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Tax Deeds & Tax Lien Sales Investing – Part 1

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By Tamera Aragon

When homeowners fail to pay real estate (property) taxes, the government has the right to sell their property in a state “tax sale”. In a Tax Lien state, homeowners have an opportunity to pay back the amount owed within a specific time frame even after their property has been “sold” to an investor. The investor may be paid back with interest. Should homeowners miss the pay deadline, the investor becomes owner of the property at great savings. In a Tax Deed state, investors bid for immediate ownership of a property or are eligible for the deed and ownership of the property after a redemption period passes.

By law, Tax Deed sales must be announced to the public, and are usually sold to the highest bidder. The winning bidder purchases the deed to a piece of property, becoming the new owner and obtaining all rights to the property – clear of any mortgages, liens, deeds of trust, etc.

One interesting thing to note is very few people know much about Tax Deed sales. So, competition may not be as fierce in this niche as it is in others.

Why Is Tax Lien & Deeds a Good Investing Niche to Consider?

  1. Tax Deeds are sold in almost every state throughout the United States. 50 states are governed by state-mandated laws to protect & reward investors.
  2. You can pick Your Price. Research the list and pick ones out that are in your price range.
  3. You can obtain properties which allow for all types of exit strategies (flip, rent, or live).
  4. Investors & Banks have been using this strategy for over 150 years.
  5. The rules vary from state to state. In certain circumstances you can obtain an entire property for only the taxes and penalties owed. Generally, you will pay between 50 to 90 percent below market price.

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General Downsides of Investing in Tax Lien & Deeds Niche?

  1. Lacking Liquidity of Funds: In a Tax Deed transaction, you can have your money tied up for several years before you can sell the property, because title companies may not issue title insurance on the property until all liens are cleared, and it is obvious that clear title can be granted. This process will sometimes take more than a year. Fixing up and or remodeling properties to maximize your eventually sale can also take considerable time.
  2. Time and Complexity: Tax Deed laws vary from state to state and sometimes from county to county within a state. This requires a time commitment to learn the rules of a state and its counties, research properties and attend auctions. In addition title companies sometimes will not issue title insurance for at least the first year on any property bought at a Tax Deed sale. This means it could be hard to get a loan until it is clear.

Investing Risk: Purchasing property at a Tax Deed sale definitely has risks if you have not done extensive due diligence. You must do your homework, title searches, drive buy inspections, history reports etc. Once you buy a Tax Deed, you will own the property including all of it potential problems. The major thing to keep in mind is that at a Tax Deed sale, unlike a Tax Lien sale, you are buying the real estate and we believe that the required level of due diligence becomes extremely high. The other thing you want to know at a Tax Deed sale is if the property is being purchased free of all other liens and encumbrances. There are a number of states where this is true and a few where it is not true. You need to make sure that you get what you paid for. This requires knowledge of what the values are and what the potential hazard could be.

In summary, Real Estate tax sale laws vary from state to state, as do the redemption periods, and there are risks investors should be aware of in addition to the potential rewards of buying tax sale properties.

Pros and Cons of Tax Lien & Tax Deed Sales

TAX LIENS: A lien is a financial claim made against a property. A Tax Lien is a claim for unpaid property taxes issued by the local taxing authority. Failure to pay real estate taxes is one of the leading causes of distressed properties leading to home loss. Investors typically buy Tax Lien properties through an auction after a homeowner fails to heed warnings by the tax authority to pay property taxes. Most states allow homeowners to reclaim their property by paying off the debt in full by a certain date. This is called the “Redemption Period”. The redemption period offered varies from state to state. However, in some locations, investors may have to wait two full years before being paid back or gaining the deed for the property.

Tax Lien Pros

  • Possibility of good returns in interest (up to 24 percent in some states) paid by homeowners.
  • Possibility of owning property at a fraction of its true value.
  • Option to sell, rent or hold the property for additional profit once title is held.
  • Lower Investment Risk: If the homeowner doesn’t pay up, the tax purchaser is first in line to own the property. No tenants, banks or brokers to deal with.

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Tax Lien Cons

  • May Not Make Any Money: There is no guarantee the homeowner will pay off taxes and interest on the lien. The process of getting the deed at the end of the redemption period isn’t simple and may require a lawyer.
  • Required Capital: You must pay what is typically a large amount of cash for your bid at the tax sale. You definitely will need more capital to buy properties at Tax Deed sales. Although it varies from property to property, from county to county, and even from state to state, you will likely need a minimum of $5,000 to $10,000 to get started in Tax Deed investing. A good credit rating may also be necessary to sign finance contracts. Check local rules and regulation as well as the history of Tax Deed auctions in an area to get a feel for the capital you may need.
  • Uncertainty of property condition: With no prior home inspection, there is no guarantee of the property’s condition or value.
  • Property Owner may Be Foreclosed on: If you foreclose, you are stuck with the hassle of selling the property from which you may profit but on the other hand you may not recoup your initial investment.

TAX DEEDS: A Tax Deed is a legal document indicating ownership of property, also referred to as “title.”When the government intervenes to put properties delinquent in real estate tax payments up for auction, investors can pay the back taxes and own the property for well below market value. To locate and invest in Tax Deed sales, check local newspapers, local tax collectors or the Internet, where many websites post relevant information.

Tax Deed Pros

  • Quick and easier way to become a property owner.
  • Opportunity to acquire existing equity.
  • Opportunity to purchase property directly from the property owner at bargain-basement prices prior to a Tax Deed sale.

Fortunately, investors who sow the seeds of diligent research can reap the rich rewards of tax property sales. DUE DILIGENCE is required for Tax Lien and Tax Deed investing deals. This concludes my article on Investing in Tax Deeds and Tax Lien Sales – PART 1.

Please watch for my next investing article that will wrap up all you need to know to start investing in Tax Deeds and Tax Lien Sales – PART 2. I’ll be going over the steps real estate investors should take for Tax Lien and Tax Deed Investing deals.

Tamera Aragon

Tamera Aragon is a professional online entrepreneur and has bought and sold over 300 properties, establishing her as an expert in the real estate investing field. Since 2003, she has purchased over 10 million dollars in real estate and currently holds properties all over the world. Tamera’s focus is on the booming Foreclosure market, buying Pre-foreclosures, REOs and Short Sales. Tamera who is a noted Author, Success Trainer, Speaker & Coach, shows her passion for helping others with the 17 websites she has created and several specialized products to support fellow investors throughout the world. When Tamara is not busy running her website, she is very involved with her Fiji joint ventures and investments. Tamera Aragon is one of the few trainers and coaches who is really “doing it” successfully in today’s market. Tamera’s experience has earned her a solid reputation in the industry as well as the respect and friendship of many of the top national real estate investment and internet marketing experts. Tamera Aragon believes her success has garnered her the financial freedom to fully enjoy her marriage and spend quality time with her children.

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

Inflation, Home Price Swings, and Wealth Distribution

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By Rick Tobin

Between January 2020 and October 2021, the M1 money supply (cash or cash-like instruments) quickly rose from $4 trillion up to $20 trillion in just 22 months. Money velocity, or money creation speed, is the true root cause of rapidly declining purchasing power and skyrocketing inflation. The more money in circulation, the less purchasing power for the dollar.

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In January 2024, Americans were paying $213 per month more to purchase the same goods and services one year earlier in 2023 because of rising inflation and the declining purchasing power of the dollar. As compared with two years ago in 2022, Americans are paying $605 more per month. Sadly, we’re now paying $1,019 more PER MONTH ($12,228 more per year) today for the same goods and services we purchased three years ago in 2021.

Shipping, trucking, and other transportation costs are quickly rising amid geopolitical tensions. Historically, increasing transportation and energy costs are a root cause of inflation trends. Don’t be surprised if inflation rates and interest rates are both higher later this year instead of lower.

Home Value-to-Income Ratio in the U.S.

The U.S. home value-to-income ratio is calculated by dividing the $342,000 median home value by the $74,580 median household home, according to Economy Vision. If home prices had grown at the same rate as income since 2000, the median U.S. home would cost nearly $294,000, or 31% to 32% lower than today’s prices.

U.S. households need an average income of $166,600 to afford a home, but the median household income is $74,580. The lowest home price-to-income ratios in large metropolitan regions are in Pittsburgh (3.2x), Buffalo (3.5),and Cleveland (3.5), while many California regions are near 10 to 20x. Some smaller suburban or rural regions in Southern Illinois and other Midwest regions are closer to 1.5 to 1.8 for home price-to-income ratios.

Increasing Distressed Residential and Commercial Mortgage Numbers

Millions of Distressed Residential Mortgages

The federal government keeps extending the millions of distressed FHA and VA loans, or offering discounted loan modifications, partly so that they don’t push the national home listing supply skyward and reduce home prices at the same time.

The C-19 foreclosure or forbearance moratoriums for millions of FHA and VA borrowers began back in the fall of 2020. As a result, many of these home borrowers haven’t made a mortgage payment for more than three years.

The FHA forbearance moratoriums for FHA borrowers expired on November 30, 2023 while the VA forbearance moratoriums were extended until May 31, 2024. At some point, these loans will need to be brought back current, sold, or foreclosed.

In the previous housing crash that was especially bad during 2008 to 2012, only about 2% (or 1 in 50 mortgages) of all residential loans were delinquent. Yet, these distressed home mortgages became future lower value comps for the nearby homes while driving their prices downward too, sadly.

If and when the national home listing supply numbers rapidly increase this year, it will eventually have a negative impact on home price trends because it’s all supply-and-demand economics at the true core. When supply of a product or asset rises and exceeds buyer demand, then prices tend to fall (and vice versa).

Concerning Commercial Mortgage Trends

An estimated 44% of office buildings nationwide with mortgages in place are claimed to be upside-down with negative equity here near the start of 2024. Some office buildings are selling for as low as $9 per square foot, not $900/sq. Ft. By the end of 2024, the underwater office building numbers may be well over 50% and the overall underwater or upside-down numbers for all commercial property types may be somewhere within the 20% to 25% range.

Physical and Online Retail Store Numbers

  • In Q3 2023, the amount of U.S. retail space available for lease plunged to an all-time low since the CoStar commercial real estate group started tracking back in 2007.
  • The previous seven years in a row (2017 – 2023) shattered all-time retail space closings per square foot in U.S. history.
  • Through just September 2023, 73 million square feet of retail space closed in 2023, as per Coresight.
  • 140 million square feet of retail space has been demolished in the last decade, according to CoStar.
  • Top 6 online sales percentages in 2023: 1. Amazon (37.6%); 2. Walmart (6.4%); 3. Apple (3.6%); 4. eBay (3%); and 5. Target and Home Depot (a tie at 1.9% each), per Statista.
  • 10.4% of total annual U.S. retail sales were online in 2017;
  • 12.2% of total annual retail sales were online in 2018;
  • 13.8% of total annual retail sales were online in 2019;
  • 17.8% of total annual retail sales were ecommerce in 2020;
  • 18.9% of total annual retail sales were ecommerce in 2021; &
  • 18.9% of total retail sales were online in 2022, per Statista.
  • The full 2023 online year results weren’t published yet.

Record-High Car Payments

Some new monthly car payments are reaching $3,000 per month, while average new car payments are near $730 to $750 per month. Additionally, many monthly car insurance payments are reaching $400 to $500 per month in cities like Detroit and Philadelphia. How much are these car owners paying in gas and maintenance as well?

The national average cost for car insurance rose a whopping +26% from last year, according to Bankrate.

The most expensive cities for car insurance are:

Detroit – $5,687
Philadelphia – $4,753
Miami – $4,213
Tampa – $4,078
Las Vegas – $3,626

The cheapest cities are:

Seattle – $1,759
Portland – $1,976
Minneapolis – $2,044
Boston – $2,094
Washington D.C. – $2,430

The average car loan today is valued at 125% LTV (loan-to-value) for the typical car on the road with a loan with an average negative equity balance of -$6,000. This is partly because so many car buyers are purchasing cars with no money down and adding their registration, licensing, taxes, and warranty fees on top of it before driving off of the car lot. New cars usually drop in value about 20% in the very first year of purchase.

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Inflationary or Deflationary Economic Cycles

Inflation has been described as an increase in the general level of prices of a certain product in a specific type of currency. Inflation can be measured by taking a “basket of goods,” and then comparing them at different periods of time while adjusting the changes on an annualized basis.

General inflation measures the value of a currency within a certain nation’s borders, and refers to the rise in the general level of prices. Currency devaluation measures the value of currency fluctuations between different nations. Some related terms associated with inflation are as follows:

* Deflation is a rise in the purchasing power of money, and a corresponding lowering of prices for goods and services. The Fed doesn’t like this economic period of time and will probably cut short term rates to offset it.

* Disinflation refers to the slowing rate of inflation. The Fed may like this type of economic time period, and may stop raising rates at this point in the economic cycle.

* Reflation is the period of time when inflation begins after a long period of deflation. Depending upon the severity of inflation, the Fed may pause the rate hikes or gradually begin rate hikes.

* Hyperinflation is rapid inflation without any tendency toward equilibrium. It is inflation which compounds and produces even more inflation. It is when inflation is much greater than consumers’ demand for goods and services. The Fed, and the rest of America, do not typically like this economic period, so they may enact a series of significant rate hikes to slow inflation.

The Wealth Distribution Imbalance

Wealth distribution across the U.S. has become increasingly concentrated in the hands of fewer people since 1990. Overall, the top 10% of wealthiest Americans own more than the bottom 90% combined, with more than $95 trillion in wealth for the top 10%.

Here in 2024, the share of wealth held by the richest 0.1% is near its peak with a minimum of $38 million in wealth in just 131,000 households.

With $20 trillion in wealth, the top 0.1% earn an average of $3.3 million in income each year. The greatest share of the wealth owned by the top 0.1% is held in corporate equities or stocks and in mutual funds, which make up over one-third of their total assets.

Households in the lower-middle and middle classes as found in the 50% to 90% income and asset brackets are claimed to have a minimum of $165,000 in wealth held primarily in real estate and followed by pension and retirement benefits.

Unless you’re in the Top 0.1%, the odds are quite high that the bulk of your wealth is concentrated in real estate if you’re fortunate enough to own at least one property today. In our next meeting, we will discuss how to find discounted real estate and other investments and how insurance and estate planning can help protect your assets for you and your family.

Extreme Rate Swings, Steady Home Gains

Between 2000 and 2023, the median U.S. home appreciated approximately 10.63% per year. By comparison, California homes rose 12.55% per year between 2000 and 2023.

Doubling Value Forecasts: The Rule of 72 is an investment formula used to estimate how long it may take for an asset to double in value using a projected annual rate of return (72/7 or 7% = 10+years).

A home purchased using the national average annual gain of 10.63% would double in value in just over 6.77 years if purchased this year (72/10.63 = 6.77 years). A California home would double in just 5.74 years (72/12.55) if these same average annual appreciation gains continued.

Home prices tend to go skyward following a Fed pivot when they start slashing rates. When will the Federal Reserve start cutting rates again? Let’s take a look at their calendar for 2024 two-day meeting dates: Jan. 30-31 (no rate change); March 19-20; April 30- May 1; June 11-12; July 30-31; Sept. 17-18; Nov. 6-7; & Dec. 17-18.

Inflation severely damages the purchasing power of the dollar while usually boosting real estate values. Because it’s more likely than not that inflation will continue rising above historical average trends, then real estate may be one of your best hedges against inflation as your wealth compounds and increases as well.

Rates may be lower, the same, or higher by the end of 2024, partly due to our volatile inflation movement and weakening dollar. However, there’s a tremendous upside for real estate investors if you’re willing to stay focused on the opportunities and not let the negative news scare you away.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411.com or our Eventbrite landing page, CLICK HERE.

Elevate Your Experience this Saturday

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What Can You Expect from Realty411’s Investor Summit? 

Watch these videos below to find more information.

Elevate your experience at Realty411’s Investor Summit in Irvine, California, by upgrading to a VIP Guest. Our National Investor Summit is this Saturday, February, 24th, 2024. This event will unite investors from throughout California and the nation!

We are starting a 9 am with networking and a delicious breakfast for our VIP Guests. In addition, our VIP Guests will also enjoy lunch with additional networking opportunities with like-minded real estate investors. VIP Guests will also receive our latest publication.

Don’t forget to Elevate your Experience with a VIP TICKET today. Only a limited amount of VIP tickets remain at $47.

A variety of important subjects will be discussed at our upcoming conference, including: multifamily investing, land banking, industrial real estate, infinite banking, asset protection, real estate development, single-family investing, finance and private lending, lead generation for agents/brokers, out-of-state investing, probate investing, long-distance rentals, mindset for success, and so much more!

Be sure to connect in Southern California THIS SATURDAY, February 24th, 2024. Join us to learn and network with fantastic companies, such as:

Marco Kozlowski, Investor & Author
Marcella Silva, Dirt is Gold
Rusty Tweed, TFS Properties
Abbas M., Model Equity
Amanda Brown, MAG Capital Partners
Barry Duron, AltLender Mortgage
Jonah Dew, The Cash Compound
Jeremy Rubin, The Friendly Flipper
Kaaren Hall, uDirect IRA Services
Kris Miller, Legacy Wealth Strategist
Paul Wilkins, Probate Expert / Investor
Anthony Patrick & Mindy, New Harvest Ventures
Eli Smushkovich, CV3 Financial Services
Linda Pliagas, Realty411.com
And More!

DOWNLOAD AND LEARN TODAY!

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Maximizing Your Home’s Value: Top Interior Design Secrets for Resale Success

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By Michael Alladawi

If you want to maximize your home’s value, a well-designed interior can make a huge difference. Whether you’re planning to sell or just increase its worth for the future, implementing key design strategies can pay off big time.

But before you dive into making changes, it’s crucial to understand what truly adds value. Not every design choice will significantly impact resale value, so it’s essential to focus on the areas potential buyers are interested in.

Use Energy-Saving Fixtures

As the issue of environmental concern grows and utility costs escalate, many buyers now consider energy efficiency as they look for a new home. By adding power-efficient features, you will be able to satisfy this need and improve your house’s value greatly.

There are many energy-saving appliances now available. Take LED lighting, for instance. The average energy saving through these devices has been noted as being up to 75% less than what amount is needed in standard incandescent lamps, and their life is much longer.

Apart from cost saving, these characteristics can also be a healthier and more environmentally balanced way of living. Smart thermostats, leak detection systems, and smart home systems often attract new buyers and are a good way to increase your home’s value.

Undertake a Kitchen Remodel Project

The kitchen is commonly referred to as the heart of any home. It is the place where food is cooked, and families sit together to enjoy each other’s company. This could make a modern kitchen a great selling feature.

Some of the most common updates that will make your kitchen look much better without breaking the beak include modern appliances, countertops, and cabinets. One of the most common improvements is stainless steel appliances, as they look great and last seemingly forever.

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Granite countertops or quartz countertops are also popular due to their high-end look and durability for regular usage. Adding cabinets to your kitchen also gives you more room for storage and keeps things organized.

But, when you do a kitchen remodel, the aesthetics must be balanced with practicality. If you have a kitchen with a beautiful but less-than-functional design, prospective buyers will be turned away. You can also consider introducing a practical layout, a generous amount of counter space, and easy-to-clean surfaces.

Replace Outdated Carpets and Rugs

Firstly, updating your rugs and carpets inside the house can make a great deal of difference in its overall aesthetics. For example, hardwood floors are what many homeowners turn to because they have a timeless appeal and a better wear and tear rate. They are easy to maintain, flexible, and can fit in nearly any interior design idea you might have.

Another great option is tile, especially when applied to rooms like the kitchen or in a bathroom remodel since they require water resistance. Tiles can also be a great decor solution, available in many colors, patterns, and textures.

The investment in new flooring may appear to be a larger expense initially. However, taking into account the possible return on investment, it can pay dividends in the long term, considering you’ll be less likely to need a flooring remodel in the future as well.

Remove and Restyle Outdated Popcorn Ceilings

Many homebuyers consider popcorn ceilings – which used to be a norm in homes constructed from the 1950s to the 1980s – outdated. From a design standpoint, popcorn ceilings can darken and date the look of any room they are found in. Plus, these textured ceiling coverings made with similarly textured materials may contain asbestos, which is now illegal to produce since 1977.

Removing popcorn ceilings and adding a more contemporary finish make your home look newer. The process includes removing the old texture, fixing any issues with the original surface if needed, and applying a new finish headboard or even just smooth plaster.

Redesigning your ceilings not only adds fresh style to your house but also allows you to improve lighting and insulation. Smooth surfaces reflect light better, which creates a brighter and more spacious room. In the meantime, if you replace insulation during repairs and remodeling, you may likely improve energy efficiency in the home.

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Maximize Practicality with Added Storage and Closet Spaces

Ample storage space is one thing that potential buyers may seek in a home. Insufficient storage can create the impression of a too-cluttered or small home, which is often a no for many buyers.

There are numerous creative designs for storage or closet spaces in underutilized areas. You can, for example, convert the area under staircases into a small closet or put shelves or custom cabinets in hallways or alcoves. For bedrooms, there could be a walk-in closet or bed frames with storage compartments.

These features not only provide you with additional space for storage in your home but also improve usability. The benefits of a well-organized home cannot be overemphasized since this type of environment attracts potential buyers who are willing to pay more in order to live in a more practical space.

Use Strategic Paint Choices

One of the simplest ways to transform and modernize a space is by giving it a fresh coat of paint. A relatively cheap renovation could help you greatly improve the attractiveness of your residence.

In the choice of paint colors, it is wise to go with neutral hues. Even though bold and bright colors can show your style, they may not be attractive to many buyers. Whites, greys, and beiges attract the largest spectrum of users – these colors are easier to match up with interior styles and furniture colors. They also create an illusion of larger and brighter spaces, which is more welcoming.

But neutral does not have to be boring. Make your interiors interesting using different shades and textures within the same color family. Additionally, saturation of the paint should also be considered. The most commonly used are satin and semi-gloss finishes since these alternatives are easier to maintain and last longer.

Get the Most Value Out of Your Renovations

Renovating your home can be exciting, but you shouldn’t forget that not all renovations will increase the value of the house. When planning a renovation, you should consider current trends while also looking at your budget. This could protect you from overspending on unnecessary improvements and also help you to identify which renovation techniques will give you the best return on investment.

MEET MICHAEL ALLADAWI

Michael Alladawi, CEO & Founder of Revive Real Estate, is a Southern California real estate veteran with a proven track record as a builder, investor, and respected home flipper. Michael created Revive Real Estate to share his industry knowledge and help homeowners maximize their profits when selling their homes. Michael’s passion for his work is as big as his desire to create lasting partnerships. For Michael, it all comes down to how much value one offers, both in business and life relationships.

Discover the Latest Insight, News and Investment Strategies at Realty411’s Investor Summit in the Central Coast of California

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Investors, did you know that the Central Coast (Santa Maria / Santa Barbara) was recently named the #1 EMERGING MARKET in the entire United States? Yes, this is correct. We are sitting on a gold mine right here in the Central Coast.

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Join us for exciting news, insight and networking at Realty411’s new in-person investor summit in one of the most beautiful areas of California, the Central Coast. Our special one-day conference will host incredible educators from around the country, who are ready to share their valuable insight with our guests.

Guests will enjoy coffee, some breakfast treats, wonderful networking and MORE!

Now is the moment to grasp this opportunity — the chance to network with sophisticated investors from California and around the country. The event begins promptly at 9:00 AM.

Some of our top educators for the day include:

Jeremy Rubin, The Friendly Flipper
Rusty Tweed, TFS Properties
Paul Wilkins, Probate Real Estate Expert
Mario Estrada, Central Coast REIA
Linda Pliagas, Realty411.com
and more!

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Be sure to pencil this date now and join us in-person to gain specialized insight and knowledge. The information shared on this day could catapult your portfolio to new levels. Discover our new property portal, our VIP perks, plus connect with new and past industry resources.

This one-day conference has something for everyone regardless of their experience level in real estate. Join this memorable day and receive knowledge for a lifetime.

  • Learn from Leaders & Industry Pros
  • Meet Local PLUS Out-of-Area Investors
  • NON-Stop Tips for Real Estate Success
  • Bring Lots of Business Cards

BE SURE TO RSVP HERE:
https://www.eventbrite.com/e/767703691407?aff=oddtdtcreator

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

New Research Reveals March as the Top Month to List Properties and Rentals

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  • A new study has identified the time of the year Americans are keenest to move – and March is the most popular month.
  • The study analyzed Google searches around property and rental sites to reveal the best time to put your home on the market or start renting.
  • Colorado is named as the state looking to move the most, whereas Alaskans are happiest staying put in their current homes.
  • An expert shares their advice on the benefits of using a storage unit to make your move run as smoothly as possible.

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New research has revealed March is when sellers and landlords should list their properties to receive the most interest.

The research, pulled together by online self-storage finder Storage.com analyzed nationwide and regional Google search volume for keywords related to real-estate sites – such as Zillow and Trulia – to determine the time of year properties and rentals are most in demand.

The added financial pressure caused by the current economic situation might deter some from moving, but for others, it might motivate them to take the plunge – whether this is driven by an urge to get onto the property ladder or because tenants want to find somewhere more affordable.

Whatever the reason, U.S. searches for for-sale and rental listings reached a whopping 476,050,700 by the end of last year, peaking in March with a total of 44,698,660 – 13% more than the monthly average of 39,670,892.

This indicates sellers and landlords should make any final touches to their properties over the next few weeks to be ready to list by month’s end, as interest could be about to surge again.

Enthusiasm around moving dropped as 2023 came to a close, with searches falling 20% below the monthly average in December to 31,662,730. Americans didn’t appear eager to change homes in November either, as the month recorded the second-lowest volume at 33,623,290.

This is perhaps because the excitement of the festivities drew attention away from searching for somewhere new to live, suggesting sellers and landlords will have the worst luck if they list during the holiday period.

The next most popular month is July at 44,097,760 – 11% above the monthly average – followed by August at 43,828,170, so owners are best off advertising their properties sooner rather than later if they want a deal underway, otherwise they may have to wait until the next rush in summer.

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As well as analyzing nationwide Google search volume, the study looked at it on a regional level to identify the states where sellers and landlords are most likely to find potential buyers and renters, with Colorado proving to be the most eager to relocate this year.

The stage averaged 14,414 searches per 100k residents, a fifth (21%) higher than the national average of 11,869 (per 100k residents).

Florida is the second state most wanting to uproot, with 13,985 searches per 100k – 18% above the US average. In third is Arizona, which is still 16% higher at 13,782 per 100k, meaning listings may still receive higher response rates there than in most states.

The Ten States Most Interested in Moving

Commenting on the findings, Chuck Gordon, CEO of Storable, the parent company of Storage.com, says: “Now that Americans have settled back into their everyday routines and bank balances are starting to recover after a tight January, it’s likely those that were home hunting beforehand will return to it – and many others may start looking too if they
set moving as a goal for 2024.

“If the trend spotted last year repeats itself, prospective homeowners are going to increase their research for potential homes again next month, so there’s not too much time for budding sellers and landlords to get their properties up to scratch and capitalize on the demand.

“Finding the right place to live can seem like the biggest challenge of the process at the time, however it’s only the first hurdle. While it’s near impossible to remove all stress from a move, beginning packing as soon as things are in motion can seriously ease the headache.

“You’ll be surprised how quickly time can creep up on you, and suddenly you have most of your house to pack still. However, it can take weeks upon weeks before you receive a moving date – sometimes even months – and living among boxes can add to the sense of chaos. If you can, use a storage unit to hold non-essential items.

“That way, there’s less loading and unloading to do on the big day. You can unpack and set up everything you need to use immediately, then add in the extras at your own pace, finding the right spot for them rather than just shoving them anywhere in a rush to feel sorted.”

Data was gathered via Google Keyword Planner, which provides nationwide and state-specific search volume behind moving-related terms, keywords, and sites. All findings were scaled against local populations to get a ‘per 100k residents’ search rate.

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411Expo.com or our Eventbrite landing page, CLICK HERE.

How to Minimize Risks and Maximize Gains

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By Rick Tobin

Between January 2020 and present day, U.S. home prices rose a staggering +47%, per S&P CoreLogic Case-Shiller. Are these price trends likely to keep rising at the same pace or not?

How is it possible that the reported published inflation rates are declining while home prices and home unaffordability rates are increasing at the same time?

Will home prices decrease, flatten, or increase later here in 2024? The answer partly depends on whether the home listing inventory supply rapidly increases or decreases. It’s all supply and demand economics at the true core.

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Let’s take a closer look at some eye-opening housing, inflation, and jobs numbers:

  • Before the Fed started raising rates in 2022, a $2,000 monthly housing budget would have bought a home costing more than $400,000. Today, a $2,000 monthly household budget gets $295,000 or less.
  • Existing home sales between 1998 and 2007 averaged 6 million per year. Through October 2023, the annual home selling pace was closer to 3.79 million housing units.
  • Over the past 50 years (1973 – 2023), home prices rose by nearly 1,300% as compared with a 610% gain in the CPI (Consumer Price Index).
  • The inflation-adjusted hourly work wage has increased by just a measly 1% over the past 50 years (not an annual 1% increase, but just a 1% total gain over and above 1973’s wages in 2023 at a 1/50th of 1% increase per year average).
  • By comparison, the inflation-adjusted median home price has gained 100% over the past 50 years. As a result, real home prices have increased by more than 100 times (or 100x) the real wage gains.

Sources: CPI, Federal Reserve, and ZeroHedge

To be able to afford the median-priced home of $433,100 in late 2023, a household needed an annual income of roughly $166,600. However, the median household nationwide earns just $74,580, which is only 45% of the recommended amount.

By comparison, the median-priced home in California reached almost $860,000 in recent months. This is almost double the national median-priced home average.

As it relates to the lock-in effect, it does not matter too much if the homeowner’s mortgage rate is 6%, 4%, or 2% if they lose their job and main source of income. Foreclosures will likely rapidly increase this year as the true unemployment numbers skyrocket, sadly. It then creates a downward spiral for the neighboring homeowners as future foreclosures become the latest sales comps while creating more upside-down homes with negative equity. Later, more underwater homeowners will walk away if they have no equity to protect.

The latest house payment ($62,165) as a percentage of household income ($94,964) number ratio is 65.46% here in California ($62,165/$94,964 = 65.46%).

Approximately 60% of all homes owned in America are owned by people over the age of 50. Average home prices across the nation have increased 45%+ since the pandemic declaration back in March 2020. At some point, more older Americans will likely list their homes for sale to take their gains and to downsize at the same time while pushing the home listing inventory numbers higher.

If you have cash or access to third-party loans or equity partners, there will be some incredible buying opportunities this year and beyond.

Water Damage and Extreme Weather Swings

It’s getting increasingly difficult to obtain insurance for both owner-occupied and rental properties. A mortgaged residential or commercial real estate property is required to have sufficient amounts of insurance coverage, or the lender may consider it to be the equivalent of a mortgage default that would later lead to a foreclosure filing.

The #1 cause of damage to homes is usually excess water from rainstorms, heavy snowfall, floods, leaky roofs, or broken pipes. Fewer than 2% of Californians have flood insurance coverage for their homes. The horrific flooding in San Diego last month will likely cause significant losses for residential and commercial real estate properties as well as push insurance premiums skywards for local San Diego County and statewide residents.

Florida is #1 for the highest annual homeowners insurance premiums that are near $9,270. How much worse will it get after hurricane season begins?

Please make sure that you have multiple insurance coverage options from your preferred insurance broker just in case you receive a cancellation notice in your mailbox in the near future.

Commercial Real Estate

Upwards of 44% of office buildings nationwide with a mortgage are now claimed to be upside-down with negative equity here near the start of 2024. Later this year, the negative equity numbers should keep rising. How will this potentially impact banks and the overall US economy later this year and next?

CNBC recently published this article entilted vacant office spaces on the rise, with over 100 million square feet available in Manhattan.

This 100 million square foot number is equivalent to 40 vacant Empire State Buildings. Occupancy rates for office buildings in that region continue to remain under 50%. How many of these empty offices will later be converted to residential units?

Blackstone, the world’s largest owner of commercial real estate and a spinoff of BlackRock, is walking away from some of their distressed and upside-down commercial properties.

Year-over-year office building price percentage losses (’22 – ’23)
1. San Francisco: -58.9%
2. Chicago: -48.3%
3. San Jose: -48.0%
4. Philadelphia: -45.1%
5. Los Angeles: -44.6%
6. Orange County, CA: -38.4%
7. Dallas/Ft. Worth: -37.6%
8. New York: -37.3%
9. Austin: -31.5%
10. Boston: -24.2%

Source: Green Street News (data for all office sales, not just for Blackstone deals)

There are another one million new rentals coming to market by 2025 over and above the 1.2 million new apartment units that were built over the past three years, according to REjournals. Will this drive down rental prices even more due to excess supply?

Banks

Between 2017 and 2023, more than 10,000 bank branches closed nationwide. From January 1, 2023 through October 19, 2023, banks fired 20,000 employees. Yet, an additional 42,000 bank employees were let go in the final 72 days of the year between October 20th and December 31st for a grand total of 62,000 bank layoffs in 2023. Will these numbers accelerate in 2024?

Next month on March 11th, the Federal Reserve is terminating their “safety net” for many banks that’s called the Bank Term Funding Program (BTFP). After the financial system almost collapsed last year in March 2023, it was the BTFP bailout programs that possibly prevented bank runs after many banks became technically insolvent. On March 12th, private money may become quite popular as a backup lending solution because fewer banks may be able to lend to even their most creditworthy clients.

The banking dominoes continue to fall…

The push towards the “Basel III Endgame” banking regulation, which requires banks with assets over $100 billion to set aside more capital or cash reserves while driving down their ability to lend, is almost here.

Basel is a reference to the city in Switzerland where the world’s superbank, named the Bank for International Settlements, is located. They govern all central banks worldwide, including the Federal Reserve. We may see an increasing number of bank closures and mergers this year and next, partly due to these new regulations.

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China’s Defaulting Real Estate Marketplace

Here comes the next potential Asian Contagion event and derivatives debt tsunami from Evergrande (3333.HK stock symbol – they were once China’s largest real estate developer) as I’ve been writing about for several years. Country Garden, also ranked as high as the #1 largest real estate developer in China, is having their own serious financial challenges as well. It could force many Chinese investors to sell off their US Treasury holdings, which, in turn, may drive the 10-year Treasury yield and corresponding 30-year fixed mortgage rates higher.

January 2024 was somewhat reminiscent of the Russian financial crisis (stocks, bonds, and currency implosions) that spread to Asia (aka Asian Contagion) and South America back in 1998. At the same time, the derivatives investments held by Long-Term Capital Management (LTCM) were so volatile and at risk that they ran out of money while almost taking down the world’s entire financial system at the same time.

Several large financial institutions were asked by the Federal Reserve to put upwards of $100 million each to save LTCM’s derivatives bets so that the financial system wouldn’t collapse. The only investment firms that refused to bail out LTCM in 1998 were Lehman Brothers and Bear Stearns. Ten years later in 2008, they were the first big investment firms to implode as the Credit Crisis (primarily related to a frozen global derivatives market) worsened and were not bailed out either, ironically.

Never forget that the global bond and currency markets absolutely dwarf all stock markets combined. Get your popcorn ready and keep a close eye on financial institutions in China, Russia, Germany (Deutsche Bank, especially), and here in the U.S.

Jobs Layoffs and Declining Cash Reserves

Job layoffs accelerated +136% in just one month between January 2024 and December 2023. Cash reserves held at banks are near all-time record lows right now. A recent survey found that 60% of the U.S. population has $500 or less in their checking accounts. Just 12% of the U.S. population has $2,001 dollars or more in their checking accounts, as per GoBankingRates.

Ballooning Corporate Debt

The U.S. corporate loan maturity amounts that ballooned or will be ballooning or coming all due and payable by the following year-end dates:

  • December 2023: $230 billion
  • December 2024: $790 billion
  • December 2025: $1.070 trillion
  • December 2026: $1.105 trillion
  • December 2027: $1.055 trillion
  • December 2028: $1.240 trillion
  • December 2029: $802 billion

Many corporations will be forced to refinance their debt at much higher rates while increasing their costs and decreasing their profits. As a result, more corporations will likely look to reduce their monthly costs, which may include increased job layoffs, sadly.

Between October 2019 and April 2023, there were more jobs created for foreign-born workers than for native American workers, as per ZeroHedge. My guess is that the foreign worker percentages have increased at an even faster pace between May 2023 and January 2024. In 2023, there were more illegal immigrant crossings in the USA each month than the total number of monthly births for US residents.

Government and Consumer Debt

According to Michael Snyder’s article entitled The United States Has The Biggest Government In The History Of The World By A Very Wide Margin, let’s take a look at some of these published numbers:

  • Upwards of 3 million people work for the federal government.
  • The federal government spent 6.13 trillion dollars in 2023. This figure is larger than the GDP of every nation on the planet except for the U.S. and China.
  • More than 70 million Americans are on Social Security.
  • More than 65 million Americans are on Medicare.
  • More than 81 million Americans are on Medicaid.
  • More than 41 million Americans are on food stamps.

Consumer and government spending trends: US households racked up $17.29 trillion in record debt last year (mortgages, credit cards, auto loans, student loans, etc.). The federal US debt crossed another milestone recently, surpassing $34 trillion. By comparison in 2009, US debt was only $10.6 trillion. Between 1980 and 1990, the total overall federal debt only increased by $2 trillion.

We’ve borrowed:
* $1 trillion over the last 3 months
* $2 trillion over the last 6 months
* $11 trillion over the last 4 years

In the previous housing crash here in California (2007 to 2012), average home prices fell to a still all-time state record amount of -41.7% from peak to trough.

  • Nearly 30% of Americans are behind on one or more debt payments.
  • 56 million Americans had unpaid credit card balances for more than a year.
  • 40% of student loan borrowers have still not made a payment even after the recent October 1, 2023 student loan payment restart date after three years of C-19 forbearance.
  • Just one late payment can drop a FICO credit score between 80 and 180 points.

Out of Chaos Comes Opportunity

Inflation is likely to remain elevated here in 2024. Historically, the ownership of real estate has proven to be an exceptional hedge against inflation while rising at a similar pace or higher each year.

With consumer debts at all-time record highs and credit card APR rates hovering between 28% and 30%+ and early paycheck loans reaching as high as 330% to 400% APR rates, it’s very important to limit your spending, set aside as much cash as possible if this may be an option for you, and keep your eyes focused on potential real estate bargains in your region.

During volatile economic time periods like seen back during the Great Depression (1929 – 1939), the Savings and Loan Crisis (‘80s and ‘90s), and the Credit Crisis or Great Financial Recession (2007 to 2012), there were incredible buying opportunities for discounted real estate. Please stay focused on your goals and targets rather than on the temporary obstacles.

Rick Tobin

Rick Tobin has worked in the real estate, financial, investment, and writing fields for the past 30+ years. He’s held eight (8) different real estate, securities, and mortgage brokerage licenses to date and is a graduate of the University of Southern California. He provides creative residential and commercial mortgage solutions for clients across the nation. He’s also written college textbooks and real estate licensing courses in most states for the two largest real estate publishers in the nation; the oldest real estate school in California; and the first online real estate school in California. Please visit his website at Realloans.com for financing options and his new investment group at So-Cal Real Estate Investors for more details. 

Learn live and in real-time with Realty411. Be sure to register for our next virtual and in-person events. For all the details, please visit Realty411.com or our Eventbrite landing page, CLICK HERE.

Real Estate Success with Flip and Dani Lynn Robison – Entrepreneurs, Authors and Speakers

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Investors, it’s time for another exclusive Realty411 live webinar! Don’t miss the opportunity to learn exclusive insight, tips and strategies by some of the top real-estate investors in the nation. On this exciting LIVE webinar, Entrepreneurs, Authors and National Speakers, Flip and Dani Lynn Robinson, share incredible journey and insight with our guests.

This online presentation is engaging and is designed to catapult our guests to the next level of real-estate success! Flip and Dani are founders and owners of The Freedom Family of Companies, a vertically integrated investment firm with:

** Over $30 Million Dollars Raised
** Over $22 Million in Assets and over 900 Units Under Management

On this exclusive and LIVE webinar, Flip and Dani Lynn will divulge top secrets and top-of-mind topics, such as:

>>> The important Investor’s Guide to Real Estate

>>> 7 Mindset Mistakes Blocking Your Breakthrough

>>> Simplified Strategies for Building Wealth

>>> How They Made $2M in 21 Months Without Losing Sleep or Selling Friends

>>> Finding Your Financial Freedom – How the 1% Think, Invest, and Design Their Lives

As a special treat for the upcoming Valentine’s Day festivities, Flip and Dani Lynn will also share a special segment for couples. Discover strategies for working and living the wild real-estate investing life with your spouse or loved.

This special presentation for entrepreneurial couples is titled: “Tips on How Couples Can Work Together Towards Real Estate Success.” Don’t miss this special webinar, online seats are LIMITED, so be sure to register today!

8 Simple Steps To Riches In Real Estate Or In Any Other Field, For That Matter

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By Reggie Brooks

Before I got involved with real estate I tried various other potential money-making ventures.  I created a company called Advanced Video Productions, and spent the first 4 weeks designing the all important ‘logo’.  I might have thought that my income was totally dependent on a well designed, slick logo. I hadn’t learned anything about time management yet.

I created another company that sold satellite systems. This was way back when satellite dishes were huge.  They could have been mistaken for UFO’s.  My  success?  I sold 1 satellite system, period.  And that one system was sold to a friend.  I hadn’t learned anything about marketing. 

Another time, I got involved with a Multi Level Marketing group and ended up with a garage full of water filters.  Well, it really seemed like a good idea at the time…..

Through the many successes and failures that I’ve either experienced over the years or witnessed others experience, I’ve identified 8 steps you can take that can put you on the fast track to wealth.  These are  simple, powerful steps that really work!!

The 3 Cornerstones Of Success

I’ve taken a lot of seminars and classes over the years, and I’ve learned that personal and financial growth requires an investment. You must be willing to invest your money and your time. Then you must make a commitment to discipline yourself. What good is having a superior knowledge  of creative real estate if you don’t discipline yourself to use it?  Many successful real estate investors have invested many thousands of dollars in their creative real estate education.  Their libraries are bulging with books, tapes, CD’s, DVD’s, and any other form of media necessary to put money-making techniques into their heads.  They understand the power of “The 3 Cornerstones Of Success”.

The 3 Cornerstones Of Success are like a 3 legged stool. As long as there are 3 legs, the stool will support your weight. However, if you loose just 1 of those 3 legs, you’ll crash to the floor.  This is a perfect parallel to the 3 Cornerstones Of Success.

  1. The 1st Cornerstone Of Success is continued education. As successful investors, we make our money buying distressed property from motivated owners. In order to do that, we must learn how to creatively solve the problems that owners have with their properties.  None of us were born with this creative knowledge. We have to invest our money and our time into our education, and we have to learn the smart, money-making principles and techniques.  Then, we use these smart, money-making principles and techniques as tools to creatively structure win-win deals. This is why we continue to read books, listen to tapes, and take classes.  This brings us to the 2nd Cornerstone Of Success.
  1. The 2nd Cornerstone Of Success is discipline. You must discipline yourself to use the smart, money-making  principles and techniques that you’ve learned.  This doesn’t necessarily mean that you have to spend 15 hours each day to work your business.  It could mean that you simply discipline yourself to write that offer, or send that letter out, or talk to that owner or neighbor, or anything else that you been procrastinating about.  So much of the time we’re so close to success, but we give up just before we achieve it.  Most of the time we give up because it is to scary or to painful to proceed on.  Anticipating an owner who says no instead of yes can be both scary and painful.  Dig down as deep as you need to and find that spark of passion that you can use to generate the discipline that you need.  Use it like a magic carpet to fly above the pitfalls to success.
  1. The 3rd cornerstone is productive action on a daily basis. You must continue to learn, you must discipline yourself to use what you’ve learned, and now you must put it to work on a daily basis.  It may be that the productive action of the day may only take 15 or 20 minutes. Success comes to the person who has made him/herself worthy of the success that they seek.  And you make yourself worthy by following the 3 Cornerstones Of Success.  Then, you’re prepared whenever opportunity comes along.

People sometimes ask me, “Come on, Reggie, tell me”.  “What’s the secret to being successful in real estate”? There is no one individual ‘secret’  that will make you an instant millionaire in real estate.  It’s more of a matter of doing a whole lot of little things correctly that empowers us to create a tremendous wealth.   Doing smart things systematically toward your goal every day will breathe life into the 3 Cornerstones Of Success.  There is nothing on this earth that can stop you if you simply follow the 3 Cornerstones Of Success. Here are a few other ideas that can help you to achieve your own level of success.

  1. Don’t Take Your Financial Advice From Broke People

When I first got involved in real estate, I let everyone know that I was launching into a new career.  I told them that I was studying courses on how to perform creative real estate deals that would make me rich.  I told them I was learning  about no money down deals, how to get owner financing, how to rehab to increase profits, and so much more.  I was so excited about my new real estate career that I had real trouble shutting up about it.  As a matter of fact, I think that I got a little cocky.  I’d tell anyone who would listen to me about the wealth that I was going to build in real estate.

I finally realized that I was sharing my excitement with the wrong people.  I was sharing my dreams with people who had no respect for them.  They would find ways to tell me that my dreams would never work. “There’s no such thing as a win-win deal”.  “When someone wins, someone else has to loose.”  They also said things like, “You can’t do no money down deals because there’s got to be some money in the deal someplace”.  They never stopped to think that the money doesn’t have to come from you.  It can come from the seller, the lender, the realtor, from private sources, or a great number of other places. It doesn’t have to come from your pocket.

This is when I realized just how important it is to share your ideas with the right people, and not the wrong people.  Share your ideas with other investors or students who are of like mind – either doing deals and making money or learning and growing in creative real estate education.  If you share your dreams with people who are not educated or not experienced in creative real estate techniques,  you leave yourself wide open for opinions.  When you get opinions from people that you respect, you have a tendency to believe them.  This can be especially hazardous for new investors.

Always ask yourself the question, “By what authority does this person give me this advice.  Has he/she been trained in this field?  Has he/she worked in this field and made money?”  If the answers are no, don’t listen to him/her.  No matter how much you love or respect the person, you have to protect your financial future from well meaning people who are not qualified to give you financial guidance.

If you have a new born baby, you wouldn’t dare even think about exposing that baby to the harsh elements that could make your baby sick.  You wouldn’t leave your new born baby outside in the rain or the snow.  You wouldn’t leave your baby in the heat of the sun, or with unsavory characters as baby sitters.  Treat your new real estate business just as you would your new born baby.  Expose your baby to the people who can help it grow big and strong, but keep it away from those who will do it harm.  And the difficult part is that for the most part, our uninformed friends don’t mean any harm.  But if you let their unfounded opinions influence you, it can be fatal to your business.

If you will continue to learn the right things – the things that create win-win situations between you and the owner – the things that make you money, now you’re ready for the next lesson.

  1. Don’t Get Greedy

My friend and mentor, Dr. Albert Lowry tells his students that it’s OK to be a bit of a pig (I call it good negotiating). It’s OK to structure a deal where you make a lot of money.  But don’t be a hog. You can blow a good deal by trying to hog all the profits. Don’t forget about the seller’s needs.  Dr. Lowry says, “Pigs get rich, but hogs get slaughtered”.  Makes sense, doesn’t it?  Keep this phrase in mind.  We’re going to talk about a principle that was so important in changing my life.  As we discuss this principle, keep in mind that you can get rich faster by doing a lot of $20K to $30K deals than holding out for that big $100,000 deal. So, without further ado, I present to you “The Win Principle”.  Caution: This principle works best when used with The 3 Cornerstones Of Success, which we talked about earlier. Here’s how it works:

The “WIN”  Principle stands for “What’s Important Now”.  Once you’ve educated yourself in creatively investing in real estate, you’ll know what you should be doing at any given time.  Whether it’s using what you’ve already learned, or, if you’re a little short on knowledge, maybe taking in a seminar, workshop, bootcamp, or listening to books and tapes.  It may be that you need to take a break, or the rest of the day off, or even a vacation.  Whatever it may be – you know deep inside exactly what you should be doing at any particular time.

If you will discipline yourself to do What’s Important Now, you WILL accomplish your financial goals.  What do you want?  Do you want to be rich??  You can be rich!!  If you will diligently exercise the 2 principles that I’ve outlined above, you will accomplish your financial goals!!!  Does it sound easy?  It does to me.  I think it’s a simple thing to do, but it’s certainly not an easy thing to do.

  1. Failing To Screen Your Sellers

As investors, we make our money when we buy property from motivated sellers.  I had to find that out the hard way.  Very early in my career I found an little old lady that lived in a huge old house in Hollywood, California.  Her name was Alice Jordan and she was part of a big mailing campaign that I was working at the time. When she responded to one of my letters, it felt like my heart was going to jump out of my chest an on to the floor!!  My  palms were sweaty, and my voice trembled.  She said that she wanted to sell her house!!  We immediately made an appointment to meet at her house the very next day.

It was sheer agony having to wait until the next day to meet with the lady in the big house.  The thoughts running through my head were non-stop!  Will she contact someone else?  Will someone else contact her?  Maybe a family member.  What if she changes her mind?  Am I really ready for this?  This is a huge step!  What if it doesn’t work?  What if I fail?  I don’t want to loose any money.   Does any of this sound familiar to you?  I think we all suffer with Uncontrollable Thought Syndrome.  There’s nothing like doing a good deal and making yourself $20,000 to $40,000 to make all those negative thoughts disappear.  You might still have those uncontrollable thoughts running through your head, but they’ll be a little different.  Let’s see, I wonder if we should go to the Bahamas, or if we should go to Hawaii?  Should I go for the Mercedes, or should I go for the BMW?

Back to the little old lady.  For three weeks, we went back and forth.  Every time I thought we were close, she’d throw some garbage into our deal that would bring negotiations to a halt.  Then I’d call her after a few days, we’d reach what I thought was an agreement, and we would resume.   This would happen over and over.  You’d think I’d have gotten a clue about this one, but I didn’t.

I happened to be talking with a friend who was a fellow investor, and I mentioned Ms. Jordan, the lady that I was dealing with, and how frustrated I’d become.  He looked at me with a little sly smile on his face.  He said, “You mean Alice Jordan”?  I said yes.

Needless to say, I was stunned.  The uncontrollable thoughts started again.  I quickly took control by feebly asking, “Uh, how do you know Ms. Jordan”?  His answer cut like a knife.  “Everybody knows old Alice.  She gets lonely and calls on someone’s newspaper ad or direct mail piece.  That’s how she entertains herself.  She never leaves the house.’

I was crushed.  I was merely an old lady’s entertainment.  Everyone else knew about Ms. Jordan. I didn’t.  My friend even called her by her first name!!  That’s when I learned how important it is not to waste time on sellers that are not motivated.  By the time you make an offer based on your profit criteria and you get a counter offer back from the seller, you’ll know whether  you have a motivated seller or not.

  1. Lack Of Focus

There are so many different ways to make money in real estate.  You can buy, fix up and sell.  You can buy and hold for cash flow.   You can wholesale to other investors.  Come to think of it, you can even make money without ever owning the real estate.  You can buy mortgages, and you can lend money and charge hefty interest rates.  And this is just to name a few.  It’s easy to see how a new investor can jump from one strategy to another.  A new investor is usually excited about the prospect of getting money worries out of the way, and as a result they’re usually more than just a little impatient.  The expectations are high, but the patience is low.

Success in real estate investing is directly dependent on your ability to take action, analyze your results, make your adjustments and take action again.  It’s a sweet little cycle that you use to get rich.  A success cycle, if you will.  The best way to capitalize on this cycle is to focus on a system that is simple and easy to work, like Creating Wealth With Abandoned Properties.  As you begin to work your system of choice, make sure you continue to learn from your results while you fine tune and tweak your business.  This is how you become a master of your investment system.  This is how you get RICH!!

You must stay focused on your goals.  I read a book that my wife gave me when we first got together, called the Peak To Peak Principle.  This was another one of those life changing experiences.  I say experience because that’s what it was.  It wasn’t just ‘reading a book’.  It was the experience of learning a principle that could help make me rich.

Here’s how the Peak To Peak Principle works.  Visualize yourself as a mountain climber doing what you do – climbing a mountain.  If  your goal is to reach the top of this mountain, then you’ll do well to keep your focus on your goal – the peak of this mountain.  However, if your goal is to conquer other peaks then, before you reach this peak, you must shift your focus to the next peak.  If you don’t shift your focus, you allow the first peak that you reach to become a plateau.  It will take a lot of energy to get your momentum moving in the right direction again. 

When you relate this principle to your real estate business, your plateau becomes a comfy little haven where you’ll find yourself sitting and relaxing.  You might eat a sandwich, read a book, or listen to the radio.  You might be so comfortable that you decide to spend the night, or the week, or the month, or the rest of your life.

Since you have your momentum going in the right direction, go with the flow.  If you apply the Peak To Peak Principle to your real estate business, you can get to your goals a lot faster.

I THINK WE’VE JUST FOUND THE SECRET TO GETTING RICH!!   It’s a matter of learning these and other ‘wealth-building’ principles and using discipline to operate my real estate business under those principles.  For the first time, I can see the how of getting rich!

Having the scientific type mind that I have, that just made this revelation even more powerful.  I can actually see in my mind’s eye exactly how I’m going to get rich!!  I floated around on cloud 9 for a long time after that.  As a matter of fact, I’ve never come down, and I never will.  It’s almost like having a ‘secret weapon’ that most other investor don’t know much about.  Learning and using the wealth-building principles can give you the edge over your competitors.

  1. Managing Your Fears

Every human being on the face of the planet has experienced fear in some form or another.  I’d even be willing to bet you that every animal, insect, rodent, and every winged creature as well, has experienced fear.  Fear definitely has a useful place in our lives.  It’s purpose is as a early warning system.  To alert us about possible dangers so that we can modify our path and create a solution to eliminate the danger. Fear was never meant to scare us into non-action.

Here’s an interesting idea.  I believe that there is a purpose for every living creature on earth.  Beavers build dams, humans solve problems.  If you take a careful look around, you’ll see a whole lot of stuff that was created by the human species.  If you look deeper, you’ll find that the purpose of each one of these inventions was to solve a problem.

It has been said that we learn better by doing, rather than by reading.  In other words, at some point, you’re going to have to get out there and get your feet wet – you’re going to have to get started.  I know, I know…  It’s scary.  Whenever you launch into something so big and significant that it can change your life, you’re going to get a little scared.  Here’s a good way to handle your fears:

This solution to handling your fears is so simple that even I was able to master it.  First of all, arm yourself with an abundance of knowledge about the situation.  Be careful not to over-analyze the situation.  You only need enough facts to make an intelligent decision.  If you have a fear of writing your first offer, you may have to pick up a book, or take a seminar.  You might have to make a bunch of copies and practice writing offers. Do what ever you have to do in order to arm yourself with the knowledge that you need.  Then, keeping the WIN principle in mind, you simply take action.  Isn’t that simple?  It really is.  The one antidote for fear is action.  Intelligent, systematic action will not only make fear disappear, it can also make you rich.

Sometimes we have a certain type of fear that robs us of an important part of our growth.  We’re afraid of making mistakes.  Even though we’ve only been involved in real estate for 5 minutes, we have this crazy notion that we shouldn’t make mistakes.  After all, we did take that 1 ½ hour seminar last year, we should be rich by now.  If you have a problem admitting and accepting mistakes, you’re missing out on one of the greatest tools that you could have in the creation of wealth.

I was in my early 20’s when a 17 year old kid taught me something that will be with me for the rest of my life.  He taught me that mistakes are our friends.  He said that every mistake that we make has within it a lesson for us to learn.  Some people are so busy trying not to make mistakes that they totally miss the lessons in the mistakes that they do make.  By learning these lessons, then making the correct adjustment in our paths to success we can get to our goals at a very fast rate of speed.

What if you were able to look into the future.  You might see that, in order for you to become a millionaire, it will take you making 175 mistakes, learning the lessons in each of those mistakes, applying those lessons to your business, and moving on to the next mistake.  You might find yourself jumping out of bed and hurrying to meet the day!  You can’t wait to make the next series of mistakes, because you know that at the end of your mistake making, lesson learning day, you’ll be closer to your goals!  If you only made 5 mistakes yesterday, you’re going to kick it up today.  You’ll make 10 mistakes today!!  And, by the time you learn your lessons and apply the changes, you’ll be surprised at how quickly you can be very far along in reaching your goals.

You’re A Winner – Read On, And I’ll Prove It To You!

Always remember the winner that you are!  You came into this world to create.  So, create!!  You have an ability within you to create whatever solution you need to overcome whatever problem that you think is standing in your way.  If you will follow the principles that I’ve outlined in this article, you can do much to accomplish every one of your financial goals.

You are a winner. Remember?  Three and a half million sperm chasing one egg.  You won!  You’re here!  That’s evidence of the winner in you.  Peace and prosperity to you and your family.

 

Reggie Brooks, is an international speaker, author and educator, dedicated to inspiring others to achieve personal success through real estate investment. He is also the #1 Vacant, Abandoned & Distressed Property Specialist in North America.

Having risen above a life of poverty, he has achieved what many people consider to be impossible. He went from making $36,000 per year at the local telephone company, to making over $40,000 per month in his real estate business. Today, Reggie delivers his personal philosophies for success at major business venues and expositions throughout the United States. Reggie attributes his success to faith, dedication to success, and to the invaluable coaches he has had along the way.