Back to Basics
By Mike Jacobson
Why do coaches keep having athletes perform basic drills? To drive home fundamentals to the point that they are executed without having to think.
Several fundamentals are key to building long-lasting real estate portfolio that provides financial freedom:
1.Know your why.
This forms the basis of why you are in real estate and what your objectives are. For most people, the top drivers to wanting financial freedom are: freedom to do the things you want with the people you want, spend more time with family, travel, and give more to charity or paying it forward. Personally I like to have a reminder of these things on the refrigerator so that I see them every morning.
2.Integrity.
A good reputation takes time to develop, but it can be trashed in a single moment.
Why do we go to real estate networking meetings? Education is only a part. An equally important part is to know who to do business with. And who not to do business with. Although everyone is expected and instructed to do their own due diligence, business is a lot easier and more fun when it is done with people you can trust.
We become like the people that we spend the most time with, such as our five closest friends or associates. Growing up we were told to choose our friends carefully as you are known by the company you keep. Business works the same way. People watch success and follow it. It gets even more important as we become more like the people we spend time with.
3.Meet with sellers.
I had the opportunity to observed a panel of experienced real estate investors recently. Each of them spends 25 to 75 percent of their time meeting with sellers. The technique for finding sellers is not nearly as important as getting in front of them and to the kitchen table. Door knocking works with a low budget, while yellow letter campaigns get to a larger number of people quickly. It’s all about the numbers. The more sellers you meet, the more offers you can make.
4.Make offers.
Income is directly proportional to the number of offers you make. Make an offer to every seller. Follow up if they don’t take it. I like to make both a cash offer and a terms offer. Even if you know a seller’s general reason for wanting to sell, you don’t know what else he is thinking. So making two offers gives another opportunity to get the seller thinking and talking about their needs.
What are some exercises that we can do to drive home these fundamentals?
Go to meetings and get to know other investors. I like to attend at least one every week.
Find an experienced investor that you like and take them to lunch.
Spend time giving back. Don’t wait for your financial freedom day.
Volunteer. It’s a great way to get to know other like-minded investors.
Knock on a door when you see a For Sale By Owner sign. Find out why they are selling by asking Pete Fortunato’s favorite question, “Why are you selling such a nice house like this?”
Then make an offer. Even if it is just on a yellow pad with basic terms.
Keep it simple. Just get out and do it. Over and over. And remember four things:
Know your why, grow your network with integrity, meet with sellers, and make offers.
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Why do coaches keep having athletes perform basic drills? To drive home fundamentals to the point that they are executed without having to think.
GaREIA Motivational Minute
Real Estate Investing Requires Self Motivation
by Paul Esajian
Working for yourself is unlike most other jobs. There is nobody telling you what to do and no paycheck waiting for you on your desk every two weeks. Not unlike most commissioned employees, as an investor you make your own schedule and ultimately dictate your own income. For many people, this is the main reason why they got started in the business – to avoid being told what to do and how much they can make. While this certainly seems like a great way to work, it is not for everyone. If you can’t push yourself to get the work done and find deals, you may not last very long in the business. Real estate investing requires self motivation.
If you do not have a business partner, you have nobody to hold you accountable. Even if you have a spouse and kids, they will not be standing over you every day telling you to pick up the phone or get in your car. You need to be able to motivate yourself every day and with every deal. Some investors are motivated by money, others by fear of going back to their nine to five job. Others have nowhere else to go and need to make their investing business work for them. Whatever it is that you use, you have to draw on it every day. The minute you start to take your business for granted, it will slowly start to slip away.
It has often been said that the difference between successful investors and those struggling for deals is that the successful investor will do what others won’t or don’t. Regardless if you work out of your house or at a dedicated office, there will be plenty of downtime and time spent by yourself. You can choose to spend this time surfing your favorite websites and looking at your fantasy football teams or you can separate your work and personal time and stick to the grind. Thirty minutes can quickly turn into an hour which can turn into half a morning of time spent doing nothing. If you add this up over the course of a week, you will see plenty of hours missed that should have spent working on growing your business.
It is very easy to get sidetracked once you close a deal and get a bigger check than you are used to. While this is a good thing, you need to remember that this check has to last you a few weeks or a few months. Once one deal closes, you need to have a new one coming in. The reality is that after business expenses, fees, closings costs and reserves, that big check will not take you very far. Most people are motivated by success and will work harder after getting a feel of just how good the business can be. There are, however, many investors who will basically shut their business down for a week or two after a closing and rest on their laurels. It is this valuable time when you should reach out to people involved in the deal and grow your business instead of hurting your shoulder trying to pat yourself on the back.
You are the CEO of your investing business and it is up to you to dictate the success or failure you encounter. The harder you work, the more successful you will be. How hard you work is entirely up to you.
GaREIA General Meeting Keynote Speaker:
Sonia Booker
What’s Your Investment Game Plan?
3 Things You Should Know About Investing in the Atlanta Market
How to Create Opportunities that Build Wealth
About the Speaker
The term “Wealth Builder” has become synonymous with Sonia Booker; an “uber” entrepreneur and real estate guru. Sonia is among the nation’s top ‘Go To’ thought-leaders on wealth creation and real estate investing. She is also one of the most sought-after speakers and real estate coaches.
Sonia is the author of “Real Estate and Wealth: Investing in the American Dream.” This bestseller is a simple, step-by-step guide to purchasing real estate as a form of wealth building.
Sonia’s DVD, “7 Basic Truths of Wealth Building” has also sparked eager conversations on how small changes now can create large rewards later. She’s also the creator of the iBuild Wealth™ Workshop and Everything Real Estate Conference & Expo.
This savvy wealth-builder started her first business at the age of twenty-four; an Allstate Insurance Agency which she later sold at a profit. Then, for twelve Years, Sonia worked with her mentor and friend, the late Herman J. Russell, legendary founder of H.J.Russell & Company. It is this iconic Atlanta-based builder and real estate mogul whom she credits with spring-boarding her knowledge and success.
GaREIA meets on the second Monday of each month at the Wyndham Atlanta Galleria, 6345 Powers Ferry Rd, Atlanta 30339.
Doors open at 5:30 pm.
GaREA is pleased to welcome our new Business Associate members:
GaREIA Success Story:
Journey to Full-Time Real Estate Investor
or
(How Quit My Day Job)
By Kyle Kufeldt
About 5 years ago, I got to a point in my career where I felt like I wasn’t getting back as much as I was putting in. So much so, that work was no longer rewarding for me. I no longer saw my corporate job as a career but rather I saw it for what it was. I was trading my precious time, for money. That put me on a course to find a better way. A way that I could somehow support my family but also have the freedom to spend my time on my terms. When I started that journey, I very quickly realized that the best way to do that, was to be in charge of my own business but I didn’t have any great idea or inclination as to what business I would start. The one thing I did know, was that I would need some seed money. In 2011, my wife and I started putting money aside for a future unknown investment.
Fast forward to the summer 2013 and I still hadn’t really latched on to any one thing but was still unsatisfied in my corporate job. That motivation continued to push me to research and try to find something that I felt could replace my current career. That is when I found a book on Amazon kindle that was only $1.00 but which discussed compounding through real estate investing. It opened by eyes to how buying rental properties could build wealth and eventually replace your day job with passive income. From that point on, I was hooked and through my google searching on different real estate topics, I found a website called BiggerPockets.com. I immediately joined the website and from the websites recommendation, I wrote my first “newbie” post introducing myself. One of the first people to respond to my post, was Curt Smith who recommended I join GAREIA.
I could tell from Curt’s enthusiasm and comments that GAREIA was a good place to learn and network. About 6 months later after attending different subgroup and monthly meetings, I started a direct mail campaign to find some motivated sellers. Through that initial campaign of only about 100 letters, I found my first deal. While I had the money to buy and renovate the property, I knew I didn’t have the experience or the time, to be able to devote to renovating the property. I knew the best way to shorten the learning curve and hopefully huge mistakes, was going to be to find someone that I could walk me through the process. That is when I started to reach to other investors and started to take them to lunch to learn about their own background. From that process, I found an experience investor that was flipping houses and also building up a rental portfolio of passive income. I presented him the deal I had found to see if he might be interested in partnering. He ran the numbers on the deal, and we did end up partnering on that first flip. I looked at it as a paid education and I learned a lot from that experience.
From that first flip, I could finally see a path to being able to eventually quit my corporate job and do real estate investing full time. Since the beginning of 2014, I have continued to stay active with GAREIA and try to attend many different sub group meetings as my time and family would allow while working a full time job. My Personal favorite is the REI Strategies meeting held every 3rd Wednesday of the month by Darlene Conquerel. I have also attended many of the Creative Financing, Wholesaling, Intown rehabbers, and Northside rehabbers meetings. I learn something new from each meeting and make new connections which is so important in real estate investing. I also believe in paying for additional education which led me to join Steve Laube’s class on “Mastering Passive Income: How to quit your date job. Steve is such a great resource to GAREIA as are all of the volunteer instructors that spend their time giving back to the community.
As I continued to learn and grow in my real estate investing knowledge, I continued to flip another 4 properties, wholesale 2 properties, and have also accumulated 3 rental properties while working a full time job. While flipping properties is still technically a job, I have much more freedom and my eventual goal is to continue to build up my rental portfolio to reduce the need to flip. Earlier this spring, I realized my successful flipping business and my pipeline of additional properties, would allow me to replace my income in the middle of this year. That is when I set a goal to make the transition to a full time investor on July 15th.
Needless to say, I accomplished that goal last month and owe all of my success to date, to GAREIA and the amazing leaders and experts that I have learned from along the way.
Want Even More Real Estate Investing Education?
Participation in GaREIA's Boot Camp is a great way to kick-start your real estate investing career! Sign up now for our next class coming October 21st - 23rd!
FOR ADDITIONAL DETAILS & TO SIGN UP FOR THE OCTOBER BOOT CAMP CLICK THE BUTTON BELOW
This hard-core real estate investing training that includes a property tour with live, ongoing GaREIA deals will fully equip you to start investing in real estate. Learn where to find the funding, land the deals, and make the SALES at this exclusive event.
Taught by a GaREIA faculty of tenured investors, experienced legal and financial professionals, and lifelong educators. Sign up now for our next class coming October 21st - 23rd!
FOR ADDITIONAL DETAILS & TO SIGN UP FOR THE OCTOBER BOOT CAMP CLICK THE BUTTON BELOW
GaREIA News Notes: July/August 2016 Edition
**Foreclosure Inventory Continues to Decline
This week data powerhouse CoreLogic released their May 2016 National Foreclosure Report showing that nationwide foreclosure inventory declined by 24.5% with completed foreclosures declining by 6.9%, compared with May 2015. The actual number of completed foreclosures decreased from 41k in May 2015 to 38k in May 2016 – representing a 67.9% decrease from its peak of 117,813 in September 2010. In addition, the nationwide foreclosure inventory was approximately 309k homes (1% of all home with a mortgage and the lowest since 10/07) compared to 517k in May 2015.
“Delinquency and foreclosure rates continue to drop as we experience the benefits of a combination of tight underwriting, job and income growth and a steady rise in home prices. We expect these factors to remain in place for the remainder of this year and for delinquency and foreclosure rates to decline even further,” said Anand Nallathambi, president and CEO of CoreLogic.
**Choice Act: Fixing American Finance
Congressman Jeb Hansarling (R-TX), Chairman of the House Financial Services Committee recently introduced new legislation called the Choice Act that calls for moving the country away from the Obama Administration’s financial control law (Dodd-Frank) to a new paradigm in banking, capital markets and financial opportunity.
Over the weekend the Wall Street Journal featured a lead editorial about the plan and how it will benefit America. The WSJ says Hensarling’s plan will “promote economic growth and protect taxpayers.”
The Texas Congressman wants a simpler system in which private investors with money at risk decide which assets are safe. Under the Hensarling plan, banks can opt out of today’s complicated rules if they have capital equal to 10% of their assets. Their tally of assets has to include off-balance-sheet exposures. No more hiding toxic paper in conduits or structured-investment vehicles as Mr. Geithner allowed Citi to do before the financial crisis. And no more pretending that a financial instrument has no risk because a regulator says so.”
“The Hensarling plan would make the financial system more stable by encouraging greater diversity. Freed to make their own decisions on the quality of assets, some banks would run off the rails, but they are less likely to make the same mistake at the same time.”
**Zillow is Working to Improve Zestimate’s Accuracy
Real estate information & home-related marketplace site Zillow recently announced that it was fine-tuning its Zestimate algorithm to boost accuracy and improve its median error rate from 8% to 6%. Zestimates are published on more than 100 million homes across the country based on 7.5 million statistical and machine learning models that examine hundreds of data points on each individual home. To calculate their Zestimate, Zillow uses data from county & tax assessor records as well as direct feeds from hundreds of multiple listing services and brokerages.
“Since we launched the Zestimate 10 years ago, we have been continually working on making it even better. With the additional statistical models and computing power behind today’s update, we are able to provide consumers even better information about millions of homes, equipping them to make informed decisions when talking with a real estate profession about buying or selling.” said Stan Humphries, Zillow Group chief analytics officer and creator of the Zestimate.
**Best Cities to Invest in Real Estate on a Budget?
What are the best cities to invest in real estate on a budget? Of course everyone has a budget they have to work with – even Donald Trump. Recently Realtor.com (using data from HomeUnion) crunched the numbers to find the top ten markets for first-year home price appreciation as well as the best first-year return on rental properties. The data drew on single-family homes priced $232,500 and under, representing the median price of existing homes at the time of the survey.
“The timing is right to invest in real estate: Median prices on existing (and not newly built) homes are expected to increase 6% this year, according to realtor.com. That makes housing a stronger bet than other investment opportunities such as the stock market, which has been delivering anemic or wildly uneven returns.”
“…Even when times get tough, or the country falls into a recession, rental properties still do relatively well…”
**Home Values 77% Higher in Zip Codes With Good Schools
ATTOM Data Solutions (parent company of RealtyTrac) recently released their 2016 Schools and Housing Report, which shows that homes in zip codes with at least one good elementary school have higher values and stronger long-term appreciation than those in zip codes without any good elementary schools. The report analyzed data from nearly 19k elementary schools in over 4k zip codes with a combined 45.9 million single family homes & condos. A good school is defined as any with an overall test score at least one-third above the state average.
“While good schools are one of the top items on most homebuyer checklists because of the quality-of-life benefit they provide, this report shows that high-performing schools also come with a financial benefit for homeowners in most markets — at least over the long term…..Meanwhile, home prices in zip codes without any good schools tend to be more volatile, which might work to a homeowner’s financial benefit in the short term but not over the long term of at least 10 years.” Said Daren Blomquist, senior vice president at ATTOM Data Solutions (parent company of RealtyTrac).
**1st Comprehensive Update to Low-Income Housing Programs in 18 Years Becomes Law
Last Friday, President Obama signed The Housing Opportunity through Modernization Act of 2016 which is the first comprehensive update to the nation’s low-income housing programs in 18 years as well as requiring the FHA to reform their condo financing regulations and make low-down-payment FHA loans more available to moderate-income buyers. Both the House and the Senate passed the legislation unanimously. This bill has been in the works for 10 years. And while the bill was not earth shattering, it could be a signal that Republicans and Democrats are open to more housing reform bills – especially considering its unanimous passage.
The bill was supported by a broad range of housing groups, including:
In a joint statement, the National Multifamily Housing Council (NMHC) and the National Apartment Association said “We applaud the U.S. House and Senate for the swift passage of ‘The Housing Opportunity through Modernization Act,’ which maximizes the impact of taxpayer dollars and eliminates inefficiencies in critical federal housing programs. This vital legislation streamlines the Section 8 Voucher Program’s property inspection process by allowing immediate occupancy if the apartment home has been inspected within the past 24 months. The bill will also extend the contract term for project based vouchers from 15 to 20 years.”
The National Association of Realtors said the bill “will dramatically improve long-fought restrictions on Federal Housing Administration financing for condominiums.”
**Brexit Unlikely to Roil U.S. Real Estate Sector
A recent article in USA Today says several real estate experts predict that fallout from the United Kingdom’s vote to break away from the European Union (the so-called Brexit) will not negatively impact the U.S. real estate sector in the same manner as it has affected Britain’s – which has raised uncertainty about market prices.
“The fundamentals of U.S. real estate are positive,” said Cedrik Lachance, director of U.S. REIT research at Green Street Advisors, a California-based real estate research firm. “That seems unchanged to us.”
The lower rates “could provide a boost for lower-income U.S. buyers” hoping to enter the real estate market, said Lawrence Yun, chief economist for the National Association of Realtors.
**Are Real Estate Buying Habits linked to Social Media Behavior?
By Brad Beckett
Yes, you read the subject line correctly. Citing a recent study from NYU, Harvard and Facebook, CNBC is reporting that decisions people make about buying property are heavily influenced by their participation in social networks – in particular Facebook. According to the report, if someone’s Facebook friends experience increases in their house price, they are more likely themselves to invest in property over the next couple years. Talk about peer-pressure, the study suggested a significant impact on local housing markets, in aggregate. The report looked at home pricing and volume data from 831 counties (covering 1998 to 2012) as well as Facebook network information of the various residents.
“A person who is currently renting and whose Facebook friends saw their homes appreciate 5 percent more than the market average in the past two years is 3.1 percentage points more likely to buy a home themselves in the next two years. The researchers also found that people are more likely to buy a larger house, pay more for a given house and make a larger downpayment.”
GAREIA Subgroup: Commercial/Multi Family
Led by Matt Boettinger
Meets the first Tuesday of each month at 7:00 PM at GaREIA Headquarters
Always remember, GaREIA is here to provide educational material, not legal advice! Do not apply this information to your specific situation without the advice of an attorney and any other appropriate professionals.