Here's an short but sweet post from Jimmy Vee and Travis Miller of Gravitational Marketing
How To Sell High Ticket Items (Like Real Estate) To Many People At Once
Put 'em on a bus!
Seriously. I saw a sign this weekend, and it really got my gears turning. Brilliant idea:
Orlando Foreclosures
Bus Tour
Call _______
That's a fantastic! They can haul a busload of potential buyers/investors around at once and show off these rare-find foreclosure homes. Yes! Sure beats showing home 1 at a time to 1 buyer at a time.
What can you do to emulate this idea in your business?
The original post is here
To your success,
Dave
www.creatingrealestateinvestors.com
Thursday, March 27, 2008
Top 10 Cash Flow Property Markets
Here's an interesting article for you buy-and-hold investors:
NuWire's rankings of the areas with the best potential for cash flow
Published on: Thursday, January 03, 2008
Written by: Cali Zimmerman
Cash flow is one of the most important considerations investors face when making real estate purchases, particularly now that so many markets across the country are struggling. Those seeking high-income property should take cash flow into account first and foremost when deciding whether or not to buy.
Cash flow refers to the amount of cash coming in relative to the amount going out. In ranking the top 10, potential for future appreciation was not considered; this list is ranked on cash flow alone. While appreciation is often the most significant form of profit for real estate investors, cash flow is easier to determine and lower risk.
Although many elements combine to influence cash flow, one of the most important ones is the surrounding market. Areas with lower home prices are more likely to have positive cash flow.
To determine our top 10 cash flow real estate markets, NuWire adjusted the average rent payment for the area according to the rental vacancy rate before comparing it to the amount spent monthly on mortgage payments and upkeep, including utilities, taxes and insurance. Mortgage payments were estimated based on an average loan—30 years at 80 percent loan-to-value and a rate of 6.5 percent—and the median cost of a home in the area. Statistics were gathered from U.S. Census data.
1. Rochester, New York
Despite the fact that Rochester's population fell by 6.74 percent, from 219,773 to 204,963 between 2000 and 2006, and the fact that it has the highest rental vacancy on this list at 17.9 percent, Rochester still managed to claim the lead as the city with the best cash flow for
investors. Homes in Rochester are affordable, at a median price of $67,600, and median monthly upkeep costs and estimated mortgage payments are low, at $418 and $341.82, respectively. The median gross rent in the area is $669.
2. Montgomery, Alabama
Montgomery is the capital city of Alabama and an important regional trade, processing and shipping center. The city was home to 202,443 people in 2006. The median home price in Montgomery is $106,300, with low monthly upkeep costs of $323 and an estimated mortgage payment of $537.51. The rental vacancy rate is lower than in Rochester and most
other cities on this list, at 9.6 percent. The median gross rent is $669 per month. Montgomery ranked third on our list of the Top 10 Places to Invest for 2007.
3. Birmingham, Alabama
Birmingham had a population of 217,131 as of 2006. The median price of a house in Birmingham is just $82,000. Median monthly upkeep costs are $347, with the estimated mortgage payment at $414.64. Monthly gross rent is $620.
4. San Antonio, Texas
San Antonio ranked number one on our list of the Top 10 Places to Invest for 2007 and second on our list of the Top 10 Foreclosure Markets for 2007. Home to 1,273,374 people as of 2006, San Antonio retains affordable home prices, with a median of $96,300, in spite of its growing population. Median monthly upkeep is only $374 per month, with an estimated mortgage costing $486.95 per month. The rental vacancy rate for the city is 10.3 percent—on the lower side of this list—and the median gross rent is $678 per month.
5. Garland, Texas
Garland was number two on our list of the Top 10 Places to Invest for 2007. With affordable housing—the median price is $116,100, upkeep costs are $544 per month and estimated mortgage payments are $587.06 per month—in addition to its growing population, which increased 11.64 percent from 2000 to 2006, Garland is attractive to investors. Garland's median gross rent is $862 per month.
6. Buffalo, New York
Buffalo has a median gross rent of $579 per month despite the fact that its population fell more than 10 percent from 2000 to 2006. As of 2006, 257,758 people lived in the city. The median home price is low, at just $60,900, with upkeep costs at a median of $430 per month and monthly mortgage payments estimated at $307.94. The rental vacancy rate is 10.6
percent.
7. Corpus Christi, Texas
Markets in Texas have been doing well recently; cities in the state took up half of our list of the Top 10 Places to Invest for 2007 . Featuring a slowly but steadily growing population that was at 285,175 in 2006, Corpus Christi's median home price is $95,100. Upkeep costs of $467 per month and estimated mortgage payments of $480.88 per month are affordable and the median gross rent is $714 per month.
8. Shreveport, Louisiana
Shreveport is the cultural and commercial center of the Arkansas-Louisiana-Texas area, and is likely to receive an extra boost from the upcoming Cyber Innovation Center and provisional Cyber Command Center, which together are expected to create 10,000 new jobs in the
area, according to KTBS.com. The population of Shreveport was 203,914 in 2006 and the median home price is only $97,000. With a rental vacancy rate of 10.3 percent, low upkeep costs of just $287 per month and mortgage payments estimated at $490.48 per month, Shreveport is a very affordable area for investment. The median gross rent is $585 per month. Shreveport was ranked tenth on our Top 10 Places to Invest for 2007 details.
9. Detroit, Michigan
The Motor City was home to 834,116 people as of 2006. The rental vacancy rate is slightly higher than the average on this list, at 13.5 percent; this is likely at least partially because of the city's 12.32 percent decline in population between 2000 and 2006. Median monthly
upkeep costs are low, at $455, and the estimated mortgage payment is $463.69 per month. The median price of housing is $97,000 and the median gross rent is $712 per month.
10. Philadelphia, Pennsylvania
With a population of 1,448,394 as of 2006, Philadelphia has a high population density compared to the other cities on this list, which helps to drive up rental rates to $746 per month. Home prices are affordable, at a median of $115,500, and upkeep costs are low, at $393 per month. Average mortgage payments are estimated to be approximately $584.03 per month.
NuWire's rankings of the areas with the best potential for cash flow
Published on: Thursday, January 03, 2008
Written by: Cali Zimmerman
Cash flow is one of the most important considerations investors face when making real estate purchases, particularly now that so many markets across the country are struggling. Those seeking high-income property should take cash flow into account first and foremost when deciding whether or not to buy.
Cash flow refers to the amount of cash coming in relative to the amount going out. In ranking the top 10, potential for future appreciation was not considered; this list is ranked on cash flow alone. While appreciation is often the most significant form of profit for real estate investors, cash flow is easier to determine and lower risk.
Although many elements combine to influence cash flow, one of the most important ones is the surrounding market. Areas with lower home prices are more likely to have positive cash flow.
To determine our top 10 cash flow real estate markets, NuWire adjusted the average rent payment for the area according to the rental vacancy rate before comparing it to the amount spent monthly on mortgage payments and upkeep, including utilities, taxes and insurance. Mortgage payments were estimated based on an average loan—30 years at 80 percent loan-to-value and a rate of 6.5 percent—and the median cost of a home in the area. Statistics were gathered from U.S. Census data.
1. Rochester, New York
Despite the fact that Rochester's population fell by 6.74 percent, from 219,773 to 204,963 between 2000 and 2006, and the fact that it has the highest rental vacancy on this list at 17.9 percent, Rochester still managed to claim the lead as the city with the best cash flow for
investors. Homes in Rochester are affordable, at a median price of $67,600, and median monthly upkeep costs and estimated mortgage payments are low, at $418 and $341.82, respectively. The median gross rent in the area is $669.
2. Montgomery, Alabama
Montgomery is the capital city of Alabama and an important regional trade, processing and shipping center. The city was home to 202,443 people in 2006. The median home price in Montgomery is $106,300, with low monthly upkeep costs of $323 and an estimated mortgage payment of $537.51. The rental vacancy rate is lower than in Rochester and most
other cities on this list, at 9.6 percent. The median gross rent is $669 per month. Montgomery ranked third on our list of the Top 10 Places to Invest for 2007.
3. Birmingham, Alabama
Birmingham had a population of 217,131 as of 2006. The median price of a house in Birmingham is just $82,000. Median monthly upkeep costs are $347, with the estimated mortgage payment at $414.64. Monthly gross rent is $620.
4. San Antonio, Texas
San Antonio ranked number one on our list of the Top 10 Places to Invest for 2007 and second on our list of the Top 10 Foreclosure Markets for 2007. Home to 1,273,374 people as of 2006, San Antonio retains affordable home prices, with a median of $96,300, in spite of its growing population. Median monthly upkeep is only $374 per month, with an estimated mortgage costing $486.95 per month. The rental vacancy rate for the city is 10.3 percent—on the lower side of this list—and the median gross rent is $678 per month.
5. Garland, Texas
Garland was number two on our list of the Top 10 Places to Invest for 2007. With affordable housing—the median price is $116,100, upkeep costs are $544 per month and estimated mortgage payments are $587.06 per month—in addition to its growing population, which increased 11.64 percent from 2000 to 2006, Garland is attractive to investors. Garland's median gross rent is $862 per month.
6. Buffalo, New York
Buffalo has a median gross rent of $579 per month despite the fact that its population fell more than 10 percent from 2000 to 2006. As of 2006, 257,758 people lived in the city. The median home price is low, at just $60,900, with upkeep costs at a median of $430 per month and monthly mortgage payments estimated at $307.94. The rental vacancy rate is 10.6
percent.
7. Corpus Christi, Texas
Markets in Texas have been doing well recently; cities in the state took up half of our list of the Top 10 Places to Invest for 2007 . Featuring a slowly but steadily growing population that was at 285,175 in 2006, Corpus Christi's median home price is $95,100. Upkeep costs of $467 per month and estimated mortgage payments of $480.88 per month are affordable and the median gross rent is $714 per month.
8. Shreveport, Louisiana
Shreveport is the cultural and commercial center of the Arkansas-Louisiana-Texas area, and is likely to receive an extra boost from the upcoming Cyber Innovation Center and provisional Cyber Command Center, which together are expected to create 10,000 new jobs in the
area, according to KTBS.com. The population of Shreveport was 203,914 in 2006 and the median home price is only $97,000. With a rental vacancy rate of 10.3 percent, low upkeep costs of just $287 per month and mortgage payments estimated at $490.48 per month, Shreveport is a very affordable area for investment. The median gross rent is $585 per month. Shreveport was ranked tenth on our Top 10 Places to Invest for 2007 details.
9. Detroit, Michigan
The Motor City was home to 834,116 people as of 2006. The rental vacancy rate is slightly higher than the average on this list, at 13.5 percent; this is likely at least partially because of the city's 12.32 percent decline in population between 2000 and 2006. Median monthly
upkeep costs are low, at $455, and the estimated mortgage payment is $463.69 per month. The median price of housing is $97,000 and the median gross rent is $712 per month.
10. Philadelphia, Pennsylvania
With a population of 1,448,394 as of 2006, Philadelphia has a high population density compared to the other cities on this list, which helps to drive up rental rates to $746 per month. Home prices are affordable, at a median of $115,500, and upkeep costs are low, at $393 per month. Average mortgage payments are estimated to be approximately $584.03 per month.
Monday, March 24, 2008
Mixed Economic News Bodes Well For Real Estate Market
Here's an interesting post from fellow real estate investor Bryan Ellis's blog:
"Some “mixed” news was announced by the National Associations for Realtors today. But I think the news is FAR more positive than negative.
First, the “bad” news: In February, median home prices took a sharp dip of 8.2% nationally. Clearly, the carnage in the real estate market continued last month with a vengeance, as that drop is the sharpest in history.
But the silver lining is this: Buyers are returning to the market. Existing home sales increased 2.9% in February. That’s the first time in six months that there’s been any positive movement in existing home sales. This suggests to me that the prices are becoming too good for buyers to overlook. And that’s a very positive thing for the U.S. (and world) economy."
For the rest of the article,go here.
"Some “mixed” news was announced by the National Associations for Realtors today. But I think the news is FAR more positive than negative.
First, the “bad” news: In February, median home prices took a sharp dip of 8.2% nationally. Clearly, the carnage in the real estate market continued last month with a vengeance, as that drop is the sharpest in history.
But the silver lining is this: Buyers are returning to the market. Existing home sales increased 2.9% in February. That’s the first time in six months that there’s been any positive movement in existing home sales. This suggests to me that the prices are becoming too good for buyers to overlook. And that’s a very positive thing for the U.S. (and world) economy."
For the rest of the article,go here.
Monday, March 10, 2008
10 Ways to Build your Potential Buyers List
I've heard a lot of people asking about how to go about building a list of potential buyers for wholesale real estate deals. Here are ten free or inexpensive ways to build your list:
1) Classified ads - craigslist, local newspapers, community newsletters, local real estate publications, etc. Many of these are free, such as Craigslist and kijiji , while others are paid placement but still affordable. Be sure to use key words such as “rehab” “fixer-upper” and so on. Another option is to advertise a free list of 55 foreclosed / distressed homes – this works because people save time getting a list of 55 properties rather than having to look at 55 different ads. If you don’t have a list of properties to send them, you can have a realtor put together a list for you, then email it out to the people who responded to your ad.
2) eBay - Post a property for sale on eBay - you will receive the contact info of all bidders. After the auction is over, contact each bidder, find out what sort of properties they are looking for, and contact them when you find something suitable.
3) Networking – go to lots of networking events, chamber of commerce meetings, workshops, seminars, boot camps, etc. In addition to learning from the speakers at these events, you’ll make valuable connections and potential partners.
4) REIA meetings - go to your local Real Estate Investor Association meetings, meet people, exchange business cards, and make note of what they are looking for. If there isn’t a REIA group in your area, why not start one?
5) Roadside signs – posting your own signs can get expensive, particularly since they are often removed by local authorities and “quality of life” units. Thursday or Friday nights are often a good time to place these signs out, since they have a better chance of staying up over the weekend (since enforcement of these signs happens most during the week). So why not capitalize on the signs that others put up? Jot down the number of every “we buy houses” and “we sell houses” sign, contact the person and see whether it makes sense for them to be on your list. The odds are that it does. Also ask them if they wholesale houses, and ask to be put on their list if they do.
6) Call realtors – ask them if they have any cash buyers who are looking for wholesale deals. Of course you want to make it worth their while to refer these buyers to you – realtors are, after all, in business to make money just like anyone else. One approach is to offer the realtor a 2-3% fee, or perhaps a percentage of the profits on deals that their buyer purchases from you. In fact, you may want to take this a step further and pay them each time their buyer purchases a deal from you – this resolves the realtor’s fear that their buyer doesn’t buy from them because they’ve purchased a property from you. Also make sure to ask the realtors to alert you if they find any really good deals, particularly if you can close in cash within 2 weeks.
7) Talk to your current buyers. Home buyers often know other buyers. Let them know you will only call the referral if they pass on a property, or if it is outside the area they focus on.
8) Talk to landlords and out-of-town owners – people often ask these people if they’d like to sell their properties, but they don’t often ask if they’d like to buy additional properties
9) Bird-dogs – typically, investors use bird-dogs to find properties, not buyers. Why not give each of your bird-dogs a stack of your cards, and encourage them to find buyers for you as well?
10) Call contractors, rehabbers, painters, etc. – find out whether they work with any investors and, if so, if they can refer you to them. The benefit to them is that when the investors they work with buy more properties, they need more help to rehab them and prepare them for resale or rental.
When building your list, have your potential buyers be as specific as possible in regards to what they are looking for in a property. The more specific they are, the less likely you will waste your time or theirs by calling them about a property that does not meet their criteria. For example, if they’re looking to purchase cheap houses only for section 8 rentals, it wouldn’t make sense to call them about an $800K property even if you’re able to get it for $200K. Ask them what percentage of market value they are interested in buying, what areas of town they are interested in, types of properties, level of repairs needed (whether it’s just cosmetic, paint & carpet, full rehab, teardown and rebuild), and so on.
Be a little ruthless in maintaining your list. It just doesn’t make sense for you to keep people on your list if they aren’t going to buy. After all, it is a buyers list, not a tire-kickers list. I know of one wholesaler who does hundreds of deals a year and his strategy is simple. It’s easy to get on his list, but he follows a strict two-strikes rule. If he calls you once with a property fitting your criteria, and you don’t buy it, no problem. If he calls you a second time with a property fitting your criteria, and you don’t buy it, no hard feelings, but you’re no longer on his list.
Another wholesaler takes a different approach – he charges people $20 to join his list, refundable by request if, after 6 months, they haven’t bought any properties through being on his list. This can be useful for people just getting started in wholesaling, as it provides a little bit of cash up front. It also helps separate the doers from the talkers by forcing people to put their money where their mouth is.
To your success,
David Wright
www.creatingrealestateinvestors.com
1) Classified ads - craigslist, local newspapers, community newsletters, local real estate publications, etc. Many of these are free, such as Craigslist and kijiji , while others are paid placement but still affordable. Be sure to use key words such as “rehab” “fixer-upper” and so on. Another option is to advertise a free list of 55 foreclosed / distressed homes – this works because people save time getting a list of 55 properties rather than having to look at 55 different ads. If you don’t have a list of properties to send them, you can have a realtor put together a list for you, then email it out to the people who responded to your ad.
2) eBay - Post a property for sale on eBay - you will receive the contact info of all bidders. After the auction is over, contact each bidder, find out what sort of properties they are looking for, and contact them when you find something suitable.
3) Networking – go to lots of networking events, chamber of commerce meetings, workshops, seminars, boot camps, etc. In addition to learning from the speakers at these events, you’ll make valuable connections and potential partners.
4) REIA meetings - go to your local Real Estate Investor Association meetings, meet people, exchange business cards, and make note of what they are looking for. If there isn’t a REIA group in your area, why not start one?
5) Roadside signs – posting your own signs can get expensive, particularly since they are often removed by local authorities and “quality of life” units. Thursday or Friday nights are often a good time to place these signs out, since they have a better chance of staying up over the weekend (since enforcement of these signs happens most during the week). So why not capitalize on the signs that others put up? Jot down the number of every “we buy houses” and “we sell houses” sign, contact the person and see whether it makes sense for them to be on your list. The odds are that it does. Also ask them if they wholesale houses, and ask to be put on their list if they do.
6) Call realtors – ask them if they have any cash buyers who are looking for wholesale deals. Of course you want to make it worth their while to refer these buyers to you – realtors are, after all, in business to make money just like anyone else. One approach is to offer the realtor a 2-3% fee, or perhaps a percentage of the profits on deals that their buyer purchases from you. In fact, you may want to take this a step further and pay them each time their buyer purchases a deal from you – this resolves the realtor’s fear that their buyer doesn’t buy from them because they’ve purchased a property from you. Also make sure to ask the realtors to alert you if they find any really good deals, particularly if you can close in cash within 2 weeks.
7) Talk to your current buyers. Home buyers often know other buyers. Let them know you will only call the referral if they pass on a property, or if it is outside the area they focus on.
8) Talk to landlords and out-of-town owners – people often ask these people if they’d like to sell their properties, but they don’t often ask if they’d like to buy additional properties
9) Bird-dogs – typically, investors use bird-dogs to find properties, not buyers. Why not give each of your bird-dogs a stack of your cards, and encourage them to find buyers for you as well?
10) Call contractors, rehabbers, painters, etc. – find out whether they work with any investors and, if so, if they can refer you to them. The benefit to them is that when the investors they work with buy more properties, they need more help to rehab them and prepare them for resale or rental.
When building your list, have your potential buyers be as specific as possible in regards to what they are looking for in a property. The more specific they are, the less likely you will waste your time or theirs by calling them about a property that does not meet their criteria. For example, if they’re looking to purchase cheap houses only for section 8 rentals, it wouldn’t make sense to call them about an $800K property even if you’re able to get it for $200K. Ask them what percentage of market value they are interested in buying, what areas of town they are interested in, types of properties, level of repairs needed (whether it’s just cosmetic, paint & carpet, full rehab, teardown and rebuild), and so on.
Be a little ruthless in maintaining your list. It just doesn’t make sense for you to keep people on your list if they aren’t going to buy. After all, it is a buyers list, not a tire-kickers list. I know of one wholesaler who does hundreds of deals a year and his strategy is simple. It’s easy to get on his list, but he follows a strict two-strikes rule. If he calls you once with a property fitting your criteria, and you don’t buy it, no problem. If he calls you a second time with a property fitting your criteria, and you don’t buy it, no hard feelings, but you’re no longer on his list.
Another wholesaler takes a different approach – he charges people $20 to join his list, refundable by request if, after 6 months, they haven’t bought any properties through being on his list. This can be useful for people just getting started in wholesaling, as it provides a little bit of cash up front. It also helps separate the doers from the talkers by forcing people to put their money where their mouth is.
To your success,
David Wright
www.creatingrealestateinvestors.com
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