The Pros and Cons of Hard Money Loans

Hard money is a way to borrow without using traditional mortgage lenders. Loans come from individuals or investors who lend money based (for the most part) on the property you’re using as collateral.
When loans need to happen quickly, or when traditional lenders will not approve a loan, hard money may be the only option. Let's review how these loans work.

What Is Hard Money?

Most loans require proof that you can repay them.Usually, lenders are interested in your credit scores and your income available to repay a loan. If you have a solid history of borrowing responsibly and the ability to repay loans (as measured by your debt to income ratio), you'll get approved for a loan.

Getting approved with a traditional lender is a painfully slow process – even with great credit scores and plenty of income. If you have negative items in your credit reports (or an income that is difficult to verify to your lender’s satisfaction), the process takes even longer and you might not ever get approved.
Hard money lenders take a different approach: they lend based on collateral securing the loan, and they are less concerned about your ability to repay. If anything goes wrong and you can’t repay, hard money lenders plan to get their money back by taking the collateral and selling it. The value of the collateral is more important than your financial position.

Hard money loans are generally short-term loans, lasting from one to five years. You wouldn't want to keep them much longer than that anyway, because interest rates for hard money are generally higher than they are for traditional loans.

Why Use Hard Money?

If hard money is expensive, why would you use it? Hard money has its place for certain borrowers who cannot get traditional funding when they need it.

Speed: because the lender is mostly focused on collateral (and less concerned with your financial position), hard money loans can be closed more quickly than traditional loans. Lenders would rather not take possession of your property, but they don't need to spend as much time going through a loan application with a fine toothed comb – verifying your income, reviewing bank statements, and so on. Once you have a relationship with a lender, the process can move quickly, giving you the ability to close deals that others can’t close (that’s especially important in hot markets with multiple offers).
Flexibility: hard money agreements can also be more flexible than traditional loan agreements. Lenders don't use a standardized underwriting process. Instead, they evaluate each deal individually. Depending on your situation, you may be able to tweak things like the repayment schedules. You might be borrowing from an individual who’s willing to talk – not a large corporation with strict policies.

Approval: the most important factor for hard money lenders is collateral. If you’re buying an investment property, the lender will lend as much as the property is worth. If you need to borrow against a different property you own, that property’s value is what the lender cares about. If you’ve got a foreclosure or other negative items in your credit report, it’s much less important – some lenders might not even look at your credit (although many lenders will ask about your personal finances).

Most hard money lenders keep loan-to-value ratios (LTV ratios) relatively low. Their maximum LTV ratio might be 50% to 70%, so you'll need assets to qualify for hard money. With ratios this low, lenders know they can sell your property quickly and have a reasonable shot at getting their money back.

When does Hard Money Make Sense?

Hard money loans make the most sense for short term loans. Fix-and-flip investors are a good example of hard money users: they own a property just long enough to increase the value – they don’t live there forever.

They’ll sell the property and repay the loan, often within a year or so. It is possible to use hard money to get into a property and stay there, but you’d want to refinance as soon as you can get a better loan.

Hard Money Drawbacks

Hard money is not perfect. While it seems simple - an asset secures the loan so everybody’s safe - hard money is only one option. It is expensive, so things have to work according to plan for profits to materialize. Hard money works differently from loans you may have used in the past: lenders might use more conservative methods to value property than you expect. Learn more about hard money pitfalls.
Cost: hard money loans are expensive. If you can qualify for other forms of financing, you might come out ahead with those loans. For example, FHA loans allow you to borrow even with less-than-perfect credit. Expect to pay double-digit interest rates on hard money, and you might also pay origination fees of several points to get funded.
If you can’t get approved for a loan because your property is in need of serious repairs, an FHA 203k loan might pay for rehabilitation at a lower cost.

Finding Hard Money Lenders

To borrow money, you’ll need to get connected with investors. To do so, find out who in your area lends money based on collateral. Local real estate agents and real estate investor groups are a good source for names. Reach out to a few lenders, discuss your needs, and develop a relationship so that you can fund projects quickly and easily when the time comes.

Top 8 Ways to Find Deals in Real Estate Investing

We Buy Houses Louisville/ Eagle Thirteen Properties

1.) Driving for Dollars

Have you ever been driving in your car and noticed a house that made you think, “boy, that house needs some work!”
If so, then you are already proficient at “driving for dollars!”
Driving for dollars is the practice of getting in your car and driving up and down the streets of neighborhoods you want to invest in, looking for potential deals. Then, you simply try to buy those properties!
But… what does a “deal” look like?
Typically, when driving for dollars you want to focus on properties that look distressed, vacant, or transitioning negatively. For example, a property with 18″ high grass is an indication that someone doesn’t care about the property much. A mailbox stuffed with old, wet pieces of mail shows someone might not live there. A tarp on the roof that seems to have been there a while shows the house might have some problems that the owner can not fix.
While driving in the neighborhoods you want to buy in, you’ll likely encounter dozens of potential properties. Write down the address of each one, including notes about the condition and snap a photo as well. When you get home, do some digging into the public records to see who owns the property. Many times you can even do a reverse-phone number search to get the owner’s number. Or perhaps you just want to write a letter offering to buy the property and mail to the owner’s address listed on the tax records.
Driving for dollars is one of the lowest cost methods to find potential properties because it involves nothing but a tank of gas and your time, which makes it great for those looking to get started investing in real estate but who have limited funds. It can also help you get to know your prospective neighborhoods really well, which will help you make smarter decisions about your real estate.
For more on driving for dollars, I encourage you to check out Chris Feltus’ posts, Driving for Dollars Part I and Part II.

2.) Direct Mail

Have you ever received a piece of “junk mail” in the mail?
Of course you have!  You get them from car dealerships, credit card companies, local businesses, and more.
Direct mail is the act of sending out a large number of targeted letters or postcards to people who might be interested in selling their property, knowing that a small percentage will call you to talk more about the possibility and a small percentage of those will end up actually selling you their properties.
Related: How to Build a House Hunting Database to Find & Track Deals
While this may seem, on the surface, to be a lost cause, direct mail marketers know that the proof is in the percentages. If they can get, for example, 5% of those mailed to call, and if they can buy, for example, 5% of the homes of the people who call — they can still make far more than those letters or postcards cost. Let’s say that a wannabe landlord sent out 1,000 letters and got 5% of those people to call for more information, resulting in 50 phone calls. Now let’s say that 5% of those 50 phone calls resulted in a property being purchased, or 2.5 homes (okay, since you can’t really buy half of a home, we’ll round down to two homes).
So, could you spend the money needed to send 1,000 letters if you knew you were going to buy 2 properties? If those deals are as financially solid as they should be, I hope your answer is YES!
It’s easy to see why flipper’s and wholesalers might do direct mail — because they get paid back right away when they sell the home. Buy and hold investors, on the other hand, do not quickly sell so they don’t see that money spent returning to them soon. However, if you consider the cost of direct mail just part of the investment (think of it as “additional closing costs), then it’s hard to not want to try this method out.
Now, who is actually saying yes to selling you their properties through direct mail?
Typically, it is motivated people who can’t or won’t sell with a real estate agent. It might be someone caught in a nasty divorce just trying to liquidate the property as fast as possible. It might be someone who is in danger of losing the home to foreclosure. It might be someone who inherited the house but doesn’t want it. It might be someone who tried to be a landlord but failed miserably and now has a deadbeat tenant who won’t pay rent and won’t leave.
Do you see a pattern here?
Direct mail marketing is about finding people with problems and solving their problems. You are not taking advantage of anyone or trying to trick someone into selling their house. You are simply canvassing a large number of people and trying to find those who you can find a win-win solution for all parties.
There are a number of different “lists” you can buy and mail to, but the most common is typically the “absentee” list. This means that the person who is on record for owning the property does not actually live at the property. You can find and purchase these “lists” from companies like ListSource.com or MelissaData.com and send letters, postcards, or whatever you think will work the best to secure you a deal. Typically, you’ll spend around $.50 for each postcard or around $1.00 for each letter, but this can depend on how much work you do yourself and how much you outsource.
One final note about direct mail marketing: success is found in repetition.
It is unlikely the person you are mailing to this month will respond with a “yes.” Trust and brand recognition need to be built first! We’ve all heard it said that before someone buys a product from a company, they need eight interactions with that brand. The same is true for your direct mail, so I would encourage you to mail regularly and to the same list. Some direct mail marketers send letters monthly to the same list; others send quarterly. You will likely find a solution that works well for you, but the point is: repetition is key! If John Homeowner gets a letter from you every month for a year and suddenly realizes he needs to sell fast, who do you think he is going to call? Some stranger from an ugly yellow sign taped to a telephone poll by the laundromat or you, the company that has been reaching out for 12 months?
For a much more in-depth look at direct mail marketing, check out The Ultimate Guide to Using Direct Mail Advertising to Grow Your Real Estate Business.

 

3.) Eviction Records

I’ll never forget my first eviction.
Cockroaches. Filth. Anger. A crazy lady. And a hefty bill at the end.
As any landlord reading this can testify to, evictions are not fun. They are messy, stressful, time-intensive, and expensive! During this period of time, many landlords begin to question why they are even in this game to begin with.
And this is why targeting landlords who are in the midst of an eviction can be so powerful! They have a problem, and there is a great chance they will be motivated to get rid of the property as fast as possible. Had someone talked to me while going through my first eviction, I would have seriously considered unloading the property right then and there.
So, how can you target landlords who are going through an eviction?
Public records.
That’s right, evictions are part of the public record in most counties of America. In other words, you can take a trip down to your local county administration office and ask to see a list of the current evictions taking place. Different counties and states do the evictions a little different, so I can’t tell you exactly how to track down the list of evictions in your area, but if you ask around enough it shouldn’t be hard to find.
Then, make some phone calls or send some letters! (See #1 and #2 above.)

4.) BiggerPockets Marketplace

What if there was a single source online where real estate investors came together to buy and sell their properties?
Well, what a coincidence! There just happens to be that very thing and we call it the BiggerPockets Marketplace. Every day, dozens of listings are posted, and real transactions happening as a result. You can post an ad for either something you want or something you have.  

Looking for a certain kind of property in a certain area? Make a post!

Looking to sell one of your properties? Make a post!

Looking to partner up with someone? Make a post!

The beauty of the Marketplace is in its connection to the “Keyword Alerts” on BiggerPockets. The Keyword Alert System is an easy-to-use tool on BiggerPockets that allows people to get automatic notifications when certain words are used in the BiggerPockets Forums or Marketplace. For example, I have “Hoquiam” set up as a Keyword Alert, because that is one of the towns I invest in. Should someone go into the Marketplace and make a post about a property they are selling (or want to buy) in Hoquiam, I’ll be notified instantly!  Thousands of Keyword Alerts have been set up, and the vast majority are for specific city names for this very reason! So go ahead and post a Marketplace ad today letting the BiggerPockets world know what you are looking for, and be sure to use the city name in your ad.
You never know who is looking to sell you a deal in your area.

5.) Craigslist

In the “good ‘ol days,” people used the newspaper to place classified ads. While the newspaper might still be effective in some areas, a new business has emerged that is quickly putting newspapers out of business:
Craigslist.
Craigslist is an online classified section that is free to post and free to browse, so makes a great resource for finding real estate deals.
There are three strategies I want to share for using Craigslist:

1. Search for Sellers: Perhaps the easiest and most passive way to use Craigslist is to simply search the site for real estate postings in your area. You can do this fairly easily and can even automate the process so new leads are sent directly to your email inbox that contain certain words that you choose (you can do this through IFTTT.com). The problem with this strategy is that there are a lot of folks doing this. If you want to get really creative, you need to go on the offensive, which brings me to #2…
2. Post an Ad: Why wait for the deals to come to you? Instead, post an ad that says you are looking for a house to buy. Make it big, make it flashy. Get people’s attention!
3. Search for Landlords: Perhaps my favorite use of Craigslist is actually in contacting landlords who are posting on Craigslist. Landlording is not easy, and as I often say: 90% of landlords out there suck! Many landlords lose money year after year and are only hanging onto the property because they know it would be hard to sell without fixing it up. Therefore, you can use Craigslist to search for rental listings that appear to have been placed by “mom and pop” landlords (not professional property management companies.)  Most likely, the landlord put their phone number directly in the post… so call them up! Explain that you are looking to invest in real estate in their area and saw their post, and although you aren’t interested in renting it, you are interested in buying a property. Even if they don’t want to sell that particular property, there is a chance they will have something they want to sell OR know someone else who does. Worst case scenario, you build a relationship with a local investor! Maybe you’ll even gain a mentor out of the deal!

Craigslist truly is a no-brainer when you are on the hunt for a good deal. Not only is it free, it’s also where people go to buy or sell things. So why not take 5 minutes today and find a great deal on Craigslist?

6.) Wholesalers

How great would it be if you could sit at home while someone else was out there, pounding the pavement, looking to bring you a killer-good deal?
Well, that’s exactly what could happen if you get your deals from a wholesaler!
Wholesaling is the business of finding incredible real estate deals (usually through the methods I’ve already talked about), putting those deals under contract, and selling (or assigning) that contract to another investor for a slightly higher amount.
For example, the wholesaler might find a deal and put it under contract for $110,000 and sell that deal to you for $115,000, netting a $5,000 profit for him/herself and helping you get a great deal.
The key to working with wholesalers is this: find a good wholesaler! This is actually trickier than it sounds, as there are a LOT of wannabe wholesalers out there who claim to know what they are doing but really don’t. Wholesaling is one of the most difficult real estate “jobs” because you have to be great at almost every aspect of the transaction (marketing, analyzing, communication, sales, negotiation, etc.), but it is consistently taught by real estate “gurus” as a get-rich-quick way to build wealth with real estate. However, if you are able to connect with a great wholesaler, you truly can get hot deals delivered straight to your inbox.
Related: Hustle: The Single Most Important Factor to Finding Real Estate Deals
To find wholesalers, I’d recommend:

• Call the numbers you see on those ugly “bandit signs” on the site of the road
• Go to every real estate club in your area
• Create a Marketplace posting on BiggerPockets (See #4 above.)
• Train your own wholesaler how to find you deals!

 7.) Bandit Signs

I actually bought my first investment deal with a bandit sign! This strategy is near and dear to my heart. The problem with this one is a lot of cities have begun to ban this practice and a lot of investors already have their signs out. When I put mine out, I take my sons out on a Friday night and we install them near stop lights and busy intersections. That way if code enforcement does remove them, it won't be until Monday at the earliest and they will be visible at least through the weekend. I also LOVE holiday weekends!

 

8.) Passion

Finally, the last method to find great deals is what I call “passion,” and it’s hard to describe exactly, but here’s the gist: people want to help you achieve your goals! Once you let the world know what you want, other people will help you get it!
Let me tell you a quick story. When I was 24 years old, I had just finished reading Ken McElroy’s book The ABCs of Real Estate Investing and quickly fell in love with the concept of investing in apartment complexes. At church the next morning, I mentioned my newfound love of apartment investing to a nice older couple who told me that they actually had an apartment complex they were looking to sell!
Now… was that luck or was that something I did?
I think both. As the quote goes, “The harder I work, the luckier I get!” I didn’t ONLY tell this one couple about my goals — I told everyone I knew because I was so passionate about it! This is the concept of finding deals through passion. Let your goals and passions be heard, and amazing things can happen.

Conclusion

As real estate grows in popularity, you have two choices:

• Sit out and wait until the next crash or
• Do what needs to be done to find a deal.

I know which option I’ll be taking… do you?

My top 5 tips for investing in real estate

If you’re just beginning to invest in real estate, you’ll find that there’s a lot to learn. Real estate investing is more complicated than investing in stocks because of the financial, legal, and extensive due diligence requirements involved. That’s why it’s a good idea to give yourself a solid education before you purchase your first investment property.
However, before you get your advanced degree, it’s a good idea to familiarize yourself with the fundamentals. To that end, here are 5 basic tips for investing in real estate.
1. Location Matters
The old adage that “location matters” is most accurate when it comes to real estate investing. Before you fork over a down payment and put yourself in a significant amount of debt over a property, ensure that it’s in a good location.
Look for the worst house on the best street. That’s a principle you’ll come across quite a bit as you delve into further real estate investing advice.
You want to invest in the worst house on the best street because it gives you an opportunity to build equity. It’s a property in a great neighborhood (“the best street”) that needs some work (“the worst house”). You can invest some money to fix it up and sell it to someone else who wants a ready-to-move-in house in a fabulous location. Professional real estate investors call this “fixing and flipping.”
2. Look for Wholesale Properties
Investing in real estate is just like investing in the stock market in at least one way: you’re looking for the best deal. If you’re a savvy stock market investor, you probably won’t buy too many stocks at their high if you plan on holding them for a long time. Instead, you’ll follow the Warren Buffet principle of getting greedy when everyone else gets fearful. You’ll buy stocks that are beaten down and make a fortune when they turn around.
That’s what you want to do when it comes to real estate investing. Avoid paying “full price” for properties. Instead, look for so-called wholesale properties that are offered at a steep discount. Sure, they’ll probably need some work. Run the numbers and see if the investment in rehab is worth the ultimate selling price.
As noted at ThinkConveyance: “You can easily invest $20,000 in a property and add twice that much to the selling price. That’s why real estate investing is so attractive to investors who want to maximize their return on investment.”
3. Understand the Tax Benefits
The people who run our government want private investors to provide housing for people. That’s because they know that if private investors don’t provide housing, then the government will be responsible for it.
To that end, Uncle Sam offers significant tax benefits to real estate investors. The most significant benefit, arguably, is the depreciation write-off. When you buy an investment property that includes a building, you get to write off the depreciation of that building as a tax deduction. You’ll have to consult your tax advisor for specifics, but basically you can expect to depreciate a residential building over 27 years and a commercial building over 39 and a half years.
Keep in mind that the IRS views your real estate investment efforts as a business so you also get to claim the “necessary and ordinary“ deductions that business owners take, including mortgage interest, insurance, and maintenance expenses. Again, it’s a good idea to consult your tax advisor about specifics.
4. Check Your Credit Report
You’re more than likely going to need to borrow money to buy real estate. That’s why you should check your credit report before you begin investing in real estate.
If you have problems on your credit report that are mistakes, get those resolved as quickly as possible. If you have problems that are legitimate, then you’ll need to work to improve your credit.
Simply put, banks aren’t going to loan money to you for a property that’s not your primary residence as readily as they’ll loan it to you for your own home. That’s why your credit has to be spectacular.
5. Use the “1% Rule”
If you’re planning on buying a property that you’ll rent out one or more tenants, use the “1% Rule” when you decide whether or not the property is worth the price you’ll pay for it.
The 1% Rule simply states that an income producing property must produce 1% of the price you pay for it every month. For example, if you’re looking at buying a property for $150,000, then the monthly rental income should be 150,000 x 1% = $1,500.
Wrapping It Up
Real estate investing offers the potential for fabulous returns. However, people have also bankrupted themselves investing in real estate. Be sure that you know what’s involved before you start.

We Buy Houses Louisville/ Eagle Thirteen Properties

Want To Get the Best Loan? Here's 7 Ways to Clean Up Your Credit Score

Like it or not, your credit score dictates everything from whether you’re approved for a credit card to what rate you’re offered on a mortgage.
As the economy has recovered from the Great Recession, many Americans have managed to get on better footing, but nearly one-third still have “bad” credit scores (under 600), according to credit.com. If you are one of them, it’s time to give that baby a boost. Here are seven of the fastest ways to increase your credit score.

1. Clean up your credit report

Before you do anything else, go to AnnualCreditReport.com and request a free credit report from each of the big three credit reporting companies:

• TransUnion
• Experian
• Equifax

By law, you’re entitled to one free report each year, no matter what. When you request it, be ready to print or save it to your computer.
Once you have the report, examine everything. In particular, look for any accounts that show late payments or unpaid bills. If that information is inaccurate, the report should tell you where to send a dispute.
Keeping a clean credit report isn’t only important for your credit score; it can also make or affect your job prospects. Employers can and do pull credit reports before making hiring decisions.

2. Pay down your balance

According to myFICO, the consumer division of FICO, the company that calculates one of the most widely used credit scores, 30 percent of your score is based on the amount you owe.
However, it’s not simply how much you owe that’s important. It’s how much you owe compared with how much credit you have, a ratio known as your credit utilization. For example, if you have a $10,000 credit limit and a $5,000 balance, your credit utilization is 50 percent. If you’ve maxed out that $10,000 limit, your utilization is 100 percent.
There are many theories on what is the best credit utilization level, but on its website, Experian suggests it’s best to have a rate of no more than 30 percent. In other words, you should never have more than $3,000 charged at any time if you have a $10,000 limit.
If you owe more than that amount, paying down your balances is a quick way to boost your score. Live lean for a few months, hold a garage sale or pick up a temporary second job to find the cash needed to drop your credit card balances.
For more ideas on tackling debt, read: “8 Foolproof Ways to Pay Down Debt.”

3. Pay twice a month

You might think you’re doing great because you pay off your card every month, even if it’s maxed out. The problem is that your creditors are only reporting balances to the credit bureaus once a month. If you run up a big balance each month, it could look like you’re overusing your credit.
For example, assume you have a credit card with a $1,000 limit. It’s a rewards card, so you use it for everything. In fact, every month, you hit your limit. The statement arrives, you owe $1,000, and you send in a check to pay it off. The problem is the credit card company is likely reporting the statement balance each month. So it looks like you have a $1,000 limit and a $1,000 balance. That’s a 100 percent credit utilization rate, and not a good thing as far as your score is concerned.
You can help alleviate the problem by breaking up your credit card payments. Go ahead and charge everything to get the rewards, but send in payments at least twice a month to keep your running balance lower. In addition, if you make a large purchase on your card and have the cash handy, pay it off immediately.

4. Increase your credit limit

Maybe you’re not in a position to pay down your balances. You could take a different approach to improving your credit utilization rate: Call your creditor and ask for a credit limit increase.
If you’ve maxed out your $1,000 card and get a limit increase to $2,000, you’ve instantly cut your credit utilization rate in half. The key is to not spend any of your new credit. It defeats the purpose of getting a limit increase if you immediately charge the card up to $2,000.

5. Open a new account

If your current credit card issuer balks at the idea of giving you a credit increase, apply for a card from a different issuer. It will still help your credit utilization rate, since your score lumps all your open lines of credit and balances together.
An individual with $10,000 in credit and a balance of $5,000 will have a 50 percent credit utilization rate regardless of whether her or she has all those amounts on one card or spread out over multiple cards.
Be aware, though, that opening multiple accounts at once is not good either. Too many new accounts can make you look like you desperately want to go on a spending spree. Don’t risk dinging your credit score — apply for only one or two new cards if you’re going to try this strategy.
You can compare credit card deals to find the best one for you at our Solutions Center.

6. Negotiate outstanding balances

Maybe your credit score took a dive because you have bills in debt collections. You can’t wipe out past mistakes from your credit report, but you can do some damage control by settling them.
Dummies.com has a short, easy-to-understand primer on how to negotiate your debt. The most important step is to get an agreement in writing.
If you don’t have any cash on hand to offer as a settlement, you can sell some of your stuff or try one of these “20 Clever Ways to Make Extra Money.”

7. Become an authorized user

Finally, if none of the above suggestions helps you, don’t despair. There is one final option, and that is to be added as an authorized user on someone else’s credit card.
Now, for this to work, you’ll need to find someone who loves you very much and who manages his or her money very well. Once you find this very special person who is going to do you a HUGE favor, you need to cross your heart and hope to die while explaining you have no intention of using their credit card. You just want to be added to their account as a way to build credit.
You see, when you’re an authorized user, the account will show up on your credit report so long as a card has been issued in your name. Then, your credit report will show all the cardholder’s on-time payments and (hopefully great) credit utilization rate. As a result, your credit score gets a boost, too.
While these seven strategies can raise your credit score fast, keep in mind that “fast” is a relative term. You won’t see results overnight; give it three months or so for the changes to begin affecting your score positively.

20 Tips for Being a Successful Landlord

1. Use “lease targeting”

Schedule the majority of your lease end dates for times when the market is providing the most prospective tenant traffic. June 1st is often a great target move-in date.

2. Treat your rental like a business

What system do you have in place to manage maintenance requests if you’re out-of-town on vacation? Are you setting aside 10% of your rental income for repairs?

3. Screen out the bad tenants

Make sure tenant income is at least 3x the cost of monthly rent. Run a credit and background check, follow Fair Housing laws, ask for referrals from previous landlords, and avoid tenants with past evictions.

4. Keep your tenants happy

It’s a LOT cheaper to retain a tenant than to find a new one. Fix repairs promptly, keep the property in good shape, treat your tenants with respect, and you’ll see less turnover and more cash flow.

5. Have a lawyer review the lease

Many of the common provisions placed in lease contracts are illegal. An attorney familiar with changing landlord-tenant laws can quickly spot lease errors and provide you with a court-tested document.

6. Reinforce good behavior

Reward on-time, advanced rent payments, or tenant referrals with movie tickets, chocolates, dinner vouchers, anything your tenant would appreciate.

7. Do not discriminate

Follow Fair Housing laws when screening prospective tenants. These Federal lows make it illegal to discriminate on the basis of race, color, religion, national origin, sex, disability, or familial status.

8. Move-in / move-out inspections

Have the tenant document and sign off on any damages before the move in. Shoot video of the property before move-in and after the tenant vacates the property.

9. Set your hours

Set “office hours” or your tenant will set them for you. After all, it’s one of the perks of being a landlord in the first place :)

10. Get professional help

Just because you worked in construction and know how to operate power tools doesn’t mean you should be breaking up concrete and fixing the plumbing problems by yourself.

11. Document everything

When it comes to being a successful landlord there is no such thing as a verbal agreement, only a signed contract. In order to protect your interests and the interests of your tenants, get everything in writing.

12. Figure out the right rent

How do you go about setting rental rates in line with the current market? Look in the local newspaper. Pay close attention to location. Check the internet for local rental rates. Always base your rent rates on current market conditions.

13. Set up a Google Voice number

Instead of giving tenants access to your personal cell number, set up a Google Voice account – which will supply you with a phone number that will forward through to your cell phone.

14. Electronic rent payments

Many tenants prefer to pay rent online. It’s faster and often more convenient. Look into setting up automatic rent payments with Cozy. I LOVE Cozy!!!

15. You are NOT the owner

When you are the owner the tenant will blame you for these decision. Fear of this blame will often lead many landlords to start making decisions out of convenience rather than common sense.

16. Have a late policy

Make it clear from day one you will be charging a late fee for overdue rent. The key is to be strict with the policy. The extra income will help compensate for the stress of not getting rent on time.

17. Use multi-media marketing

“List it and they will come…” I wish it were that easy. In order to get your property in front of the renter (many or which are millennials), you need to have a presence across multiple marketing channels.

18. Keep family out of it.

Renting to friends and family is a recipe for disaster. Each time, you’ll be faced with the following dilemma: Lose the money or lose the relationship. Don’t put yourself in that situation.

19. Have an enforceable lease

Make sure you have an air tight lease that sets the terms and conditions for your tenants.

20. Get the right insurance

Make sure you have the maximum amount of rental insurance, property liability insurance, and any other type of insurance required in your state.

How to Make Good Tenants Happy and KEEP THEM!

As a property manager/landlord, you are already aware that good tenants who pay their rent on time, take care of the property, and are well-mannered and polite, are hard to find. Add to this the loss in rental income as the property lies vacant, the time, effort and money that goes into advertising for new tenants, screening potential tenants, turning the property….phew! It makes more sense to put your effort into retaining the good tenants, who are already renting from you, doesn’t it?
Here are a few pointers to help you ensure your best tenants stick around and renew their lease:

1. Look after the property… and your tenants

Your job does not end with handing over the keys to the rental unit. In order to attract and retain good tenants, you have to maintain a clean, well looked after property that demonstrates your intentions as a landlord or a property manager. You have to make your tenants feel happy and proud that they are living there. A swimming pool that is always filthy, overgrown landscape, malfunctioning outdoor lights – all these factors will count against you when your tenant makes the final decision to renew the lease or move out.
On the other hand, a landlord or property manager who ensures the walkways and sidewalks in his property are cleared of snow in a timely manner in winter, responds to requests or complaints promptly and efficiently, maintains a clean and well-maintained property, and shows concern for the comfort and well-being of his tenants wins their support and loyalty.

2. Be responsive and proactive

It is simpler to get your tenant to renew the lease if he likes you and is happy to deal with you. If you never answer your tenant’s calls, do not call back or show up for the important things, don’t be surprised if he decides not to stay for another year.
Respond to your tenant’s requests or complaints promptly and efficiently. If you feel you need more time to resolve the issue effectively, communicate the situation to the tenant. And most importantly, don’t ignore the request – even if you feel that the problem is something beyond your control. Instead, discuss the issue with them and offer support or resources to help them solve it on their own.

You should also be proactive in solving issues that you know are bound to crop up sooner or later. Come up with a preventive maintenance program to keep track of periodic tasks such as testing smoke detectors, tree trimming, changing HVAC filters and so on. One of my previous landlords used to arrange for a home inspection every fall to make sure that the property is well-insulated and equipped for the coming winter. He also used to contact us on the first of every month to ensure that we are happy with the home or apartment and do not have any concerns. Remember, happy tenants make for a happy landlord.

3. Observe fair housing practices

Follow fair housing rules that help your tenants create a comfortable home for themselves. Offer reasonable rental prices that are comparable with other properties in the neighborhood. It doesn’t take a genius to understand that your tenants are not going to stay with you if you charge high rents that are not inline with the neighborhood or current market conditions.

4. Don’t be a stranger

Don’t be the stranger who turns up only to collect the rent. Send out a greeting card or gift basket to your tenants on their birthdays. Wish them on major festivals and thank them for being a good tenant or paying the rent on time. It won’t cost you much, but will bring you a lot of trust and goodwill and help build a relationship.
At the same time, remember your boundaries as a landlord. Don’t show up every other week without prior notice. It is a huge invasion of privacy and can quickly scare away even the best of tenants!

5. Set up a rewards system

Several innovative property management companies have recently come out with resident rewards systems to reward tenants for good behavior, and hopefully, reduce tenant layover. For example, a tenant gets 100 points if he pays the rent on time. He gets another 500 points if he refers a friend who also becomes a tenant. He can then redeem these points for free gifts, household items, restaurant coupons, movie tickets or property upgrades. Obviously, such programs are beneficial for the landlord only if he has a sizeable number of tenants.

6. Form a big, happy family!

Involve your tenants in the community and help them out down roots by organizing events, talks, games or seminars where they can interact with each other. Set up a weekly book club or sports league. Create a garden area where residents can hang around out. Throw seasonal parties. Send out weekly or monthly community newsletters detailing local programs.

7. Train your staff to be tenant-friendly

Remember, you may or may not be able to personally address every tenant concern or complaint that comes your way. Most often that not, your tenants are going to interact with your employees or the leasing office staff. Hire people who understand your policies and treat your tenants with respect.

8. Offer renewal incentives

If you’ve got some great tenants coming up for a lease renewal shortly, contact them before the end date and find out what their plans are. Offer them a renewal incentive if they are still deciding – it may just swing the vote in your favor.
Though you can always ask them directly what it would take to renew the lease, you can also go with the standard and tested renewal incentives such as cash bonuses, electronic gifts, free covered parking, new kitchen appliances or rent discounts. You can also allow them to choose from a list of pre-approved home modifications, such as new flooring, window treatments or different wall colors, to make them feel more at home.
As with any other relationship, the tenant – landlord/property manager relationship requires continuous investment of time and effort. If your tenant is still set on moving out, don’t hesitate to ask him what went wrong. If you are lucky, it may be something that you can fix, or at least, correct the next time around.

7 Lucky Reasons to Go to Thurby

Thurby is the new Oaks.
Locals say it’s what Oaks used to be, before the world caught on that the Friday before Derby was one of the greatest days to go to the track. After this discovery, what was once “Louisville’s Day at the Track” became awash with outsiders. Out-of-towners, with their tour buses and overpriced tickets, stampeded our track and took over our holiday on Friday.
No worries–we just moved our party back a day, to the Thursday before Derby, now affectionately known as “Thurby.” Louisvillians have made this day their own, with lighter crowds and a perfectly primed Churchill Downs ready for the taking.

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The Paddock is perfection at Thurby. You can actually walk through the area and see a horse.

If you have not had the pleasure of attending a Thurby, might we offer you seven solid reasons why you should go? In no particular order, they include:

1. It’s Louisville’s day at the track.

Remember when you’d go to Oaks, and you’d see every single person you knew, plus their families and even their grandparents? Everyone had a section that they gravitated toward, where they had lifelong seats. Remember when you knew that if you wanted to see your friends from college, you would go to this section? See your friends from high school, go to this section and on and on. That’s what Thurby is now shaping up to be.

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Back to the old neighborhood seats, where everybody knew your name

2. It has all the trappings of Derby with no fuss.

You would think you were going to Derby when you go to Thurby. Everyone is in their best finery, wearing dresses, suits, hats and fascinators. Mint juleps and lilies are flowing. Horses are all there. But here’s the twist: THERE ARE NO LINES. There is no crushing mass of humanity. Best of all, everything is immaculate. It feels like being first in line to go to Disney World.

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Concessions are ready and waiting for you, with no sign of a crowd.

3. You get a lot of bang for your buck.

General admission to the Paddock is $15. Third-floor clubhouse box seats are only $30. And it’s really only $30. It’s not like when they list the Derby tickets at $100 and you really end up paying $1,000 a ticket. Plus, you feel like you’re having a private tour of Churchill Downs before the Derby. With no crowds and the track in prime condition, you get to experience all of the wonderful amenities without all the crowds and craziness.

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You cannot get this close to a horse, much less SEE a horse, on Oaks and Derby days.

4. The cocktails, entertainment and food are all top-notch.

There’s a band! There are premade drinks and punches! There’s awesome food at the concession stand! And you’re not standing in line for an hour to get a $9 beer in a can.

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Huge vats of margaritas and Bloody Marys all made with top-shelf Brown-Forman products

5. It’s a test run for Oaks or Derby (or both!).

Want to see if that fascinator is going to give you a headache? Can your shoes make it all day? Is your dress too short? Consider Thurby a test run for so many operational issues. It’s like having all the prep work done for Derby, so that the little things, like a raging blister or a wonky hat don’t ruin your day.

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Guess what? You’ll miss my favorite people outside the track on Thurby. They don’t get there until Friday.

6. It is a great girls’ day or boys’ day out.

Thurby is a great excuse for a girls’ day out or even a boys’ day. We’ve even celebrated birthdays at Thurby. If you need a reason to get a bunch of friends together, this is a good one.

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Girls’ day out!

7. It doesn’t have to be a marathon.

Because it’s on a regular workday (well, not really here in Louisville), you can go at lunchtime, stay for a few hours and be home for dinner. It’s a little like a secret rendezvous. Because the tickets are so cheap and nothing is a hassle, you can just do a drop in and not commit to an entire day of marathon tracking.

13 Simple Tips for Selling Your Home

We’ve all heard about how “bad” the real estate market is. But what’s bad for sellers can be good for buyers, and these days, savvy buyers are out in spades trying to take advantage of the buyer’s market. Here are 13 thing you can do to help sell your house.
1. Audit your agent’s online marketing. 92% of homebuyers start their house hunt online, and they will never even get in the car to come see your home if the online listings aren’t compelling. In real estate, compelling means pictures! A study by Trulia.com shows that listings with more than 6 pictures are twice as likely to be viewed by buyers as listings that had fewer than 6 pictures.
2. Post a video love letter about your home on YouTube. Get a $125 FlipCam and walk through your home AND your neighborhood, telling prospective buyers about the best bits – what your family loved about the house, your favorite bakery or coffee shop that you frequented on Saturday mornings, etc. Buyers like to know that a home was well-loved, and it helps them visualize living a great life there, too.
Plus: 13 Moving Tips to Keep in Mind
3. Let your neighbors choose their neighbors. If you belong to neighborhood online message boards or email lists, send a link to your home’s online listing to your neighbors. Also, invite your neighbors to your open house – turn it into a block party. That creates opportunities for your neighbors to sell the neighborhood to prospective buyers and for your neighbors to invite house hunters they know who have always wanted to live in the area.

© iStockphoto/Thinkstock

4. Facebook your home’s listing. Facebook is the great connector of people these days. If you have 200 friends and they each have 200 friends, imagine the power of that network in getting the word out about your house!
5. Leave some good stuff behind. We’ve all heard about closing cost credits, but those are almost so common now that buyers expect them – they don’t really distinguish your house from any of the other homes on the market anymore. What can distinguish your home is leaving behind some of your personal property, ideally items that are above and beyond what the average homebuyer in your home’s price range would be able to afford. That may be stainless steel kitchen appliances or a plasma screen TV, or it might be a golf cart if your home is on a golf course.
6. Beat the competition with condition. In many markets, much of the competition is low-priced foreclosures and short sales. As an individual homeowner, the way you can compete is on condition. Consider having a termite inspection in advance of listing your home, and get as many of the repairs done as you can – it’s a major selling point to be able to advertise a very low or non-existent pest repair bill. Also, make sure that the little nicks and scratches, doorknobs that don’t work, and wonky handles are all repaired before you start showing your home.

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7. Stage the exterior of your home too. Stage the exterior with fresh paint, immaculate landscaping and even outdoor furniture to set up a Sunday brunch on the deck vignette. Buyers often fantasize about enjoying their backyards by entertaining and spending time outside.
8. Access is essential. Homes that don’t get shown don’t get sold. And many foreclosures and short sale listings are vacant, so they can be shown anytime. Don’t make it difficult for agents to get their clients into your home – if they have to make appointments way in advance, or can only show it during a very restrictive time frame, they will likely just cross your place off the list and go show the places that are easy to get into.
9. Get real about pricing. Today’s buyers are very educated about the comparable sales in the area, which heavily influence the fair market value of your home. And they also know that they’re in the driver’s seat. To make your home competitive, have your broker or agent get you the sales prices of the three most similar homes that have sold in your area in the last month or so, then try to go 10-15% below that when you set your home’s list price. The homes that look like a great deal are the ones that get the most visits from buyers and, on occasion even receive multiple offers. (Bidding wars do still exist!)
10. Get clued into your competition. Work with your broker or agent to get educated about the price, type of sale and condition of the other homes your home is up against. Attend some open houses in your area and do a real estate reality check: know that buyers that see your home will see those homes, too – make sure the real-time comparison will come out in your home’s favor by ensuring the condition of your home is up to par.
11. De-personalize. Do this – pretend you’re moving out. Take all the things that make your home “your” personal sanctuary (e.g., family photos, religious décor and kitschy memorabilia), pack them up and put them in storage. Buyers want to visualize your house being their house – and it’s difficult for them to do that with all your personal items marking the territory as yours.
12. De-clutter. Keep the faux-moving in motion. Pack up all your tchotchkes, anything that is sitting on top of a countertop, table or other flat surfaces. Anything that you haven’t used in at least a year? That goes, too. Give away what you can, throw away as much as possible of what remains, and then pack the rest to get it ready to move.
13. Listen to your agent. If you find an experienced real estate agent to list your home, who has a successful track record of selling homes in your area, listen to their recommendations! Find an agent you trust and follow their advice as often as you can.

Bandit Signs: Do They Still Work in 2017?

Let’s face it. Bandit signs, those small plastic “WE BUY HOUSES” signs posted on telephone polls and at intersections, are the Kanye West of the real estate industry. The people that love them think they’re absolutely brilliant, and the people that hate them… well, they just wish they’d go away. As divisive as they are, we took a deep dive on the state of bandit signs in 2017 to see if they’re still a good way to generate leads.
For more (legal) ways to generate leads, check out our top 43 real estate lead generation ideas.
Okay, throw on some music that gets you amped about making more money (our pick) and let’s get started.

Where To Buy Bandit Signs (And How Much They Cost)

Source: Phillip’s Natural World

You can purchase bandit signs at any online or brick and mortar sign shop. Coroplast (corrugated plastic), is both weather resistant, and fade resistant, so it should be your first choice. You can buy them for as low as $1.99 each. Then you’re going to want to stock up on staples, a heavy duty staple gun, zip ties, or maybe even a dedicated sign stapler.

The Psychology Behind Bandit Signs: Why They Work

Source: New York Transit Museum via BBC.com

For more than thirty years Dr Jonathan Zizmor has been running the same decidedly un-slick ad in the New York City subway system. It’s dominated by a garish rainbow, a confusing and cluttered hodge podge of different fonts, and a layout that’s well…there’s no other way to say it, ugly.
As silly as it looks, the design flaws were probably no accident. Here’s Dr Zizmor himself explaining his ads to Business Insider:

“I was getting all my fancy-schmancy people, but I wanted to see the rest of the world,” he said. “Most people don’t even know a dermatologist.”

How many people know a professional real estate investor?

9 out of 10 People Agree…

If you were to ask ten New Yorkers what they think of Dr Zizmor’s ad, nine of them would probably just roll their eyes and laugh. After all, the ads are pretty silly looking.
Of course Jonathan Zizmor doesn’t care about nine out of ten New Yorkers. He cares about the 10th New Yorker. The one who works a lower wage job and has severe acne, or maybe an embarrassing scar. For them Zizmor’s ad is a serious one—they don’t see a silly ad. they see a doctor who is approachable. Someone who won’t look down their nose at them or make them feel inferior for having an embarrassing skin condition. A doctor who looks like a regular person, terrible taste in graphic design and all.
That tenth person might have been putting off treatment for years, or even decades. They’re probably worried that they can’t afford treatment at all. They’re also probably more than a little embarrassed to be looking for acne treatment or scar removal in the first place. Despite all this, they’re finally ready to throw in the towel and call a dermatologist. On the subway the next morning, they’re confronted with this ad:

Source: Laser Dermatology NYC

Again, they’re a little bit embarrassed, they’re worried about not being able to afford treatment, but they’re still committed to calling a dermatologist TODAY. Who do you think they’re more likely to call?
Since you’re reading an article about bandit signs you probably already guessed the answer. They’re going to call Dr Zizmor. Wouldn’t you?

Why Desperate Homeowners Respond to Bandit Signs

If you’ve been working as an investor, rehabber, or wholesaler for a few years, that tenth New Yorker who called Dr Zizmor probably reminded you of someone: A homeowner who needs to sell their house quickly. Think about it. They’re probably embarrassed to be so close to foreclosure, they definitely don’t have a lot of money in the bank, they need to sell yesterday, and probably think they’re going to get taken for a ride by the broker in the gleaming S Class and Saks Fifth Avenue pantsuit.
Here’s what most desperate homeowners who need to sell are looking for in buyer:

• Someone they can relate to
• Someone who won’t make them feel ashamed
• Someone who might be closer to their economic level
• Someone who will tell it to them straight
• Someone who they might be able to out negotiate
• Someone who speaks plainly

For many homeowners who find themselves in stressful financial situations, calling a number on a bandit sign might make a lot more sense (at least emotionally) than heading over to the local boutique real estate office.
Now that you have a better idea of why bandit signs work so well, let’s dive in and look at the 7 problems you’ll encounter when using them. Even better, we’ll show you how to avoid those problems and start generating leads with bandit signs.

The 6 HUGE Problems with Bandit Signs in 2017 (and how to avoid them)

Before you start getting excited about how many new fix and flip projects you’re going to get from a weekend of posting bandit signs, you need to understand the risks. Here’s a quick rundown of the risks and potential downsides of bandits signs.

1. They’re Called Bandit Signs For a Reason…

Bandit sign is not just a catchy name. Bandit signs are called bandit signs for a very good reason; in many municipalities bandit signs are actually illegal.
Yes, really. Despite (or maybe because of) the recent explosion of interest in fix and flip and rental investing, many local communities have been cracking down on bandit signs. In Philadelphia for example, a weekend spent putting up bandit signs can cost you as much as $75 per sign. Putting up 20 signs, which is not an unusually high number for many investors, might end up costing you $1500 in the city of Philadelphia. In Orange County Florida, the fine is $150 per sign. That’s $3000 for twenty signs…

How to Avoid Getting Getting Fined in 2017

Let’s not beat around the bush here. The only way to truly avoid getting fined for putting up bandit signs is to not post them at all. After all, cold calling FSBOs, signing up for Zillow Premier Agent Direct, or mastering Facebook ads can get you great listings too. That said, since you’ve gotten this far into the article, you might want to know how creative investors avoid paying fines. Here are a few of their ideas.

Get permission from property owners

Although local ordinances might affect them as well, owners of private property are probably going to be a lot more forgiving than the local government. If you’re nice, they may let you put up your signs for free. If it’s a really prime location (busy intersection, downtown area near public transportation etc) then it might even make sense to work out a deal. Would you pay $50 for 5 good leads? I know I would.

Talk to your lawyer

Let’s face it. Legal statutes, even at the local level, can be byzantine and opaque unless you’re a lawyer. Instead of crossing your fingers and guessing, buy your lawyer an expensive lunch and ask them.

Put your signs up on Friday night and take them down Sunday night.

Some agents recommend putting your signs up on Friday and taking them down Sunday night. Since they work for the government, the odds of a code compliance officer working on the weekend are pretty slim. You also might avoid the ire of the local community. If they see you’re at least making an effort to not visually pollute their neighborhood, they may be less likely to call and complain.
That said, some investors have been reporting that code compliance officers are catching on and are now working weekends as well. Tania Matthews, a Keller Williams Mega Agent in Central Florida, reported that in her area at least, code compliance officers have been known to work weekends. This is why getting permission from property owners or researching local regulations is still your safest bet.

2. Some Local Residents HATE Them… and Will Hate YOU for Putting Them Up.

Source: The Adventures of Johnny Northside

No matter how you justify it, at the end of the day you’re trying to buy houses for below market value. Worse, you’re probably trying to buy them from vulnerable people in often desperate financial straits. They’re also ugly. Yes, they’re strategically ugly, but would you want dozens of bandit signs on your block?

How to avoid the Ire of the Community in 2017

Don’t use bandit signs to generate leads! If you’re dead set on using them, try putting them out temporarily, or putting them up on private property only.

3. You’ll Probably Violate DOS or NAR Disclosure Regulations

Source: https://www.rrar.com

Even if you get a pass from your lawyer and find a nice old lady who lets you cover her house in bandit signs, you’ll probably still run afoul of DOS or NAR disclosure regulations.
In most states, real estate advertising is highly regulated. The most common advertising regulation by far is that Realtors or even sometimes non-Realtors must fully disclose their licensure in all advertising. That means your cleverly amatuer looking hand written WE BUY HOUSES sign might have to include “Sally Smith, Licensed Real Estate Salesperson”. For many homeowners, that makes you someone they’re trying desperately to avoid: a skilled professional.
How to avoid violating DOS or NAR disclosure regulations in 2017
There’s only one real answer here and probably not the one you’re looking for. Follow all DOS and NAR regulations regarding real estate advertising to the letter. In 2017 advertising regulations in most states have gotten more strict, not less strict. The odds of getting fined for this are pretty slim, but if you’re a Realtor working under a designated broker, they will more than likely demand you follow all applicable regulations. For good reason too. They’re the ones that will get fined.

4. Your Bandit Signs are Going to Get Taken Down

Since posting bandit signs in your farm area might run afoul of local ordinances, make the neighbors angry, or get in the way of your competition, the odds of all your signs staying up can be remote.
Town employees, angry local residents, or your competition might decide to grab a utility knife or pry bar and tear your signs down. If you’re not careful about putting them up, the weather might do that job too.

How to avoid getting your signs torn down

Here are a few ways to make sure your signs stay up:

Create a map of where you posted signs and check on them occasionally

Throwing up a few signs and hoping for the best won’t cut it these days. You may post 20 bandit signs on a Friday and by Saturday morning only have three left. If you don’t remember where you put all your signs, that means you might not be getting calls from your best locations.
Instead, write down exactly where your signs are and take a few minutes to check on them once a week or so. If you find a location with competitor’s signs still up and yours torn down, that might mean it’s a great spot and your competition is trying to keep it for themselves. Pay special attention to these areas.

Use strong zip ties or heavy duty staples to post your bandit signs

If you’re posting signs to telephone poles or utility poles, always use heavy duty zip ties and contractor grade staple gun to put them up. There’s even a company that makes a two foot long heavy duty stapler specifically designed to post bandit signs.
You also might want to consider getting a little creative with placement. Generally speaking, the higher up they are, the more visible they are. They’re alo much harder for people to take down. If you have permission to post signs on a local building, use heavy duty concrete anchors to make sure your signs stay up.

When they go low, you go high

Let’s face it. Even the most dedicated vandal or real estate investor is probably not going to lug around a 12 foot ladder to tear down your bandit sign. That means the higher you can get them, the safer they’ll be. Here’s a quick video of just how easy it is to hang signs 10 feet up with the Sign Stapler tool.

5. There’s Too Much Competition

Source: Pexels

Let’s face it. With the rise of a hundred and one new TV shows about flipping houses, real estate investing is trendier than Pokemon these days. In fact, according to a study by Zillow sister site Trulia, more than six percent of all homes sold in 2016 were flips. That’s the highest percentage we’ve seen in more than a decade. That means your new investment strategy is probably going to be shared by more than a few people in your town. If you happen to work in one of the cities that Trulia found to be flipping hotspots like Las Vegas or Tampa, then there might be enough would-be investors in town to fill a minor league baseball stadium. Here’s how you can live with the competition.

If you can’t beat them…

Your grandmother’s best advice (besides to always wear comfortable shoes) applies to real estate investing too: If you can’t beat them, join them. Instead of viewing your local investors as competition, why not reach out and try to work with them? Real estate investors are not all cut throat Gordon Gekko clones. In fact, some of them can be downright friendly and actually want to work with other local investors. No one has all the money, all the time, or all the connections in the world. Meeetup.com and Bigger Pockets host hundreds of real estate investing meetups every day. If you keep seeing the same “I BUY HOUSES FAST CA$H” sign with the same phone number, give them a call. What do you have to lose?

6. You Might Not Get Any Leads

Source: imgflip.com

Of course like any lead generation strategy, there is a possibility that spending an entire day putting up bandit signs won’t get you any leads at all. Here are a few ways to tweak your bandit sign strategy to make sure your phone rings.

Your signs need to stand out

In order for people to see your sign and decide to pick up the phone, your signs need to stand out. A good rule of thumb is that if your sign is not legible enough to be read and understood from 20 feet away you need to go back to the drawing board.
In order to make sure your signs stand out, come up with a dead simple message “I BUY HOUSES ALL CA$H” along with your phone number in big, bold text (black), and choose a bright, highly visible background color (yellow or orange are pretty popular).

Pick your locations strategically

Like everything else you do in real estate, there is one mantra that should be in the back of your head when you’re putting up bandit signs. Location, location, location. What good is putting up a hundred perfectly designed signs if no one ever sees them?
Some locations to consider when posting bandit signs might be busy intersections, downtown areas close to mass transit. Shopping centers, malls, banks, Home Depot, check cashing companies, and payday loan offices.
Since many people will be driving by your sign at 30+ miles per hour, higher is generally better than lower. That means telephone poles, utility poles, or if you’re lucky, on commercial or residential buildings in busy areas.

Quantity over Quality?

There are two schools of thought here. One is that the more signs you have up, the more calls you get. While this may be true to some extent, if you were to actually track where the majority of your calls are coming from, you might find that you get 90% of your calls from 10% of your signs. Why not save yourself the headaches and mileage and only maintain your signs where you’re getting calls from?

Use a google voice number to track your results

Since bandit signs probably aren’t going to be your main lead generator, you need to be able to quickly and easily track who is calling you from your signs. One easy way to do this is to set up a google voice number and use that on your sign.
You can even set up several numbers if you have signs up in more than one neighborhood, then use call tracking software to easily identify the most effective locations.

The Bottom Line

Although bandit signs can be a tricky way to get leads, if you have check your local laws, find the right locations, and take time to maintain your signs, they can be a great way to build your business.

4 Simple Tips for Finding Incredible Real Estate Deals

When I was a child, every Saturday morning was the same: Wake up early, pile into the car with my mom  and start looking for . . . yard sales! Yes. I was raised by a "yard sale mom."
Because we didn't have a lot of money, we bought nearly all of our clothes, furniture, toys and pretty much everything else from someone who no longer wanted those items. And, let me tell you -- my mom was the master at those sales. She knew how to find the coolest gadgets, toys, games and appliances for pennies on the dollar. She could negotiate a 50-cent t-shirt down to 10 cents, and regularly did. She would even buy far more than we needed, just so she could resell those items at her own garage sales and make a profit to fund our family vacations.
Today, I do far less yard-sale shopping  but the lessons I learned from her haven't changed. I still want to find a great deal. Today, however, instead of 50-cent t-shirts, I spend much of my time hunting down great real estate deals, because I'm a real estate investor.
Whether I plan to flip that house, hold the property as a rental or go for something entirely different: Everything begins with a great deal. Here are four simple tips you too can use to find better deals on your own real estate, whether you're looking for an investment, a property for your business or simply a home for your family.

1. Consider buying a bank-foreclosed property.

When someone fails to pay a mortgage payment for an extended period of time, the lender will ultimately repossess the home and remove the occupants. Once the home is empty, the lender generally lists the house for sale on the market, using a local real estate to list it.
While the foreclosure, in itself, is of course sad (no one rejoices when someone loses a home), once the deed has been done, these properties can be some of the best deals you’ll find in real estate. Banks want to be in the business of lending money, not managing property, so they are often quick to offer large discounts just to get the deal off their books. Translation: You can get a great deal on foreclosed properties, if you know how to buy foreclosures right.
Because the foreclosure process can take several years, these properties are often in need of some serious repair or updating. So, further discounts may be given to compensate -- for buyers willing to brave a rehab.
Talk to a local real estate agent about the foreclosures in your area, and start checking some out. You might be surprised at the deals you can get.

2. Be the first . . . or the last.

In real estate, often the old adage holds true: The early bird gets the worm.
Oftentimes, it’s not the highest offer for a property that gets accepted, it’s simply the first. Therefore, if you are looking for a great deal, be quick about it! Get a pre-approval from a bank so you can jump at any property right away, and have your real estate agent set you up with automatic email alerts notifying you of any new property that hits the market.
Then, don’t delay -- check it out quickly, and make an offer the same day if possible.
Conversely, another way to find great deals is to look for properties that have been on the market for a long time. Those owners are often far more willing to sell for a discount, because they are tired of holding on to that property. Many times, they will have been making two mortgage payments for months (or years) and will entertain almost any offer.

3. Approach absentee owners privately.

In a hot real estate market, like the one most of the United States is experiencing today, great deals can be hard to find because of the large number of people looking for a home. In some areas, a single house for sale might get a dozen or more offers in the first several days.
Therefore, one of the best tactics real estate investors use today is to look outside your multiple listing service and instead contact owners directly, asking them to consider selling. At any given time, a good percentage of the population will entertain that option, so why not reach out before they list the home with a real estate agent?
One of the best kinds of people to target is absentee owners, which simply means someone who owns a property but doesn’t live there. They might be landlords (who hate their tenants) or owners who inherited their houses and are simply unsure what to do with them. You can find these deals in a number of ways, such as:

• driving around, looking for houses that look vacant, and using online public records to track down the owner
• buying a public record list using an aggregate-list site like ListSource.com
• calling mom-and-pop landlords who are listing properties “for rent” on Craigslist. Let them know you aren’t interested in renting, but you would like to talk to them about buying.

4. Look at a lot of deals.

Finally, understand that finding good deals is largely a “numbers game.” You often have to kiss a lot of frogs to find the prince!
For me, I look at deals in terms of a funnel. At its top, numerous leads come in, but at the bottom, only a few come out. Therefore, if I want more deals at the bottom, I need to improve each aspect of my funnel, including the quality and number of leads at the top. For example, my funnel might look like the following:

• Raw leads from my real estate agent -- 200
• The location is somewhere I would buy -- 100
• A quick analysis shows promise -- 20
• A deeper analysis still shows promise - 10
• Deals I've made an offer on -- 8
• Offers I've made that have been accepted - 1

Notice that, in the above funnel, my agent sent me 200 possible properties, but at the end, I ended up making offers on only eight and only one offer was accepted. If I wanted to buy two properties, I know I'd need to look back on my funnel and find a way to increase my numbers. Because, again, it’s just a numbers game.
Whether you are looking to buy an investment property, purchase a home for yourself or buy real estate for another reason, remember: You make your money when you buy. If you want to have immediate equity in your property, which can help you build wealth in the future, or save you in case of an economic turndown, you must find great real estate deals.
So, don’t settle for paying market-price for a house. Instead, follow the four tips here to get a deal so good even a "yard-sale mom" would be proud!