That is the question every rehabber asks himself/herself.  Many cities and states don’t legally require that all contractors be licensed (though most require that plumbers, electricians, HVAC contractors, and the like are). But even in places where a license IS required, there are plenty of unlicensed folks who are happy to do jobs ‘under the table’.

The natural thinking among real estate investors is that we can save money by not using licensed folks: that if I use a licensed contractor the job is going to cost me more money.  

Yes, I have asked that question myself.  And I have tried to cut corners by hiring the “handyman” who is not licensed.  Here are a few of the results I have seen.

1. On an early project I discovered the contractor who was doing excellent work, had a cooler on the job.  I didn’t think much about that until I noticed beer cans on the job site.  So, I dropped in one day unexpectedly and discovered my contractor was drinking beer on the job.  When questioned, he replied, “I’m doing fine.  I am perfectly OK to do the job while drinking.  To prove it, I can trim my thumb nail with this power miter saw and will not cut myself.  Here, let me show you.”  He didn’t get the ch
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              Beginning investors have a tendency to get stressed out by the very thought of “negotiation”.

              They put off calling sellers (or calling them BACK) for days and days. They worry about what the seller might say and what they should say back to the seller.

              It’s as if they believe that something they could say to the seller—or fail to say—would make that seller motivated or not motivated.

      The truth is, sellers come to you already motivated or not motivated, and what YOU say doesn’t change that one way or another. And since that very important fact is completely out of your control, that means that the only thing you actually need to worry about in a “negotiation” is

1. Building rapport
2. Getting the information you need
3. Protecting your time

              To that end, there ARE some things that experienced real estate entrepreneurs do, and do consistently, to maximize that chances that any given seller negotiation will be a successful one.

•               Balance your need to get the information quickly
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I remember the first phone call I got back in March, 2020 from a REIA leader (Real Estate Investors Association) on a Saturday asking me what we were going to do now that they shut down the world and we couldn’t have live events anymore.  At that time I had no idea how to answer that question for 2 reasons.  First reason I wasn’t aware of that because I don’t watch the news and I spend as little time as possible on facebook and other social media platforms because everyone has become so negative.   And the second reason is that we were hosting a live event at that very moment so I told them that we would talk on Monday.

I just assumed that they were talking about their state and that it was not going to affect most of the country.  But by the time I turned a TV on Sunday night, almost the whole country was on lockdown.  That week Vena Jones-Cox from Cincinnati REIA was doing their first Online Main Meeting and there was over 600 people in attendance at that event including myself.  Everyone heard about the Cincinnati REIA and their topic was how to deal with tenant and real estate with all the new rules and restrictions that had been trust upon us in less than a week or 2 weeks for a lot of the country. 

At first it was fun for me and everyone working with new technologies and working through the challenges to adjust to the (don’t yell at me…) new normal.  People were working from home and we had to take all our training session that we have been
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Seller financing is a term that covers a lot of different things. But it basically is a process to purchase or control a property without needing all cash of getting a loan to pay the seller off. Seller financing can be a useful tool in a tight credit market. It allows sellers to move a home faster and get a sizable return on the investment. And buyers may benefit from less stringent qualifying and down payment requirements, more flexible rates, and better loan terms on a home that otherwise might be out of reach.

In a seller financing transaction, the seller takes on the role of the lender. Instead of giving cash to the seller, the seller extends enough credit to the buyer for the purchase price of the home, minus any down payment.

Seller financing can be done in many different ways and with multiple options in the same transaction. The most common form of seller financing is with a Contract for Deed (AKA Agreement for Deed or Land Contract), but there are many alternative options available, including lease options, Subject-To and wrap around mortgages.

A Contract for Deed is simple to understand, you make monthly mortgage payments to the seller directly rather than getting a loan from bank or private lender. Let’s say you agree to pay the seller $100,000 and they agree to a Contract for Deed at a 6% interest rate with a 5 year balloon p
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Imagine this scenario… 

You find a good piece of real estate that you decide to buy. 

You have little money to buy it, but you decide to use whatever money you have as part of your down payment. 

You get qualified for a 90% LTV loan. 

You call around and you are able to raise the remaining money you need for the down payment from your close friends and family. 

You promise to pay them a generous interest rate of 8% for lending you their hard-earned money. 

The following month, you find another good real estate property that you want to buy.

You have no money to buy it, but you know you can raise the money. 

You have great income and credit and once again you get qualified for a loan with 90% LTV.

You call around and you are able to raise some of the money from your close friends and family. Again, you promise to pay them a generous interest rate of 8% for lending you their hard-earned money. 

This time, you remember about a line of credit you have, and so you decide to use all of it to close the deal.

You’ve now raised
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 Just yesterday - almost literally, the news was that House Flipping is Down.  Now, the news is that House Flipping is strong! What gives? 

After reading an article published by Housing Wire, and written by Jessica Guerin, I want to share with you the statistics show that house flipping is strong again.  The number of homes flipped in America is approaching its high of 2006, just before the crash.

The latest data from CoreLogic reveals that 10.9% of all home sales in the fourth quarter of 2018 were flips, or homes that have been occupied for two years or less. This is the highest rate since the housing bubble days of 2006, when flips comprised 11.4% of home sales. (See chart below)

House Flipping accounts for close to 15% of the current home sales in America

The overzealous speculation of house flippers in the months leading up to the crisis is often cited as a contributing factor to the housing bubble. So should we be worried now that houses built on spec appear to be making a comeback?

No, says CoreLogic, citing evidence sugg
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Something peeked your interest in real estate. Maybe it was the Flip this house, or Flipping Vegas or any other the other 100 reality TV shows that have nothing to do with reality but makes for entertaining TV.  Maybe it was a radio ad from some national guru looking to build their business in your market and they want you to join their team.  Maybe it was an ad on Facebook telling you that it is so simple to make $30k a month without even getting out of bed.  Maybe it was a friend that really did flip properties or a relative that owned several rental properties.

Whatever the reason is that you decided to give real estate investing a try, you soon realized that there is a lot to know and the real estate business can seem overwhelming when you are first starting out.  I know because I felt that way in the beginning and now I mentor students through the minutia all the time.

In one of my early mentoring sessions with my mentor, he said something to me that I just laughed at, at the time but later realized how profound that statement was that he repeated to me over and over until I finally got it.

He said; if you want to get to where I am, you need to KISS your way to Riches.  Keep It Simple Stupid.
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When it comes to making offers, most investors only know how to make one offer at a time.  They usually make an all cash offer, also known as the MAO (Maximum Allowable Offer) or they get a loan from a bank, hard money lender or a private investor.  This strategy has worked fine for investors and if you are only making offers on bank REOs on through the MLS, then a cash/MAO offer is really all you will be able to make.

The average number offers to get one accepted with this approach is 20-40 offers to get one accepted in today’s market for most of the country.  Some more experienced investors have been able to reduce that number down to about 5-10 offers to one acceptance by being very selective on what properties to make offers on.  In other words, they know from experience that certain properties from certain banks or listing agents simply will not accept their offers so they don’t even make the offers. 

The secret to success in the real estate business is making offers.  The problem is that most investors use the same offer process when dealing with sellers directly and they are missing some huge opportunities if they just knew how to create alternative offers that don’t require cashing out the seller.

Ask yourself these two questions:
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There is a lot of confusion out there with newbies and some seasoned investors as to what exactly Wholesaling means.  The easiest way to describe this is to look at the Minnesota State Statue: 82 REAL ESTATE SALES REGULATIONS Sub 55 Definitions. Condensed Version: You cannot sell a property for another for a fee without a real estate license.  So the question is, as a wholesaler, what are you selling?  If you have a property under contract, you can sell your rights to the contract, not the property.  This is done via an assignment agreement which allows the assignee to step into your place as the buyer.  That is the basics of wholesaling. 

Some states actively go after real estate investors for incorrectly wholesaling.  These investors get themselves into trouble because they can’t explain legally what they are doing and therefore say the wrong things, like I am trying to find a buyer for the seller.  That shows intent, and as the previous FBI Director James Comey famously explained, it comes down to intent.

The problem is that your true intentions may not reflect your stated intentions because you don’t understand the legality of what you are doing.  If you just change what you are saying, to reflect your true intentions, then you will avoid a lot of aggravation and harassment from the state.
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