OfflineI had a question from someone and I thought to just spill my take on this page.
The question was....
If you read "DEANS LIST" you will come upon a section that speaks of market "cycles". We are obviously at the BOTTOM of the market, more or less, at this time.
The strategy for this type of market is BUY and HOLD.
Now that doesn't mean you can't do assignments or the occasional flip to generate cashflow, but it is a general strategy for the "cycle".
The exit strategy is to hold onto as many "marbles" as possible for as long as possible, then CASH OUT once I am ready to do so incrementally.
Let's say you have a two dozen rental homes that bring in several thousand a month in income.....when the market is high....why not sell one that you bought at the "bottom" of the cycle that has TREMENDOUS equity for a minor divestment and large infusion into your bank account?
If you are in the "Upswing" of the cycle you can begin to consider Flipping as a usual course of action.
Though you may not want to be a Landlord, the passive residual income that you will have coming in month after month is well worth enjoying as a STABLE source of funds.
A portfolio of nice cashflowing rental properties, FULL of equity is the KEY to WEALTH in the long term.
Flipping is a function that we perform as a source of funds to BUILD the portfolio. It also can pay some bills too, of course.
Basically, every time that you purchase a property you are evaluating the strategy of THE MOMENT.
You must decide with each purchase what function that particular property will serve, based on the Value, and your assessment of the particular property.
In other words...."is it a keeper?" (added to portfolio) OR do you "clean it up and throw it back?" (Flip it for cashflow.)
Some properties you may buy, and just want to hold onto, because it has some kind of attraction that makes you keep it. That's fine ONLY if it cashflows.
So that's it....the main function of our business.
BUILD WEALTH, and CASHFLOW. Remember you can have TONS of Cashflow, and very little wealth. Wealth is LONG TERM. That's why the portfolio is the basis by which we determine the Wealth. Residual Passive Income and Huge Equity will put you on the map.
Sam
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
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Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
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Don't let EXCUSES be the nails that keep you INSIDE the box.
Sounds about right. I'm just always worried about not finding renters and getting stuck paying the rent myself. That's the only worry of mine. I see house all over my area that say for rent, and they've been that way for awhile.
hi sam
love the big picture CASHFLOW AND EQUITY...can you feel it coming?...the sensation of wealth... it's coming. without a vision people perish...not us,not the DG family, we're going to the promised land! LOL
thank u sam.
here's to living the dream!
cynthia
Sam you probably already know this but.....once you get the 10 or so property limit that the lenders hollar about.... you can contact a portfolio lender and have him to roll all your properties over into a blanket portfolio for you. That way your slate is wiped clean and you can start all over again. But since you are using HML's it may not matter.
You are doing so good!
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"
Well Done. You impress me more every day.
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!
Thanks CBR, SIS, Moundman, and Cynthia......I think everytime that i write down these types of answers it helps ME more than enayone else.
It helps me to really , once again , sift through the enormouse infusion of information that has been thrust into my mind in the last 2 months.
It helps to sift it and turn it over in my mind so that I not only can express it , but affirm my belief in myself and the system that is taking us all to ne heights.
The feedback is MOST appreciated, especially by those that have already made their fortunes in this business. It is a faith builder to hear that Seasoned verterans like Sistreat , and CBRpower concur with my assessment of what I have learned.....once again...THANKS guys.
Sam
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
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Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
You mentioned you were worried about finding tenants for your properties once you purchase. Two very effective strategies we have been using for years is the Lease/Option or Rent-To-Own, as many people call it, and/or owner financing.
These strategies are even stronger in this market than ever before. With credit being tighter and people still desiring to own their own home, you can offer to put them in on a L/P or O/F and help them work on their credit until they qualify.
This gives your Tenant/Buyer the sense of homeownership. They take better care of the property and you don't get all of those annoying trouble calls.
Plus you get a downpayment up front and a premium monthly rental. You can offer monthly rent credits going toward the purchase or closing costs which is also an incentive for them to pay on time.
We advertised two properties last week for Lease/Purchase or Owner Financing and got a total of 52 calls and they are still coming.
Hope this helps.
CTP
Yes...that is one of the strategies we are taught here, but it doesn't hurt to continue emphasizing these techniques....we all need reminders.
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
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Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
Hello fellow investors. . .I SIMPLY love having postive cash flow every month from rental properties. . the freedom I enjoy, just knowing that the $ is there every month, is second to none. We chose to invest some of our earnings in private loans to family members for nice returns and the double-blessing is that we're helping them.. AND getting monthly income. Actually, in most cases, because we've learned so much about leverage. . we are using OPM even for those personal loans. .. so there..
As for rentals, we could/can rent six-times over any property we have; as soon as one comes available, BAM. it's rented and I have to rush aroundand kill the news add to stop the phone from ringing. .I am a believer that buying and hold right now is a key strategy and for us, a pos. cash flow or break even is good enough .. keep on rocking and rolling in real estate.
crosstown looker
crosstown looker
Well Said......thanks again and Let's keep the ball rollin'
BUILD your knowledge base....it is your ARSENAL to wage war against disbelief and the negativity of the status quo. You need your weapons......It's your choice whether you carry them or not.
------------------------------------------------------------------------------
Build Relationships and open the door to opportunities that could once only be dreamed of......never take those relationships for granted.
--------------------------------------------------------------
Don't let EXCUSES be the nails that keep you INSIDE the box.
There are four aspects to foreclosure investors can focus on to create deals.
• 1- Behind in payment: The homeowner is behind in payments but it is not yet public knowledge. There is very little competition for these deals. These deals are found primarily by advertising and by referrals.
• 2- Pre- Foreclosure: Fist action has occurred and the preliminary foreclosure notice is now entered into public record. The competition will increase at this phase of foreclosure because a “Notice of Default or Lis Pendens, or Notice of Sale has been made public by the foreclosing party. Pre-foreclosure involves working directly with the homeowner and in some cases the lender.
• 3-Auction: If the loan is not brought current or paid off in full, the property will be auctioned off to satisfy the underlying debt. The auction date and time are advertised to the public and the property is then auctioned off usually on the steps of the courthouse. The financial goal of the lender is to recover the principle loan balance, interest, property taxes paid on behalf of the owner, court costs, attorney’s fees, late fees and penalties. Auctions typically require cashier’s checks.
• REO (Bank owned property): The lender will normally bid at the auction for the amount of defaulting loan, late fees, back payments, taxes, legal fees and any other allowable expenses. This typically the initial bid amount. If nobody enters a bid higher than the bank, the bank takes ownership of the property which is called “Real Estate Owned” (REO) then you can do a Short Sell with the bank.