I have set a new goal for myself. I am now making a MINIMUM of 10 offers every day. I’m offering on REO’s, Pre-Foreclosures, Fixer Uppers, Rehabs, Rentals and Plexes. The result? I’m finding deals left and right! I’ve got a couple right now that look like they’re good to go, and about 40 others I’m waiting to hear back on. Some days I’m making as many as 30 offers on deals. The properties are all over the Valley, although my focus is in the East Valley (Gilbert, Mesa, Chandler, Tempe). The strategy is to then assign the contracts to you, the investor/buyer, double close at escrow, or, keep it myself. If you’re interested in getting in on the action, please contact me and let’s get you in on these opportunities before the market tightens back up!

Are you maximizing your Return on Investment (ROI) and Cash Flow from your Commercial Investment Property? You can apply Cost Segregation tactics to your Investments and save a bundle on your taxes. Essentially, cost segregation is the process of separating out personal property assets from real property assets for decreasing your tax liabilities. Using a Cost Segregation Study, you can shorten depreciation time frames on certain elements in your property from 27.5 or 39 years, down to as little as 5 to 15 years. This allows you to free up more money now to assist with current tax liabilities, or apply to startup costs or other investments. Wikipedia has a great reference explaining how this all works.

It’s always best to have the most knowledgeable people on your team. I became affiliated with the Lackman Commercial Group largely due to their expertise and extensive background in Accounting. Two of the founding members have been CPAs for many years, and can easily assist applying such techniques when purchasing Commercial Property. I don’t know many other Commercial Agents who can assist with the purchase/listing of your property, as well as provide the highest quality and expert advice in maximizing your financial returns. If you would like to purchase or sell Commercial Real Estate, please contact me to see the benefits you’ll have with the Lackman Commercial Group.

I’ve always believed that people’s true colors come shining through when they’re put under abnormal or stressful conditions. We’ve all known people in our lives who are kind, sincere and genuine 98% of the time. However, you give them a few drinks and they become mean, cold hearted, selfish and even combative. Or there’s people who completely change their personalities in stressful situations, whether it be a major life crisis, or a Super Bowl game. True we all behave differently to some extent under various pressures of life. However, I’m talking about people sacrificing their morals, integrity and relationships when times get tough.

Since the downturn in the Real Estate market, I’ve noticed a major shift in colleague’s personalities and integrity as a whole. On a daily basis I’m hearing more and more stories of investors pulling scams, stabbing business partners in the back, even taking advantage of people for their own personal gain, all while having no remorse for their own actions. True, this has always existed in this industry, but it seems to be happening more often in the past couple years.

My own personal experiences are no different. Business Associates I’ve known for years have sold their souls to the devil in order to make a few bucks, forcing me to cut all ties immediately. People who have always been honest and trustworthy have now become expert scam artists and stabbing everyone in the back. It’s sad to see those relationships perish, but I refuse to associate with anyone with those kinds of standards and morals.

From what I see, the market changed, money became tight across the country, and people panic. Instead of adapting to the changes in the market and holding your values, many people decide it’s easier to screw someone else over than to hold true to their morals and standards. Essentially, their true colors were finally allowed to shine through. To them, it’s better to screw other people over, risk going to jail and throw away trusted relationships than it is to adapt to the market. So that begs the question- does the market have control over who you are as a person?

If you believe so, maybe you’re in the wrong industry. I can assure you, that every industry is impacted by the real estate market. You’ll feel the effects no matter where you go. Is it possible to build your net worth while holding true to your morals? To be honest, it doesn’t matter what the market is doing, it’s a matter of what YOU are doing. YOU must shift the way you do business and deals. YOU must shift the way you handle tenants, vendors, and find properties. YOU must change the way the systems and mechanics work in order to adapt to the ever-changing market place. However, the things YOU must not shift and change are your morals and standards. It is possible to be successful while retaining your integrity. Yes, times are different, deals are different. What you would’ve paid 85% 3 years ago you won’t touch for more than 75% now. I get that.

The way you are adapting to this market shows every fiber of who you are as a person. Are you bailing out when the times get tough? Let me throw this out to you- maybe the market isn’t ‘tougher’ right now- maybe it’s just DIFFERENT. Are you freaking out while waiting for the market to turn around? Are you sacrificing and taking risks that you normally wouldn’t take? Maybe a simple change in the mechanics of your business is all you need. I promise you, this won’t be the last change in the real estate market. It is constantly changing, and as a result, you must change your business systems as well. If you find yourself changing your morals and integrity, that should serve as an alarm going off in your head that you’re not adapting properly. It would probably serve you to take a step back, realize that MANY people are making great money in this market, and all you need to do is shift the business mechanics, not who you are as a person.

I know for a fact that those who sacrifice their integrity pay for it, one way or another. Those who maintain their integrity and shift their business systems to adapt to the market, realize ongoing success and wealth throughout their careers. Sometimes a hard look in the mirror is the toughest thing you can do, but is usually the most profitable. If you’re not making as much money, or expanding your portfolio as rapidly as you’d like, maybe it’s time to take a look inside and ask yourself some tough questions.

UPDATE- Read this article for more information- FBI Reports Housing Scam Activity Increasing - Doubles in 2007

"I want to buy a foreclosure, I hear they grow on trees!" "Where can I get a list of foreclosures?" I hear these questions a number of times a month from various people. They hear all the hype in the media, then watch one too many infomercials, and think it’s as easy as 1-2-flip to make their $100k this year. Next thing you know, they’re fantasizing about quitting their job, working 2 hours a week from home, and raking in the profits. Believe me, if it were that easy, there wouldn’t be infomercials about it! Those ‘gurus’ you see on tv would be giving trump a run for his money, never spilling a word about how they’re doing it, not even to their closest family members. They certainly wouldn’t be selling some 100 page ‘manual’ on late night tv for $20 each!

Yes, I can give you a list of foreclosures. In fact, I can give you a list of about 150 new foreclosures every day. The question is what are you going to do with them? Most people I encounter believe that if it’s in foreclosure, it’s for sale. They think that the owners must WANT to sell their homes long before the bank starts the foreclosure process, and are begging for someone to come take it off their hands for a rock bottom price. Let me sum it up in one word- WRONG. In my 7+ years in the pre-foreclosure business, I’d say that less than 1% of the people I’ve encountered have ever WANTED to sell their homes. All the rest want to stay and keep their home. They haven’t come to terms with the reality of the situation yet, and are still scrambling to get a loan or win the lottery.

If you don’t believe me, I invite you to go to the County Recorder’s site, look up a Notice of Trustee’s Sale, and go knock on the door of one of those houses in foreclosure. You’ll figure it out in about 10 seconds how these people feel about selling their home. You’ll be one of about 20 who have knocked on their door THAT DAY. It’s MUCH tougher than you would think. If you enjoy being threatened, chased off a property, law suits thrown at you, then you found your calling. Not to mention all the ways the deal can go bad and backfire on you later. I see it happen all the time. Believe me, it’s a tough and risky way to find deals.

Yes, there’s ways to do it, but it takes a TON of knowledge, practice, and guts to make it happen. Why not leave that to the professionals who do this day in and day out? Oh, because you want to get it for cheaper than what they’re selling it to you for. I understand. So, let me ask you this- the next time you buy a home, why use a loan officer to get your mortgage for you? You could go directly to 1,000+ banks, shop their loans, negotiate the best rate/price/terms and cut the mortgage broker right out of the equation. It’d save you a few thousand dollars in costs! Or instead of going to a car dealership for your next vehicle purchase, why not go directly to the auto auctions and purchase it directly yourself? Again, it would save you about $5-7k on the cost of the car.  All you have to do is find the auctions, research them every day, go there, research the vehicle to make sure it’s in top condition, and play the bidding war until you win. Sound like fun? Or, is it worth the few extra thousand to save the hassle, and buy direct from a professional? I agree.

A professional knows the ins and outs, the pitfalls and winning strategies. They know what’s legal and what’s not. They know which are good deals, and which are not. Most importantly, they have deals coming at them continuously, so they can pick out the best one for your investing portfolio. And for a few thousand dollars more, it’s worth their time and effort. I am currently tracking thousands of foreclosure deals in Maricopa County. All of these are ready to be sold, and just need a buyer. If you’re ready to pick up a deal, contact me and we’ll go to work for you. Leave the dirty work to the professionals.

If you aren’t familiar with a seller leaseback, let me explain. Investor Bob approaches Homeowner Holly after finding out she’s in foreclosure. Being the caring and sensitive guy he is, Investor Bob proposes to Homeowner Holly to sign over the deed to her home, and he’ll ‘lease it back’ to her for a year until she can get back on her feet. In doing so, he’ll bring her mortgage current, and she’ll act as a tenant/renter of the property during that time. Once she’s back on her feet, she can ‘purchase’ her home back from Investor Bob and they both go their merry ways. Homeowner Holly is ecstatic at this option as she gets to stay in her home, repair her credit, avoid the embarrassment of having to move, and retain ownership once she’s back on her feet again. Homeowner Holly owes $160k, with an additional $10k in arrears on her mortgages. Investor Bob knows her home is worth $250k, and sees potential to make some serious profits.

Homeowner Holly signs over the deed to the property, as well as a rental lease agreement to Investor Bob. Investor Bob brings her mortgage current, and starts making her monthly payments on the mortgages. Homeowner Holly is happy that all this mess has gone away. Three months go by, and Homeowner Holly loses her job. She can’t make her ‘rent’ payment to Investor Bob. Investor Bob, a wise opportunist, quickly files an eviction notice and kicks her out of the home. He quickly wholesales the property out to Landlord Larry for $200k. Landlord Larry fixes up the home, throws a new tenant in there and chalks it up to another great portfolio purchase.

Investor Bob takes his $30k profit he made on the transaction and heads off to the Caribbean for a week. After all the hard work, he’s earned a great vacation. Upon arriving back home, he is welcomed by a court order to appear in front of Judge Jerry. Homeowner Holly is suing him for stealing her home and equity. Investor Bob takes some of the money he made from another Seller Leaseback and hires a fancy $400/hr attorney to represent him. He gathers all his paperwork, throws on his nicest suit and heads down to the courthouse for victory.

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ok- I just wrote a post about this, and for some reason my server timed out when publishing it- and I lost it. So, instead of trying it again, here’s a great post about exactly my thoughts.

Why the Holiday Season may be a Great Time to Buy a Home

Here’s an excerpt-

My opinion, if you believe in conventional wisdom in this real estate market you are the greater fool.

Sellers who are listing in the holiday period are motivated. Odds are they have a job change, a life change, or a mortgage they have to get out of. They need to sell their home and want to do so as quickly as possible.

Not only are the sellers motivated, but they’ve BEEN motivated for months- and have no buyers. Now, it’s Christmas time, the market is slower, and they’re even more desperate to get this house and financial burden off their backs. How motivated do you think people in foreclosure are, or divorce, or probate this time of year? You think they’re motivated- what about the BANKS? Do you think they need to get as much debt off their backs before the end of the fiscal year? You bet they do! SHORT SALES HERE I COME! What a great time for picking up deals!!!

I got an email earlier this week from a guy who I’ve never met before. From what I can tell, he’s fairly new to the investor/wholesaler game judging by the emails he sends out and the questions he asks (ie- who has a hard money lender, etc). I’ve never met him before, and have no idea how much business he does. However, I do get a couple emails a week either asking questions, or, posting a possible deal he found.

This specific email says that he has an investor looking for a property on the East Valley. He wants a quiet, nicer neighborhood at about 70-75% LTV. When I replied explaining that I can find him a deal for his investor- he tells me he won’t work with a REALTOR® because he can’t tack on ‘his fee’ to then pass on to his investor. NOT TRUE.

I try to explain how assigning contracts work, and after 2 attempts of follow ups, I never hear back from him. It’s too bad, too- he could’ve just had this deal that just slipped away. So, for all the others out there- let me explain quickly how you can assign a purchase contract.

You get a home under contract, with ‘<your name> and/or assignees’ as the buyer. Most investors will do this so that they can assign the contract to a different buyer or entity before closing escrow. The way you do this is you simply ask your title agent to assign the purchase contract to whoever you want before closing. It’s that simple. The kicker is whoever is taking over the contract, must stay within the terms of the original contact as written. As long as they do, it’s smooth sailing. Many REALTORS® and banks have a problem with this, simply because they don’t understand it. They tend to cringe because most investors will use this tactic making it difficult to stay current on the paperwork. It also tips off the seller/bank that you don’t intend to close on the property yourself, which explains why most banks hate it as it as they see it on their short sales all the time (which, have a high failure rate of closing).

As an investor myself, I ALWAYS write a contract with my LLC, and/or assignees as the buyer. Even if I don’t intend on flipping the paper, you never know what will come up before closing. And yes, this is what’s deemed as ‘flipping paper’ in the seminar world.

So back to this ‘investor’- if he wanted to flip the contract to his buyer, and tack on a little fee for himself- he just charges his buyer an ‘assignment fee’. Most guys will try to snag around $5,000 for this ’service’ of finding the deal. How this is handled is entirely up to the middleman- but most will take care of that through the title company to ensure it’s done properly, and everyone’s happy. It’s perfectly legal, and done all the time with most experienced investors. I wish this guy luck, and hope he comes back after getting more educated from his ‘mentor’.