Wednesday, January 13, 2010

Don't WAIT For Opportunities - CREATE Them!

Are you a Waiter or a Creator?

As a self employed Realtor in Oklahoma City, do you get the maximum value out of every minute of your business day for all of the hard earned dollars you spend paying for advertising, gas money and all of those killer membership dues?

I am a local real estate investor here in Oklahoma City, and I hope this tip explodes your business for the New Year.

When driving around showing (hopefully pre-qualified) buyers houses, do you ever stop and take a look around?

Sure, you are showing your client houses and you are doing a great job narrowing down their search and making sure it fits their criteria and it's in the right price range - but are you maximizing the value of your time?

How many potential opportunities do you DRIVE BY without ever even REALIZING it?

It's time to take the blinders off, and get the most bang for your buck this year.

Next time you are out and about showing houses or going to potential listing appointments, take a notebook and a pen with you. When you are driving through the neighborhood, keep your eyes open for houses that look like this:

Broken windows

Tall Grass

Sagging Roof

Burn damage

Mail overflowing from mailbox


Abandoned cars in front yard

Well, you get the picture!

You know, the houses you find that you hope the owner NEVER CALLS YOU ABOUT.

They can't go FHA and obviously the owner can't afford to fix them up. But just because a retail buyer wouldn't touch it with a ten foot pole doesn't mean an investor wouldn't buy it, give you a big, fat hug, fix it, and list it with you at full commission!

There are investors in Oklahoma City who love, love, LOVE to buy distressed properties to rehab and put back on the market for FHA buyers. And if you bring enough deals to these investors, it will earn you a feather in your cap to where you can get them to list ANYTHING with you, because you bring them so many deals.

Remember - an investor only makes money when they BUY, not when they SELL. So, a gem to a real estate investor is a piece of trash to a retail buyer.

As an investor, we like those diamonds in the rough. We love to buy them, fix them and make them a desirable property.

Every Realtor wants to list the desirable property in the desirable area of town. How many of you call off my ad or send me emails on Craigslist once I fix up my houses and put them on the market?

And how many of you call me when you find a distressed property that nobody wants to list?

If you were an investor - who would you list your property with?

The Realtor who found you the gem to begin with, or the Realtor who is asking for business because it's a fixed up DOLL HOUSE that everyone wants to buy?

Make an agreement with your investors beforehand that you find the deals and make the tiny commissions on the buy (because it has to be a cheap property if it needs a lot of work) and that your payoff will come when the property is fixed up and ready to put on the market.

If the investor is greedy and doesn't want to pay you 6% after you did the leg work and brought the deal to them, never do business with them again. That's why I suggest negotiating the deal to list them BEFOREHAND.

Pretty soon you will find that you have a pipeline of remodeled, rennovated listings heading your way that every FHA buyer can qualify for just by opening your eyes and making yourself aware of all the opportunities that abound.

So, don't wait for a listing, create a listing!

If you bring deals to a real estate investor, you will be worth your weight in gold to them. We buy them cheap (50 cents or less on the dollar) but we buy them quick and don't poke around like a retail buyer, which saves you some time.

Also, the run down houses you find that are NOT on the MLS are usually the best deals, because none of the other investors know about them yet. When you put it on the MLS, the whole world knows if it is a deal or not. If it doesn't sell in the first day it's on the market, chances are it isn't a deal anyway - or else it would have sold.

So, finding a deal when you are driving around town showing buyers or going on a listing appointment is like LEGAL insider trading. You know about the deal before anybody else knows about it, and put it on the MLS as "pending" when you enter it for the first time.

If you ever run across anything, don't hesitate to call or text Rose Wilkinson @ 405-881-5958

Where Is The Best Place To Invest In Real Estate?

If you check with you will notice that Oklahoma City is called "Recession Proof" due to our stable employment record, growth and strong housing sales.

Of course, there is a difference between being an investor and being a trader.

If you are looking for a deal where you can buy it for $100,000 and flip it for $300,000 or more - you will not see that in Oklahoma City.

The bread and butter of the Oklahoma City economy are houses that range between $50,000 to $250,000. After you go past the quarter million dollar mark, you lose most of your buyers.

HOWEVER, the reason why Californian investors FLOCK to Oklahoma City is because they can cash flow the snot out of our properties.

For instance, I have a deal here in Oklahoma City that generates a 24% return on cash flow alone once the property is rented. That is not including equity or future appreciation - I am speaking of cash flow alone.

Purchase price is $25,000
Property is ready to rent for $500 dollars
Property appraises for $45,000 dollars
Appreciation rate is 5% annually.

$500 per month off of $25,000 investment is a 24% RETURN. That means in roughly 4 years - you will have your initial investment back 100% and any amount you receive over that is an infinite return.

Once again, not speaking of equity position or future appreciation. I am speaking of CASH FLOW ALONE.

Because when investing in real estate, you don't want to just look at appreciation alone. You want to look at:

1. Cash flow
2. Equity
3. AND future appreciation

We don't have dramatic appreciation rates like California and Florida did during the boom - but Oklahoma City is the place to be if you are looking to buy and hold.

It is also great for flipping houses, because you can buy for as low as 50 cents on the dollar here, and still sell high. A lot of Oklahomans don't know our economy is booming, because they listen to the doom and gloom about what's happening in California and Florida. So, they are giving these properties away for 50 cents on the dollar as well sell them for full retail value!

If you would like to partner with me, or if you need help building your portfolio in Oklahoma City please call or text me at 405-881-5958. I am a local investor, and I was born and raised in Oklahoma City. Save my cell number in your phone!

The Commercial Real Estate Crash

Commercial real estate is in big trouble for a variety of different reasons.

1. More businesses are going online to save on overhead costs (No rent payments, electric bills, employee costs, etc) so they can pass the savings on to the customer.

2. Due to the economy, small businesses are failing and closing shop.

3. Also, people are a little more scared to try a new business venture with the economy being in the condition that it's in.

In my opinion, vacant land isn't such a hot investment, either. It just sits there and eats up tax expenses.

Right now, the best thing to buy is income producing properties, such as apartment complexes, mobile home parks, and senior citizen centers. Right now, the baby boomers are retiring, and there is a tremendous shortage of retirement homes / assisted living centers for senior citizens.

Also, due to all the foreclosures, the apartment business is flourishing in this economy. Remember, people always gotta have a place to live. And if they aren't home owners, they have to be renters!

Everyone is predicting doom and gloom in this economy, but when sales are low - rentals are high, and when rentals are low, sales are high. Real estate is not a luxury item, it is a necessity.

But anytime you are purchasing a piece of property, make sure it has potential in three different ways:

1. Buy low (in this economy, you can command a 50% discount if you pay with cash)

2. Buy in an appreciating area (So not only do you have a property you bought for a steal, but make sure it will also increase in value over the years. Go back 10 years for market trends)

3. Buy income producing property (Good old fashioned residual income. This will cover your taxes, insurance and also put some money in your pocket month after month)

If you have this triad, you will be a very successful real estate investor and will be on the path to financial freedom. And don't settle for anything less than ALL THREE benefits of investing in real estate. Don't just do it for appreciation, or tax write offs. Buy it for the three reasons I listed above, and you will be ahead of 90% of the so called real estate investors out there.

Call or text Rose Wilkinson @ 405-881-5958

Stock Market - Is It Time To Buy, Sell, or Hold?

I don't know anything about the stock market, because I believe in real estate investing over stocks (You will find that serious investors either prefer stocks, real estate or a combination of both)

But here is THE BEST piece of advice I can give you...

The best thing to do if you want to be a millionaire is to listen to a millionaire and do what a millionaire does.

In other words, if your friends, family or the people on Yahoo answers are NOT millionaires, it may not be in your best interest to take their advice.

If you only want to make $50,000 a year - then do what people who make $50,000 a year do.

So, before you take on any advice, consider the source. Because part of being a good leader is being a good follower.

Considering The State Of The American Economy, Is It Wise To Invest In Real Estate Outside Of The Country?

Real estate is only a lucrative investment, because it is extremely localized. Real estate investors generally target a specific area because they know the rental rates, tax rates, the rate of appreciation and what direction the city / state / country is heading in before they invest their dollars.

But here is the thing that most people don't realize...

Now is the time to buy in America, not invest in a different country.

Now is the time to buy, because the prices of real estate have deflated almost down to rock bottom, in some cases.

What most people fail to realize is that economies aren't based on doom and gloom forever. The economy goes in cycles filled with booms and busts. The true investors who are in it to win it buy when the economy is bust and sell when the economy hits another boom.

The true players in the game are buying up properties like CRAZY, and either renting them out or offering owner financing to those who can't qualify for a mortgage.

Even in a city as distressed as Detriot, Michigan - you can pick up properties over there for just a few hundred dollars. Most people don't know this, but because of the high inflation and cost of living in California, Warner Brothers is relocating their studios to Detriot because real estate is extremely cheap over there right now, and it would be cheaper to house their cast and crew.

So now, while everyone is running away from Detroit, smart business people are trying to figure out a way to relocate over there, because the cost of living is so low, due to the demand of living there being low. Yet, as soon as a company like Warner Brothers relocates to Detroit, EVERYONE will want to buy there then - and that will make property values soar.

The time to get into real estate is when everyone is running away. Even if you can't sell it right away, you can always rent it out or finance a buyer with a wrap around mortgage. The demand is high for owners who are willing to owner finance their properties, due to the credit freeze.

I would love to partner up with you, and tell you what I do and what's going on in my business.

Call or text Rose @ 405-881-5958

Is Capitalism To Blame For Economic Downturn, As Michael Moore Claims?

I personally think that Michael Moore is way off the mark!

Here are the reasons why we are in a DEPRESSION, not a RECESSION:

Reason # 1:

The government is the one who regulates lending. They cut all the red tape around qualifying for a mortgage loan in order to stimulate the economy after the 9/11 attacks. As everyone can remember, we were in an economic crisis after the terrorist attacks, so the government responded by allowing almost anyone to get a home loan (in order to stimulate the economy)

After 2002, people were buying and selling homes like crazy, which was a temporary fix to the economic crisis. Now, we are seeing the backlash of the governments actions through indiscriminate lending practices. People who had no business getting home loans were qualified for mortgages they couldn't afford. Which is why we are seeing the record high foreclosures we are seeing today.

Reason # 2:

The stock market is crashing because the Baby Boomers are retiring, and they are yanking their nest eggs all at once out of the stock market. 64 is the legal retirement age when you can pull money out of the stock market tax free to live on. There is an estimated 30 million baby boomers. All of those people yanking money out of the stock market at once is sure to cause a rift in the economy. Also, the Baby Boomers are collecting on social security checks and Medicare, another burden on the economy.

Reason # 3

Finally, globalization is hitting us hard. Jobs are flying overseas, due to Americas over inflated economy. Because of America's cost of living, we are required to make $20 bucks an hour to survive. Whereas an employee from India can live off of $5 bucks a day - because there economy is not overinflated like ours. People are laying off employees like crazy, and outsourcing those jobs to India, Mexico and China - simply because labor is cheaper overseas.

This has little to nothing to do with capitalism. There are powerful economic trends going on in this country that is out of everyones control. Capitalist will take a great part in helping the economy, due to buying up these toxic mortgage loans, starting new businesses, and creating jobs - but I don't see capitalism as being the cause of this economic depression.

What Are The Costs Involved When Purchasing An Investment Property?

I am a house flipper in Oklahoma. Of course, you aren't going to have a lot of out of pocket expenses that somebody with a mortgage would, but here is what you can expect:

1. Title insurance and research: $1,100

2. Doc stamps (To file the titlework at courthouse) $250 (give or take)

3. $1,000 for one year insurance policy (It is so expensive, because house is vacant and has higher risk for vandalism) Of course, if you are paying cash for the property, you don't have to get insurance - but it is obviously smart to do so.

4. You do not have to buy this, but it would be nice to buy an appraisal and get a professional opinion on what the after repair value of the home is worth. AFTER REPAIR VALUE is very important, not in it's current condition. The cost of appraisal is $300 dollars.

5. Also, it would be nice to have a home inspector tell you what repairs need to be done in order to make the house go FHA financing. The reason you want to make sure that the home will go FHA is because that is the type of loan 90% of your buyers will have. It is what is known as the "poor man's loan" because it is backed by the government and requires the buyer to have very little to absolutely no money out of pocket. However, the house has to be in pristine condition, according to government regulations. The cost of an FHA inspection can range from $150 to $250 dollars.

6. You also might want to figure how far away you live from the property and how often you plan on making trips to the property. I don't know if you are fixing it yourself, or hiring contractors - but you have to hover over contractors to make sure they are getting the job done. At the very least, you will have additional gas expense. Plus, you may have to rip and run up the road to get contractors supplies (or get them yourself) or sometimes, the contractors will get everything for you - but they will tack on as much as 20% to their invoice for drive time.

This isn't part of your question, but I would create a budget for each phase of your rehab. And also, here is the formula I use to figure out if the house is a good buy to fix and flip (or not)

1. Calculate the After Repair Value (ARV) in the neighborhood (These are top of the line homes featuring granite countertop, new paint, new appliances, completely remodeled, etc.) Write this number down, once you figure out what your remodeled home will be worth on the market.

2. Subtract the amount of repairs the property will need from the after repair value. If you are a former contractor or have a contractor who can give you a bid on the repairs needed, this is the figure you can use. You may also use the figures based on your inspection report.

3. Once you subtract repairs from the after repair value, you will have the homes CURRENT market value (without repairs)

4. I never pay more than 50% of what the homes current market value is.

To give you a visualization, let's say I am buying a home. And the top market value in the area for my home is $100,000. However, the home needs about $20,000 in repairs to get up to that point.

What I would do is take $100,000 and subtract $20,000 in repairs to come up with $80,000 - which is the properties current value.

I would then offer the home owner half of this amount, which is $40,000 dollars.

So, my total investment would be $60,000 dollars to make the home worth $100,000.

Of course, you have to factor in Realtor commissions as well, which are generally 6% of the homes top market value. Also, most buyers do not have cash out of pocket to pay for their closing costs, so most sellers have to foot the bill - especially in this market.

So right away, you can shave 10% profit right off the top of the $100,000 dollar mark for Realtor fees and closing costs.

Also, what I do is intentionally make the property a little bit lower than the other homes in the neighborhood to be competitive price wise. In this example, I would probally list the home at $90,000 dollars to start out with. Then I would factor in $9,000 dollars for Realtor fees and the buyers closing costs. That means I would net $81,000 dollars - or a $21,000 dollars. (But remember, you bought title work, doc stamps to file title work, insurance, the cost of gas driving back and forth to the property and of course, property taxes) So you are looking at about a $10,000 to $15,000 profit

I say "profit" but then there are capital gains taxes. If you reinvest the money into buying more real estate, you will owe 0% taxes until you sell the next property, and claim it as income. But if you take the $10,000 to $15,000 as earned income, depending on your tax braket - you could end up giving Uncle Sam between 20% to 50% of your gross profit. So, I think it is wise to reinvest your earnings into buying more houses. As always, talk to your accountant.

As you can see from this example, it is smarter (in my opinion) to stay within the $150,000 to $300,000 range when flipping homes. The reason being is there is a bigger spread for profits. However, other investors might argue with me - because investors who buy $100,000 properties or lower tend to sell a higher volume than an investor who focuses on the $150,000 to $300,000 range. It's just a business philosophy that I hold, it is not necessarily the common view of most investors.

Call or text Rose @ 405-881-5958

What Is The Best Way To Invest In Order To Curb Inflation?

First of all, I want to state that I am not a financial advisor. However, I am a full time real estate investor, so you could say that my full time job is investing time, money and resources for a higher rate of return.

The leading financial institutions in America are banks and insurance companies. Part of being a good leader is being a good follower.

What I mean by this is that a bank won't lend you money to speculate on the stock market, nor could you obtain an insurance policy to guarantee your stocks will be secure. In fact, most banks disclose that mutual funds and other stock certificates are not backed by the FDIC.

In contrast, a bank will lend you money to buy real estate all day long, and I'm sure everyone has heard of home insurance.

The reason why banks and insurance companies are so eager to lend and insure real estate is because real estate is tangible, where business (stocks are shares of a business) is more of an intangible idea.

Also, with real estate you have more control.

If you cannot sell your property, you can always rent it out for a passive income. Also, there are three ways to make money in real estate:

1. Cash flow - residual income off of renters. Whatever you get above and beyond your principle, interest, taxes, and insurance is yours to keep.

2. Equity - If you buy a house for $50,000 that actually appraises for $100,000, you can either sell the house for $100,000 and collect a $50,000 pay check, or you can go to the bank to refinance the equity out of the property.

3. Appreciation - There is only so much land available on the Earth. There are booms and busts in real estate, but everyone agrees that there is only so much space on this planet to buy. So, the same property you bought for $50,000 that is worth $100,000 today - may be worth $125,000 in 3 to 5 years.

I have not even mentioned the tax breaks you get by investing in real estate. Here is just an example of what I mean:

There are three types of income:

1. Earned
2. Portfolio
3. Passive (Residual)

Earned income (doctors, lawyers, attorneys) are taxed in the highest brackets, and have to give 50% of their income to Uncle Sam.

Portfolio income is equity, or what your assets are worth but haven't sold for. Once you sell, you can be taxed up to 20% of your proceeds.

Passive is generated from royalties, copyrights or real estate rentals, and is only taxed up to 10% in most cases.

With real estate, you can sell that $50,000 for $100,000 then take that $50,000 proceed and RE-INVEST that money into more real estate, tax free. In other words, you can use Uncle Sam's money legally to invest and buy more real estate. The technical terminology for this is called a 1031 exchange.

There are NUMEROUS ways to invest in real estate, regardless if you want to buy rental properties, rehab and flip houses, or become a partner with a real estate investor like me and provide the funding while I find the deals, manage the contractors, secure a buyer, and do all of the leg work to make the business a success.

You can partner with an investor who buys steeply discounted properties, set up a self directed IRA where the money continuously rolls back into your account tax free, and your money is secured by a 1st position promisory note. In other words, if the venture fails and the house doesn't sell for full appraised value- you own a house that is at least 50% of the appraised value that you can either rent out or sell to get your money out of.

All you have to make sure of is that the title on the real estate is clear, which an attorney will provide for you for very little cost. And your money will be secured by the real estate.

You can form a partnership with me, own the real estate with me, and I will do all the leg work as far as finding the deals, finding a buyer or renting them out for a profit. We can show recent sales in the neighborhood, and provide contracting bids to show how much work each property needs.

Those are just a few ideas to get you started, if you want to take a closer look at real estate. You and I would have to form an LLC together, and have a business partnership. I am not selling a security, I would only be able to partner with you as a business owner where you have as much say as I do about the property, and what happens to it.
Call or text Rose Wilkinson @ 405-881-5958

Financial Tip For A Prosperous New Year!

Imagine for a moment how many products and services the world has to offer.

It is staggering, isn't it?

I will list a few common products and services people use on a daily basis, just to get our wheels turning: Baby sitters, financial planners, manicurists, hair stylists, car salesmen, mechanics, jewelry dealers, appliances, massage therapists, attorney, etc.

Now, picture all of your friends, family and co-workers who communicate with you on a daily basis about things they want and need. They TELL YOU what they want to buy on at least a weekly basis.

So this year, why not meet as many people as possible who offer quality products or services so the next time someone you know brings up that product or service in conversation you can tell them, "Hey, I know somebody who can help you!" And make a referral fee off of those services.

Will you get rich and take over the world? No...

But it would be a very casual, light hearted way to generate an impressive part time income over a period of time, just for dropping a name. It may help with some bills, starting a retirement account, some fun money, or better yet... some gas money!

My name is Rose Wilkinson with Roz Buys Homes, and I buy houses FAST due to divorce, job loss, lay offs, medical issues, death in family, burned out landlords, dangerous neighborhoods, etc! If you have a friend, family, or co-worker who needs to sell their house FAST, I will pay you a $500 finders fee! Save my number in your phone under "House Buyer" because you never know who you might meet in this economy!

Call or Text Rose Wilkinson @ 405-881-5958