When To Hire Help For Your Business

As your real estate investing business starts to take off you will be faced with the decision on whether or not to get help. By help I am referring to others to assist you.

Lately I have been reading more and more news reports about crooked investors scamming millions of dollars from unsuspecting consumers (property owners/renters).

As I read each new claim I am having a hard time believing that so many set out to do dastardly deeds against the vulnerable. My observation has been that most investors who find themselves on the wrong side of the law have fallen victim to one or both of two dynamic forces which overwhelm then sucks the investor down the tubes.

* The desire to live the perceived lifestyle of a millionaire.

* Lack of organization within their business.

During the past few years we all have been bombarded with the millionaire message, especially in real estate. Nearly every marketing piece entices you to come discover the millionaire secrets to real estate investing.

The message has become so saturated that the many real estate investor seminars look more like a carnival than a learning environment. This environment can be a financially deadly trap to the person not realizing he is in business.

Before long he is doing more houses than he is capable of managing on his own, so he begins to take shortcuts to maintain his lifestyle.

The other factor I see causing so much grief is the serious lack of organization. The well meaning individual sets out to sincerely help property owners out of a bind. She begins to make promises too many. Soon her business takes off.

Like most she is unprepared for this adolescent phase of her business. Her attention is only on the front end of the business which is bringing in and closing deals. Soon, little or no attention is given to the back end of the business.

You know like record keeping, accounting, filing taxes etc. Before she knows it she is two years down this slippery slop. Then three, then four years of a sinking mess.

Only now with years of disorganization does she painfully give in to the idea of hiring help. In desperation she hires the first person through her door who seems like a nice, trust worthy person. Never mind they do not have the required skills needed to run a real estate business. Not surprisingly the investors business crumbles in a shambles when this new hire turns out to be a bigger burden than help.

The investor finds herself in a royal mess. Unfilled taxes, no accounting system, no record keeping of deals she loss control of. To add insult to injury she is being sued by 10 property owners who claim she failed to live up to her end of their deal. WOW! All because she was unorganized.

My guess is the above scenario will either sound familiar to you or scare the living goo-goo out of you. It should because this is what happens to many investors. As a result, it is an average four years, and they are out of business. Some even trying to stay out of jail.

Disorganization has been the nasty culprit for many failed real estate investors.

So, how to get organized? Start early! If you are just starting out in this business you should have as part of your plan to someday have to hire help to keep things moving in the right direction. You will need to plan on at least one assistant.

Some people mistakenly use family members in this role. Unless that family member has a sincere interest in what you are doing and you can see eye to eye, do not do it. More times than not, the family thing does not work out.

Who and when to hire? There is no one right answer here. My recommendation is to start sooner than you think. Needing to hire help is like eating. Better to take in several small meals before allowing hunger to over take you. By then you have waited too long and may over do it.

Some ideas for hiring. First let me qualify my personal opinion about hiring employees. I hate it!!!! I do not enjoy the interview process. I do not want someone who I have to motivate and stay after every day. This is what having employees can be like.

Instead I have learned to be pretty good at outsourcing. I have been down that path with employees and it was not a fit for me. . . . or them. I just do not have the patience to stay after people.

Instead today, I have become very good at outsourcing to specialized professionals. People who can answer your calls like PatLive.com Or getting an virtual admin person to handle the mundane tasks in my business. I have even set up technology systems to pay and track my bills. See guru.com doubleclick.com for ideas for virtual assistants. Check out virtual phone systems like speechphone.com, which make it appear you are all under the same roof.

Start small. Perhaps you start with a person or company to take your incoming calls. Next outsource a bookkeeping service to keep you on track financially. Be sure to complete a few deals first (two or three). Then create a budget for outsourcing. I prefer to work out of my home or where ever in the world I feel like. I have highly skilled professionals to call on for my business needs.

In my publishing business I have two awesome virtual assistants each living on opposite ends of Canada. None of us have ever met in person. I have only seen a photo of one after six months of working together. BUT let me tell you we work like a well oiled machine. They are responsive and come through every time I need them. AND I pay them monthly on an hourly basis.

My real estate business is similar. I have an assistant who is a real estate agent who lives in Virginia, I live Washington DC. We may see each other once a month. I have another field manager handling all my physical real estate business, inspecting houses, driving for dollars, meeting with people etc. and he and I met in person once.

We use a real estate management software created by investors for investors, which is web-based. I can work from anywhere. When I am in town you can find me at a Starbucks or a sidewalk cafe.

Now if you prefer to have an office and employees, more power to you. It could better suit you than it did me. In that case you will want to take your time with the interview process. Hire slow and fire fast. Before you hire your first person, be it employee or contracted assistant, be sure you write out everything that person needs to do for you.

Have a detailed task list already prepared so when you interview them you can match their experience with your needs. Also once you decide on a person or outsourced service, agree on a probationary period of 60 to 90 days. Have a detailed punch list of what must be accomplished with deadlines. Use this list as your objective measuring stick. If they fall short, cut the string. Even if you like the person. Cut it quickly! You are in business to make money and stay organized.

The warm and fuzzies have no place in the hiring game. Be objective and start getting help sooner than later. Because if you are at that four year mess I described at the beginning of this article, you will really need skilled professionals to help you out of the hole.

I know, I was once there. I had a five year mess before I hired my first employee who unsystematically helped me create a bigger mess.

Remember to hire slow and fire quick. You are in business. If it is friends you want, join a social club in your town.

Take Action!

Ken Williams
www.thewholesalewizard.com

Please Email Me; I Want To Know What Is On Your Mind!

I want to know what is own your mind. Therefore, I am taking a different approach with my weekly email newsletter today.

I would like to know if you have any questions for me that you think others like you would want to know the answers to.

Please email me your questions about Wholesaling specifically and real estate investing in general. Maybe I will feature them in my upcoming email newsletter.

Now do not take this as I have run out of things to talk about because every day there is something new on my mind about real estate investing which would interest you.

This is a way for me to stay in touch with you, my valuable subscriber. So do not hold back, cast your thoughts upon yours truly.

Just a few ground rules please, keep your email short and to the point (never mind my long email stories). Next be respectful and think of questions or comments to benefit the rest of the subscribers in my database.

I thank you in advance for your time and input.

HEADS UP!

I have another Teleseminar training coming up in September. If you have attended one in the past please tell all your real estate investor friends about it when the email arrives later this week.

Now if you have not attended one of my trainings you are in for a real treat. So be sure to watch closely this week for my emails so you can be one of the first to enroll. I can only take a limited number of participants so Fast Action will be a must!

Coming to you later this week.

Take Action!

Ken Williams
http://www.thewholesalewizard.com/

PS. Tell me what is on your mind about wholesaling or real estate investing in general by replying to this email. I may post your question on my future weekly tips.

Vacant Properties, Best Source For Leads

How do houses become vacant anyway?

Well, there are many factors such as, divorce, death, job loss, etc. But most recently there is a tidal wave of vacant properties due to the rise of foreclosures.

Once you understand how this phenomenon of vacant and abandoned houses actually occurs you will have a leg up on your competition. Why?

Think about it for a moment, most realestate investors are incestuous with their activities. Most doing the same outdated, counter productive marketing activities. You know, like posting bandit signs, newspaper ads or subscribing to overused lists.

As the saying goes people are like sheep being led to the slaughter by uniformed other sheep.

That saying really hits home for me when I think about how investors go about locating and tracking pre-foreclosures. Many trust their wallets to solve the problem by subscribing to list services or running expensive commercials.

There may be a few crumbs to get by going about it that way. But remember this saying by yours truly If it is public it has been picked over.

Picked over by whom you say? By the few ultra savvy investors in your city, that is who! These investors know that to be able to cut through the clutter of bumbling and stumbling wanna-be investors, contrary actions are a must.

That is why one of the very best methods for finding those smokin hot deals which no one else knows about is with vacant and abandoned houses.

If it is pre-foreclosures you are after there is no better way to get a jump on the sheep than tracking this type property.

As a matter of fact the actual foreclosure is the end result of many things gone wrong over a period of time finally sending the property owner reeling in a state of confusion.

Many times during this intense financially pressured, back breaking, spirit draining period the property owner throws in the ownership towel in exasperation.

He/she abandons ship in the middle of the night adding his home to the growing ranks of vacant properties.

See, even at this point of abandonment the bank may drag its feet in taking legal action against the property owner for back mortgage payments. The banks are overwhelmed in some areas to stay on top of their defaulted notes.

The sheep stand around grazing in the weeds of misinformation, waiting on the bank to make a public announcement down at the court house.

Meanwhile the astute investor has a system in place to identify these vacant properties long before the sheep gets wind of the blowing scent of greenbacks.

The sheep are all bumping into each other, heads to elbows ambling down the same dead end path of nothingness.

I am encouraging you break rank right now from the sheep herder and think outside the box. Start by noticing the vacant houses in your own neighborhood. These properties are literally everywhere.

In my Wholesale home study system you have everything you need to research the owner to strike a deal saving him and the bank a lot of trouble and unnecessary loss.

Remember the foreclosure notice is a last resort by the bank to recoup its money. No bank or lender wants to foreclose on a property. It is expensive, time consuming and looks bad to their investors.

Therefore, in most cases it can take months before a bank takes action. In the process there may have been attempts to work things out with the property owner to save the house.

Early Signs of Financial Distress

While money is tight the property owner starts to slip on routine maintenance such as grass cutting and basic landscaping. Funds are tight in that household. What ever is scrapped together goes toward the mortgage.

Other housing expenses start to slip through the cracks such as property taxes, insurance, and HOA fees.

The astute investor is monitoring not only the physical condition of properties but expenses as well.

The numbers of vacant and abandoned houses are on the rise in direct proportion to the increase in foreclosures. If you have been paying attention, foreclosures are at a 40 year high and predicted to get worse before better.

If you are reading this I know you are ready to break ranks from the herd and blaze your own path. Now is the time to take action and order my Wholesaling For Fast Cash, home study system where you will get my beat them to the punch marketing strategies.

Go to this link now and order yours today.
http://www.thewholesalewizard.com/main/

Take Action!

Ken Williams
http://www.thewholesalewizard.com/

The Fear of Failure - Do Not Let It Stop You


The Fear of Failure Do not Let it Stop You.

Following is an article I wrote for a youth Investor training event. I think it has much relevance for adults as well:

Fear can be a good thing if used to your advantage. Fear is an emotion nature provided each of us as a warning mechanism signaling possible danger ahead. However, fear should never be allowed to prevent you from taking a few bold steps in life.

Because there is so much pressure in today???s society, to avoid failure many people focus only on what they do not want.

Your mind is like a magnet attracting to your life the things you think about most. So if all you think about is failing at something; that is what will happen.

The anxiety of being frightened by failure follows most people into adulthood. To avoid failure, most adults choose the safe path in life. The reasons are the same as when they were kids.

It is the fear of being judged by their friends and family should they fail at their dream. Many work extremely hard to create an image of success even when they know they are failing.

Is it possible to experience failure and still succeed? Absolutely! If you talk to any successful person, like Michael Jordan, Bill Gates, and the actor affectionately known as The Rock, they will all tell you stories of personal failure.

In case you did not know it, successful people fail far more times in life than those playing it safe. Michael Jordon can not make a basket sitting safely on the bench. No, he has got to get in the game and take a shot even at the chance he may miss.

The same is true for you. You must get in the Game of Life and try a few things you really want to do. Understand, you may have a few failures along the way. That is normal. My dream as a teenager was to own a real estate business.

I had my share of failures and I did my best to avoid the fear of failures along the way. I have come to realize how failure is a natural part of reaching success. Nothing happens in a straight line.

Accept failure as a natural progression toward your dreams.

There is no shame in failure, there is only shame in never trying. (quote)

Take Action!

Ken Williams
http://www.thewholesalewizard.com/

Real Estate Appraising is Tricky Business

Real estate appraising is tricky business. It is an arbitrary business based on opinions. And you know what is said about opinions.

Determining property values in our business is critical. Use the wrong value going into a deal, could mean a disaster on the other end.

My experience with appraisers over the years has been one of a love/hate experience.

An appraisal report, no matter how official it looks is nothing more than someone's opinion. A calculated guess even.

Years ago a very experienced appraiser told me his business was an art, not a science. The personality of the appraiser enters into the formula as well. Conservative personalities usually spits out a conservative report.

Anyone who spends a little time in the real estate business will soon discover appraisers can be deal killers or deal makers.

Lenders base their loan to value ratio on the appraiser's report. A few years ago during the boom years, real estate refinance loans were hot. Banks were flush with cash!

In that case appraisers were pressured to come in with the highest value possible to make the loan possible. In the market of today the opposite is the case.

With cooling market sales, banks, even hard money lenders, have tightened their lending standards. Caution is the current feeling.

One thing is for sure, there is no more accurate appraisal than that from a human being.

So what is up with the electronic appraisals? Technology is being used more and more to attempt to value property. Banks have been using their own software programs for years to determine value for properties.

There are many free websites today, which will (supposedly) give an accurate value for properties. Some are more accurate than others. However!

No matter how sophisticated the software program, there is no replacement for the man on the ground.

The computer can not get down on its hands and knees to poke, prod, smell, inspect or physically touch a subject property.

Property values can be misleading. A computer can never account for current condition and location like the flesh and blood, clip board carrying appraiser.

The savvy appraiser on the ground will take into account the property's condition, and actual location on the street. I call this the pebble in the water approach in my wholesale manual.

Neighborhoods have pockets of both good and bad trends which a computer is unable to catch. But, the man on the ground certainly will.

The national appraiser's union has opened a law suit against a large mortgage lender for taking their reports and loading them into a database to use for future appraisals.

The alleged violation is that the man on the ground sends back his report to the lender, only to never get follow up business. The lender loads that report into their database for future use or even to sell that same data to others.

If this is the case, it is not a smart move on the part of the lender. Appraising is a case by case business. Technology can never replace that man on the ground who can see, touch, and smell the property.

As far as the electronic appraisals go, you can use them as a guideline. But more intricate info is needed to grab the finer details of the value of a property.

Remember, ours is a business of numbers, not emotions. You must get the best numbers to get the best deals.

Take Action!

Ken Williams
www.thewholesalewizard.com

Wholesale/Retail - Two Different Worlds

The topic has come to my attention that many are confused about the two vastly contrasting worlds of Wholesale and Retail real estate.

Let me begin by emphasizing why I do not like the term Flipping. Mainly because flipping often involves the commingling of the wholesale and retail markets.

Also many people who use the term have no idea what they are even talking about. But when you decide to think of the real estate business in clear cut terms such as wholesale or retail your business life will become so much easier and better focused.

The wholesale world in real estate involves investors and their affiliates. The retail world involves consumers and their many advisors.

Sadly enough far too many people mix the two, to a disastrously counterproductive outcome.

Investors are guilty of mixing, such as assigning to retail buyers or attempting a bank loan when buying an assignment contract.

Agents also mix the two worlds when they try to sell a junker property to a retail buyer at retail prices.

Wholesale real estate, involves, investors who deal directly with the source. Within the wholesale side of the business institutions play a minor role in the overall equation.

I personally prefer the wholesale world and avoid dealing with the retail side of the business as much as possible.

I like dealing directly with the home owner, skipping the agent or other 3rd parties when buying. I also prefer to deal with fast acting money sources such as hard money lenders or private lenders.

I do not care that the rates are higher. I factor that into the price. It is about the ease and availability of the money, not the cost. (You factor cost into the price).

I prefer to deal with other investors when selling my properties. I avoid the endless hassles of the retail buyer and their army of advisors who can kill your deal at any stage of the process.

When selling or renting properties to the consumer I prefer to contract that out. I am too impatient for the red tape mentality.

The wholesale world is fast, mostly unregulated, discounted, creative and all about the bottom line.

The Retail world on the other hand is the complete opposite. The Retail world is bloated with regulations, laws and customs created to protect its players but actually often kill creativity and the deal.

Mostly institutionalized, the retail world is slow, burdensome, and is process oriented. Results, it seems are an after thought. Rewards and certificates are valued more so than actual income.

Another stark contrast between the two worlds is that investors are concerned with NET dollars per transaction. Agents, on the other hand, are more impressed by total gross dollar sales. Never mind that their NET was a drop in the bucket by comparison.

Some real estate brokers even brag about the number of agents they have in their office. Never mind that a third are dead weight and few are doing little in the way of actual sales.

Let me sum it up, the Retail real estate world is more about the warm and fuzzy. The emotional side of the business. The Wholesale world is about the bottom line. Get in, get it done, and get out!

Some might argue as I have heard many agents, make the point. That investors are cold fish, and out to get a fast buck. I can see their point and will agree there are many investors whose attitude reeks of selfishness. But they are the exception, not the rule.

Finally, I say to you to each to his own. Enter that world which best suits you. But be careful to never mix the two.

Keep things clear, clean, in the right lanes and watch how simple life is meant to be.

Take Action!

Ken Williams aka The Wholesale Wizard....

http://www.thewholesalewizard.com/

Why Agents Should Work With Investors

Some real estate agents just do not get it! Especially those who work in a relatively active market.

I read a USA Today article about the dismal numbers agents deal with to make a living. The numbers I am talking about are income, broker splits, hours spent driving around finicky buyers, and marketing dollars spent on listings which go stale.

According to the article agents average income is dismal during the firsts two years. In my opinion their numbers are painful even for the experienced who hang around for 16 years or more.

Check this out. The article quoted these numbers from the National Association of Realtors (NAR).

Average annual income during first two years is $15,300 (before taxes and expenses). Income for 3 -5 years, $44,200. Even the grizzled veterans who stick with it for 16 years or more average $76,200. And believe me they earn every dime with constant hard work, no time off and crazy hours.

And these numbers are getting worse all the way around!!

Just think, by contrast the average profit of a new wholesaler is as much as the annual income of the agent with 2 years in the saddle. And, I might add, with a fraction of the work. But, that is another story. Do not get me started.

The agents I meet who get it, by IT, I mean they understand where the real money is in this business. I usually meet these renegade agents at a real estate investment seminar.

Just last week I met an agent who works in the Northern VA market just outside DC. Now, this guy gets it! His business model is to work with fast action cash paying investors.

This agent is extremely rare in his market. He has figured out how it is better to string a few fast closing deals together without the usual hassles of a retail deal. He works in the wholesale side of the business.

He has dedicated himself to locating properties at wholesale prices. He analyzes them quickly, makes a brief call to one or two of his HOT buyers who jump into action. In less than a month the agent is in and out of the deal, with check in hand. Do that a few times, the commissions add up quickly.

Sure, there are a few REO (REO= Bank owned) agents doing similar tactics. Mostly in markets where things are slow. However, when the real estate retail market is hot most agents forget about investor buyers.

Even though sales have slowed here in my DC market, most agents still do not get it. Here is an actual example:

Agent lists a junker house at $750K, which has an ARV (retail value) of $850k. He is told by Joe the handyman the house needs $50k to fix. The agent is holding out for a sucker.....er, eh I mean a retail buyer who will pay top dollar. As a result the house sits. It sits for a year, and the agent still does not get it.

The agent wastes everyone's time. Usually he is driven by greed and ignorance. What a combination.

Now lets look at how a savvy agent might look at the same situation. She does her homework; ARV is $850k with 60 days to sell. She contacts a licensed reputable contractor, who actually does renovations. Fix up is $150k, she advises the sellers of the numbers. She is in charge of the situation.

She explains to them that to get a quick sale, she could contact her investor/developer clients who can purchase in less than 30 days. But, the price must be reduced to the low $500s a realistic number. You will be in and out with your money in hand with no hassles, she tells them. She will even refuse to work with them if they are uncooperative.

In the second scenario everyone wins. The sellers are rid of a time and money sucking junker house. The investors have a project the paid a fair price for. And this smart agent is in and out with commission check in hand. Ok, the check is smaller, but she is done four such deals like this while the first type of agent sits on a stale listing for a year or more only to eventually bring his price down to the $500k range.

Another thing the smart agent understands by working with investors is having a solution for those seller crises which have a short fuse. If there are just days left before an auction, most agents walk away. If the seller owes more on the property than it is worth the agent walks away. Same with liens, structural damages, legal damages etc.

As an investor it is up to you to show the agents in your area why they need to work with you. Show them how working with you will benefit their business. This will be easier if you are in a slow or declining market. The challenge is if you are investing in an active market. Agents will not get it.

The NAR has predicted the continued dropping of agent incomes this year. Many, 25% of agents, were licensed over the last five years, during the boom years. These agents are most vulnerable to the changes. Gone are the easy deals where you stick your sign in the yard, sit back and wait for competing offers.

Many of these new agents are bailing out of the business with tails tucked. So, while you go about your daily business of locating and selling properties, add a few agents to your team. Work only with the ones who get it.

Here is another tip to grab the agent's attention. Offer to give them leads for listings. That's right. As you market and talk to sellers you will realize many do not have urgent situations and would be better off listing with an agent.

In turn your new agent contact will gladly pull comps for you and work with you on various deals.

Remember, agents need us whether they realize it or not.

Take Action!

Ken Williams
http://www.thewholesalewizard.com/