Real Estate Broker’s License Schooling

There seem to be so many paths to take in real estate investing. There is so much to learn. I seem to be having trouble focusing on what to learn. I did get my real estate math down better. I feel that I can evaluate a deal. I still need to learn how to estimate fix up costs. The general consensus is that this one is learned in the trenches, and only by experience.

The other aspects of what to learn are conveyance, law, asset protection, marketing, and more.

After much self debate, I decided to purchase an online broker license program. I may, or may not actually get the license. But the cost of learning real estate principles and practices via this program seems cheaper than most seminars and programs on real estate investing. And so far I am learning a lot. If I decide to actually take the brokers exam, I should be ready by December. I do find the niche of eco brokering interesting. But I’d rather market myself as an investor, with a broker’s license.

A lot of craziness in the financial world lately. I am just laying low. Learning basic principles, such as how to take title to a property.

Real Estate Investment Team

I am trying to figure out the best entity for my real estate investing business. I California we lose 800 bucks a year right off the bat for a California LLC. That bothers me, especially since I am already paying it now for a different Cali LLC business I own.

I found an awesome post for who should be on your real estate investment team.

I love that website.

Scared of Lease Options

I tried to explain sandwich lease options to a broker friend of mine today. He seemed scared.

I was also trying to figure out how a broker would get paid if he found this deal.

I’ve read that the investor can give the broker part of the option fee he collects from the tenant/buyer, for the commission. I think the seller can give part of his option fee to the broker as well, that he collected from the investor. Thereby making the broker’s upfront commission worth it, and close to what it would be through a conventional sale. Perhaps with a percentage of the back end, too.

I worked more on my business plan. I am working on the market analysis segment. It’s fun when everything goes smoothly. I’m working on the residential buy and hold portion at the moment.

Real Estate Investing Business Plan

I’m back from my vacation. It was fun. I like the east coast. I was on Lake Winnepeasaki in New Hampshire, and I also took a duck tour in Boston. What a great time. I had a blast hanging out with my girlfriend’s family.

Yesterday I started creating a Real Estate Investing Business Plan. This will help me think things through. I think it’s a great idea – one that I’ve been procrastinating on. I found a basic business plan outline, and I will fill in the blanks as necessary.

As far as reading I finished Art of the Deal (Trump 1987). I liked that book. I am getting close to finishing Real Estate Fast Track (David Finkel). This book has some tips that feel pretty solid. I’ve also starting studying more about Lease Options as a way to raise short term capital. I am thinking that or wholesaling. Whatever complements buy and hold, and facilitates growth of the company.

I’ve found a resource to figure out construction costs: RS Means. It’s a large daunting database of books and such. But I’m getting there.

I am research some possible ways to create a niche as well.

Vacation Time

I’m heading out to Boston tonight.
I will be on vacation for a week. I am finally meeting my girlfriend’s family.
She’s been living with me for a year – it’s about time.

Here are some to dos I need to handle when I get back to Los Angeles, feeling all refreshed by the eastern time zone.

Create Business Plan

Learn to Estimate Fix Up Costs

• I need to come up with a somewhat accurate way to calculate fix up costs

Learn how to execute the following aquisition strategies.

• Lease Options
• Subject To
• Owner Financing
• Take Title in a Land Trust for any Strategy

Continue to Build Teams in the locations I am considering.

• Realtors
• Contractors
• Property Management
• Attorneys
• I know there is more but this is a good start.

Start Interaction with two sellers or Realtor/Investors per week.

I seem to be taking in a lot of information, but I don’t feel like I’ve been targeted enough in my learning.
The business plan should help this.

Have a great week everyone.

~Matt

The Art of the Deal

I’ve been reading The Art of the Deal, by Donald Trump (1987). I’ve heard /read from numerous  sources that this was a good book; A keeper, and one that’s worth re-reading. I am about half way through and I must say, I like it a lot. Much more than the other real estate book I was reading.

The Art of the Deal is not a how-to book. It’s being inside Donald Trump’s head from the time he got out of college until the late 80s. I feel I’ve learned quit a lot about what it will take to be an investor from this book. Since it’s not a how-to book you have to read between the lines. But I find that is often the best way for me to grasp concepts. We get to see all the Risks Donald takes, all the Red Tape he deals with, various negotiation tactics, and all in the context of Real Estate, a subject that I’m a starting to grasp the terminology in.

Aside from the book, I’ve been taking small actions steps. I spoke to a Vegas Realtor I liked. I am learning more about the markets I am looking into. Real estate is actually selling in the Hot areas of the Markets I like. But I still think It may come down more.

I also learned some great stuff about land trusts that I need to revisit and internalize.

Very short term goals:

Create a business plan and find a niche.

Good Property Management

Today I read a thread on biggerpockets.com about property management. Do-it-yourself versus hire-a -company to do it. It was very informative. I learned the difference between property management and property maintenance. I am also exploring more Vegas neighborhoods over the world wide web.

Structuring a Deal

Today I researched more markets. This time in Arizona instead of Nevada. I learned about some good neighborhoods from city-data.com. It’s amazing what information is available on the world wide web.

The latest book I am reading has some solid sounding information on deal structuring. The author says that fundamentally there are two ways to make a profit when purchasing real estate: Either buying all cash at a very steep discount – 70% of the as-is value, or lower. Or, getting the deal on great terms.

For terms he recommends one of the following:

• Lease options ( Rent to own )
• ‘Subject to’ existing financing ( Taking over the sellers payments )
• Seller financing

Those sound good. But I can see how I’d have to be confident and ‘in the know’ so the seller trusts me when I bring those to the table. I’d need to find out what the seller’s situation is, and what he needs (not wants), first.

Lease options sound interesting: I lease the property with an option to buy at a fixed price in x number of years. At least 5 sounds about right in the current market.

Subject to sounds dicey. I take over the sellers payments. The seller still owns the loan, and I own the property. If I default on the sellers loan the bank can take the property, that is the ’subject to’ part.

Seller financing sounds nice. The examples in this book had sellers financing at lower than market interest rates for conventional loans. I wonder what time period these examples took place in, the 80s?

I am hoping my first deals will pencil out with conventional financing: baby steps, if you will.

I read about some of the usual marketing techniques, too: Bandit signs and such. However this book emphasizes building systems for your marketing channels, so you can hand the channels off to your employees down the road.

Property Management Software

I ran demos on a few property management software applications. Some felt pretty good. I’m so tempted to build one myself. But that is just me switching projects to prolong the risk of making offers and doing deals. Fear of failure and success have fun ways creeping up on me. A semi related project may help alleviate those fears. I’m not saying I wouldn’t be able to build a killer property software application. But it would take a few months, or longer, and that is time I need to be investing. Especially when I can leverage someone else’s application for a nominal fee, or free, depending on what I go with. These are the types of potential bottlenecks I deal with in my head.

I may just use a CRM system. SugarCRM seems cool. So does rentomatic, and a few PMS solutions that I found on biggerpockets.com.

I emailed a couple more Realtors that are investors today. I’ll know more this week. Could there actually be deals on the horizon? I hope so.

Restrictions for Real Estate Investment Loans

I read today it’s going to be harder to get conventional loans as a real estate investor:

• Investors can only get 4 loans, including their primary loan
• Loan must be at 80% LTV.
• More fees.
• 4Plex requires 25% down.

Looks like I only have three more loans left before I have to get creative. I see an opportunity for commercial blanket loans. Those type of lenders should do well.

Goals today. Hmmm, Read the post below again. Play volleyball. Have fun. I can use a night of fun.

I am still in search of quality interview questions for out of state Realtors and property management companies. as per the post below.

I’ve contacted about 7 Realtors in Vegas, just waiting for my to qualify them.