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This is that time of year when many people make goals or resolutions for the coming year.
It’s a good thing to do for your real estate business too.
You’ll have a much better chance of meeting your objectives if you write them down and create a plan of action.What’s your plan for 2017?
Is your objective to increase cash flow? How much per month?
To get there, will you buy houses subject-to or do master leasing or…?
Or will you get some of your existing rentals paid off to increase cash flow?
What’s your plan?Is your objective to make more cash? How much cash?
Will you do wholesale flips, highest bidder sales, or what to increase your cash?
What’s your planIdentifying WHY you want to meet these goals helps you reach them too. If you have a big enough WHY, you will
insure your success. What’s your why?Need help developing a plan for 2017? We’re here to help!
In light of the rising housing prices, lack of inventory and rising interest rates I am trying to figure out my best strategy for 2017.
I heard yesterday that housing prices in my city (Atlanta) are up 6% compared to the national avg. 5%. It’s not quite California- but in my opinion people are paying way too much for some of these properties and that sales will halt when rates get over 5%.Can anyone share their strategy or suggestions for 2017? I’d love to compare with my ideas. Right now, I am planning on marketing for Highest Bidder Sales for cash and acquiring some investments for cash-flow. I’m really interested in a mobile home park- but think that I best wait on that for a market correction. Any advise? I am having some analysis paralysis…
Where do you think the market is heading and what would you avoid right now?On another note- we are currently renting and I’ve been investing our down payment while we look for a “forever” home in our desired area. I wonder if we should just continue to invest and wait for a correction before buying for ourselves (or maybe we should do something creative like an option, seller finance or something else?)
Thanks for any input!
KathleenFirst of all I want to let everyone know that we are working on a way to fix it so the words WRAP instead of being
cut up at the end of the sentence.The State of the Union Coaching Call on January 17th will give you a lot of brain power on where the market is
headed, what to do, and what not to do. I’ve invited the smartest real estate people to be on the call. One of
them lives in Atlanta. These are not the flashy marketing guys who don’t have a clue about changing markets.
The investors I invited are real deal investors who have been in the business 30-50 years and make their
money buying/selling/leasing houses.The current market, and everything I’m reading, makes it feel like deju vu — these same things were happening
in 2006 and 2007 just before a huge real estate crash. Prices are going up at crazy rates. Yet, the number of
people apply for a mortgage is actually going down. Foreclosures are already starting to go up. Some
foreclosures are people who got an adjustable rate mortgage or with a balloon. (huge mistake).To make matters worse, they are doing low doc low down loans again for people who have no business
buying a house. It’s a recipe for disaster (more foreclosures)Some of the safest things you can do ( and the reason I talk about them so much) are wholesale flips,
master leasing, highest bidder sales, and getting options. Learn as much as you can about these
techniques!I don’t think it is a good time to buy/fix/sell. If interest rates go up, you will lose a % of your buyers.
You can usually make about the same profit, without the risks, if you just wholesale.You don’t need to wait to get in to your forever home but don’t buy it just yet. Start looking for the
perfect house that you can”buy” with a lease option. Get a percentage of your rent applied towards
the options so you don’t feel like you are throwing your money away renting. Make sure you
negotiate the option for 3-5 years with an extension. If the market tanks in Atlanta, you don’t have
to exercise your option OR you can renegotiate the option price later OR you can sell your option.Master lease for cash flow. Or buy subject-to or with seller financing but only if you can get a
property well below market with a low fixed interest rate. Then rent it out.
It needs to cash flow from day one!Do deals that produce CASH CASH CASH primarily in 2017. Wholesale flips and highest bidder
sales are best. Save the cash – be ready to snatch up some great bargains that will require cash later
if there is a market crash. Learn how to crank up the volume of motivated seller leads!Also a good time to develop relationships with private lenders.
Cautiously optimistic! That’s my strategy for the US.
I’m hoping 20% capital gains taxes go down in 2017 and the extra 3.8% obamacare tax goes away.
If that happens, I’m selling more rentals in Texas then reinvesting the money in Panama where a
$1 goes a LOT further. I have a two bedroom in Texas that I bought for $50,000 subject to the
mortgage about 10 years ago. The mortgage balance is only $12,000. The house is now worth
about $145,000. It’s insane!. Taxes went up 30% this year. Insurance went up 20% this year to
$1250. This really hurts cash flow! I could reinvest that money in to building three 1250sf
houses for $35,000 each in Panama. They would rent for $800 each. No property taxes.
And insurance is $160 a year per house.Anyone else care to discuss their plans for 2017?
Thanks for the thorough answer! I feel validated that my strategy for 2017 is what you say to do too. I am sending out my first marketing piece next week… Fingers crossed.
Still want to hear from others on their predictions for 2017. Can’t wait for the call…I know Dyches Boddiford is from Atlanta. I took a class with him about 15 years ago about investing from your IRA. Too bad I didn’t have any money in my IRA then! I do now though- and I still have the worksheets from that class. He is somewhat of a RE legend here in Atlanta (along with John Adams who seems to have retired.)
Anyway, my MAIN goal this year is to get to Panama for next years seminar. That will be my reward for hitting all my milestones..
Now you’re in a position to compare Jackie’s strategy (with all kinds of risk protections built in) in this rising market that shows all the classic signs of another coming crash — with the strategy used in that “glory story” of the Australian “rent-vesting” couple that I posted about 10 days ago. Recall that the British DailyMail.co.uk story described how the couple kept on renting, instead of buying the roof over their heads (which seems like sound risk minimizing), in order to assemble a pyramid of rental houses (far more risky). They held each house long enough to refi, pull out cash, and use that to buy the next, and the next, and the next rental houses. That strategy works as long as the housing market keeps rising.But when the central bank-created business cycle / financial bubble runs its course, and the financial spigot is turned off, the housing crash is inevitable. What do you think that does to a mountain of leveraged, pyramided properties?
So why that story, and where do you think it came from? Especially since there are other media accounts (from non-British media) that the housing market in Australia is softening, and the air has begun to leak out of their housing bubble? That article was almost certainly not submitted to the British press by that happy-so-far couple who don’t have a motive. But who do you suppose in the FIRE economy (FIRE being the acronym for Finance, Insurance, Real Estate) might have had a motive to try anything, including news manipulation, to goose housing sales to replace some slowing commissions — while there are still suckers who don’t understand business cycles? Perhaps some real estate agencies, or auction houses (which sell much of Australian housing), or lenders (part of the “F” in that FIRE acronym)?
I’m trying to make the point that believing every glory story in the media (instead of relying on far better judgment from those who have been through such boom-and-bust disasters before) is a fool’s folly. The media’s motives, and those who feed it fuel, seldom have your best financial interests (including safety precautions) aligned with theirs. Sadly, that Australian couple never met the CashFlowDepot community.
–Dee
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I’ll say this after listening to you folks chat. Feeling optimistic. I spent 15 minutes a day writing down my objective for the new year. Wholesaling was not even on my mind until receiving a wholesale deal from a guy who had too many fingers in the cookie jar. I went brain dead, so I reached out to Jackie, and she didn’t like what she saw. I passed. She mentioned wholesaling might be a good direction for me to go.
Dee, I read that article when you posted it days ago and it sent a shiver down my spine. I am a realtor and my biggest customer throughout the 2000’s was a highly leveraged builder. When the crash came- I had to terminate 9 contracts that I had out for him (land) because his creditors pulled back the financing. I thought about him when I saw that couple wondering how they are going to pay for these properties when rents inevitably come down and the market corrects and they have no equity. I had another developer friend have a breakdown when he was forced to liquidate all his property because he couldn’t afford to keep it and his notes were due. It was terrifying. The last thing I want to do is over-borrow.
Thanks for the input.After the last crash, I did a lot of Highest Bidder Sale for builders in Colorado who lost everything. They went from
having a $2,000,000 house in the mountains, plus a $1,000,000 house in town and all the fancy trimmings to
living in a $1,000 a month 2 bedroom rental and filing bankruptcy. Life long relationships were ruined.It’s not just the money you lose, it is the confidence you lose that really
hurts you. It makes you afraid to get up and start all over again.That’s why I stress doing RISK FREE deals. You can make a LOT of money without taking on risks and
without getting bank loans. CFD will teach you how!
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