1) How long have you been involved in real estate investing? What were some of your jobs before doing real estate full time?

I have been involved in real estate investing for a little over a year now.  I have been a stay at home mom for the last 10 years, and before that worked in a print shop for 10 years.

2) How did you first get started in real estate? What strategies do you use and why?

I got started in real estate for several reasons. For many years real estate has been the one thing (besides the kids) that could keep me up all night thinking about it.  I have always loved going through houses and I have wanted a place in the country to have weddings at for many years. I thought about becoming a Realtor, but I didn’t want to work their hours and worry about my kids, too. While I was researching the Realtor option online I came across real estate investing information and realized it was something I could do from home and still be with my kids.  Then a long-time friend and former business partner of mine called me and while we were talking we both told each other we were thinking about real estate investing, so we laughed and then partnered up and created our LLC.  We started out with the idea in mind that we were going to buy and hold, or rehab and sell.  But with no money to invest, and limited credit we decided we weren’t going to get anywhere fast that way.

So we now focus on wholesaling or lease optioning when we find owner Financing. 

3) Which property types interest you? (Apartments, Commercial, Duplexes/Fourplexes, Land, Multi-Family homes, owner finance, etc)

The types of property that interest us the most are single-family or multi-family properties with owner-financing.  We have done an REO and a short sale as well.  I spend as many hours a week as I can continue my education, so that I have as many options available to me as possible when finding deals. Sometimes, if you know how, you can make a deal where there wasn’t one.

4) What types of financing do you regularly utilize? Have you ever used Private mortgage or private fund? If so, can you give details on how e thprivate lenders are different than traditional lenders?

We used traditional financing on our first deal, since then we have been relying on owner financing.  I would love to find some private lenders; I would like to get my REIA to look for private lenders as a group effort.   Private lenders would enable us to do so many more deals than we do now, and make it faster and easier to do them.

5) How did you go about finding properties?

We find properties by driving, calling ads, placing ads, bandit signs and referrals.  We haven’t tried mailing campaigns yet.

6) What is your average purchase price?

We try to keep our price range between $60,000 and $150,000.   However, since we have chosen to either wholesale or buy with owner financing we don’t worry so much about the price of the house as long as we know that we have either gotten it under value and can assign the property to another buyer for a good price, or we know that there is room in a deal to make money putting a lease-option buyer into an owner-financed house.

7) How do you typically sell properties?

We sell the houses ourselves.  I prefer to sell houses with the least amount of paperwork and delay as possible for me.  That is why I like to wholesale a house; I collect an assignment fee and am done with the deal, although sometimes I end up having to wait until a deal closes and funds before I get paid.  Or we sell to a lease option buyer.   Sometimes we will have to deal with a buyer’s agent, but we prefer to deal directly with the buyer.  The more people that get involved, the longer it seems to take to do anything.

What is your average net profit per deal?

On a wholesale deal we average between $1,000-3,000, on a lease option we like to see at least $2,000 up front, $100-200 per month, and about  $10,000 on the back end.  Just depends on the deal, some are less, some are more.   We aren’t going to kill a deal because we get greedy; we just want to move the properties quickly.

9) Describe your first deal and how much you made on it?

Our first deal was a REO that we purchased using 103% traditional financing.  We bought it for $44,500.  It took 3 months to close on it.  We borrowed $1,500 for the earnest money and closing costs.  The payments were supposed to be around $480, ended up being $547.  The realtor told us we could probably get $500-525 in rent (he also told us our payments should be about $350), and we ended up renting it for $550.  We planned to lease option it and use the option money to do some work on the house to increase the value, and then to sell it.  But my partner was afraid of having to make a payment which we didn’t have the money for and so we ended up just renting it to someone who was supposed to let us know after 3 months if they were going to decide to lease-option it or not, but they never would make the decision.  We decided we had no business owning a house when we couldn’t afford to do the work and weren’t even cash flowing on it, so we sold it after 8 months.  We didn’t list it, but we had to deal with the Buyer’s agent, and after inspections and all ended up losing a good deal of our profits by agreeing to split the cost of repairing the roof, so we only made about $5,000 on the sale.  But we did learn a couple valuable lessons; always make it clear up front that you are selling the property as-is (unless you just want out of it badly like we did) and always double check the math before you sign the papers, never assume the numbers are correct just because they do this every day.  We had agreed to a selling price of $58,000, the Buyer wanted to finance his realtor’s commission and his closing costs, so they were supposed to add that amount to our selling price, but they ended up shorting us.  I caught this mistake after we had already signed the first papers, but by then it was too late and it cost us about  $300, which I know it isn’t a huge amount, but every penny counts in a deal like this when you have been nicked and dimed to death every time we turned around. 

10) What is your goal one year from now?

Our goal one year from now is to have our marketing campaign firmly established to be supplying us with at least one lease-option property a month and a wholesale deal or two every month.  We also plan on having some private lenders in place within the year.

11) What are some of your philosophies on life and success?

My philosophy on life and success…be a life long learner, education is power. Find something that you want to do and do it!  Don’t make excuses, don’t listen to negative talk, and don’t be afraid of failure.   If you fail, learn from your mistakes and do better next time.  Find people who are doing what you want to do and hang out with them, even if you have to put an ad in the paper to find them (that is how I started my REIA) or find them online.  If you want to make a million dollars, don’t listen to the people who haven’t made a million dollars, the ones who tell you it can’t be done, listen to and follow the example of those who have done it.  Take a stand for your life, your values, and choose to be a value creator in your life, choose the path you want your life to take, don’t just take the easy path.   Dare to push yourself into being more, into being someone who can make a difference.  Life is to short to sit back at the end and say, “I wish I would’ a…” Be proud to be the one to say, “I’m glad I did!”

12) What are some of the pitfalls of real estate investing, especially when starting out?

Some pitfalls when starting out would be the lack of experience, lack of confidence in yourself, lack of confidence from others, possibly the lack of money, lack of being taken seriously as a business until you have been   around for a couple years.  When you first start out a common mistake is to rush out and buy any old property just to say you have one.  We did it too!  If a beginner can find someone with experience willing to mentor them, at least through their first deal, I think they would be a lot better off than trying to do it on their own the first time.  Confidence in yourself and from others comes with experience.  When you know you can do it, others will see that confidence too.  As for money…some have it, some don’t, you don’t need to have it, but you have a larger selection of deals available if you do.  But even if you don’t have money, you can still find partners and private lenders that do.  And after you have been in business for a couple years it becomes easier to get credit and lines of credit in your business name.

13) What is the one thing you love most about being a real estate investor?

I love real estate investing because it is exciting to me, every deal is different, and the possibilities are endless, limited only by your imagination!

14) What is the most important quality someone can have to be a successful real estate investor?

I don’t have just one, but seven important qualities of successful real estate investors.  I did not make the list, it is condensed from Josh Brown’s 7 Characteristics of Real Estate Millionaires.

A.Education/Continued Education:  They know the importance of continually seeking higher education to take them to the next level in business and in life.

B.Quick and Decisive Action:  They evaluate the situation, make a decision, and move on.

C.Single Focused:  They concentrate on what they are good at and only focus on objectives that will enhance their main goal.

D.Build Teams:  They figure out where their time is most valuable and acquire team members to handle all the “other” stuff.

E.Take Risks:  They aren’t afraid to take risks.  They quickly calculate their risk involved in a deal or a situation and take action.

F.Passionate Beliefs:  They wholeheartedly believe in themselves and their goals.  They block out fear and have complete faith in   themselves and their business.  Who is going to believe in you and your business if you don’t?

G.Master Marketers/Sales People:  They understand the importance of developing marketing and sales skills.  They know if they can sell themselves and their services they will always have options for making money.
 
Another one I believe is important is to help others. If you can focus on helping others solve their problems, you will succeed.