Hey, it’s Larry here.  One of the questions that I get more often than any other question about working with us is:

How do I submit a property to you?

What is your buying criteria?

Well, as many of you know – at least those who own my Ultimate Buying and Selling Machine, which is my course that teaches how to buy and sell houses the same day using the Internet, which is based on my book Getting Started in Real Estate Trading – I need to be able to sell my properties at 70% of the after repaired value. That 70% includes purchase price, repairs and closing costs.

In other words, whenever I buy a property, I need to be able to add my $5,000 to $10,000 to $15,000 to it, then include repairs, closing costs (which I generally figure around 4% of the 70%), taxes, insurance and attorney fees (which I usually figure around $2,500) – and that is the price that I need to be able to sell it for to another investor. I want another investor that buys this property from me to be able to buy it, pay all the closing costs, fix it up and then they have 30% instant equity built into property.

Is it easy to do that? No, not all the time. But if you will do this in buying your properties to resell to other investors, it will be an easy sell if you negotiate a deep enough discount or you can turn around and sell it to another investor at 70% including purchase, repairs and all closing costs.

Also, I get people that want to know about submitting a note to me, as far as Filthy Riches type note. By the way, I only buy Filthy Riches notes from Filthy Riches students. That way you know exactly what we are looking for and how to protect yourself and get the most amount of money from your notes.

Because these Filthy Riches notes are such small deals and because you are buying them at $4,000, $5,000 or $6,000 and then creating a note buy [xx 00:02:19] sell price of $30,000, there is not really a lot of equity – real, true equity – in the notes. So you have to be able to sell them at 25-35% yield.

But if you are buying a property for $5,000 and you sell it for $30,000 and they give you a couple thousand dollars down, even if you only get $15,000 for the note, you still made $10,000-12,000 on this deal, so it’s still a really good deal. In fact, if you buy it for $5,000 and you end up netting $12,000 or $15,000, then you sold it for 2-3 times of what you’ve paid for it. You can’t do it on $100,000 or $200,000 house – there’s absolutely no way.

I hope this helps in understanding how to submit a property and a note to me. For complete details on submitting a property or a note to me, just go to www.InvestorsRehab.com and click on a link Submit a Property. It will give you all details about submitting a property to me to buy and submitting a note as a Filthy Riches student to buy.

Thanks a lot and be sure to look for next month’s newsletter where we have some really special items included for you! So thanks a lot and have a great day!

April 2009 Q&A

I’ve been getting a lot of questions lately from students who ask me, “What exactly is the stimulus package?”  “How is it going to affect me?”  “How can I get a copy of it?”  “How can it help me?”

These are all good questions.  The document is huge.  There are actually two stimulus packages – the one that President Bush created right before he left office and then the one that President Obama created right after he came into office.  So there are actually two separate stimulus packages.  What they are designed to do is get the economy going again by getting lenders back in the game of lending money instead of sitting on the funds that the government is giving them.

When people borrow money it stimulates the economy because they buy goods and services which creates jobs and employment.  The economy is in a slump part and parcel because consumers are sitting on their money and they have less money to spend.

Another big part of the second economic stimulus package was designed to get the government spending money on infrastructure – roads, bridges, construction, etc.  That will create more jobs and put more money in the economy for people to go out and spend money or go out and get further into debt.  People will be able to borrow money again.

I’ve had a lot of people ask how in the world can they take advantage of these stimulus packages.  I know these are long documents.  What I’ve done for you is make these documents available online at TheCoachingClub.com.

As you know as a newsletter subscriber you can switch your membership over to TheCoachingClub.com.  You will still receive your newsletter AND you can access all the great information at TheCoachingClub.com.  For example, I’ve uploaded the stimulus package documents for you to read right online or to download.  Granted, its not exciting reading, but it is good information.  You can see the different areas where you can make some money.

For example, there are tax credits for first time home buyers.  You might think that first time home buyers are people who have never owned a home.  Actually that’s not true.   The stimulus document defines a first time home buyer as someone who has not owned a home in the last 3 years from the date of purchase.  So if you were to purchase a home on March 15^th of 2009, as long as you haven’t owned a home since March 15^th of 2006, you qualify for the First Time Home Buyers Credit.  The tax credit is up to 10% of the value of your home purchase!  So if you buy an $80,000 home you will offset your taxable income by $8000!

How can you benefit from this?  When the lenders start lending again and they open up financing because the government has given them the money to do that, people are going to start buying homes again.  It creates a much better marketplace for you to buy, repair, and resell homes!

You can offer homes at better prices or with better repairs or amenities and you can make a big profit.  Be very picky about the homes that you buy.  Make sure they are in desirable areas, and areas that homes will sell quickly.  That is one of the questions that you will want to ask realtors when you are looking at properties.  Ask what the property will be worth when it is fixed up.  If the realtor tells you $250,000 then you ask if they could sell it for you, repaired, at that price.  If they say yes, find out how long it would take.  You want to focus on homes that you can sell upon completed repairs in 3-6 months at a healthy profit.

Having said that, go to TheCoachingClub.com and sign up today.  You will be billed for The Coaching Club but not for your newsletter plus you will have all the great trainings and benefits from The Coaching Club.  You will no longer be billed for your monthly newsletter.  But you will still receive it.

So, log into The Coaching Club and read up on the stimulus packages.  You can find all sorts of great incentives to help you make more money in real estate!

Larry

A lot of students have been asking about the “Cash for Clunkers” program and does it make this a good time to buy a new car.  As a part of the “Stimulus Opportunity Secrets” course that I’ve just released we’ve done a lot of research in our office on the 2009 stimulus package.   The “Cash for Clunkers” program was a later addition to the stimulus package, and didn’t really make it into the course.  So I wanted to answer your questions here.

There are considerably more questions about this program than answers.  Top that off with the fact that the program ran out of funding and is now internally battling in Washington to be “refueled” makes it a crazy topic to understand.  The NHTSA administers the program and car dealers must register to be eligible.  You can find registered dealers by going to http://www.cashforclunkersfacts.com.   The program went official on July 24^th of 2009.  The good news is that with the program you are practically guaranteed to get more for your car than you would to sell it directly or to trade it in through a traditional trade-to-dealer program if it is an older model. 

The program basically gives you trade in credit on any passenger car which gets less than 22 miles per gallon, any light duty truck that gets less than 18 miles per gallon, or any large light duty truck that gets less than 15 miles per gallon.  If you make a purchase that improves your passenger car miles per gallon by at least 4 mpg you will get a $3,500 voucher, by at least 10 mpg you will get a $4,500 voucher.  If you purchase a light duty truck that improves your miles per gallon by at least 2 mpg you will get a $4,500 voucher, by at least 5 mpg you will get a $4,500 voucher.  If you purchase a large light duty truck that improves your miles per gallon by at least 1 you will get a $3,500 voucher, by at least 2 mpg you will get a $4,500 voucher.  These traded in cars are not resold, but rather destroyed and taken off the roads for good.

One disturbing trend in the Cash for Clunkers program is that many older vehicle owners are finding that the stats given on the government site for their car’s miles per gallon are ridiculously high.  However we have read of at least one car owner who fought that number and won. 

The CARS – Car Allowance Rebate System – is a government sponsored trade-in program signed into law in June.   Some stipulations need to be understood before you rush to your local dealer.  The car must be less than 25 years old and still be in drivable condition.  This is NOT a drag it in, push it in, pull it in type of promotion.  The car must have been continuously insured and registered to the same owner for the full year preceding the trade-in.  You cannot run out and buy an old clunker to use for the program.  One added bonus to consider, however, is that some manufacturers and dealers are offering ADDITIONAL incentives and discounts which could save you even more money.

The CARS vouchers are not in addition to trade ins, so it would be good to know the value of your car before you go shopping.   To double check your government rated fuel mileage, go to http://www.fueleconomy.gov.   If this program doesn’t work for you, don’t forget that there are also Federal incentives for buying hybrids, buying biodiesel, buying flex-fuel, or even converting your existing car to one of the above.