The Urly Bird

Why Not To Deal With A Real Estate Consultant

Real estate professionals should be cautious about who they deal with to buy and sell property because the greatest barrier to closing a transaction is using a weak intermediary that does not get deals done, are time wasters and commit fraud.

Many real estate consultants require buyers to forfeit private banking information. Releasing private banking information can lead to the circulation of your information to a network of consultants to use as bait to attract a seller. On the other hand, I know real estate experts that have closed deals by getting bank statements from buyers. 

Make sure who you commission to get your deal done is legitimate. 

Red flags to watch out for: 

• when they say they buy anything, anywhere, in any condition,
• have people “on the ground”,
• use the term “unlimited”, such as, unlimited supply of properties or unlimited budget,
• know powerful and rich people, and
• a combination of all of the above

These red flags do not mean that fraud is being committed, but that extra due diligence should be taken.

You are in the driver’s seat if you are the one with property or cash. Some real estate consultants mostly act as a broker. This means they may use any of the red flags to gain access to you. Go direct to the buyer or seller if you are a professional that can negotiate your own transaction. 

Some real estate consultants are not licensed and this might be illegal in some jurisdictions. Licensed people have a fiduciary duty to represent their client’s interests. Some real estate consultants might not know their clients as well as licensed real estate agents because they aren’t trained to know their client and this results in long chains of brokers called daisy chains between buyers and sellers. Daisy chains happen because everyone believes that they can earn a commission, go on the word of the consultant that brought them the deal without verifying the identity of the buyer or seller.

Benefits Of Hiring A Real Estate Consultant

Not all real estate consults result in long daisy chains or fraud and many provide valuable services to clients.

There are many large credible real estate consultants. Credible real estate consultants are good when they provide strategic marketing, internal human resources, and information technology advice and not only focus on connecting you to buyers and sellers. It’s great when real estate consultants have a license because then you know that they can provide both functions.

How Do I Go Directly To The Buyer Or Seller?

You need to build relationships on social media and have in person meetings with large buyers and sellers. You can also do direct mail for sellers, real estate investor association meetups and web landing pages for buyers.

You can see who is the buyer or seller on Access The Flock Real Estate Marketplace. Real estate professionals are also rated by each other using the Urly Bird Grade vetting system.

What has been your experience with dealing with or being a real estate consultant?

Follow on Facebook, Twitter, Google+, YouTUBE, LinkedIn Group, LinkedIn Personal.

Accounting for capital expenditures saves you money because it delays tax payments.

What is a capital expenditure?

Capital expenditures occur when you:

Spread the cost of the expenditure (the fixed cost) over the useful life of the asset.

 -According to Investopedia

Accounting For CapEx

How can you spread the cost of something over its useful life? You do this by accounting for depreciation of capital expenditures. Depreciation essentially accounts for the wear and tear of property as an expense each year, which reduces taxable income on your income statement and lowers your taxes. There is cash based accounting and double entry accounting. Double entry accounting is good for you because you get to reduce your expenses on paper each year paying less tax. In real estate, I recommend using double entry accounting - and you might have to legally in your jurisdiction - because of tax laws.  

The advantage of budgeting for capital expenditures is that you can invest the money that you save from paying taxes and earn a return elsewhere until it comes time to sell the property. 

The downside of accounting for capex is that you can get shocked with a tax bill when you sell your property and there is a difference between the price and the depreciation. Plan for taxes when you are going to sell property. You can do this by knowing the types of capital expenditures for apartment buildings and houses.

Types of Capital Expenditures For Apartment Buildings and Houses

Depreciating a capital expenditure is also called capitalization. This is a good chart for budgeting for various capital expenditures.

• Interest payments can be capitalized over the life of a building. 
• Since HVAC systems can last 15-20 years and are equipment, they can be capitalized.
• Washer and dryers can be capitalized.
• Improvements such as electrical wiring, plumbing and lighting can be capitalized.

Types of Capital Expenditures For Apartment Buildings

• Elevators, cleaning equipment, parking lots, and appliances are examples of capital expenditures that differ from houses.

Tax jurisdictions treat taxes when you sell due to capex differently. There are strategies to delay paying taxes when you sell in some jurisdictions like buying more property with funds from a recent sale.

I highly recommend having a tax professional on your team so that you know what can be capitalized and what can’t and to plan for taxes when selling a property.

Do capital expenditures make your deal worth doing?

Follow on Facebook, Twitter, Google+, YouTUBE, LinkedIn Group, LinkedIn Personal.

You can make money if you have the right buyer or seller that someone is looking for. And it’s hard to build a network of buyers and sellers. That’s why so many of you are doing lunches looking for the right fit to earn your fee and travel North America to put deals together and build trust with people. Sometimes, focusing on a region. It takes money to find a buyer or seller. That’s why you come to me to see if I have a buyer or seller that fits.

You are susceptible to falling for pranksters. There are high costs associated with finding buyers and sellers and networking. Not everyone has money to be in real estate but you have high hopes and dreams. Can you spot a fake buyer or seller? Try to spot who’s fake within the first five minutes on the phone. One real estate coach can do that. I let you decide who’s real after I connect you two on The Flock. Hopefully you will give feedback about the person that you dealt with using the marketplace rating system - The Urly Bird grade. This will filter out fake deals when you use the real estate marketplace in the future. Save yourself years closing the transaction by spotting a fake within the first five minutes of talking to them over the phone. You need to have a network of real buyers and sellers.

It takes many years to build a well connected rolodex of real estate professionals that you can trade real estate with. It is really valuable. It can be hard and expensive to grow your network of real estate professionals from which you can deal with. Everyone wants access to buyers and sellers. You spend lots of money on direct mail, travel, internet ads, and developing ongoing content for your websites which drive traffic successfully.

Some things that you can do to get started as cheaply as possible is start your own blog and focus on SEO, if you haven’t already. Building your network will be the best investment that you will ever make in real estate and it can take a couple of decades to achieve this - if you aren’t already a big player - and even then it’s not always easy to find a buyer or seller.

What has been successful for you when building your database of real estate buyers and sellers?

Follow on Facebook, Twitter, Google+, YouTUBE, LinkedIn Group, LinkedIn Personal.

There are lots of ways that you can try to get motivated sellers contact information - and other information when you have contacted them and are negotiating the deal.

Some work, and some unfortunately might not.

The simplest way to get a list of motivated sellers is to purchase a list that an online vendor sells from county records - if public in your area - from taxes or late payments on a mortgage. Sometimes these lists go stale and are not updated, which is why it is important to use a service that constantly updates it’s sellers.

Lists might not be the best source of leads because everyone can purchase them from vendors. Saying that though, I found foreclosure lists to be successful when I was sending direct mail.

Doing regular direct mail to everyone in a neighbourhood might not allow you to contact all motivated sellers but it will give you direct access presumably to mostly homeowners, which is ultimately what you want to negotiate a deal and close a transaction. I know one successful real estate coach relies on doing direct mail drops because he is successful at them - and even travels across North America doing deals with this approach.

The next approach that I can think of that many lead generators rely on is SEO or - search engine optimization - and capture motivated seller leads on your website. This takes time but gives you access to generally highly motivated sellers on a consistent basis.

One approach that I saw online, is to go to craigslist and contact listings. I’m assuming that this approach might not work as well because you need it to scale to many motivated sellers and preferably in a location.

Access The Flock Real Estate Marketplace has motivated sellers information that you can access by bringing buyers to the marketplace.

How To Get Motivated Sellers Information When Negotiating A Real Estate Deal

Assuming that you now have a seller, how do you get access to their property information if it wasn’t included on the method that you used to find them?

Sometimes real estate professionals keep this information confidential because they don’t have the seller under contract. I heard one real estate professional put a deal together by bringing his buyer’s proof of funds, and the list of the corporations shareholders to the seller and that unlocked all of the property information for due diligence. I think if you are doing the type of deals that require this it’s important to have your fee held in escrow from the buyer and a master fee agreement - just in case you get cut out of the deal.

What have you done to be successful at getting motivated sellers information?

Follow on Facebook, Twitter, Google+, YouTUBE, LinkedIn Group, LinkedIn Personal.

This Ohio house buyer has $100,000 to spend on:

• multi-family duplexes
• single family residences, and
• apartment buildings

Access this cash buyer here.

Hurry! Quick! Run! Get your real estate! There are deals!

Well, maybe.

According to the recent Brexit it’s forecasted on many news channels and blogs that North American real estate prices could increase over the coming years as a result of the Brexit!

Well, they forecasted that London offices could see a decline of 20% over the next couple of years and I am assuming that it is all relative - that money will flow internationally.

But what else is driving the flow to increase prices from the Brexit?

Because of the market “turmoil” it is likely that US interest rates will stay lower for longer making US real estate more profitable as mentioned here. Investors will benefit from a larger spread from mortgage payments and rent creating cashflow - as well as REITs that are investing in these properties in the US.

By appearing or being more stable than the London real estate market, North American real estate could seem more attractive - relatively.

I said in a previous blog post that foreign Chinese investors like US real estate because they see them as stable investment vehicles - well real estate.

This article says that the US will be considered a safe haven. And that the bigger markets like New York, Miami, Los Angeles, and San Francisco will likely be bought first before buying or looking towards smaller markets.

The Brexit could have further and other negative consequences for the global economy in the long run.

What do you think is going to happen to real estate prices globally as a result of the Brexit?

Follow on Facebook, Twitter, Google+, YouTUBE, LinkedIn Group, LinkedIn Personal.

What’s the point of building a buyers list if you don’t have a sellers list?

I think if you are going to make money getting in the middle of buyers and sellers it’s good to have a list of both.

You can get a sellers list marketing in your area with direct mail, bandit signs - if they are legal - billboards, blogs on your website and landing pages.

But, let’s focus on the cash buyers list - in a specific location.

You can use public records or software that shows buyers that have already bought in the area - but that doesn’t show buyers that have cash NOW! Though, you can look for owners that are corporations because they may buy again and do it professionally - like a REIT.

The easiest way to get a list of current cash buyers is to build a landing page on your website and pay for Facebook ads that target that location - make sure that the keywords that you are paying for on your landing page match the keywords that are in your ads such as: “Buy Houses in …”. Some real estate professionals have spent $50,000 in Facebook Ads building their cash buyers list in a location!

I’ve also heard that looking for “We buy houses” ads in Craigslist is a great way to find buyers - but I don’t know.

It’s important to note that searchers use “asset type location” and “location asset type” when searching for your property that you are selling - if you are going to rank in Google.

There is an idea that if you focus on an area you can do better because there is a higher likelihood of a transaction happening.

Let’s see what other people have to say:

There is a debate about whether to have a buyers list of 400 cash buyers before having a seller.

My first deal I had zero buyers and a list of foreclosures. I contacted one seller from the foreclosure list and they wanted to stay in their home - and we needed to find a buyer that would do a rent-to-own as a solution for the seller to stay in their home. So we had a seller. 

The deals attract the buyers.

Many of you know this and that’s why you share your deals for sale on social media sites like in Facebook Groups - because they attract buyers. Secret folks: sometimes those deals aren’t even real - they’re just intentioned to get access to your buyers. So you’ve got to be careful with that one.

But yes, having a property under contract - that is a good deal - does attract cash buyers and might even attract more than one cash buyer whom you can build long term relationships with - ideally!

This is my real estate marketplace’s cash buyers list. 

I got most of those buyers because I had deals that they were interested in on my website.

You are free to access these cash buyers by bringing a seller to the real estate marketplace.

What have you done to grow your list of cash buyers?

Follow on Facebook, Twitter, Google+, YouTUBE, LinkedIn Group, LinkedIn Personal.

You want to make money in real estate but don’t quite know how, don’t have the money, credit, connections, experience. Well you are visiting the same marketplace where there are experienced REITs doing the same very thing that you are trying to do but you two aren’t connected yet to make money. You want more deals, more transactions and more money or are starting out with real estate so that you can get financially free or provide a return to your investors through flips, wholesaling, and buy and holds. There are lots of strategies.

The problem is that you aren’t connected with the right person for right now - the access that you need - to make money from real estate.

Another problem that you might be having is that you don’t know where to start. You don’t have access to a buyer, seller or property and don’t have the marketing system in place to get those assets that will help you make money with real estate. You don’t want to only rely on the MLS because you want to get direct access to the best - most competitive deals - that aren’t always listed! You also don’t want to rely on services that provide access to people that have already done transactions and may not be serious about transacting right now! Another problem that you are facing - if you have some experience - is that you can’t always trust the person that you are transacting or doing a deal with over the internet.

Access The Flock Real Estate Marketplace strives to provide you with access to the right seller or buyer algorithmically. There are already buyers and sellers being matched in Access The Flock Real Estate Marketplace.

To capitalize on this opportunity to make money in real estate you should start building your own marketing system to generate buyer and seller leads for yourself so that if you need them matched to close a deal, you can bring them to the marketplace and see if you get matched up and try to close a deal to make money. If you are already established, I recommend bringing 30 buyers and sellers to the market in the next month to see if you will be matched up in the marketplace to close a deal.

What Can You Do To Get A Buyer Or Seller?

Assuming that you do not have many resources, a marketing system, or a buyer or seller this is what you can do to get started as cheaply and easily as possible to make money in real estate virtually and online.

1. Start a blog on your own website
2. Create a seller landing page to capture leads
3. Create a buyer landing page to capture leads
4. Write a lot consistently on your blog to grow traffic to your landing pages
5. Put your sellers under contract to do a deal and prove that buyers are real - Know your client or buyer and seller
6. If you don’t have a match to flip, wholesale, then bring them to the real estate marketplace

Becoming a Real Estate Landlord

Buy from your own buyer leads from your website as mentioned above. I heard the best deals come from your own website. Or, if you have cash you save yourself as a buyer on Access The Flock Real Estate Marketplace and get access to sellers - deals and property!

How To Access A Buyer Or Seller On Access The Flock Real Estate Marketplace?

• Create an Account - Join the Flock
• Choose to Access a Buyer or Access a Seller
• If you want to access a buyer you fill in the seller form
• If you want to access a seller you fill in the buyer form
• If you don’t get a match, share the link on your blog and social media profiles to attract a match so that you can close a deal

Strategies On How To Make Money In Real Estate

• How to make money virtual wholesaling using Access The Flock Real Estate Marketplace
• Different real estate strategies to make money

What are the best ways you’ve found to make money in real estate?

Follow on Facebook, Twitter, Google+, YouTUBE, LinkedIn Group, LinkedIn Personal.

You’ve had some troubles with the off market real estate industry on the internet for a few past years and it hasn’t gone away.

Some of the same old problems persist where:

• People don’t trust each other
• They don’t know if their seller or buyer is real
• They think that their seller or buyer or client is real and don’t think or know whether the buyer or seller on the other side of the deal is real - so they don’t trust the person that they are dealing with
• There are too many people between the deals - called daisy chains - making it impossible to get in the middle and make a profit in any way possible because information can’t properly get passed from buyer to seller or to exchange information in a way that produces trust and a closed transaction
• There is outright fraudulent documents
• People will cut you out of the deal once they find out who your buyer or seller or client is and bypass you 
• There is confusion as to what is legal and in what jurisdiction 

Wouldn’t it be nice if there was something that guided these transactions between real estate professionals so that they closed? Like a real solution?

Wouldn’t it be nice if the rules of the off market real estate industry have changed.

Some possible new rules that I propose that came from most of your mouths could be a real solution.

Some of the rules we could follow include:

-Know your client before bringing them to the marketplace

-Build a reputation by getting feedback from your peers specifically about how well you close transactions in a central place for everyone to see

That would be it.

That would solve - probably - all of these problems!

What do you think would solve some possible problems you are facing in the off market real estate industry?

Follow on Facebook, Twitter, Google+, YouTUBE, LinkedIn Group, LinkedIn Personal.

Landlords and Asset Managers care about rents - and raising rents.

So, let’s talk about whether or not to raise rents.

I don’t think you can, because then you’ll drive your tenants out.

I think you can because you have to keep up with inflation - increasing prices of doing business - and repairs - so that your tenants stay there and happy! And keep paying you monthly or recurringly.

It depends if you are a large commercial REIT or a smaller residential landlord.

One of the key factors in raising rents in a commercial complex - I think - is that you can keep your anchor tenant to keep drawing visitors and other tenants to the buildings.

For smaller residential investors and REITs it’s important to keep the property up to standards - and at market levels - so that you can keep tenants.

Don’t bother raising rents because you are afraid of losing rents to tenant turnover. 

Don’t worry about that. Just keep tenants happy with a good property and raise rents regularly to support market conditions and not scare tenants away with a huge price increase.

There are details that you have to keep in mind when raising rents. Whether it is legal under your tenancy contract. Or if the property is rent controlled.

Something that you can do to keep tenants happier is have a clause stating that you can raise rents at smaller amounts more regularly - maybe a certain percentage annually or so - or try to raise rents at the end of the rental agreement when they are deciding when they will renew with your contract in the same place - with you!

So many investors don’t care about supplying tenants with solutions to their problems - like fixing things and making repairs. One solution is a price correction - dropping the rent to accommodate for repairs that need to be made. I don’t think that that is a great idea.

You have a brand to keep up - or a reputation. And you don’t want people saying that you aren’t taking good care of your tenants. Also, the building is your appreciating asset and it’s worth the money to repair and maintain it - ideally, or you probably should not have bought it!

Don’t be lazy - just raise rents!

Take care of your tenants.

What was the response from tenants when you raised rents?

Follow on Facebook, Twitter, Google+, YouTUBE, LinkedIn Group, LinkedIn Personal.