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Tips To Minimize Your Risk & Maximize Your Profits (Part 2)

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By Tamera Aragon

“Real estate is definitely a path to be seriously considered in building your wealth. Where to invest varies depending on the location of the investment as well as market timing. My investment choices change as often as the market does. Being sensitive and aware of changing market trends is helpful to know where to invest and the most profitable strategy to follow”.

What was just quoted was a highlight to part of this real estate investing article series of minimizing risks and maximizing profits for investors. You can review the first 3 rules here: “Top 7 Tips To Minimize Your Risk & Maximize Your Profits P1”.

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Top 7 Tips To Minimize Your Risk & Maximize Your Profits

Rule #4 – Use a Tried and True Strategy

Why make all of the mistakes others have already made if you don’t have to? Find a good investment strategy that works with your goals and stick to it. You will be tempted and pulled in many directions by all the different gurus out there saying their way is best.

Find a mentor and coach with experience in today’s market and then follow where they lead. After all, why would you walk through a mine field alone if there was someone else familiar with the route who could lead you safely through?

Rule #5 – Have Attorney Review Contracts

Hire a professional real estate attorney to review all your processes and paperwork before utilizing it in your market. Because most trainers and coaches are not attorneys, as much as we try, we cannot be experts on laws in every state in the U.S. For this reason, it is vital for you to make sure the contracts and steps you are taking are not going to lead you to the courthouse.

Anyone can sue anyone these days. The way to avoid this is to first of all, always be nice and come from a place of caring in your dealings with others. Don’t avoid dealing with situations personally or you may find a costly summons to court forcing you to deal with things the expensive way. A second way to avoid litigation is to assure your paperwork and procedures are legal to the best of your ability.

I know attorneys can be expensive which is why I signed up to use a service that offers me unlimited consultations and a certain number of document reviews for only $50.00 a month. I recommend this way to be the most cost effective resource to be able to accept advice from a licensed real estate attorney in any state.

Rule #6 – Have Basic Computer Skills

You will want to know how to use email, internet and office products like Microsoft Word and Excel (Google had free versions of these). It is helpful to know how to create graphics but not necessary. You will need high speed internet to enjoy utilizing this wonderful tool and avoid the frustration of being unable to watch videos and waiting for pages to load.

You can do your entire real estate business from a computer. You will absolutely need to type contracts and do research and there is no faster, easier way than this. If you do not know how to use email, the internet and basic word on a computer, find a class you can take to learn the skills you lack. If you have tried to do business without these tools, you will find them to turbo-charge your business once you have them.

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Rule #7 – Diversify Your Investments

Don’t put it all into one area or one type of real estate. So how did I go from having no money to the prosperity I enjoy today? It started with a book called the “One Minute Millionaire” by Mark Victor Hansen and Robert G. Allen. This book showed me I could really have the kind of lifestyle I desired, if I would diversify my income, while at the same time making wise investments.

I studied this philosophy on money found in this book as well as in others like it. Then, I did something many are too afraid to do, “I put what I learned to work in my life”. I currently divide my income into various investment strategies such as real estate, stocks, business ownership, savings, Money Market, IRA’s, and others.

However, since I see that 40% of today’s billionaires made it in real estate, I have chosen to place a large percentage of my time and money into this strategy. What type of real estate do I invest in? This varies about every 6 months depending on the market conditions as I mentioned earlier. I also have relationships with “power team” of experts so we have all the correct data to consider our strategy as the market changes.

In summary, there is no hard fast rule that applies to all investing – except one. That is this. In order to profit from your investments, we have found it important to diversify them. Consider different types, different areas and different strategies that make the most sense, therefore bringing you the highest return on your investment.

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.

Tips To Minimize Your Risk & Maximize Your Profits (Part 1)

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By Tamera Aragon

Quote to live by:

“Without effort, you cannot be prosperous. Though the land be good, you cannot have an abundant crop without cultivation.” – Plato

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Real Estate As a Path To Wealth & Freedom

Forbes magazine lists the top 400 wealthiest people every September. In September 2007, 40 of the 400 people on that list made their billions specifically in real estate. Many of these people started with nothing, some immigrants even, to move up into this category. Real estate is definitely a path to be seriously considered in building your wealth. Did you know that most of those 40 billionaire real estate investors are only doing their real estate part time? And do you realize they can run their real estate investing business from anywhere in the world?

Freedom… Just the sound of that word brings a smile to my face. Real Estate investing offers you the freedom to make your own choices about how and where you spend your time along with who you spend it with. Financial and time freedom is definitely something successful real estate investors enjoy.But what about the risks you say? Of course for every “tit” there is a “tat”, for every high a low, for every good a bad. Yes, unfortunately like any entrepreneurial venture, there are risks. My husband owns a retail store and he risks every day that someone is going to trip and fall and sue him. He risks that he may not sell enough to pay his bills, etc. I think you get the point. However there are steps you can take to minimize your risks and maximize your profits.

Top 7 Tips To Minimize Your Risk & Maximize Your Profits

Rule #1 – You Do Not Need To Re-Invent “The REI Wheel”

You will need to get training and have a mentor or coach, (or maybe several), in order to succeed. Even the best athletes in the world have a coach. Why? Because a coach will keep you on track. Don’t try to do it on your own. That school of hard knocks is going to cost you way more than good training and an experienced coach. I believe this to be the first step in minimizing your risks and maximizing your profits.

Rule #2 – Do Your Due Diligence (or as I say, “Do the Due”)

Would you buy a car without checking the engine, tires, brakes, or interior? Would you marry someone without learning all you can about them and knowing their flaws and good things before you take the plunge? I hope not!! Then why do so many real estate “investors” buy a property without doing the proper due diligence before they get into a contract?Answer: Many simply lack the knowledge of what to look for in a property when considering it for investment purposes. In other words, you don’t know… what you don’t know, right? So here’s what you need to know. Before you ever buy a piece of real estate you should check it out from top to bottom so you know exactly what you are getting into. A little bit of work upfront will save you huge headaches and money down the road.

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People often ask me, “What should I look for before committing to buy a property?” There are two ways to make money in real estate. If the property is going to supply these profits for you, you would want to consider it.

  1. When the property brings you cash flow from monthly rents while also appreciating.
  2. When you make a profit re-selling the property through appreciation.

Now keep in mind, you can profit from appreciation two ways.

  1. Market appreciation – the economy is causing properties to increase in value.
  2. Forced appreciation – when you either buy property cheaper than what you can resell it for or you can do some improvements to increase the value more than what you spend.

Here are Three Most Important Questions I ask myself before I consider a property for investing?

  • Would we buy it for ourselves?
  • Would we want to tell our friends and family?
  • Is this a good deal for other real estate investors?

The most important outcome to consider is if the answer to this question is yes, “Will my money put into this property make me more money?”I call what I do real estate “investing”, not real estate “divesting”. You will always want to do the same. How do you know if it is going to make money? You do your due diligence before you commit to buy any property. Of course, as you know, there are never any guarantees in life.

However, if you have certain criteria every property needs to meet in order to profit and how to evaluate a property for those qualities, the likelihood that you will succeed are much greater. It’s very easy to get caught up in wanting to help people if they need to sell their house. Or you may just personally think a property is good looking. But those are not the only reasons you would want to buy. To avoid getting emotionally involved in a property purchase, I have created a due diligence checklist. I have provided a tool that has saved many people from both passing on deals they should take as well as taking deals they should pass.

I took from my own trials and errors & created a checklist – The Real Estate Investing “Before You Commit” Due Diligence Checklist. Keep in mind every one of mine or your personal due diligence items on that “checklist” do not need to be followed on every deal you consider. However, it’s a great list to follow and assure you have remembered to consider all that can affect the outcome of your purchase. Your due diligence makes all the difference on whether your purchase of property brings you a profit or a loss.

Rule #3 – Invest Using the Strategies that Make Sense and the Location That Makes Sense for the Current Market Conditions

I always say invest where it makes sense and dollars. You don’t need to invest in your home town, because you live there…nor do you need to go all over the country investing everywhere else. Do your homework and invest in locations that align with the real estate investing niche you chose using the strategy that is a fit.

For example, three years ago I was investing nationally in pre-construction in most strong appreciating markets. That strategy made sense at the time. It would not make sense in a depreciating market.

Today I live in a town that has been on the top 5 most foreclosures list for over 2 years. Why would I need to invest nationally when there are more than enough leads right in my own backyard? Where to invest varies depending on the location of the investment as well as market timing.

My investment choices change as often as the market does. Being sensitive and aware of changing market trends is helpful to know where to invest and the most profitable strategy to follow. The last four rules of the “Top 7 Tips To Minimize Your Risk & Maximize Your Profits” will be concluded in Part 2.

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.

Tax Deeds & Tax Lien Sales Investing – Part 2

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By Tamera Aragon

So here is a quick recap of Part 1 – Tax Deeds & Tax Lien Sales Investing: 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” with interest to a real estate investor. Should homeowners miss the payment deadline, the investor becomes owner of the property at a great discount. 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. In Part 1 – Tax Deeds & Tax Lien Sales Investing I covered the descriptions of the different investing strategies as well as the rewards and the risks investing in tax liens vs. tax deeds.

Tax Deed Investing Process For Real Estate Investors

Now I am going to cover some of the steps you will need to go through as you go through the entire tax deed process and come out a winner with your real estate investment.

Obtain and Review a List

Obtaining a list of the properties that a county is going to auction at the next tax deed sale is the first thing you need to do. You should first of all find a website for the county and see if they have or will publish a list of their tax deed sales on their website.

Sometimes the county will send you a list two weeks prior to the auction for a minimal fee. You will also want to know how often they update the list prior to the auction. If it is possible to obtain this information in person and meet the people at the county office, it is better than by phone. The more people you personally know and the more questions you ask the better off you will be when you really may need help.

Once you obtain a list, they are usually fairly limited on the information they give about the property. Usually it lists Parcel number, name of owner, address of owner or property sometime both, amount of taxes owing.

You will also want to find out:

  • Date of next auction?
  • When and how do they publish the list and how you may obtain a copy? (Often they are required by state law to publish the list in a local newspaper by a certain date. Usually newspaper will have a copy or it is available online.)
  • What is the actual auction and bidding format?
  • Do they require bidders to register before the auction?
  • What is the registration process for bidders?
  • How your tax deed will be paid for at the end of the auction?
  • How the auction is conducted and rules about bidding?

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Initial List Screening

Most lists will have more properties than you can possibly research. You need to screen the list for the types of properties that you are interested in. Usually there is a code number, the county staff can explain to you, that indicates if a property is a single family home, a developed lot, commercial, residential, duplex, apartment, etc. This is the first step in screening the kind of properties that you have decided you are interested in.

Second is to find the properties that are in the part of the town you may have determined you are interested in.

Third you can screen by the value of the property and the amount you are willing to bid.

Most of this initial screening can be done from a basic list.

Additional information that you want to obtain about the property include what type of improvements are on the property i.e. building, utilities, landscaping, curb and gutters, etc. or is it just land. Also find out the assessor value for both the land and improvements. Take note of the taxes due and when they were last paid. If there is a house or any type of building on the property find out the size, year built, number and type or rooms and if possible find about any other special features the structure may have. Learn additional information about the neighborhood by looking at the houses next door or across the street and maybe even talking to neighbors.

With all of the above information you can narrow your list down to the few properties that you need to drive buy and check out.

Visit the Property

If at all possible, a personal visit to the property is essential. If you can’t do that, a visit via the internet, through different search sites is the next best thing. However nothing tells the whole truth better than visiting the property. What seems like a very nice house could turn out to be next to a crack house or a busy grocery store or on a very busy street. What sounds like a normal building lot may have a beautiful view. You need to screen your list down to a number of properties that you can take the time to go see, especially with tax deed sales.

To save time and money you need to organize on a map your drive-bys so that you can find and record information about the properties in a timely manner. There are many mapping programs available on the internet that you can put the address in, and they will automatically give you a route. When you drive by, the number one thing is to take a picture of the property for your files. You want to write down identifying features found in the picture in case you get them mixed up. You want to rate the house, note any problems and repairs that are needed and rate the neighborhood. Usually unless the property is vacant you should not approach the house or talk to anyone about it.

Some quick things to take note of are as follows:

  • Paint and roof condition
  • Broken windows, doors, cement
  • Underground or overhead utilities
  • Trees, shrubs, general landscaping
  • Condition of adjacent properties
  • Property accessibility
  • Discolored soil or dead vegetation
  • Traffic on the street
  • House vacant, lived in, for sale sign

Make sure to drive around the area looking for any industry or business that would distract from the desirability of the property. Also look for similar properties in the neighborhood that may be for sale and call the owner or real estate agent to find out the price and condition as a comparison for properties value. You can print out this checklist on a spreadsheet that you can fill out while you are in the neighborhood and attach the picture of the property too.

Once you have accomplished all of this research, you are now ready to narrow your list, to the final properties that you will bid for at the tax deed auction.

Check for Recorded Problems

Now is the time to return to the county offices. Go to the county clerk’s office to check if there are any liens on the few properties you now have on your list. Some counties make this process very easy by having the information available online once you have the parcel numbers and address of the property. If there are liens on the property make sure you get the name and contact information on the business of person placing the liens. You need to also check for mandatory deed restrictions on the property. In other words, find out what you can or can’t do or build on the property. You should also check for any government assessment that may be filed against the property.

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The last thing you need to check, as close to the actual auction as possible, is to see if there were any last-minute redemptions by homeowners that would have removed the property from the auction table. One of the most frustrating things about tax deed auctions is the fact that many people don’t want to lose their property and will somehow pay their taxes at the very last moment.

It is not uncommon for a tax deed sale to have 40 to 50 percent of the properties redeem at the last minute. We therefore recommend that you research twice as many properties as you think you can afford to buy because half of them may be redeemed the last day or hour before the auction takes place.

Attend the Auction

The basic work is now over the fun and hopefully reward begins. Go to the auction with a very specific plan and stick to your plan.

Usually, you should arrive about 30 minutes before the auction begins, so that you can register, check the final list that will be there for any last-minute redemptions of your properties, find a good seat where you can see what is happening and review the written or oral instructions that will be given. You may be surprised that there will probably be many people at the auction. Only half of them will actually bid while the rest of the people just come to watch.

There are many types of people at the auction who you will be able to quickly identify. The professional investors who have deep pockets and usually win whatever bid they participate in. The local investors who know the area and the properties around their home or offices and understand value, they are important to watch. The beginners who have no idea what is going on and of course YOU. At this point just smile, stick to your plan and bid amounts. Do not get emotionally involved with the bidding.

Purchasing and Maintaining Your Deed

If you are a successful bidder on a deed, you will need to be prepared to pay the full bid amount plus any fees and outstanding taxes. In some state or counties, you will only be required to pay a deposit of perhaps 10% with the balance due in 30 days. You need to make sure that you have talked with the county official before the sale and know what the payment policy and procedures are if you are successful in obtaining a deed.

In some counties, the owner can still redeem the property within a year after the deed sale. Most states and counties, of course, recommend that no major expenditure and improvement be done during this waiting period in case the sale is over turned. However, this does not prevent you from using the property, renting the property, leasing the property with an option to buy, or using the property for financing purposes.

It is always best to consult with a local real estate attorney about any legal strategies you may have prior to final settlement. Whatever you do make sure that you place liability and fire insurance on the property as soon as the auction is complete. If something happens you will be liable and no one will overturn the sale at that time.

Selling the Property

Now it is up to you, your family, and your real estate agent as to how you profit from this real estate investment adventure once you have the finalized deed. The bottom line is profits no matter what strategy you follow. This concludes my article on Investing in Tax Deeds and Tax Lien Sales from a real estate investor’s prospective.

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.

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.

Targeting Properties – For Sale By Owner (FSBO)

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By Tamera Aragon

One of the longest proven successful ways to get good leads as a real estate investor is calling on For Sale by Owner (FSBO’s) listed properties. In my experience, I have found great success in helping FSBO’s with their situation while at the same time buying discounted real estate. If you are on a budget and just getting started then you can do this yourself, or if you can at all afford it, I highly recommend you hire someone like a virtual assistant to do it for you.

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Why Are FSBO’s Good Leads?

Often times homeowners who place their house on the market without a realtor ( FSBO’s), are in a position where they need to sell a home quickly. When this happens, you are able to help them by closing quickly with cash, while at the same time, you receive a great discount. There are many reasons a homeowner might need to sell quickly. Some are trying to avoid getting behind on payments, some are already behind on payments, others need to immediately move to new location for job, some received a property gifted through probate, may be experiencing illness or maybe the landlord doesn’t want to own a property for rent any more, etc. Whatever the specific reason a person doesn’t utilize a realtor and place their property for sale on the MLS, Craigslist, Kijiji or even EBay, it is likely there is an opportunity for you to get a great wholesale deal.

Where Do You Get FSBO Leads?

The first step is to locate the properties not listed on MLS, however for sale by the owner direct. How do you do this?

1. Classified Ads Online: There are several online classifieds such as Craigslist.org or Kijiji.ca or backpage.com and many others. It’s so easy to search the internet for this stuff just type “your city” properties for sale by owner; see what comes up in the Google and Bing search engines!

2. Newspaper classifieds: Checkout newspapers in the areas you would like to buy. (also often available online)

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What Do You Do Once You Have The Locations For Leads?

A. Grab a copy of the FSBO magazines offered for FREE in grocery stores. These could be great leads as someone is paying a lot of money to put their house in a magazine. I view this as sign that the owner could be a motivated seller.

B. Go the websites of newspapers and look at their classified section online. You can put these links in your favorites.

C. Visit FSBO online websites. Here are a few sites I like:

  • Owners.com
  • ForSaleByOwner.com
  • FSBO.com
  • HomesByOwner.com
  • Trulia.com

You will want to check the FSBO sections in these resources daily. If there is a good real estate deal for sale, it will be sold quickly to the person who acts quickly – You!

What Do I Look For In A FSBO Deal?

All ads listed could be potential investments. To save time however , you want to be looking for keywords or phrases that indicate the seller has a motivation to sell or is showing signs of flexibility. Here are a few examples of keywords to watch out for:

“Must sell” “Just reduced” “For Sale Or Lease” “Seller Financing” “Fixer Upper” “Handyman Special”

Create Your Motivated Seller “Hit” List

This is a list of those you will want to contact to find out more about the property and the seller’s situation. If using paper (like a newspaper in hand), you will want to mark the ads with your sharpie or highlighter as you are scanning the paper for those “motivated” words listed above. Mark as many ads as you can! It is better to have too many leads than too few. If online- – -copy and paste the ads found on newspaper, classifieds and FSBO sites to a word or excel doc, then print it out. Remember having too many leads is a good thing as it keeps your options open.

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.

Land Flipping & House Flipping – Are They Different?

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By Tamera Aragon

I have been buying and selling residential real estate as a real estate investor for almost 7 years now. I have invested in just about every avenue of real estate investing from Pre-construction, Assignments, Tax liens, Rehabbing, Probate, Bankruptcies, Pre-foreclosures, Short Sales, Foreclosures and REOs, Buy & Hold, and FSBO’s. I have profited from literally all of these strategies and showed others how to as well.

However, lately I have learned about a twist to an old strategy, one that I had heard about, but never done. Buying land and re-selling it via owner financing for a monthly profit, is the new real estate investing strategy. It goes even further, after you buy it and sell it with owner financing you can then eventually flip this property to another buyer. I picked this up from Jack Bosch, who has closed over 5400 land deals himself and I think he is on to something!

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I have found the biggest stopping points for many of my new real estate investing students are usually:

#1 – The risk of getting into something they cannot find funding for and letting people down
#2 – Getting into a deal and finding out later something was missed, causing financial loss.

Many new real estate investors are frozen stiff because of these fears. It is for this reason I’ve listed some of the reasons a real estate investor might want to add land flipping to their portfolio of investments.

Why Land Flipping Might Be Better

There is virtually no competition for land, especially rural land. This area of investing is over flowing with a lot of opportunity – there is an abundance of forgotten land out there that sells for cheap! You can purchase land for literally pennies on the dollar.

With land you do not have to know as much about real estate like construction, termites, mold and all the other things of that nature that you must know when investing in houses.Here are some compelling reasons to add land flipping to your real estate investing portfolio:

  • Very low, (or sometimes none), acquisition costs
  • Lower risk – limited money down to lose
  • Lower inspection requirements
  • Quicker closings
  • Less initial capital output
  • Buyers are usually more savvy investors
  • Good Potential for monthly residual income with your owner financing
  • Usually no upkeep required
  • Usually low holding costs (no fire insurance, fix up, utilities involved)
  • Higher number of buyers are repeat buyers (compared to home end buyers)

Why Houses Flipping might be Better

For some real estate investors flipping houses might have been the first investing niche that they started in. Let’s list the major reasons why house flipping is a good investing strategy:

  • More potential to generate income while you hold it – owner financing or renting
  • Everyone needs a house since shelter is a basic necessity of life. Not everyone needs vacant land
  • Potential to profit big doing just one good deal
  • Potential for higher monthly residual income per property
  • A lot more home owners in desperate situations than there are landowners.

Compared to the land flipping, house flipping might seem better, but the acquisition and maintenance cost are much higher for house flipping. Another thing to note is that land flipping profits on average, are lower than house flipping, and you must do more deals to profit higher dollars.

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Research the Region

Look for these market positives when investing in both land and housing deals:

  • Unemployment rate in the area of purchase is low compared to the national unemployment rate
  • Be sure to keep your ears open for news of major business expansions
  • General area & its population is growing and expanding. If it is, best if the area is expanding in the direction of the property you are interested in buying
  • Talk to the city and county planning and zoning agencies where the property is located; they will be able to give you valuable information about area growth and building projections.

6 Ways to Minimize Investing Risks

Here is a list on how to lower your risks for investing in houses or land before closing on any deal:

  1. Run necessary tests and inspections depending on specific area and property
  2. Check with county records to verify no complaints or notices for required repairs are filed
  3. Make sure you work with contract escape clauses to assure you can walk away for any reason.
  4. Avoid giving check or cash money down until you are positive you are going to close.
  5. Make sure that your purchase contract is worded in such a way that it allows you to only transfer cash at the time of closing.
  6. Make sure the title is not “cloudy” and property is marketable. Remember IRS liens have to be paid! If you buy a property with those liens, that bill becomes yours. Do your due diligence in running a title report before closing.

Land and House Flipping Similarities

In summary, you can follow a lot of the same strategies marketing to land owners as I’ve always done buying & selling to home owners. The best type of deal, whether land or houses, is when the seller, for one reason or another, wants a quick & easy way out of the obligation of owning their house or land – leaving you the opportunity to buy at a discount and profit in the short and/or long term depending on your goals!

Real estate investing, just like most things in life, has benefits and risks no matter how you look at it. There are always those unknown and unexpected circumstances. In the scheme of things, you need to decide…are you able to live a peaceful, joyful life as you are building your wealth through real estate investing in land and/or houses. Your personal risk tolerance is what only you can decide. I am doing both wholesale land and house flipping and holding, looking at each deal individually. Because most importantly, it is all about profitability and the bottom line!

Most Important!

Universally, success is about having a system, a RE power team and a mentor to help you down the path of real estate investing. Those are the keys to your success. Surround yourself with experienced people who are doing real estate investing successfully – they already have figured out the “code”. You can learn from them so – “Why re-invent the wheel?”, as they say.

Knowing you have experience at your side alleviates those fears of the unknowns, increasing the chances for a faster, easier and happier ride to the peak of real estate investing success. I would like to leave you with a quote:

“Perhaps the very best question that you can memorize and repeat, over and over, is, ‘what is the most valuable use of my time right now?’” – Brian Tracy: Professional Development Author & Speaker

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.

Attending REI Clubs And Other Networking Events

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By Tamera Aragon

“It isn’t just what you know, and it isn’t just who you know. It’s actually who you know, who knows you, and what you do for a living.” Bob Burg

Networking is such an important part of your business. You must let everyone know what you are doing. Everyone can be a “bird dog” for you – And you for them. Throughout the 30 years of owning several businesses, I can honestly say this type of marketing has been the most effective and the most fun!

A great book to read if you are uncomfortable with the idea of attending and speaking at events to network yourself and your business is “How To Win Friends and Influence People” by Dale Carnegie. It’s a great book that helps you to understand why you need to network with others as well as knowing what to say when you meet with new contacts.

Of course my belief in the benefits of networking is reflected as I founded a networking group called Women’s Success Group, (a nonprofit networking group since 1998) and now starting an Investors Network in my own town.

For the sake of this quick how-to article, I am going to focus and share all of my marketing strategies exclusively to those involved in real estate investing.

Networking Your Real Estate Investing Business

I would like to start with suggestions for some places to Network your real estate investing business.

  1. Search Real Estate Investor Clubs in Your Area
  2. Check meetings and trainings for local Real Estate Associations
  3. Check meetings and trainings at local Title Companies
  4. Check on handyman, builders and contractor associations in your area
  5. Ask everyone you talk to for referrals for networking events that have worked for them.
  6. Of course chamber events and networking clubs that meet at breakfast and lunch are a general source to get to know the general public.

I know the biggest fear and reason many people don’t attend networking events is they don’t know how to approach or what to say to others when first meeting them. So here is an idea – for every person you come in contact with at any type of networking meeting, your conversation might go something like this:

—–> “Hi there, my name’s __________. What’s your name?”
—–> “[Say their name] – What is it that you do?”
—–> “How long have you been doing this?” (Don’t be surprised most investors are part timers)

If they ask what you do for a living or about yourself, be prepared!

1) Hand them your card.
2) Summarize your business in 30 seconds or less.

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Real Estate Business 30 Second Commercial

This is where spending time writing down how you want to market you and your business is important. You want to be concise and clear in describing what you do and what types of referrals would be most helpful. Try to incorporate something that differentiates you from the rest. Here is an example of a 30 Second Commercial:

“Hi my name is _________________. I consider myself the real estate investor with a heart. My passion is to work with home owners in jeopardy of losing their homes to foreclosure. If the home owner wants to keep living in their property I give them direction on how to do that or if they just want out – maybe they lost their job and can’t afford to keep it any longer, then I offer to buy their property. My goal is to create a win-win-win. Win for the home owner/seller, win for me the buyer/ investor and win for the bank when I take the house off their hands. If you know anyone that can use my help I pay a $1000 referral fee to you when I buy their property.”

Here is my personal 30 second commercial to everyone:

“I enjoy buying and selling real estate having closed on over 500 properties in the past 5 years. Some people call me the Flipping Queen because as you know, flipping is another term for contracting to buy and then selling real estate quickly for a profit. Or as I say Flipping it. I look to invest in residential real estate at a discount through Pre-Foreclosures, Short Sales, REO’s, Bankruptcies, Probate, as these are the usual reasons a seller is motivated to sell a property at a discount. After I am in contract to buy, I will often “flip” or turn the contract or property to an end buyer at a discount too. Are you interested in buying and/or selling discounted residential real estate?”

Real Estate Investing Networking Questions

Now What? Listen – Listen -Listen to their response or their own commercial. The important thing is that you are interested in what they do for a living. Don’t talk about yourself or again until asked. Ask them questions about their occupation and how you can be of support to them in their line of work. If this person is a potential power team member for you, ask if you could contact them in the future. (You would be able to follow your list of questions for power team members and take notes when you called them back)

However, if this person is an investor, you might want to ask some of these questions:

  • “Do you buy, fix and sell or do you buy and hold?”
  • “How many properties do you own and/or have you sold?”
  • “What part of town do you invest in?”
  • “Really, why that area?”
  • “What do properties cost in that area?”
  • “Do you pay cash for them or what banks do you use that are investor friendly?”
  • “What title company do you enjoy using the most?”
  • “Do you know any of the other people here?”
  • “Who are the big investors in this area?”
  • “If you ever come across some good deals and you don’t want them let me know.”
  • “By the way, do you have any property you want to sell?”
  • “We sometimes have properties for sale as well, if you’re looking to increase your inventory.”
  • “Well, Mr. /Ms. Investor based on what you told me and where you prefer to buy; if anything comes along I’ll make sure to call you first.”

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What To Do “After” a Networking Event

Make sure to collect everyone’s card, email address, fax, cell, and correct spelling of first and last name. Write a note or 2 on the back of their business card helping you remember the next steps you will want to take with this contact in the future. Just a “nice meeting you” card in the mail or email is often a memorable gesture encouraging future communication regarding each other’s business needs.

Networking should be a part of everyone’s marketing plan. Attend, join, participate – whatever you want to call it – your local REIA or REI clubs and real estate networking events. The important thing is to get in front of people!

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.

Enjoying The Mindset Of A Successful Real Estate Investor

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By Tamera Aragon

Quote to live by: “The one thing you can’t take away from me is the way I choose to respond to what you do to me. The last of one’s freedoms is to choose ones attitude in any given circumstance.” ~Viktor Frankl

You Own Your Thoughts, Now Control Them

What if it was possible to be happy even when things aren’t going your way? What if there was a simple way to be happy, despite your environment, while staring adversity straight in the eyes? Would you like to know how to ignore the “nay sayers” and the media full of gloom and doom telling you every reason why you cannot be successful investing or flipping properties in today’s market?

Would you like to get rid of the noise in your head telling you every reason why you shouldn’t make an offer on a property or you cannot really make money at buying and selling houses or some other crazy negative thing. That’s right – no more hurtful critical thoughts! Can you imagine?

I know it sounds like a great idea, but doesn’t seem to be very realistic at first glance. The good news is, it doesn’t have to be realistic, it just has to work, and it will, if you stick with a few basic principles. The key here is in the simplicity, and in keeping yourself accountable for sticking with the following principles.

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My Experience

This is a system I’ve been using for quite some time, and can testify to its merit. I decided that I was tired of being unhappy, and letting my own made up fears or even the real environment and the people around me control how I felt.

Be Selective In What You Think About

The wonderful thing about thoughts is that you genuinely own yours. No one else has power over what you think about. With this power, you are faced with a big choice that can impact your entire existence.

  • Positive Thoughts. You can choose to think about goals, ambitions, people you love, beautiful scenery, and things you enjoy. This affects your physiology by making you stress free and healthier.
  • Negative Thoughts. You can choose to think about death, disappointment, destruction and misery. It’s so stressful to think about how unfair life is, which causes your immune system to take a dip.

Ask Yourself the Important Question

Yes, a single question is powerful enough to change your thoughts. Just ask yourself: How do I want this to affect me?

When you ask yourself about what you want, you are able to take control. If being happy in the face of adversity is what you want, than you choose to let yourself be affected positively. You take negative situations, and treat them as a learning experience.

Instead of taking minor discomforts and turning them into major frustrations, let them affect you in a positive way. For example, you can turn a 48-hour commute into a learning experience.

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Switch Channels

Treat your life as a television set, and when your thoughts project channels of unhappiness, hit the next button on your mental remote. Switch to something pleasant and stick to the happy networks.

Remember, you control whether your thoughts are positive or negative and with this choice you own your happiness – which, in affect, will make you healthy, wealthy and wise.

Steps to Success

  1. Put a rubber band on your wrist (not too tight – don’t want to cut off your circulation)
  2. Every time you notice yourself thinking something negative, pull that rubber band and snap it… just enough to make you jump. This is called cognitive conditioning. By inflicting some discomfort when you perform a behavior you want to change or stop, this will help you to subconsciously avoid doing that thing over time.
  3. In addition to inflicting discomfort, change your mind’s channel by asking yourself the question: How do I want this circumstance I was just thinking about to affect me? Of course you “want it” to affect you positively somehow. This question, though you may not have the answer in the moment, will get your brain working on the solutions rather than focusing on the problem.

“Positive and negative are directions. Which direction do you choose? When you affirm the positive, visualize the positive and expect the positive, and your life will change accordingly.” Remez Sasson

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.

Don’t Quit Your Real Estate Investing Dream

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By Tamera Aragon

Today, I wanted to share one message – Don’t Quit! That’s it. Don’t Give up! Wherever you’re at, whatever you are doing, If you have a dream or a goal and a life that just might seem too hard today… I am writing to tell you – Don’t quit!

Please enjoy the five-minute excerpt from the movie, ‘Facing the Giants’, it’s a piece of inspiration for anyone that is in the real estate investing game.

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In this video, a football coach teaches a valuable lesson about the limits we place on ourselves. And how important it is for you to NEVER GIVE UP as others watch you, as a leader.

Have you ever felt…. “I’m successful at my day job, but I’m failing at my new venture…” Then you will want to learn this mindset reset tip offered by my friend Doug.

“Sam had always been pretty good at most things she attempted, she was also great at her job, so when she was introduced to a money making opportunity, she figured ‘why not?’”

After investing a lot of time and money, Sam still wasn’t seeing the rewards she felt she’d been promised by the promoter. She said she knew there were other people that were creating success following the same things she’d learned, so she’d concluded that she must not be cut out for it. “I’d better just quit, I’ll never get the hang of this, I’m a failure” she complained.

I invited her to consider shifting her perspective on the matter. “Rather than assuming you’re a failure, would it be more correct to say that you’re a person with many successes under your belt who hasn’t yet mastered this particular skill?” She hesitated, “uh, yeah I guess that’s right.”

I could see the gears turning, so I went on, “and what would happen if rather than assuming you’re failing at this new venture, you decided your results were just feedback telling you what changes you need to make.” “What do you mean?”, she asked.

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I went on, “have you ever slipped on an icy sidewalk before?” “Yes, I’ve done that” she said sheepishly. I continued, “So did you conclude you’d failed at walking and that because of that you yourself were a failure so you should just probably hang the towel up on everything?” “Of course not, that would be silly,” she laughed.

“When you’re right, you’re right,” I smiled. “Whether you realize it or not, you implemented the feedback you got from the ice. You thought, hey, there’s slippery ice on the sidewalk and adjusted how you walked. Perhaps you stepped more carefully. Maybe you grabbed some sand or salt and spread that over the ice. Maybe you got off the sidewalk and walked around the ice. The point is, you changed what you were doing and successfully got to where you were going.”

Armed with this new perspective, Sam proceeded to pay careful attention to what she was doing and tracked her results. She then considered what things she could adjust that would affect her outcome, and get her the result she wanted. By implementing one change at a time to and tracking her activities, eventually, she figured out what tweaks she needed to make to achieve her outcome.

Remember, there is no failure, there’s only feedback.” ~ Doug O

In closing, here are some powerful words from the man whose life displayed this “don’t quit” attitude wholeheartedly…. Winston Churchill left us with these words of wisdom:

“Never give in. Never give in. Never, never, never, never—in nothing, great or small, large or petty—never give in, except to convictions of honor and good sense. Never yield to force. Never yield to the apparently overwhelming might of the enemy.”

Be Inspired…..

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.

REO’s (Real Estate Owned) Investing Explained

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By Tamera Aragon

Let’s explore a real estate investing niche that could bring you riches: REO’s (Real Estate Owned By The Bank). It’s formed from the third and final stage of the foreclosure process. An REO property is created when no one purchases the house at the auction, forcing the bank to buy the property back itself. Remember the bank didn’t want the house back, but the property was the collateral for the money lent to the homeowner. The property now becomes “Real Estate Owned” meaning- it’s 100% owned by the bank. REO investment properties can present many profitable opportunities for real estate investors.

Why Is Investing in REOs a Good Niche to Consider?

  1. Below Market Value – One of the prime benefits of buying a REO property is most REO properties are available at below market value. The reason for this is that the bank is liable for the taxes on the property and they generally prefer to sell it to you at below market value and get it off their books.
  2. REOs are a Nightmare to Lenders. Property taxes, city and county assessments, utility bills, and maintenance costs eat into the lender’s profit. The threat of vandalism and illegal occupancy requires that lenders board up REO windows and doors. Often times lenders must hire security services to watch over REOs to keep out trespassers. For these reasons, lenders are often eager to sell REOs quickly.
  3. You are Buying Property Free and Clear of Liens – once you close, you receive clean title policy without exception.
  4. No Back Taxes – banks have paid everything at closing.
  5. House is Most Often Vacant – I can go there as much as I want before I close.
  6. Clear Equity Value – You do not have to argue about “correct” amount of equity with the homeowner.
  7. Minimum Risk – Among the different types of bank foreclosed properties – pre-foreclosures, foreclosure at auctions or HUD foreclosures – REOs offer the buyer the least amount of investment risk. REOs are generally properties that have survived a foreclosure auction and now belong in the lender’s inventory of non-performing assets. The banks maintain these properties and are generally sold free of liens and other encumbrances. This is why you would use a title company to insure the property in case a lien as later found.
  8. Availability – Compared to other foreclosure properties, REOs are easier to locate. All you need to do is to contact any Real Estate Agent who will send you current listings. You might also go online to mortgage companies or banks directly. You can usually find a list of REOs in your area online if there are any. Pick an area and start buying every good deal in sight. 🙂
  9. Potential for Great ROI (Return on Investment) – Reselling a foreclosure home can provide a great return on your investment. You may not be interested in buying a foreclosure property for yourself, but you still have the option to make a profit by reselling it. After all, this has been the most frequent practice used by many real estate agents to generate income. Moreover, a little renovation work can further add to the value of the property and generate higher returns.

Buying REO’s is one of the best ways to generate profit in the real estate market today. However, before you finalize your purchase, make sure you do your due diligence and research the property so you feel comfortable with the purchase. It’s important to research as much as you can about the area, current housing prices, planned developments, proximity to stores, the town, etc. This research can save you many headaches and problems down the road. The research required and other steps to succeed in this niche should be supplied to you by your mentor, trainer and coach.

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What Are The Downsides of Investing in REOs?

  1. While there are bargains to be found, REO properties don’t always sell below market value. The bank will always do a BPO (a kind of appraisal) and often the person doing this property appraisal is from out of town and does not completely understand the market.
  2. It can be difficult dealing with bank-owned properties as some lenders are in offices far away from where the loss-mitigation department is struggling to process the listings and getting everyone in sync on your end can be a challenge. Today’s REO’s are almost always handled by the bank hired Real Estate Agent who would be accepting your offer from another agent or representing you in the process.
  3. The investor must be careful when looking at bank owned property to know what the real value of the property is. The bank owned property might not be a great bargain. Be sure and include a time for inspection in your offer contract and do your homework before finalizing. Make sure that the price you pay (if you’re successful in getting offer accepted) is comparable to other homes in the neighborhood. Consider the costs of renovation, including time to complete them. Don’t get caught up in a bidding war and pay more than you should.

Good Market Conditions:

  • A lot of houses on the market
  • Average time on the market for houses is 4 months or longer
  • Depreciating Market
  • Large number of foreclosures

Bad Market Conditions:

  • Low inventory of Houses
  • Average time on the market for houses is 3 months or less
  • Appreciating Market
  • Low number of foreclosures

10 STEPS TO INVEST IN REO NICHE

1. You must find the right buyer’s agent to work with you on finding properties. If you are going to employ the services of your own real estate agent (a buyer’s agent) be sure to find one based on the following criteria:

2. Ask Realtor for a list of all REO properties with some recommendations for good deals.

3. Ask Realtor to contact you first when they know of an impending listing giving you chance to make an offer before it hits the market.

4. Before finalizing your offer, have your agent contact the listing agent and ask the following:

  • Are there any inspection reports?
  • What work has the bank agreed to?
  • Is there a special “as is” form?
  • How long does it take the bank to accept an offer?
  • How does your agent deliver the offer

5. Make an offer.

Your offer should include an inspection contingency period that allows you to terminate the sale if the inspections reveal unanticipated damages that the bank will not correct. Even though you agreed to purchase property “as is,” always give the bank another opportunity to make repairs or give you a credit after you’ve completed your inspections. Sometimes the bank will re-negotiate to save the transaction instead of putting the property back on the market.

Banks do not want to see a lot of proprietary disclosures; For instance, they are exempt from the California Sellers Transfer Disclosure Statement (TDS-14). If there are real estate agents involved, either representing you or the bank, those agents are required to provide you their disclosure statements.

Offers are usually FAXED to the bank. The listing agent needs your originals. There is no formal presentation. Keep in mind: nothing happens evenings and weekends (banks are closed).

6. Since there is no face-to-face presentation to the bank, provide the listing agent with a pre-qualification or better yet, a pre-approval letter along with proof of funds and copy of down payment check. A cover letter adds a nice touch as well. You should make your offer easy to accept.

7. Wait for bank to counter or accept offer.

8. Negotiate terms until a profitable offer is accepted by the bank in writing. (Do not spend money on property until you see a written acceptance by the bank)

9. Close on the property

10. Sell or Rent property for profit.

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Where to Obtain REO leads:

  • Search Public Records:
    In various stages of the foreclosure process, notices are recorded with the County Clerk at your County Recorder’s Office. This information is public record and is available to anyone. Just visit your county’s office and you can search for a Notice of Default (NOD), Lis Pendens or for a Notice of Sale. The best part of searching public records yourself is that it is Free. In addition, you’re likely to find newly posted properties that haven’t yet reached many of the online foreclosure data providers.
  • Find Asset Managers:
    You can also find REO properties through Asset Management companies. Simply put, these companies help lenders dispose of assets. Many of these asset management companies will provide listings of the REO properties that they represent on their website.
  • Find Government Foreclosures:
    The government can also foreclose on properties. Good place to start is www.hud.gov.
  • Make contacts at local community banks who take in their own REO’s and make friends with the person who oversees the sales of them. Many smaller banks don’t have as many REO’s therefore, don’t send out to other companies to handle.
  • MLS: This is the most common way to find REO’s today is this way. After a property has been foreclosed on and taken back by the bank, they are usually listed with a Realtor on the Multiple Listing Service (MLS). .With the number of foreclosures banks are holding right now and most are not handling their REO’s sales in-house. In fact it is nearly impossible to purchase 1 single REO from a large bank, let alone going in with millions of dollars offering cash for bulks of them. I personally have not been able to get through to the big banks directly to buy REO’s for the past 18 months as of the time of this training. This is the source I have used most successfully in today’s market.

This concludes my article on Investing in Real Estate Owned by the Bank (REO’s)

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.

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