Real Estate Investors Association of Greater Cincinnati

Lease Options and Subject Tos, aka “Getting the Deed” are two very popular ways to purchase real estate with little or no money down. Acquiring investment real estate can be handled with many different approaches, but these two techniques can be implemented with little or no money down in most incidences.

A lease option is a technique which involves gaining ‘control’ of a property, but not owning it.  It is the right to possess a property now and purchase that property at some future date with terms you define when you buy it.

A “Subject To” is getting the deed to a property without getting a mortgage for the home.  Instead, the seller signs over the deed to his home ‘subject to’ the existing mortgage. The buyer in this case makes the mortgage payments on the old loan but does not need to get a mortgage themselves to acquire this home.

Both of these techniques usually require little or no money down.  In both of these techniques it is possible for the buyer to get money from the seller or the purchaser (or both!) in the beginning of the transaction.  These techniques, when used properly, will provide for huge profits.  They are both awesome and when used hand-in-hand by invest
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 When it comes to acquiring properties, rehabbers have different potential avenues to pursue for good deals: buy direct from property owners, purchase from a wholesaler (who is flipping the contract to you via assignment or a double close), buy at auctions, etc.

 When a wholesaler flips a real estate contract, he is transferring the rights of a purchase agreement to another buyer (you). The process involves finding a property for sale, signing a contract for the real estate, then flipping that contract to a new buyer to make a profit.

 Rehabbers looking for good real estate leads, i.e. identifying motivated sellers who are prepared to sell  their property below current fair market value, can be very expensive. High qualify leads can cost hundreds of dollars each. Unless you have a highly sophisticated lead-gathering system in place, you can spend large amounts of money and wind up with bad or no results. So, one big advantage of buying from wholesalers is that they do all the legwork finding deals, for which you pay them a fee. That way the rehabber can concentrate on what he does best: rehabbing (repairs, painting, cleaning up).

 A. Dealing with Wholesalers

Suppose you find
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For decades, I’ve heard Pete Fortunato going on and on about his “financial friends” and “allies” and how important they’ve been to his enormous success in the real estate business.

As a relatively new investor, my limiting thought was, “Great, Pete, you’re a million years old [he was probably 45 at the time] and you’ve been doing this forever, and you have rich friends who’ve ALSO been doing this forever, who know that you’re super-experienced and able to perform.

Also, you’ve helped them with YOUR money or deals, so they help you with yours.

What in the world has this got to do with me? I don’t have the track record or the relationships with people with money that you have, nor the money to help THEM with THEIR deals, so move on and tell me how to buy houses with no money!”

Because I Just. Didn’t. Get it.

I thought that a “financial friend” was something like an actual friend or family member, who might, I don’t know, give you a loan at 0% interest just to help you get your first deal—a sort of angel with a checkbook who’d do whatever it took to get you the money you needed.

Or that it was a person in a mental rolodex of people who had money—like private lenders, or hard money lenders—who could be ‘convinced’ to give it to you IF you qualified and IF yo
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Brandon and Amanda Neely are the President and CEO of Wealth Wisdom Financial. They make financial planning more accessible through podcasting and through developing personalized financial strategies for individuals and couples, as well as profitability strategies for small businesses. They work virtually to help real estate investors all over the United States to create smart, stable financial futures. They reside in the Oakley neighborhood of Cincinnati.

“A banker is a fellow who will lend you his umbrella when the sun is shining but wants it back the minute it begins to rain.” - Mark Twain

Ain’t that the truth? Now, let me ask you one of the most powerful questions, “What’s the economic forecast?”

As investors, we’ve been taught to use “other people’s money” (OPM) as leverage to help us gain traction in real estate. Another powerful question: when OPM is your strat
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Insurance for “Subject To” properties is a commonly misunderstood challenge.

A “Subject To” deal is when you agree to purchase a property subject to the existing mortgage along with all other liens attached. The existing homeowner deeds the property to you and you take over making the payments to the lending institution. You do not assume the loan through the bank. It’s a popular creative investment strategy for real estate investors.

When it comes to insurance for “subject to” deals, some rules of thumb usually apply:

1. If you (or your entity) own, or have a financial “stake” in the property, be the “first named insured”. The first named insured is the primary recipient of any potential claim benefit or liability protection only.
2. A “loss payee” will have its interests protected in the event the property itself is damaged (a mortgagee is inherently BOTH).
3. If you decide to keep the “homeowner’s” policy in place and be named as the additional insured, be advised: if it is discovered that the ex-owner, the first-named insured
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Try not to roll your eyes too much when I say this: I was scared shirtless of seller negotiation for YEARS. It’s absolutely true: I have a constellation of nature and nurture traits that make my choice of professions kind of hilarious.

I’m waaaay on the end of the introvert/extrovert bell curve. My Meyers-Briggs profile is INTP. My DISC test says that my “I” is a 25 out of 100. If you don’t know what any of that means, it means that I am naturally extremely introverted.

Add to that the fact that I have a tendency to get very anxious over uncertainty—I try to run every scenario and every outcome mentally before I do anything—and you don’t exactly get a recipe for someone who’s a “natural negotiator”.

In the beginning, before I really understood seller psychology, or how to deal with the objections they throw out to offers, or, for that matter, how to deal with rejection without feeling like I must have messed up somehow, I literally lost, I don’t know, hundreds of deals to the fact that I couldn’t get out of my own head long enough to actually tell sellers what I’d like to pay them for their houses.

Drew LOOOOVES to tell the (sadly, true) story of m
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BreAnn Stephenson, National Real Estate Insurance Group

There are many key relationships involved in real estate investing but hiring a proficient Property Manager is critical. A good PM can help you achieve maximum cash-flow from a property or may pave your way to bankruptcy. Many property losses involve “absentee” Property Managers or their tenants, evidencing the need for careful consideration when hiring this service. Today we will discuss 5 crucial qualities a good PM demonstrates and a sample of corresponding questions to help reveal if they possess these 5 C’s.

Crucial “C” Quality #1 – Clear Communication

Communication is the cornerstone of any investor-PM relationship. One pattern we see much more than we’d care to is a decline in communication between the property owner and PM, directly followed by damage at the property. You will want regular reports from your PM about your property’s condition and confirmation the rent is still coming in. You will also want to know immediately if something goes wrong so that it can be fixed, and any further damage minimized. Asking the following questions can help uncover your potential PM’s communication skill level. Read More...

Just like a house, you can’t build a financial fortune from the roof down. You need to build a foundation first. 

Have you ever noticed that some people seem to have wealth flowing to them? Yes, some professions tend to pay more than others, but in every field, those with the most wealth are the ones that have a legal foundation already in place.   

This foundation is set up using an understanding of the legal strategies associated with wealth accumulation. Unfortunately, many people are “taken to the cleaners” by less-than-competent lawyers who fail to educate their clients. 

The basic foundation of wealth consists of four legal tools. If you understand the tools and know how to use them, your chances for success are much better. If you and/or your parents don’t have the four tools already, it is time to get moving. It’s worth every effort you make and every dime you spend getting the foundation in place. Here’s a basic overview of the four tools: 

Testamentary Will 

Everyone needs a will. Even if you have a revocable trust, you need a will. The
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Excluding banks and your own capital, there are two commonly used sources of funding for real estate investors: private money and hard money.

Knowing what each source of funding brings to the table as well as where each source may fall short will be important for you as a real estate investor looking to scale your business.

What is Private Money Lending?

Private money lending is typically done by individuals. Their capital may come from extra cash they have on hand, self-directed IRA/401(k), a line of credit, etc.

Pros of Private Money Lenders:

1. They usually lend their money locally, so they know the area well.
2. They may have lower terms than hard money lenders because they have less overhead.
3. They tend to be more flexible than hard money lenders when it comes to making a deal work.

Cons of Private Money Lenders: Read More...

Maybe you’re someone who's completely comfortable asking complete strangers questions like, “How much do you owe on your house” or saying things like, “That’s crazy, you’ll never get that price”.

But if so, you’re unusual—most real estate entrepreneurs have a tough time telling other people that their properties are not worth what they think they’re worth. Whether it’s that you don’t want to argue with a seller who seems certain that his price is right, or whether it’s your fear that YOU’RE the one who’s wrong, or whether you don’t want to disappoint or offend complete strangers who’ve come to you for help, the fact is that you might just have a hard time choking out the fact that you need to pay less for a property than what the seller wants.

I’m the same way. The difference, though, is that I have over 2 decades of trial-and-error-based experience in talking to property owners of all descriptions. And because I’ve spoken to, oh, 20,000 or more sellers, I’ve had the opportunity to try a lot of phrases that get my point across without sounding confrontational, insulting the seller or his ugly house or iffy neighborhood, or asking questions that the seller might find invasive if stated too directly.

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