Real Estate Expert Robert Irwin Says "Buy Real Estate NOW!"

My friend, Dan Auito just published what he calls the Real Estate Encyclopedia of 2011.  The actual title of the book is "Be a Real Estate Heavyweight: 95 Experts Show You How".  Amazingly, he published it all as a pdf and has given it away FREE.  Really.  You don't even have to give up your email address to get this from him.

I got it late yesterday.  Dan cautioned me that it is not the kind of book you sit down and read through.  Rather, he told me, it is a reference volume where you look in the the table of contents to find the topic you need to read up on and then you go to that section.

After perusing the table of contents, I came back to the Introduction, written by Robert Irwin.  I have five books written by Robert Irwin about real estate finance on my bookshelf!  The guy is a legend and one of my business heroes.  I have learned more about how to approach creative financing from him than almost all my others sources combined.

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When I read his introduction, I thought that he must have written it for this blog.  He even references lemons.When I read Robert's intro, I thought, this is exactly what I have been telling people for a while now.  Perhaps they will actually listen if they hear it from someone else as well.

So, I have excerpted a portion of the introduction and share it here with you (my emphasis added in places).  So, without further ado, listen to the wisdom of a true real estate heavyweight, Mr. Robert Irwin.

As Dickens wrote, it is also the “best of times,” so, too, are there great opportunities. I’m speaking, of course, of real estate investments. For those with the gumption to make lemonade out of lemons, there’s never been a better time to invest in property.

The U.S. population is growing by about 3 million a year. That’s an enormous rate of increase and all those people need some place to live. That means that hidden beneath the falling prices is a huge pent-up demand just waiting for a stable market to unleash itself.

Further, and something every investor should pay special attention to, is the ratio between housing prices and rental rates. (After all, the lifeblood of real estate investing comes from rental income.) The traditional relationship between rental income and housing prices is about 20 to 1.

During the housing bubble that lasted roughly between 2000 and 2006, that ratio went as high as 33 or 34 to 1. Rentals are once again approaching the “magic”20-to-1 ratio.

Perhaps most important of all, the price of housing has reached its long-term trend line. If you were to chart housing prices from the end of World War II through today you would see a saw-tooth generally upward trend (at about 5 percent a year), then a huge spike up that was the housing bubble, and a dramatic pitch downward, that is today’s slump. But at the end of that slump, you would see the trend line just where it’s supposed to be as if the bubble hadn’t even come along….now, they are roughly where they should be, given 70 years of history.

[educated stock investors call this the “support” line. TS]

For the investor who has the foresight and the gumption to see clearly when others are lost in the fog, this can be the best of times. Once again it’s possible to buy property at a reasonable price. Finally sellers are willing to negotiate reasonable terms. Once more, you can step in and make money—potentially big money—by buying low, holding, and eventually selling high.

I can’t tell you when, but I firmly believe that in the future real estate prices will not only return to their former highs, but will exceed them! I believe that those who have the courage and foresight to act when the market is down will reap enormous benefits when it eventually turns up.

It’s all well and good to get enthused about making your move into the real estate market when it’s down. But how do you learn the mechanics of doing it? Where are you going to find out how to get the financing you need, learn to determine true values, uncover the location of suitable properties?

You can’t just look at the rules of the past. Time has moved on and the rules have evolved. What’s needed is a strong resource to give you the information you need to make an informed investment. What you need is a guide to today’s opportunistic real estate market.

Robert Irwin

So, now you have heard from more than one person. I have been saying for some time that NOW is the time to invest in real estate.  If you wait until the newspapers say it is the right time, ALL the smart money will be moving out of it by then.  NOW, you are hearing it from an expert who has been doing this for most of my adult life.

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I have 5 immediate investment opportunities available here in North Carolina, right now! They are solid investments producing steady cash flow.  If you aren't ready or willing to become a landlord, no problem.  You can make your money work for you as a private lender.  You get a first lien position secured by a deed of trust on the property and you get a steady check each month while someone else deals with the headaches of tenants, toilets and termites.

However, if you are ready to get the greater rewards that come with the greater risks of being a landlord, you can buy any of these 5 properties and, based on current cash flows, anticipate a 10% return on your money right now.  When the market turns up and everyone else thinks it is a great time to buy, you can sell these properties to those wannabe investors and make a very nice profit while they take on the risks of being a landlord.

If it is so great, why would someone sell these units?  The answer is simple, the seller doesn't WANT to sell. He WANTS to hold on to the units and work with a private lender to create a win-win solution.  But, since he has some personal debts that MUST be settled NOW, he is willing to SELL, take on a partner, or guarantee a private loan.

If you would like to know more about these opportunities, contact me directly (Tom@CharlotteWealthPartners.com), but you better do it FAST, because these deals will not be available very long.  The good ones never are.
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I have been successfully investing in real estate in the Charlotte area since 2001.  I have weathered this financial chaos because of the common sense rules I use for investing.  If you are looking for a guide to help you take advantage of today's real estate market, look here.  Be warned, my experience and knowledge is not FREE.  I paid dearly for both my knowledge and experience and I cannot afford to give them away to anyone.  Besides, if I gave them to you for FREE, you wouldn't value what you received.

If you would like your own copy of Dan Auito's amazing, FREE encyclopedia for real estate, just follow this link.

Robert Irwin is one of America’s most respected experts in all areas of real estate and the author of more than 60 books in the field. His Tips and Traps series for McGraw-Hill have sold millions of copies. He is a real estate broker, contributing editor to numerous magazines, and reliable leader for investors, home buyers, and sellers.

Tom Sheppard is the author of "Fire Yourself: Get the Job You Want" available from XLibris Press. Tom 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. 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 (TM), go to www.CharlotteWealthPartners.com

I Get No Respect

I Get No Respect

When I was born, the doctor said to my father, " I'm sorry, we did everything we could but he still pulled through."  – Rodney Dangerfield

Rodney Dangerfield is famous in the world of comedy for the line “I get no respect.”  Mobiles homes, trailers, are the Rodney Dangerfield of the housing industry. 

The mobile home is truly one of the most brilliant and disrespected ideas in housing and investing in our day.

 

When Bill Clinton was running for the office of President and women kept coming forward claiming he had sex with them, many of those women were discounted with such terms as “trailer trash” and “what you would expect if you walked through a trailer park with a twenty dollar bill in your teeth.”

Even banks give trailers no respect.  Most banks won’t lend people money to buy a mobile home.  In fact most mobile home buyers can only get their financing from one or two providers.

This scarcity of lenders spells opportunity for investors.

Mobile home buyers are typically people who have little or no money for a down payment and they either can’t afford the high closing costs of traditional home buying, or their credit rating is too low to get approved.  They buy a mobile home because it seems like a fantastic value.

They can buy a three or four bedroom home with 1,600 to 2,400 square feet of living space for a fraction of what it would cost for a stick built home of similar size.  And, mobile home manufacturers will cite a book full of statistics to convince buyers that mobile homes are built to higher quality standards than stick built homes.  Maybe one day, the rest of the world will believe those statistics.  Until then, if the place has steel floor joists, you are going to have a hard time finding financing.

The biggest problem with mobile homes is that they truly depreciate.  When you buy a stick built home for investment, you get to claim depreciation.  Often at the same time you are depreciating the house on your taxes, the market value of the home is appreciating.  For a mobile home, just like for your car, the value of the home does not go up with time, it truly depreciates.

I was recently giving financial counseling to a woman in my church.  She was contemplating buying the mobile home she was currently renting.  I advised her against it on two counts.

1)      Mobile homes go down in value over time. They will fall to a floor value, but they don’t appreciate in value.

2)      The home she was looking at buying was sitting on a rented lot.  When you buy a mobile home on a rented lot, you had better be prepared to move it to a lot that you own.  Otherwise, even when you pay off what you owe on the mobile home, you will have to keep paying a sizable chunk of money each year for lot rent.  And if you don’t pay the lot rent, the park can take ownership of your home with ease.

I told her that mobile homes are not a great investment for a home owner, but they are great investments for investors.

When I see a  mobile home, I see a big ATM.  But, there are right ways and wrong ways to invest in mobile homes.  I have done both.

My biggest  mistake was to buy a cheap mobile home in a mobile home park that I did not own.  The cheap part was a good idea, but having it on top of someone else’s dirt was a really bad idea and it was even worse because it was inside someone else’s mobile home park.

Why was this a mistake?

1)      I had to pay lot rent every month until I got someone else to buy the home.  If I didn’t pay the lot rent, the management could seize my property for the rent owed.

2)      The park management had veto power over any buyer,  unless they were going to move the home out of the park.  Park management always reserves the right to deny people the right to rent a property inside their park and they can deny people who want to move their mobile home into the park.  That means you have to get their approval for any buyer or renter you bring to the table.

3)      The park management had their own homes they were selling which they would show to prospective buyers in direct competition with my offering.  When your mobile home is competing with homes owned by the management company, you are fighting an uphill battle to get your home sold or rented.

I still managed to make money, even on mobiles home in someone else’s park.  But it was a lot harder than it should have been.

Now, I only buy mobile homes that I am going to move onto land I own, or I buy them and the dirt under them.  This makes life much easier and makes the investment more profitable.

The other thing I do when investing in mobile homes, is I try to avoid being a landlord.  Of course I do that on nearly all my investments.

If you are happy being a landlord, then you can ignore these next few points I make.  The problem with being a landlord is that anything that goes wrong with the place, you have to fix it, regardless of whose fault it may be.  This means that your operating expenses (the costs of keeping the property going) are higher than they are for an owner occupant.  If you run your rental investment properly, you will always set aside reserves from the revenues to be used for maintenance, repairs, and vacancies. That way you always have cash on hand to deal with the expenses that must be paid to keep or get a property rented.

I prefer to sell my mobile homes to owner occupants.  In an ideal situation, I sell them the home and rent them the dirt (the lot) beneath it.

Why sell the home and rent the dirt? 

When I sell the home, either outright or using a contract for deed, either way I shift the operating expenses such as taxes, repairs and maintenance on the trailer from me to the owner occupant.  This means I can actually charge less money and make more money.  That sets up a win-win.

I like to rent the dirt for purely selfish reasons.  The average American moves every 3 to 5 years.  This means that your owner occupant is likely going to look to move in just  few years.  If he owns both the trailer and the dirt, he will sell both and move on and your cash flow will likely end, unless you managed to finance the new buyer.  And, you won’t get the down payment, that will go to the seller.

Very few mobile home owners are willing or able to go to the trouble and expense of moving a mobile home.  All-in costs of disconnect, moving and reconnect can run to $5,000 or more.  Most don’t have that much money sitting around to do that.  So, they are looking to get out  and get into a new place for little or no money down.

If they move out and try to sell the trailer, you have put yourself in the position of the mobile home park management.  They cannot let someone else come in and occupy the trailer because the renter or buyer must be approved for the lot rental agreement.

If they move out they are still obligated to pay the lot rent.  If they fail to pay the lot rent, it is a fairly simple court procedure to seize the trailer for unpaid rents and now you own it again.

If you want to be nice, you can offer to forgive them their debt and take title to the trailer in lieu of repossession.  Yes, with a mobile home it is repossession not a foreclosure.  And repossession is a much simpler, faster, and less expensive process than foreclosure.

Either way, when your owner-occupant moves out, chances are very good that you will regain ownership of the home for little or no cost.  Now, you can fix it up and sell it again.  The difference is that the second time around, your cost basis in the investment has been completely or almost completely wiped out by the prior occupant.  That means that nearly every dollar you get from the new buyer is pure profit.

Here is what the numbers can look like:

• ·       Suppose you buy a mobile home on its own lot for $20,000 and divide the cost evenly between the land and the home.
• ·       You sell the home (not the lot) to an owner occupant with a sale price of $30,000.  If you get $2,000 down and finance the rest at 11% interest that is a monthly payment of only about $250 for the home.
• ·       You rent the lot to the buyer for another $250 per month.
• ·       The only expenses you have are for taxes on the land since the owner occupant is paying for insurance, taxes on the trailer, repairs and maintenance.  If your land taxes are high, you might be paying $1,000 per year for the dirt.
• ·       $250 + $250 = $500/month x 12 months = $6,000 per year.  Less the taxes you pay on the land ($1,000) = $5,000 plus the down payment ($2,000) you received puts you at $7,000 for year 1.  Now your cost basis has been reduced to $13,000.
• ·       In year 2 you of this scenario you will clear $5,000 and your cost basis falls to $8,000.
• ·       In year 3 you add another $5,000 in income and your cost basis drops to just $3,000.
• ·       This means that by the end of year 4, you have realized a 100% return on your original investment and have earned $2,000 in pure profit, to put you at an ROI of 110% of your original investment.
• ·       If the owner-occupant decides to move at any point after this, you are well positioned to take over the place for little or no expense and turn around and sell it for $30,000 again.  But this time, your cost basis will effectively be zero so you will be making money from day 1.

And it can be even better than this.

A friend of mine bought a trailer for $3,000 and was able to charge $300 per month in rent.  Do the math!  It means his investment was paid for in just 10 months, less than a year.  Every dollar after that was profit!

The other beautiful thing is that long after the banks and the tax man feel that the value of the home has fallen to zero, you can keep selling or renting this home to people who don’t want to share walls with other tenants in an apartment, but don’t have good enough credit or finances to buy a stick built home.  Many of these mobile homes are still habitable after more than 30 years of continuous occupancy.

Now you may be able to see why when I look at a mobile home, I see an ATM.

Because my company currently owns mobile homes, I see a lot of these for sale every day.  I buy many of them.  Some, I set up as passive investments for those who want the benefits without the hassles.  Others, I sell to other investors.

If you are interested in exploring opportunities to invest in mobile homes, just put your name and email in the form in the box below this article (or use your Facebook account to register).  Over the next month, you will get three free e-books with education about investing in real estate and getting your money to work for you without relying on banks.  After that, if you are still interested, we can talk in detail about what you are looking for and how I can help you get where you want to be.

Why does it take 30 days and 3 e-books before we can get down to brass tacks?

The laws of the United States and the State of North Carolina put limits on who and how I can talk with people about investments.  Any investment in real estate other than for your personal dwelling is considered a security and as such is regulated by the SEC and other governmental entities.   Without becoming a licensed securities broker, and becoming subject to a ton of additional regulations, I am limited by law to  discussing investment opportunities only with friends, family and associates.  And, the lawmakers have determined that if we have had at least 3 communications over a 30-day period without discussing returns or specifics of any actual offer, then you qualify as an associate or friend.  So, between the three e-books and our exchange of emails over the next 30 days, we can clearly show the SEC that we have become friends or associates before we ever talked about any specific investments or rates of return that you might be able to realize from investments with me or any of my companies.

Before I close, I would like to revisit one point from above.  I mentioned that the lack of financial institutions who will lend to buy mobile homes represents an opportunity for investors.  This is a classic example of turning adversity into opportunity.

Many people would look at the lack of lenders and see only the lack and back away.  I see a lack of lenders and a high and increasing demand from buyers for low-cost housing.  This creates an opportunity for investors to use a little cash and put it to work in a way that turns it into a lot of cash.

Under the scenario I described above, if an investor had as little as $60,000 they could buy 3 or more mobile homes and within four years have added 3 more.  That could turn an initial $60,000 investment into a cash flow of $30,000 per year.  If you only have $20,000 in your self-directed IRA or investment portfolio, then start with just one mobile home.  In a few years, you will see that as you plow you money back into your business, it will begin to grow like crazy.

Now that is turning lemons into diamonds.

Tom S.

Tom Sheppard is the author of "Fire Yourself: Get the Job You Want" available from XLibris Press. Tom 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. 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 (TM), go to www.CharlotteWealthPartners.com

New Newsletter

Diamond Finder

Tuesday March 27th, 2012 Vol 1.2

Things are breaking wide open for us here in the Charlotte Market.  I have just begun my “Tired Landlord Campaign” and we already have 16 properties we are looking at.  And guess who brought them to the table????  My #1 student apprentice – Lori!!!

Way to kick it Lori!

So what is my “Tired Landlord Campaign”?  It is really simple!  I am reaching out to landlords to find out if they are sick of all the hassles of toilets, termites, and tenants.  I offer them a better alternative!  I convert them from being landlords to being bankers.

When was the last time you called your banker and said, “hey dude, the tenant hasn’t paid the rent yet, so I’m going to hold off on sending you the mortgage?”  The answer of course is “Never!”  Or, have you called your bank and said, “Hey man, the roof needs to be replaced so I’m going to pay to get that fixed and then I’ll send your payment next month.”  Of course not.

Landlords get silly calls like that all the time – “hey man, my mother was sick and I had to pay her emergency room bill, so I can’t pay the rent this month.  Is that Okay?”  And worse than that, when the place is vacant, they still have to make the mortgage payment.

Like the old Calgon Bath Beads ad, I offer to take them away from all that landlord crap.  Instead, they can be the banker – going to the mailbox and collecting checks each month, regardless of what is happening with their old property.

So, if you know anyone who is tired of being a landlord, send them my way.  If I buy their house(s) I will definitely give you a piece of the action.

Tom S.

Properties For Sale

Call 704-699-6080 or email me for additional details, photos, or to make an offer on any of these available properties ...

120 Hemlock Ave, Kannapolis, NC Bedrooms: 3 Bathrooms: 1 Living Sq Ft: 1200 Lot Sq Ft: Construction: brick ARV: $90,000 Repair Cost: 0 Asking: $70,000 Other details: Currently rented for $560 per month 611 S Shaver St, Salisbury, NC Bedrooms: 3 Bathrooms: 1.5 Living Sq Ft: 900 Lot Sq Ft: Construction: brick ARV: $70,000 Repair Cost: 0 Asking: $65,000 Other details: Available for sale or rent

8600 Archer Road, Kannapolis, NC Bedrooms: 2 Bathrooms: 1 Living Sq Ft: 1200 Lot Sq Ft: (1.4 acres) Construction: Stick ARV: $112,000 Repair Cost: 0 Asking:  $80,000 all cash or $100,000 with seller financing Other details:  Large carport  Immediately available for sale or rent www.8600ArcherRoad.info 5962 Wilderness Trace, Hickory, NC Bedrooms: 3 Bathrooms: 2 Living Sq Ft: 1800 Lot Sq Ft: Construction: Mobile Home on land ARV: $75,000 Repair Cost: $0 Asking: $68,000 Other details: Currently rented out for $650 per month

Become a celebrity apprentice!

Would $5,000 to $10,000 a month make a difference in your life?  If so, you’re in luck.

I have never done this before, and I may never do it again, but I am taking on 5 people into an apprenticeship program with me.

If you want to learn how to invest in real estate in the Charlotte market, then there is really no better way than to become one of my apprentices.

There are three ways to get where I am today!

1)    You can do it all yourself – go out there and start making offers and trying to make money in real estate.  Trust me when I say this is the way to get hurt really badly.
2)    You can do what I did – invest tens of thousands of dollars to get a solid education in real estate investing and then go out and start buying and selling real estate.  This is much better than Option #1, but you can still get hurt pretty badly (ask me how I know that) and you will have invested a lot of time and money before you ever start making any money at all.
3)    You can do what I finally did that turned my business around – you can hook up with someone who already knows the business and is willing to take you under their wing and teach you what you need to know to be successful in real estate investing.

I will help you build your own real estate investing business from the ground up.  And, you will make money while you learn.  I will teach you how to find great deals and I will take you by the hand and move you through the whole process to make your deals happen.  Heck, I’ll even go to the bank with you to cash your checks! 

You are probably asking yourself – why would Tom do this?  Doesn’t he worry that he’s creating competition for himself?  The answer is that competition doesn’t worry me.  There are so many great deals in the Charlotte market right now that I cannot possibly even find all of them, much less do all of them.  There is plenty and to spare.  Besides, I learned a long time ago that I really enjoy helping other people succeed.  So, if you have dreamed of making money in real estate like I do, now is the time to act.

You don’t have to quit your job either.  You can start this part time.  Once the checks start rolling in, you may decide it is time to get out of the corporate rat race – or you may decide you like having all that money coming in on the side in addition to your paycheck. Either way is fine.  Both models work well.  I know, I have done both.

I'm currently accepting new apprenticeship applications. I will not be accepting everyone, because to succeed in this business you have to be a go-getter.  Also, I have a limited amount of time available to teach and coach my apprentices, so the openings are very limited. 

Click below to read more & apply now ...

www.coaching.thomasksheppard.com

Weekly Wisdom Shot

We are living in the dash – no I am not talking about the hectic pace of our lives. 

If you visit a cemetery you will notice that the headstones have a birth date and a death date, usually separated by a dash.  That dash between birth and death is our life.  It can be nothing more than a dash, or it can be filled with meaning and significance.  The choice is up to us.

Highly Recommended

In May of this year, I am going to Texas for one of the only events that can pry me away from my business – Mega Partnering V.

My good friend JT Foxx has been hosting Mega Partnering events for the past several years.  I have been to every one so far and they just keep getting better and better.  It is the only event that I will plan my vacation around.

If you want to meet with hundreds of successful people in a setting that is designed to help you network successfully, then you cannot afford to miss Mega Partnering V.

If you want to know more, just follow this link: https://foxx.infusionsoft.com/go/mega5prime/thomassheppard/ 

I have been to every Mega Partnering JT Foxx has hosted so far. Each one has been better than the one before.

Testimonials & Questions

So, last post I promised a testimonial here from Bob Yon of New Dream Home Solutions in Salisbury, NC.  Yesterday, he sent me a video testimonial.  Follow the link here to his video testimonial.

www.tomsheppardreviews.com

Laughter Doeth the Heart Good

A lawyer is standing at the gates to Heaven and St. Peter is listing his sins:

1)    Defending a large corporation in a pollution suit where he knew they were guilty
2)    Defending an obviously guilty murderer because the fee was high
3)    Overcharging fees to many clients
4)    Prosecuting an innocent woman because a scapegoat was needed in a controversial case

And the list goes on for quite a while.  

The lawyer objects and begins to argue his case.  He admits to all of these things, but argues, “Wait, I’ve done some charity stuff in my life also.”

St. Peter looks in his book and says, “Oh yes, I see.  Once you gave a dime to a panhandler and once you gave an extra nickel to the shoeshine boy. Correct?”

The lawyer gets a smug look on his face and replies, “Yes, yes!”

St. Peter turns to the angel next to him and orders, “Give this guy 15 cents and tell him to go to Hell!”

Well, that’s it for this edition of the Diamond Finder.  Here’s hoping you are able to turn all your adversities into advantages!

Tom S.

Tom Sheppard is the author of "Fire Yourself: Get the Job You Want" available from XLibris Press. Tom 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. 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 (TM), go to www.CharlotteWealthPartners.com