Saturday, December 11, 2010

The Educated Real Estate Buyer

I recently had the privilege of attending five days of training that were amazing and powerful.  Portions of this training were available to the public at $5,000 per ticket.  A select few of my friends were able to attend the public portion at a significant discount thanks to my relationship with the internationally syndicated radio talk show host, JT Foxx.

You may ask yourself why would a successful Real Estate Entreprenuer like Tom take five days away from business and family to attend training? I will tell you why, it is because knowledge is the most critical success factor in this or any business.

Although the fundamentals of business don't chang, market conditions do. The strategies that worked in the previous decade, year, six-months no longer work with today's market. Because of that, every successful business owner will regularly engage in Zero-Based Thinking.

In Zero-Based Thinking, you start by assuming that you are starting over, completely fresh. Instead of working from what you "know" about your market, your customers, and your business, you take a fresh look.

Once you have rebuilt your market view and your customer definition/view then you look at your business and ask, "Why? Why? Why?"

Yes, you actually ask it at least three times about everything you are doing in your business. "Why are we doing that?" "Why do we believe it is working?" "Why should we stop doing that?"

Asking lots of "dumb" questions will help you to uncover the false assumptions and changed foundations beneath your current business practices. Making that critical examination in the light of a new look at your market and customers can help you avoid going down the drain with your competition or getting run over by the new business on the block who approached it with a clean slate and is killing everyone else because of not being bound by outmoded practices or traditions.

Zero-Based Thinking is just one of the many things I learned in this five days of training. I have already used it to make my business better, and there are dozens of more things I learned that I will be using to make my business and my next six months more profitable than the six that went before.

If you think it is costly to spend so much time and money on education as a business owner or individual, consider how much bad experience costs.
~ Tom S.
PS: In case you were wondering, I spent a day and half with Raymond Aaron, a day and half with JT Foxx, and then two days with Nido Qubein, JT Foxx, Raymond Aaron and Phil Grove.  If you don't know who these people are, then follow the links associated with their names and be amazed at the caliber of people I am learning from.

PPS: In addition to the instruction from the folks I mentioned above, I was in the room with a couple of dozen successful business owners from all across the country.  Many of these folks are worth millions and millions of dollars.  I was able to network with them and learn from them too.

Tom Sheppard has been successfully investing in real estate since 2001 while working part time. In 2008 he left a six-figure job as an enterprise project manager with a major national bank to manage his real estate business full-time. His goal is to help 100,000 people find peace of mind by finding quality, affordable homes. Why pay retail when you can buy a home at below market prices? www.buybelowmarket.com. He is currently looking to expand his network of funding partners who are helping him achieve this goal. If you would like to know more about how you can do well by doing good, contact Tom at TSheppard@ADBProperties.com

Tuesday, November 16, 2010

Real Estate Investors Go On Offense

Investors Go On Offense
"The exclusive National Real Estate Investor/Marcus & Millichap Investor Sentiment Index shows that investor confidence has taken a major step forward in the past year. After bottoming out in 2009 with an index rating of 91, investor sentiment rose to 113 in the first quarter and 119 in the third quarter of this year."
 
I read this headline from market experts Marcus and Millichap with great interest.  For some time now, I and my associates have been telling our friends who are standing on the sidelines holding fearfully onto their money that this is the ideal time to invest in real estate.  It seems the big money agrees with me and is moving ahead.
 
Meanwhile those who could be working with folks like me to buy some of the cheapest real estate deals they will see in their lifetime continue to wait until everyone acknowledges the trend and has jumped on the bandwagon, thereby assuring that they will be victims of the buy high and sell low phenomenon that always wipes out those who follow the crowd.
 
You can trust me on this; when everyone in the media starts talking about how great the real estate market is doing, I and my associates will be selling and maximizing our gains while getting ready for the next down cycle that will inevitably follow the craze.
 
Is it too late to get in now?  No, but it will be soon if the gurus at Marcus and Millichap are right.  By the middle of 2011 they predict investor confidence will be very strong and market activity will be significant.
 
There are still lots of deals out there to be had and even as little as $10,000 can be parlayed into significant returns for the savvy investor.

Tom Sheppard has been successfully investing in real estate since 2001 while working part time. In 2008 he left a six-figure job as an enterprise project manager with a major national bank to manage his real estate business full-time. His goal is to help 100,000 people find peace of mind by finding quality, affordable homes. Why pay retail when you can buy a home at below market prices? http://www.buybelowmarket.com/. He is currently looking to expand his network of partners who are helping him achieve this goal. If you would like to know more about how you can help, contact Tom at TSheppard@ADBProperties.com

I read this book.  In fact I have it personally autographed by the author, George Ross who I had dinner with.  It is a very interesting read and provides some significant insights that I am applying to my own business.

Tom S.

Tuesday, November 2, 2010

360 Millionaire - Last Chance


Why you should be beating down the doors to attend the 360 Millionaire Class with JT Foxx and what you will learn there!

Because JT Foxx continually updates his materials to work in the current market, the exact details of what he teaches in one class are not the same in the next class. So even though I have attended his class before, the list of learnings I give here is partial, generally accurate, and probably won’t be covered in exactly the same way as it was when I heard him teach it before.

Last year, JT called this class, “Partner Your Way to Millions” and it was a great class. Since then he has renamed it, retooled it, and completely updated it to be even more effective.

Why would anyone want to attend a class about millionaires? Very simply because we all want to be financially independent. Some of us want to be stinking rich.

Robert Kiyosaki (a friend of JT’s) in his book, “Rich Dad Poor Dad” teaches that financial independence is when you have income sources outside of your job that meet or exceed your ordinary expenses. For many of us financial independence is enough. Others want still more.

Many of us who were raised working-class, like I was, have been taught to look down on people of wealth as some form of leech on society (some politicians try to manipulate us with this ploy today). This is a way for us to make our relative poverty into a virtue and their wealth into a vice that we aren’t afflicted with. This is really just a mental coping mechanism, an excuse to help us to avoid feeling bad that we haven’t been good enough with our talents to lift ourselves to that level. Jesus taught in his parable of the talents that we should be very aggressive in turning our 5 into 10 and our 10 into 100. And yet, we sneer at those who turn 10 into 100. My mother taught me that this is what is called, “reverse snobbery.” It is actually a form of pride and envy. Did you realize that even us poor folk can be guilty of the kind of pride and envy we imagine is in the heart of the wealthy.

A wise man taught me that being wealthy won’t make you a good person or bad, it will just make you more of what you already are. If you are a jerk, you will be a bigger jerk. If you are nice, you will be even nicer to people. Wealthy people give more to charities that poor people, because they can and they want to. A little while ago I spent a weekend with a man who is worth $300 million. He doesn’t need to work another day in his life. He was paid to be there with a group of us and teach us his secrets of negotiating. Every dollar he received for being there was contributed to his favorite charity – a children’s hospital. How would you like to be able to give $30,000 to your favorite charity? You can’t when you need that money just to pay your bills. But if you are financially independent and wealthy you can do that, if you choose. Financial independence is about having the ability to choose what to do with your time and your money.

Do you want to spend your whole life depending on how much your boss likes you so that you can improve your financial security? Most of us dream of the day when we can sing along with Johnny Paycheck and say to our boss, “take this job and shove it. I ain’t workin’ here no more.”

In our society today we equate the term millionaire with someone who doesn’t have to depend upon their job anymore. If you become a millionaire, you can join those who have gone before you to tell their boss to “take this job and shove it.”

But are we willing to do anything to make that day happen? What is keeping you from making that happen? If you are like I used to be, there are several things (fears) holding you back. For years these prevented me from even trying to be too successful:

  • I am afraid that I will have to give up what is most important to me in order to attain financial independence. The stories of wrecked lives on the path to wealth are many and legendary. It is true that the enemy of our happiness wants us to give up the sources of true happiness in exchange for worldly wealth or fame. But, that is a false bargain. There is no reason you cannot be financially independent while not sacrificing the most important things in life.
The trap of trading what is important for the mundane is even more prevalent when you are depending upon the pleasure of your boss for your financial well being. How many opportunities to do what you know is important have you missed because you couldn’t afford to take time off from work?

Many years ago I realized the danger of the lure of corporate success. I decided then that I wasn’t going to accept the notion that others pushed at me that the only way I could succeed in the company was to give my life to the company while sacrificing everything else that was important to me. I decided that when I retired from a successful corporate career, I wanted to go home to my first wife and children, not to an empty home or one filled with reminders of failed relationships that had been destroyed in my quest for financial success in my career.

In 2008 I retired from a job paying me six figures per year. I went home to my first wife and children. My successful career did not cost me my marriage and my family. If I had learned many years ago what JT Foxx teaches today, I could have succeeded in my career much quicker and I could have retired to become my own boss much sooner, all without sacrificing the most important things in life.

  • I don’t know what I need to do to become financially independent. Some once told me, “if you think education is expensive, try ignorance and experience and see how much more expensive they are.” That is really true. I have paid the price in ignorance and experience on some things and paid for education on others. I can authoritatively say that education, no matter the cost is much less expensive than the alternatives. Education gives us a chance to become wise by learning from the ignorance and experience of others.

Even when we really want to become financially independent, most of us have no idea how to make that come to pass. I did it in 2008. I met JT after then and he taught me things that have helped further my dream. If I had known years ago what he is teaching today, I could have made my exit from being under someone else’s thumb years ago.

What You Will Learn from the 360 Millionaire?

The truth is that what you learn is a function of what you are open to learn and what is taught. Because I don’t know how open your mind is to receive the knowledge you need to change your life for the better, I cannot tell you what you will learn in this class with JT. But, I can tell you some of what he will teach if you are able to learn it.

A fundamental truth that JT teaches in all his classes is that the key to building your net worth is your network. Building your business or advancing your career is tied to your ability to build and utilize a network of strong relationships with people who become willing to help you achieve your goals. Your network is equal to your net worth.

Some of what you will learn in the 360 Millionaire Class with JT Foxx
  • How to build your network
Effective ways to network
How to find millionaires in your community
How to build relationships with millionaires
How to monetize your network
  • The model JT used and still uses to get the funding he needed to start his business
Step by step how to apply this model to fund your own business
Keys to maintaining this model indefinitely
  • Secrets of branding
How to tell someone about your brand in under a minute
How to get them to ask you for more information
  • Secrets of marketing
How to get your brand in front of people
How to bring people to your business
How to monetize your marketing
How to become The Expert without being branded a “know-it-all”
  • How to manage your image
  • Secrets of successful businesses
Key functions you need to create or have in place
Key information that will make or break your business

This short list just scratches the surface. There is a lot more he will teach in the two days of this class.

This Really Is Your Last Chance

JT has announced that although the class will be held in 2011, he will no longer be personally teaching this class. Yes, you will still be able to get some wonderful instruction, but you won’t be getting it directly from someone who is widely recognized as a marketing genius.

If you are a friend of mine and want to attend the class being held in Charlotte on this December 4th and 5th you need to get in contact with me right away.

Tom ~

PS: You can enroll for the class by going to www.360millionaireclass.com If you are a friend of mine, send me an email letting me know you have enrolled in the class in Charlotte and I will give you a special promotion code that will give you a significant discount off the $5,000 fee that is regularly charged for this class.  My email is at the bottom of this blog.  But you must act fast, seating is filling up quickly and when the seats are gone the discount will be irrelevant.

If you are sick and tired of seeing your investments go into retirement long before you do,

call us today for the cure.
704-699-6080

Or

Leave a message for us 24 hours a day at 704-900-1488
We will call you back within one business day.


Why Buy Retail?



See my latest video about what we do at The Gold Seal Homes Group: http://www.youtube.com/watch?v=ACJx3wpKezQ


About J.T. Foxx
J.T. Foxx started investing 6 years ago with nothing more than a rusted out Ford pick-up truck, $974 dollars and the clothes on his back. Now just four 6 years later, he has closed over $40 million in real estate deals, become an internationally recognized speaker and developed a multitude of successful business ventures - all by mastering the Art of partnering, branding & marketing.

J.T. is most recognized as a very successful real estate investor and entrepreneur but he is also a popular nationally syndicated weekend radio personality of the "J.T. Foxx Show" and the "Canadian Wealth Show". His radio program features such celebrity guests as Senator McCain, Secretary of State, William Cohen, Rev Jesse Jackson, Trump, and George Ross (Donald Trump's right hand man), and celebrated authors like Robert Kiyosaki, author of Rich Dad, Poor Dad and Bob Proctor, from The Secret and Mark Victor Hanson from the Chicken Soup for the Soul series.

Even though his recognition and success in business and radio continues to rise, J.T.'s true passion is teaching and reaching out to those who dream of achieving their goals by creating differentiation and thinking differently. J.T. teaches the same practical applications he utilizes daily and that actually get results in today's rapidly changing marketplace, bottom line his techniques work.

J.T. is beloved by his audiences for his results oriented, no-nonsense approach to business and to life - but most importantly because he gives them the tools not only to make more money, but to thrive and make a powerful impact for the better.

Tel: 1-877-272-3031
events@jtfoxxorg.com
http://www.askjtfoxx.com


About Thomas K Sheppard
Tom started investing about nine years ago with no money and no credit. Learning avidly from established experts, following their instructions and working part-time he was soon able to build a real estate business with more than a $1 million in assets.

Two years ago Tom retired from a six-figure salary with a major national bank to work at his real estate business full time (www.adbproperties.com). Since then he has founded The Gold Seal Homes Group which has the goal of helping 100,000 people attain peace of mind by finding quality, affordable homes. In the current market, the primary thrust of the Group is to help people buy homes at below market prices(www.buybelowmarket.com).

Tom can be reached at: 704-699-6080 or tsheppard@adbproperties.com

Monday, October 25, 2010

You Can't Make Money in Real Estate in THIS Market... WHATEVER!





Here is the true story of how one of my partners and I recently made more than $23,000 in just 10 weeks. And, how one fortunate home buyer was able to buy a home at 30% below market.


My partner put up the money and I did all the work. Then we shared a 77% (annualized) return.

My partner and I bought this home in a good neighborhood in South Charlotte in late July for $140,000. Just ten weeks later we sold this same house for $181,497.

In the interim, we put on a new roof, cleaned the place up, made a few repairs, and got bids for upgrading the kitchen. After spending about $5,000, we sold the property for $181,497.

My partner didn’t have to attend any of the closings. I was there when we bought it on July 28, 2010, he was in California. I was at the closing on October 15, 2010 when we sold it. He was back in California after just returning from Australia and New Zealand.

He didn’t have to pound any nails or take time off from his busy schedule to manage the property or the work. I made all the arrangements and wired him the funds at closing.

After taking out all our costs (including real estate agent commissions) we had just over $23,000 to split between us. That was a 16% cash-on-cash return in just 10 weeks. If you annualize that it is an annual return rate of 77.22%.

How would you like to earn 77% a year on your money?
I meet people every day who, when I tell them that I buy and sell real estate, they tell me that, “You cannot make money in today’s market buying and selling real estate.” I tell them, “Don’t tell that to the guy who partnered with me on this house. He will call you a liar.”
Many people believe that if you make money it is because someone else got ripped off. I don’t work that way, but how about if I give you the facts and let you decide.

How did we get such a great deal when we bought the house?

I won’t kid you, finding really great deals in this market is not easy. There are a lot of houses offered for sale, but not many that are really on sale.
We bought the house from an estate. The heirs had left the house sitting for months and they didn’t want it. They were happy to get an ALL CASH offer that didn’t depend on a bank loan (which is pretty hard to get on a house that needs repairs). When we closed, they took their money and ran away, happy.
When they left, the house was filled with stuff that we had to remove before we could go forward. Also, the roof was in danger of collapsing, so we had to get a crew in there fast to fix the roof. Instead of just slapping on a few shingles, we took it down to the wood, replaced several sheets of plywood and then put on 30 year architectural shingles. Boy, were the neighbors happy to see that!
Did the Buyer get ripped off when they bought the house?

We don’t work that way. We sell houses at below market prices. Here are the facts, you decide.




We removed all the trash from the house, and there was a house full of it. Then we pulled up the carpets and revealed beautiful hardwood floors that had been covered up since the late 60’s and were in fantastic condition. We went out and got bids on upgrading the house to current standards. We negotiated those bids down from $60,000 to $42,000 and then passed those on to the new buyer at closing.


If they do the upgrades, the house will be worth about $260,000 right away. So, do the math. They paid $181k to buy the house. If they pay $42K for the upgrades, the property will be worth $260K. They will have $223K into a house that is now worth $260K. That is more than $37,000 in owners equity, beyond what they paid. In other words, after everything they will have bought the house for 14% below market value.

Why pay retail when you can buy below market?These buyers bought this house for
30% below market value!
When they complete the upgrades they will still have bought the home for
14% below market value!

Why pay retail when you can buy below market?

Are you tired of seeing your 401K turn into a 101K?
You need to learn how to get your money working for you!

Are you tired of seeing your IRA acting like it has retired before you have, in spite of the money you keep putting into it?

Robert Kiyosaki, the author of Rich Dad Poor Dad has correctly taught people that financial independence is when your investments earn enough to pay all your bills. Then you are no longer dependent on your job and your boss. You need to make investments that consistently earn money for you at double digit rates!

Real estate is the thing that has made more millionaires than any other business in history.

Any investment advisor will agree that you should always buy low and sell high in order to make money.

Right now real estate prices are the lowest they have been in decades!

This is the time to buy real estate.
But, if you don’t know real estate and local markets you could still end up losing money by making bad buys. For your money to make money for you in real estate, you need to partner with a seasoned real estate investor who knows the local markets and knows how to make money in real estate no matter what the market is doing.

Our company has been actively investing in real estate in the Charlotte market since 2001. We didn’t get hurt by this big market downturn because we always buy our real estate the right way. Our systems, processes, and expertise allow us to find the really great deals and make money on them.

We are actively seeking to expand our network of investors and potential partners. If you want to take advantage of the BEST REAL ESTATE MARKET IN DECADES, but are afraid you don’t know enough or you don’t have enough time to learn what you need to know, don’t worry, just contact us. We will help you get started making your money make money for you.

No one cares more about your money than you do!

We are more conservative with our partners’ money than we are with our own.

If you are sick and tired of seeing your investments go into retirement long before you do,

call us today for the cure.
704-699-6080

Or

Leave a message for us 24 hours a day at 704-900-1488
We will call you back within one business day.


Tom ~


Why Pay Retail for a Home or Investment Property?

http://www.buybelowmarket.com/

See my latest video about what we do at The Gold Seal Homes Group: http://www.youtube.com/watch?v=ACJx3wpKezQ

Thomas K Sheppard has been successfully investing in real estate since 2001. A veteran of the US Marine Corps and more than 17 years in the banking industry, he is focused on helping 100,000 families to find quality, affordable homes. He buys, sells, and rents homes in the Charlotte, NC metropolitan area, including Mecklenburg, Cabarrus, Rowan, Union, and Gaston counties. If you are looking to buy, rent, or sell a home, condo, or apartment in those areas, or would like to learn about how you can help 100,000 families find quality, affordable homes, contact him at tsheppard@adbproperties.com or visit his website http://www.buybelowmarket.com/.

Tuesday, September 28, 2010

Wall Street Woes Mean Main Street Opportunities

A hedge fund manager, Andy Kessler, recently opined in The Wall Street Journal that, "Wall Street firms are actually down close to 15% for the year" and "Wall Street faces headwinds that will force its hand. We are at the bitter end of a 30-year interest rate cycle. Declining interest rates are the ideal environment for economic growth." [What's The Matter With Wall Street?]

So, how are declining interest rates and a declining Wall Street turning into "Main Street Opportunities?" When the stock market has to rein in its wild claims of gains, ordinary investors do better. When the stock market is riding high, many people (and their money) are lured into investing in stocks by the promise of large gains, especially fast ones. Of course the reality is that the only people making large gains are those who bought the stocks before the big run up and are now selling them to the average investor and pocketing wads of cash.

If the market has to dial back its expectations, investors are more likely to turn away from the siren song that wrecks them and pay attention to investments that seem a lot less sexy, but which actually are consistently producing better returns for investors. I am talking here about private mortgages and private lending.

What Happens to Your Money in the Stock Market? About ten years ago if you had put $10,000 into a stock fund that mirrored the Dow Jones Industrial Average, ten years later, you would have about $9,540 in your account. Zero growth in ten years. How is that possible? Because ten years ago the Dow was at 10,000. After that it went down and stayed down. Only recently did it climb back up to 10,000 again. Which means you would have had a decade with negative or no earnings.

What Happens to Your Money With Private Lending? In contrast, if ten years ago you had put $10,000 with a real estate entrepreneur as a private mortgage at just a 7% interest rate, ten years later you would have about $18,385. That is 80% more than than you would have in your stock market account. Which would you rather have, a $460 loss after ten years or an $8k gain over ten years? Why the huge difference?

Investing in dull and boring real estate private lending actually harnesses what Albert Einstein called "the most powerful force in the universe," compound interest.

Keep It Simple Silly - most real estate entrepreneurs prefer to keep things simple. They like simple interest and they like interest only. That means when you lend $10,000 to a real estate entrepreneur, most of them prefer that the loan is interest only and better yet, interest is paid annually instead of compounding. It makes it easier for them to keep track of costs of funds and it lowers their outgo slightly. For you it means you have a simple interest income calculation on your taxes. Then when the loan is paid off, you can clearly see the gains and the return of principal. Then you can do it all again.

In many cases, real estate entrepreneurs are looking to use your money for a year or less. Some may put it to work for longer periods. You decide if you want to keep getting it back and putting it back in, or if you like having it sit there and earn steady money for you. Either way, you can be in control.

What Real Security Looks Like One of the best aspects of this kind of private lending is the security you get compared to stocks. When you buy a stock, the value can fall to zero. Just ask those who held GM stock when it went bankrupt and was bought by the government. In contrast, when you invest in real estate you get a mortgage or a deed of trust on a real house. And the house is insured with you as a named beneficiary. This means that if the borrower stops paying you back, you can take the house. You can live in it or sell it, as you choose. If the house is destroyed, the insurance will pay you back what you are owed. Either way, you have significant and real protection against loss and your investment is unlikely to become worthless. You have no such protection with stocks.

Banks Are Doing it With Your Money Right Now If you are putting your money into certificates of deposit (CDs) or other savings accounts at banks, the reality is that you are already taking all the risks of lending to real estate entrepreneurs and getting none of the returns. Lending to real estate entrepreneurs for centuries has been the lifeblood of the banking industry. They take your deposits, pay you a few pennies of interest, and lend them out to real estate entrepreneurs and make dollars of interest - for them, not you. In recent years bankers too were lured into wild and risky investing schemes using derivatives and other arcane and complex calculations. Soon they will return to their roots, robbing you of your earnings by lending your money out to others. I suggest you rob them instead.

Cut them out of the lending game and take the gains for yourself. Become a private lender today and turn Wall Street Woes into Main Street Opportunities. For some free info on how private lending works go to http://www.robthebanklegally.com/. But, before you do that, go back to the paragraphs above on "What Happens to Your Money..." and add a zero to the end of each number. Then you will see just how powerful this private lending can be.


Tom ~

Why Buy Retail?

http://www.buyahousebelowmarket.com/

See my latest blog about what we do at The Gold Seal Homes Group: http://www.youtube.com/watch?v=ACJx3wpKezQ

Thomas K Sheppard has been successfully investing in real estate since 2001. A veteran of the US Marine Corps and more than 17 years in the banking industry, he is focused on helping 100,000 families to find quality, affordable homes. He buys, sells, and rents homes in the Charlotte, NC metropolitan area, including Mecklenburg, Cabarrus, Rowan, Union, and Gaston counties. If you are looking to buy, rent, or sell a home, condo, or apartment in those areas, or would like to learn about how you can help 100,000 families find quality, affordable homes, contact him at tsheppard@adbproperties.com or visit his website http://www.buybelowmarket.com/.

Thursday, September 23, 2010

Meeting With Millionaires and Making Money With Friends

On September 11 and 12 I spent the weekend in Chicago meeting with millionaires. Really, lil ole me!

I went to an event called Mega Partnering hosted by JT Foxx. Several millionaires stood up on the stage over those two days and each shared the secrets of how they got where they are. In contrast with most celebrity-filled events, they didn't try to sell us anything. With very few exceptions, there weren't any books or tapes available for sale at the back of the room.

In addition to the millionaires up on the stage, there were many sitting in the audience. JT taught us how to network with them and then gave us the chance to do just that.

I met one guy who represents a hedge fund that invests in real estate. I met another who has created a deal exchange where deals and money come together. Some of these folks are looking for deals that start at $2 million and go to $200 million. Others are more in my zone, looking to fund purchases of single family homes.

Some of these are just money lenders. Others are looking to partner with quality people in select markets so that they can work together to make a lot of money in this crazy market.

Why would an experienced real estate investor like me be interested in working with these folks? The reality is that there are many more opportunities in the market right now than I can make happen. So, I need lots of money to be able to buy lots of homes at prices significantly below market so that I can sell them at a discount to people looking to buy a home for themselves but don't want to pay retail.

Why go to a private money source instead of the bank? There are several reasons why a private money source often works much better for buying real estate instead of using a bank.
  1. Right now banks aren't lending. I know the newspapers, the ads, and the TV commentators talk about how much the banks are lending. It is largely a lie. The number of loans that banks reject these days is at an all-time high. This means that more people than ever before are jumping through all the hoops the bank puts up only to find in the end that the bank has found some reason not to do the deal. I don't need that kind of frustration only to lose the deal in the end.
  2. Banks limit the number of loans they will make to one person, and sometimes they limit the number of loans the person can have regardless of where they got them. As a real estate investor, I have many loans. Don't get me wrong. I understand why banks don't want to make too many loans to one person. It is good risk management on their part. Still, it acts to limit the size and profitability of my business. I am not keen on having someone else tell me that I cannot earn more than a certain amount! I don't like the notion that someone else can tell me I cannot buy more houses than they think I should.
  3. Banks are restricted by government regulation. They have to jump through many hoops to lend me money, and in turn they make me jump through many hoops.
  4. Private lending sources don't have the limits I mention above. They look less at me and more at the deal. They aren't afraid for me to fail, that will just be an opportunity for them. Because of that, they will fund deals that the banks won't.
  5. Private lending sources use common sense - bank employees use policies and procedures.
I could probably go on about the benefit of using private lending sources for pages and pages. Let me leave you with one more reason to use private lenders.

Not all private lenders are millionaires. Most of them are ordinary people with a few thousand dollars in an IRA, a CD, or a 401K with a former employer. Working with these kind of folks, I am usually able to give them a return that is much better than what they are getting from their current investments. I like helping other people to succeed. When I can succeed with them, that is the best.

I have many friends who have let me use their money to buy real estate in my business. They have made tens of thousands of dollars in interest while sitting at the beach, letting me do the work. Private lending is a powerful tool to turn ordinary folks like you and me into millionaires like I met with in Chicago.


Tom ~

Why Buy Retail?

http://www.buyahousebelowmarket.com/


See my latest blog about what we do at The Gold Seal Homes Group: http://www.youtube.com/watch?v=ACJx3wpKezQ


Thomas K Sheppard has been successfully investing in real estate since 2001. A veteran of the US Marine Corps and more than 17 years in the banking industry, he is focused on helping 100,000 families to find quality, affordable homes. He buys, sells, and rents homes in the Charlotte, NC metropolitan area, including Mecklenburg, Cabarrus, Rowan, Union, and Gaston counties. If you are looking to buy, rent, or sell a home, condo, or apartment in those areas, or would like to learn about how you can help 100,000 families find quality, affordable homes, contact him at tsheppard@adbproperties.com or visit his website www.buybelowmarket.com.

Thursday, August 19, 2010

Buying a House for Pennies on the Dollar

Can you really buy a house for Pennies on the Dollar?

Yes, you really can, and I have. And yes, there is a catch!

Recently a partner and I purchased a home that is worth about $300,000 for just $140,000. In case you don't have a calculator handy, that is 46 cents on the dollar.

This is a nice house in a nice neighborhood. So, what is the catch? Well, actually there is more than one.

Catch #1) ALL CASH and QUICK CLOSING

When you find a house that you can buy at a price significantly below the market value you must have access to a large sum of money that is available immediately. We had to close in less than three weeks from the time we found this deal.

Three weeks isn't enough time for traditional lenders to even finish determining if they think you will pay them back. Then they need to spend several more weeks scheduling and evaluating the house you want to buy. The bottom line is, a fast close for a traditional lender is six weeks and most won't get done in less than twelve weeks.

So, if you cannot get the money fast, then the deal will get away from you.

Catch #2) Lenders Will Only Consider the Purchase Price

When you find a deal like ours, most lenders will look at the contract price of the property and will only lend a portion of that value. This will still leave you with the need to come up with anywhere from 5% to 20% of the contract price in order to make the deal happen.

Catch #3) Lenders Will Decrease the Loan Based on the Property Condition

When you find a house at a great price, in most cases it is going to require some repairs. If the repairs are too significant, the bank won't lend you anything, regardless of how low the purchase price is. They don't want to end up owning it in case you walk away with their money. If the repairs are within reason, they will decrease the stated value of the home by the amount of the repairs and lend you a portion of the decreased value.

Catch #4) Fixing the Property Requires More Cash

With very few exceptions any house you can buy for 46 cents on the dollar is going to need some repairs and some updating. To do the repairs and updating will require more money.

Our deal was no exception. We had to put on a new roof within days of closing to make sure we didn't have the inside get damaged from rain that would have come through the old roof. Then we had to clean out the house and make several other repairs. Lastly, we had to update the tiny kitchen by expanding it and improving it.

All of this requires a lot more cash, in addition to what we paid for the house at closing.

Catch #5) You Have to Pay While You Wait

When you get a loan to buy and fix a house, you have to keep making payments on the loan even though you aren't living in the house. If you get a loan that doesn't require payments, then you are just deferring payments while the interest is piling up. That is what is known as the cost of capital.

Catch #6) If the Repairs Aren't Done Right It is Still Your Problem

When you are doing it yourself or even having others do it for you, if the repair or upgrade is messed up, you are still on the hook. You will suffer more for it than anyone else in terms of money, time, and frustration.

Conclusion

Every week my team and I find and buy homes for pennies on the dollar. We work with a group of investors who make money with us by lending us the money to buy and fix these homes. We pay cash and close quickly. Then we fix up these homes and make sure they are done up right. When we are done, we want to sell them fast, so we put them on the market at a discount price. That way you save m0ney even while we make money.

While it is true that you can find and buy houses for pennies on the dollar, there are a lot of hidden downsides to doing this for yourself. We know and understand the problems with doing this. We do it every week.

If you buy a home from us, you will save yourself the time and frustration of trying to find one of these deals and you will save yourself the aggravation and disappointment of trying to buy and fix up one of these homes.

Why bother when instead you can let us to all the dirty work and you still get a discount on a beautiful home?


    Tom ~

    Why Buy Retail?

    http://www.buyahousebelowmarket.com/


    See my latest blog about what we do at The Gold Seal Homes Group: http://www.youtube.com/watch?v=ACJx3wpKezQ

    Friday, July 16, 2010

    JT Foxx's First Million in Real Estate

    How to Become Wealthy


    A very wealthy octeganarian recently told me the secret to his amazing wealth. We were chatting at a social event and after we had been talking for some time he leaned toward me and asked, "Do you want to know the secret to how to become wealthy?" When I nodded in anticipation, he told me, "Watch what wealthy people do, learn what they do, and do it."

    On July 11 and 12 I spent two days with JT Foxx learning how he did over 500 real estate deals and how he does his deals today. Because JT is an active real estate investor when he teaches he is sharing methods that work today. Unfortunately a lot of real estate investment courses are taught by folks who made a killing in real estate a few years ago and they are teaching what worked for them back in the day. And, although that "day" may return, the real estate market continues to change and anyone investing using yesterday's tactics is likely to find themselves in legal trouble, financial trouble, or both.

    In the interests of full disclosure, I have to tell you that I am a mentoring student of JT Foxx. That being said, you need to understand this: I have been investing in real estate for many years now and I have attended hundreds of hours of training from dozens of different companies and investor/instructors. Of them all, I have found JT's instruction and materials and support programs to be the most comprehensive and practical when it comes to investing in single family homes.

    I will also disclose that I did not always want to do business with JT. When we first met, a couple of years ago, I found him to be abrasive in a number of ways. Since I don't have to do business with people I don't like, I took a couple of classes from him and then I went on my way.

    Early this year JT called me up and invited me to attend his Mega-Partnering event in Los Angeles. Yes, he called me personally - this was not a voice-blast, teleconference, or webinar. I decided to check it out and I am glad I did for two reasons:

    1. JT is a true student. He practices what he preaches. He teaches that we all need to keep educating ourselves and getting the coaching we need to improve and lift our game to new levels. The coaching he received since the last time I had seen him had really taken hold and he is a much better man now than he was then. His integrity is as intact as always, but he isn't the abrasive guy he used to be. This is someone I can do business with.


    2. His Mega-Partnering event was phenomenal. I don't want to take up space here talking about it, but if you get a chance to attend one, you should make the time and go. You will meet more people who can help you in your real estate investing business in two days than you could in two years. The next one will be held in Chicago in September 11 and 12 (http://www.megapartnering.com/).

    So, about the course in LA I just came back from... and why it would benefit every investor I know.

    Some of what JT taught is what he has done right. He also taught what he has done wrong, which can often be even more valuable. If we can learn from our own experience that is good. If we can learn from others' experience, that is best.

    One of the things he taught is the importance of approaching our real estate investing like a business. This includes understanding the need and uses of bookkeeping, accounting, and management reporting. I have to confess that this is something that I wish I had heard and done years ago. Nearly every investor I know tends to approach real estate more like a hobby than like a real business.

    A real business knows every month how much money was made or lost.

    • Bookkeeping is entering the data and

    • Accounting is making sense of the data.

    • Reporting is making sure you can see what is going on in your business. There is an old axiom in business, "what gets reported get improved."

    I had several other "ahaa" moments during the two days. I would love to tell you more about what he taught, but that would be giving away his content. So, I will have to leave it at this.

    If you have a chance to attend one of his classes, I encourage you to do it. If you are serious about investing in real estate I encourage you to get involved in his coaching and/or mentoring programs.

    On this last point, I have met most of his coaches. Like JT they are active real estate investors and are living by what they are teaching. As a point of reference, many coaching programs are focused just on helping you overcome the attitudinal and behavioral roadblocks that are preventing your success. While that is worthwhile, it does not give you practical knowledge of how to conduct your real estate investing business and how to buy, manage, and sell your real estate. In fact, many of the coaching providers are coaching companies, subcontracted out by the big-name instructor and they are contractually prohibited from helping you or giving you concrete instruction regarding real estate investing. JT's coaches and mentors are not subcontracted out and they deal with the motivational roadblocks and with the practical instruction in real estate investing as well.

    If you would like more information on:

    1. How to be a private lender see the Investors page of http://www.buyahousebelowmarket.com/

    2. How to become an equity partner, contact me directly at tsheppard@adbproperties.com

    3. How to become a successful real estate investor, keep reading these blogs or contact me directly at tsheppard@adbproperties.com

    Tom ~

    Why Buy Retail?

    http://www.buyahousebelowmarket.com/