presence In 2003, I walked through a house in Minneapolis to give my friend who had bought it, some advice on rehabbing it. I suggested he have the drywall replaced in most of the house. He objected and said the cost of the labor would be too expensive. I asked him, ?What is expensive to you?? He told me that drywall labor cost around $25 per hour. I fired back and told him that drywall labor should not cost him more than $10 per hour. After he finished laughing at me, he informed me...
More About: Commentary , Estate , Real Estate , Real Estate Investing , Real

Five reasons to start investing in real estate again
2008-04-11 04:13:00
Just like any other financial market, real estate continually cycles through its highs and lows.  There can be great debate on whether the market as a whole has bottomed out, but there is a growing consensus that many markets already have. Either way, now is a great time to start investing in real estate. Here are five fundamental reasons to start investing today: Price:  The sales price in almost every market has dropped substantially.  When you combine the effects of short sales, foreclosures and bank owned properties with an already saturated market, this makes for a real steal for those that have a good game plan. Inventory:  Inventory is at an all time high in most markets, which only contributes to the falling prices, but also helps with selection.  Investors should not only look at the sales price and appraised value, but they should look very carefully at the rental market in which they are selecting a home.  Sometimes passing on a little equity to capitalize on a strong r...
More About: Economy , Estate , Real Estate , Real Estate Investing , Investing

Why People Who Think Real Estate Mess Will Soon Improve Are Wrong
2008-04-09 15:50:00
How is this for a blunt statement: If you are one of those who believes this subprime real estate debacle is going to turn around anytime soon, you are wrong! I’m not saying you are probably wrong. I’m not saying you may be wrong. I’m not even saying that more than likely you are wrong. I am saying…you are wrong! This is NOT going to get better soon and here is why: What we are witnessesing is so far beyond a real estate/mortgage issue that it isn’t funny…and no one is laughing anyway. This is about a lack of confidence in our financial institutions that have let us down; in our regulators who failed to regulate; in our politicial system that failed to act; in our collective greed which apparently knows no limit; in ourselves for being stupid enough to actually believe there is such a thing as a free lunch when, in reality, there isn’t even such a thing as a free cookie. And now, we are all paying for it and will be for some time to come. ...
More About: Economy , Commentary , People , Estate , Real Estate

Foreign Real Estate Investment: Will It Spread To Your Town?
2008-04-08 19:49:00
Although I haven’t read any reports in the last couple of months, at the beginning of the year there was buzz about foreign investment in US real estate. Some reported on foreign investors taking advantage of the weak dollar to put down enough to create a good cash flow with the expectations, also, of appreciation after the market turns around. Domestic investors were still leveraging properties happy with breaking even. On the face of it this sounds like foreign investors have the better idea. I’ve always thought of leveraging too much as risky with less return, but I suppose if the interest rates are low enough, it can make sense in certain situations where appreciation is expected, but it doesn’t seem like a good short term strategy right now, and could even be a poor long term strategy, unless you consider long term 10 or more years. It seems to me the present real estate environment in the US is ripe for foreign investment and this trend will continue for awhi...
More About: Estate , Real Estate , Real Estate Investment , Investment , Foreign

Why Do You Think It Is So Hard to Win the Championship Twice?
2008-04-07 22:13:00
I do believe that it is human nature to celebrate a championship victory as if it were out of character for us. In real estate investing, the championship is EVERY HOME RUN DEAL. Some investors never see a home run but have lots of hits and lots of RBI’s which is fantastic as well. But my concern here is that we get caught up in the hype of the potential profits of deal A without continuing to operate in a normal manner to see that the deals (B,C,D…) due to follow come to fruition. This temporary path off course is very prevalent in the sports world and the principle can really be applied to any industry. Three weeks ago, an investor was making 15 calls per day, going on at least 1 appointment per day, and fulfilling at least 5 direct mail piece projects per day. The deal of a lifetime came rolling down the street. Picture this: A 5 bedroom 2.5 bath 4 level brick Row House placed in a historic district of Georgetown in the Nation’s Capital where the same prop...
More About: Championship , Hard

So You Want To Be A Real Estate Wholesaler?
2008-04-07 13:00:00
Whenever I attend my local real estate investment club meeting someone using the same pick-up line inevitably approaches me: “I?m going into wholesaling, can I call you when I have a deal?” Most of these people are never seen or heard from again. It seems that most of them attended some guru?s curse on how to make big bucks in real estate even if you have no money. They fall prey to the notion that it?s really easy, just find a deal and flip it to an investor. How hard could it be? The gurus have these people thinking that there is nothing to it. The reality is that finding deals to wholesale is no easy task. Most of these novices are unprepared to do the work involved. If they do find a deal they have only done half of the work. The other half is having an investor to sell the contract to. Is It A Deal? Many of these wanna-be wholesalers have no clue as to what a good deal is. I can?t even begin to count the number of times I?ve been called with a “hot” de...
More About: A Real Estate , Estate , Real Estate , Real , Flipping Houses

Texas: The Next Real Estate Boom?
2008-04-04 17:06:00
During a class I was teaching in 2005, one of the students asked why all the “idiot” California investors were flocking into town and buying newly constructed houses for as much as $0.90 cents on the dollar? His question drew some laughs from others in the room and they also wondered why they would pay that much when the local Dallas market was not appreciating while the rest of the country continued to appreciate to record highs. I remember not knowing the answer at the time but I began to question the California investors when I was in contact with them and started to take notice of what and where they were buying and what they were doing with them. Within a few months, my opinion had been formed and I began re-raising the students question and following it up with my answer. Q: ?Why are all the idiot California investors flocking into town and buying newly constructed houses for as much as $0.90 cents on the dollar?? A: They aren?t idiots. In fact, they are the oppos...
More About: Commentary , Estate , Real Estate , Texas , Real

Benefits of Buying a Bank Owned Property (REO)
2008-04-03 21:27:00
REO stands for real estate owned. This term is used when referring to a home that has gone through the foreclosure process, failed to find a buyer at the auction, and is now owned by the bank. One of the benefits of buying a bank-owned REO property is that investors can purchase the home free of title liens and other claims. Lenders generally expunge all second and third liens, as wells as delinquent taxes, HOA and mechanics? liens. Another benefit of buying an REO property is that they are generally vacant. Investors can save a tremendous amount of time and energy because the eviction process has been taking care of by the bank. Not all REO properties are available to the general public. Banks typically like to sell these properties to investors that buy million dollar portfolios of REO properties at one time. Scales of economies work in favor of both, the bank and the investor(s). Banks can move hundreds of properties at one time saving them time and money. The investors get a p...
More About: Buying , Foreclosures , Property , Housing Bubble , Owned

Fuels Costs, High Gas Prices and the Real Estate Investor
2008-04-03 16:23:00
Fuel prices are already taking a huge slice out of family budgets with soaring heating and energy cost; but thats only the beginning. As gas prices skyrocket, the money to buy it must come from the family budget, making it even harder to keep up with the bills and the mortgage payments. When many homeowners purchased their home during the housing boom of 2005 gas was sitting around $1.93 a gallon, with talk that it could go as high as $2.50. Now it?s sitting at about $3.59, and often climbs towards $4.00 (with $5.00 being on the horizon). So even if a person fills-up their tank (22 gallon) just once a week, that?s an extra $146.08 a month they?re paying out. Based on my previous commuting experience, fill-ups are required about twice a week, so the cost is closer to $300 a month. Higher oil prices also mean paying more elsewhere, as businesses are forced to pass on the increased costs. There are many items people don?t think about oil being in, such as roofing, plastic plumbing pi...
More About: Economy , Estate , Real Estate , Gas Prices , Investor

U.S. Financial Crisis May Be Moderating Some Experts Say!
2008-04-02 15:38:00
Could that be some light, just a little light at the end of the tunnel? It seems as if, in recent weeks, there has been a steady drumbeat of bad economic news all traced back to that original subprime mostgage crisis. The near collapse (okay, some may argue it was an actual collapse) of Bear Stearns was like a thunderclap heard around the world, alerting financial institutions that things may get a lot worse before they get a little better. And, that is probably still going to be the case, many so-called experts think. The Bush administration plan to more closely monitor various financial institutions (commercial banks have long had tons of regulations)doesn’t seem to be going over all that well. And, even the officials whose plan it is are saying they do not expect any action till probably after Bush leaves office. So, where’s the good news promised? Now,let me just say upfront, no one should get too excited by the good economic news out in the early part of this week....
More About: Economy , Foreclosures , Financial , Experts , Crisis

Real Estate Investment Vision: Economic Conversion
2008-04-02 01:05:00
We all know about changes. Change happens all the time. The city you’ve lived in for years looks nothing like it did 5, 10, 20 years ago. Ride around the city, now looking at it as an investor, and everywhere you’ll see once successfully operating buildings now sinking into disrepair, or the businesses operating out of the buildings are not doing the business they once did, or older residential areas that were once popular are now no longer popular. One thing you can be assured of as an investor who is striving to gain vision, is that if you achieve vision, you’ll be way ahead of the game, because most people take what is and look no further. Many investors invest because they like the current use of a property — it’s got cash flow, tenants, everything seems to be fine, so buy it and let it run its course — make a few improvements, increase rent, so on and so forth. But what COULD the property be with a little knowledge and a little imagination? ...
More About: Estate , Real Estate , Real Estate Investment , Real Estate Investing , Investment

How to Find an Commercial Apartment Building Loan Professional
2008-04-01 20:24:00
Financing the purchase of an apartment building can seem like an overwhelming task for the first time investor. Generally, I have seen that both novice and even experienced commercial real estate investors underestimate the amount of work and due diligence that is required on their behalf to get the job done right. Usually it is not just lack of experience but also a lack of education that causes the most difficulties. The first time apartment building investor should dedicate a good deal of time to finding a competent commercial mortgage broker who specializes in apartment buildings or other cash flow commercial real estate properties. One of the most common errors that I see the novice investor make is to work with a broker who has little experience with commercial mortgages. For example, I have seen many new investors decide to use the services of a mortgage broker who only has experience in residential mortgages. The new investor may feel comfortable with this residential m...
More About: Building , Commercial , Loan , Find , Professional

Introducing the World?s Tallest Building: Mile-High Tower in Saudi Arabia
2008-04-01 00:45:00
. . . and we thought the Freedom Tower was going to be tall . . . It is always fun to preview cool architectural achievements around the world! We’ve covered everything from the world’s smallest apartment to the coolest architectural projects in the middle east (includes the then proposed-tallest building in the world) to the world’s largest building (proposed in Moscow - slated to dwarf the Pentagon). Once again, we’ve learned of a building that is slated to make the competition cry tears of inadequacy . . . The Daily Mail reported today that Saudi Prince al-Walid bin Talal, one of the richest men on Earth, has unveiled plans to build a tower that will be 1 mile tall (5,280 feet) in Jeddah, Saudi Arabia - dubbed the Mile-High Tower. Photo Courtesy of The Daily Mail This building, expected to cost £5billion ($10 billion US), if completed, will be more than twice as tall as any planned or completed skyscraper on Earth . . . talk about ambitious! “Expe...
More About: Building , Architecture , World

If An Economy Crashed In The Woods And No One Cared, Would It Make A Sound?
2008-03-31 13:00:00
Could you imagine driving by a bad car wreck without looking? Could you imagine other drivers whizzing by without gawking at the carnage? Neither can I. Yet, that is exactly what seems to be happening with the economy. Sure, everyone knows about the foreclosure mess and mortgage crisis because the news outlets feast on these stories. But what about the other things that are going on? Bear Stearns Bear Stearns was one of the major players in the mortgage and credit debacle. At one point the company?s stock was selling for over $170 per share. On March 12th the stock was at $57 per share. The following weekend the government agreed to make $2.4 billion in loan guarantees to keep the company afloat. That Sunday it announced that it had arranged a takeover by JP Morgan Chase for $2 per share. This economic news was absolutely stunning. Looking for the latest on the situation that night, I tuned in the local 10 O?clock news. I was sure that this would be the lead story. Not a word. It ...
More About: Economy , Housing Bubble , Blogs , Sound , Make

Now is the Time to Press . . . Don?t Listen to the Spectators!
2008-03-30 18:03:00
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” - Theodore Roosevelt Since my last few posts offered stories of hard times on real estate investors using FHA on this end of the country and those who are lacking serious attention to detail, I wanted to change the tune for a quic...
More About: Commentary , Time , Press , Listen , The Time

Meet the Investor: Interview with Real Estate Investor, Christian Malesic
2008-03-28 19:01:00
We’ve got a wonderful interview for everyone today! Christian Malesic is a relatively new member to BiggerPockets, but in that short time, has given quite a bit of himself to help others out! His knowledge, enthusiasm, and energy is captivating, and I thought we ought to find out more about the man. Christian focuses primarily on a buy and hold investing strategy in the Central Pennsylvania area. Meet Real Estate Investor Christian Malesic How long have you been investing in real estate? Round 1 went from 1994 to 2002. Round 2 started in 2006 and is gaining momentum everyday. While studying Electrical Engineering at Lehigh University in Bethlehem, PA, I was an Air Force cadet with dreams of becoming a career officer and a leader among men. I excelled as a cadet and was a better than average engineering student, especially in digital systems and computer hardware & software, which made me a highly desirable Air Force asset. Partly due to this, but mainly due to our l...
More About: Real Estate , Interview

Selling a Home???? Make your buyers first 6 months payments!
2008-03-28 17:08:00
Need an incentive to help move a home? The answer is PITI Abatment. Do not let the financial jargon scare you. For years production builders have used this incentive to move inventory. Now every seller/investor has the opportunity to participate. What is PITI Abatement? An incentive to the buyer to have the first 6 months of the mortgage paid by the seller/investor. PITI Abatement program is a product designed specifically for home-buyers. You can give a 6% Seller Contribution that can be used for Principle, Interest, Taxes and Insurance payments. What are the General Guidelines? Loan amounts up to $417,000 Up to 100% of the purchase price in some markets Minimum score of 575 Fixed Rates and ARMs Interest Only is available Income limitations may apply Closing costs can be paid by seller too No prepay penalty What is the Realtor or Investor marketing element? 6 MONTHS PAID! BUY THIS HOME AND I WILL PAY YOUR F...
More About: Selling , Home , Make , Buyers , Months

Choosing a Commercial Realtor
2008-03-27 20:31:00
During the heyday of the residential real estate market boom a few years ago many investors were exclaiming: ?why should I hire a realtor to sell my property and give him 6% of the sales price when I can just as easily sell the property myself and keep that money in my own pocket?? This made a lot of sense at the time as residential houses were selling like hotcakes and all you had to do for marketing was to hold an open house. In fact, during those days, many sellers were actually getting offers ABOVE the asking price. Times have changed, and about 95% of commercial real estate sales are handled by licensed commercial real estate agents. In fact, there is not even a multiple listing service for commercial real estate sales. This means that unless you work with a licensed commercial real estate agent you won?t even access to or knowledge of the properties available for sale. I recommend that the commercial real estate investor educate himself as much as possible before even con...
More About: Commercial , Realtor

Don?t Cry for Me Argentina?Build and Buy Real Estate in Panama
2008-03-27 08:08:00
Just in case there was an oversight in your real estate investing plans in 2008; be sure to look toward Panama to buy land and build on it. The widening of the Panama Canal has been underway for over 6 months now and the real estate market is hotter than ever. With an estimated cost of $5 Billion and a delivery date 8 years from now; the opportunities are endless. Dan Schlossberg of Consumer Affairs mentioned that “After consuming 10 years and 25,000 lives, the Panama Canal opened on Aug. 15, 1914.” I shouldn’t be the only investor that gets excited about those numbers. We figure with today’s equipment and construction technology; the number of employees being used falls shy of 25,000 but is still overpopulating the surrounding areas of the project. A shortage of rental housing in these areas can be addressed with the purchasing of land and the building of mid-size multi-family homes and/or apartment buildings. It is a dream come true even for a newbee ...
More About: Estate , Real Estate , Argentina , Real

Is America Going Broke?
2008-03-27 01:33:00
Is the United States going broke? Many would roll their eyes at this notion; they would tell you that the country has never defaulted on its debt that its long-term interest rates are historically low; that the dollar is the world?s reserve currency; and that China, Japan, and other countries have an insatiable demand for U.S. Treasuries. Others would argue that the official debt reflects taxonomy, not fiscal essentials; that the total of official and unofficial liabilities is enormous (The costs of hurricanes Katrina and Rita alone could easily total $200 billion over the next few years); that federal spending and medical expenditures are exploding, and that the United States has a history of defaulting on its official debt by means of inflation. On the other side of the coin is China; China is saving and growing at such astonishingly high rates that it can potentially provide the United States, the European Union, and Japan with huge quantities of capital. Some would suggest that...
More About: America , Economy , Commentary , Foreclosures , Housing Bubble

Consumers Worried; Home Prices Down; Trillions in Losses; Any Good News? We
2008-03-26 12:56:00
How about some good news for a change about real estate, mortgages, credit, jobs, consumer confidence, Wall Street stability, the future of civilization as we know it? Sorry, not gonna get it here. Evidence is evidence and though some may like to engage in wishful thinking, the evidence is not good at all. Goldman Sachs is actually forecasting that credit losses around the world caused by the current near panic in financial markets will hit some $1.2 TRILLION!!!!! The same report predicts that U.S. banks, brokers,hedge funds, etc., stand to lose around $460 BILLION in credit losses. SCARED CONSUMERS Very scared, in fact. Consumer confidence has hit a five year low; people are nervous about their jobs, their homes, their credit, their lives. But one example of why the worry: From January 2007 to January 2008, the price of existing single-family homes dropped some 11 percent. And then, there’s Bear Stearns Yeah, JPMorgan Chase upped its bid increasing the value of Bear Stearns...
More About: News , Economy , Housing Bubble , Home , Good News

Investment Team - A Real Investment Team
2008-03-25 14:59:00
This week I’d like to be both practical and a little futuristic. On Bloodhound Blog, my blog, Bonzai, and several other blogs, such as, A Life That POPS, lately, there has been talk about changes in the real estate field, and one of those changes, the team approach, is a topic I’d like to relate to investing — not just “team” as in professionals you use for guidance or as vendors to make individual deals, but a partnership “team”, a small, local investment company. I was going to write about Economic Conversion, but I’ll save that. Investment groups are nothing new, just as real estate teams are nothing new, but how these teams/groups function in a biz 2.0 world will, no doubt, be changing quickly. It’s difficult for one person with a notebook to keep up with all the information inundating us in the information age. The concept of a local diverse, super investment team using some of the practices of Business 2.0 is an appealing i...
More About: Real Estate Investing , Team , Real

The Not So "Lucky" Wanna-Be Tycoon
2008-03-24 12:00:00
Last week I wrote an article about “Lucky ”, the wanna-be real estate tycoon (article). The article was meant to be a tongue-in-cheek story, yet many people took it seriously. The fictional character “Lucky” was a composite of many people that I have met over the years. He was portrayed as someone who wanted to get rich quick, yet was too lazy to work for it. He kept looking for short cuts and was certain that getting rich in real estate was easy if only he could get someone to reveal the secret formula. There are many companies out there that prey on these people. They offer a free seminar that is nothing more than a sales pitch. They look to sell books, tapes, sales courses, boot camps and mentoring programs. They hold themselves out to be experts in the field of real estate investing. What they really are is experts in marketing. When someone buys a program the company is generally looking to upsell them, or get them to buy additional programs. While there...
More About: Foreclosures , Housing Bubble , Tycoon

Real Estate Investment Economics
2008-03-22 15:29:00
Real Estate Investment Economics When considering the economic viability of an investment, present income and future income should be evaluated carefully along with changes and predictions of demographics. A fully rented strip mall may look attractive to start with but an evaluation is in order to determine economic viability. Is the area growing at a rate where future increases in rent will be realistic? Or, is the property at its maximum for rent in the area? If ongoing maintenance is needed and improvements are necessary to help the tenants remain competitive, is there room for rental increases to offset these costs? Perhaps if the mall is in a growing area and all improvements would enhance the tenant?s business and there is room for incremental increases in rent, then it?s safe to say it?s a good investment, however, if the property is in an area that?s flat or declining and all improvements to make it more attractive are unlikely to be recovered through rental increases, then ...
More About: Real Estate , Real Estate Investment

Meet the Investor: Interview with Real Estate Investor and Landlord, Tom Sm
2008-03-21 12:37:00
We certainly have not been focusing on our investor interviews lately and we’re making a concerted effort to change that. We’ll start with an interview with one of our active BiggerPockets contributors, Tom Smith. Tom has given much of his time to help fellow BP’ers through our forums and has become a staple in the community. He focuses on extremely affordable properties in Ohio that he rehabs and rents out (typically costing much less than 1/10 the price someone could buy for even the cheapest home in Southern California, for example). We’re excited to have the opportunity to learn more about this relatively new, but successful, investor. Meet Real Estate Investor Tom Smith How long have you been investing in real estate? I have been investing for a little over one year. What attracted you to becoming a real estate investor? I believe the main attraction was that I had found something that would allow me to use the construction skills that I obtained as a ...
More About: Real Estate , Real Estate Investing , Interview

How to Be a Successful Real Estate Investor. The Story of One Valuable Pre
2008-03-20 23:27:00
How Valuable is One Lead? People often ask me what the average response rate is when mail marketing to homeowners in pre-foreclosure. There are two answers depending on what the content of the letter is. If the purpose of the letter is to see if the homeowner is willing to sell, then the average response rate is one half of one percent (.005%). If the letter is offering to allow the homeowner to remain in their house, then the average response rate jumps up between 1% and 4%. So if 100 letters are sent, you could expect 1 call every other month. The point is, every response is extremely valuable and it is even more important to answer the call and not let it go to voice mail. My opinion is, if they took the time to call you? They will take the time to call the next person in line as well. What extreme are you willing to take that to in order to get a deal? I recall a phone call I got on Christmas Eve, 2001. My Fiancee at the time and I were all dressed up and were walking out th...
More About: Estate , Story , Real Estate , Investor , Real