Commercial Real Estate Investment Articles

Many times people looking to get into rehabbing and flipping houses find it difficult to locate a real estate agent who will work with them. Here’s a letter I drew up to mail to agents. It was designed to be sent using our corporation letterhead. However, I’m sure you can adapt it to your own method or approach. The basic ideas can also be used when contacting Realtors either by phone or in person.

I was inspired by recent posts concerning an FAQ sheet to give to tenant/buyers about the lease option. I started thinking that a Q&A sheet like that would come in very handy for sellers as well.

I have been promoting lease options for almost a year now and have been working my butt off getting tenant/buyers to take the properties I have and finding the ones they want. It has been a waste of time to find specific properties for tenant/buyers. So I had a chat with my favorite lender, and we came up with a plan.

Last weekend, my folks had a garage sale. I was just sitting there thinking, and all of a sudden it hit me: Why not make up some signs that say “We Buy Houses” and see if I can get any leads? That’s exactly what I did.

As most of us know, one of the toughest things to overcome for our buyers is the down payment. Especially when that down payment needs to be verified. I have on two occasions now successfully overcome this problem both legally and ethically.

Let’s assume you have run an ad geared toward generating calls from sellers. The first question is: How is the call answered? I don’t know about you, but I don’t have time to sit around waiting for my phone to ring, so my phone is answered by voice mail. The caller is required to leave a message if he wants to tall to me.

Here’s a crash course in commercial real estate terms.

After being in the single-family house business for the last 28 years, I was looking for a way to make my operation more efficient. And along came the Internet. WOW, what an improvement to my business! Here is what we did.

Five years after buying and giving back about fifty units–and newly penniless, I discovered this thing called creative real estate. Control without ownership, solving people problems, use your brain to buy property–not your cash.

In real estate investing, as in many aspects of life in general, we are salespeople. Learning sales techniques can increase our ability to produce a better income for ourselves by allowing us to make better deals, whether buying or selling.

Here is a great tool that works for buying and selling, but we’ll concentrate on just the buying side.

Fire-damaged homes offer great profit potential but also pose special concerns and hidden risks for investors. I would not recommend a fire project for the first time investor, but I would suggest that experienced investors and renovators should not overlook an opportunity that has few competitors.

There is an incredible power in understanding the time value of money. The investor who understands the power of cash flows will be the investor who gets very rich. No matter what you do in your investment life you simply must understand the time value of money.

In my part of the country (Wisconsin), this technique is almost unheard of, but it works. Here is what I did.

I think it is time someone put a stop to the accelerated mortgage nonsense. This scheme, variously known as the “Banker’s Secret” or accelerated mortgage plan or bi-weekly mortgage plan are almost always a very poor deal for the person who decides to go into one of these programs.

I have created a time machine. Just think back to the remember when you could buy a house for $6,500, hold on to it for a few years, and sell it for $30,000. If I could do that now, I’d buy ten. Well I’m here to tell you. You can. I just did. The city was Baltimore, but the location can be anywhere with inner-city decay: Board ups, drugs, high crime, etc.–exactly the place everyone expects to find a fortune.

One of the best ideas that I have used when trying to get a lease purchase deal closed uses an alternative type of option consideration/earnest money deposit. If the seller is okay with the idea of a lease option or lease purchase but thinks my consideration a little too low, I simply ask him how much exactly he needs.

I found a single-family home appraised at $149,000. The seller had $62,000 in equity. I offered $105,000 all cash, which was accepted. I found a partner to front the $105,000. Refinanced the property at 80% of market value for $119,200.

For the last couple of months, I’ve sent the following postcard to every “house for rent” ad in my local paper. I don’t call on the ad, I just use a CD reverse directory to get the addresses from the phone numbers.

Investing in real estate or discounted paper is a wonderful way to increase the size of your retirement fund rapidly. The “Rule of 72” explains why. The Rule of 72 is a banker’s rule that calculates the number of years it will take for a sum of money to double. You divide the number 72 by the annual percentage rate you are receiving on that sum of money. For example, if you are earning 6% interest on a CD, divide 72 by 6: 72 / 6 = 12 years

People spend cash on real estate for a variety of reasons. Probably the most common reason for spending any cash at all is that the bank making a new mortgage on the property requires a cash down payment or it won’t approve the mortgage.

Here’s how I found seven (7) new real estate investors who will pay me cash to buy my position in escrow. I found a local chapter of “National Association Of Remodeling Contractors” and called a couple dozen names on the membership roster. I told each one:

Property owners who live out of state are frequently very motivated to sell their real estate. Tenants may have stopped paying the rent, started trashing the property, or the property may be vacant. It is very difficult to control your real estate investments when you live far away from it.

You do not have to scour the courthouse or do mass mailouts to find good, small notes to buy. Just create them yourself.

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