Under Contract (lease option)

Wow, after three contracts that fell through we decided to do another lease option. About three months ago a couple walked through the house and really loved it and I never heard anything from them after. A few weeks ago a realtor calls me and says she has a couple that is interested in a lease option and wanted to know what the details were. She got the paperwork signed and the checks and it turns out that it is the same couple that walked through it earlier. Pros: She did all the finalizing and got checks. Cons: It will cost me 10k if these guys exercise their option. We'll see, at least I'm less stressed!

P.S. My birthday is at the end of September and I'll be 28! I better get to work. I have been working on something very exciting that will get me to a million by thirty! Stay tuned.

Rehab

Who would have thought that a house that is 2 years old would need rehabbing! I guess I haven't done that much, mostly just replaced the carpets. When the lease option didn't work out for the past tenants because they didn't take the necessary steps to fix their credit I got the house back. The tenants had dogs in the house and it smelled. I replaced the carpets and that fixed the problem. I have since also built a deck onto the back of the house and started to build a fence. The deck cost me about $400 in materials and took about 10 hours. For the fence I have only set two of the 8 foot 4x4. I only have 16 more to go for 1/2 of the fence! After having the house

on www.forsalebyowner.com for a couple of weeks I had it under contract for 320k but their financing fell through. Since then I have showed it 30 or 40 times. Most people want the grass in the back yard installed. I am in the process of getting it appraised and pulling some cash out. The house should appraise for close to 360k. I am thinking more and more that it is a good idea to hold onto it so I am looking for another 2 year lease option. As soon as I get the cash from this one I will be working on pre-foreclosures in the Utah county area and in Colorado.

Times almost up!

Well the deadline nears and the house still has not been sold by the lease option tennants. Their first mistake in trying to sell it has been to hire an agent. They have to sell the house in 60 days and they lose $20,000 in negotiating power by hiring an agent. They have until April 31 and I think they have a 10% or less chance of selling it. I have given them every chance to make a great deal of money on it themselves but they have let them all slip through their fingers! This will be the last lease option I do. From now on I will do OARs. The best thing about an OAR is that I can get much larger down payments and a garuanteed increase in income on the house every year! If you'd like to learn more there is a free tutorial on OARs here: http://ryan.oarrealestate.com/compare.htm Ready to add another real estate investing strategy to your arsenal, or do you want to add another stream of passive income? Well, do you know how the OAR compares to rehabbing, wholesaling, and flipping? Which method creates $339,108 in annual income more reliably? If you don't know, then consider the first lesson on this website a "must see. "http://ryan.oarrealestate.com/compare.htm In fact, you owe it to yourself to take all 10 short lessons at this website because they teach the secrets behind adjustable rates, of analyzing your local real estate market conditions, and comparing real estate strategies. They look at median income and average prices in your local real estate market to discuss which real estate strategy works best locally. http://ryan.oarrealestate.com/compare.htm They cover the following topics: OAR, lease option, tenants, rehab, wholesale, land contract, subject to, and due on sale clauses. There's ZERO sales pitch--the lessons actually teach you the strategy. You may apply for the OAR Real Estate Program but only if it makes sense in your market. This link gives you a $15 coupon: http://ryan.oarrealestate.com/compare.htm

Sincerely,

Ryan Reynolds

Too good to pass up

After weeks of searching for a house that was close to both my daughter's and son's new schools, we found a semi-affordable house with a ton of potential. After driving around the neighborhoods that would be central to both of the school (which are on the east side of the city but on opposite ends) for what seemed like weeks, we called on a sign in the yard of a house we had previously dismissed because of such poor pictures on the MLS. After walking thru, we made an offer the same day and negotiated for four more days. The house is roughly 50k less than anything we can find in the neighborhood, and although it needs some TLC, it is very large and has unbelievable views. The biggest problem with a house like this is that after fixing it up is very difficult to sell and move away from (there is too much emotional attachment). It might be a good one to fix up and pull a bunch of cash out of to invest in other projects to avoid moving. We have to be out of the house we sold in November, that we have since been renting, in April. I'll post some before and after pictures of the renovations we make to the house.

Multi-Unit Apartments instead of residential

In the real estate world there are many different ways to make money. All of the stuff on my site so far has been dedicated to people like myself that aren't worried about taxes and cash flow yet because we are in need of cold hard cash. Well for those of you out there that have a little money or equity (I'm hoping to join the club shortly) investing in multi-unit apartments can be a windfall. Because I don't have much experience (yet) I have been looking for a kindred spirit that had some useful information. The site I found is http://www.rocketmortgage.net/investment_blog.php and has a ton of investment tools that are very useful. I hope it is helpful and "O be wise; what can I say more?" Jacob 6:12

Keeps going and going and going!

No, not the energizer bunny, my Hobble Creek property. I sent the tennants the extension agreement that raised the price by 30k and the monthy lease price by $400.00. The tennant called and said he was working on a loan and thought the price increase unfair. I told him I would only raise the price by 15K but the $1840 was not negotiable. He thanked me and said the loan should fund by the 18th. I got a check for the remaining $400 that he owed me on the lease payment. I told him that if the loan didn't go through, the price would go the 315k and he would have until May to sell the house. The appraisal was last week and it appraised for 360k, not the 375k he needed to get his own loan. Because he has subpar credit the lender wants at least an 80/20 loan to value ratio. I let him know that if he is 1 day late on the payments in the future that the option immediately ends and I take ownership of the house. In the mean time he will try to sell it or get a different loan. The most ridiculous part of the whole ordeal is that if he would have put a small deck in the back and put up some fence around the yard it would have appraised for what he wanted. Also, if they didn't have so much white trash yard "art", if they hadn't broken two of the windows on the front of the house, cleared out some of their crap from the house, and towed away a few of the broken down cars out or the driveway it would have been a breeze to get the appraisal to go through. It will be interesting to see if I get the house back in February because I know they can't afford the payment, or if in May they still haven't been able to sell it because they don't realize their stuff looks so trashy and anyone walking through the house will run on the way out. It will be satisfying to clean it up, finish the landscaping, and put up a fence and sell the house for 399k. I'll keep you posted!

The big one that got away

Today a friend of mine that is a realtor called and said she had a deal that was too good to pass up. We set a 7 pm walk through time and I headed over at 6:45. It had been sold a couple of hours earlier. The house was listed at 214,000 but was easily worth 235,000 and much more with the basement finished.

I hardly ever use a realtor to find houses but welcome calls if they have something too good to pass up. Usually I can find much better deals by visiting people who have just been sent default notices or sellers trying to sell on their own. I am only trying to make a 10 percent profit on a house and when you can buy a house without the 6 percent commission tacked on the job is already half over!

Talking to my wife yesterday I realized that we need to start looking for the next project. We went from working on three projects simultaneously to only one that is almost sold. I have been on the lookout as I drive around and have seen some definate possibilities but had to much going on.

I sent the termination of lease option letter to the tennant in the Hobble Creek house and he called me scared. The lessor told me he is working on a loan so I said I would give him until the end of December but after that it will be time to find a new place. I keep saying that I don't care either way I just want to be done and it still stands. It would have been nice to make twice as much on this deal but if he can buy it we will still recieve a pretty large check. In-fact the largest to date. If he can close the loan before Christmas I will definately be less stressed for the holidays. I spoke with the loan officer today and he assured me that 10 days after the appraisal we should close on the house. The loan officer also assured me the appraisal would be this week. We'll see :-]

One of the deals I am considering is buying the house across the street from me and tearing it down and just selling the lot. I would love to build on it but the timing is off. Feel free to email if you have any questions.

North Orem House Closed and Funded

After being on the market for four weeks we sold the house in Orem and the transaction funded on Thursday. This is the first property that we truly flipped. With all of the other properties we have lived in them for a little while (three to eight months) and then sold them. This house we bought with a conventional loan. I have to say that we did make less on this house than usual but it sure was nice to not have to move :-) My wife is expecially happier. We are renting the house we are in until April 2007 so hopefully we can flip a few more before then.

The lease option on the Hobble Creek house ends December first of 2006 and the people that are trying to buy it now are asking for an extension. When I first signed the lease with them I was desperate to avoid the hefty payment. I gave the people that signed the lease an incredible deal. Now the house has appreciated and my payment has gone up. I can handle the payment now without a problem and so the extension will be costly. I think they will be angry with me but they had two years at a contract price. If they want to stay they will need to pay current market value for the home and the associated payment. We'll see what happens. I had an attorney draw up the extension paperwork and after I do an inspection I will send them the paperwork in the mail. If they cannot extend I will probably have to give them some money to leave so I can start repairs and marketing the house right away.

Cash in on foreclosures

Fast-rising default rates and widely available market data have made it easy to become a real estate closer. Here are some essential tips for rookies.

By Carleen Hawn, Business 2.0 Magazine
October 26 2006: 6:27 AM EDT
(Business 2.0 Magazine) -- Two years of interest rate hikes and flattening home prices have put the squeeze on homeowners who gorged on debt during the boom. Now they're struggling to keep up with ballooning payments or, worse, losing their homes to creditors.
In September alone, more than 112,000 U.S. homes fell into foreclosure - a 63 percent jump from September 2005, according to RealtyTrac.

Ideal market conditions, in other words, for a niche group of real estate investors - foreclosure gurus who deliver panicked homeowners fast cash in return for property acquired at enviable discounts. They used to go door-to-door and staple ads to telephone poles.
Top 10 foreclosure markets in the U.S.
Today, though, an array of new online services like PropertyShark.com and Foreclosures.com is making a once-shady business more respectable - and teaching a new class of investors how to turn hard times into sweet profits.
Take 37-year-old John Cordero. From 9 to 5, he's a broker for a financial-services firm in Burlingame, Calif. In his spare time? Relying on Foreclosures.com for good leads and guidance, Cordero has purchased and resold nine houses in some stage of foreclosure since 2003.
What Cordero calls a hobby is looking more and more like a dream career: Foreclosure sales have so far padded his net worth by $700,000.
Web sites haven't changed the basic rules of the game, of course; they've simply sped it up and invited more players.
Here's what several pros consider essential knowledge for rookies.
1. Find diamonds in the rough from the comfort of your desk.
Many sites update foreclosure listings as soon as they're available, and often include the amount owed and the estimated value. Some even mention code violations or complaints against previous owners.
"It's stunning," says Bill Rohlfing, who does about half his business of acquiring "shell" buildings in Harlem through foreclosure. "I'd be doing hours and hours more work if I didn't have PropertyShark." Other sites provide useful hand-holding for first-timers.
2. Time your attack.
Don't even consider attending public foreclosure auctions, which are typically controlled by banks and other big lenders. Small players get their best shot by scouting a property right after it goes into default, when there's a brief window to negotiate directly with the owner.
"The whole idea is to get the property before it goes to the [auction] table," Rohlfing says.
After spotting a default notice online - the first stage before the formal auction process - he goes into action.
"First I call the lawyer who represents the owner to ask if there is a way I can negotiate with the owner before it goes into auction," he says. The typical answer is a firm no, but Rohlfing takes that as his cue to try to do it anyway, preferably in person.
3. Make the owner your partner.
Currying favor with the owner is another way a small player can get the necessary leverage to strike a quick deal. Cordero, for instance, often promises to solve the owner's immediate problem by covering enough mortgage back payments to get the loan out of default.
Then, in exchange for the deed to the property, he provides the owner with an apartment, rent-free, while he refurbishes the house. When he sells the home, Cordero cuts the owner a check for a portion of the profit - usually 10 to 20 percent.

10 mistakes that made flipping a flop

By Jack Gruber, USA TODAY
Casey Serin waits for his vacant property in Sacramento that he bought for $294,891 in January to sell. His monthly mortgage payment: $2,551.76.
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By Noelle Knox, USA TODAY
SACRAMENTO — If there's a poster child for everything that went wrong in the real estate boom, it just might be Casey Serin.
In one year, the 24-year-old website-designer-turned-real estate-flipper bought eight homes in four states — and in every case but one, he put no money down. At his peak, in April, Serin had $93,000 he'd taken out of the homes as he bought them. By July, he was broke, desperate for one last deal.
Now? Serin has $140,000 in credit card and credit-line debt and five houses in foreclosure. Last month, he started iamfacingforeclosure.com, a blog that's drawn both notes of condolence and expletive-laced condemnation.
"I did some stuff shady, but I'm not going to hide from it," he says. "Somebody can learn from it. I've already had people contact me and say, 'Hey, I'm in the same place.' "
The rise and fall of Casey Serin is a tale with moral and financial lessons for real estate buyers, lenders and regulators. Having consumed real estate guides and seminars, Serin made just about every mistake a newbie could make — most of them, he admits, were no one's fault but his own — from fudging loan applications to buying homes sight-unseen. That he began with bold dreams of class mobility makes his fall a peculiarly American saga.
Serin didn't know much about real estate at 19, when he bought his first condo. As a website designer, Serin was earning $35,000 a year at S.M.A.R.T. Association, a maker of marketing systems for health care providers. He quit to start his own Web-design company but couldn't earn enough to cover his mortgage. So he moved in with his parents and sold the condo a few months later. His profit: $30,000.
"My goal was to reinvest that money," Serin says. "But I also needed a car. My car was falling apart. I used some of it to keep me going, and for living expenses and things. And I used some of it to go on dates."
He also stopped working for three months.
By the time he married in 2004, the money was gone. He and his wife used credit cards to cover living costs because Serin's business wasn't bringing in enough money. When he found a job that summer as a Web designer, the couple had piled up nearly $20,000 in card debt, half of which they'd spent on real estate courses.
He bought Carleton Sheets' No Down Payment real estate program and attended seminars by Russ Whitney, author of The Millionaire Real Estate Mindset, and others.
"Sure, they used pressure sales tactics to get you into it, but looking back on it, I don't regret it," he says. "They told me how to start safe, but I really didn't start safe. I went all out. So it was my own fault."
As with all investors, Serin's goal was to build wealth. He was intrigued by Robert Kiyosaki's Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money — That the Poor and Middle Class Do Not!
"My eyes were opening up: 'Oh, OK, this is how the world works.' "
Mistake No. 1
Using 'liar loans'
In October 2005, Serin was desperate to pay off credit cards. But he was eager, too, to put his real estate training to use. He sought "a motivated seller — someone who wants to sell quick and doesn't mind giving a discount to get the deal done."
He found a Sacramento couple who'd twice cut the price on their home and were asking $360,000. Aware that the market was softening, Serin successfully bid $330,000, including his closing costs. But he also wanted to pay off his credit cards. So he took out a $360,000 mortgage and asked the sellers to give him $30,000 in cash once the deal closed.
"I was able to qualify for the loan at 100% financing," Serin says. "I used a 'stated-income loan.' It was really higher than I was making, so it was a 'liar loan' — that's what they call them in the industry."
Stated-income loans were created to help people with variable incomes, like commission-sales jobs, qualify for mortgages. Lenders require little or no proof of income, but they charge a higher interest rate to compensate for the risk. Stated-income loans have grown in pricey areas where traditional buyers are stretching past debt-to-income lending ratios, and some lenders turn a blind eye.
In California, 75% of purchase loans this year have little or no documentation of income, up from 34% in 2000, First American LoanPerformancesays.
But Serin also deceived the bank by saying he'd live in the home. Banks typically charge higher rates and require larger down payments for investment properties.
"Lying on a mortgage application is a federal crime," says Joseph Falk of the National Association of Mortgage Brokers. "It includes bank fraud, wire fraud and mail fraud and potentially a host of state offenses. This can result in jail time."
At the time, though, Falk says some lenders were willing to ease their criteria for borrowers because, with housing prices surging, they knew they likely wouldn't lose money even if the loan went bad.
Mistake No. 2
Overpaying
Serin flipped the Sacramento house immediately, and agreed to purchase the buyer's old house. But Serin's buyer needed to put 20% down and had to pay a penalty to the bank for paying off his mortgage early. So Serin helped him out at his own expense.
"I paid too much for his house," he concedes. And since he'd already used cash from the first house to pay off credit cards, Serin took out a $10,000 credit line for repairs on the buyer's old house.
Mistake No. 3
Lacking cash
Serin put the second house on the market but lacked the money for the $2,500 monthly mortgage, plus his rent and payments on the credit line. So he rented the house with an option to buy it later. Acting in haste, he rented to tenants who could pay just $1,400 a month.
"I got desperate," he says. "I couldn't flip it, and I had to stop the bleeding."
Mistake No. 4
Quitting your day job
"Now, I'm thinking I've got negative cash flow, I've got the credit line. I need to do more deals."
As the California real estate market hit the skids in late 2005, investors began looking in such states as New Mexico, Texas and Utah, where prices were still climbing. Serin, with dreams of becoming a full-time investor, decided to take three weeks off work in January and go to New Mexico.
"My goal was this: to find enough deals in three weeks that I could put under (a sales) contract ... so I could have enough in the pipeline so that it's safe for me to quit my job. If I can't get anything out there, then I go back to my job. But in my mind, I was already succeeding, and I wasn't looking back." He bought two homes in New Mexico with no money down and liar loans. He took back $20,000 in cash — enough to carry his payments for a while. Back in Sacramento, he gave two weeks' notice.
Mistake No. 5
Hiring an unlicensed contractor
Serin next bought a house in Modesto, Calif., that he'd found through the Internet. The deal was packaged by a "wholesaler." A wholesaler finds an under-priced home, puts it under contract and then transfers it to an investor in exchange for a fee of $5,000 to $15,000.
The house was appraised at $380,000; Serin paid $323,000, including closing costs and $15,000 he got back from the seller. The wholesaler "told me the repairs that needed to be done, but it was a lot more than he described."
Serin hired a contractor, but when he sought the license number, he couldn't find any records. The contractor said the work would take a month or two. After three months, the job was only half done and the contractor wanted more money.
Mistake No. 6
Buying sight-unseen
The sixth home Serin bought was in Utah. A developer had subdivided a tract and sold off the lots for custom homes. The last lot had a 25-year-old house on it.
"I bought it sight-unseen," Serin recalls. The developer "told me, 'It's outdated; you just have to update everything.' I didn't realize, not only is it outdated; it's awkward looking. ... Every room had a different color carpet. Some rooms had a photo-type wallpaper with nature scenes."
He realized that the $18,000 in cash he pulled out of the deal wouldn't begin to cover the renovation needed. He put the house back on the market and left town.
Mistake No. 7
Buying out of state
On the trip to see the Utah property, Serin stopped in New Mexico. One of the homes he'd bought there was rented; the other was on the market but not selling. Fearing he'd soon have to start paying the mortgage, Serin tried to rent it out with an option to buy. "I was even saying, 'You don't need to put anything down, just show me you have a good job, good credit and take over," he says. "But I couldn't do it fast enough. I was only there a week and a half."
Mistake No. 8
Buying too many properties too fast
The seventh house was near Sacramento.
"I basically used up all of the equity... and the market is already going down," Serin says. "But it made sense to me at the time because I'll take the $50,000 (cash back from the seller). I'm finding it takes a lot more money than I thought, and what if I run out of the money I already took out?"
The mounting financial pressure was getting to the young flipper. "I'm thinking about how to use the cash (backs) wisely and keep everything afloat," Serin says. "I realize I'm buying way too much. I'm not able to manage it all. And it just sort of happened. By April, I had six houses."
But he didn't stop buying. He was caught up in the frenzy.
Mistake No. 9
Underestimating remodeling costs
In May, he snatched up a house in Dallas. "I thought it was going to be my best deal so far, because of the spread," he says.
The wholesaler said the property was appraised at $310,000, and the owners would sell it for $190,000, but it had to close quickly. Unable to get another loan so fast, Serin went to a private lender, who appraised the property at $275,000. To get the loan, Serin had to put down $30,000 and put $30,000 more into escrow to cover the needed repairs.
Sight unseen, Serin went for it.
When he finally saw it, he said, "The layout was weird. There was a garage conversion, which I knew about, but because of my inexperience I didn't know the garage conversion kills it because very few people want an extra room. Most people want the garage."
Serin thought he could renovate the property for $15,000.
"I ended up spending $30,000," he said. "It ended up being a monster."
His bank balance was dwindling. Serin was also burning cash traveling between his properties. He purses his lips and inhales sharply. "That's the sound I was hearing."
Mistake No. 10
Having a poor exit strategy
Having just read How to Sell Your Home in 5 Days by Bill Effros, Serin flew to New Mexico in June and auctioned the vacant house in one week, eking out a tiny profit. He tried it a week later in Texas. A disaster. Just three low bids.
By July, Serin was out of cash and living off credit cards. He took out more lines of credit to try to keep pace with his mortgages. He wanted to go for one last deal in New Mexico. His wife saw copies of the letters he'd written to the banks.
"She's like, 'I don't want no fishy business.' "Part of me is like, 'Well, I know it's not right. I know I'm lying to the banks, but I've got to do what I've got to do. I got into this mess. I've got to get out somehow.' And it was like, once you make one lie, you've got to keep lying, in a way."
His last loan was rejected, and Serin hit bottom. The bills for his mortgages and other debts total $20,000 a month. He's says he's determined to pay off his loans. He's considering bankruptcy, restructuring the loans and trying to get another Web-design job.
Serin's current situation is bleak. He is currently unemployed as is his wife, who has gone back to college to get an accounting degree. They rent an apartment and have $140,000 in debt, and the remaining five houses he owns are facing foreclosure.
Yet, ever the optimist, he says, "There might be some other possibilities in the works right now for some additional real estate deals that would be completely aboveboard and allow me to make some money.
"There are some wholesaling opportunities where you find a contract and sell it to another investor. You can make 5, 10 or 15 grand on that stuff. That's enough to almost carry it for a month."

Closed and Closed

Well today is my 27th birthday, and I thought I might post a quick update. We closed last Friday on the Provo house that we are living in. On Monday we closed on a house purchase in north Orem. This will be our first time buying a house traditionally and probably selling it the same way. It is listed for sale on forsalebyowner.com for $228,900, and we have been getting hits on it since the first day. At this price I think the house will sell quickly. We have a three thousand dollar incentive to close by the 1st of November which would mean we don't have to make any payments on the new mortgage.

The Provo house closing went as smoothly as humanly possible. I can't say enough good things about the title company! Brad, the owner of GT Title, took it from beginning to end and did an amazing job!! I will have to call Mike and thank him for the information. Mike is the son of the lady who purchased the Orem house from us last fall. He referred us to GT Title, and we will use them again.

One hiccup in our closing on the Provo house is that the previous owner, R. Kauo, owed about six thousand more than he thought (or admits to knowing about) and he owed eleven thousand more than than I owed him. He couldn't bring any money to closing so I also had to pay his part of the closing costs (which should have been half of the total costs). I had him write me a note for nine thousand and forgave the rest. I'm carrying the note interest free until he's late on a payment. After all its just money, and I wonder how much of the nine I will see anyway. Again, I'll keep you updated.

The Hobble Creek house is still tied up with the lease option but ends December 1st. I think more and more that we will get that house back soon and sell it and make four times what we would have. I talk to the tennants every month when they are late with their payment and remind them time is running out. I have heard many times that 70 percent of all lease options expire, but I can't believe anyone would be daft enough to let this house slip away. The people living in it now could have easily made eighty to a hundred thousand dollars with a little elbow grease and a for sale sign. But lucky for me they are lazy. I am working with a real estate lawyer now to make sure everything goes smoothly when it is time to end the option. I will probably offer the current tennants a couple thousand just to leave without a fuss and another fifteen hundred to leave the house in good shape when they do leave. I'll keep you updated :-)


Now go make some money in Real estate, and I'll see you in Italy!

Lease Option Title companies

In the last five years, I have done quite a few transactions involving lease options and none of them have gone all that smoothly, with the last one being the most impossible. I finally found a company that deals with assigning lease option contracts to new buyers, and I hope it will go smoothly. As I was writing this I got a call from the loan officer's title company, and I told the girl on the phone that I need my title company to work on both sides of the transaction to make it go a lot smoother. We will see what happens. The title company is GT Title.

Signed and accepted offer

We have had quite a bit of interest lately in the duplex here in provo. We are getting a call a day and about three people a weekend walking through on average. The last three weekends we have had offers, and we negotiated on the last one and got it signed and done. It is scheduled to close the last half of September. You can never be sure until there is a check in hand, so we'll see.

Amy's grandmother has decided to sell her house so we have begun the process to buy it. She is willing to discount the house 6 percent since she can avoid Realtor fees. I am a little nervous about it because it doesn't meet two of my three criteria but we'll see. I always say "don't buy a house unless it (1) has an unfinished basement or an unrented basement apartment, (2) needs some superficial work i.e. paint, carpet, mowed lawn, and (3) is at least 10 percent below market value. Grandma's house needs a little work but it is very minimal, and the basement is already finished. So the only real qualifier is that the sales price is discounted to roughly 10 percent. It is in a great location and should be easy to advertise. Plus, we won't need to move in since we will be renting our Provo house back from the buyers until at least April.

I continue to call the people that are in the Hobble Creek house and find out if they are able to close by December 1st or not, and I am starting to think that I will be reselling that house. They are still hopeful and say they will be able to close but haven't even started the process and credit and income could be a real obstacle, not to mention the new payment. I really don't care either way. It would be nice to just be done with it by December and get a check for the equity and not have the loans in our name any more or any hassle. On the other hand, the house has appreciated quite a bit and I wouldn't mind making an extra fifty thousand on it either.

It could be a very good year or a very stressful year or both. We'll see!

CriclePix

We got a call from a financial services firm that is willing to pay a photographer to put together a spectacular photo presentation of the house. They even have a link generator that will allow you to just paste a link onto any online ad. Take a look http://www.circlepix.com/home2/WR4X9K !! I just posted it onto my add on forsalebyowner.com and need to add it to my free KSL.com ad. This is a great tool to speed up the sale process because it helps screen potential buyers, making the people who do walk through more likely to be serious about the property rather than just curious. I recommend it to anyone who is serious about saving some money by not paying a Realtor to sell a property. A good picture really is worth a thousand words (and a bad picture could cost you a sale!).

Duplex for sale

I have neglected my blog for too long! We have worked on the Provo house, rented the basement, and listed it for sale. I always post my properties on forsalebyowner.com. The only negative is that overzealous agents are constantly contacting me, telling me they can sell my house for more much more quickly than I can :-) From previous experience I realize they will say anything to get a listing. I tell them if they are so certain, they can buy it and sell it at that magical higher price themselves. Since I'm not in a hurry to sell anyway (my wife isn't too thrilled about moving yet), we can set our price and just watch to see what happens. We're already getting calls, so I don't think it will be too long.

As we get nearer to the December 1st cutoff date on the Hobble Creek lease option I can't help but wonder if I will get the house back and have to put some money and work into it and resell it, or if the current lessors will exercise their lease option and close on it. I don't really care either way. If I get the house back, I think I can sell it for three times the profit. However, if they close on it I wont have anything keeping me from purchasing a fixer-upper and start making bigger profits more quickly. The reason I have the duplex for sale is so I can have some cash to fix the Hobble Creek house should we get it back.

We were never able to buy the twin home back, which is probably for the better. It would have been too much to handle with everything else going on. Surprisingly Benjamin called me and asked me to send him an invoice for what I thought he owed me, partially restoring my faith in humanity. I thought about it for awhile and decided to invoice him only for the actual money I put into the home instead of what I lost by his dishonesty. I realized that if I invoiced him for the lost opportunity of the $25,000, he wouldn't send me anything, so I invoiced him $2,400 for the deposit and extra each month I sent him. Even more surprising after four months of calls he actually sent me a check for a thousand. I gave most of it to Jorge to return his deposit and the extra money he paid each month, so hopefully that will help him feel better about things. Now we will see if Benjamin can finish and pay the other $1400. Ironically Ben is making great money by helping investors find profitable pre-foreclosures in Oklahoma! I am excited to start using his methods here. More on that later.

It has been quite astonishing to see the appreciation of the Utah County market. It should continue for at least another two years by the looks of things. This is an amazing time to make money in real estate.

Forex

From the time I started trading forex, I have broken even. I have taken my account from $1,000 to $3,000 several times and then with one large stupid trade have taken it back to $1,000. So my new strategy, which so far has worked beautifully, is to trade to between $1,500 and $1,900 and withdraw $500. So far so good. The real genius of this is it keeps me from overtrading my account. I am excited to be able to spend more time on A&R Technologies and trading after I graduate. My last final is tomorrow in international finance. So, pending an implosion on that test I should graduate on the 28th!!!

Sold Lease Option

I used to think I would want the house back that I sold on a two year lease option a year ago. We designed it and had it built. It is a beautiful house in a great location but the people we sold it to smoke. I don't want to have to spend the money to try and reverse the damage they have done to it. Instead I just want them to cash me out and be done with it. I spoke to the buyer/renter last month and he said he was already working with a lender. I am excited because it would be nice to have that off of my credit and to get the equity out that I have tied to it. A big lesson I learned on this one is that it doesn't matter how desperate I may be to sell a house, it is worth the wait to not lease to smokers.

Short Sale

Quick update. We are still working on the short sale but I predict we wont get it done in time. The bank is giving Benjamin until the 10th to get all of the paperwork to them but I don't know if that is going to happen. I wonder how hard it is to buy the house from the bank after it forecloses on it. The house we just bought on lease option just continues to look better and better. We have done a ton to it. Spending almost two thousand in the last week and a half. I put up rain gutters, replaced a garbage disposal, repaired the dishwasher, tore down all of the old wallpaper, fixed a basement apartment sump pump, put new flooring down in two rooms of the basement, unclogged almost every drain in the house, installed the satellite, installed the projector, changed all of the doorknobs, installed a garage door, installed the automatic garage opener, cleaned the carpets, de-junked the yard, and a lot more but you're probably already bored of reading the list. School has been hard but manageable and I just recieved my Foreign Service Written Exam registration notification. I am not as excited to take the test as I thought I would be. I know I wont have enough time to study with school and the house. Somehow Amy has found time to study and wants to take it "just for fun." She's nuts.

Finding a house with the right things wrong.

Here is a great article!

How to Cash in on a Fixer-Upper
By Robert J. Bruss

There are two types of houses. There are "pretty houses" in excellent condition. But there are also the "fix-up houses."
The sellers of "pretty houses" usually expect to receive a top dollar sales price. Such houses can be great places to live, but they usually don't offer immediate profit potential.
However, sellers of "fix-up houses" are often grateful for any purchase offer. If the house is in very poor condition, mortgage lenders won't even finance the sale. Sellers of these "really bad" houses often have no choice but to help their buyers by financing the sale.
What is a fix-up house? Some "fixer houses" just need minor cosmetic work. These can be great bargains if the asking price is substantially below those of comparable nearby homes in good condition.
A cosmetic fix-up house usually just needs paint inside and outside (paint is the most profitable improvement), repairing, cleaning, new carpets or floor refinishing, new light fixtures and fresh landscaping.
In his best-seller famous book, How I Turned $1,000 into $5 Million in Real Estate in My Spare Time, Bill Nickerson recommended a fix-up profit formula of spending $1 to increase the home's market value by $2.
Not every fix-up house will meet this profit criterion. But it clearly doesn't pay to spend $1 to increase the home's market value by just $1 or less.
To earn profits, look for the "right things wrong." As professional real estate improvers say, "Look for the right things wrong."
That means house buyers who are looking for either a profitable investment, or a profitable personal residence, should seriously consider buying houses with the need for profitable cosmetic improvements such as those explained above.
However, unprofitable fix-up houses with the wrong things wrong include those with foundation problems, major structural defects such as horizontal wall cracks, need for an expensive new roof (some bad-looking roofs don't cost much to replace), very old-fashioned kitchens and bathrooms that need major renovation, and serious soils problems.
For example, the house on the hill above my residence has been vacant over two years. It has very serious soil stabilization problems. Fortunately, my property is not affected.
The lot offers very little open space for a lawn or swimming pool. The one redeeming factor is a beautiful view. This is a classic example of a house with the wrong things wrong, starting with its bad foundation.
How to earn tax-free profits from a fix-up house. If you would like to earn up to $250,000 in tax-free profits every two years (up to $500,000 for a married couple), just buy a fix-up house at a bargain price, fix it up while living in it for at least 24 months, sell for tax-free profits up to the limits of Internal Revenue Code 121, and do it all over again every 24 months.
The only drawback is living in the residence while the profitable fix-up work takes place. This tax-free home sale fix-up profit method can be reused every 24 months.
Personally, my best fix-up house experiences have been in middle-class neighborhoods in decent quality school districts. No matter how nice you fix up a house, if it is in a bad quality school district, it will have limited appeal to prospective buyers.
Buy wholesale from a motivated home seller. The best way to profit from fix-up houses is to purchase at a below-market price from a highly motivated seller. That means the seller wants a quick sale and maximum profit is not important.
Strong seller motivations include job transfer, unemployment, illness in the family, death in the family, birth in the family, drug or alcohol problems, rental house absentee owner management problems, retirement, inheritance, and family problems.
A savvy buyer's agent can often help arrange a profitable purchase, especially if you look like a repeat buyer with lots of future profitable business.
Before making a purchase offer, ask your buyer's agent to determine (1) how long the seller has owned the property and (2) the seller's purchase price. If the seller has owned the house a long time, that means the seller usually has lots of negotiation room for the sales price and terms.
Understand how to finance your fix-up house. Because the property is not a "pretty house," the seller might be having difficulty finding a buyer. The solution could be to ask the seller to finance your purchase, at least for two years while you fix up the property to make it acceptable for a mortgage lender.
If the house has no existing mortgage, your first purchase offer should provide for seller finance terms. Even if the listing agent discourages you, make your offer anyway.
Personally, I've lost count of how many houses I purchased with seller carryback mortgage financing after the listing agent said the seller needed cash. Retiree sellers especially enjoy receiving a modest cash down payment, such as 10 percent, and a seller mortgage to provide for retirement income.
In today's home sale market, for example, if you offer the seller a carryback mortgage at 5 percent or 6 percent interest, that's a great investment for the home seller.
However, if the seller rejects your offer and if you have good income and good credit, your bank will probably approve your mortgage application, especially if it is for a short-term 5-year mortgage, which you expect to refinance after the fix-up work is completed.
Where do you find profitable fix-up houses? Every community has houses available that need profitable fix-up work. A sharp buyer's agent is invaluable for locating these wholesale gems that offer profit opportunities.
Also, don't overlook foreclosures, REOs (real estate owned by foreclosing lenders) and other distress properties. Driving around middle-class neighborhoods and jotting down addresses of potential fix-up houses can often produce results. Tell everyone you know that you are looking for a fix-up house in a good neighborhood.
How do you finance your fix-up improvements? After you own the house needing fix-up, if you have good income and good credit you can probably finance the fix-up work with a home improvement loan from your bank. Banks love home improvement loans because they are very profitable and the default rate is virtually zero.
If you anticipate a profitable quick resale within a few months, called a "flipper," you might want to finance the improvements on your credit cards, bank credit lines, and even borrowing on a second mortgage from a "hard money" lender, such as the local loan shark.
Get more real estate articles from Inman News

http://realestate.msn.com/buying/Articleinman.aspx?cp-documentid=24856&GT1=7637

Lease option in a hurry!

Well, Friday the Thirteenth came and was luckier than we had hoped.

We had to be out of the house in Orem that we recently closed on (they let us rent it back from them for a couple weeks) but the short sale we've been working on for over two months now is still not finished (it keeps going and going and going . . .). We had planned on moving back into my parents' basement for a couple weeks until we finished negotiations with the bank for the springville house (although we weren't looking forward to a family of four living in a one-room apartment!). I worked every day for a week on my parents' basement to get it ready but we couldn't get it done on time (it's still waiting for tape and texture and paint).


Meanwhile, Amy had been noticing a house for sale near our son's school. She drove past several times in the past two months, but never stopped to get the phone number. Wednesday, she stopped to look at it and noticed that it had a lease option on the sign. She called and set up a walk-through for that evening. She saw it and, though it wasn't perfect, she said it was "intriguing" and talked me into going over to look at it later that night. I had been spending one last night working at my parents' house and didn't get done until 10:30 or so. We drove by and the owner was still there cleaning so I stopped and walked through. We went home and made an offer which we drove over to the owner's house at 12:30 that night! We started packing the moving truck Thursday afternoon but still hadn't heard back on our offer. Finally we got a call saying that the seller was having our agreement looked at by a lawyer and that he couldn't get back to us on it until Friday morning. We continued packing on Friday (not knowing where we would be moving to) and had everything out by 2pm.

Amy and my mom cleaned while I talked to the seller of the lease option. He was very skeptical about having us make an offer so quickly and was worried that we weren't serious or would just be trouble for him. He did agree, however, to meet with us later that night. We sat down with him and his wife Friday night and went over the agreement to make some minor changes. After meeting with each other, everything got worked out quickly, and we got excited about doing the deal together. I was just going to move everything Saturday but U-haul called and said if I didn't get the truck back by 7am they would charge me an extra $300.00 to make up for the money they would lose to rent it to others (we had mistakenly thought that we could extend our use of the truck by just paying for an extra day). Since we weren't interested in padding U-haul's pockets at our expense, we headed over for the house as soon as papers were signed on the lease option. At 2 am we finished unloading the truck into our new home with all of our new neighbors pitching in. I couldn't believe that neighbors would come help so late but they did, and a truck that took me over eight hours to load was unloaded in 45 minutes.

I paid asking price for the house which was $160,000 but I only pay a $1000 a month and a hundred of it goes to principle. The house has a basement apartment that brings in $500/month. I installed a garage door on Monday and already put in about $2000 in improvements. I put in a couple doors, put a sink in the downstairs apartment, and bought all of the flooring I will need to make the downstairs rentable. We don't plan on spending a lot more on the home but there are a lot of superficial updates and fixes (painting, tearing off old wall paper, etc.) that will do a lot. More sweat equity is needed at this point than anything!

We still plan on closing on the Springville house and either selling it for $20,000 more than we get it for or just renting it out. We haven't quite decided yet.

I started my last semester of college a few weeks ago and hopefully it will go well. At least I have a place to live! (That always makes my wife happy.)

For sale by owner, getting started.

I've had lots of people ask me, "How did you get started?" Real estate seems a little intimidating with the big numbers (to a lot of people $150K seems like a lot of money!), the various legal forms, the unfamiliarity of it all. But it's also intriguing. A lot of people have made a lot of money in real estate.

My first education in real estate came from Carleton Sheets. Most of you have probably seen him if you've been up later than you should and watching TV. When I was seventeen I did, and I bought his course. I read everything in a couple of days and started to put his information to work. The most important lesson I learned from the entire course is to get a good pulse on the market. I can't remember exactly how many houses I walked through or even how many offers I made that first year, but it was a lot. And that's how I got started.

The best first step you can take in real estate is to really find out what is out there. It is impossible to spot a good deal if you have never walked through a property or looked through the real estate classified ads. Get through as many houses and condos and duplexes as you can, and one day you will stumble on a deal that is just too good to pass up. If you've gotten a good enough grasp of the market, you'll recognize it when it does.

It usually takes me between two and four weeks to find a great deal. If you have a little more money, foreclosures and distressed properties are a great way to make money in real estate. I was a college student without much (any) money, so I had to start with little money down and low risk opportunities (yes, they really do exist). At first I worked with a real estate agent, looking at properties listed on the MLS. Although that is a great way to find out what houses can sell for, it isn't the best way to find a deal. After I realized that, I struck out on my own.

I looked through the paper and drove by houses until finally I found a house on a third of an acre in Provo for seventy-six thousand dollars. Even more important than the price was the fact that I was able to talk the owner into carrying the financing for two years. Almost as important was the location (near BYU in a nice neighborhood). For a picture and more information, see my earlier blog "Recap of 2001--2004." I used student loans as a deposit on the lease option and the payments were low. My family and I moved into the house, which though small was perfect for us. We made some minor improvements (during which I found out that finish work really isn't my thing) and then put it up for sale almost immediately.

At first, we listed it with a real estate agent. The first six months with the agent, we only had two people walk through. At the end of our contract we promptly switched signs in the yard from the agent's to a "For Sale By Owner" and had a signed offer within a few weeks. We ended up selling the house and getting a check for twenty-six thousand dollars. Not bad for my first real estate deal!

I wouldn't have known it was a great deal when I saw it if I hadn't been through a lot of houses in the two months before I made an offer. The other great information that I gleaned from the Carelton Sheets course was the questions to ask potential sellers. Price isn't the only factor in finding a great deal. Price is important, but if a seller isn't willing to carry financing or consider a lease option, it might not be possible to buy the house anyway. Carelton Sheets has evaluation forms which I used to learn more about what to specifically look at in properties. The experience of using those forms and looking through several different properties gave me more confidence and maturity to take from when I met with the seller. It was enough to give her enough confidence in me to carry the note. It is definitely the most important first step of entering the real estate world.

Although I don't use everything from Carleton Sheets' program, I would highly recommend the course if you are really interested in getting into real estate investing, part time or full time. There's no easy way, you have to be willing to put the time in to learn the information enclosed and put it to use. But if you do, it can give you a great starting point.

Closing, funding, finding a place to live.

The first check I recieved for fifteen thousand just posted to my account and the five thousand two hundred shows up on the account but hasn't cleared yet.

It is amazing what twenty thousand dollars will do to your spirits. I was giddy all day yesterday. We went to a wedding in Manti Utah for a great friend of my wife and I found everything to be funny. I have never tasted alcohol or taken drugs but I imagine the euphoria is about the same. I guess I need to get checks like that more often. Russell got a late Christmas present, the buyers got a new years house, and I can sleep better at night. The only real losers in this our my neighbors, not because I'm moving, but because on the loan docs it shows the purchase price at $222,000 with five thousand in closing costs which would put the actual value of the house at $217,000. When the reality is is that the buyer paid $235,000! Russ should write everyone in the neighborhood an apology.

I got a call from the agent working on my short sale purchase with the bank. I will post alot more on this later but want to get everything finished first!

Simultaneous closing

I had to wait to cool down a couple days before I got on and posted almost the rest of the story. Two days before Christmas morning Russell Peay decided to be a little more flexible and alot more greedy. Right before we bought the house from the Peay's they refinanced and got a loan with a prepayment penalty. Obviously not the brightest move but I guess he wasn't as stupid as I thought, just an ass. Russell realized that I had no negotiating power and took advantage of it. He called and let me know if I gave 3300.00 in concessions that would go directly to him he would work out the closing. But with the new closing I had to totally relinquish my rights and get bought out of the old contract. It wasn't all that bad I guess because we should still recieve a little over five thousand from them and another fifteen thousand and something from the new buyer. The only real issue now is making sure we recieve the money from the buyer. I don't have anything in writing and no real negotiating power except for possesion of the house. Caroline, the buyer, has been more than patient and reminds me of my grandmother. I don't believe there is a dishonest bone in her body, but we are still talking about more than fifteen thousand dollars. I have had to adjust my plans for the next few months because we are recieving more than four thousand less than anticipated but it shouldn't be too much of a setback. Amy has worked more than usual editing and the Satellite store has been doing better than usual. The really stressful thing left to do is find another house. We are supposed to be out of here on the 31st and don't have a place to go. Today our inlaws left after being here for a week so now we can resume packing and looking for a temporary house until the short sale in Springville finishes.

Ignorant Seller

I have never used so many cell phone minutes in one day. We are working on the close for the duplex we are living in that we are buying on a lease option. In the past when we have done this we have just reassigned the new purchase agreement to the seller and take a step back and just get our equity out of the house by signing a letter of interest in the property. Well when I tried to explain the situation to Russell Peay the seller his eyes glazed over and all of the sudden he was unwilling to listen or try to understand anything. He doesn't understand the process and is unwilling to be flexible in the least. We removed all liability and made sure he was paid exactly the same as per the earlier agreement but was unwilling to budge. He said "I have an agreement with you and I am only willing to do exactly what is said there which is sell you the house." I let him know that we could also assign the contract to the new buyer and he said that would be illegal according to orem city code. I didn't realize how ignorant he is but he was sure that if we assigned the agreement to the new buyers that we would be violating the owner occupation law in Orem. I don't know what planet he is from, but the close and the assignment can be at the same time, duh. Anyways, I can't believe the buyers are willing to be so patient but they love the house and are commited to buying it. I went over tonight and signed an extension on the agreement that brings it out to the 15th of January but I don't think we'll be delayed much past the fifth. The only real stickler doing this way instead of doing the assignment of the new purchase agreement is that all of the loan work has to be redone. I feel bad for the loan officer and his step-mother. Hopefully we can work this out because I'm getting ulcers! Next time I will not do a lease option but an owner finance. In that case I wouldn't have this problem. I am lucky that I had the option to assign the agreement

No Deal! December 19, 2005

This morning I called to find out if my family and I would have a place to live after tomorrow. My inlaws and their kids got here last night and this morning. We thought we would already be moved into our new house in Springville, the short sale, but alas, we aren't. So I called Nick, the one working on the short sale with the bank as the agent. He let me know that when he called the bank to find out where the house was in the process today, they said they hadn't recieved anything yet (everything was sent more than a month ago!). So Nick refaxed everything, but that doesn't help me for the next few weeks. (I'm also wondering how this happened that we are just finding out about this now, when Nick says he's been calling the bank to check up on it every day?)

My next call was to Mike who is working on the loan for his step mom who is buying the house I'm in now. He let me know that the house was still closing tomorrow or Wednesday and that most likely we could rent it back from them for the next week and a half, until New Years. So the good news is I don't have to tell my inlaws and my wife's sisters they don't have a place to stay for Christmas (not to mention my family!). The bad news is I don't have any idea when we can move into the Springville house or how long the short sale should take. Hopefully Washington gets the information this time and gets the ball moving on their end.

My wife isn't holding her breath on that one and has been researching houses and apartments that are available in the area. She found one just a block away that is a great deal, month to month. We'll call tomorrow and try to set it up as a back-up to move in January first.

Merry Christmas!

Lease option, Foreclosure, Marketing

I don't know exactly where to begin on this one because I should have been writing this every day as it happened, but I'll do my best.

So it all began in August of 2004 when we finished building the house in Springville. We put it on the market, expecting to be there for awhile. October 1, we received an advantageous offer for a lease option. The only negative was the closing date (October 15, only two weeks away) and the people that bought it (smokers without a great credit history). But, we accepted and then started looking for another house.

A friend of ours had to leave the state for a few months and said he would let us stay at his house at a discounted rate for a few months until he returned. We just needed a place to stay while we looked for our next deal so we gladly accepted. Well his temporary stay turned more permanent and he decided he wasn't coming back. We asked if he was interested in selling and he decided he would sell the house for what he owed. We agreed on a seller-financing option where I would cover the mortgage payments, earning the same principle that he was earning each month.

We decided to live there and list it for sale for $25 thousand more; then when it sold we would move and find another house. We ended up living there until May of 2006 when some friends of ours decided they really liked the house and were willing to pay a little more since they could buy it from us on a lease option. I had a three-year lease option to buy the house and so I resold the house on a two-year lease option. The deal stipulated that Ben, who we bought it from, would pay all of the closing costs and that Jorge, the new buyer, would also pay all of the closing costs, meaning that on top of the $25 thousand we could probably make another three thousand.

From there, we moved into a new house in a great area with a legal apartment and posted it for sale on the internet. We bought the new house for $217,000 and put down $5,000. We paid $1500 a month with $300 of the payment going toward principle reduction. Also, we collected $630 a month from the tennants below. That made our out of pocket expense $870 with over a third of that going to principal reduction.

In August of 2005 we started getting phone calls from Jorge saying he was getting foreclosure notes on his door and calls from people saying they could help. He was annoyed and wanted to know what was going on. I frantically called Benjamin, and he assured me that the house had gone into default through a bank error but he was making extra payments to bring it current. I decided to just buy the house outright so I wouldn't have to deal with the worry from Jorge. So I started the loan process and quickly got everything ready to go. When we requested a pay off amount, we found out the truth. Ben hadn't made payments in eight months (practically since signing the lease option agreement with us) and was getting close to foreclosure. What made matters worse is that the homeowners insurance hadn't been paid in over a year. They had placed a lien on the house and had gone to collections creating a hefty sum due because of all of the legal fees now tacked on. Ben now owed more than the house was worth, not to mention more than we had agreed I could buy it for. If Ben had made payments instead of living on the money I was sending him, he could have easily sold me the house for the agreed upon price.

Jorge moved out and called the police, not realizing that it is not illegal to lease option a house that is being bought on lease option (the permission is expressly granted in our contract). He just saw that my name wasn't on the title and thought I had fraudulently represented the situation. I rehearsed what had happened to the seargant that called (after I spoke with my attorney), and he got Ben's contact info and told me I should be fine but what Ben had done was a Felony.

The worst part of the situation, beyond the money and the inconvenience, was that I was caught in the middle of two "friends"---one who had repeatedly lied to me for months and had committed fraud against me, and one who no longer trusted me because he thought I was involved with the deceit.

So now we come to the present. I got an offer on the house I am in currently and sold it (cash out) for a profit of $18,000. We will also get the equity we have built up and the down payment, so it should equal a check for $26,000. We had the sellers pay half of the closing and now the buyers are also paying half of the closing, which means we shouldn't be out of pocket any closing costs. We were supposed to move on the first of December but the loan officer had some trouble with the conforming duplex. So after three appraisals and some fanagaling, we are supposed to be out in two days. The only problem is is that we have submitted a great short sale offer on the springville house, but the bank hasn't even assigned a negotiator to the file yet, even though it has been there for over a month.

To make matters worse my inlaws are coming on Monday for the holidays, and we were supposed to have already moved to Springville. So my family and I have to be out of this house the week before Christmas, and we have no place to live or host our parents! There are two hopes. One is that there is a miracle and Monday the bank assigns a negotiator, they love the offer, and we can close in a day (our loan has been out of underwriting for over a week). And the other hope is that we can rent the house from the people buying the house for at least until Christmas. I think the second scenario might be the closest to reality, but we could also end up living in a hotel with our stuff in storage. We have been packed for the last week, so we don't have to stress about that too much.

I'll keep you posted. I also need to write more about the day to day stuff, as well as my marketing, finding, and financing methods, which have proved invaluable. Oh, also how to have top notch legal representation for very little! Until next time . . .

How to become a millionaire in 7 easy (hah!) steps

I found this great article. I agree with most of it.

By Laura Bruce Bankrate.com

The road to wealth is not paved with infomercials. Those wee-hour TV staples would have you believe that you'll become "Fantasy Island" rich by placing tiny ads in the classifieds, or by buying up -- for no money down -- distressed property and selling it for millions.

Unfortunately, the only thing you're likely to get from watching those infomercials is dark circles under your eyes from lack of sleep. If you actually go to the seminar or buy the tapes, you'll probably just have more debt.
The truth is, unless you're lucky enough to receive a sizeable inheritance, you'll need to navigate your own route to prosperity. But while Bill Gates-style megawealth may be elusive, becoming a millionaire is definitely within reach of those who start young and develop the right habits. And anyone, at any age, can develop the traits that increase wealth and decrease debt.
"You can have money or you can have stuff, but seldom do you have both early in life," says Jason Flurry, certified financial planner with Planmark Capital Management LLC, in Alpharetta, Ga.
"Part of our culture is, 'Fake it until you make it.' Debt holds people back. They buy liabilities and they make those payments forever. Spend less than you make, live a modest lifestyle and don't live up to every raise. Some people have spent their prosperity for the next 10 years and they've done it on credit."
It's a matter of choices Flurry isn't suggesting you decorate your home in plastic lawn furniture, forego cable TV and dine on macaroni and cheese every night. But do you really need to buy a car that's so expensive that you must stretch the payments out five or more years? Do you have to have that 50-inch widescreen HD-ready TV right now?
Many people who choose wealth over "stuff" wouldn't consider spending money on the "latest and greatest" because they know their money can be put to better use elsewhere. Buying a "liability" would probably cause them stress because they'd rather buy an asset -- something that will appreciate over time and give them a return on their investment.
Flurry says he has a hard time getting some of his older clients to spend their money.
"They've been savers all their lives and the thought of spending $5,000 or $10,000 on a vacation is ridiculous; it doesn't matter that they're worth $3 million. They're really the last Depression generation and it's burned in their memory that they need to squirrel away money."
7 steps to wealth Paring it all down, we've come up with seven steps to becoming wealthy. Remember, wealth is relative, it doesn't necessarily mean "millionaire." The goal for many people is financial independence, says Stewart Welch of The Welch Group in Birmingham, Ala.
"That's the point in time when your cash flow from investments is equal to or greater than your income from work. Look at the statistics: 95 percent of the population never achieves financial independence. For 65 percent of retirees, Social Security is their largest source of retirement income."
The No. 1 reason people don't achieve financial independence, says Welch, is they don't have a written financial plan. So, that is our No. 1 rule for becoming wealthy.

1. Develop a written financial plan Saying you want to be wealthy isn't good enough. You need to come up with a workable plan and put it on paper.
"The written plan forces you to do something," Welch says. "Calculate what you need to earn and how to invest. The plan isn't just the goal, it's the whole thing -- the dream, the goals, the options. The options are scenario planning -- all the ways you can accomplish that goal -- open a Roth IRA, contribute to a 401(k).

2. Save, save, save The end result of your financial plan should be systematic investment. Get in the habit of saving money. Build an emergency fund in a money market account so you don't have to raid the rest of your savings and investments when there's an unexpected major expense. Make it a point to save at least half of every pay raise.

3. Live below your means Don't be a walking billboard for overpriced designer clothes, shoes, sunglasses or jewelry. Don't allow your house or car payments to be budget-busters.

4. Lay off the credit Some people say that if you can eat it or wear it, don't put it on your credit card. That's good advice, but take it further. Try not putting anything on your cards that you can't pay off in two or three months. You need only one or two credit cards. If you have a fistful, pay them off and cancel them. Remember, debt holds you back.
"It reduces cash flow for other things, including investing," says Welch. "If no one gave you money to borrow, you'd be better off and the economy would be smaller. If they only let you borrow 75 percent of the value of your home, you'd be a heck of a lot better off."

5. Make your money work for you It takes money to make money, but that doesn't mean you need a lot to invest. Open an account with a mutual fund company that has no-load funds and low expense ratios. Build a diverse portfolio and you can reasonably expect to earn 8 percent to 10 percent annually on your investments over the long haul.
6. Start your own businessIn the 1996 book The Millionaire Next Door: The Surprising Secrets of America's Wealthy, the authors state that two-thirds of the millionaires are self-employed, with 75 percent of them entrepreneurs, and the remainder professionals such as doctors and accountants.
"The idea that most people inherit wealth is outdated. A lot is built through businesses. Business creation is the No. 1 driver of wealth in this country," says Zultowski.

7. Get professional advice A good financial planner can help you fill your portfolio with the right investments and dump the wrong ones. You don't need to relinquish control, but you do need to form a good working relationship with someone who has expertise in this complicated area.
"About 76 percent of those surveyed are actively involved in the day-to-day management of their financial affairs," notes Zultowski. "They get involved; they learn about finances, they're not day traders. They work with advisers but ultimately make their own decisions."
If you can't afford to have a financial planner manage your money, many of them will review your portfolio and make recommendations for a one-time fee.

This last point is a real stickler for me. The only advise I have received from the financial planners out there has been to line their own pockets. If you want the best advise here is the financial bible and a link to one of the essentials that just wouldn't fit in the booklist blog.

Forex

I have really enjoyed trading forex. I love the instantaneous orders and not paying commissions. I look forward to learning as much as I can. My system right now has worked well for me, and I will continue to use it until something better comes along.

Right now I use FXCM's trading platform for my demo account (paper money). I rely heavily on the professional trades that they post on their news platform (for both my real and paper trading). Their professional traders post supports, resistances, the respective strength at different levels, where they think the market is headed short-term, where the purported buy and sell orders are, and most importantly, their own trades. If they ever make it required to have an account to recieve these updates, I will definitely open one with them again. For now, however, it can be accessed along with the free demo account.

The trading platform I use is from GFT and is called Dealbooks. This trading software is so great that as soon as I found it, I had to open an account with them. They will let you try it free for thirty days and possibly a little longer but it is well worth trading with GFT in order to have access to it. Not only can you use the trading software and trade straight off of the charts, but you can trade mini's or in smaller increments than the usual standard lots without affecting the spread. The only cost of trading is the spread so it's great to find a broker that doesn't increase the spread for mini's.

I also use indicator 75 that is based on my Dealbook charting software.

Keep checking back or subscribe to this post to see updates as I learn.

The Web site for FXCM is www.fxcm.com. Download the free demo and the news plugin. You should paper trade for at least a few months (some books I've read have suggested paper trading for a year or more) until you feel confident trading and then trade for at least a year (on author suggested five years) on a mini account. It is amazing to see the difference between paper trading and real money trading! I average over 100 percent on my paper account but have much more modest gains, so far, on my real money account.

I have gotten the best value by using FXCM for my info and free demo account and www.gftforex.comfor my charts and actual real money trading. Here is a book that has given me invaluable insight on how to maximize profits and minimize losses. There is one more book that I read and loved, but I will have to add it later because for the life of me I can't remember its name. But I have found that while actually trading is really important, reading about it can save you a lot of frustration and money!!

Reading List

I have realized that a large part of who I have become has come from what I have read. The mindset and drive to take the path less traveled and to become an entrepreneur has come from life experiences but it has been solidified by the books I have read and learned from.

I think it is difficult to teach someone to be an entrepreneur, but I do believe that most of us have some ability within us, and it needs to be developed. In fact if you're reading this, you are on the right track. Many of my friends and people who have gotten to know me always ask what books I read to get my information. So I'll put together a short list of the best books and try to add books that are a little more specific to what I am writing about whether it is Real Estate, Marketing, Forex, or Entrepreneurship in general. Here are three that are essential and fun to read at the same time. They will help you start to develop the entrepreneur inside.

Waiting on a loan . . .

Well we are a few weeks past due on the closing date for the house we are in now. We were supposed to have closed on the first and recieved a pretty nice check, some of which we will put down on a short sale we are negotiating with a bank for. Once the transactions have finished I will add specifics but I don't know the legalities so will keep it a little vague. We moved into the house we are in now sometime around May. We had it listed on a great site that is inexpensive and creates a ton of leads. I will have to post on that later to explain more about our selling strategies and how we get top dollar for houses we sell. Anyway, the loan officer for the house we are selling is the buyer's step-son. I don't know if he is just not very well connected, but he is having a hard time getting the house through because it is a legal duplex. It has been a good thing in a way because we don't have a place to live yet because the house we are buying is from a short sale and we haven't finished negotiating with the bank. Again, I apologize for the vagueness---there isn't a whole lot of value in this post, but I promise once I update it it will be worth the wait. And it just goes to show you why everyone isn't doing real estate. The rewards are great but it can be so frustrating!

My wife reminded me of the first house we bought and sold. We had it on the market for six or so months with a Realtor and only had two walk-throughs. After our contract expired, we decided to try selling it ourselves. We had an offer and earnest money a few weeks later and were supposed to close in the beginning of August. But then, because of financing delays, we didn't end up closing until mid-November! Oh well. Who can complain when the money is so good?!

Make money surfing the web continued . . .

Well, it worked! I deposited $1,000.00 with 12dailypro, a hyip program, and they just sent me back $1350.00 after 12 days! I was a little skeptical to get involved with this but now I took back my initial $1000 and am just using the extra $350 they sent back to work the program. Maybe once I close on the house I'll add another thousand or two to keep in there all the time.

Basically at that rate you double your money on a monthly basis. Pretty impressive.

So, how can you get started? Here's what I did: I had to jump through some hoops to get the account set up. First, I had to register a paid email address because you can't use gmail, hotmail, yahoo, or any of the free ones because they aren't associated with a specific ISP address. Second, I had to register with 12dailypro and get an account set up with stormpay.com (their partner company that takes care of the finances). I then had to transfer money to stormpay and then from there to 12dailypro.

Since I got my money back, I am pretty impressed with the results and will take advantage of the free money while it's being handed out. What the heck.

For those of you who are like my wife and wonder why in the world this site would do this, let me show you why it's good for them. First, if you miss a day of checking in and surfing your 15 web pages, they don't pay you. You only have miss a couple for them to make money on your initial deposit (since they pay you less than you put in). In today's busy world, that probably happens a lot! Second, they make a lot of money through Stormpay (a percentage of all the money you put in and take out goes directly to them. It's small enough to make it worth it still, especially if you don't take the money out of Stormpay but reinvest it into 12dailypro without getting the fees taken out). And third (although there are probably other reasons), they make money from the advertisers since they can guarantee so many people seeing the ads every day.

Finally, it is important to remember that something like this is never a sure thing. In fact, in the terms and conditions it states that they can change the terms at any time at their discretion. So, make sure it is discretionary money that won't kill you if they decide to keep it (although that would kill their business so I don't see that happening for awhile at least!). But still, it is a 100% return a month, and the company has gotten good reviews online. So, if you're interested, put in some money, watch it grow, then take out your initial investment and just use the "free money." It will grow faster than you can imagine!

If you have any questions about this email me, comment to this post, or click on the links on the right side of the main page for more info.

A&R Technologie, INC.

I guess it's about time I put something in here about A&R Technologies, Inc. A year after my wife and I married, we decided to open up our own satellite retail store (primarily promoting DISHNetwork services). We had run kiosks successfully in the local malls for almost a year but the hours were overwhelming since we both attended University and college full time as well.

That first year we made a decent living but our living conditions were hardly decent (we were saving everything to earn enough for a downpayment on our first house). We lived in a basement---not an apartment but just a room in a basement. My wife and I (bless her soul) shared a kitchen and living room with the disfunctional family upstairs. What an experience! The good things that came of it were that we were able to save a lot of money and we found that we could live anywhere, even if it wasn't fun!

After almost a year in the mall, and a month before the birth of our first son, we left the kiosk, started our own company, and started doing the normal Dish Network retailer stuff: door-to-door, telemarketing, summer sales, and print advertising. Wow, what a learning experience. I am earning an International Business degree, but I could never have learned what I did in those two years anywhere but where I was. After being in business as a sole proprietor for a year, we decided to incorporate as an S-Corp. We sought out opportunities to expand to other areas and spread out to Oregon, Nevada, California, Idaho, Georgia (long story!), and Wyoming. After about a year, however, we realized that we weren't ready to expend the resources and time that it would take to be profitable in so many locales; we cut our losses and brought everything back home.

The lessons we learned didn't come cheap. We are still paying off $55,000 in credit card balances accrued during that time. We didn't realize that even when we were grossing $26,000 a week, our costs were exceeding our profits (primarily because of mismanagement issues, poor marketing decisions, and other problems we have chalked up to the learning curve), and we were definately not going the right direction. Hindsight is always 20/20, but it really would have been nice to diligently enter everything into Quickbooks and really measure what was going on so it didn't come as such a surprise that things were running so inefficiently. Also, to have daily and weekly reports to take advantage of good markets and to quickly get out of bad ones would have also saved us a lot of money. The ironic thing is is that running a Dish store that now offers television, telephone, and high-speed internet is less lucrative for us than real estate. My wife and I have made at least twice as much buying and selling houses as we have in four years of running the store. We can't wait for the day when we can either close the store or burn it down and just do real estate. We'll see. But still it is a great business and has been invaluable as a learning experience and also as a supplement to our income (or right now, just to paying off its own debts).

Hopefully this has been as useful to you as it has been to me. If you have any questions or comments please feel free to let us know.

Procrastination (Hurry up and wait)

Well the snow has begun to fall, and the roads are like an ice skating rink---slippery and covered with amateurs.

The hardest part about buying and selling real estate the way we do, besides moving every four months, is the down time in-between projects. So many times I come across other deals or opportunities that I would love to take advantage of but can't. We are supposed to close on the house we are in by mid-December and close on the north springville short sale at the same time. It is nerve-racking just waiting, and I really don't want to pack and move in the snow. We should get a fairly large check from the sale of this house though, so hopefully that will give me enough motivation to do it.

I am in a trade right now, shorting the dollar, and I forgot to close it before the market closed on Friday afternoon. Hopefully nothing crazy happens.

School is coming to a close, and I have three more powerpoint presentations to put together and then present. They are due tuesday so hopefully I can get them done well in time. Maybe just for fun I'll post one on this. The 12dailypro website is intruiging. I have finished a 12-day period and requested the funds. I am waiting to see if they actually pay out. I put in almost a thousand and took out 1400 after 12 days so it could be pretty lucrative. I am very sceptical because it is basically a ponsi scheme. But it should run for another year or two at least. I just want to get out what I put in and only invest what I have made. As long as they pay out what they are supposed to, I will continue to put money in. Well see. It takes seven business days to recieve a payout so I'll keep you posted.

Good Appraiser/Bad Appraiser

Today I spoke with the loan officer working on the loan for the house we just sold (he also happens to be the son of the lady who is purchasing the house). He had an appraiser come and do an appraisal a week ago but she wasn't willing to do any work. She thought she could just take some measurements and do a quick internet search. She could only find one "comp," one we were familiar with just a few houses down the street. It sold for several thousand less than ours, and as we knew from talking to the buyers, it was lower for good reason! Although we provided her with their phone number and asked her to just give a quick call to verify it, she told us that she wasn't required to do any more work and promptly turned in a low appraisal.

After her appraisal came in low, I talked to the loan officer and gave him the number of an appraiser that is willing to do some leg work to find out what a house is really worth. He investigated the comparison house and found that the house I am selling is almost identical in size and floorplan, a legal duplex that consists of a downstairs apartment and a regular house on top. But that is where the similarities end. The house down the street sold in seven days on the MLS. It was listed in good condition and rented but in fact was vacant and destroyed. The carpet had to be replaced because of rodent feces, cat puke, and other unbelievably disgusting things. Several windows were broken, there were holes in the walls, and everything had to be repainted. The home I am selling on the other hand is in perfect condition including a year lease on the basement apartment! Because the first appraiser wasn't willing to talk to the people who purchased the house that she was using as a comp to find out the real condition and only relied on the MLS listing without any verification, she ended up with a very unprofessional comparison. The second appraiser on the other hand was willing to actually do his job and find out why I had my house on the market for less than 24 hours and had an offer, a back-up offer, and four people that wanted to be called if the first offer didn't go through!

Needless to say, once the work had been done the appraisal came in right where it was supposed to be. Now I just need to find a place to live! I am working on a short sale and I will write more about that when I am closer to getting it finished (hopefully soon since this house should close within the month).

Forex

About a year and a half ago, I saw an infomercial about 4xMadeEasy. I had already been interested in forex trading but really needed a jumping in point. I went to the seminar, bought the software, paper-traded very successfully for a month, opened a real account and promptly lost over half. I learned that I still had some things to learn! I started doing some more reasearch and reading and actually left the 4xMadeEasy software for more technical charts I found online (which were free instead of $99/month!). I sold the 4xMadeEasy software for almost what I paid for it and was glad to have had it if for no other reason than that it got me into forex trading. I did quite well over the summer but when school started up again this fall, I didn't have enough time to keep up on everything so I stopped trading full-time. But that doesn't mean I have stopped following the markets. In fact, I check the charts at least once a day most days.

As I have been watching the Eur/USD pair (my favorite to trade) the last few months, it seemed as though a bottom was forming. After reading a few articles on the issue, I decided to jump in after a prolonged absence and go long on the Eur/USD. The timing couldn't have been better. I woke up the morning after I had put in the trade and had doubled my money! I wish I would have just let the trade play out because instead of letting it go I closed the trade (I've seen too many of those profits just melt away while I let them go hoping for another climb!), and as I watched it today I realized I would have doubled my investment again! I did get back in but not as soon as I would have liked and now I'm a little under water. I need to be patient though because I really see the Euro taking back some of the losses against the dollar.