Is Real Estate Investing for You?

So you want to know if the real estate investment game is for you. How to get started? Where to invest? Why? Do you need a lot of money? Is it risky? Do you need great credit? A ton of knowledge? Do you need to spend thousands on courses and seminars? And on and on and on the questions go!

Real Estate for Beginners

Part of the mission of this Real Estate site is to offer advice to those just getting started, but also for those who haven't had much success, and those looking for less risky methods of investing. Even if you're a seasoned pro with your own Flipping Houses show you will find useful information on a variety of other topics like "Rent to Own", "Options", "Cooperative Assignments", "Subject To", "Contract for Deed", "Real Estate Websites", "Toll-Free Numbers", "Buying Homes", "Commercial Property", "Creative Financing", and a host of related topics.

If you've been researching real estate investing for more than 5 minutes you are no doubt feeling a tiny bit overwhelmed with the mountain of information on every aspect of the business. There's a lot of conflicting information and ideas and if you're studying online then you also know all this investment info is spread far and wide across many forums, blogs, sites, and whatnot. There's a ton of useless crap that won't get you anywhere. And then there's the sales pitches for the $10,000 bootcamps and the $1,500 50-DVD courses that promise to teach you everything you need to know to make millions in real estate your first week.

Right...

What I'm hoping to do with this blog is cut through as much of the junk as possible and give you just what works. It's all free for the taking so enjoy! I am personally in love with low risk (or no risk) investment techniques that don't require money or credit or partners to get started. Why? Because a) investing your own money is risky, b) using your own credit is limited, and c) finding partners when you're new isn't exactly easy, plus you'll feel pretty bad when you lose their money because you didn't really know what you were doing when you bought that handyman special with the swampy backyard.

There's no need to get into high risk-high reward investments right now anyway. Do you really need to try to make $100,000 on your first real estate deal? Would you be happy with a quick thousand or two to get your feet wet? Sure you would. And that's exactly what you'll find here. Simple to understand, easy-to-use, ready-to-implement real estate tips and tricks that even a total novice can put to use right away.

OK, so let's talk a bit about deciding if real estate investing is even something you want to get involved with. There are pros and cons to consider and it does take effort and time so if you're already working yourself to death and have no time for your life or your family then maybe real estate isn't for you. If you can't stand any risk at all investing of any kind probably isn't a great idea either.

But chances are if you're reading this then you have a strong entrepreneurial spirit, some time, maybe even some money or credit (although you don't need them to buy property, they certainly can't hurt). I'm sure you've been reading lots of articles and forum posts and blogs before arriving here, if not maybe you have some preconceived ideas about real estate. The fact is I've been around long enough to have seen new investors come and go all over the internet. A few from each 'generation' (a generation online is like 1 year, maybe less) succeed and build great real estate businesses, while the rest ask a lot of questions and do a lot of research, but never make any money. Eventually they give up and are replaced with a new group of newbie investor wannabes who ask the same questions and do the same studying all over again.

It's my goal to help you get passed the studying phase and into action as quickly as possible with enough real estate know-how and the right tools to start making money. Because the only way you're going to stick with it and become one of the success stories is by bringing home a nice cheque (paycheck for my American readers) to show your spouse, children, or just to frame on the wall of your home office.

Speaking of a home office. You're going to need one if you expect to take this investing in real estate adventure seriously. You don't actually need to set aside a separate room (if you can that would be good though) it can just be your computer desk in the corner, but while you're working, it's your real estate entrepreneur support station, don't forget that! You'll need a phone, computer, and internet access (I suppose you already have that since you're reading this? duh!)

Things you don't need to get started in real estate as a business: Business cards, a company name, an LLC, a toll-free number, a domain name, a professionally designed website, a graduation badge from some $25,000 seminar, a shelf full of real estate courses, a ton of money, an 850 credit score, or any of that other nonsense!

You do need to be able to find and contact people who are buying and selling property (thus the phone and internet). You need a solid understanding of at least one basic investment technique (that's what I'm here for!) and you need the right contracts to go along with that technique. That's it! Really! All the other stuff is just a waste of time and money at this point. You can operate under your own name for now. Until you start making money you don't need to worry about taxes or corporations or establishing an internet presence. The real estate business is about connecting with as many buyers and sellers as possible on a personal level, in person if at all possible, but the phone and internet work too.

The point is...you can get started with much less than you imagine. I completed my first real estate deal before I'd read a single course and I had to write my own contract! (NOT something I recommend, I was lucky I didn't get sued!) If you're like most newbies...which you aren't since you've read this loooong post...you're probably wondering about, if not actually posting questions on forums, along these lines:

"Should I set up my real estate LLC and website before I call my first seller?"

Answer: NO!

"Should I get 1,000 business cards printed or do I need 5,000? Color? Glossy?"

Answer: NO!

"Will 500 'We Buy Houses' signs be enough to bring in calls? When's the best time to nail them to telephone poles?"

Answer: When you're least likely to get arrested.

"I have a 3 inch thick stack of listings from my realtor..."

Answer: Stop right there!

And the granddaddy of them all:

"Do I need my real estate license to invest?"

Answer: NO!

All you really need is a little guidance and a willingness to take action. You'll get the first part here, but only you can bring the action.

Lease Purchase Benefits for Sellers and Buyers

Lease purchase agreements are commonly offered by sellers of hard-to-sell properties. Think about it, if the property was easy to sell, the seller would sell it to a conventional buyer who would pay the seller cash.

• Sellers generally get market value at today's prices and relief from paying a mortgage on a vacant property.
• Although the lease payments may exceed market rent, the buyer is building a down payment and banking that the property will appreciate beyond the agreed upon purchase price.
• Buyers generally make a small down payment, with little or no qualifying, making a lease purchase an attractive way to ease into the benefits of home ownership.
• Buyers also receive a forced savings plan since part of the lease payment is credited toward the purchase price at the end of the lease option agreement.
• If the buyer defaults, sellers do not refund any portion of the lease payments nor the option money and may retain the right to sue for specific performance.

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20 Things you Need to Be a Successful Investor

What does it take to be a successful real estate investor? Well here's a quick list of some of the skills that will take you far!

1. Detail-oriented
2. A quick learner
3. Excellent interpersonal skills
4. Ability to self-manage (time, resources etc.)
5. Apply what you learn
6. Good negotiation skills
7. Passion for real estate
8. Desire to help others
9. Have an investment plan
10. Master your niche
11. Ask for help
12. Build a team
13. Network
14. Have a mentor
15. Listen to the market
16. Always be learning
17. Focus on marketing
18. Understand buyers and sellers
19. Give people what they want
20. Never give up

Doing a Lease Option / Lease Purchase

Hire a real estate lawyer to draw the documents and explain your rights, including those of possession and default consequences. The property might be encumbered by underlying loans that contain alienation clauses, giving the lender the right to accelerate the loans upon sale.


Sometimes sellers give the option money to their real estate agent as full payment of commission. Agents are not always involved in the exercise of lease options or fulfillment of lease purchase agreements and, even if you have retained real estate agent representation, you still need a real estate lawyer. Agents are not lawyers and cannot give legal advice.
In the event of a lease purchase, obtain all the disclosures and do your due diligence just like you would on a regular sale. This means:

• Get a home inspection.
• Examine the title policy.
• Obtain an appraisal.
• Read seller disclosures.
• Consider obtaining pest inspections, a roof certification, home warranty plan and hiring other qualified inspectors.

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Basics of a Lease Purchase

• Buyer pays the seller option money for the right to later purchase the property. This option money may be substantial.
• Buyer and seller agree on a purchase price, often at or a bit higher than market value.
• During the term of the option, the buyer agrees to lease the property from the seller for a predetermined rental amount.
• The term of the lease purchase agreement is negotiable, but the common length is generally from one year to three years, at which time the buyer applies for bank financing and pays the seller in full.
• The option money generally does not apply toward the down payment.
• A portion of the monthly lease payment typically applies toward the purchase price.
• Option money is nonrefundable.
• Nobody else can buy the property unless the buyer defaults.
• The buyer typically cannot assign the lease purchase agreement without seller approval.
• Buyers are often responsible for maintaining the property and paying all expenses associated with its upkeep, including taxes and insurance.
• The buyer is obligated to buy the property.

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Basics of a Lease Option

• Buyer pays the seller option money for the right to later purchase the property. The lease option money may be substantial.
• Buyer and seller may agree to a purchase price now or the buyer may agree to pay market value at the time the option is exercised. It is negotiable. However, most buyers want to lock in the future purchase price upon inception of the lease option.
• During the term of the lease option, the buyer agrees to lease the property from the seller for a predetermined rental amount.
• The term of the lease option agreement is negotiable, but the common length is generally from one year to three years.
• The option money generally does not apply toward the down payment.
• A portion of the monthly rental payment typically applies toward the purchase price.
• Option money is rarely refundable.
• Nobody else can buy the property during the lease option period.
• The buyer generally cannot assign the lease option without seller approval.
• If the buyer does not exercise the lease option and purchase the property at the end of the lease option, the option expires.
• The buyer is not obligated to buy the property.

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How I Made $4,750 by Solving 2 Problems

Would you like to know about a real estate investing technique that’s simple to learn, works in all market conditions, costs next to nothing to use, and has virtually zero risk? Too good to be true? Here’s the catch: You’re not going to get rich off of one deal. Still interested?

The Cooperative Assignment (CA for short) is gaining ground as the tool of choice for many full-time investors and at the same time is recognized as a great way for beginners to get started.


So what is it?
A CA is where you take a Lease Option, Contract for Deed, or some other form of Owner Financing contract, write the terms to be attractive to both buyer and seller, and then market it and assign it to a buyer for an instant cash profit.

A CA turns you into a consultant who uses their knowledge of terms and marketing to bring buyers and sellers together in a win-win deal.  It allows buyers to get into a house faster, cheaper and easier, and gives sellers the chance to move on with their lives while making extra money from the sale of their property.


Things You Need
There are a few things you need to do a CA smoothly.

1. ‘Terms’ paperwork. You can use a Lease and Option, a Contract for Deed, or anything similiar.
2. Yard signs and directional signs to draw attention to the house.
3. Voicemail so you can describe the house and terms ONCE instead of 100 times to 100 different buyers.
4. Website to showcase the house (recommended but optional).

Things You DO NOT Need
For reference, and maybe a little inspiration, here’s a list of things you DON’T need:

1. Lots of money ($50 should do it)
2. Good credit
3. A job
4. A real estate license
5. Fix-up skills
6. Repair estimate skills

Now I bet you’re curious what a CA looks like on paper, right? Here’s one of mine so you can see how it worked out for everyone involved:

After calling several FSBOs from the paper I came across Mr. S. who had a 3 bedroom, 1.5 bath, 1-car garage townhouse for sale for $142,900.  He had already bought another house and needed this one sold or rented within 60 days. In 9 days I found a family eager to own their own home but needed some extra time to get their credit in shape to get a mortgage.  14 days later the deal was closed and I had my profit.


The Seller
$149,900 sale price, $300/month positive cash flow plus mortgage reduction and tax deductions, and pays no commission or closing costs.


The Buyer
Got out of their basement apartment and into a move-in condition townhouse with all the trimmings without the hassle of dealing with the bank or a realtor.


The Investor
For an investment of about $40 and 10 hours of my time, I made $4,750 cash profit in 3 weeks.