1.) Loan-to-Value Ratio – Perhaps the most common problem in today’s mortgage industry is a low loan-to-value ratio. This is the percentage of the loan amount compared to the overall value of the property. For example, if you currently have a balance on your first mortgage of $200,000 and the appraisal comes back with a value of $250,000 then your loan-to-value ratio (LTV) is 80 percent. For a conventional loan, lenders require a minimum of 5 percent equity or a maximum LTV of 95 percent. In addition, any loan over an 80 percent LTV requires private mortgage insurance (PMI). Of course, the problem is that over the past 2 years many areas of the country have seen properties decline in value by 10 to 20 percent or more causing many homeowners to have a high LTV ratio. Even if they are under 95 percent, many homeowners still find themselves having to settle for higher interest rates, PMI payments, or both. That is why it is absolutely critical to know the appraised value of the home before applying for a mortgage. The simple reason is that appraisals cost money. Most lenders will charge $375-$425 for a basic single family appraisal and this cost is non-refundable. So, if the value comes in lower than expected (and today many do!) the homeowner could risk losing their money and never being able to close on the loan. So should you check Zillow? Yes, but don’t rely on it 100 percent. Recent statistics have shown that Zillow has been within 10 percent of appraised values less than 50% of the time. In other words, 50% of the time Zillow is off by more than 10% and 24% of the time Zillow is off by more than 20%! Therefore, a crucial step for all homeowners to take before applying for a mortgage is to get an expert opinion of value from a real estate professional.

2.) Credit Report – The second most common reason why mortgage applications get denied is a problem with the borrower’s credit report. A lot of attention is paid to the FICO score, which will need to be at least 620 with most lenders and over 720 to get the best interest rates. However, more frequently and less obvious are issues regarding open collection accounts. The scary part is that most of the time, people do not even know they exist. Very often medical collections show up on credit reports without the applicant having ever been notified by the medical company or their insurance company. The balance of a medical bill will simply be sold to a collector who will immediately contact all 3 credit bureaus. These days, collection companies are so busy that they can go months and even years before contacting you about the account. Needless to say, it is a critical step to have your credit report checked before applying for a mortgage. Lenders will require that all collection accounts be satisfied prior to closing and many times it could take months before an applicant is able to pay it off and get it removed from the credit bureaus. Also, if there are any other issues such as late payments, liens, and high balances, it is best to take care of it ahead of time because lenders will not accept updated credit reports once they are pulled for an application. Should I get a copy of my free credit report online? Yes, but the scores that are gotten from Freecreditreport.com and other online services are often not the same as the report used by lenders. It makes most sense to have an actual lender get an updated report directly from the 3 credit bureaus. For your security, remember to never send your social security number over the internet.

3.) Debt-to-Income Ratio – The third most common reason why mortgage applications get denied is that the applicant’s debt to income ratio (DTI) is too high. The DTI is a simple calculation which begins by first taking the total of all applicants’ gross monthly income before taxes. For example, if a married couple makes $40,000 and $50,000, respectively, then their gross monthly income would be $7,500 ($90k/12). The next step would be to add up all of the couple’s monthly obligations. Included in this number is the minimum payment on all credit cards, charge cards, home equity lines, student loans, car loans, and any other credit account. Utilities such as cable, electric, gas, etc. are not included. Finally, you can add to this number the monthly escrow amount for taxes and insurance, and the principal and interest payment for your new mortgage. This total expense number cannot be more than 45 percent of your gross monthly income.

4.) Insufficient Reserves/Assets – Often overlooked, insufficient reserves can prove to be the difference between a closed loan and a denial. What most people do not know is that most lenders will require at 2 months of reserves for loans with loan-to-value ratios over 80 percent. This can be a substantial amount of money. For example, if the loan amount is $300,000 the principal and interest portion of this, depending upon the interest rate, can be as much as $1,600. You then have to add in the monthly escrows for taxes and insurance. If taxes are $8,000 per year and the insurance premium is $700, that means the total payment is $2,325 and 2 months would be $4,650. This amount would be needed over and above any funds required at closing – down payments, closing costs, escrows, etc.

5.) “Subject To” Appraisal- Perhaps the most infuriated mortgage applicants are those that receive a “subject to” appraisal. This means that the appraisal report and the value for the property is subject to certain conditions being completed, typically repairs to the property. These days, ever detail of a property’s appraisal is scrutinized and the repairs needed might seem trivial to a potential borrower, but many lenders will refuse to close on a loan until appraiser’s conditions are met. Sometimes, more stringent lenders (and often the ones with the lowest interest rates) can add additional conditions for an appraisal the appraiser did not even mention in the report. These items can be anything from a hole in the roof to slight paint chipping on the exterior, to mold in the basement, or exposed electrical wires in the laundry, and everything in between. The bottom line is, if there is anything about your home that can look skeptical to the untrained eye, chances are either the appraiser or lender will notice it. Take a close look at every detail of your property BEFORE applying for a mortgage because it can be very costly and time consuming to correct during the application process.

The purpose of this article was to help clear up any misconceptions regarding today’s mortgage industry. It is well known that closing on a loan is more difficult today with more stringent underwriting guidelines. Many loans that could have closed easily 5 years ago, are getting denied in today’s market. But, with the right information and knowledge before starting the mortgage process, an applicant can be better prepared for the road ahead.

Source by Joe Jesuele

Most aspiring real estate investors suffer from an insidious form of perfectionism. They possess all the tools to get started but get sidetracked by procrastination dressed as “preparation.” There’s always one more book to read, one more course to attend, and one more guru to contact.

But there’s another group of potential investors whose ambition is ready to conquer the world but they’re not ready to invest—yet. So, how do you know if you’re NOT ready to invest yet and what steps you need to take to get ready?

3 Telltale Signs You’re Definitely NOT Ready to Invest in Real Estate

1. You don’t have a long-term investment strategy.

There are plenty of ways to make short-term income in real estate: house flipping, wholesaling, bird-dogging etc. But in my opinion, all those methods fall under the category of real estate “jobs” (or when done at scale, a real estate “business”), not real estate investing.

That’s not to say that you can’t utilize real estate “jobs” to help your quest to purchase long-term real estate investments if you have competitive advantage over other players in the space. What skills, knowledge, or network do you bring to the table that give you an edge in flipping, wholesaling, or bird-dogging?


Perhaps you have superior knowledge of the local real estate market and the finishes that buyers prefer in that area. Or you might have a good network of contractors that can renovate properties at a similar quality for a lower price than competitors. Or maybe you have an established strong list of investors who will buy a deal from you if you bring it to them. These are important questions to ask yourself before you embark in a side hustle real estate job or business.    

Related: 3 Questions New Investors NEED to Ask But Don’t

But in the end, whether you’re flipping houses or wholesaling distressed deals to more established investors, you are essentially trading time for money. The income you are earning is tied to the time you are spending on the tasks that are generating it. The income is active, meaning, if you stop working, it stops coming in.

Now compare that with a long-term real estate investing strategy that involves the purchase of quality assets for the purpose of holding them over the long-term. There’s no question that you must work to find the deal, put it together, and stabilize the property with some quality tenants. Even if you’re working with professionals that are helping you with each of those tasks, you must manage those professionals and that requires work.

However, once the property has been stabilized, it’s an asset that works for you day and night. With each mortgage payment, it’s increasing your net worth. With each year that passes, the balance between assets and liabilities moves further in your favor. There’s definitely work involved but it’s high leverage work. Once the investment is established, you don’t have to trade time for dollars anymore. The income and net worth increases happen passively.

Don’t put the cart before the horse. Strategy comes first, and execution follows unless you want to be wandering in the wilderness for years. Let me be clear: Your real estate investing strategy doesn’t have to be some formal or fancy plan. But it does require that you spend some time thinking about where you are and where you want this strategy to take you financially. Then run the numbers on how many properties that will require, how much capital is necessary and the steps you will take to execute.

Bottom line: If you don’t have a long-term investment strategy, you’re not ready to invest in real estate. 

2. You don’t have your financial house in order.

What do you have to do to have your financial house in order?

First, you live on less than you make and save a healthy percentage of your income every month. It’s a bad idea to try to fix cash flow management problems by purchasing an investment property. That’s like trying to save a bad relationship by having a child. It just doesn’t work.

Second, you need to have three to six months of expenses in a liquid emergency fund. This will prevent you from impulsive ,boneheaded moves (like selling in a down market) because you face a cash crunch.

Third, you protect the downside with inexpensive term life insurance equal to 10-12 times your current income. This is so you don’t build your real estate portfolio on a foundation that could crumble any day.

Related: 4 Toxic Habits That Sabotage Even the Most Promising New Investors

Last, but not least, unless you’re planning to pay cash for your investments, you need to have a high enough credit rating that will allow you to easily secure financing. Perfect credit isn’t required but it sure helps so you should at least be on a trajectory that eventually leads to perfect credit. If your financial house is not in order, you’re not ready to invest in real estate.


3. You haven’t saved sufficient capital.

This seems like another axiom from the Captain Obvious files, but a real estate investor needs to save up sufficient capital. Still, how do you know what amount of capital is sufficient? Sufficient capital is that amount that allows the investor to secure top tier long-term financing terms for the purchase of a quality asset that fits their risk profile.

If your risk profile calls for it, you should purchase a higher quality, lower risk property instead of purchasing whatever property your current saved capital will allow. If you’ve saved $20,000, that will allow you to purchase a $95,000 property with 20% down plus closing costs. If a high quality asset in the market costs $160,000, that means you need to save more capital, not purchase a lower quality asset that fits your available capital but not your risk profile.

If you haven’t saved sufficient capital to afford the purchase of an asset that fits your real estate investing strategy, you’re not ready to invest in real estate yet.

In Conclusion

If you want to successfully invest in real estate long-term, there are three things you need to master before you are ready to invest. You must have a long term investing strategy, put your financial house in order, and save sufficient capital for the right investment properties.

Do you disagree? Is there something else you’d add to this list?

Weigh in with a comment!

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While preparing this article, I started thinking about failures and setbacks. I have discovered that we all have experienced failures and setbacks at some point. In any arena or industry, the difference between the champions and everyone else is how they respond to the setbacks. I watched the movie ‘Invincible’ the other day. The title character in the movie was pursuing his dream of playing in the NFL for his hometown Philadelphia Eagles. He was a long shot and he knew it. He had not played college football and was not drafted into the NFL. Every morning before he went to practice, he had a habit of looking at a note in his locker. The note seemed to inspire him to perform at a higher level. He did this every morning without fail. It got to the point where I was talking to the TV screen asking, what is on that note? The note was a letter from his ex-wife informing him of the fact that she was leaving him and that he would never accomplish anything in life. He ultimately achieved his dream of playing for the Philadelphia Eagles and proved that you can bounce back from your setbacks. My goal in this article is to show you three things that you need to bounce back from your setback. You too can bounce back from your setbacks and all you need is the following three things.

The first thing you need to bounce back from your setback is the Right Aim. When I refer to Aim I mean a vision. A vision helps to keep your setbacks in the right perspective. Noted author and speaker Dr Gene Mims said it best when he said “when you have a vision, circumstances will arise, but when you have no vision you are ruled by your circumstances.” It’s not enough to merely have a vision, the vision should be in writing. Did you know that 97% of the population is without a written vision or goals? Having the vision in writing would put you in the top 3 % of the population.

The 2nd thing that you need to bounce back from your setback is the Right Attention. By attention, I mean that your attention should be on the process of practice and preparation. The Olympic Gold Medalist does not win the medal at the games. The medal was really won during his time in isolation when he was practicing. If he has a setback in the games, he can improve his process of practice and preparation and overcome this setback the next time. We can do the same. If we have a setback, we can take a step back, and improve our preparation and practice process and make a comeback.

The 3rd and final thing that you need is the Right Attitude. Winston Churchill said it best when he defined success as the ability to go from failure to failure without losing your enthusiasm. If you have the right aim and the right attention, you recognize that each setback is bringing you closer to your goal. I would like to introduce you someone that you may already know. His struggle will help to clarify what you need to bounce back from your setback. He was born into poverty, and lacked a formal education. He joined the Militia and obtained the rank of Captain. His leadership skills were so questionable that he was demoted down to the rank of Private. He met a nice young lady and was engaged to be married. She died of a sudden illness. This event caused him to have a nervous breakdown. He recovered and decided to open his own business. The business failed. He then decided that he would pursue a career in politics. He ran for a seat in his state legislature and lost. He ran for a seat in the US Congress and lost. He ran for a seat in the US Senate and lost. The individual that I am introducing you to you is Abraham Lincoln, the 16th President of the United States. In addition to the right aim and attention, he had to have the right attitude to overcome all of those setbacks.

If you have the right aim, the right attention and the right attitude, you too can bounce back from your setback.

Source by Eric Twiggs

The Big 5 of professional team sports in the USA are NFL, NBA, NHL, MLB, & MLS. The popularity of these 5 sports has grown every year & advent of cable TV, Pay Per View model means these 5 sports are most watched sports in the USA. These are richest professional team sports in the USA with both men/women leagues. Financially these leagues & its players enjoy massive success through sponsorships, ads and ticket sales.

Popularity of Major League Baseball / MLB

Major League Baseball was started in 1903. The MLB all-star games attract most viewership in the USA where players are selected by fan voting. Babe Ruth, Yogi Berra, Hank Aaron, Alex Rodriguez, Joe Dimaggio are most popular players. New York Mets, Cincinnati Reds, Pittsburgh Pirates, Boston Red Sox, & New York Yankees are popular MLB teams.

Popularity of National Basketball Association / NBA

National Basketball Association was established in 1946. All-star games are the biggest attraction each year, where players are selected by fan voting. Kareem Abdul Jabbar, Magic Johnson, Michael Jordan, Kobe Bryant, Larry Bird are most popular league players. Boston Celtics, New York Knicks, Philadelphia 76ers, Chicago Bulls, Los Angeles Lakers, Dallas Mavericks are popular NBA teams.

Popularity of National Football League / NFL

National Football League was founded in 1920 as a version of rugby where players participate wearing protective gear to avoid injuries. NFL Super Bowl is most watched annual event on TV. Tom Brady, Reggie White, Don Hutson, Joe Montana, Aaron Rogers, Tony Romo, Calvin Johnson are most popular league players. Miami Dolphins, New England Patriots, Dallas Cowboys, San Francisco 49ers, are popular NFL teams.

Popularity of National Hockey League / NHL

National Hockey League is hockey on ice; one of the fastest sport in the world. NHL all-stars game is most eagarly watch in the USA. Bobby Hull, Rick Martin, Bill Cowley, Michel Goulet, Alexander Ovechkin are most popular league players. New York Rangers, Philadelphia Flyers, Edmonton Oilers, Los Angeles Kings are popular NHL teams.

Popularity of Major League Soccer / MLS

Major League Soccer (MLS) started in 1994 is nothing but football. MLS All stars are the most popular match watched by people. David Beckham, Landon Donovan, Didier Drogba, Kaka, David Villa are most popular league players. New York City FC, New York Red Bulls, Colorado Rapids, Houston Dynamo, LA Galaxy, Sporting Kansas City are popular MLS teams.

City wise rivalry is what defines these professional team sports in the USA. These leagues have no relegation/promotion policy & the teams play with each other throughout the year.

Source by Sanjeet Veen

Real estate investing involves finding deals—properties or notes—at a discount big enough to make money. And in this current hot market, you need to find the deal that no one else has found. But how can you tell if it’s a deal or a scam?

Not every property fits into the cookie cutter mold that a traditional lender will loan on—they have people to answer to as well. How do you know the lender you’ve found isn’t going to run off with your money?

Here are 10 common tip-offs that maybe your red-hot deal isn’t such a hot idea after all.


There are legitimate ways to finance the purchase of a property and fund any renovations outside your traditional institution-based lenders. They will typically have higher rates and charge you points (a point is equal to 1% of the loan) and will want you to have “skin in the game.”

Unless you have worked with the lender multiple times before or are close, personal friends with them, be very wary of any of these circumstances.

1. 100% Financing

One hundred percent financing does exist, but not for your first loan or first deal. A lender wants his money back—and giving you 100% of the purchase price, even with a first-position lien on the property, doesn’t do much to stop you from walking away if you find something unexpected and un-budgeted.

If you don’t have any money to put down on the property, then start looking for a partner who can help fund the downpayment, or start looking for another investor to sell the deal to. If it’s a good deal, you won’t have a hard time selling it. If you have a hard time selling it, it wasn’t a good deal.


2. Upfront Fees

Just about any fee or charge will be collected at the closing table, with the possible exception of an appraisal fee. The lender will give the loan based on the appraised value of the property, and if the appraisal comes in low, you may decide to cancel the loan. The lender doesn’t want to try to collect the fee after the fact—especially if you aren’t getting a loan through them.

But there is no such thing as insurance on a loan. Title insurance is a real thing, but that isn’t insuring the loan, it’s insuring the chain of title to the property in question. Like I said above, most fees are paid at closing, when it’s a sure thing that the loan is being funded. Be very wary about any fees the lender is requesting before you are sitting at the closing table.

Related: The Real Truth About How Title Insurance Works

3. Changing Interest Rates

Once your rate is locked in, it’s locked in. It doesn’t change unless there are some pretty outstanding circumstances.  If your rate is changing, take a deeper look at the lender.

4. Extremely LOW Rates

The least expensive way to fund a property is a traditional mortgage. Those rates currently (as of March 1, 2016) hover around 4%.

A hard money lender isn’t going to give you a loan for 4% — he doesn’t make any money at that rate. He also isn’t going to loan for 2%, 3% or even 8%.

Hard money loans right now are around 12%-15% PLUS 2 or more points. Hard money costs a lot. It’s meant to be a quick fix, not a long term solution.

5. Extremely Bad English/Spelling

Another tell-tale sign that your lender isn’t the real deal is if all communications come through email, and they use atrocious spelling or have horrible English. I’m not talking about an occasional misspelled word; I’m talking about sentences that don’t make any sense. Look out for emails that are really hard to read, leaving you trying to decipher what they’re talking about.

If someone legitimately has money to lend you, they’ll also have a legitimate grasp on the English language.

6. Generic Email Account

A professional lender will usually have a web presence, which includes email addresses affiliated with the website. This isn’t always the case, so think of this one as more of a pink flag. But if your lender is using an email like [email protected], you should tread very lightly. It should be more like [email protected]

7. Google Doesn’t Know Them

Google knows everyone and everything. If you do a search on Google—and you SHOULD research them on Google—and Google comes back with nothing, run.

8. They Mention Western Union

Western Union is a great way to wire money. They are a recognized company, but a legitimate lender doesn’t use them. If your lender says anything about Western Union, RUN, don’t walk, in the opposite direction. This isn’t a red flag, it’s a purple flag with flashing lights and sirens!


Finding the Actual Deal

Once you think you have found a deal worth pursuing, your Red-Flag-O-Meter should be tuned to high alert. A great deal will pass all the tests, so you should be looking for ways to make the deal fail, not ways to overlook problems.

9. Seller Won’t/Can’t Let You Inside

Just like the rental scams on Craigslist, where someone will list a home they don’t own as a property for rent but can’t let you inside for any number of reasons, this scam also rears its ugly head in purchases—especially when the deal is too good to be true.

There are exceptions to this red flag. When a landlord has renters that he doesn’t want to inconvenience with multiple showings, he or she may wish to hold off showing the inside until they have the property under contract. If this is the case, make the contract contingent upon seeing the condition of the interior, or write a letter of intent with a price range rather than a firm price, again contingent upon seeing the inside.

But if the seller can’t let you view the property at all and gives vague or ridiculous reasons for this, it’s a good chance they don’t own the property or have the right to sell it.

10. The Numbers Are AMAZING

Finding a good deal is difficult, and finding a great deal is even harder. When a seemingly AMAZING deal pops into view, you should immediately be on high alert. While it IS possible that you will find a smoking deal from someone who just wants to be rid of it, it isn’t probable.

George C. Parker sold the Brooklyn Bridge multiple times to unsuspecting immigrants who literally just got “off the boat” at Ellis Island. He would bribe the men working on the boats to direct people to him who seemed to have a lot of money with them. Parker would sell it for just about any amount—from $75 to $5,000, whatever they had on them.

How did he persuade them to give him giant wads of cash? He portrayed himself as an exhausted bridge owner who just wanted out of it—and convinced them they could earn millions by erecting a tollbooth on the bridge. In fact, only when police arrived to dismantle the tollbooths did the “owners” learn they had been scammed.

Related: 4 Types of All-Too-Common Real Estate Scams Making Headlines

If your “seller” claims to be an exhausted owner who just wants out of it at a price that seems unreal, it probably is. Proceed with caution.


4 Ways to Avoid Being Scammed

So what can you do to avoid being scammed? Two words: Due diligence. The first stop for any too-good-to-be-true deal should be the public records department of the county in which the property is located. The first stop for any too-good-to-be-true lender is Google.

1. Don’t Feel Pressured

Any legitimate deal needs time to be vetted, inspected, and researched. If someone wants an answer right then and there, just say no. You are presumably giving them thousands of dollars for the ownership of a property or receiving thousands of dollars to purchase a property. They can give you a little time to do your research.

Pressure to commit PLUS pressure for money upfront should be glaring red flags. It is far better to miss out on a deal than to lose money because you felt pressured to get in too fast.

2. Reasonable Deposits

Earnest money is a real thing and is typically 1% of the purchase price of the property. Earnest money should be held by someone other than the seller—either a title company or at the very least, a real estate agent. Make sure you get a receipt for any money given. Your canceled check is NOT enough of a receipt.

3. Do Your OWN Research

Sellers will give you information about the property according to their records. That’s great, but make sure you do your own research, too. Some items are easy to verify, like property taxes and any HOA dues.

But other items may not be so easy to confirm, like utility bills, actual tenant rent, or the current state of the home. Ask for copies of bills, and get tenant estoppel statements that give true rent amounts signed by the tenants themselves. Get your own home inspection, rather than relying on the report from a “pre-inspected” home.

4. Vet Lenders

Legitimate hard money lenders will have an online presence. They will have a website that gives information about their company, multiple ways to contact them, and information about their process. It should be a professionally designed site, too. If it seems less than professional, it probably is.

Private lenders are people you know or acquaintances of people you know. Private lenders don’t go advertising for borrowers.

Related: It CAN Happen to You: How to Guard Against Dangerous Real Estate Scams & Squatters

Protect Yourself

Finding a good deal can take a long time, and it’s natural to be excited when you think you’ve found something before anyone else has.

Finding someone to fund your deal when you’ve heard “no” multiple times can be exciting, too.

Make sure to cover your financial interests. It’s far better to have lost a deal than to have lost all your money.

We’re republishing this article to help out our newer readers.

Have you found a scam? What tipped you off?

Please share your red flags below.

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Maybe, like so many others, you lost your job. At the very least, like just about everyone else in America, you realized that nothing is as secure as we once thought. Maybe you’re trying to obtain a better-or earlier-retirement. Or perhaps you’re looking for an opportunity that will provide a better lifestyle than your current nine-to-five gig.

Whatever the motivation behind your interest in real estate investing, the answers provided to the following frequently asked questions will help you decided if investing in real estate is the right choice for you.

How do I get started investing in real estate?

Like anything else, you need to learn the ropes. Educate yourself.

What’s the best source for easy-to-understand educational material?

You will find more information than you could possibly use on the internet. Take advantage of free memberships to websites dedicated specifically to investors. You will find tons of articles, forums, blogs, books, courses and seminars.

So, you’re saying, “Just read some articles on real estate?” Come on; nothing’s that easy!

Of course not; it’s also a great idea to seek out classes in your local area. Attending an actual class serves a dual purpose, in that you will also have the opportunity to meet others involved in investing and to start building your network.

How do I know what kind of property is the best investment?

The “best” investment varies from person to person. You can determine the type of investments that are best-suited to you by defining your goals now, in the beginning.

My goal is simple; I want to make some money. How does that help me determine what is a good investment?

Define your goals very specifically; do you want to make a bunch of money right away? Then look for a property you can flip. Do you want to build a long-term residual income? Then invest in a property you can rent. Are you handy? You could score a great deal on a fixer-upper. The amount of time and labor you are willing to invest is also an important consideration when determining the best investments for you.

Okay, I’ve read every piece of real estate literature I can get my hands on, I’ve taken a couple of classes, I’ve defined my goals…now what?

First of all, keep reading! As we all learned-painfully-the real estate market can change quickly. Keep your knowledge and industry contacts current. It’s also important to revise your plan and redefine your goals from time to time.

I’m interested in real estate. Why did I need that marketing class?

As I mentioned earlier, taking actual in-person classes serves a dual purpose; education and networking. Now is the time to call on that network of professionals, and put some word-of-mouth marketing into action. A strategic combination of this and targeted direct-response marketing is a powerful tool that will bring qualified leads directly to your door.

What if I make a bad investment?

There is an element of risk involved in any new venture. But if you want to make a positive change for your financial future, it’s necessary to take a chance on yourself. By educating yourself, clearly defining your goals and devoting plenty of time and energy to your network and your marketing campaign, you will secure for yourself the best possible chance for success.

Source by Jennifer Bland

Why is organization so important in a real estate business (or really, any business for that matter)?

Let’s dive into three major reasons:

1. Freedom

Being organized is not about rules, it’s about freedom. The freedom to relax when you are away from your desk. The freedom to enjoy your work, knowing it’s all getting taken care of. Organization helps keep your stress level at a minimum because there is a plan and place for everything.

  • You won’t need to worry, “Was that bill paid yet?”
  • You won’t need to ask, “How much money is our rental actually bringing in?”
  • You won’t need to wonder, “Did that maintenance job ever get taken care of?” Or, “Did I ever call that tenant back?”

David Allen, author of the incredible productivity book Getting Things Done calls that concept “mind like water.” It’s the idea that your mind becomes still, like a calm lake, when everything is organized and out of your head. The goal of this chapter is to walk you through the process of doing just that: getting your property management system out of your head and into files, computers, spreadsheets, and software. Only then can you achieve “mind like water.”

2. Legality

In addition to keeping stress to a minimum, organization is also about staying legal. The IRS requires accurate reporting about the income and expenses on your property. Therefore, we’re going to spend some time showing you a few different ways you can keep records about how much is coming in and how much is going out.

Related: The Big 64-Point List of Landlording Tasks (& How to Outsource the Vast Majority of Them)

3. Profitability

Finally, organization is about profitability. That’s right: Being organized can actually make you more profitable in your business. By knowing where all the money is coming from and where it’s all going, you will always have an accurate picture of how your rentals are performing, allowing you to take action to correct it.

As you begin to set up the organization for your business, keep these three goals in mind. Does the action you take move you closer to these goals or further away? Can you improve upon them? One of the things that sets a business apart from a hobby is the goal of always improving. Being organized will help you do just that.

The good news is, organization is largely a “set it and forget it” event.

Once you have a system in place, your business organization will become second nature to you. You’ll spend less time organizing, less time working, and more time enjoying life. But first you have to set up the perfect system.

Do you prioritize organization in your business? What does your system look like?

Weigh in with a comment!

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HUD announced it was making an investment that could allow thousands of children to leave foster care. It awarded $30 million to public housing authorities across the U.S. that identify youth at risk of homelessness and families whose lack of housing is the primary reason their children are in foster care.

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By having a Listing Agent, you can leverage yourself through them. You can increase the number of appointments and even schedule simultaneous appointments. You could be off listing the Jones’ while your Listing Agent is working with the Smiths.

This expansion has the effect of increased listings sold but will also influence your buyer controlled sales. Because of the increase in listings, you will increase your ad calls and sign calls, which will increase leads, buyer prospects, buyer clients, and buyer sales. With increased listings sold and buyer sales, you will also increase your past client ranks in a shorter time frame, which will increase referrals. You will also usually see a decrease in cost per transaction, which will make each transaction more profitable.

You will raise your image or increase your brand recognition in the marketplace. With more listings in the ground, you become a more well-known Real Estate Agent in the marketplace. This will increase the unsolicited call-in appointments that say, “I see your sign everywhere.” Your quality of life will be enhanced because you aren’t the only plow horse hooked to the yoke to pull the business. There is some safety in numbers as long as the other horse is hooked to the yoke with you and isn’t shoving you down or pulling your plow rows from straight to crooked.

Your time away from the business will be more relaxing, and the business will operate while you are gone. For an Agent without a Listing Assistant, before they go on vacation, at best, is a fire drill and, at worst, is total chaos. Inevitably, everyone wants to list just before you want to take time off. Whether that’s the influence of Murphy’s Law or just that your focus and intensity rise before you are heading on vacation, the days leading up to time off are usually some of the busiest of the year. The lead up to your time off will be more controlled with a Listing Agent.

The time while you are gone will also be more effective for the business. I always had people who wanted to list their home call when I was away. Our first objective was to try to make them wait. If that jeopardized our opportunity to list the property, we sent in the team. That was usually a Buyer’s Agent or another Agent in my office that I would split the listing with if it was more than my Buyer’s Agent could handle. If you don’t have a Listing Agent, it’s rare to list new property while you are away. You might generate buyer sales or listings sold, but you won’t take any new listings. The net result is a drop in listing inventory when you are away enjoying your family time.

If the team managed to delay a few listing appointments, you will have a work backlog to attend to when you return. You will come back relaxed and recharged only to jump into the frying pan that has been on the stove heating up while you were gone. There will not be a slow, smooth transition back into the business. You will need to be back on your “A” game the minute you hit the front door of your office. A solid Listing Agent makes the before, during, and after period of time off much easier for the Lead Agent. Without a Listing Agent you may have come back from a vacation feeling like the time off wasn’t worth the extra effort invested before and after your return. That won’t happen with a Listing Agent.

The cons of a Listing Agent are as significant as the pros. The most glaring ones will happen to many Agents before they even make a dime of profit from them. This causes the risk of adding a Listing Agent to your team far exceed that of the Buyer’s Agent.

First you will need to invest significant resources to find quality potential candidates. You will have to pan a lot of river beds to find a gold nugget. You want them to have the right attitude first. You can’t train a good attitude. The behavioral style must be similar to yours. Again, that’s something training will not solve. They either have it, or they don’t.

Finding them through delivering flyers to all real estate offices, sending e-mails through the MLS system or Board of REALTOR®s, or doing direct mailings through the Board of REALTOR®s’, mailing lists takes discipline, practice, money, and time. Even using a strictly word-of-mouth campaign through your company, your Broker, your mortgage company, the title company, and even other Agents you know or do business with, will be an investment of your resources. If you stick with it long enough and consistently enough, you will find the right person over time. You can’t be impatient. You are really looking for a rare individual, rather than Johnny Anybody. The wrong hire is worse than no hire.

The training investment is far more significant for a Listing Agent. The investment of your time and energy to make this person a top performer for your team in the listing area will be hours each week. You will need to role-play, coach, book appointments for them and yourself, and go on your appointments and theirs for a period of time. They will need a lot of work with you, or they will have to blow a lot of leads and opportunities that you would have landed to even reach the basic competence level.

A non-negotiable for me would be a non-compete contract. I would never hire anyone in this position without one. The resources you will invest to find this persona and train them are enormous. The training, skills, and intellectual property you are giving them as your Listing Agent are priceless.

Champion Team Rule – You are not in the business of training and equipping your own competition.

If you don’t use a non-compete, I guarantee they will leave you and compete with you in the future in the open market. Many will leave you and not only compete with you in the open market, but also compete with you for your own stable of past clients. This is especially true with the ones they directly did business with and have a relationship with.

A drawback to a non-compete is some quality candidates won’t sign one. You could lose some good people. My view is you have now ferreted out the ones who would have left and left quickly. The ones who object to the non-compete will leave as soon as they feel they have learned enough to make it on their own. Once they reach that moment, they hit the road. Many already have that figure in their head when talking with you. They think, “I will spend twelve months learning the business from the best, and then I will go out on my own.” When they get in the position that they start to have some success, their ego grows, and their timeline gets cut in half, and they are gone one morning without any notice.

Another major con is that you will be saddled, at times, with listings that you would have turned down or ones with terms and conditions that aren’t in your favor. You will be forced to deal with over-priced listings that you will have to invest your time in to get the price reduction. In the interim, you will have to market them knowing the money is being wasted because it won’t sell at its current price. You will have listings you wish you didn’t have in your inventory because of condition, motivation level of the seller, price, or area or type of property (i.e. a manufactured home in a trailer park). Your options are either, bite the bullet and hope it comes out OK, or deal with it head on with the seller in correcting the issue or referring it to someone else. Referring it to someone else has the risk of alienating the seller and the Listing Agent on your team.

All of these situations affect your bottom line negatively in terms of time invested by you and your staff to solve the issues, more marketing dollars spent on each property, lower odds of you achieving a sale and earning a commission. The Listing Agent can have the attitude of getting any and all listings they can because it’s not their resources they are using in marketing dollars, staff time, and your time to fix the problem. They have all the potential upside of earning a few dollars with none of the downside of increased costs and lower odds to cover out of their pocket.

Source by Dirk Zeller

Back in August, Skyline AI, a real estate investment technology company that uses artificial intelligence for real estate investing, raised $18 million from various venture capital sources, including JLL’s tech startup investment fund, JLL Spark. And now, Skyline is making another move to continue it push to use AI to source, analyze, acquire, manage and sell institutional-grade real estate investments.

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