Tom Dunn - Socially Responsible Investing

Socially Responsible Real Estate Investing

There are many ways to practice socially responsible real estate investing. In this article I will outline what I believe to be the best way to invest in real estate in a socially responsible manner.

I run into all kinds of people, many of whom are less than charitable when they find out I own rental property, and that I also flip houses and mobile homes. I frequently find myself disagreeing with those same people about just what socially responsible real estate investing means. For some strange reason, many people are predisposed to look down on those who engage in such capitalistic endeavors. Often, these are the same people who benefit from one or more of the many government programs that my tax dollars support.

Here’s what I mean when I talk about socially responsible real estate investing.

I am a man of my word, so when I say I’m going to do something, I make every effort to do it. This applies to offers I make on properties, promises I make to tenants, and agreements I make with contractors and service providers. In my mind, there is no more powerful way to engage in socially responsible real estate investing.

Being a landlord and property investor makes me a productive member of my local economic community. I strongly support and add to the tax base, and help provide a healthy living to several Realtors, contractors, and service providers. I also bank locally, and contribute to my local Real Estate Investor club. These are all great ways to pursue socially responsible real estate investing.

In addition, I provide clean, safe, affordable housing to several tenants, including children and senior citizens. I also provide housing to those in the lower income brackets through HUD’s Housing Choice Voucher Program, also known as Section 8. Providing this type of housing is another powerful way to practice socially responsible real estate investing.

There are those who believe that in order to practice socially responsible real estate investing, one needs to provide free housing to the deserving poor. I do not agree with that assessment. The Bible says, “The laborer is worthy of his hire,” and certainly that applies to property owners. I commend those who choose to be charitable, but I do not believe it should be legislated. It needs to come from the heart, and be supported by a consistent practice of sound business principles.

That attitude, and the underlying economic practices, are reasons why the United States of America has been, and continues to be, the most charitable nation on the face of the earth. Practicing socially responsible real estate investing isn’t the result of some feel good nonsense, but rather the application of wise investing habits and moral consistency.

Now, go make more offers!

Tom
DealFiles.com

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Three Secrets For Talking To Sellers On The Telephone

In this short article, I want to highlight three tips for fielding seller’s phone calls in response to your marketing efforts.

When your phone rings, realize that the seller has overcome a lot just to pick up the phone and call. He has chosen to call you from among all of the other investor’s who have ads out there right now. That’s good news – your marketing is working!

The first rule is… ANSWER YOUR PHONE! Too many investors spend their hard earned money on marketing and then let the calls go to voice mail. Trust me, when a motivated seller calls, the last thing they want is your recorded voice asking them to leave a message. Many callers will simply hang up. A real, live person makes all the difference. Just following this one tip alone will put money in your pocket.

Second, don’t start out by grilling the seller. If they don’t say much at first, a few simple, non-threatening questions about the property will get them talking. Let them go on for a few minutes, and often you will find them telling you their story without being asked.

If they have talked a long time, and you still aren’t sure about their level of motivation, simply ask, “Why are you selling?” This is usually enough to get them to tell you everything you need to know. Most people WANT to tell their story – believe me, it’s true!

Finally, if the information you have gathered indicates that there is a deal there, don’t let the call end without securing a commitment from the caller. In other words, in the parlance of all good salesmen everywhere, ASK FOR THE ORDER!

That doesn’t mean negotiate the sale of the house on the phone. That you want to do in person. What I mean is, get an appointment with the seller before you hang up. If at all possible, make the appointment NOW. Say, “Mr. Seller, I’m free for the next couple of hours. Would it work for you if I came over right now to see if we can work this out for you?”

Believe me, very few other investors are going to offer this kind of speed, and if the seller is truly motivated speed is what they’re after.

To recap, when a seller calls answer your phone, let them tell you their story, and get a commitment before hanging up.

Tom Dunn is a successful real estate investor and author. For more on beginning real estate investing, visit DealFiles.com.

Looking For Private Money For Real Estate Investing On The Internet

One of my readers, Jim, posted the following comment to the post below:

[begin quoted text]
Hi Tom,

Finding Private Money is something we are definitely trying to get because we have more properties than we have money for and we are tired of paying all the points for HM.

We have done some marketing to our subscriber base from our website (www.thegooddealguys.com) and have gotten a few bites but nothing solid yet.

My question is what type of information are these sites you searched on actually giving you. I need to find the people that can be Private Lenders and I have not found any site that can put me in contact with those kinds of people. Yes, people selling courses but that is not what I am looking for.

Any ideas?

Thanks,
Jim
[end quoted text]

Here's my response, which I also emailed to Jim:

Hi Jim.

Thanks for your excellent comment and question.

To answer your question, I need to start out by telling you something you probably already know- the internet is extremely long on information, but extremely short on relationships and person-to-person contact.

The reason that's important is because borrowing private money for real estate investing, or for any other reason for that matter, is almost always going to be based on personal relationship, and personal relationships are best established and built locally.

The internet is a great place - probably the BEST place - to learn how to obtain private money, the mechanics of setting up a lender network, and a system for managing that network. The internet is not a very good SOURCE of private money. For that, you will need to think locally rather than globally.

The best source of private lenders for you and your business is right in your own town, city, or community.

My suggestion... use the internet to learn and implement a system for locating private money, even if you have to pay a few bucks for a GOOD system, then implement that system right there at home. As I'm sure you have already discovered, real estate investing is a people business, and the private money facet of it is no exception.

I believe it's nearly impossible to establish the level of trust required in private lending without face-to-face contact, which is essential to creating the right kind of relationship. Every Private Money course or kit I'm aware of that's worth it's salt will teach that, as well as showing you exactly HOW to build a private lender system right there at home.

Jim, it's important to point out that HARD MONEY is different. You can find hard money on the internet, because hard money lenders don't really care about you- it's just about the numbers. If the numbers work, they know they'll get their money no matter what. You pay big bucks for that privilege, as I'm sure you're aware.

Building a successful, local private money network takes a little time and effort, but the rewards are well worth it.

Hope that helps, Jim.

All the best.

Tom

Private Money For Real Estate Investing Best Sites

Searching for private money for real estate investing? Well then, you’re already in the right place… the internet! If you have spent much time online, browsing or doing concentrated searches, you have probably already found several websites that focus on using private money to fund your real estate deals.

One search you should do immediately is “private money for real estate investing.” The number of sites returned will blow you away. One recent search on Google yielded 6,150,000 results. Of course, not all of them are tightly focused on the topic – in fact, MOST probably aren’t – but the top 20-30 were very relevant. A few also turned out to have good information.

You could also try the shorter versions like “private money real estate” or just “private money”. I tried “private money” on MSN and got 36,543,981 results. Wow… try surfing those in an evening!

The great thing is, you really only need the first page or two of results to gather some top-notch information, much of it free or low-cost.

Don’t get confused by the term “hard money lender”. Hard money and private money are definitely two very different things. Hard money is a much higher cost option for higher-risk transactions.

Don’t be fooled by hard money sites masquerading as private money lenders. They’re NOT the same.

There is a place you can go for advice and information about developing a private money network of your own. Called simply private money for real estate investing, you can find it at http://www.private-money-real-estate-investing.com.

There is also a page of private money for real estate investing best sites.

Can't Sell Your Home – Start Investing In Real Estate!

So you’ve been trying to sell your home for quite a while, with no success. Oh, sure, you’ve had a few people through, maybe even a lot of people, and every time your life was disrupted… all for nothing. No offers, not even a nibble. It’s getting frustrating. Since life has given you some lemons, why not make lemonade and use this as a springboard to start investing in real estate?

You may be wondering, “How can this be an opportunity for me to start investing in real estate?” Glad you asked.

Since you’re having trouble selling your house through conventional means, maybe now’s the time to go a bit unconventional, and learn a creative real estate investing technique in the process… a technique that you can use over and over again to create wealth for you and your family.

If you use this technique to sell your home, you will be following in the footsteps of thousands of other homeowners who have followed this same strategy to start investing in real estate.

I’m talking about the lease / option method of selling your home.

What is a lease option? Simple… instead of selling your home outright, you’re going to lease it to someone, and at the same time give them the option to purchase it at a fixed price within a fixed period of time.

Why does this work? How can this allow you to sell your home faster and easier? The answer has to do with the type of people that will respond to your “lease with the option to buy” or “rent to own” ad. They will be people with bruised or damaged credit, but don’t let that scare you. Often these are good people who are back on track after a tough period in their life.

They’re not deadbeats… at least not the ones you’ll be putting in your home, because you’ll be carefully screening them. You’ll want to check their story, and verify employment and income. Trust your gut, but verify everything. Select carefully, and realize that it may take two or three tries before you get to the end result you’re looking for- a tenant who becomes a buyer.

The other great reason to use the lease/option technique is price- you can often sell for full market value… even more! What a great way to start investing in real estate.

There are three important terms you will need to negotiate with your tenant/buyer in order to enter into a lease/option agreement with them… price, option term, and monthly rent. Once you’ve learned to do that, you’ll be well down the path many others have followed to start investing in real estate.

Price is the price you will sell them the house for when and if they exercise their option. The option term is the length of time the option to buy is open to your tenant buyer. This is often one year, but could be longer. It’s up to you. I’ve seen option terms as long as five years, but in my mind that’s too long, unless you just want to be a landlord.

Finally, the monthly rent should be enough to cover your mortgage, taxes, and insurance, plus something left over to give you a positive cash flow every month. After all, there is a little hassle involved, so you should get something for your trouble.

Now, here’s the icing on the cake. You can and should collect a non-refundable option fee from your tenant/buyers, and you should get it upfront. The amount is negotiable, but generally about three percent of the value of the home is appropriate. So, on a $150,000 property, the option fee would be between $4,000 and $5,000. This shows good faith and commitment on their part.

Hopefully by now you can see that this is a great way to both get your home sold and start investing in real estate. You make money three ways… when you collect your option fee, when you sell the house, and every month in the form of positive cash flow. Plus, the home remains in your name until they exercise their option, so you still get all the tax breaks associated with homeownership.

Listen, I know there’s a lot more to say on the subject of lease option, and there’s certainly a great deal more on how to start investing in real estate. This is just a primer, but hey… we’ve all got to start somewhere, right?

A New Site To Check Out

I wanted to ask you a question... "Are You Milkin' It?"

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If you're looking for real estate investment opportunities, you owe yourself a visit right now.

All the best,

Tom

No Money Down Investment Mortgages

In any meeting of real estate investors the topic of no money down investment mortgages almost always comes up. I’m a firm believer in putting as little cash as possible into my real estate deals, and if you’re going to succeed in the long term, you should learn to think the same way.

This is really just Real Estate Investing 101… as simple and basic as you can get, yet vital for you to understand. No money down investment mortgages are a topic you should seek to understand and here’s why.

Your supply of cash is limited, and always will be.

There it is. I don’t care how much cash you have now, or ever will have. I don’t care who you are, or where your bank account stands. You’re cash supply is finite, not infinite, and cash is a valuable resource that gives your real estate investing flexibility and leverage. Using no money down investment mortgages allows you to preserve cash, one of your most valuable resources.

Having ready cash allows you the flexibility of moving quickly when others can’t. It also gives you confidence and leverage when making your offers. That doesn’t mean you need to actually use your cash… merely having it is often enough.

Using no money down investment mortgages and other types of low or no down financing should be undertaken with great care, however. Make sure you’re not paying full price for your properties and financing them at full market value. The way to employ no money down investment mortgages is to buy value. In other words, buy at 80% of market or less, preferably much less.

That one strategy alone will ensure your long-term real estate investing success. If you just go out and pay market, finance the full value, and thus hang on to your cash, don’t make the mistake of thinking you’ve accomplished anything worthwhile. A chimp could do that.

Learn to recognize and buy value. Finance as much as you can to leverage your limited cash, and repeat the process. Over and over. Use creative financing and no money down investment mortgages to accomplish your goals.

Now, go make more offers!

For more information on creative real estate and no money down investment mortgages try http://www.dealfiles.com/investmentpropertymortgages.html.

If you would like to learn about beginning real estate investing try http://www.dealfiles.com.

Private Money For Real Estate Investing – Get Confident - Get Flexible!

What’s so great about having private money for real estate investing? Have you ever looked a fantastic deal square in the eye and had to walk away because you weren’t in a position to move on it? If so, ready access to private money could have made the difference.

Having a reliable supply of private money for real estate investing gives you two things you need to be super-successful… confidence and flexibility. Let’s see why…

First, imagine that your marketing is working like it should, and you’re getting calls from highly motivated sellers anxious to get out from under their property. Further, let’s assume you’re already in the middle of a deal or two, and you have, say, a quarter of a million dollars tied up for the next few months.

You get a call from Mr. Gotta Getoutnow, who has already moved and is shouldering two huge house payments. His vacant house, valued conservatively at $190,000, is costing him a cool $1200 each month… and he hasn’t lived in it for 6 months! He’s willing – even anxious - to let it go, if you’ll just cash him out of his mortgage to the tune of $132,000.

Unfortunately, your marginal credit rating won’t permit another loan, your cash is tapped, and your house is already mortgaged to the hilt for those other deals you’ve got working. How much confidence do you have on the phone with Mr. Getoutnow? My guess… not much! But how much could you have if you knew you had access to a half million or so in private money for real estate investing?

See the difference? I thought so!

Now, when you get his call, instead of hemming and hawing about some nebulous ‘creative acquisition techniques’ you’ve used successfully in the past, trying to impress him with your vast knowledge and experience, you simply tell Mr. Getoutnow, “I’ll be right over,” and off you go to get the house under contract. You have the confidence to do this because you know, comfortably resting in your hip pocket, is all the private money for real estate investing you could possibly need!

What about flexibility? How does private money for real estate investing give you that?

The answer is in the options private money for real estate investing gives you. Let’s face it, the number one stress inducer in real estate – other than tenants – has got to be obtaining financing and working with lenders. Why? Because they want so much freakin’ information, that’s why.

If you’re like me, you can’t stand filling out all those forms banks ask you to fill out. What could they possibly need all that information for anyway? I mean, come on. It’s a loan, here’s the property, it’s worth $150k, I need a loan for $100K, what’s the problem? When you have private money for real estate investing, you don’t fill out forms!

Not only that, but what’s up with those lenders having to hammer my credit report every time I get a loan? First there’s an inquiry, then they add the loan to my list of debts, so the whole world knows my business. I’m definitely NOT down with that. Now that I have all the private money for real estate investing I could possibly need, there’s no hits on my credit report, and nobody ever sees the debt listed. I don’t have to worry the next time I go to apply for a car loan that I’m going to have to answer a whole bunch of stupid, embarrassing questions. I’m a happy guy!

Heck, I’m just about the most confident, flexible guy in town, thanks to my ability to raise private money for real estate investing! I can’t say this strongly enough…

You’ve got to figure out how to get some of your own!

Thankfully, it’s easy enough to do, and you don’t have to pay a small fortune for some guy’s overpriced course. There are tools that can help you, and eliminate a lot of the hard work you would otherwise have to do upfront, but these tools don’t need to be expensive.

For more information, and a more in-depth article, visit Private Money For Real Estate Investing on the DealFiles website.

Now, go make more offers!

Tom Dunn
www.DealFiles.com

Real Estate Investing Mentors – Maximum Mentoring

If you have looked for and found one or more real estate investing mentors, you may be wondering, “What next? How can I get the most from this real estate mentoring relationship?”

The answer is, quite simply, give the most!

It’s strange but true, the relationships we typically get the most out of in life are those we put the most effort into, and your relationship with your real estate investing mentors will be no different.

Be prepared to go out of your way to be helpful to your real estate investing mentors, and you will be amazed at what happens. Whenever I have mentored someone, it has been my experience that the more they put in, the more they got back. If they were especially helpful and generous with their time, they not only learned more quickly, but they also achieved their goals much faster.

Let me give you an example. Close acquaintances of mine, a couple, had been looking for real estate investing mentors for quite some time before they asked me. I gladly agreed, and we decided to work on a rehab project together. Using my expertise, I would buy a house that needed rehab. Using their expertise, they would rehab the house. We would then rent it out, holding it in an LLC.

That’s exactly what happened. They did everything I asked of them, and then some. Not only did they complete the rehab in a timely manner, they did a fantastic job. They learned by watching closely how I acquired the house for far below market value. They learned, because that’s why they were looking for real estate investing mentors in the first place.

They also watched and learned how to get the house rented, and how to properly manage the rental. They can now do all of this on their own, and I’m sure they will. They learned because they started out looking for real estate investing mentors with the right mindset- they had the will to work hard!

If you would like to know more – such as exactly how to go about finding real estate investing mentors – check out Real Estate Investing Mentors.

Now, go make more offers!

Tom Dunn
DealFiles.com