Naked Lady Real Estate, The Bare Truth About Real Estate Investing

Look up rental rates in any neighborhood....

I just came acoss this website (through someone on am following on Twitter!), that tells us the neighborhood rentals. 

It's called ZILPY.  Real Coolio.  Check it out!

Short Sale is the only way to sell this house...

Guess what...  my house in Taft is in escrow and we just got the appraisal back.  When I bought the house my ARV was $150K.  The the property plummeted in value at the end of 2007 and in Feb I had to sell it for $125k.  Now 3 months later after dealing with the non stop demands of the buyers lender, we finally got the appraisal done.

Drum roll...  how many of you think I am going to say something good? 

How many know that I am going to say something so sad...   

It appraised at... $75K.  There is said it.      

The sucker lost 50% value....  what a crock.  So now, in order for it to close escrow, I will need to get a short sale approved.  Wow.  Can you believe it? 

Actually it's just a relief.  I have been stressed for the last several months over this house.  I knew it lost value.  Of course!  What house hasn't?  But 50%?  Holy schniekies! Can anyone say Short Sale?

I just had a nice long chat with and investor friend who owns 10 properties.  She was telling me that she has been getting together with her mentors and they all are talking about which of their houses will have to go back to the bank.  They just can't sell the houses because nobody is qualifying for the loans. This is almost the case with my house. There are still a few contingencies that we have to cover in order for the house to close.  So even if we get the short sale approved - which we will, I am not even sure we can get the loan completed!  If not then I suppose I will stick it back on the market and try again.

It is what it is. I'm not going to worry about it.  You win some you loose some.  When times get tough you need to pick yourself up and fix the situation as best as possible, learn the lessons and just keep on trucking! This was just an investment property.  There are people out there in far worse situations than me.  They are actually loosing their homes that they live in.  Now that’s sad.

I’ll work hard to make my next deals be winners, so it’s all good baby!

Is there really such thing as a Free seminar?

The other night I was up late working and I saw the infomercial for a big “Guru” in real estate investing.  Everyone knows who it is.

 

I had several reactions as I watched this:

1. As an investor, it still brings back memories for me to watch these guys and feel like “Yes – If I buy your product – I too will be a millionaire investor!”  This is why so many good people end up buying into this bullcaca.

2. As the Club Manager of one of the largest REIC’s and who knows this “guru” pitch very well – I’m completely turned off by the “come to our FREE 1 ½ hour seminar and learn how to make a million dollars” song and dance.  It’s hogwash!  What they’re really saying is: “Come to our FREE event and we’ll pitch you for 1 ½ hours on our product or upcoming seminar that sells for only $3000K and then once you buy that we’ll pitch you on our mentoring program that is only 30K”  “You will probably learn some things, but don’t count on the majority of you really doing anything with it, since we don’t give you much support unless you pay for it big time.”

3. Finally as an owner of a real estate club – I’m so o-v-e-r this tired strategy of pitching product and mentoring programs in seminars like this.  Way back in the Days of Yore this was one of the only ways to get information from “experts”, but now there are many avenues to get quality training and education - and when I say educated – I mean educated AND supported by a real network of your peers and colleagues. 

There is nothing FREE about these seminars. Of course, if you want to learn from these gurus –will have to buy something. However this is not what’s upsetting.  I believe in buying education.  Heck I buy mentoring and coaching all the time.  What I don’t appreciate is the continuous up sell for their 20K, 30K or even 50K mentoring programs.

If you don’t buy their most expensive product, you will receive continuous annoying calls from sales people selling their “mentoring” program.  Listen, I understand this process from personal experience. I was getting calls for several months from this same infomercial guru’s sales people about 2 years ago. I’m telling you – the only thing that saved me from signing my life away and buying a 20K program was that I started working for REIC of LA and learned very quickly that all that pitch was a just that – a pitch to sell you more! I got the insiders view of this world – and as many of you know – I didn’t like what I saw. 

There are good gurus out there.  But they are probably 2 out of 5.  We just need to be careful not to fall for all the hype.

It’s important to have continuous networking, education, mentoring and coaching AND you have  to go out and do deals while you are learning.

However, the likelihood that you will get all that you seek from a “big time infomercial guru” is nill & none.  Well… that’s if you don’t have a lot of money. If you do have a lot of money, many of these gurus will love you to death and will nurture you until the cows come home if a) you keep spending with them and b) that you keep spending with them.

Bottom line: Find a good real estate group or club that you can trust, network with people, get yourself educated in specific areas, go out and do deals and fail forward fast!  Don’t listen to the guru’s own hype in order to decide if their program is right for you.  Ask people that you network with to give you recommendations on which product or mentor they like and have actually learned from. Don’t just buy blindly. And please – don’t go to the big named infomercial “gurus” and just start buying their entire product!  Not unless you know a handful of people that have personally invested in their services and have been successful.  PLEASE!  I beg you!

Non Performing Notes anyone?

I have been feverishly building my network on myspace and facebook and boy - it's been incredible!  If you haven't joined these networking sites yet -  you should consider it!  Way too much to go into right now, because the point is that I have made a connection with a gal who has a huge portfolio of non performing notes in 1st position.  We are looking them over right now, but the truth is, my friend and colleague Pete Mendenhall is the note specialist - not me. 

But I am anxious to learn and learn fast!  Thank goodness he is good friends with David Butler and now it looks like I must call on him to teach me a thing or two.

For those of you who do not know much about Notes, would you like to have an intensive to learn more?  I do!  I think I will organize one.

Let me know if you are interested and as well - if you might want to get some leads for deals?

Join me on Facebook! 

"We didn't see it coming.." What the heck are you talking about?

Today I am at a Real Estate Law & Business Symposium at UCLA.  I was extremely excited to attend this event because I wanted to learn from these very important & smart business men in real estate.  Even though these speakers are extremely educated and are perhaps the top in their fields, I am shocked by how many times I have heard the statement: "We didn't see it coming at all" in regards to the extreme downturn in the real estate market!

Can you believe this?  I almost had a conniption.  I just wanted to raise my hand and ask - WHY? How in the hell could you not see this coming?  I saw it coming almost 4 years ago!  Jeez it's not brain surgery.  People that cannot afford homes are buying them with these ridiculous loans, the new homes industry was building gazillions of homes and selling them for ridiculous prices in neighborhoods that were there was selling for half and sometimes a quarter of what their new homes were selling at.  And don't get me started on Inland Empire.  I was a sales manager for a company that serviced new home construction sites throughout Southern California.  I would go down to Inland Empire and just shake my head wondering who the heck was driving out there to buy those homes and how could they be selling at those overinflated prices!

I just don’t get it.  It’s ridiculous to say the least. Give me a break por favor.  I makes me almost realize that those “who didn’t see it coming” and not just the suits today, I mean everyone who is in real estate – that say they didn’t see it coming all had something to gain from not seeing it coming.

But what do I know... I'm just a pretty little girl. 

I just got in trouble cuz I didn't want more leads...

That's very weird isn't it?  But it's true.  I was offered leads from someone who is a very big investor and the owner of a real estate club. But when I gratefully and humbly turned down the offer - I got slammed as not being very ambitious.  Yikes-ola.

Call me crazy.  I just didn't want to take on more than I could possibly handle.  Especially in the format that we would be partners in the deal - therefore taking on a whole 'nother person that I would have to "answer to".  I'm moving out of the game man... no more bosses por favor. I have a steady stream of my own leads coming in that I'm working on and in addition to that I have my own REI Groups to run along with my radio show.  Why in the heck would I take on more leads and projects that I couldn't possibly manage in an efficient way.  There are plenty of other people that will benefit from her passing on those leads to.  I know that.  It's all good baby... 

Ever since I left my position as Club Manager of the largest REI Club in L.A. I have been going through a weird little transition period over here. It seems that I have been getting a lot of offers from folks in "high places" and when I thank them for the opportunity - but turn it down, somehow I am the foolish one.  Would you turn down the opportunity to go work for someone? (hint: work FOR someone.)  Am I crazy?  Or maybe, just maybe I already have big plans and projects in the works.

I would really like to hear from anyone out there who at one time was "working for someone" and started to break out on their own and was encouraged to stay where they were rather than be independent and successful in their own right.  Tell me about your experience.  It's fascinating to watch it play out to say the least.   

Dubai: The Magical City? Hhhmm... I don't think so.

...Or maybe I'm just a pretty little girl and should stay out of big important things that I couldnt possibly know what I'm talking about...  But I just read the most interesting article about Dubai and all the crazy construction going on there.  Even though I have read many articles on the different projects such as the hotel Burj Al Arab on its own island and the "world" islands, this is the first time I read something about Dubai that wasn't just a "isn't it wonderful" article.  The Article also spoke about how this country is growing and why.  I must say that I don't feel so enthralled with Dubai now.  It doesn't sound so magical to me anymore. As a matter of fact I just put 2 and 2 together and realized that it was Dubai that was trying to buy our Ports several years back. I remember that happening and was freaked out about the idea of it.  But time has passed and I forgot it was Dubai. 

It seems to me that they are going down the road of excess and "immorality" that the extremist hate so much about America doesn't it?  Now that's gonna leave a mark... Click here to read all about Dubai.

Being conservative... priceless.

                                 I’m really having to work my tuckus off getting my house in Taft sold.  They have requested numerous pieces of documentation from the buyer and even at that - they want more.  I think that once we get them the rest of the information which includes a sworn statement that they are indeed a human, that they have sold off their children so that they are no longer an expense and that God has come through with his letter of recommendation, we should be all set.

If this doesn’t work then I don’t know what to do.  The problem is – and please listen long and hard my newbie investor friends; is that I do not have enough margin in the house to lower the price anymore.  Why?  Because I bought last year in August ’07 and the sucker lost a ton of equity the last quarter of the year… duh! Additionally, I admit that I paid too much for the mofo.  At least $20K too much.  That is a lot for a house in Taft! 

It’s all a learning lesson and in this market – I know without a doubt that there is a lot of money to make for investors.  However (!)...  We must tread cautiously and perhaps be overly conservative for now.  Of course we cannot get stuck in a rut and not do any deals for fear of making a mistake, but certainly there is plenty of room for improvement in my evaluations of ARV (I will say I feel a lot smarter since going to Bruce Norris’ REO Bootcamp this year.)  Now I know, conservatively speaking, if I can sell a “$550K” house for $500K in 3-6 months then you better believe that I have it in my budget to sell it for $480K.  Which means $480K (minimum) is my ARV not $500k and ESPECIALLY NOT $550k! 

Please investors – do not use the comps or the last houses sold as your ARV.  Plan for a loss of  price at 2% a month for now. AND of course I am talking generally here.  I know there are areas of L.A. that are not going down that much and a few that are not going down at all.  All I am saying is; be conservative for now my friends.  Now is not the time to be a cowboy (or cowgirl!) – cuz it really smarts when you get tossed around and thrown off the bucking beast!

Don't forget to tune in to our Radio Show today! 

Today, Wed April 2nd

12:00pm - 1:00pm PST

Topic:  Can you make Millions using your IRA to buy Real Estate?

Today our guest Kathy Holcomb from PENSCO Trust will discuss what it means to use your IRA to buy real estate and how you can potentially make millions of dollars in your IRA by the time you retire.  You will learn:

1)  What is A Self Directed IRA and How is it Set Up, How Long does it take to set up an account ?   Is it  tax deferred?

2) How can a person invest it into Non Traditional Assets such as Real Estate Investments, Using your IRA Money to Lend Out to Others, or Invest into a Business

3) What is a PROHIBITED TRANSACTION ?

4) What is a Roth Tax Free Account ?

5) WHY have your money in a custodian like PENSCO TRUST ?

6) When can I receive profits from my IRA account ?

CLICK HERE TO LISTEN TO THE SHOW

If you missed it - don't worry - you can still listen to the podcast!