Occupying your investment property in a timely and profitable manner

To maintain a positive ROI on any investment purchase you have to have tenants, right?

RIGHT.

However, I often see many investors going about this process the wrong way! I am constantly hearing the stress and aggravation of landlords whom can't get their property rented in a timely OR profitable manner. Stress kicks in, Buyers remorse is next, and the drinking ensues (joking).

What can we do to be sure that our new investment becomes occupied at a desirable rate with just as desirable tenants?

Become your own rental agent!!

As a Realtor I am sure i will get burned for stating this, but the MLS is NOT the way to rent your property in these times! To do so requires the added expense of 10% of your gross lease net. Doesn't it make sense to first of all save that amount, and secondly to pass on those savings? If you are going to give up that 10% to an agent, give it straight to your tenant!! No, I don't mean hand them a wad of cash for signing a lease, just require less of a deposit for them to move in - isn't that a motivator to choose your property over your competitions?

Do your research before you buy!!

If this doesn't sound like the most logical advice I can give...... But it's true and often forgotten. DO NOT and I have to repeat - DO NOT buy an investment rental property without figuring out what your lowest rental income will be. Forget the greed and how much you could charge, how much can you get? Do your work and find out first of all what current tenants in comparable units are paying, and secondly what comparable units are asking. Will the lowest amount you can expect still make your ROI high? If not, move on.

Don't get bogged down with Credit Apps & Referrals

Everyone deserves a second chance right? Just because a prospect has bad credit or can't provide adequate references does not make him/her a bad tenant. Yes, the percentage of default is higher, but I've also seen people with 760 credit scores go into foreclousre, we all have by now. This may sound lacksidasical or imprudent, but GO WITH YOUR GUT. You need to judge your prospective tenants by yourself, what feeling do you get from them? If it feels right, go for it. There are no guarentees in life, we sometimes have to take a chance on the underdog, when the odds are against us however they can pay off in spades! (wanna go to the track?)

Keep your tenants happy

Again, seems obvious but this is also often forgotten. A happy tenant is a paying tenant as well as a courteous tenant. Remember the days of highschool parties? If you were friends with the homeowner didn't you look after the house during the ruckus? If however you were in a "strangers" home, spilled beer here, dent in a wall there, whatever.... not my house. Tenants have the same mindset, if they like you and understand that you repect them they will treat your home as it is theirs and the payoff for this is priceless!!


For more tips, advice or ideas on occupying a rental property to the best or your ability visit us at:

SFLA Investments


or write us direct at info@sflainvestments.com


To your wealth

- Rick

Investing in Short Sales vs. New Construction

Short Sales SUCK!!

All the chatter about short sales is really wearing thin on me. Can they be a great deal? Of course. Are they the best way to invest in this market? NO.

As most of you probably know already, "short" is the worst way to describe these sales. The process is long and tedious, often drawn out for months on end. While the deal may be worth the wait monetarily, you need to be aware of the other pending issues that may and will arise during this drawn out time frame. As we know by now, short sales happen when a homeowner can no longer afford their home and need to sell below fair market value. Now ask yourself this, if the homeowner can't pay the mortgage do you think they will continue to maintain the house to the best of their ability? Of course not. Landscaping goes first, then common problems become ignored, the electricity gets turned off - no A/C breeds mold, the pool turns to a green sludge filled nightmare, the home begins to smell and termites and bugs start to move in by the thousands. All while you are waiting for the bank to get back to you with an acceptance or denial of your offer. By the time the bank does respond, the home is worth about 5-10% less then you offered at original contract. So, you tell me.... are short sales the way to go?

In reality, they can be a great investment if done right, but they should not be your main focus in this market. What should be?

New Construction!!

With the economy in the state it is currently in builders are scrambling to sell out their remaining inventory. Now keep in mind that these builders pretty much have carte blanche as to what terms they can accept. There is no wait for third party approval of your offer and many builders original lenders will actually finance you at lower then average rates just to get you in the door!

Let's also keep in mind that you are now working with new product, not just new but BRAND NEW. The builder will also often offer a warranty on the home and all appliances. That alone cuts future costs!

There is also a strong point to be made that many of the past sales in these communities have closed at much higher levels then you will be paying. Instant Equity no longer exists monetarily but in essence that is what you are receiving with many of these purchases, and for a long term hold what's better then that?

New construction units are also much easier to rent. The grounds are beautiful, the interior is brand new, and in return you can demand a stronger rental rate.


Short sales can work, they will not disappear and may offer strong returns, but in today's current market there is nothing better then snagging a new construction unit at rock bottom price.

For more information be sure to visit http://www.sflainvestments.com/

To your wealth,

Rick

Long term holds vs. Flipping

This economy has set new "guidelines" in terms of Real Estate Investing. Long gone are the days of the two week flip, the assignable contract or the instant Millionaire wholesaler. Let's not forget however that these occurrences are a large factor to what has put us in this sinking ship.

We need to get our heads wrapped around the long term hold. FLIPPING homes is out like polyester. The long term hold is in like Flynn!! Just look at the S&P - falling at dramatic rates, 401(k)'s dwindling at a record pace, retirement accounts telling you to get back to work!! THIS IS THE TIME TO BUY AND HOLD SELF SUSTAINING REAL ESTATE!!

Buy Low Sell High

I've typed those words often on this blog but will continue to do so until it really sets in. Now is the time to make your move!! This is the time to purchase residential, income producing Real Estate at amazing values!! AND GET THIS!! It doesn't have to be a short sale or foreclosure!! It can actually be new construction! With the economy in the crapper, deals are everywhere!! Builders need to sell their inventory, they are almost "forced" to take losses to appease the funding bank. We just closed on a new construction property (3/2.5 two story townhouse) at a record low price, actually 45% less then previous '08 sales of the same unit!! Now if this isn't buying low, I don't know what is.

Here's the Beauty

Ok, so buying low is great....we get it... blah blah blah... But the economy is tough Rick, my funds are down, the country is in a recession, and my stocks aren't worth the paper they are printed on.

Well here sir/ma'am is the beauty..... These units rent for your hold costs!! Not only are you saving the 40-50% off standard purchase price, but the unit is now paying for itself!! Your net rental income actually pays for all your expenses. Yes, ALL. Taxes, HOA, Insurance, even incidentals.

Now get this!! Your ROI appreciation rate will be close to triple that of your neighbors! As long as they don't lose money, all you can do is gain! With 40-50% already built in as "instant equity" there is no where to go but up. While the economy resets (and it will take a while) your self sustaining property grows money! And it costs you NOTHING!!

Listen people, we are at the bottom. The market has bottomed out due to the bailout. It needs time to reset, are you going to wait for the reset to make a move? If you do there is no point at that time. NOW IS THE TIME TO BUY/HOLD/PROFIT...

It will take years to see a market like this again, do NOT let it pass you by.

-RICK
Be sure to click the SFLA Investments link to your right for more info on what I do and how I do it.

The Fannie Mae and Freddie Mac Bailout

BAIL OUT BAIL OUT BAIL OUT!!!

I've heard, read and said the term "bail-out" more in the past week then a big wave surfer. The news of the GOV taking over Freddie and Fannie have a lot of people asking a lot of questions.

My thoughts

My gut instinct with the bailout is that the short sale opportunities we are after will remain the same. It is my understanding that although the gov can guarantee a new loan for the homeowner to re-fi their current property, it is up to the bank to first grant permission for owner to do so. Many of the sellers we are dealing with can’t even afford to rent back from us, in turn that means they can’t afford the home at fair market value and in my mind there is no way they will be approved for a newly structured loan to keep their home. I think the only people this will actually help are the ones that were honest in the beginning when applying for the original loan. If borrowers were straight about their income and debt, were approved for a loan under those terms and those loans then turned out “bad” due to broker negligence they should be able to afford a newly structured loan to keep their home. What we are dealing with however are owners who applied for loans with a stated income that was grossly over estimated, went forward with interest only loans, did 100% financing or all of the above. It is my opinion that these homeowners will continue to take the brunt and will not, nor should be bailed out. Only time will tell, but I hope I am correct. It’s simply unjust for all of these speculators and irresponsible borrowers to be allowed to stay in these homes when they are the main reason the market is where it is. To summarize, I don’t think the institutions will take a “wait and see” attitude unless the current owner is a responsible individual with an income to debt ratio that merits a new loan. A short sale is only possible when a homeowner submits a letter of hardship, if you had a hardship letter in your hand, would you loan more money to that individual? I wouldn’t and I hope the banks won’t either.

When the banks are TIGHT the time is RIGHT

If you've been watching the news you've seen the constant flow of bank trouble. Banks shutting down, being "taken over" by the Gov, shutting down mortgage divisions, getting audited, the list goes on and on.

What does this mean for the savvy investor?

When banks deplete, you win. No, no, no, this isn't a Lending Tree commercial. I said DEPLETE, not COMPETE!! If you know anyone trying to buy in this market you've heard the horror stories about obtaining financing. Banks are as tight as tight gets right now. They want ZERO risk and have pulled the purse strings so tight that no one can get a dime without a 1400 credit score (don't email, I know it's a fictitious number)....

Ok, so how does this help you?

BY LOWERING FAIR MARKET VALUE!!!

It seems stupid, I know. The market is a mess, foreclosures are EVERYWHERE, NO ONE can sell, and now?............ NO ONE CAN BUY!!!!

People can't get loans to close on anything, that in turn brings less buyers to the table in a market where inventory levels are at their highest! This in turn lowers fair market value of just about any area you are interested in. If seller Smith can't find a buyer, has a load of competition that won't go away because banks won't fund, Smith will take what Smith can get!!

Who's Smith, how do I find him?

That's the rub, but that's also where I come in. Smith is out there, but it takes time and patience to locate him in a market full of FSBO's, Short Sales, Foreclosures, Listed Property, REO's, etc. You need to do your homework, talk to EVERYONE, and not be afraid to low ball any thing you have interest in. If you have the financing, if you have the cash.....

CASH IS KING?
YOU ARE KING!

If you have funds, the time is right!! Forget the stock market, forget mutual funds and CD's and Commodities .................. It's time to deal in the #1 proven ROI - REAL ESTATE!!

THE TIME IS RIGHT!!!
LIKE NEVER BEFORE............

Florida Short Sales - Don't lose them, USE THEM!!!

Ok, you're on the short sale kick... ya gotta have one, right? I get it!!

What a deal!!
Oh my god, they're so cheap!!
Why buy a "regular" home when I can buy a short sale?
I only want to look at short sales...

The problem?

YOU CAN'T CLOSE ON THEM!!!

Short sales are having an atrocious effect on our Real Estate market. Listing agents are pricing these homes at ridiculous levels with the hopes that the bank will accept..... and what happens?

THE BANK DENIES!!!

This is what I just can not wrap my head around. Why would an agent, trying to sell a home, trying to put money in their own pocket list a house/condo/townhouse at a level that will be unacceptable to third party approval? It does nothing but waste everyone's time, never mind the agents money to advertise the property.

WHAT CAN WE DO ABOUT IT?

Stop searching only short sale homes!!
Use their low list price to negotiate a "standard" home listing!!

Doesn't it make sense? The name of the game in Real Estate is and always will be negotiation. I don't care if you are buying a home as a first time homebuyer, a second vacation home, a condo for your college student child, or strictly for investment purposes. IT IS AN INVESTMENT!!

As an investment you want to pay the lowest price possible, right?
Right.
There are an awful lot of homes for sale, right?
Right.
Most of those homes are short sales, right?
Right.

Look at the market in a different light, instead of trying to scoop up all the great short sale deals (which will never close due to third party approval), go straight to the "standard" homeowner and use the short sale listings as comparable properties when making an offer. The "standard" home seller decides him or her self what they will accept, not the bank!!

Listen, short sales are "in vogue" they are "sheik" they are the new foreclosures like brown is the new black, I get it, but like most of the latest styles, you can't get your hands on them without the right contacts. So......

DON'T LOSE THEM......
USE THEM!!!

STOP WASTING YOUR TIME!!!

Are you spending countless hours at the courthouse? Wasting money with subscriptions to Investment websites or newspapers? Risking life and limb by knocking on pre foreclosure doors?

STOP!!!

There is no longer any need for these old school techniques, there are PLENTY of opportunities for the savvy investor - ah ....... but are you savvy?

I AM!!!

And ............ I WILL DO THE LEGWORK FOR YOU!!

There are countless amounts of people that want to take advantage of this market but don't know how, when or where to make a move. Do I scour the classifieds? Do I put a sign on my car? Do I staple cardboard to telephone poles?

WHAT DO I DO? HOW DO I MAKE MONEY?

The first thing you need to do is recognize....that's right....recognize!! Recognize that I am here to help YOU MAKE MONEY!! I don't charge for it, you don't have to mail away for anything, you only have to listen, ask questions, respond and REACT!!

I have a multitude of investors whom I bring deals to on a daily basis - they can't take them all, so some get passed on - do you want in? Email me now, let's get to know each other and make you some MONEY!! Better late then never....right?

I am an ordinary man, your typical Real Estate Investment Specialist... what's different about me?

I CARE

I know, I know...cliche agent... but it's true - ask any of my clients. I work for you, not the other way around. I only want to meet your goals, not my own.

If you are new to investing, are a seasoned pro who would like a contact in this hot area, or just want some simple advice - email me now. My services are FREE to you!!

Don't let this market pass you by....you WILL regret it.

Look forward to hearing from you

-RICK

Short Sales Vs. REO's

If you are reading this I am sure you are well aware of Short Sales and REO properties and the effect they are having on the market.

LET THEM HAVE A POSITIVE EFFECT ON YOUR BANK ACCOUNT!!!

The stories are endless..... "I got a $700,000 home for $420,000" ...... " I just picked up a home that closed in '05 for $535,000 and only paid $330,000!!"

These deals are out there, short sales are EVERYWHERE!!! But don't let the short sale "medusa effect" influence you and your investing decisions. Short sales are long, drawn out processes that can go no where quick. The main strategy in Real Estate Investing is speed, you need to be able to act quickly and efficiently. Short sales unfortunately do not work well with this strategy. What they do work well for is helping to "sell your offer". Use the short sale comps to evaluate your offer on REO properties and get these "QUICK CLOSE" properties at the same price with less hassle!!

When everyone is scrambling for the next best investment strategy it's time to shake and bake, zig zag, razzle dazzle. THINK OUTSIDE THE BOX!! Believe in your strategy and MAKE IT WORK.

THE NUMBER ONE ADVANTAGE OF SHORT SALE CLOSINGS IS OUR ABILITY TO PURCHASE NON-SHORT SALE PROPERTY AT A SIGNIFICANT DISCOUNT!!

REO property is the way to go, they already own the home.....are no longer strategizing on what offers to accept to offset the loss on the first mortgage and only want FAIR MARKET VALUE.. Fair market value is now down, why? Yes, short sales!!! Use others losses for your gain!! Investment 101...

If you are ready to take advantage of this market you need to act yesterday!!!

REO and Corp owned property is the way to go people!! Get off the short sale train and invest with your brain!!!

Any idea how many foreclosures are out there?

Are you taking advantage of this market? Listen, it's sad yes, we are in a "recession" yes.... but now is the time to act, NOW is the time to set yourself up with an amazing South Florida real estate portfolio.

Do you like living in Sunny South Florida? So does 85% of the the rest of the country, and THAT is why South Florida Real Estate will continue to be a sound investment. Don't watch these opportunities pass you by any longer.... ACT NOW!! I can get you into a self-sustaining investment home....a home that will show a 15-30% ROI!!!

FOR A LIST OF GREAT FORECLOSURE OR PRE FORECLOSURE OPPORTUNITIES EMAIL ME NOW

- Rick
rick@rickrapp.com

I'm BaaaaAAcck!!

Have not posted in a while and I apologize for that.

I have been to busy buying and closing on SELF SUSTAINING properties!!!

This market is like a candy store, and I am the Kid!!

I used to mill over court documents for days at a time looking for the next great deal, I used to stare at the Newspaper scouring for the next best foreclosure, I used to low ball the hell out of listed property just to make the numbers work...

THERE IS NO NEED ANY LONGER!! THIS DOES NOT GET EASIER!!

Prices are horribly low, but how long will they remain? Will they go lower? Will Congress pass a bill to bail out all of these pre-foreclosure home owners?

Who's to say?.....not me..

What I will say is that there is no time like the present, if the numbers work now, ACT on that!!
Do you have any idea how impossible it was to acquire income producing or at the least self sustaining property in South Florida just one year ago?

Well people, it has become easy - DEALS ABOUND!!

If you are interested in learning more about the available deals in the South Florida contact me today. I will email you opportunities that are available now.

I do not push, I am here to help you not sell or pitch you. My services cost NOTHING!!

If you are thinking of investing, congratulations you have come to the right place and found your man!!

- Rick

Free Real Estate Investment Spreadsheet to all readers!!!

Email me for a free copy of my investment "cheat sheet"

As you can all probably figure I spend a good part of my days searching for the next GREAT deal. As I have talked about in the past it takes more then a "drastic price reduction" or an "extremely motivated seller" to make a deal great. This chart will help you easily and quickly decide if the property is worth your time and effort or not. If the numbers don't work, don't try to make them work.......MOVE ON!!

If you would like a copy of this spreadsheet just send me a quick email, I would be glad to send it over.

-Rick
rick@rickrapp.com

DEALS ABOUND!!

There are deals all over the place!! Check out this three story townhouse I found for an investor group from out of state. Three bedrooms, three full baths, two car garage, rentable at $1900 a month, previous owner paid $511,000 in '06........we paid half of that!!!

This is the kind of stuff you need to be buying, and now!! This market will not remain for ever, you need to find the deals and move quick. When we went to contract on this unit there were four other offers on the table, a few were actually for more money!! But I know how to negotiate, I know how to get you the best possible deal available.

This home will go back up to its original value in a few years (people are still trying to sell them for $500+) and when it does the set of investors that purchased will make a HUGE profit....not to mention that while they wait for the property to appreciate.......The HOME IS PAYING FOR ITSELF!!!

It's like taking candy from a baby right now....if you want to make the kind of money you read about in those how to books, or see on late night infomercials, do it the smart way, the real way, the RIGHT WAY.

Contact me today to have opportunities like this sent to you on a weekly basis.

- Rick
rick@rickrapp.com

Flipping in today's market

What are you.....nuts?

I recently attended a Real Estate Investment Expo and quickly noticed that a bulk of todays "investors" are still interested in flipping homes. WHY? If you are watching the market you should realize this is not the time to sell anything, and I mean ANYTHING. Now is the time to be a long term buyer.

Flipping and flippers scare me in this market, not personally, but I get scared for them. I think a lot of people have been watching to much TLC and home flipping programs. They need to make a program titled "The ultimate Landlord" it is much better suited for the market we are in.

It does not take much more then common sense to realize this is the time to be a holder of property. Why would you buy something that someone can't sell only to try to sell it a month later? I don't care how much "curb appeal" you think it needs, or how the new paint job should really spice things up. You are NOT going to make any money!! Why not?

Because it costs you at least 10% to purchase then resell any property, and that does not include taxes!!!!

Be smart people, don't believe the hype.....do your homework first and then make money!!

Look for property that you can rent out for your holding costs
AND DON'T THINK THEY ARE NOT OUT THERE
THEY ARE ALL OVER THE PLACE!!

If you can flip it, you can rent it

Appreciation is the name of the game in this market. If you can find something that will give you a 7% annual return on your money, AND you can rent it out for your hold cost.....

BUY IT NOW

If you can't find one, email me....I'll find it for you.......for FREE!!!

- Rick
rick@rickrapp.com

Are you sick of this market? CHANGE IT!!

I am hearing it day in and day out:

"Rick what is with these people? Prices are ridiculous, when will the market change?"

WHEN YOU CHANGE IT!!

We need to act and react together as buyers, investors, and Realtors. We CAN make a difference it we all get on the same page. Why are inventory levels so high? Because sellers are asking astronomical amounts for their homes and NO ONE will pay them!! So how can we reset the market?

By making low ball offers day in and day out and by doing so teaching sellers that we are not in a peak market any longer.

By getting REAL!!

This market will not reset itself
Things will not automatically get better
Prices WILL NOT BE what they were three years ago....

SELLERS LISTEN UP!!!

THE MARKET SETS THE PRICE, NOT YOU!!!

How much is a home worth? Whatever someone is willing to pay for it - plain and simple.

We are currently inundated with unrealistic sellers asking far to much for much to little. If you own a stock and it goes down, do you try to sell for what is was selling for at its peak? Of course not. When the price of gas goes up, do you offer the attendant .50 cents less a gallon because that's what the prices once were? Of course not!! Then why......why do you continue to ask for an '05 sales price in an '08 market?

Because no one is offering less!!

"What are you talking about Rick, do you feel ok today?"

What I mean is that these sellers are listed at and asking these crazy prices because no one is showing solid proof of a market change. Realtors are not being honest with them for fear of a seller getting mad at them and giving the listing to someone else and buyers don't want to offer less and feel "stupid".

People it's "stupid" not to offer less!

If we want to see a change we need to make that change happen by banding together and resetting the market. We are the only ones capable of making a change. If a seller consistently gets offers 25% below his asking price what do you think they will do? Common sense tells you exactly what they will do....they will lower their price and finally accept less....if they accept less then what?......the neighbor will drop their price and also accept less.....then what?.......

INVENTORY LEVELS WILL DROP AND THE MARKET WILL RESET!!

We need to educate the sellers by offering less and purchasing for less. We educated them three years ago by offering more and purchasing for more didn't we? We taught them that they could get more then they wanted then, its time to teach them that times have changed!!

DON'T BE SCARED TO MAKE LOW BALL OFFERS!!! IT IS THE ONLY WAY THIS MARKET WILL CHANGE.......

Now if we can only get gas prices down! ;)

- Rick
rick@rickrapp.com

Recession = Time to buy?

Yes Yes Yes!!!!

Are you timid about buying because we are in a recession? (and don't think we aren't)

DON'T BE!!

We have all heard the term "buy low, sell high" right? Well there is no better time to start investing in South Florida Real Estate then right now. There is an over abundance of inventory, sellers are getting scared, the NYSE and DOW are down and falling more each day, NOW IS THE TIME!!

But what if the recession gets worse?

- America knows what is going on, but more importantly the government is watching things very closely (whether you believe that or not) and is going to step in soon and get us back on track, this IS AMERICA!! The secret is to buy BEFORE things get better, buy low sell high. Could it get worse? Of course, can it get better? It will. But what we know now, right now is that we are in the middle of it all and there is not a better time then the present to react and make your move.

If you are ready to prosper from the economies downfall email me today for more information on what to buy, how to buy and where to buy in the Sunshine State. People are ALWAYS going to want South Florida property!!

Let's make some money!! Email me now:

- Rick
rick@rickrapp.com

Question from reader Answered

Just received this email and thought I would answer here for any of you that may have the same type of questions

Hey Rick

I'm a first time visitor and I was checking out your blogs on investing in south Florida web-site
I am new to real estate investing, i live in california and have been knocking on doors to try and pick up some properties with some equity in them what do you recommend when you say invest with your brain not your wallet..

what I'm trying to ask, as you mention in what makes a bad deal good to look out for HOA fees, rental rates ,taxes and ur monthly mortgage payment..obviously rent rates,hoa fees and mortgage to measure positive or negative cash flow...right

what could you suggest i look out for..

thank you ,

JH - (name changed for anonymity)

First of all JH, thanks for visiting the blog!

I love to hear that you're knocking on doors, but you may be wasting energy. I would like to discuss where you are getting your leads before I give further advice but we can discuss that privately via email.

Gang, the reason I say this is that you DO NOT want to be buying lists of pre foreclosure properties from any type of firm,business or website offering the service. What is bound to happen is you will be one of possibly a hundred investors knocking on the door, calling or sending letters. UNLESS you have a VERY distinct way of differentiating yourself, it will be a waste of time and money. Get with an agent who specializes in Investment Real Estate and get the right leads the right way. If you need help finding the right agent, email me and I will set you up with the best person or people in the city you are in. That being said, let's move on.

When I say to invest with your brain and not your wallet I am in essence referring to two things:

1. Do not get greedy with your projected returns

(You can refer to the post directly below this to expand on the principle I am about to explain.)

Please do not set your return goals to high just to pad your WALLET. Think more (with your BRAIN) and realize that any positive return is a success in Real Estate Investment, get in and get out! If your neighbors are renting for $1500 a month and making $200 positive cash flow, rent yours out for $1400, take your $100 positive and MOVE ON TO THE NEXT!! The point of renting the home is to have the mortgage paid for, you are going to make the BIG MONEY on the sale 3-7 years down the road, not on the extra $100 per month. PLUS you will obviously be the first to rent seeing that you now offer the best price for available product. Make sense? Good.

On the flipping side of Real Estate Investment use the same concept. If you project a sales price of $500,000 because that's the average rate in the neighborhood, advertise at a steal, give 10% off, sell in a week and MOVE ON TO THE NEXT!! GET IN AND GET OUT!! Less hold time equals more money in the long run, what seems and may feel like a loss now are gains on time and money that you WILL BE attached to shall you try to get top dollar for your flip.

2. Do not get cocky with the amount of money you have to invest

Just because you may have money to invest in Real Estate does not make you a smart investor. Don't go for the first thing you see, do your homework and invest with your BRAIN....simple yet sometimes....scratch that, many times overlooked.

What makes a bad deal good in terms of HOA, mortgage payments, rental rates, tax, etc:

No matter how much work a property needs, if after that work is complete your numbers still work out, its a good deal! If you think its a bad deal, express that to the seller and beat them down until the deal is good!

If you are visiting this site I am sure you know that you want your rent to be more then all of your fees, but please please please be sure to calculate EVERYTHING when figuring your net numbers. Vacancy allowance, Annual repairs, City and State Tax. We all love surprises just not in Real Estate!!

What should I look out for:

• hidden fees from associations
• maintenance for problems that the seller can fix now
  
• assessments that the seller forgot (yea right) to mention
• tenants that don't pay
• unforeseeable home repairs (they will happen)

Thanks for the questions, I hope this helped. If not send more!!

-Rick
rick@rickrapp.com

Do you HAVE to make a 35 - 40% return?

NO!!
GET IN AND GET OUT!!

One thing that really confuses me is the lack of "willingness" to want to make moderate returns in this market. People are so used to hearing about 25+ percent returns on Real Estate investments from a few years back that they now think thats the norm, anything less isn't worth it. Does that make sense to you? It makes zero sense to me. If I can find you a home that will offer a quick 10% return as a flip what would make you hesitate? Nothing? Good, let me show you how to do it.

As I keep saying in these posts, you want to be positive with each investment, makes sense right? There are however certain investors out there that will pass on properties that have a moderate risk in regards to making cash on the flip. So what these investors want is a property that will offer a HUGE return on investment. For example they want a home that they can buy and rehab for say $400,000 and sell for $540,000 they expect a 35% return!! Now there is NOTHING wrong with that, I wish I could bring all of my clients such high returns. These deals are possible, but why waste all of your time and money waiting for a 35% deal to come along when you can pick up 5 10% deals in the same amount of time, with the same amount of money out of pocket, AND MAKE MORE MONEY!!!!

Let's say you buy the same house in the explanation above. You have comped out the neighborhood, you have done all of your research and you know that with the right marketing, exposure, agent and buyer you can make 35%. How long do you think that will take however? 6 months? A year? In this market I wouldn't be surprised. So why don't you take "a loss" and market the home for $475,000, sell in a week, make your 20%, move on to the next property and be happy?

Investing with your brain, and not your wallet!!!

Now I am not in any way saying make less money when you can make more, I am simply saying in Real Estate the name of the game is GET IN AND GET OUT why hold property that you don't have to for an extra 10-20%? Is it really worth it in the long run? And doesn't a longer hold period equal more risk?

WOULD YOU RATHER HAVE ONE 35% DEAL A YEAR OR 5 10% DEALS? Ummmmm.....

Let's make some money the smart way people!!

Email me today and let's get started

-Rick
Rick@rickrapp.com

What a "Good Deal" looks like

THIS PLACE LOOKS LIKE CRAP!!

How can this be a good deal? The place is a mess!! What is that?

It's a kitchen, or obviously lack there of. How can this be a good deal? This specific property is currently owned by a bank, it has been foreclosed on and is now available for sale. Because the property looks like this it is listed at a drastically reduced price! And because it looks like this, no one wants it!!

Let me show you quickly why this is such a good deal:

Sales History for this community by sq/ft

2005 average price per square foot - $278
Today's average price per square foot - $222

Your price per square foot - $145 !!!
(Including rehab!!)

Now thats a bargain!!! Sure the place needs a kitchen, sure it is going to take some elbow grease, but when has making money ever been easy? This property will carry itself, you can occupy it with a tenant and actually profit monthly!! You get paid to own more property!! You make money on an investment that already has instant equity!!

This my friends is what a good deal looks like.

Want a good deal? Of course you do.

Email me today at rick@rickrapp.com let's make you some money in this market!!

Short Sale vs. Forelclosure

There has been a ton of talk lately about short sales. What are they? How do I find them? Are they good investment opportunities? What does it even mean?

A short sale is when a seller is facing foreclosure and is trying to sell the property for less then they currently owe the bank. The bank is going to "come out short" on the sale of the property. For example, a homeowner who is has a home that is worth $400,000 in today's market but owes $500,000 and can no longer afford it. The seller can no longer afford the home and needs to sell, but does not have the $100,000 difference to pay the bank to get out shall he acquire a purchaser willing to pay $400,000. What the homeowner has to do is contact the bank and ask if they are willing to take less then he owes. They may be willing to "short" themselves on the sale of his (their) home.

Why would a bank be willing to do this? In today's market there are an abundance of homes facing foreclosure as I am sure you must be aware of, I think at this point my cat is aware of it!! When a home is foreclosed on the bank becomes the solitary owner of the property. They don't want the home however!! Why would they? It becomes a negative hold for them, they now own a home that is bringing in no income and probably requires fee's of some sort to hold, ie. HOA fee's, taxes, electric bills, etc. It may be beneficial to the bank to accept less then the balance of the homeowners mortgage to simply move on and get the home off their books. So at times they will be willing to take less. However, it is COMPLETELY up to the bank as to the amount they will accept. The homeowner must also prove that they can no longer handle the payments by submitting W-2's, pay stubs, hardship letters and more.

A short sale is not an easy process for either party. The buyer has to wait for a response from the bank, which means he/she/they can not take advantage of other opportunities that may arise. Once your offer is submitted it can take up to two weeks to get a response from some banks, then up to 6 months to close. The bank, as any other institution would, waits for better offers and does not want to simply give the property away as some would assume. Being a "savy" investor and low balling a bank thinking you are helping them out will get you no where. They know what its worth, trust me they have done their homework.

From a sellers standpoint a short sale is in no way a saving grace. You are required to pay taxes on the difference paid to the bank. Example, you owe $500K, bank accepts $400K, you owe taxes on $100,000!! That's right, the government is not going to just let you walk away......did you really think they wouldn't want their due?

And on to Foreclosures -

A foreclosed property is one that was not sold through a short sale, or auction (we will talk about that in a bit) and is now listed for sale, usually through a Realtor, by the bank. Now as I said before, a bank is a business and they want the most possibly attainable, wouldn't you? Don't you think they want to make a profit, even if the last owner only owed $100,000 on a $500,000 home? OF COURSE!! And this is why not all foreclosures are good deals, just because a home has the word "Foreclosure" on it does not mean it will make you rich!! Please remember that:

Just because a home has the word "Foreclosure" on it does not mean it will make you rich!!

The word Foreclosure has become such a magnet to new investors, many think if they can find them they will strike it rich, not the fact Jack. Just like anything else, some are good, some are bad. Learn to decipher good from bad and THEN you will become rich!!

People you need to do your homework when investing in Real Estate, and if you don't know where to start, contact a professional, I know of a great one!!

For more information on Short Sale and Foreclosure properties email me today!

- Rick Rapp
Real Estate Investment Consultant
rick@rickrapp.com

How do I find good real estate deals?

There is no secret to finding good real estate deals, no magic formula, no secret sauce. Just like everything else in life it only requires hard work, time and dedication. If you are serious about investing in Real Estate and are ready to move financially when the right deal comes along all you need is time......or the right agent.

As a Real Estate Investment Consultant I am constantly on the look out for investment property. Now you may hear many agents, brokers, and even friends say they are activly doing this but you have to ask them and yourself, "do they know what they are looking for?"

What differentiates a good real estate deal and a bad one? Many many things, some of which you will find in posts below. The importance of knowing exactly what to look for is second to none. You can have $2,000,000 to invest, but if you don't know what makes a deal good that money will not grow, it will depreciate and at a very rapid pace. I will tell you now that a smart investor with $50,000 will make more over time then a "lack-luster" investor with $2,000,000 to invest. The name of this game is "positive hold". I don't care if you are making $100 a month on a property or $5000, you NEED to be positive from the start, don't speculate. Don't convince yourself that appreciation is on the way or that it MUST be good because you are paying 30% less then the homeowner paid......you MUST be positive.

If you can find postive hold real estate deals, you've found a "good deal"

If you want help finding these deals,email me now.

Rick Rapp
Real Estate Investment Consultant
rick@rickrapp.com

Who get's the worm? I want you to get the worm!!

When a property becomes a good deal you are not the only one that is going to know about it, I am not the only one that is going to know about it. The point that I am trying to make is that this isn't hidden information, its public knowledge and the early bird IS going to get the worm!! So when you find it you need to buy it. If the numbers work its not the time to hem and haw its the time to buy!

Now I don't want you to think that you have to close on the property just because I am telling you to buy it once the numbers work. OF COURSE I want you to do your homework, OF COURSE you need to have the home inspected, OF COURSE you need to do your complete due diligence, but would you rather do that while the home is still on the market for a competitor (and that's what all other investors are) to purchase, or would you rather do it all when you are under contract? I vote to do your homework while the home is "yours" and if you don't want it after your homework is complete..... JUST GIVE IT BACK!!

There are things called clauses in contracts, certain legal "outs" to protect the buyer and seller.....YOU MUST USE THESE TO YOUR ADVANTAGE!! Take the time legally given to you to do your homework. If you find termites, walk....if you find a hole in the roof, walk....if you find mold....walk!! But please...oh please give yourself a chance to acquire your new investment!! Don't lose money because you decided to procrastinate!! If you wait to put an offer in until your homework or due diligence is complete then guess what....the home WILL be gone, I promise you someone else WILL buy it. And what's more frustrating then spending time and money on research and inspections only to find out that the home is no longer available. I've been there, and excuse the lack of political grammar but ..... IT SUCKS!!

Use your inspection period to your advantage buyers!!

Call for more information or to have any questions answered:

Rick Rapp
Real Estate Investment Specialist
rick@rickrapp.com

What makes a bad deal good?

Having a property pay for itself is not in anyway an easy task, if it was everyone would be doing it right? It takes time to locate, negotiate and occupy "self-carrying" properties, but it is possible. HOWEVER, and this is a very important "however" you need to move NOW when it is found. These properties are very rarely just waiting to be found. They are often homes that have been on the market for a long time and have just had a recent price drop..... then BAM!! a BAD DEAL IS NOW GOOD

Now keep in mind that this isn't hidden information, its going to be public knowledge..... so when you find it...... you need to buy it! If the numbers work its not time to hem and haw its time to buy!

The reason I say this is that you can not afford to lose the property to another investor, you need to act and act now. I'll get into that more later in a different post.

Now back to what makes a bad deal good. First of all we want the property to pay for itself, or at the very minimum cost you a few tanks of gas a month. To make this a reality many factors have to work together. You need to equate four key points:

1. Average Rental Rate
2. HOA Dues
3. Yearly taxes on property
4. Your monthly mortgage payments on an 80% loan - EVEN IF YOU ARE PAYING CASH!!

Most of this information is easily obtainable but if you need help locating it contact your local Realtor....I know of a great one ;)

When you equate all pertinent information 1 should be greater then 2+3+4, is it?

YES? - BUY IT NOW
NO? - Renegotiate or move on

This simple equation helps tremendously when deciphering what makes a bad deal good.

For more information contact Rick

Rick Rapp
Real Estate Investment Specialist
rick@rickrapp.com

Invest with your brain, not your wallet

Many of us have been waiting to invest in South Florida once again and now may be the time though you may not yet be ready. Our hearts are broken and our portfolios cry with the direction the market took in late '05 and continued through '06. Too many cooks in the kitchen? Too many Trumps in the market is more like it. We had such an influx of "savy investors" flood the market when there was no way to lose. 100% financing, incredible appreciation, instant millionaires!! Well, we all know what happened I don't need to rehash it, but now it's '08 investors!! Time's have changed and are changing fast!!

There is an influx of inventory as I am sure you are aware, the question you need to ask yourself is, "how many of them are deals?" In my mind a deal is any property that you can acquire that will carry itself over time. There are an unlimited number of sellers out there today that will take far less then their asking price, even less then they may have paid for the home. There are also a number of pre-foreclosures and bank owned properties that you can pick up for "pennies on the dollar" BUT that does not mean they are good deals!!

Many factors come into the equation when deciphering whether a deal is good or bad, do you know what these factors are? Are you aware of the necessary monetary needs required to make a good deal good and what can quickly make an O.K deal bad? Let me give you a few hints and tips:

1. PAYING LESS THEN THE HOMEOWNER PAID DOES NOT EQUAL A GOOD DEAL
2. BUYING A HOME PRE-FORECLOSURE DOES NOT MEAN YOU GOT A GOOD DEAL
3. BUYING FOR 20% LESS THEN THE LAST SALE DOES NOT EQUATE TO A GOOD DEAL

Are you ready to make money in this market? I'm not talking about quick money, I don't mean cash in hand. I am referring to building your portfolio, BUILDING wealth, not acquiring a few hundred thousand cash when you owe double that, but actually building your nest egg, providing for your future.......

AND HAVING SOMEONE ELSE PAY FOR IT!!!

Contact me today if you want to start investing in real estate the smart way.

Rick Rapp
Real Estate Investment Specialist
rick@rickrapp.com