Every month I have clients call that they received a notice from Duke Energy (the local gas and electric utility) or from the Water Works, asking for access to check their equipment. People often are confused why we get these requests. 

The reason is twofold – equipment upgrades or checking for leaks. In years past, a “Meter Reader” would go door to door every month reading the gas and electric and water meters. They went in every property monthly and manually read the meter so they could bill you. If you were not home, they did an estimated bill based on your history.

Technology has changed this, and new meter technology lets them read the meter without entering the building. At first it was a separate little box they attached to meters or in the case of electricity, they had a way to read it though the electric wires. Early versions put out a signal and the utility had to have someone drive down the street to get the meter reading. Over time these devices have changed, and newer versions can be read remotely anytime.

I recently got a letter from the Water Works about my house. The man came and was able to pop off the top of the meter and replace it with the new top that has a transmitter built in. It took him less than 5 minutes to make the upgrade. Then he cut off the wire to the old transmitter on the wall – and left it there.

Duke Energy’s newest gas meters also have technology to read remotely. New gas meters are also much smaller, ... Read More…

What are the consequences of selling that property you have held for 15 years? You may walk away with some cash, assuming you haven’t refinanced the property. If you have refinanced the property and taken cash out, you may find yourself owing more in taxes than you get when you sell. By the time you’ve paid off the mortgage and paid all of those taxes the government wants, it could literally cost you to sell your property.

Why? Because the depreciation deduction that you take on a rental property is really just temporary—you get to write it off while you own the property, but you have to “recapture” it when you sell.

We all know that for the most part your property doesn’t really depreciate over time. Meaning it does not go down in value. We plan on the property to go up in value.

Well, since it really did not depreciate, the IRS wants you to return the deduction. So, in addition to the capital gain on the property (Sale Price less the purchase price and any improvements you did) all the depreciation has to be added back to income (or recaptured) when you sell the property.

If you have held a property for all its depreciable life (27.5 years for residential rentals) then basically the entire sales price, less sales expenses will be taxed. That means that if you have refinanced at 80%, I hope you have kept some of the cash from the refinance. You may very well need it after paying closing costs and the income taxes.

There is h ... Read More…

I was in the middle of negotiating on a probate property. It was the original home the seller’s family built in 1962. I could see the seller was very attached to this home. Why wouldn’t he be? He had an amazing childhood in this home. The first time I met with him I spent about two hours getting to know him. Finding out what his goals are and what he is looking for in a buyer.

This may sound remedial, but it’s important to understand; the seller is really the one who has some pain that he is trying to avoid. This is something many new and experienced real estate investors forget. It’s for this reason, I spend so much time on the phone and in person speaking with the seller. Many people have told me this is a waste of time. To them I ask, “Is it really?” If you don’t spend the time getting to know your seller, how will you ever find out what their real estate problem is to create a deal that will resolve/ease their pain? 

As the potential buyer, you need to take the time building rapport with the seller. Don’t forget, you can be up against more than a half dozen potential buyers. What is going to make you stand out as, “the only logical choice.” Understanding what the seller’s needs are must be crystal clear.

Mr. Seller really wanted all cash for this property. I mean who doesn’t? Almost every seller I speak to without exception originally “thinks” they want all cash. It& ... Read More…

Think of yourself as an investor or buyer’s broker. Your goal is to buy one or two single family detached houses at the best price possible. So, you target foreclosures.

First you will need to see if someone in your community offers a foreclosure listing service. Most large cities have them. That will save a lot of time.

Then comes the sorting process. You are looking for value. So, one sorting process would be to look for properties with old loans. 

Maybe you’ll have a property style sort. Only brick on slab, no houses on pier footing – whatever makes sense or non-sense in your market.

Maybe you’ll have a type of sort, like no condos; or a function sort like three bedrooms or larger.

There are three stages of foreclosure. The first stage is pre-foreclosure. It includes people who are behind on their payments and homeowners that have had foreclosure action filed against them, but the sale has yet to occur. This is the best time for the most profit requiring the least cash and/or credit. The second stage is the sale at the courthouse steps. This one is for experienced investors, and we will skip it for now. The last is the REO stage or dealing with lenders who have taken properties back that were not successfully sold on the courthouse steps. (This is a good one, but like stage two, it will take cash or credit and sometimes both. And the deep discounts are fewer.)

Now is the time to contact the owner in foreclosure. Maybe you sent a postcard ... Read More…

Hiring the right contractors is crucial for running a successful real estate business. It's important to acknowledge that turnover among contractors is common in this industry. Contractors may become too expensive, busy, or their quality of work may decline over time. That's why it's crucial to continuously network and search for new contractors to add to your team.

Finding a Contractor:

• Network at your local Real Estate Investors Association (REIA) to connect with investors who can recommend reliable contractors.
• Join local real estate Facebook groups and seek recommendations from fellow members who have had positive experiences with contractors.
• Utilize websites like Angie's List or Home Advisor to explore contractor options and learn about their specialties and areas of expertise.
• Create a Craigslist ad specifying the type of contractor you're seeking, but be prepared to conduct thorough due diligence when assessing responses.

Due Diligence:

When you connect with a potential contractor, start with an interview to explain your business and the expectations you have when working with contractors. Inform them about your application process and set clear expectations regarding contracts, payment terms, project timelines, and expected quality of work. If they seem like a good fit, provide them with a contractor application and establish a deadline for its submission. Conduct a background check through your local court system website and search for mutual connections ... Read More…

Hey, folks, Ron is going to be in Cincinnati and Columbus for 1-day workshops on July 28th (Cincinnati) and July 29th (Columbus) and it’s only $47 for 1 person ($67 for 2). Register HERE it’s a great use of your day AND 100% satisfaction guaranteed 

There’s a common mistake I see students making repeatedly and it doesn’t seem to matter if they are new or been around awhile. That mistake is:

Doing Everything They Can to Feel Busy Except the Critical Things Required to Stay in Business.

It’s so easy to be busy. Anyone can do it and most people would say they’re very busy almost all the time.

“If I only had more time.”
“The days just aren’t long enough.”
“So much to do and so little time.”

A rat in a circular cage is busy running in circles but getting nowhere. Pretty soon he has a heart attack and dies. Being busy will not make you rich. In fact, it can have the opposite affect and prevent you from ever achieving wealth. Don’t get me wrong. Rich people are busy too. I’m very busy most of the time. Always something chasing my attention. An endless supply of things to work on that sucks up my time. 

The difference is I constantly and consciously work on…only those items I can’t delegate and are worthy of my attention.

Minutia is a deadly disease that steals away the most productive time of your life and robs you of the great things you could accomplish&h ... Read More…

Every day I meet people at a stage of their lives where debt is greatly affecting them. They are beginning to realize that debt takes much more than just your money.  

I am talking about people with average salaries—and people making good money or even exceptional money, but not necessarily making financial progress. These are good people, people that deep down know there is a better way but never seem to find it.  

When I refer to Good Debt, I am actually using shorthand meaning “good uses of debt.”  Debts, like guns, are actually neither good nor bad in and of themselves. In both cases, it takes a human to pull the trigger. When we sign, scan, or otherwise acknowledge indebtedness, we are pulling the trigger. It is how we use debt, and what we use it for that makes it good or bad.  

Using debt without considering value of the goods, services, or property being acquired is the beginning of serious trouble.  

Using debt wisely can increase your wealth, net worth, and cash flow. Using it poorly decreases or destroys these things. Never using debt at all is also a waste of resources—sure, you can use your available cash to invest in your future, but you’ll never get the leverage that good use of debt can provide. 

Let’s take an example that everyone can relate to investing in your own home. You could avoid debt altogether by waiting until you had $150,000 or more all in one pile, then pay ... Read More…

7 Reasons why buying land is a better investment than traditional real estate. 

Real Estate investment is HOT right now. Every time you turn the TV on, there’s a new house-flipping show. But you see a deeply-edited version of reality. Buying a house to flip is so much more difficult than it seems.

Land is a different story. When you compare buying land to buying houses, the advantages pile up fast. Land flipping is both a no-brainer and a well-kept secret. Here are 7 compelling reasons why buying land is a better investment than buying houses.

1. Less competition
2. Extensive education unnecessary
3. Less hassle
4. Less cash upfront
5. Less risk
6. Sell remotely
7. Quicker profit turnaround
   
   

#1 There Is Very Little Competition

Everyone and their brother is flipping houses these days, but that means there is a ton of competition in the market. There are only so many houses to go around. Sure, there are plenty of houses, but not ones that you can flip for a big profit. Since everyone is going after the same houses, the demand for these properties has become outrageous.

Investment in land, on the other hand, is one of real estate’s best-kept secrets. No one is making TV shows about land flippers since there’s nothing sexy about selling dirt. People don’t realize how valuable a raw piece of land in the right location is. However, the question “is buying land a good investment’ definitely YES. And, once people start finding out about the land fli ... Read More…

          I have a friend in Colorado Springs who owns a bank. Several years ago, I complimented him on his employee retention. My banker and I both understand that his most important assets walk out of his bank each night to go to their respective homes and that his job is to get them to come back each morning. His key to hiring great employees is to screen for proper job skills, attitude and moral code and then empower them to be the best that they can be.

          Jim Collins states in his book, Good to Great that all great companies put the right people on the “bus” and that great people will know where to drive the bus. He is saying that great companies hire the best people that they can find and then let these people “drive” the company where it needs to go in order to make the company soar. Great employers do not micro-manage or hire for specific tasks as much as empower great people to grow into their potential and be great at what they do.

          I believe that if landlords would take these examples and apply them to their rental business, then their success and bottom-line profit would increase dramatically. Landlords expect tenants to do a job, but many have never defined the job description, and few share their expectations with their tenants. If I were running an employment ad for tenants it would rea ... Read More…

          When I work with new investors, I find that most of them are looking to me to provide them the Holy Grail, the single source key for the mother lode.

          They ask, “What is the absolute best way to generate leads, or the best script to use. How can I go from broke to filthy rich in 30 days or less?

          What is the one secret that if I learn and apply it untold wealth will be mine?”

          They say, “I know it must be there because I see these guys on late night TV, I know because I’ve been to a seminar, I know because I bought this course....” 

          Living in Florida makes this even more entertaining because long before the Pilgrims landed on Plymouth Rock, a Spaniard named, Ponce de Leon, was roaming through the Florida swamps looking for the fountain of Youth. I visited it last year and even had a sip of this rather vile water, I honestly didn’t feel any younger and now a year later, my grey hair remains. Anyway, back to the story.

          Like Ponce de Leon, investors looking for the one and only secret to success are fooling themselves.

          There are many excellent techniques for buying, selling and holding p ... Read More…