Is clear that more foreclosures are coming. I think I’ve been beating that drum pretty loudly of late. Here’s some interesting foreclosure news: There is one county in my market of Maryland where 75 REO listings hit the market in one week (week of April 22nd). That’s pretty astounding given the fact that in some recent weeks there have not been more than 75 total bank-owned listings.

U.S. Foreclosures Will Increase

A recent report (see the video) below from Bloomberg.com affirms what we have all believed for a while. Foreclosures will surely increase. Look people, I don’t care what the media is telling you, the economy is NOT getting better. People are still unemployed or under employed, and as such mortgages are simply not getting paid. And now that the robo-signing scandal is largely behind us, and the banks have received their $26-million dollar “how do you do” from Obama and friends, I think the flood gates are about to open!

Are you ready? If not – you better get ready!

We’re coming into a hot season, I can feel it. Those of you who know how to scour the internet for great deals are about to ride a pretty sudsy wave. Those of you who are lacking the knowledge on how to capitalize, are gonna be left in the dust. I’m currently rallying all my private money sources and I’m recruiting more. I’m also marketing and putting the word out to wholesalers. What will you do to get up to speed?

Will you know the REO agents in your area? Will you have a good solid proof of funds letter? Will you know your target markets like the back of your hand – meaning – will you know the comps and the ARV’s? How about buyers? If you’re a wholesaler will you have buyers like me already lined up and salivating for you to find them HOT HOT deals?

Now the’s precise time to start planting those seeds of success. The next wave is coming.

Check out the video below. Then, if you’re not ready, click on the banner to the left and get you some solid education from one of the hottest wholesalers in the county. This girl really knows her stuff!

May Not be a Tidal Wave of Foreclosures

Its an age old question amongst real estate investors, entrepreneurs and really – all of human-kind. The Quality Quantity Conundrum. Where do you fall in the spectrum? You better have an answer to this question. Here’s why.

MORE MORE MORE = GOOD BETTER BEST?

Everywhere you look, there’s a quest for more, more, more. Bigger cars, bigger houses, bigger bank accounts, bigger boobs, bigger lips. You get the picture! I just gotta say it – what is it with these crazy woman who do this to themeselves? What is so lacking in their lives?

But I digress – let’s get back to real estate.

A DNA-level human quality tells us the more deals we make, the more successful we will be, but that’s a typical rookie-intermediate mindset and a common investor mistake.

A TALE OF FREE AND CLEAR

My good buddy Steve Cook likes to tell a story about three very well-known, successful and well-off Baltimore City Landlords who decide to take a 7-day trip to Europe. The first investor owns 1000 houses with bank financing, the second owns 150 houses with bank financing, and the 3rd owns 20 houses, free-and-clear. Round about the 5th day of the trip, one says, “Guys, I’m having such a good time – why don’t we stay another week.”

Can you guess which of the three made this comment? Can you guess how the other two responded?

Investor one with the 1000 houses, and investor two with the 150 houses, both rich guys each said, “No can do.”

Both their phones were ringing off the hook for the entire week. Tenant calls, management calls, vacancy issues, maintenance issues. You name it – the phone was ringin. With 1150 houses between them – each was sacked with issue after issue and each was tied to their respective business like a cinder blocks chained to their ankles!

Investor #3; Mr. Free and Clear, waived good-bye to his buddies as he alone stayed for the extra week!

I WANT IT ALL, CRAIG!

What if your competition is closing deals faster than the time it took for Kim Kardashian to file for divorce? Who cares! There’s one person and one goal you should be focused on – is you. Don’t obsess over how many deals you’re working. Seriously, this might be the best advice I could ever give you!

Here’s the deal. I’ve been there. I’ve lived the stress filled, anxiety ridden life of juggling 7-8 big rehab projects at a time. I know what its like to have several hungry lenders simultaneously looking for their monthly juice. I know what its like to manage a bunch of knuckle-head contractors. And let me tell ya, it ain’t fun!

When you’re working a ton of big deals at once, you don’t control the deals. They end up controlling you, and before you know it, your life and your time are no longer your own.

YOUR GOALS

I once did a poll in a room full of investors. I asked them, “Why did you get into real estate investing? What are your goals?”

Almost every one of them responded, “Freedom. I got into real estate investing for more freedom!”

Let me be clear, there is very little freedom in working more than 3-4 deals at a time. Especially when those deals are “rehab” deals. The key to quality of life, and to your precious freedom is quality deals NOT quantity deals. Those  investors who go for quantity are often the same who end up broke, divorced, and wondering how their kids grew up so darn fast.

Your business goals should never supersede your personal goals. The business MUST fit in to the personal. Never the opposite.

The internet is littered with Guru’s who claim to be doing 100′s of deals per year – and I know a lot of these guys. Most aren’t making nearly the money the claim to be making! Trust me on that!

It’s easy to be attracted to great deals – especially when you don’t have a firm grasp on what your end goals are, and that’s when the deals slowly start controlling you. You’ve got to go into every deal knowing precisely what you want to get out it, and your goals should be driving your decisions, not the appeal of taking down yet another deal.

Here’s an example;….say your short-term goal is to make money quickly. A few weeks later you come across a smoking hot rental where you know you can clear $500 a month after expenses. You then decide to buy the rental, which (as you well know) is a long-term investment. The decision to buy a rental completely contradicts your short-term goal for quick money, and now the deal has not only dictated your decision, but has also negated your original goal, and chances are you’re going end up with less money and less freedom.

The slide from Quality to Quantity is a slippery slope to an erosion of your freedom.

Remember, a quality deal is one that will contribute to the overall success and completion of your goals. It’s simple. If a deal won’t keep you on track and on your way to meeting your goals, it’s “talk to the hand time.” Stick to your plan, and invest your time, energy, and money on quality deals, and don’t worry about the competition. Trust me, they’ll be wondering why they have no life, while you seem to have it all.

 

 

Ok, so it may not be as exciting, titillating, and erotic as Fifty Shades of Grey, but the IRS Publication 590, a comprehensive guide to Individual Retirement Arrangements (released in December or 2011) covers new rules for 2011 and 2012. Bust out the whips and chains, ’cause here’s 103-sultry-pages of what’s new and good with the Publication 590 and IRS Updates for Your IRA.

There is no income limit for IRA contributions, at first glance, but don’t get too excited. If you want those but for these contributions to be deductible, however, there has to be limits, and those limits THANKFULLY increased in 2012.

What if My Job Covers My Retirement Plan?

If you’re fortunate enough to work for a company that covers your retirement plan, you should know that deductions for IRA contributions get phased out if your modified adjusted gross income (AGI) meets any of the following criteria:

• More than $92,000 but less than $112,000 for a married couple filing a joint return or a qualifying widow(er),
• More than $58,000 but less than $68,000 for a single individual or head of household, or
• Less than $10,000 for a married individual filing a separate return.

ROTH IRA

Now let’s talk about your Roth IRA. If you’re starting to look as old as Diamond David Lee Roth – guess what – you need a ROTH! For those who don’t have a Roth or need a refresher, a Roth is a special type of retirement plan that is typically tax-free, provided certain conditions are met. The tax law of the United States allows a tax reduction on a limited amount of saving for retirement. The Roth is different from other tax advantaged IRA’s in that the tax break is given on the money withdrawn during retirement, rather than on the money contributed. There are a few stipulations that can impact the amount you can contribute. If your AGI falls into any of these categories, be prepared for the modification.

• at least $173,000 and your filing status is married filing jointly or qualifying widow(er). You are disqualified from making any Roth IRA contribution if your modified AGI is $183,000 or more.
• at least $110,000 and your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2012. You are disqualified from making any Roth IRA contribution if your modified AGI is $125,000 or more.
• is more than -0- and your filing status is married filing separately, you lived with your spouse at any time during the year. You are disqualified from making any Roth IRA contribution if your modified AGI is $10,000 or more.

You can contribute to your  IRA anytime during 2012 or by the return filing due date (excluding time extensions).

There ya have it, kids. The 2012 IRS 590 Cliff’s Notes. Fifty Shades of Grey – pshhhh, who needs it.

 

 

I have often said that flipping houses is a roller coaster ride. Its not a job for the faint of heart. Recently I came up with a new analogy. If you want to learn How to Invest in Real Estate, how to, “flip the house,” as I say – you must first understand that flipping is like a shaky, wobbly, 3-legged chair. Its fragile, baby – so be careful how you sit.

Even though it seems every one and there mother is now investing in real estate (let’s face it the barrier to entry is pretty low), there are three critical variables to real estate success. Miss any one of the three and your little wobbly chair will fall over faster than Snookie after a night of partying down at the Jersey Shore.

Real estate investing is a serious business played with serious money. You owe it to yourself to make sure that you stand on solid footing before you venture into a deal. Wanna know how to get it right? Watch this video below.

(Shameless alert: THIS MIGHT BE MY BEST VIDEO EVER!)

Well, here’s another update on this fast moving house before and after; Rolling Thunder. My little version of Flip This House. In this 2.5 minute episode, I talk about what I think I do better than any other rehabber in the country – “sizzle with the steak.” Ever been to Ruth’s Chris steak house? You know when they bring that $40.00 steak to your table and its still sizzling? Ever wonder why they do that?

I’ll tell you why – BECAUSE IT COSTS $40 FRIGGIN’ DOLLARS! The sizzle is like that added bonus that makes you feel like your getting something really special.

Well, that’s how I do my rehabs. Lots of sizzle. And THAT is why my houses sell for more dollars and in less time than most other houses in the neighborhood.

Check out this video below where I show you what I’m doing with the basement.

S0 many stories lately on the next wave of foreclosures. Is the foreclosure dam ready to break? Maybe its wishing thinking, maybe I’m just bored as I twiddle my thumbs through one rehab at a time – but I oh, how I dream of riding that next sudsy wave. Frank and Brian over at ThinkBigWorkSmall.com are all over this story in a wildly entertaining way that only they can report.

What do you think? Is the foreclosure dam ready to break?

How does 1.6 to 8 MILLION foreclosures sound to you? Tasty, huh?

Watch below. These guys are my heroes!

Crappy, deadbeat tenants. I cringe at the thought of them. They generally don’t give a rat’s ass about paying rent, and they treat your property like a port-a-potty…and that’s just the tip of the iceberg. In short, bad tenants can make you wish you never invested in a rental property…ever. Landlord and tenancy problems have been around since before Jesus – so you would think we’d get smarter. But those tenants just keep getting smarter to0!

Why not fight back to minimize the financial firestorm they can cause? Here are some tips to help you take action, so put the boxing gloves on, Iron Mike, and sing it with me…”hit me with your best shot, come on and hit me with best shot….fire awaaaaaaaaay!” (yes, a Pat Benatar reference, finally) And with that…

Let’s get ready to Rumblllllllllllllllle!

The Uppercut: A Solid Tenant Lease

Anticipate future problems like cleanliness, breakage, property maintenance, late payments, and even criminal behavior with a rock solid tenant lease agreement, and be sure the tenant signs it before he/she moves in. Lease agreements vary by state, so make sure you’re using the right lease. You can buy lease agreements online, sometimes on your state’s website – but I find that the best property managers in town usually have the best leases!

The Left Jab: Abide by Disclosure Laws

Bad tenants also tend to be cry babies, (and wanna be attorneys) running to Legal Aid and whining about how their landlord wants, them to fix the broken door, or wants to throw them out on the street. Cry me a friggin’ river. First thing the lawyer will do is check to make sure you’re lease agreement is legit and complete with all the necessary disclosures. Options for complying with these laws include reading your state’s landlord-tenant code directly, hiring a real estate attorney to advise you, or using an online landlord forms system that automatically fills in all of the required forms for your state. And by the by – you better know the lead laws in your state as well as the new RRP law recently enacted by the EPA.

The Right Hook: Offer the Tenant a Vacate Deal

When its time to get ride of a problem tenant, you can make it easy or you can make it hard. As temping as it may be to open up that fresh can of whoopass, try a little honey; negotiating with your tenant first by offering them a vacate deal. Give them a week to hightail it out of your property with all of their crap, and in return, you won’t take them to court. If they’re smart, they’ll play nice. But let’s face it, you’re probably  not dealing with the finest and most upstanding citizen, so be prepared to file the eviction, which will leave a nice big blemish on their credit report, and if they broke the lease could also leave them without their golden ticket otherwise known as the Section 8 voucher! Yes, that’s right – you can petition Section 8 to revoke the tenant’s voucher if for whatever reason the tenant breaks the lease!

The Knockout: Comply with Local Eviction Laws

It’s a simple as this; you have to comply with your state’s eviction procedures if you want your tenant out for good. How can you be sure you comply? Again, you have options. Hire a real estate attorney who specializes in evictions (and be prepared to have deep pockets). Hire an eviction specialist for a bit less cash, or DIY baby. Just mail the appropriate notices to the tenant, and file an eviction form with the local landlord/tenant court.

Hopefully, you’ll be one of the rare few who only get responsible, courteous, and intelligent tenants. (I think I just tinkled myself from laughing so hard.) Good tenants, every time? Yeah, and there go the pigs flying outta by anus.

Disclaimer: The boxing references used in this post are merely metaphors. I do not support or encourage violence. (sigh….jees)

What am I missing here? Give me some COMMENTS!!!

Congratulations! You’re workin’ your first deal, and that means you’re really doing it! You’re doing more than 90% of all supposed real estate investors out there! That’s awesome, really it is. But my guess is (if you’re like most of us), you’re probably feeling the first time deal jitters along with sinking feelings of doubt and confusion. The good news is, that’s normal and frankly, it never goes away. The even better news is, there’s a way to diminish that dreadful doubt.

RISK MITIGATION

Put on your hard hat, because you’re undoubtedly going to run into two major roadblocks while you’re working your first deal:

• Risk – At some point early on, you’re going to ask yourself if the risk is worth the anxiety you’re feeling, which will make you second guess the deal altogether. You need to learn how to identify all the risk variables – then reduce them to a “move-forward” level.
• Rookie Questions – You’re new to this game, so you’re going to have questions like “how do I know if a deal is a good one, what kind of insurance do I need, how do I find the money, how do I manage contractors, what’s a scope of work? … all of which will (unfortunately) fuel your anxiety.

Your first plan of attack is to ask for help. Look, if you’re going this game alone, I don’t care how good the deal is or how much money you have – you are on a one way bus ride to Failure-ville without the help of someone like me who has been at this for 8 years. Swallow your pride, put the Macho-Man attitude aside, Randy Savage, and talk to someone who’s experienced and knowledgeable. Doing so will help you reduce your “deal risk”, so you can move forward with confidence.

Here are six tried and true techniques for you to put to the test.

 

EDUCATION: ITS ALL ABOUT RISK REDUCTION

6 Tips for Success:

1. EDUCATION: Do I need to slap you upside the head, or do you get that a thorough education is your best defense and the BEST tool to make you feel most at ease with the deal process, especially when it comes to the rules, laws, and daily struggles of real estate investing. So get smart…and fast.

2. FINANCIAL ANALYSIS: This is a no-brainer; you must know your profit BEFORE you make an offer. How the heck else can you feel confident in investing if you don’t know where you stand financially. Always remember, you make money when you buy the deal not when you sell it!

3. DUE DILLIGENCE: Do the due, baby. By that I mean, cross those “t’s” and dot those “i’s”, and in short…cover your ass. Know the neighborhood, know the comps, know your precise rehab costs. If you’re a landlord, speak with other nearby landlords to see how much they are getting for rents. Find out how long it takes them to fill vacancies. Find out if the area is subsidy-friendly, or if vouchered tenants avoid the neighborhood like the plague. Know what your competition is doing in the area!

4. START SMALL: Lemme put it to you this way – if you’re a 40 year old virgin, do you set your sights on a Carmen Electra type for your first time? Hell no!  She’d laugh in your face, and walk away feeling less than satisfied muttering to herself “even my dismal acting career lasted longer than that!” Not a good plan. Moral of the story is – start small, and make sure your first experience is gonna be a winner. I can not tell you how many investors start out with marginal deals, lose money – then never invest again because they are soured by their first deal. Newbies are eager buyers. This ain’t Monopoly money we’re playing with so make sure you’re never an eager buyer.

5. CONTINGENCY PLANNING: Bottom line – always have a plan “B”. Be proactive, and ask experienced wheelers and dealers what potential problems to expect. Prepare for the worst, and you’ll be pleasantly surprised if things go according to plan (but don’t hold your breath). As a rehabber, I have never gone into a property and said, “if I can’t sell this house, I’ll just rent it.” That’s not a contingency plan. My contingency plan is the FAT FAT cushion of NET profit I have in the deal. So, if I have trouble selling the house or if I bust the budget in my rehab, my contingency plan is – I make $30,000 instead of $50,000. Yeah – its a pretty good life.

6. CONTRACTS & AGREEMENTS: This ties into the “cover you ass” plan mentioned above. Get letters of intent, document everything, and establish contracts between you and all the people you work with. Make a written plan for your success – and that plan must include the blueprint or rules of the road between you and your contractors. This is crucial for any business, especially real estate. Having contracts and agreements that use those rules to your advantage is a great way to manage your risk. Keep in mind, however, that even if a contract is signed, it’s absolutely not written in stone. But if you keep the contract contents within the boundaries of the law (and you strive to always do what’s right), you can feel good about using these as a stress reduction tool.

These six tips should give you a solid jumping off point to help reduce your first time deal risk and anxiety. Now you’re ready to be unleashed into the real estate deal makin’ biz as an educated, experienced, and fearless real estate professional. And with that, I say…RELEASE THE KRAKEN! (I’ve always wanted to write that.)

C’MON….let me hear your comments!

Starting a business in real estate – or any type of business, for that matter, ain’t easy. It may seem that the more you plan, the more goals you set, and the more you fine tune your plan, the better off you’ll be. Eeeeehhhh (wrong answer buzzer). Think again. The key is to keep it simple. Don’t get your panties all in a bunch worrying about every detail. KISS Keep it Simple Stupid means to simplify your plans and goals, and stick to them.  Whether you’re looking for success in the real estate biz, trying to lose a bunch of weight, or just trying to achieve success however you define it – you need to listen-up.

Reality Check 1, Check 2…

You told yourself you’d lose 20 lbs, and ya didn’t. You said you’d be retired by 40, and that’s just hilarious. You promised your wife you’d stop watching sports with your hand 1/2 way down your pants (but it’s so warm and cozy down there). None of it has happened. So maybe it’s time to face the facts. Realistic goal setting isn’t your forte, so perhaps it’s time to have a come to Jesus with yourself. Its time for a reality check. Pour yourself a cold one, kick your feet up, look in the mirror, and ask yourself:

• is our list of goals longer than OJ’s criminal record?
• do you wake up in a panic and rush to get things done then say “if I just had 4 more hours in the day”?
• have you stopped enjoying what you do?
• do you feel scattered and unable to finish one project at a time?
• do you find that you’re consistently not meeting your goals?

Paralysis by Analysis

Look, its no secret that I’m a fat guy. For years I’ve lived under the guiding theory that I’m just big-boned. Facing up to the cold hard facts of “fatness” a few times in my life, my belt-size has gone up & down more times than Luther Vandross’. Who did ya like better? I know I loved me some fat, sweaty Lutha’. Right now, I’m on a quest to lose 60 pounds. This beginning period is just like starting a new real estate investing business or any business for that matter.

Suppose I spent my time and action getting prepared for weight loss. Suppose my days were spent going to Dicks to make sure I has the right work-out gear and testing out  the perfect running shoe. Suppose I spent a few weeks reading inspirational books on weight loss. Suppose I then spent another few weeks putting together meal plans and sorting the ingredients in those plans down to the aisle locations in the grocery store so that I could optimise my time when shopping.

Have a lost a pound yet, people? Have a lost a whole bunch of time? In the case above I was completely stricken with Paralysis by Analysis. And trust me, I see this all the time with new and experienced investors and entrepreneurs!

Lots of Action vs. Money Making Results

If any of this rings true with you. If you’re more into making business cards, and thinking up a killer name for your LLC for real estate and website, you ain’t making money! If you’re more into making slogans and T-shirts, you are making action, yet these actions are not producing money making results! You’re spending money and wasting time!

Tear up the old objective list.  Burn it, use it as toilet paper, don’t even look at it. Run! Create a realistic list of short-term goals that will lead to long-term success. Set a big goal (like me losing 60 lbs), then make 5 small goals that lead directly to the big goal. Once you hit those 5 goals…pick 5 more.

If you want to make $1 million bucks flipping  houses, making a website and an LLC is the least of your worries. Trust me with this! If I want to lose 60 lbs, a pair of running shoes is the very least of my worries when I have a dusty pair already in the closet.

How to Be a Smart Investor

Here’s the difference between you and “them” (or at least it soon will be, right?) – “they” are always reinventing the wheel, back-tracking, planning and re-planning, and just flat out spinning their wheels. Point is, the average entrepreneur is always wondering “what’s the next shiny object that’s gonna catch my eye?”  The average investor is constantly changing his plans based on what someone else is doing. They don’t work with blind confidence and laser-like focus.

But that won’t be you. Ohhhhhhh no, that won’t be you! You want to know how to be a smart investor! You’ve got the eye of the tiger, baby, and you’re gonna figure out how to cover all your bases…and then some…by doing the least amount of work. How is this possible, you ask? Narrow down your objectives, break your big goal into ACTIONABLE chunks of little goals that are absolutely necessary for you to reach your big goal. Eliminate the fluff, don’t spin your wheels on rabbit trails that lead to no money, and get to doing ONLY those important things that lead to directly to your goal.

 

Here’s the 2nd installment in my latest installment of Flip This House, Craig Fuhr style. Watch as I take you on a little before and after trip through Rolling Thunder. In this short video I show you how we made just one little change to make the place feel more open and airy, and modern. Look, if you’re dealing with houses that were built more than 20 years ago, trust old Cousin Craig – those crappy places need a face life more than Robert Redford. And I ain’t talking a little botox to fill in the creases…I’m talking “bust out the blade – we’re going in heavy.”

Framing is almost done. This kitchen and 1st floor is gonna be tighter than a tick!