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VIDEO: The 5 Wealthiest Moguls In US Real Estate

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Mirror, mirror on the wall, who’s the richest of them all?

Well, Forbes recently answered that question, breaking down the wealthiest across a number of categories. And as for real estate? Courtesy of our friends at therealdeal.com, here are the top 5 richest real estate moguls in the country.

Real Estate Investing

REAL ESTATE: 20 Ways To Find Off-Market Deals

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As the market heats up, it becomes more and more fashionable to find off-market deals.

But, not all “off-market” deals are worth buying. In fact, a huge portion of off-market deals aren’t on the market because… you guessed it, they want more than the property is worth.

But, it’s also true that most on-market deals will sell at or above market value in today’s hot market. .

So it’s a catch-22. Most off-market deals want more than the property is worth, but if it goes on the market, it will definitely sell at full value. So what do you do?

Even if 90% of off-market deals are a waste of time, that other 10% of the deals might sell well below market value, whereas anything listed online will definitely sell at market value. So, there is still some opportunity for money to be made.

So, today we’ll cover different ways to find the coveted “off-market deal.”

1. Pocket Listings

This is a deal that an agent or broker has but hasn’t brought it to market yet. This is more common in commercial deals and also residential deals that aren’t very marketable.

There are a few reasons why a seller may not want to openly market the deal. The biggest of which, is they do not want to spook the in-place management or tenants. If tenants are afraid their rents will jump, they will start to move which lowers the Net Operating Income of the property and makes it less marketable. THe management

Here’s why:

It sells the deal almost immediately, the broker can probably get near the asking price (or they would put it on the market), and it sells virtually instantly which makes the broker look good.

So get to know some high-powered brokers and get on their buyer’s lists.

2. Direct Mail

Some people hate it while others swear by it. Essentially you buy a mailing list, write letters to the owners, mail it out, and hope to get a call.

The response rate is low, around 0.5%, but people who direct mail look at it another way – for every 1000 homes they mail to, they get 5 calls and probably close one deal.

That’s really not bad if you think about it.

I personally sent out a direct mail campaign this year and had a response rate of over 3%. I closed a 20%+ cash on cash deal and sent less than 1,000 letters. So, it’s totally possible to create a great campaign with great results!

3. Driving Neighborhoods (and following up)

This works for both residential and commercial. Choose a market, drive around, and write down all the properties that appear to be in distress.

Then find the number of the owner and call them.

If the property is in distress, the owner is probably motivated to sell.

4. Cold Calling

This is related to #3, except you are just calling a list of properties instead of driving them first.

5. Property Management Companies

They will probably be the first ones to know when an owner wants to sell. They may be able to make an introduction between you and the owner.

6. Eviction Court

Look for houses with recent or pending evictions. For multifamily, look for a property with a large caseload of evictions which could signal a property in distress.

Owners with eviction problems are more likely to entertain an offer to sell.

7. Create a Website

People always take you more seriously if you have a professional looking website. In fact, it’s gotten to the point that lack of a website will actually hinder you from succeeding, even if it doesn’t generate much traffic or sales.

7a. Create Great Content for Owners

Having a website is a requirement, but if you want it to generate traffic, name recognition, and leads, you need to create content for your target audience.

People tend to talk to other people like themselves, and that’s true for how they write as well. That’s why accountant and attorney websites are usually so terrible because they are focused on impressing other attorneys and accountants!

Flip it around and focus your content on your target audience. If you want to buy single-family homes, create content for people who are trying to sell a single family. Same is true with multifamily.

8. Title Company

They probably know all the major groups that are buying/selling in your area. If you have a good connection here they might be able to make an introduction

9. Landlord or Apartment Association Meetings

You want to be the first to know when a current owner is selling. So, go to their professional meetings.

10. Real Estate Investing Meetings

If another investor knows about an off-market deal but doesn’t have the money to get it done, they may be willing to tell you about it.

11. Start a Podcast

Similar to creating a website, a podcast is a great way to meet other real estate professionals and start building those relationships.

12. Tax Delinquencies

If an owner can’t pay their taxes, they are probably motivated to sell.

13. LoopNet or MLS

A lot of people believe LoopNet or the MLS are terrible places to find deals. There will undoubtedly be a good deal here or there on these services, you can also use them to get to know some of the brokers in a new market.

Ask the brokers for references to good property managers then ask those managers for references to more brokers.

So, internet listing services are a good way to get a conversation going, even if you don’t ever close a deal from it.

14. Tradespeople/Vendors

They tend to get around and know all the major communities and property owners in the area. You could ask for some insights into different areas, which are full and which are vacant, and which ones have problems.

15. BiggerPockets

BiggerPockets is focused more on the single-family side, but may also be a great place to find other professionals.

16. Networking

Relationships rule everything in real estate. Do we really need to go into detail about why you need to be at every networking event in your city?

17. Create a YouTube Channel

YouTube is the #1 video search engine. People often search YouTube because it’s a lot easier to convey a message in video than in writing. So, if you are trying to reach a target audience, it’s a great idea to create video content for them.

18. Bankers and Brokers

Mortgage brokers and bankers may not know who wants to sell, but they will know all the major owners and sellers because they’ve probably worked with a lot of them.

19. Craigslist

Look for properties that are for rent. A listing means there is a vacancy. It’s usually just part of ordinary turnover, but if you see a property being listed a lot, there may be a problem.

20. Start a Meetup

People love networking. In addition to attending other networking events, you can create your own. Since it’s your event, you will have the stage which builds your name.

21. Find a Bird Dog

Take any one of the categories in this article and get another person to do it for you. In return, you’ll compensate them for every deal closed.

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Real Estate Investing

Here’s How To Get A Mortgage You Can Actually Afford

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So, you’ve finally decided to purchase a home. After years of contemplating if you should buy or rent, then saving, building your credit etc, it’s now time to dive in and get it.

Purchasing a home is exciting. After years of dreaming, you’re finally getting a place that you can call your own.

It’s really easy to get caught up in the excitement making you forget to ask one crucial question – how much “home” can you really afford?

…and, once you decide how much you can afford, you should stick to it. It’s all too easy to decide on a price, then find the home of your dreams is only $25,000 more. Then you start thinking, “we can make this work…” But, can you really?

According to statistics, the median monthly mortgage payment for homeowners in the U.S. is $1,030. That’s a lot of money.

While you may love the fabulous kitchen or huge backyard one house offers – if you can’t pay the mortgage every month or get the cash to fix what’s broken, your home’s never going to be a blessing.

The good news is, determining how much ‘house’ you can afford isn’t rocket science. You can use the four tips here and utilize online tools to help you figure things out.

Build a Solid Foundation

There are countless people who have gone broke by buying a house simply because they believe it’s the “grown-up” thing to do. However, life events such as having a baby or getting married aren’t reasons to buy a house.

The time will be right when the money is right. Before trying to figure out how much house you can afford, be sure you are financially ready to purchase a home.

To do this, ask yourself the following questions:

  • Are you debt free and have an emergency fund of three to six months put back
  • Do you have enough cash to cover moving expenses and closing costs?
  • Can you afford a 15-year-fixed-rate mortgage?
  • Can you make a 10 to 20 percent down payment?
  • Do you have enough money to set aside each month into passive investments above and beyond your mortgage?

If you answered “no” to any of the questions above, it may not be the right time to purchase a home. Wait until you have a better financial foundation.

If you are currently financially stable, then move on to the next tip.

Maximize Your Down Payment

One of the biggest costs in a new mortgage is PMI or MIP. Both of these are different ways of saying that you need to pay an extra fee every month because you didn’t put enough down.

If you can get to 20% or more, then you won’t have to pay mortgage insurance for the lender. This can save you hundreds of dollars per month.

When buying a home, remember – the more money you can put down, the better. Higher down payments mean lower mortgage payments every month and the ability to pay your home off faster.

While the best option is to pay 100 percent of the home cost in cash, this isn’t viable for most. If this is the case, then try to put down at least 20 percent. By doing this, you can avoid paying for private mortgage insurance.

Calculate the Costs

All you need to do to figure out what you can afford when it comes to buying a home is to crunch a few numbers. If you need help with this, consider using a mortgage calculator with down payment, which will help you figure things out.

If you want to do things manually, consider the following:

  • Add up all the income you bring in every month. If you bring home $2,000 per month, and your spouse makes $3,000, then your total monthly take-home pay is $5,000.
  • Multiply your total monthly take-home pay by 25 percent to determine your maximum mortgage payment.If you are bringing home $5,000 per month, then it means that your mortgage payment should not be over $1,250 each month, including insurance and taxes.

Remember, your bank or lender will tell you that you can afford WAY more than that. In fact, some loans allow you to get to 40% or even 50% of your income going toward loans. While they may allow it, it isn’t financially smart to borrow every dollar you can afford.

Don’t Forget About Maintenance and Capital Expenditures

When comparing if you should rent or buy, most people look at the total rent, compare it to the mortgage, and say it’s better to buy a house.

What you are forgetting is that rent includes all the maintenance costs in a home whereas a mortgage does not.

As a general rule of thumb, it’s good to plan on spending around 1% – 2% of the total home value every year in maintenance and CapEx.

Major capital expenses are things like a roof or HVAC that last for several years. Even though you might have 10 years left on your roof, you should start saving for it now, along with the dozens of other major items that will not last forever.

So, if your home is $200,000, you should think about adding another $2,000-$4,000 per year in maintenance and capex. You definitely won’t be spending this much every year, but what you don’t spend now will be spent in a year or two when you have to replace a $12,000 roof, replace a garage door, etc.

If you have higher end appliances and fixtures, you should be more toward the 2% whereas standard grade homes can be closer to the 1% mark.

Conclusion

When you know your numbers, you will be able to shop for a mortgage and a home with confidence. Trying to determine what you can afford without considering the tips here may leave you with a home that’s going to cause you financial hardship in the future.

Remember, buying a home is not an investment, it is an emotional decision. Once you recognize that, you can begin to take it seriously and make decisions based on actual facts, rather than be driven entirely by your desires. If you base everything on the emotions involved with buying a home, you’ll dive right into a mortgage that you can’t really afford.

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Real Estate Investing

REIT Scorecard: Last Week’s Winners And Losers

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With a difficult and dicey macro environment, how are REIT stocks faring? Are investors looking to diversify their portfolio and increase REIT investments in a volatile stock market environment?

With a comparatively high dividend yield and a stable stream of income, REITs might be a good bet for investors. The earnings season is here and several REITs will be impacted if they outperform or underperform estimates.

Here, we look at the top REIT gainers and losers over the last week.

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