Iowa Real Estate Investor

We salute you Mr. Testimonial Whore

While others have trouble testing a new product, you have not only tested but endorsed 400 guru launches and products in the last month alone. Most people would think that is impossible, but not for you, because you are Mr. Testimonial Whore.

Yeah, you might be endorsing products and giving less than truthful testimonials.  However, you  know it helps you get your name out and really give you a celebrity status with all the other guru hacks.

It’s not easy writing review after review for the same regurgitated crap. Most people never add up how many millions have supposedly been added to your bottom line by each product.  If someone will gave you a dollar or even space on a crappy website, you will take the time to really write a great review of a not yet released product.

Some people might ask how you endorse 400 products that you say each added 2 million dollars to your bottom line in 60 days or less…  Well, that means you made an extra 800 million dollars from these courses in just 2 months alone. However the students you market to will probably not notice, so keep at it you little Testimonial Whore.

(Does it ever make you curious how these gurus are on the road 200 days a year speaking, have enough time to test out 400 different products and implement them in their business for “massive profits.”)

Every landlord is looking for the perfect tenant, with the perfect credit score, with the perfect job which produces the perfect income, and the perfect pet which usually means none.  If they had kids they would be perfect and stay inside with no toys.  They would never make any noise or disturb the neighbors.

On weekends, they would take time to clean the house, make sure the lawn is double cut in diamond shapes and the garden has no weeds.  This tenant would always pay all their bills on time, have some savings put away and take their payments very seriously.  The walls would be perfect, the carpet would be cleaned monthly, and the bathroom would be spotless.

If this represents the type of tenant you picture living in your rental… YOU’RE AN IDIOT… In fact this is the type of tenant that scares the crap out of me.

If a tenant has great savings, great income, stable job, great references and great credit…..THEY DON’T NEED YOU. This is the type of tenant that usually moves out quickly and is a pain to deal with because they know they can go anywhere to rent.  They want to be treated like a king. It’s kind of like dating the hottest chick in school; there is always a long line of competition trying to step into your place any chance they get.

A stumbling block now becomes a stepping stone

The best tenant is going to be one who you gave a hand up to and doesn’t have anywhere they can go. They appreciate your kindness in renting to them when they probably couldn’t qualify at other places.  So if things don’t work out with you, they have a crisis.  The perfect credit couple laughs and moves on.

PROFITS ARE MADE BY LACK OF TURNOVER

My job as a landlord is to make the best judgment of who is going to keep my house nice and stay the LONGEST!!!  Why do busy work month in and month out, filling units with people who don’t care enough to stay more than a year at a time?  I want to find someone who has shaky credit and help them back on their feet. I want to help a single mom in the middle of a divorce who now has bad credit and very little job history. You see, we’ve only got so many years here and instead of kicking someone when they are down, let’s take the time to help them out. Yes, you will get taken advantage of, however perfect credit does not mean they take care of property.

The best part, damaged tenants will make you FILTHY RICH!

If you take care of your property, also treat your tenants with dignity and respect. Make sure they are being treated the same way you would want to be treated in their situation then you will have a following of tenants who stay with you for years at a time. The longer they stay the more your profit shoots through the roof and by default you have no choice but to be filthy rich.

Some of the best tenants I have ever had have shaky pasts, however it’s the past.  What was a stumbling block in the past is now a stepping stone to a better life.

Landlord 2.0

This is for advanced investors.

Use your rentals to find the best tenants!, not the most qualified on paper. Watch them year after year. Then when you find ones that pay on time, work hard and are easy to deal with, call them up and make a deal. Offer to sell them a house on contract or lease option that fits their dream scenario. A dream that was always out of reach due to their credit, job, and life circumstances.

Now you have taken a tenant and turned them into a home buyer. You were smart and qualified them with a little and now you trust them with a lot. You are now a step above the competition and beside making great profits you changed someones family for generations.

So next time you come across that perfect tenant RUN!!!

(Disclaimer- obviously you need to follow your landlord/tenant equal housing opportunity guidelines and treat everyone the same…but instead of junking the bad ones, keep em’.)

What is your favorite type of tenant? Is there a type you look for the most? Let me know by leaving a comment below.

We salute you MR. OBITUARY MAILER.

While family members are crying and grieving,  you are plotting how to make money from the relative’s death.

When others are sad about going into a funeral, you go with a stack of papers to sign and a well rehearsed appeal to try to get the home at a discount.

Don’t worry about it!  If he really wanted the best price, he should have sold it before he died.

So we tip our hat to you Mr. Obituary Mailer.

(The sick thing is, several guru courses I have read talk about mailing to addresses from the obituaries asking to buy homes.   Don’t be a douche bag!)

This story starts out way back in 2005.

Most investors will only tell you what they made, here is a funny story about what I lost. 

Back in 2005 I moved to Georgia because I was too cool for the Iowa Real Estate Market.  I was making great money and I had way more money than brains.  So if everything is going perfect, what does a smart real estate investor do? That’s right-they shut down business and move to Atlanta.

Thrifty Mansion Shopping

I was living in  Atlanta and needing a place to call home.  I was being thrifty and checking out foreclosures. After going through mansion after mansion I decided to go after contemporary mansion in Sandy Springs located off Riverside.

This place was a dump. It was raining and we had waterfalls from the roof raining down in the middle of the living room. The roofs leaked, there was mold all over, and half the windows had bad seals.  We even found broken glass from giant wall-sized fish tanks. There were mirrored walls that were all busted in the master bath.

It also had a spiral staircase in the master bedroom closet.  This house had an indoor pool, outdoor pool, weight room, green water fountains,  guest house, greenhouse, basketball court, motor court, acres of land in a private gated community… I thought I had it all.

Always Borrow Never Pay Cash

I had a lot of money at the time, so instead of finding a house and paying cash, I decided to finance.  Being new to the area, I had to rely on new acquaintances for referrals for my financing.  I ended up getting the name of a lender who had a great track record for financing homes and doing what he said he was going to do.  It also helped that several builders of million dollar plus homes recommended him. I contacted him, and within a day or two I was all pre-approved.

Time To Make An Offer

I decided that this house was mine and wrote an offer.  It just so happens that this house was in the middle of a huge bankruptcy case and my Realtor suggested I  go down to the courthouse  to see if my offer was accepted. I wasn’t sure if this was the right move or not.  I was so  nervous that on the way down I sharted (fart+sh–) in my pants in the BMW and had to pull over in a nasty…I’m talking nasty! gas station to clean myself up.  So picture me all dressed up, suit and tie, with a brand new BMW pulling into this nasty, I mean NASTY gas station near downtown Atlanta. After I cleaned myself up and made it back to the car without getting shot or mugged, I proceeded to the court house.

ORDER IN THE COURT

At the courthouse my Realtor was there with the trustee.  Next I got introduced to about a dozen big time lawyers.  I was thinking this isn’t so bad, and then the judge called the court in order.  My offer was presented and then all hell broke loose. Lawyers started yelling back and fourth about who would get paid if this house sold and who’s lien was superior to the others.  On top of that, I had a shady ex owner who’s business might have had a lien on the property giving me the dirty eye and then intimidating me with false accusations on who owned it and how the situation was all wrong. I was just a naive Iowa boy and had no clue about all this stuff.

Accepted!

Well, the hearing ended and my offer was accepted on the terms that we put $50,000 cash in a non-refundable escrow account (why the heck does it have to be in a escrow account if it’s non-refundable?) and close with cash within 2 weeks. No problem I thought, my lender is “the man” and he has assured me he can do this and has lots friends who back him up.  So I wrote the check for $50,000 and started making plans to move in. I was looking for local craftsmen to do the work.

Lender Liars

Well, midway through the the next week I came to find out that my “trusted” lender was told by the government to close up shop, and it affected me and a lot of other people.  Then I only had a couple of days to find financing for a million dollar dump!  Being in an area that was new to me and needing several million dollars made it to difficult to do in that short a time period. On top of that, my old lender had all my paperwork.  Now he was gone, so I had to deal with trying to get all the information again-it was a mess.

I Lost It All, Baby!

Long story short, I lost my $50,000 in cash.  They said I could  hang on to the deal, but I had to put more money into it.  There was another bidder, so they were going to raise the price for the next contract a quarter million.   Feeling burned, I decided to walk without my $50,000 in cold hard cash.

Fastfoward to 2009- I was sitting in my home in Iowa, watching ‘MTV Cribs’ with my wife.  They were going through Akon’s home in Atlanta. When I saw what house it was, and I jumped up and said, “NO FREAKIN WAY,”  that’s that old dump I lost a wad of money on!”  Akon now calls it ‘Dreamland’ and has out fitted it with classy stripper poles and and wild animals. I will give props to Akon for fixing up the joint, that place needed millions in work.  The house is in a small gated community in Sandy Springs on a nice quiet street called Wilderlake.   It has a fantastic lot and has more privacy than 99% of the homes in Atlanta.

I don’t regret this costly lesson, I learned a lot in the process.  It also opened the door for  me to come home to my friends and family.

Here is the MTV VIDEO OF IT

OR HIGH DEF

Have you ever lost a lot of money on a deal or think this is crazy? Let me know by leaving a comment below.

Having trouble doing late night pillow talk about private money? Don’t worry, here are 12 easy steps to help you talk dirty about private money.  I hope this tickles your curiosity and you come back for  more. So go ahead and read this, you big “no money down, $10 in the bank, creative real estate investing , station wagon driving, bandit sign planting” stud.

1. Take money from whomever will give it.

Let’s face it, as a real estate investor you need money. So if you come across some jerk with money, take it! Don’t waste your time hand-holding and making sure you have a plan. You are smarter.  You watched a ‘No Money Down’ course,  so you are the expert!  Take the money and figure the rest out later.

2. Use free legal forms off the internet.

All lawyers want is your money.  No way on earth that they are “highly trained” and know how to read that legal jargon to help keep you out of trouble.  The fact is they have bills to pay and they will overcharge you a few hundred dollars to supposedly keep you out of trouble. Make sure you copy contracts from online with all kinds of terms that cannot be enforced, and have other state’s laws and codes mentioned within it.

3. Don’t answer the phone.

If you owe someone money and they call to ask you about it, DO NOT PICK UP THE PHONE.  Just assume they need to chill out and not worry about their money.  They are probably stupid anyway and need to get a life.  If they are worried about you paying them back, they should have never loaned the money in the first place.  Tip: Remember, you read a ‘No Money Down Real Estate Course’ so you are the EXPERT!!!

4. Interest rates do not matter.

If someone has money they will give you, pay them whatever interest rate they want! Remember, you will only need a short term loan and there always is a way to show it’s a good deal on paper. You will sell the property so fast that you will sucker them and there is no possible way they are smarter than you..remember the ‘No Money Down Real Estate Course’?

5. Don’t worry about where they get the money.

Do not spend any time finding out where they get the money to loan you. If  it’s coming from a good fella or it’s 100% of a senior’s retirement account, it’s still green and doesn’t matter. Always assume it will work out because you are smarter then everyone else. Worse case  scenario, if it didn’t work out you might be on a few front pages in the newspaper.

6. More debt is better.

I remember hearing from a famous author who once said, “the more good debt I have, the richer I am.” So go out and get into as much debt as you possibly can. Make sure it’s “good” debt backed by real estate and not “bad” consumer debt. Remember, those foreclosures you bought from the bank were “good debt” at some point on someone else’s balance sheet. Don’t worry about the whole “the borrower being a slave to the lender” religious talk, that’s old, out of date wisdom.  This economy is new and you are the expert!

7. Pay back the money when you feel like it.

If you borrow money to do a deal and then it sells, just use they proceeds to go have some fun and get your next deal going. If the private lender asks you about the deal, just tell them it’s going “good” and they should get the money back in no time.  Also refer to step number #3.

8. Don’t worry about when or how they want payments, get the money first.

Get the money first, then worry about when and how they want it paid back. If you have a big wad of cash,  little payments aren’t going to matter much. You are a self-made, soon-to-be millionaire, so you will always have the money. If you mess up, you can always find another lender to payoff the old ones. I call it my Bernie Madoff trick.

9.  Assume raising money is always 100% legal in every situation and assume the SEC doesn’t care about your offering.

Go ahead and buy advertising to find private lenders.  Send letters to random rich people’s homes.  Always use language like “guaranteed” and “low risk” within your materials to help get more money and make the private lenders feel more secure.  Don’t worry about laws-you are small time the SEC has bigger fish to fry. I would also advise using fake testimonials to help build your case. Another trick is to say “me and my associates have done millions in deals.”  ‘Your associates’ can refer to someone who you met in the back of the room at a real estate conference at a Super 8 motel.  He had to be telling the truth when he said  they (his other “mysterious” and hidden partners) raised 100 million dollars of private money in two weeks using secret methods online. Granted, he told you this right before he bummed a few bucks to get a soda…

10. Don’t care about their investment goals and how they want their money invested.

Who cares if they want a safe and secure investment?  I won’t lose sleep over it. Hey if they don’t want to make millions with you, then they need help. It’s not your problem if they have needs, wants, and desires that might not match up with the way you are using their money. The best way to solve this problem is to take the money, do what you are going to do anyway, then answer them with what they want to hear. If they ask about it being safe and secure say “yes” if they say they want high yield and a risky play to make more money say “yes”.   No risk, no reward, right?

11. Borrow money from family members.

If you want a good life, always…I mean ALWAYS…ALWAYS borrow from friends and family members. The closer they are connected, the better chance you won’t have to hear from them again (if things go wrong). Imagine your uncle always telling your family members what you owe him.  You would have to explain yourself over and over again at all family gatherings. If you get money from them and fail to pay it back, worst case scenario is that it tears your entire family apart.  However best case is you get enough money to lease an entry level Lexus.   Happy family or 30k Lexus on lease… give me the Lexus, I can always find new friends and family.  

12. Always believe Gurus when they say something like this:

“I walked into a room, made a presentation and walked out with 5 million in private money loans that day.” The guru has to be telling the truth and I’m sure they have no incentive to lie.  It’s not like they are trying to sell you anything…or I mean it’s not like they need social proof to move a product. Don’t bother thinking “if you can walk into a room and make 5 million in ten minutes, why is he standing on stage for an hour to make 20 grand?  Those are small thoughts, and you must think bigger to make millions.

BUY NOW-my arm is too weak to keep flipping burgers!

Now I need you to run to the back of the room with your credit card to buy my “Platinum, Members Only, Limited Time Accelerated Coaching, Mega Wealth-Building, Secret to Success, Private Money, Success Club Coaching, Limited Membership Program.”   I usually charge $50,000 for the package, due to high quality CD, hand signed certificate and a custom printed water bottle, however, I’ve been asked by the host to cut you a good deal.  So, if anyone can get me enough gas to get home, they can have this limited edition CD free!

But wait, there’s more! You also get access to a hotline with a local virtual assistant I found on craigslist for $8/hr., who can help you with all your private money mentoring questions.

Do you have any more dirty tips about private money?  Leave a comment.

Iowa Investor definition for the day: Buyer’s List Whore.
What exactly am I talking about?  Let’s go into the definition below.

Have you ever overpaid for a guru’s course that talks about building a buyer’s list before you have a property?  You must create tons of fake ads to help drive a list of “motivated buyers” itching to buy from you-before you even have a property.

Now you get to spend the next two weeks on the phone wasting your prime time minutes with calls like this:

Caller- I see you have a 3 bedroom for sale on contract, what was that address?
You – Yes, I do have a 3 bedroom on contract…uh… it’s not 100% done, so for liability purposes we can’t show it yet. But….can you tell me how much you have for a  down payment and what you are looking for, and I will tell you if it fits?
Caller-Look, I want a 3 bedroom on contract because my credit is shot.  We got some money but want to see it before we talk numbers.
You – Would you have like 5k- 10k down?
Caller- So you ain’t going to tell me the address?  Tell me more about it then.
You - It’s a 3 bedroom, 2 bath home.  We are now painting and carpeting.
Caller – Can I drive by it?
You – Well, how about I take your name and number and I will call you back when we are ready?
Caller – You know what?  We are not too serious right now anyway.  Bye. (dial tone)

That is your typical call when building a list using a fake property to find “highly motivated” buyers itching to buy your properties.

Ignorant Reader’s Answer-
I already know what you are going to say: “Jason you are wrong.  Real estate is a numbers game…and yeah, most calls suck.  But you do find people with money who are too stupid to know that you don’t have anything to sell.  And if you find them something you could (in theory) make money!”

Jason’s Answer-
If you spend your time taking calls from strange people without anything to sell or rent….YOU AIN’T NUTTIN’ BUT A BUYER’S LIST WHORE!!!

Instead-
Spend your time and money looking for a great deal on a house. Next, apply yourself 100% to marketing that property once it’s under contract. If it’s a good deal, you will have no problem moving that property, and you will actually make money as opposed to wasting your time with fake buyers trying to look at a fake property.

Have you ever spent your time being a Buyer’s List Whore?  Let me know how it went for you by leaving comments below. Feel free to make up stories to back up the use of a buyer’s list and how effective it is!

Here is some insider secrets to make your real estate smell good enough to eat!  Now I’m far too lazy to do all these, but the longer a house sits, the more tricks I try.

1.  Roll of cookie dough- You can pick this up at the store for about two bucks and it makes your house smell like a home. If your property is missing a oven, you can bring a toaster oven and do the same thing. I always set the cookies right next to the purchase contract.

2.  Put a few drops of real vanilla extract on a light bulb - This one is one my little dirty tricks. This will make your house smell so good you will want to slap your mamma!  Get the baked cookies smell without working.  If you’re like me, that is the only way I like it!

3.  Use food-scented Glade plug-ins- Yeah, this is OK, but more often than not your house will smell like a trailer home from the 80’s.

4. Scented Incense Sticks- These look great in bathrooms, but looked stupid anywhere else in the house. Plus, your house starts smelling like a stoner’s car from high school.

5.  Sprinkle cinnamon on a cookie sheet and bake it on low. – Yeah this kind of works the same way the vanilla extract works on the light bulb, this is very easy but works extremely well.

6.  Light candles- in areas that are safe from fire. Feel free to use as many candles as you want, however then you have to deal with possibly knocking them over, and having to go blow each one out before you lock up.

7.  Bake a frozen apple pie- You can stop by Hy-Vee and pick up one of these babies for $4 bucks. Throw one in the oven and just wait for the magic to happen. This would be a great half-aced way to do a showing.

8.  Put some fresh Bounce sheets in your furnace registers.  Some people say it’s the duct tape method of fixin’ the smell round  ’bout your trailer home! (It works best in the winter.)

9.  Fabreeze- works well in areas that other things don’t- especially in them funky areas of the home, those where some of the old owners used to go about there business without bein’ clean and all.

10.  Duct tape the toilet shut

What do you do to make a house smell good?  Let me know by leaving a comment below.

Almost every rental property I have ever owned had a tenant leave a nice working washer and dryer in the unit at some point. Most of the time they are buying new or the next place they are moving to already has them, so they will no longer need the old ones.

So instead of being lazy and doing nothing, I choose one of two things.

First, I see if the new tenants will need them. If they do, we negotiate a price between $10-$20 a month to rent the washer and dryer from me.

$20 month x 12 months = $240 a year profit from a FREE machine. Now imagine if you have 5-100 units paying you this.

Do you wonder what happens if they break them? Easy, I go on craigslist and buy a set for $50-$100 to keep making that good rental money. If it was an old machine, I really don’t care. However if  I can tell the tenant went out of their way to break it, I will charge them the replacement cost for nice used appliances off craigslist.

OR….

If you don’t want to make extra money month in and month out, sell the appliances left behind on craigslist for QUICK-N-JUICY MONEY WASHING PROFITS BABY!

What do you do to make extra money from your rentals? Let me know by leaving a comment below.

Do you ever have a property that gets a lot of calls but not very many actual good leads?
To separate these calls from  your personal cell phone you can do this:

Buy a Virgin Mobile cell phone and have all those leads go to it.  You can customize the message for that property and keep your personal phone number away from the public.  These phones usually cost $10-$20 and are worth every penny.

This helps me turn business off at night when I’m home but leave my personal phone open for family calls.

How do you separate business and personal with real estate?  Let me know by commenting below.

Everyone who owns or manages property has dealt with tenants getting locked out.
You know they call when they come home late at night or when you’re in the middle of having fun.  So instead of getting all mad about it, I plan ahead.

When I put a tenant into the rental, I hide a lockbox in a bush or attach it to the house in some way.  Now when the tenant calls, I inform them where the lockbox is, and the code to get the key and they are in.  It’s that simple.  Next time I am on that side of town, I put the key back in it and change the code.

Now that’s how you can make $30 doing the least amount of work possible. I call it my LOCKBOX PAYDAY, BABY!  I’m not going to change my lifestyle because a tenant forgets a key or makes a mistake.

This method works best for duplexes and single family homes.

How do you plan ahead?  Tell us more in the comments below!