Part Time REI » Getting Started

Take Action

Erik Hitzelberger — Fri, 26 Sep 2014 16:08:00 +0000

Here is today’s question. What are you waiting for? Take action!

If you have been thinking about entering the flipping market there is not time like the present. Are you really still thinking… “I don’t know enough. It will take too much time. I don’t have enough money.”?

Sure it is scary starting something new. Yes we are seeing great low interest rates and there are tons of deals to be made. We know some people are still afraid to venture into the market. We here the excuse ” I don’t know enough.” a lot. But you can’t know everything at first right?

Real Estate mogul and Billionaire Donald Trump has acknowledged this. “You can’t know it all. No matter how smart you are, no matter how comprehensive your education, no matter how wide ranging your experience, there is simply no way to acquire all the wisdom you need to make your business thrive.” he says. What a great inspirational quote.

Let’s look at the question “Why do you want to start investing in real estate?” The answer to this can be different for many people. Maybe you want to retire early. Maybe you want to plan that dream vacation. Maybe you are just tired of the daily grind and “working for the man.” All of these questions can be good motivators to achieve the place in life you want to be. Clear goals implement clarity. Along with a goals, setting a clear schedule will compliment your structured goals. How much can you invest? How important is this pursuit? Most people just don’t want to feel like they’re spinning wheels and getting nowhere. Make your time count. Write down your goals and make small steps forward in order to reach them. Do you need to take a class? Do you need to improve your credit score? Do you need to talk to a mentor who is doing what you want to do and ask what your next step should be? However many hours you have to invest, use them to connect with people who are successful at what you want to do.

The important thing to remember is you will get no where if you do nothing. Taking action takes courage but you can gain that confidence by arming yourself with the knowledge and setting the right goals.

To learn more about Part-Time REI visit us at http ://part-timerei.com/

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Some Great Advice on Getting Started

Erik Hitzelberger — Fri, 19 Sep 2014 16:16:57 +0000

When starting out investing in real e state, it is important to do all the research you can. There are tons of helpful tips out there if you know where to look. We strive to provide our readers with just that: the knowledge to be a successful REI. Sometimes we find articles that are just so good we need not write one ourselves because they sum up everything we have been telling our audience. Here’s one of those articles on getting started.

Article originally appeared on the RenTec Aug 25th Blog https://www.rentecdirect.com/blog/2014/08/dont-miss-a-step-in-your-real-estate-investing-plan/

1. Assess Your Finances

Make spreadsheets that include all of your incoming and outgoing cash flow. Tracking your monthly income and expenses for a couple months will give you an idea in variations and possible cash savings giving you more money to invest. If you know there are some big ticket items in the near future (i.e. roofs, paint, European vacations), make sure you take that into consideration in your calculations.

2.Define Your Real Estate Goals

Now that you know how you sit financially it’s time to come up with some goals. Before you start searching for real estate to invest in take the time to sketch out your goals. Explore your desired outcome in investing in the real estate market. You should have a clear idea of how long you want your money tied up for, what type of properties you are interested in investing in, and what type of risk you are willing to take.

3. Educate Yourself and Use The Advice of Trusted Experts

Good deals don’t just land in your lap you have to be willing to set aside a great deal of personal time to research a deal to avoid making an expensive mistake. It pays to do your homework when investing in real estate rushing into a deal without doing basic due diligence could cause you to lose money. Remember the bottom line is what matters when purchasing real estate. Just because a property can be bought for $50,000 and rented for $850 per month doesn´t necessarily mean it´s a great deal. You need to know and keep track of all of the expenses associated with the property. Things like high taxes, homeowners association dues, property management, income taxes, repairs, and vacancies all tap into the bottom line

4. Be Wary of the Deal of a Lifetime

If you find a property that looks to good to be true you are likely not seeing something. Amazing investments don’t stay on the market long and chances are you didn’t find the good deal before everyone else did. A good clue is if it has been on the market for quite sometime and no one has snatched it up. In my opinion the best deals are the ones that are safe and will bring you cashflow for the longterm or be easy to offload if you plan on flipping it.

5. Visit the Property and the Neighborhood in Person

Proper due diligence involves research at home as discussed in number 3 above and actually getting out and seeing things for yourself. In addition, there are many reputable realtors who will give you accurate feedback on different neighborhoods. Check out the neighborhood, the crime rates, demographics, average income, average rent, and sales prices.

6. Just Do It!

If the deal pencils out after you’ve covered all your bases and considered all the foreseen, and have included a buffer for some unforeseen, expenses take the plunge and buy the property.

To learn more about Part-Time REI visit us at http ://part-timerei.com/

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Tips on Finding Flipping Leads

Erik Hitzelberger — Fri, 05 Sep 2014 16:00:08 +0000

You never know where you might find your next big lead. This is something we often tell our newcomers to investing in real estate. It is true. A lead can indefinitely come from any where. While they may not necessarily fall actually in your lap, you can make sure that one doesn’t pass you by.

Think of it this way. To generate continuous leads, you will need the have the skill and habit of consistently planting seeds that will later grow into opportunities. Just like a real plant, it will need to be cared for and paid attention to. If you get a lead and do nothing with it, you will just watch it wither away like an unattended plant.

Here is a list of potential lead generators to think about:

MLS daily searches
Business cards you accumulate at networking events
Direct mail
- Non-Owner occupied
- Owner-occupied with equity
- Probate/estates
- Local Professionals (attorneys, CPAs, etc)
- Eviction landlords
- Tax sale owners
Radio advertising
Wholesalers
Coffee Shops
Yard Signs
Foreclosures
Car magnets
LinkedIn
Facebook
Bigger Pockets

The list could go on and on. We hope that you take these LEADS for starting your own leads in your own real estate investing opportunties. Where have you found a lead? Did we forget one? Tell us how you generate leads for REI.

Flipping House Series: The “No Deal” House

Erik Hitzelberger — Mon, 18 Aug 2014 16:43:05 +0000

Missing out on good deals can be painful. The ‘lost’ income is hard to replace and the experience can be frustrating. New investors tend to miss these deals because 1) other investors hear about them first because they have better networks or 2) the new investor takes too long to analyze the deal. That being said, getting into a bad deal can be crushing. Most people can’t withstand the mental and economic toll that losing tens of thousands of dollars can take on your investing career. This apparent paradox begs the question, “how do you move quickly and avoid disaster?”
The answer is to 1) have good systems, 2) have a good team, and 3) remember that real estate is about control not ownership. The first two items should be obvious, yet many wannabe investors skip over these ‘soft’ items. Poor results ultimately lead them to give up claiming this doesn’t work where I live or some other phrase that places blame squarely on something other than themselves.
The sad fact is that the first 2 items are incredibly easy to do and can provide tremendous value. Using a Property Repair Estimate Checklist and Deal Analyzer will help you make sure the numbers are in line. Having a solid team (agent, contractor(s), inspector(s), mentor) increases the speed and quality of decision making.
The third item often requires a paradigm shift. Many people think you have to have everything worked out prior to submitting an offer. This is not true. If you get an accepted contract, you control the property. The seller cannot offer it to anyone else until you release the contract. Meanwhile, you can use inspection, financing, and other contingencies to protect your interest if you discover the property is not a deal.
Does this mean you should put every property under contract and then do your due diligence? Absolutely not. However, if it passes your initial screening, then secure the deal under your terms and proceed knowing you have a way out.
I recently had an agent call to tell me about a property. The house was in a decent area, it fit my normal buying criteria, and it was priced in a way that allowed for nearly $50K in repairs. Due to other obligations, I knew I couldn’t get to the house for a couple of days. So, I walked through the PREC with the agent. The repair cost seemed to be in line, so I made an offer.

Living Room

Front of House

Bedroom

Bathroom

Basement

A couple of days after the offer was accepted, I went to the house and instantly knew the numbers were going to be tight. As I expected, my inspector turned up significant items that I hadn’t accounted for in my initial estimation. Since the numbers no longer worked and the sellers were unwilling to renegotiate, I released the contract and my escrow money was returned.

By having good systems, a good team, and using contingency clauses correctly, I gave myself the opportunity to get a great deal and to avoid a terrible one. This time, the latter option was the correct decision. Total loss = $225. Loss Avoided = $10-$15,000. That’s a smoking good deal!

To learn more about Part-Time REI visit us at http ://part-timerei.com/

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The Do’s and Don’ts Of Investing Part 1

Erik Hitzelberger — Fri, 25 Jul 2014 15:55:23 +0000

When someone decided to try their hand at flipping houses, often the first question is, “where do I begin?” Today we will go over a few do’s and don’ts when starting out your flipping career.

1.) Don’t Forget to Do Your Homework
Not many people naturally know about investing in real estate. That is one of the reasons we exist; the help educate future investors on how to actually invest part-time. Don’t jump into something you know nothing about. Do your homework. Know what you are getting into. Flipping is not as easy as the TV shows make it look. Just because you saw it on TV, you read it in a blog post, doesn’t mean you are Barbara Corcoran from Shark Tank okay?

So take the time to learn your craft, do your homework, read the books, listen to the Podcasts, and check our our Flipping Houses University while you are at it.

2.) Do Research Your Farm Area

What is your poison? Do you like single family houses, multifamily, or commercial. What ‘s profitable in the area you plan on making your farm area? Is it better to flip, buy and hold, wholesale, or is land-lording the way to go in your market? These are all good questions you need to check into. Also make sure if you do not have your real estate license that you get a good Realtor on your investing team. She can help you find comps to potential investment properties and furthermore help you research pricing and rent levels.

3.) Don’t Invest in Something You Don’t Understand

This kind of goes back to the #1 rule when investing in real estate. If you try to invest in something you don’t know, how can you be successful? To quote the most successful investor we can think of, Warren Buffet, “Never invest in a business you can’t understand.”

We would be wise to adhere to Mr Buffet’s words of wisdom. If you don’t get it, then maybe flipping houses isn’t your retirement plan after all.

4.) Do Surround Yourself with Like Minded People

One of the best ways to learn about investing in real estate is to surround yourself with successful investors. Ask them questions, a lot of questions. Go to networking events. Join an online chat room about flipping houses. There are also plenty of cities out there that have REI groups that you can join and get the investor mindset.

Be sure to check back next week for Part 2 of The Do’s and Don’t of Investing.

To learn more about Part-Time REI visit us at http ://part-timerei.com/

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Forgetful Flippers

Erik Hitzelberger — Fri, 18 Jul 2014 16:00:32 +0000

Let’s face it. There is so much to remember when investing in real estate. We have definitely given plenty advice and tips on how to leverage other people’s time so you don’t have to be the one to do and remember everything, but there are still some small items that can escape an REI’s mind.

Have you ever overlooked any of these items when flipping a house?

1. Vanishing Vandals

Rehabbing property is not a one day job. Depending on the time of year, it can take several months to finish. An empty piece of property is vulnerable to vandalism. Vacant Home Insurance is not required in all states and will cover vandalism only during the first month that your property is unoccupied, after that you are on your own. Keep in mind these easy tips:

Cover windows with sheets or drapes
Request the police for extra patrol and also explain to them that you are rehabbing
Barricade all windows and doors that do not lock
Change the locks
See #2

2. Light it up!

If you were a buyer, would you buy a house that is full of shadows and dullness or one that is adequately lit and looks like it has some life in it? A well lit house looks less depressing and livelier.

Yellow lights are a no no. You can easily establish an upbeat mood with a bright set of lights so it’s a good idea to go for those. Another thing that you should never forget to replace is flickering lights. Some people associate flickering lights with horror films with gory murder scenes. Overall, proper lighting is a very economic way of showing potential buyers what you have done with the property.

3. Conforming and Comparing

If you are going to install new fixtures in the house at least ensure that they match. For starters, door knobs and hinges should match and so should shower heads, faucets and towel racks.

If you are going to purchase new appliances ensure they are all from the same brand or at least have the same style. Make sure your upgrades are comparable to other in the neighborhood as well.

4. For Sale Only When Finished!

Curb appeal is one way of attracting potential buyers but if a buyer sees a “for sale” sign outside a house that looks like it survived a storm, they might make a mental note never to return. Also don’t list a house with a picture before the renovating the front of the house. If the front of the house is dilapidated, that is what buyers will see on the picture. If you want to sell your house as soon as possible, this would be a less than ideal way to begin.

5. A New Mailbox

What’s the first thing you notice when you pull up to a house that you are interested in buying? Most people notice the mailbox.

Don’t mistakenly give potential buyers the wrong impression with an old rusty mailbox. This could tell them that the inside of the house is probably just as rusty. After all, if you didn’t bother to take care of it, what other thing did you also forget to take care of inside the house? Remember that mailboxes are not that expensive. You can get custom mailboxes from any of the local shops in your area for under a hundred bucks.

To learn more about Part-Time REI visit us at http ://part-timerei.com/

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5 Smart Moves for REIs

Erik Hitzelberger — Fri, 11 Jul 2014 16:00:10 +0000

Every Friday we try to supply our readers with some smart tips or tricks to make investing in real estate a smoother ride. Today we want to review some smart moves for REI when starting out in the business. Read on to check out our top 5 smart moves.

1. Recognize that investing is a business.

Being a landlord and an REI is different from being a private homeowner — it’s a business and you need to treat it like that. Have a good business plan. This type of investment is not hands-off. It can be passive but it requires involvement. It requires your time. It requires certain knowledge and skills.

2. Start small.

Don’t get in over your head right away. Starting with a single house or smaller multiple-dwelling unit, perhaps with a partner, is a good staring move to see if the business really suits you. Starting with a single home will allow you to get a feel for the maintenance, bookkeeping and other work required.

3. Know your Farm Area

As with any business, location can be critical. And we all know real estate is all about location, location, location. A home that seems to be a steal might be priced lower because it’s in a neighborhood most people wouldn’t actually want to live in — one that has higher crime, noisy streets or poor schools. For that reason, investing in out-of-state property is a gamble. Do your research and get comps from your Realtor and only buy in neighborhoods you know well or have carefully researched.

4. Figure out the right rent and rentors

Rents differ widely around the United States. Zillow, Craigslist or a real estate agent can give you an idea what they are where you’re buying. Then you need to determine if that rent will be enough to cover your costs.

Too often, people take a look at their loan and think if they cover that, they’re doing fine. But you’ll need to pay property taxes and insurance. Don’t forget though about regular maintenance. Things break, and you will need some money in the bank to deal with unexpected expenses.

You’ll also want to know the rate of return you’re getting on your investment. There are formulas, such as the “capitalization rate,” to help with this, but you might want to turn to a professional. A good accountant can make sure the purchase makes sense.

Finding a good first tenant is also an important step. Run background checks if you can. Finding and keeping good tenants is the heart of successfully investing long-term in real estate.Happy tenants are critically important. They’re your customers and the way you keep them happy is by keeping the property in good shape and treating them with respect

5. Leave it to the professionals

If you decide to manage your property, you’ll probably need to consult a real estate lawyer to get a solid lease and learn the rights of tenants. You may want an accountant, and you’ll need a list of good plumbers, electricians and tradesmen. Building your investment team is very important; so is leveraging other people’s talents. Your goal is to have a second income, not a second job.Turning to a property management company can be a smart move. It’s usually worth it to pay 7% to 10% of our rental income to a manager.

To learn more about Part-Time REI visit us at http ://part-timerei.com/

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The Females of Flipping

Erik Hitzelberger — Wed, 09 Jul 2014 16:27:58 +0000

Anything you can do I can do better. So says the new wave of women investing in real estate. Flipping has undoubtedly become more and more popular since the early 1990s. Real estate investing is the new alternate way for an average American to gradually build wealth over time and not play the risky stock market. But like the stock market, this type of investing was slated as a man’s world. Women it seemed,were more comfortable in the less dominate roles of decorating and real estate agents.

Woman Can Too!

But as more and more women are becoming CEOs and other top ranked executives of Fortune 500 companies, this new wave of women are flooding the flipping market. Women are being drawn toward real estate investing as a viable way to ensure to take care of their family and make sure that they will have income or can retire early.

It is no longer a man’s world. Real estate investing, with its potentially high returns, can offer women an excellent way to boost their income streams for years to come. This can be especially important in retirement, since women are at a greater risk of outliving their savings due to their longer life expectancy, fewer years in the workforce, and smaller paychecks.

Like anything else you endeavor into, you want to make sure first and foremost you know what you are doing. Whether you are a man or a woman always make sure you are getting the right resources by thoroughly educating yourself in the business. If you are a woman who would like to get started in real estate investing, either in commercial properties or residential properties consider joining a local real estate investing club. Here you can network with other investors—male and female. There are also clubs designed specifically for women real estate investors across the country. One way to find these groups is through a site like Meetup.com. Today there are even online investing clubs devoted exclusively to female real estate investors. There are also many online resources that can help you get started. Be sure to check out our Flipping University for helpful tips and blogs on how to get started investing in real estate.

Just remember: it’s 2014. Women real estate investors no longer have to feel invisible or feel inferior. Don’t be afraid of getting taken advantage or getting ripped off by service providers. Be confident and have the knowledge and nothing can stop you. If men can be successful flippers, women can too!

News stories and resources

Real Estate Investing from A Woman’s Perspective (Toronto), Meetup.com

“Real Estate Investing is No Longer a Private Club,” Forbes.com, April 2, 2014

“Real Estate Investing, It Isn’t Just for the Boys Anymore,” Huffington Post, July 12, 2013

Field Guide to Women in Real Estate, National Association of Realtors®

Meetup.com

National Real Estate Investment Club

To learn more about Part-Time REI visit us at http ://part-timerei.com/

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Podcast 05: Building Your Real Estate Team

Erik Hitzelberger — Mon, 07 Jul 2014 16:47:14 +0000

Today in our next podcast, we will be discussing your real estate team and why you need it. In this episode Bryan and Erik talk about not getting overwhelmed by building your real estate team. They will discuss who is on that team and what responsibilities each team member has.

Building Your Real Estate Team

To learn more about Part-Time REI visit us at http ://part-timerei.com/

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Can You Do It?

Erik Hitzelberger — Wed, 02 Apr 2014 16:00:51 +0000

Today’s post is all about success. We thought we can blog all day about how to be successful, what books to read, what we wish we knew before we started flipping houses etc. But what really motivates people to start a new endeavor? What is that one thing that that makes you commit to a new product or service? The answer is word of mouth advertising ( the best kind that money can’t buy!). Who do you choose for a plumber? Usually one a friend or relative has had a good experience with. Investing in real estate is the same. What better way to convince you to get started than to tell you the real life success stories of people just like you?

What success stories give us is the inspiration to believe that we can overcome obstacles that are in the way of achieving our goals.
Here are just a few success stories that we found on the web. Hopefully they will inspire you to get started!

1. http://www.kiplinger.com/article/real-estate/T010-C000-S002-a-real-estate-success-story-justin-pierce.html

2. http://www.creonline.com/beginners-keep-at-it.html

3. http://www.biggerpockets.com/forums/223/topics/115094-21-months-in-15-deals-either-done-or-in-the-pipe

Part Time REI » Getting Started

Take Action

Some Great Advice on Getting Started

Article originally appeared on the RenTec Aug 25th Blog https://www.rentecdirect.com/blog/2014/08/dont-miss-a-step-in-your-real-estate-investing-plan/

Tips on Finding Flipping Leads

Read more: http://www.nasdaq.com/article/why-more-real-estate-deals-dont-fall-into-your-lap-cm383348#ixzz3CIv8Q2XC

Flipping House Series: The “No Deal” House

The Do’s and Don’ts Of Investing Part 1

Forgetful Flippers

1. Vanishing Vandals

2. Light it up!

3. Conforming and Comparing

4. For Sale Only When Finished!

5. A New Mailbox

5 Smart Moves for REIs

The Females of Flipping

Podcast 05: Building Your Real Estate Team

Can You Do It?