If...

My brother is in an advanced Medical School and is going through the ups and downs with the challenges that come from such an advanced and intense program. With that I have been reflecting on Quotes and Poems that I believe in. Not just things that sound pretty, or something I think is nice. But things that shake me down to my very core.  Things that make my Soul Sing and chills go down my spine.

Quotes that you not only agree with but you believe are a part of who you are or who you want to become on a level no one understands but you. I was fortunate to attend a school, in my elementary years, that required us to memorize poems. I struggle with memorization, and it is interesting how something will happen that brings back a spark of memory back.

A few nights ago my wife and I were watching a movie and someone quoted the first line of this poem.  As they did lightening went through my body and I remembered the first part of this poem.  I have read it several times over the last two days and I want to share it with you. If you have Poems or quotes that sing a song to your heart or make chills go down your spine, not stupid cute poems, but ones that have serious meaning, I invite you to share them with all of us by making a comment to this post.  I will work to highlight what I feel are the best of the best.

Being a real estate investor is not an easy thing to do. We have seen several real estate investors take advantage of people and situations. We have also seen many more investors do the right thing no matter the cost.  Either way if we had more people that governed their lives after this poem the world would be a much different place.

I now share with you “IF” by Rudyard Kipling. I do so as a Reminder to my brother and to my son for what I believe a model life should be…

If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too:
If you can wait and not be tired by waiting,
Or, being lied about, don’t deal in lies,
Or being hated don’t give way to hating,
And yet don’t look too good, nor talk too wise;

If you can dream—and not make dreams your master;
If you can think—and not make thoughts your aim,
If you can meet with Triumph and Disaster
And treat those two impostors just the same:.
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build’em up with worn-out tools;

If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings,
And never breathe a word about your loss:
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on!”

If you can talk with crowds and keep your virtue,
Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
If all men count with you, but none too much:
If you can fill the unforgiving minute
With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
And—which is more—you’ll be a Man, my son!

I just got back from a quick lunch and I can’t keep in what I saw. I have a pile of things waiting for me to do but I watched this real life event unfold and it made me think of all the real estate investors I work with.

So, I have set my work to the side of a few minutes so I can share this with you.

While at lunch I sat down to eat my delicious Greek Salad with Chicken.  As I was sitting there I noticed a woman, her baby and her husband.  They seemed as though they were having a conversation.  I did a double take and noticed the guy had a Bluetooth Headset in one ear, a Headphone bud in the other ear and the second head phone bud wrapped around the top of that ear as well.

I could not help but notice this strange situation.  Here this man is sitting with his wife and daughter with a device in each ear.  Was he talking to his wife?  Was he talking with his daughter?  Was he talking on the phone? Or was he singing to the music in his head set? I have no idea…. And I bet his wife and child didn’t either.

My Question is very simple… Was this guy Focused or Distracted? Please comment on this blog and let me know your thoughts.

I think this guy was completely distracted.  He had so much “noise” he could not hear anything.

He had his wife speaking to him, he had his daughter with him, he had his music bud in one ear, and his bluetooth in the other. What was he really listening to?  I believe all he was hearing was NOISE!

This is a trap that too many real estate investors get into.  They follow this guru and that guru and they have so much noise they don’t know what to do.

Or real estate investors will look at commercial properties, rental properties, High end properties, Single family homes, condos and every type of property out there.

Some real estate investors bounce around from city, to city, to city looking for the great deal.

My message is very simple… to be FOCUSED as a real estate investors you have to eliminate the NOISE.

My advice to this gentleman and to fix and flip real estate investors everywhere, take out the headphones, remove the bluetooth, and listen to your wife.  Be focused on her for awhile and your results will soar.

If you are a real estate investor suffering from too much noise. You can turn down the volume by eliminating options. Discrimination is a word that has such a negative connotation, when in fact the word itself is wonderful! You need to learn how to discriminate against some of your options as a real estate investor. Limit the noise and you will see your real estate success improve over night.

By the way, your wife will be happier as well…

2011 Housing Shortage Nationwide

Brian Wesbury, chief economist for First Trust Advisors believes that America is going to have a “much bigger problem on our hands” if we don’t start building houses.  In Mr. Wesbury’s research he has found that by 2011 if we don’t start building homes there is going to be a major housing shortage in the United States.

According to Mr. Wesbury “We need one and a half million houses per year just to keep up with the population growth“. However, with property damage and properties that are in need of major renovation he estimates that number to be closer to 1.6 Million homes needed per year just to keep up with population increase.

So based on natural population increase the United States is going to need 1.6 Million homes to provide for the demand of buyers wanting to purchase homes.

What does this mean for Real Estate Investors? If you have been on the Fence, GET OFF NOW. Now is the time to buy homes, now is the time to fix up homes and now is the time to get the homes ready to sell. 2011 is not that far off and if the predicts hold true it would be a great time to have some homes on the market.  If you have been buying homes, you need to look at ways to buy more homes. The wave of demand is coming.

To Read the full Story you can go to: http://realestate.msn.com/article.aspx?cp-documentid=23505825

Boss Doesn't Get to PLAY!!

Well, it has been over two years since we finally decided to unchain our Portfolio Manager, Keith, from his desk and let him have a vacation.  When he went, Ryan (see the picture above) had to take over his position as well as others in the office taking up the slack.  We find that we are all very grateful for Keith as he makes the ball roll pretty smoothly here at DoHardMoney and we don’t want him to take another vacation for AT LEAST another two years!  Hopefully, his wife won’t read that part.

Anyway, some things we learned upon doing Keith’s job for a week:

1.  Some investors do not fill out their own application.  Now, why do you care about that?  This is a big deal for a few reasons.  One, it’s a contract.  I can’t believe anyone in this day and age would have someone else sign your name for you on a contract.  It is legally binding.  Whether electronic or not.  You are obtaining a loan, you need to understand FULLY what you are getting yourself into.  We pride ourselves on the fact that we state everything about our company, our policies and our terms on our website, however, many people do not take the time to read that.  So, as a last resort, we would hope that someone would take the time to read the application they are filling out.  Know that as soon as you submit your application, we are going to send evaluators out to the property and we expect the evaluators to be prompt with their services (24 hour maximum).  Also, we need to make sure that the subject property address on the application is correct.  It is difficult to pull information on a property that isn’t the property we are trying to fund on.  Lastly, access to the property, the more information you can get us about access to the property the easier it is.  If we cannot get the evaluators in, the more delay we have on getting this funded for you.  We don’t need you there for access to the property, and honestly it is preferable that you aren’t as we are looking for unbiased opinions from these third party agents.  A key box or real estate box is ideal with the code.

2.  We need to be doing a better job of keeping you, as the investor, informed of the progress.  So, with that in mind, we are going to come up with a simple method that you can have access to your file and see the progress day or night.  That way you will never be without the knowledge of how your file is being handled.  Sound good to you?  It would certainly make me feel comfortable if I were in your shoes.

3.  Obtaining the necessary documents for closing is easiest if you can start gathering them as soon as you submit the application.  We are trying to reduce our closing time even further.  Currently we can close a loan in about 7 to 10 business days.  However, there are such FANTASTIC deals out there, that we think we can help you obtain them.  But the only way we are going to be able to do that is if we can close on these deals faster.  So, in order for us to help you, we need you to help us.  We have a series of documents that are required in order to close a deal.  They are listed on our website at the CLOSING CHECKLIST, if these documents are gathered and presented to us at the time of application or 24 hours thereafter, we would be able to close a deal in under 5 business days or less.  Wouldn’t that be great?  We could do more Auction sales, Sheriff sales, Foreclosures, etc.  So, all the fantastic deals that you may have had to pass up because you couldn’t get the funding in time, we would be able to do.

4.  The last thing that we learned is how organized we really are.  Now, of course this isn’t something that you would be able to assist  us on.  However, while I am on the subject, let’s discuss how this would relate to you as the investor.  Organization will be a huge tool in your toolbox.  Once you have obtained the property that you are intending to do a rehab and resell on, if you are not prepared from the moment it is recorded to begin the rehab, then your profit begins to dwindle.  So, please, work on your organization skills and make sure that you have all of your ducks in a row in regards to your financing, handymen, supplies, timelines, contracts, and above all keep focus on what needs to be done.  That way when it comes time to gain your profits, you will be better prepared and organized to be your own boss, start the next project when it comes up and perhaps spend a LITTLE bit of time playing.

What Real Estate Investors Can Learn from Warren Buffett

This May I had the wonderful experience of attending the Annual Shareholder Meeting for Berkshire Hathaway.  This meeting is the opportunity for Warren and Charley to answer questions from shareholders as well as give a reporting on the company as a whole.

It was a great experience to be in Omaha and soak up the wisdom of Warren. I have to admit I am a huge fan of 90% of what Warren has to say, I completely disagree with his views on taxation. Frankly, he is not the “average American” or even wealthy American and I don’t think he understands or remembers what that is like. Stating that, I can now get off my soap box and on to the “Meat” of the discussion.

Warren has stated on several occasions his confidence in the United States and our ability as a country to be successful moving forward. In the Shareholder Meeting Warren stated:

“The World has a Bright Future”

That is my message for Today… The World has a Bright Future! I believe that to many investors are sitting on the sidelines and out of the real estate investing game. They have FEAR for the future and don’t know what to do next.  I think this simple message from one of the greatest investors and entrepreneurs of all time should be taken to Heart… The World has a Bright Future.

Frequently I visit with people that think the “Sky is Falling” and the world is going to come to an end. I simply disagree with this FEAR driven. I believe the media loves these stories because they draw attention to the Gloom and Doom Sales!

The Definition of FEAR

F             Future

E             Events

A             Are Not

R             Real

Future Events Are not Real!

Too many people believe that the future is already made.  That their lot in life has already been cast and they have no control over the future.

As Pepsi would say in their advertising of extra super caffeinated beverage:

“WAKE UP PEOPLE”

The Future is what we make of it! If you are a real estate investor that has been sitting on the sidelines in FEAR then get up and go make some deals happen. As an investor you should be actively going after good deals. No matter what type of market we are in someone is making money in real estate. This to can be done by you as well. We are not suggesting that you should buy bad deals. But we are saying you should be always looking and making offers on good deals. Now is the time when fortunes are made and we are seeing many clients doing just that. If you have been sitting in the sidelines for ANY Reason, WAKE UP PEOPLE, the future is what we make of it and as Warren Stated “The World has a bright future!”

What Real Estate Investors can Learn from Popcorn Sales

No, your eyes are not fuzzy. Popcorn… Like the kind you get at the Movies.  My mouth waters as I think about it. Changes in the market create massive opportunities and there has never been a better time to be a fix and flip real estate investor.

 Many of you are old enough to remember the days when Popcorn was only sold in two sizes… Small and Large.  If you can remember those days please, leave a comment on this blog. It will be fun to see how many people remember it. 

 When there were two sizes offered, the small would account for 80% of popcorn sales at movie theaters and the large accounted for 20% of the popcorn sales at the movie theaters.

Years later someone came up with the bright idea to have three sizes. The old small stayed as a small, the old large became a medium and then they introduced the JUMBO size (the new large).  You may be wondering how in the world would this help.  If it did not work they would have changed it back to the old small and large a long time ago.  The change to three options was remarkable. Popcorn customers did not want to be the cheap guy and buy the small, and most of them certainly did not need the JUMBO. So the medium became the most common purchased. The medium was really the old Large.

When the change was made to the three sizes, the old small that received 80% of sales declined to 20%; meaning that 6 out of every 10 customers that were buying a small now purchased a medium or jumbo. Think of that . . . Movie Theaters just increased the sales price for 60% of their popcorn customers. 

 Let’s look at the breakdown:

 20% purchased the small compared to 80% before the change

 60% purchased the medium compared to 20% before

 20 % purchased the new large (Jumbo) compared to 0% before

 This was a drastic increase in revenue for the Movie Theater in popcorn sales and the only thing they had to do different was to make the offer. Make it available.  This needs to be repeated it again JUST SIMPLY MAKE IT AVAILABLE!

 So what can Real Estate Investors learn from popcorn Sales? GIVE OPTIONS! That is all there is to it. When you are working with a seller on a home, give them options. You don’t want to only give two options - we can do the deal or not do the deal. You want to give three options to help the homeowner solve their problem. If a homeowner feels that they have options it takes away the question of if they should work with you or your competitor and it makes the homeowner think about what option is best for them. The homeowner can think about their needs and what is the best solution to their problems.

 Please keep in mind these options don’t have to just be about price. Price is only one of several factors a homeowner seller may care about. For example a homeowner seller may be motivated to get their credit repaired after a short sale. You could offer credit repair service for FREE if a client went with you versus your competition.

 A Homeowner Seller may be interested in getting a deal done fast and so offering a closing within 10 days or less may be an option for a seller. Typically if you offer a fast closing you could discount the price a little. You could also offer a longer closing at an slightly increased price. Or you could offer the homeowner to stay in the home after closing for a month or two. With this you may be able to offer a discounted price as well.

 There are several things that can be offered to homeowners when negotiating to find a good fix and flip property.  I recommend that you always offer 3 different options to a homeowner when you are trying to purchase a property.

 If giving three options works as well for you as it did for the Movie Theaters you could see a 60% greater close rate on homeowners looking to sale their home to you.  Think if you could buy 60% more homes this year as a real estate investor.

 I am off to the movies tonight with my wife. We will see if Eclipse is all it is cracked up to be… and we will certainly enjoy the popcorn.

You can sell a property in this manner but you need to have your own funds to complete the transaction. Meaning you cannot rely on the funds from the End Buyer C to be able to close the transaction. This is also commonly said that the transaction has to stand on its own and not rely on the End Buyer C. Because your obligation to purchase the property as Buyer B is not conditional on the End Buyer C purchasing the home. Therefore you need to have the ability to purchase the home even if the End Buyer C does not perform.

To do this you need to work with a transactional or simultaneous closing funding. Transactional funders are not looking to the value of the real estate, they are looking at the likelihood that the Buyer C will be able to purchase the home from you if they lend. So they are not looking towards property values. As you know here at DoHardMoney we look almost exclusively at the value of the property rather than the transaction. Transaction lender is doing just the probability. They are looking for the strength of buyer C.

Also Transactional funding is very short term. Typically term is 1-2 days and at most a week. So you need to be confident that the end buyer is really going to perform.

If you are looking for Transactional Funding I think that www.ShortFunding.com would be your best bet. I know Chris and Paul at Short Funding and I think they do a great job. Keep in mind you are going to want to work with them for quick transactional funding. They are not going to provide loans over a week or so.

I hope this shows our commitment to make sure you can be a successful real estate investor.

Keep MORE money in your pocket instead of out the window. See what available tools we have to gain the biggest PROFIT for your property!

Okay, in one of my posts, we talked about what is the process. So, I am going to revisit this because I think you are going to be interested in the new change we have implemented.

We talked about the evaluation fee, well, we still have to do evaluations, AND they are still the same amount.  However, what I like about it is that you get something more for your money.   Now, we always did these items for your money, but we kept it for internal purposes.  But now, we thought, WHY??  You should see all that we are looking at to determine the value on your loan.  So, when you pay your application fee, we will provide you all of the paperwork that we put together for your loan.  So you will receive:

Area Market Condition Summary

Computer Generated Estimated Value

Virtual Drive By Report

Interior/Exterior Review

To see a complete list of what is included in each of these items you can click HERE.  And if you read my previous post, we have new and exciting tools that will help you determine how much we will lend and give you a Property Approval Letter PRIOR to you committing to the moolah.

Now you are probably asking yourself, well, didn’t I just get a loan amount from the tools that I previously paid for? Why should I go through all of this rigmarole and pay you any additional money? You received an estimated loan amount and it will give you a range, however, we can only give you a computer generated loan amount and can’t give you a completely accurate amount until we have someone on-site looking at your property. That is where the rigmarole comes in and you pay the additional dinero and we send out our evaluators.

Hope you like this change, let me know your thoughts.

PLEASE!! Don't deny me anymore!

WOW! I love what we got going on in our world over here. I think you are going to love it too. The best that we have added (so far) are some new tools.

Okay, before I leap before looking, let’s step back and talk about why a loan is denied.

1. You entered an application without first reading our complete criteria of loans we simply CANNOT do. For example: rural/agricultural or small farming communities, Recreational properties or cabins, Manufactured homes, mobile home, duplexes, triplexes, and 4-plex, Commercial properties, lots, raw land, construction, counties with population under 75,000, major renovation such as foundation, trusses, additions, or changes to the structural integrity of the house.

2. Now other than items in number 1, the only other reasons would be credit problems, and again, that would be you not reading our criteria. We don’t check for credit score, we check to see if you are running from the law! Hehehe, no, we are checking to see if you have an active Bankruptcy or outstanding judgments. If you are running from the law, you have bigger problems then a Bankruptcy or judgment and I just don’t think you should be focusing on a fix and flip right now, but hey, just my opinion.

We will loan to you after that, but you are going to want to know some specifics about your property and the area around which you are trying to purchase the property. We look for some very specific things when you submit your application. We want to know sales activity of the subject property within the last 12 months, the depreciation or appreciation for the area over the last 12 months, the number of homes sold within the immediate area within the last 12 months, rate (amount) of foreclosures in the area and we will also get an estimated value of your property (low and high).

Here at DoHardMoney, we thought maybe we should offer this information to our borrowers before they try and apply for a loan. It would make their lives so much easier when trying to determine if the property they are going to obtain is a good deal or not. SO, ALA PEANUT BUTTER SANDWICHES, I present to you, our Market Summary Report to let you know about the Sales Activity, Foreclosures, etc. and our Estimated Value Report that tells you about how much the property is worth and how much we will lend on it, BUT an even better deal, get them both together, learn all about your property, why you should or even perhaps, should not buy it, how much you may be able to sell it for after doing your rehab and how to sell it for the GREATEST PROFIT and you can actually buy yourself a few PB and J sandwiches with the money you make!

Hope you enjoy them, and look forward to doing business with you.

Oh YEAH!!  One more thing.  We have a podcast you might be interested in hearing.  Go to this link and let me know what you think.  Ryan does his best thinking (talking) on his drive to work.  http://ryangwright.podbean.com/

Refinancing - Another Option!

So, let’s talk about refinancing . . . How would that work with a Hard Money Lender? Well, hard money lending all depends on your exit strategy. Unlike traditional financing where they are assuming you will stay put for quite a few years, with hard money, you are there to get in and get out. So, yes, of course we can refinance, but we are going to want to know the circumstances first. For example, did you buy the property at an auction, trustee or foreclosure and used your own capital and now just need to get your money back so you can rehab and flip the property? Then GREAT! We are here for you. Do you own the property free and clear and now want to refinance so you can rehab and flip the property? FANTASTIC, let’s do a deal! Are you living in the house, and the payment is too high, so you want to refinance but can’t do it through a traditional bank? We are NOT for you. We would expect for you to pay us back in a VERY short period of time. Our loans are for non-owner occupied residences, so it wouldn’t be available for that type of refinance. Refinancing is definitely an option we can provide, but please understand we are not looking to take over the problems of another hard money lender so we are going to look very closely at the property. If we are also paying off a traditional lender at a lower rate we are going to look very close as to your purpose in doing this.