Make Huge Money in Real Estate in 2009

27 Dec

3 Sure-Fire Methods to Make 2009 Your Best Year Ever!

Part I

Get Rich in Real Estate

2009 will be the greatest time in our history to amass a fortune that can set up our families for years to come.  I believe this, do you?

Your attitude about the current market condition is the cornerstone of your success.  You can’t build wealth with a mind full of fear that is influenced by every negative news article that is read. It’s paralyzing and unproductive! You must convince yourself that now is the time

Once you have yourself convinced, it’s now time to take massive action. There are 2 ways I use to really go after something I want.

1. By reading everything I can get my hands on about the specific subject, I will buy every book I can on the subject, search every article online and ask as many successful people in the field as I can. I download every audio book I can find and listen to them constantly in my car.  I rarely listen to music.

2. Dive in by just doing it, make offers on houses, look for properties, talk to realtors, talk to appraisers, get pre qualified for a loan. Just Do It, don’t hesitate or wait for #1 to be complete.  You will learn the most by getting in the game, not sitting on the sidelines.

So here are my 3 sure-fire methods to making 2009 your best year ever

I’ve done or am doing each and every method I am about to share with you, this is not easy or a get rich quick scheme, this takes hard work and focus and a never give up attitude. If you have any questions please email me at: SeanTerry@cox.net.

Every investor is in a different position in there lives or careers, some investor have experience and others are just beginners.  Some investor have good credit and cash and others do not.  I was one of those investors that was a beginner and had terrible credit and no cash.  There is  a huge opportunity for an investor regardless of their situation.  Every obstacle can be overcome, if you want it bad enough.  Believe me, I’ve seen them all.

Lets get started, Here are the 3 Methods:

1. Flipping Distress Properties (even in this market)
2. Fix and Flip
3. Buy Cash Flow Properties and Hold

Flipping Distressed Properties

Here are the 2 best sources of properties to flip, of courses there are many more, but I prefer these.

1. Pre-Forclosure
2. Bank Owned Properties

Pre-Forclosure

This was how I got started in my full time real estate investing career.  My credit was shot and I had little to no cash. (I will share my story in a later post, make sure you subscribe for free updates).  Because of the current market, a lot of the distressed properties owe more on the mortgage than the property is worth.  I don’t suggest the short sale route, it’s to much of  a pain.

The fist step is to find buy and hold or fix and flip investors to sell the properties to, you do this by joining your local real estate investing club and network with local investors in your area.  There are a lot of people looking for good wholesale deals.  Also you can look in the local newspaper for investors that are buying houses. Just ask them what their criteria is for buying homes and they will tell you.

Now you need to determine the value after the property is fixed up.  Learn how by reading this post – How To Value A Property.  Make sure you know the investors criteria that your going to sell the property to, or just offer 50% of the projected value of the subject property.

1. Get a list of Pre-Forclosure/Notice of Trustee Sales in your area, you would be better off finding a local data company that delivers this type of information. I don’t like using the bigger online companies because the data is not fresh enough. We use Information Market here in Phoenix.  Make sure the data comes in excel format.
2. Do a sort in excel using these criterias:
A. Column A: Deed Date 2000 and Below
B. Column B: Trustee Sale Date
3. Now, pull all the deed dates form 2000 and below.  This will reduce the amount of data you have to work with and will also give you properties with potential equity. The sale dates will let you know what properties will be coming to sale in the next 30 days, these are the best deals because the clock is ticking and a solution hasn’t been found yet.
4. There hundreds of ways to market to these properties but I found that I like these two the best
A. Send a post card:  Make sure you tell them what’s in it for them and list your benefits.  Mail to the list 3 times per month.
B. Knock on Doors: This is by far the hardest, but extremely effective way to get great deals. I have made hundreds of thousands of dollars knocking on doors. 
5. Once you have someone ready to go, you then want to write up a contract.
6. When you write your contract make sure you add in “subject to investors approval” this will allow you to cancel escrow if you can’t line up a buyer.
7. Now call or email your investors that you met at the real estate club and offer them the property at $15k+ higher than your contract price. Make sure you have a lot of pictures and details about the property. 
8. Now that you have an interested investor in your property you need to execute  purchase contract with the buyer and open escrow at the same title company or attorney that is handling the 1st escrow.  Make sure you put in the contract “subject to marketable title”. This will allow you to back away from the contract if something goes wrong with the 1st escrow.  Also ask for a $5K non-refund able earnest money deposit.
9. The title company or attorney will close your transaction and then your investors minutes after resulting in a nice profit.  This is called a “Double Escrow

Here is a check from a flip I did from on a house I knock on several years back.

Check8-03

Bank Owned Homes

Flipping bank owned homes is a little more difficult these days, the banks have stop allowing a “Double Escrow”.  Now before you get started you need to line up a hard money lender, you can easily find several at  the local real estate investment clubs, they are asset based lenders that don’t check credit, they strictly lend off the property.  The terms are roughly 18% interest no points with a 6 month term.  They most likely require 10%-15% down payment.

Flipping Bank Owned Homes

1. Search banks owned properties using MLS or have a realtor assist you.  Look for the cheapest homes in the area you are focusing on.
2. Now you need to determine the value after the property is fixed up.  Learn how by reading this post – How To Value A Property. Make sure you know the investors criteria that your going to sell the property to, or just bid 50% of the projected value.
3. Submit at lease 10 offers on 10 different homes.  Using these terms:
A. $1K Earnest Money
B. Cash Offer
C. 10 Day inspection Period.
4. Once your offer is accepted, call or email your investors that you met at the real estate club and offer them the property at $15k+ higher than your accepted offer. Make sure you have a lot of pictures and details about the property.  Most listing agents are using the lock boxes with the codes, ask the listing realtor for the code so you can have it available for an investor that would like to view the property.
5. Now that you have an interested investor in your property you need to execute  purchase contract with the buyer and open escrow at the same title company or attorney that is handling the 1st escrow.  Make sure you put on the contract “subject to marketable title”. This will allow you to back away from the contract if something goes wrong with your contract with the bank.  Also ask for a $5K non-refund able earnest money deposit.
6. Since the banks will not allow a double escrow anymore, you will have to close on the property using your hard money contact.  I know this is a little scary because you are banking on your investor buying the property, but if you get a $5k earnest money deposit that is non refundable it reduces that risk of him canceling escrow.  Talk to your hard money lender and he will guide you through his process of closing the 1st escrow.
7. The title company or attorney will close your transaction and then your investors several hours later resulting in a nice profit.

I know this sounds complex but it’s really not, once you have successfully completed your first transaction than you will realize it’s not rocket science.

Remember this, Never Never Give Up!!!  I hate when wimpy people come to me and say, “I tried this and it’s doesn’t work” That’s bull pucky, as my father in-law would say, of course it works.  The questions  is did THEY work.  I have made allot of money using these methods and so can you.   Just be relentless and don’t let excuses stop you from reaching your dreams!

Part II will be released shortly, stay tuned

Learn how to Buy Cash Flow Properties for Only $7,500 Total Out of Pocket!

Happy Investing

 

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25 Responses to “Make Huge Money in Real Estate in 2009”

  1. Thomas Bartke 01. Jan, 2009 at 10:28 am #

    Hi Sean: Excellent posts – I commend you for taking the time to maintain this great blog! I might add that funds for double closings are available at much lower overall costs than hard money if you use "transactional funding". http://SellerFunding.biz/blog

  2. Sean Terry 06. Jan, 2009 at 1:27 am #

    Thanks for the comment SoCalGal, please read the section about "Pre-Forclosure" you will see that it is very possible to make huge money with no credit or cash, that $29,139 check above is a result of this method. It cost me no money out of pocket and my credit was not pulled. The "Strategy" is called a "Double Escrow" it's been around since 1971 and is very profitable. I must say it is harder today to do these double escrows but we buy properties from wholesalers all the time who using this method. Learn more about about this type of flip, I think you will find it interesting as I only touched the surface.

  3. SoCalGal 06. Jan, 2009 at 12:11 pm #

    I disagree with Sean that "anyone can buy real estate with no credit and no money." It's not a negative attitude that I speak: it's a fact. If you have a strategy for someone who, like yourself, has "shot credit and no money," please tell us what it is.

  4. Bob Norton 09. Jan, 2009 at 5:53 am #

    Nice blog. I'm selling stuff turn-key in Michigan but its kind of a hassle. I'd like to have more buyers using their investment accounts and pay cash of line up some longer term private money. What type of success are you having selling turn-key rentals.

    Thanks,

  5. SoCalGal 09. Jan, 2009 at 6:25 am #

    Yes, I see the check. I'd like to hear the details. Who was the lender? What was the structure of the deal? How did the buyer get the money to (a) purchase the property and (b) fix up the property? What was the purchase price? What was the sales price? How did the seller overcome seller title seasoning issues? Etc.

  6. Sean Terry 09. Jan, 2009 at 9:22 pm #

    Thanks for the comment SoCalGal, here are the answers to your questions:
    1. Who was the lender? I had no lender because I just got the property under contract with a long close. The buyer used cash to purchase the property from me.
    2. What was the structure of the deal? I got the property under contract for ~$44K and sold the property to the buyer using a double escrow for ~$75K.
    3. How did the buyer get the money? He had cash
    4. How did the buyer fix up the property? He was a general contractor and like fixing up houses for a side business.
    5. What was the purchase price? Mine was~$44K
    6. What was the sales price? His price was ~$75K
    7. How did the seller overcome seller title seasoning issues? He didn’t because he held on to the property for cash flow.

    There is only a seasoning issue if the borrower is requesting cash out, there is no seasoning issue if it’s just a rate and term.

    I hope this helps

  7. Sean Terry 09. Jan, 2009 at 9:25 pm #

    We are having good success, it’s been tougher with the Fannnie guideline change but we always adapt and overcome. Send me a link to your site and I will place it on our blog roll to help you out with traffic.

    Thanks,

  8. Sky Minor 10. Jan, 2009 at 8:13 am #

    Excellent job. Are you ordering NOD lists from your title company?

  9. Sean Terry 10. Jan, 2009 at 8:08 am #

    We use Information Market, you can check to see if they do states outside of Arizona. I like your site, good job.

  10. glenn 09. Mar, 2009 at 1:20 pm #

    notify me of follow up comments

  11. glenn 09. Mar, 2009 at 1:21 pm #

    put me on list

  12. Inside-Real-Estate 25. Mar, 2009 at 1:51 pm #

    The fact that opportunists are looking into investing in real estate again is a good indication to me that the market is starting to recover. Everyone cross your fingers.

  13. Tim Mayfield 23. Apr, 2009 at 11:18 pm #

    As a head football coach at a local high school here in Phoenix, it is extremely important to build a “WINNING” team at all levels. I’m closing on my 1st deal with Fortress Investments and let me tell you the service/support and the actual product (house w/tenant) has been incredible. Can’t wait for this refinance to finish and go through so I acquire my 2nd property from Fortress Investments. Thanks Sean. Here’s to a long and happy relationship! You and Mike really do a great job!

  14. Sean Terry 26. Apr, 2009 at 10:56 pm #

    Thanks Tim, you’ve been great to work with. We’ll keep the deal coming!!!

  15. Javier Mendoza 26. Sep, 2009 at 9:49 pm #

    Hi Sean: Excellent posts – I tip my hat to you guys for taking the time to write and maintain this great blog!
    I am just getting started in real estate investing and I find your blog extremely helpful, more so than the program I paid thousands for..

    Your story is of great inspiration to me, I am currently a real estate appraiser in norther California, curently working of building my power team…I am fascinated by the possibilities in real estate and look forward to a finacial free future…

    Thank you very much for doing what you do…

    Wish you the best of luck

    Sincerely,
    javi mendoza

  16. Ursula 04. Jan, 2010 at 9:26 pm #

    Hey Terry, do you have a title company in mind that will do double closings or simultaneous closings throughout the country? If so, please share that information. Thanks!

  17. HR Interview 09. Jan, 2010 at 7:13 am #

    Nice article but now that 2009 has passed can you post an update on how did it go for you in that year. i am very curious to find out.

  18. Portland Real Estate 01. Jun, 2010 at 8:05 am #

    What a good break down. Let me know if you ever want to guest blog on my website.

    Cheers!

  19. feliz 06. Jun, 2010 at 6:59 am #

    I just couldnt leave your website before saying that I really enjoyed the quality information you offer to your visitors… Will be back often to check on the new stuff you post!

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  21. Adam 29. Jul, 2010 at 12:09 am #

    Very interesting .. thanks you

  22. Omar Johnson 06. Aug, 2010 at 7:58 pm #

    Great post! Creative real estate investing will always boil down to this: Your ability to find and located motivated sellers. Wouldn’t you agree?

  23. steven 10. Mar, 2011 at 11:14 pm #

    Real Estate business are in boom nowadays. Property prices are touching the sky.

  24. boat parts 28. Apr, 2011 at 7:03 am #

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  25. Graphic Web Design Perth 02. May, 2011 at 11:54 am #

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