I’m probably going to get a bad reputation in the world or real estate trainers but, oh well! Listen folks, I have no problem with the real estate gurus of the world if they really are gurus. I’m just not settled with the market of selling informational materials and ripping people off at the same time. I’ve befriended an individual that I’ll probably partner up with in the future. Let’s call him Frank. Frank is very new to real estate investing and would like to get started in this market. A month prior to meeting me (around July of 08), Frank bought a package for about $1000, which is great! He really wants to learn to invest in real estate and are taking steps to do so. With that package, Frank is able to talk periodically with his real estate trainer. Frank also likes to surf the web a lot and usually gives his email and phone number to receive free information. A 3rd party company got his contact information and gave him a telemarketing call on September 14th about real estate coaching. During that call, this “Real Estate Guru” (supposedly a business mentoring worldwide group), convinced Frank to purchase a package for $1500 that evening with the promise of training him to build wealth within 6 months. Frank has every right to say yes or no to this offer. Apparently he said, yes. If you have ever been to real estate seminars or been a part of free conference calls, you know they can be very persuasive and aggressive when trying to make a sale. Again, no problem that Frank reluctantly agreed to buy.

One may ask me, how did I know Frank was reluctant to buy if I was not on the call? The answer is, that night, September 14, 2008, he called me right after making the purchase, left me a message sounding very uncomfortable. Frank message asked me to call him back as soon as possible. Unfortunately, I was not able to return his call until the 17th. At this time, I had no idea what he wanted or what had happened. While talking to Frank, he said, “I bought this package for $1500; It’s a real estate coaching course; What do you think about it.” I asked, “what do you think?” Frank immediately expressed his discomfort. He said, “I tried to call you but you weren’t around; Couldn’t you hear my voice; It’s not in me to be the mean guy, I like to make people happy!” Granted, that is a problem Frank need to fix but OK, he bought this real estate coaching package 3 days ago and no longer wanted it. I told Frank to call the company and ask for his money back and tell them you no longer want to enroll in the group. He said OK and made the call. I got a call back 15 minutes later from Frank and he said, the company said it was too late. At that point I was baffled. So I said, (among other things) let’s call on 3-way and this is how the conversation went (see below). The contact person’s name was Jay.

Ring-Ring on September 17, 2008

Jay: Hello
Jersey Girl: Hi, my name is Tamara and I’m calling on behalf of Frank. He purchased a coaching package from you all but would like a refund. Frank said he just spoke to a Jay who informed him it was too late to get the refund. I do not understand what that meant. Can you please clarify? Frank is also on the phone.
Jay: Who is this for again?
Jersey Girl: Frank “Beep”.
Jay: Oh right, It’s too late to get a refund after 3 days.
Jersey Girl: The transaction just went through on his card on the 15th and it’s only the 17th now so he’s well within those 3 days.
Jay: Oh right, OK, if we process a refund for him, he will need to pay 20% in fees.
Jersey Girl: What fees are those?
Jay: We already sent him to a coach and he’s had coaching…that cost us money.
Jersey Girl: He hasn’t been coached yet.
Frank: Jay, I didn’t do the coaching yet. I haven’t even gone through orientation.
Jersey Girl: This transaction just took place 2 days ago.
Jay: Oh, he hasn’t been coached yet?
Jersey Girl: No
Jay: Well there will be a 10% fee
Jersey Girl: 10% for what?
Jay: 10% for swiping the card. Our merchant account is expensive.
Jersey Girl: You don’t pay 10% for a merchant transaction!
Jay: Our merchant account is top of the line and they charge us for swiping the card.
Jersey Girl: That is ridiculous!
Jay: OK well the 20% will apply.
Jersey Girl: You just said 10%, why is it back up to 20%?
Jay: It’s 10% to charge the account and 10% for the refund.
Jersey Girl: You got to be kidding me! So before it was 20% for coaching now it’s 10% to charge him and 10% to give him a refund!
Jay: Yes, again our merchant account is top of the line and it cost us to do the transaction.

Meanwhile in the background I hear something that sounds like, Hi, can I help you?

Jersey Girl: So can we process this refund now?
Jay: Do you want to process this refund or does Frank? It sounds like you are doing all the talking.
Frank: Jay, I really didn’t want the coaching in the first place.
Jay: Well I can’t do it now. I had my calls forwarded and I’m not in the office. Can I have a cheese burger and fries please.
Jersey Girl: What is going on??
Jay: I’m not in the office, I had my calls forwarded to my cell phone, I’m trying to get something to eat.
Jersey Girl: This is crazy. When can you process the refund?
Jay: I can’t take my office with me so it will have to be tomorrow. Call me tomorrow morning and I’ll be able to process that for you.
Jersey Girl: What time tomorrow?
Jay: You’re on the east coast, correct?
Jersey Girl: Yes
Jay: Well I will be in the office at 11AM your time. Call me then.
Frank: OK
Jersey Girl: OK
Jay: Bye
Jersey Girl: Bye
Frank: Bye

We were pleading Frank’s case to get 1500 bucks back over a burger and fries at a drive through window. Folks I can’t make this stuff up! I don’t have the time or energy to do so. That’s why I’m not big on these real estate training gurus. There are good ones out there but in my opinion, too many bad apples. We are talking $1500 that this company wanted to take 20% of for credit card transactions. They really didn’t want to give the refund as you can see from the conversation. Is this a bad or good apple? You be the judge!

Happy Real Estate Investing!

Even as Investors, we may be running into issues with our own houses and finances. Let’s face it, it’s getting harder to unload your properties as wholesalers or rehabbers. Houses will sell and are selling but the market conditions are rough, to say the least. But, it’s a great time to purchase, if you have the capital.  My point is, even “we” as investors can use a little help (especially those of us who are full time).  Right now FHA loan programs are being modified quite frequently.  I would continue to research loan programs that would be suitable for your needs.  Take advantage of the multitude of programs out there (especially being offered by the government and FHA).  I came across this group that specializes in FHA home loans.  You can check out their web site by clicking here.  Give them a call and ask questions or browse the web site, FHAMortgageCenter.com.  FHA deals with a lot of owner occupied homes so you may be able to refinance the house you occupy.  What I like about FHA Mortgage Center is that FHA loans are their specialty. If your considering FHA, go with someone who fully understands the product and stays up to date on the changes FHA is making.

If you are a beginner rehabber, why not buy and live in the property instead of flipping right away.  This can benefit you tremendously.  One, it gives you the opportunity to get your feet wet with fixing up a house. Two, you don’t have the added pressure of trying to sell quickly before you lose your money. Three, you will be able to sit on equity that will  give you added purchasing power for your next project.  FHA have great rehab loans for owner occupied properties.  Check out FHAMortgageCenter.com to learn more about the programs they have to offer.

Are you looking to be a landlord, or do you want a multifamily unit. FHA have very good programs for owner occupants of 2-4 unit properties. It could be very beneficial to buy your first home as a 4 family, live in one unit and rent the other 3 units out.  You would essentially be living for free or with a minimum mortgage payment.   First time buyers of owner occupied homes can put as little as 3% down payment. That is excellent for a 2-4 family property.  Most investment loans require a 10-20% down payment.  I would really explore FHAMortgageCenter.com and or speak to someone about their programs.  If your just starting, it’s a great way to get over that hump, test the waters and go for it!

Happy Real Estate Investing!

One of the toughest things you will face as an investor is keeping deals together.  For an example, one of  my short sales .  A newer townhouse built in 2006. Current owner owes 280K on the property but we are able to sell it for 200K.  There is a first and second mortgage.   It’s definitely a great deal and I had many buyers interested.  The only issue with the property is that it’s not in the greatest part of the neighborhood.  The area is up and coming and the price is definitely right.  It’s also near a well known college in NJ.  We got an interested buyer and have been working with him for the past 3 weeks.    It’s a newbie investor who’s looking  to rent out properties or do quick rehab flips. This property would have to be the rental he’s looking for because there really isn’t much to fix on it. 

The deal was going along fine until the buyer began to tell me about other properties he’s interested in.  Everything started to fall apart.  In this market I firmly believe buyers are out there but they have a lot to choose from.  The price, area and condition of the property need to be right for your buyer.  It’s very important to know your market for the house you’re dealing with.  Not all strategies will be the same for each house just as not all buyers will be the same for each house.  I would suggest having a back up on all your deals.  No need to put all your eggs in one basket.  Also, continue your marketing campaign. If I’ve learn anything as an investor, it is, the deal isn’t complete until you close.

The buyer I had was nervous about the mortgage payments in relation to the rent he would receive.  He also started to look at properties with a lower asking price…so he told me 2 days ago.  We decided to sweeten the pot for him, to give more of an incentive to stick with us.  Pay his taxes for a year (NJ taxes are pretty high);  Or, pay the first 3 to 4 months mortgage.  These are just added bonuses to give incentives on buying the house.  There are many different incentives then the typical pay closing cost or giving toward repairs.  As it stands now, the buyer is thinking about the new incentives.  Regardless of that, it’s time to be aggressive with finding another buyer.

PS.  Check out my new photo gallery. I have before and after pictures of past rehabs, click here

Happy Real Estate Investing!

Have you noticed that most Real Estate Educators/Gurus always seem like they are making a sales pitch?  If you said yes, I have too.  Even the most sincere Gurus out there seem to have that same sales pitch in the end.  I recently joined a real estate investment call where a Real Estate Mentor was doing a presentation on a particular niche in real estate investing. Just for the sake of not wanting to burn bridges, I’ll leave the name of the mentor anonymous. I thought the presentation was informative and they actually gave out good information or I should say resources to utilize.  As the call dwindled down to the last 15 minutes, the sales pitch began.  It’s like they all went to the same “sales pitch school”.  Who knows, you might hear me say one. ;-| 

There’s always bonuses for extra material if you act now.  If you are the first 10-20 people to buy the package, you’ll get an even better bonus such as direct access to the mentor’s email and fax.  The truth is, this particular Guru really didn’t need to do all that. They could have given their presentation and let those who are really interested in investing in real estate using that niche, purchase the information. I believe that is the difference between the people who buy information material and use it and people who buy information material and shelve it.  If you need to be pushed into getting something, it must mean you really didn’t want it. Yes, Yes, I know some people need a little extra push to get things done.  But this is where my theory truly hits home.  If it is an individual that requires that extra attention, using a mentor that lives across the country is not suited for them anyway.  They need an “In Your Face” mentor that is preferably local.  This particular real estate educator stated ”they” had an estimate of 3500+ students all over the world.  I remember a much much higher number being mentioned but I want to be a little more conservative because I couldn’t believe the number.  Hmmm….How can one person mentor so many?   Especially since ”they” are a mentor that said “they” are still in the trenches. 

Okay, so I understand that “he/she” is not talking directly to 3500 students daily but I’m sure a fraction of those people would like more attention then just buying the material.  And yes, I understand that some mentors hire a staff to handle student issues.  So, does that mean you are still being mentored by real investors who are actively in the real estate market today?  

Just to caveat this post, I’m not saying mentors are bad, I actually recommend a group on my site.  I think everyone should have a mentor and should be educated in any business venture they are actively pursuing.  My point is to be careful out there and don’t buy based on the pressure of the “sales pitch”.  We all want to be successful in this business.  Stay grounded and true to yourself, your finances and your desire for this industry. It’s not for everyone but it is a great place to be if you have a passion for it. 

Happy Real Estate Investing!

Have you ever received a response from one of your direct mailings but when you reach out to this “motivated” seller, they just were not motivated enough? The home owner is somewhat motivated because it is financially hard for them to keep up with the mortgage payments. You realize as the conversation goes on, they really want you to buy the house from them at market value or for what they owe on the property but there is no equity. Subject-To financing is not the way to go because the mortgage payments are to high and again, no equity. The short sale is a possibility but they are not behind on payments and they already have it listed with a realtor who’s trying to get their commission. It seems like the deal is dead in the water and you really just need to move on.

Don’t throw in the towel just yet! I wouldn’t write off home owners that do not seem motivated enough to fit within your investment criteria. Although I do not wish things will get worst for them and in all honesty hope that things will work out. The truth is, in time “somewhat motivated” in some cases turn into “very motivated”. I just got a new short sale deal from a lead I got about a year ago and it reiterated to me that it pays to stay in touch with your leads. If some of your leads say the home is listed with a realtor, you never know if they will or will not sell. In most cases if a house is on the market for more than it’s worth, chances are it won’t sell. Be patient with every lead you have. Every lead will not turn into a great deal for you but don’t throw away potential leads by writing them off the minute the numbers do not seem to work. I would show compassion and hope that things will work out for them, but if it does not, let them know they can call you back. And even if they don’t call you back, it’s worth taking time to following up with them. Check on them once in awhile to see how they are making out. This has happened to me on more than one occasion, where a lead that seemed like a dead deal turned into something that could work. Although things do not fit your investment criteria now, when the home owners circumstances change it may fit.

Just remember that you’re dealing with people in difficult situations. I can’t be the type of investor that is just after the money. Yes, you want to make money in this business but you should be sympathetic towards individuals that feel they have this heavy weight on their shoulders. If they have exalted all their other options, you are pretty much their last chance to get out of a strenuous situation. Always keep that in mind as a real estate investor.

Happy Real Estate Investing!

I’m currently looking to do more rehabs.  People may think this market is bad for rehab projects but I beg to differ.  There are people out there buying real estate and they are looking for deals.  Likewise, there are people out there selling real estate significantly below market value due to foreclosures.  Most experienced investors know this market is the market of short sales and that is the way to go.  I’m looking to short sale a property that needs work, fix and flip it.  Or, if I find a great bank owned property that is well below market value and needs work, that would be a great candidate as well.

With that being said, I’m looking to partner up with people who would like to rehab with me.  I am looking for two types of individuals.  Someone with good credit with a desire to learn and invest in this market.  This candidate will learn from an experienced investor as well as get hands on experience with the whole process of rehabbing.  God willing, together we will do deals and make some money. 

The second type of partner I’m looking for is someone who has cold hard cash. As we all know, Cash is King.  If you have the money to buy real estate with cash, you can get some awesome rehab deals.  If you have equity in your home or investment property and want to venture into the rehab world, feel free to join me as well.  If you just have money sitting around and would like to put it to work, rehabbing has great returns.  Whatever your situation is, if you want to invest in real estate and rehab homes don’t hesitate to contact me.  I’m looking for people just like you!

If fear has held you back, this is the perfect chance for you to get over that hump.  If you’ve been going to real estate seminar after seminar and have never put any of what you learned to use, join me now and I will take you through the rehab process with real life experience as a partner, not student.  I want to help you make money not take your money!  Not only will you advance as an investor but you will make money at the same time.  I love to build relationships and keep my network growing.

I am the Jersey Girl Investor and I like to rehab homes, what do you like to do?  Let’s have some fun, make some money and build our network!

Happy Real Estate Investing!
P.S. If you are real serious about real estate investing and rehabbing, call me at
(888) 528-8694.  Leave a message and I’ll be sure to get back in touch with you.

My sister called me up about a month ago because she and her husband are thinking about purchasing an investment property to rent out. She lives in the Northern Virginia area which is a great place to invest in real estate. Forbes states that FairFax and Loudoun County VA, top the list of American’s richest counties which they based on median household income data from the 2006 census. You can check out Forbes top picks here.

Also in VA, my sister was telling me about these new immigration laws being passed where law makers are cracking down on illegal immigrants in the Northern VA area. Now the housing market is not only being affected by the mortgage and real estate crisis but that area is being affected by the amount of illegal immigrants being deported and taken from their homes. To learn more about this topic, read an article in the WorldNetDaily. Real estate that was either owned by a friend or family member that used the financial support of an illegal immigrant or real estate investors who were renting to that market of people but now have vacant properties which they cannot afford are finding themselves in foreclosure. So, do I think it’s a great time for her to invest in an investment property, ABSOLUTELY. Now is the time folks. If you can afford an investment property at this juncture in your life, go for it.

Here is her situation, does this sound like you?
A) She can afford an investment property
B) It’s a buyers market so there is a lot to choose from given the real estate “market” conditions (as explained above)
C) She already has a tenant lined up!

Okay, so maybe “C” does not sound like you but, given those 3 circumstances make it a win-win situation for her. And if you have 2 out of the 3, it’s still not a bad idea.

Now onto the steps of choosing the right place. That’s when I get hit with the other questions. Such as, How much should I offer? Would you offer asking price? My answer to those questions are all relative to the condition of the real estate, neighborhood, fair market value (FMV) of home, owner’s expenses to maintain on property and the amount of rent she can receive from tenants. Those are the basic factors I’m looking at but there are some investors who do a very intense calculation before purchasing an investment property to hold. Of course, how much you offer also depends on how much you can afford. If you know the information I’ve just stated, it can give you a good idea of the home you want and how much you will offer.

Hello Fellow Real Estate Investors.   Have you found yourself in an investing predicament where you bought an investment property 3 years ago with an interest only ARM loan?  If you calculated your expenses and passive income based solely on the short term interest only payments, times may be getting tough.  Now that loan is about to or has already reached its term where the interest rate will begin to rise! I’m glad the federal government seems to want to help people in situations like that but we also need to look into a mortgage refinance. 
 
Did you finally feel like you could afford a new home since you qualified for 100% financing with a 2 year ARM and a great rate? It’s a great feeling to be able to own a home and you don’t want that to get away from you.  Both scenarios describe many home owners whether they are investors or first time home buyers.  It’s tough out there and refinancing your property may be the solution.  I find myself looking into that option.  It seems hard getting qualified for a home refinance because so many banks/lenders qualifications are really strict right now but I stumbled upon this site, www.refinance.com.  There you will find different loan products and resource tools that will help you consider your refinance options.  To name a few, they have an “Easy Refinance Calculator”, “Which Loan Can I Afford” tool and an “Amortization Calculator”.  There are also other resources available for you to use as you seek to refinance your home loans. What I really like is that they specialize in mortgage refinancing!  Although most lenders and mortgage brokers can refinance a loan, it is nice to know that a company specializes in that area.  They cater to giving you better terms than your current mortgage.  If you feel the need to refinance or just looking for a better rate, I would suggest checking out, www.refinance.com.
 
Happy Real Estate Investing!

As I was saying, my Lots are zoned R-4 Moderate Density.  With this zone, they allow single-family and two-family homes.  You can find this information about the zoning at city hall.  They have documents, which you can take, that have Bulk Zoning Requirements.  The duplexes would qualify under the zone I’m in but since I want to split the Lots to have 3 duplexes, it would require multiple variances.  For those who are unsure what variances are, here is the definition: In land use, a variance is a requested deviation from the set of rules a municipality applies to land use known as an ordinance, building code or municipal code. 

On the Bulk Zoning Requirements document, it states the following predefined requirements for each zone (R-1 through R-6 in this particular city) .

• Minimum Lot Area
• Maximum Density
• Minimum Lot Width
• Minimum Lot Frontage
• Minimum Lot Depth
• Front Yard Setback
• Side Yard Setback
• Combined Side Yard Setbacks
• Rear Yard Setback
• Maximum Floor Area Ratio
• Maximum Percent Building Cover
• Maximum Total Lot Cover
• Minimum Number of Stories
• Maximum Number of Stories
• Maximum Building Height
• Minimum Improvable REA
• M.I.A. - Diameter of Circle

With all the above predefined by the city, if you deviate the slightest from that, it would require a variance (approvals by the city council).  My builder (Linda) went through the different requirements with me and let me know the impact of splitting the two Lots. I would need a variance on about 7 items. Getting approvals will require me to get the architect to design out my plans and hire a lawyer (builders suggest a lawyer that is familiar with your particular city and have already been before the board many times).  Such lawyer would know what to expect from the city and what they may or may not allow. The lawyer would do the presenting at the city council.

Since, last I wrote, I spoke to the Planning Director in the Zoning & Planning department.  I wanted to get an idea of what the plans are for the city in the area my new construction will take place.  The city owns a large amount of land across the street from my Lots and there were rumors of different things they would do with the real estate.  The director seemed very friendly and was very forthcoming with information but it was hard getting in contact with him. Apparently, he is extremely busy so I didn’t get him until the 3rd or 4th try.  I was only able to get about 5 minutes of his time on the phone so I decided to set up a meeting with him, Linda and me.  That will take place this Thursday if all goes well.   That’s all for now.

Happy Real Estate Investing!

I met with my builder Friday afternoon. It was a definite eye opener as to the many things you need to do in order to build new construction.  My builder is a woman who has over 40 years of experience as a builder and many years as a reputable realtor.  I felt like a sponge trying to soak in everything she was explaining to me.  The way I set up my relationship with this builder is that, for a discounted builders rate, she will sort of mentor me through the project and I will do all the leg work.  I will be the gofer in getting the project moving and keeping it on schedule.  Of course for the things I cannot do because I am not licensed, will be handled by my builder.  I want to learn the ropes and begin to establish contacts in this particular field of real estate investing.  My experience as a rehabber will be very helpful but being a builder is definitely more involved.

At this initial meeting, my builder (let’s call her Linda) brought me up to speed with some of the things we needed to consider when deciding what to build on the land. My initial intent was to split the 2 LOTs into 3 adjacent LOTs and build 3-Duplexes.  She already had the tax map and zoning information from the city.  The tax map was hard to read but we had the lot dimensions from the tax records.  Based on the two documents, we can figure out what zone my LOTs are in and what you can build on the property based on the zoning laws.  My particular LOTs are in zone R4.  But guess what, I don’t have my documents with me so I really can’t explain what that means now.  Stay tuned as I will continue Part II of this post.

Happy Real Estate Investing….