Wake Up And Smell The Smoke
Saturday morning I woke up alone. Slowly before opening my eyes I began to stretch. Taking inventory as I moved one limb at a time, yes, all the usual aches and pains were still there. I don't know whether I felt or heard it, but there was a major thump on the bed signaling the arrival of the very large cat, that I share living quarters and a wife with. My inventory had reached my right hand, it was working and I could control it. I slowly reached for my glasses. Forcing my eyes open, I see a very agitated cat pacing back and forth like an expectant father.
Cat is shouting at me, I respond "what" the cat rushes to my head. Now standing four inches from my face he explains loudly in no uncertain terms that Brenda, our wife, is missing and his bowl is empty! I remember now, Brenda left an hour earlier, she'd be back about noon. I tried to explain, but cat got even more upset. It was clear, I had to get up.
Finally 12:15 and Brenda arrived. I kissed her, told her I loved her, and said I'm hungry. The cat demanded to know how dare she leave before his breakfast, and he's hungry, despite his half full bowl. She said lets go yard saleing and I'll buy you lunch. I was happy, and with a few strokes to his soft under belly the cat was placated.
Three disappointing yard sales and one garage sale later, none had really wanted to sell the yard, we reached Burger King. Hunger satisfied, we decided to drop in on our friend Jim Dixon. I write about Jim in "One House At A Time / Finding And Buying Single Family Rentals" he's the maintenance man for one of my real estate investment students. Leaving Burger King we had to wait for a speeding fire engine going our way. Finding two yard sales on our way to Jim's and still no yard for sale, we heard more sirens. Leaving the second sale we spotted thick black smoke, in Jim's direction. Jim lives in one of three houses one of our investor owns at that location and that's where the smoke is! No more distractions, we went straight to Jim's. Happily for Jim and our investor the fire was a block away.
Real estate Gurus, myself included, tend to write about the sexy parts of real estate investing. Good Gurus do teach the mundane but even we emphasize the exciting subjects. Smelling that smoke had me thinking about insurance! Most of us rarely think about Insurance, but we should!
Here in Las Vegas most homes have doubled in value in the last three years, yet very few home owners and investors have increased their insurance coverage. It's likely that your mortgage lender is covered by your insurance, they are very careful to protect their interest. But, are you covered for your liability and your equity?
A few things home owners and investors need to know about insurance:
1. You must have it! Insurance protects your liability, your lender, and your equity.
2. You must have an insurable interest, if you don't really own the property you don't have any protection for your (potential) equity. If you control a property, by a lease option, option, or sales agreement, you may have liabilities regarding the property but you don't have insurable equity.
3. You must be "named" on the insurance policy, if your name is not on the policy, you're not insured!
4. Don't depend on inflation protection! If your insurance company uses a inflation factor as opposed to a current appraisal you're probably way under insured.
5. Your lender is only concerned that you have coverage sufficient to pay off their loan.
6. Your real estate agent, your guru, your escrow agent, your attorney, and not even your insurance agent are responsible for you having sufficient insurance!
7. You've worked too hard creating equity to lose it through the careless acts of a tenet. Saturday's fire was caused by an octogenarian on oxygen who had to have a cigarette before getting out of bed.`
Notes to investors flipping houses:
1. You are liable even if you haven't taken or recorded title. The seller's insurance never protects you and may not cover the seller for monies you still owe him.
2. Vacant houses are an attractive nuance they draw vandals, squatters, drugies, and young lovers, like bugs to a light.
3. It's insane to have people working, for you, in an uninsured property. Your cheap help may get extremely expensive if they hurt themselves.
4. It's hard to insure a vacant property because the insurance companies know the risk. If the insurance companies think there is a big risk, how can you afford to be unprotected?
Flood insurance is not part of your hazard insurance! Lenders will require flood insurance if you're in the hundred year flood plain. Many of the recent floods were on land never included in any previous flood plan. Water runs down hill, so unless you live on top of a mountain, you maybe flooded someday. Flood insurance is a federal government program, so your insurance agent is not going to be reminding you, you need it. Flood insurance is priced based on the risk factor, if you're at a high risk it's costly but cheap. If you're in a low risk area it's inexpensive.
So check your insurance before you wake up and smell the smoke.
Copyright 2005 William J Archambauly Jr
William J Archambault, Jr has been in lending and real estate since 1969. A mortgage broker in Las Vegas, NV He writes about up to the minute real estate, tempered with the wisdom of our grandfathers. He is the author of "One House At A Time / Finding And Buying Single Family Rentals" available at http://www.reii.org e-mail: author@reii.org
How Not To Lose A Million Dollars In Real Estate
Five quick attention getting rules for new and experienced real estate investors! All to any of us have forgotten the wisdom of our grandfathers, or discounted it as from simpler times. This short article will not teach you real estate investing, but it will help you understand conflicting advice!
I recently saw an article "How to lose a million dollars in real estate" what a great title! Then I saw the author Verna Jones-Cox (real estate short sale expert) no wonder it had a great title. I met Verna about two years ago and I would have expected no less.
So with my apologizes to Verna, your title was to eye catching not to play on.
My own book "One House At A Time" is directed at real estate beginners and burnt out students of TV real estate gurus, the very people that can't afford to lose money. These are also the very people that are most likely to lose money, especially when miss lead as so many are.
"One House At A Time" is subtitle "Finding And Buying Single Family Rentals" the key words are "Single Family" most people should stick to what they know! Single family homes whether rentals or flips are just like the houses most of us have lived in all of our lives. Maintenance, improvements and day to day upkeep are the same as you've been doing ever since your mother first noticed you were big enough to push a broom. Buying and selling them is just like your own home.
New real estate investors have enough to learn, single family rentals are simple to maintain (just like your home), but you have to deal with tenants, rental laws, and contracts. Flips require different decisions retail or wholesale, paint or paper, landscape or simply clean, etc . . . Sticking to what you're familiar with will ease the learning curve and most new investors will make money, if only because it hard to make a big mistake!
Rule # 1. To make money expand upon what you know!
On the other hand even if a person has lived in an apartment for 30 or 40 years, walked on land, shopped in stores and worked in an office every day of their life there is very little relevant experience to owning and managing them! I attended a meeting of would-be real estate investors, a group I knew well. Their Guru (with little experience but more money that his audience) spent more than two hours urging the audience to liquidate their single family homes to buy into commercial projects! It wasn't until the very end that we learned he was pimping a $5,000.00 week end book camp on commercial investing! Most of these people had not yet mastered single family rentals! Some didn't yet have a home of their own. The only thing this program was offering was a chance to lose $5,000.00.
Rule # 2. Avoid pimps!
Most of you reading this don't yet have a million dollars! Your losses will accrue from inaction, delay, and procrastination. In today's real estate market most of you will not lose a million dollars. You will lose several million dollars!
Rule # 3. Buy houses! Now!
"NO!" That's the advice most often given if you foolishly ask anyone if you should do anything. There is never a risk telling you "NO." If you ask a friend should I and he says "yes" and you fail he lost a friend! If a friend says no and you succeeded anyway "you got lucky" everyone wins. If you lose, there's great bounding in commiseration, and great satisfaction in "I told you so!" You'll get the same "NO!" from your attorney or CPA, but they will send you a bill for bad advice. Strangers will say "NO!" because they don't want you to succeed. Family will say "NO!" because they don't want you to get hurt.
Rule # 4. Avoid third party advice.
Some people will advise you to "do it." They're the ones who get paid! We all know what you call someone who "does it" for money. Getting paid is good, I'm a mortgage broker I get paid when you "do it" just like your real estate agent. I'm also a Guru. Be careful, good advice is worth paying for, but whores are whores!
Rule # 5. Avoid Whores!
William J Archambault, Jr has been in lending and real estate since 1969. A mortgage broker in Las Vegas, NV He writes about up to the minute real estate, tempered with the wisdom of our grandfathers, He is the author of "One House At A Time / Finding And Buying Single Family Rentals" available at http://www.reii e-mail: wja@reii.org
Copyright 2005 William J Archambault Jr
For the same reason a plumbers pipes leak
In "One House At A Time / Finding And Buying Single Family Rentals" I write about why your real estate salesman can't make you rich, despite all their earnings very few have even made themselves rich. The real shame is active real estate and mortgage people see opportunities all the time and fail to recognize them.
Why real estate and mortgage salesman seldom buy
real estate!
1. When was the last time you heard of a lender or real estate salesman making anyone one rich? I mean clients not their brokers or ex-spouses!
2. How many salesmen do you know who have any security if they stop selling? What happens to them if the market changes?
3. How many people do you know that own any property besides their own home?
4. Why do the TV real estate gurus draw such large crowds? Yet, you can walk into a real estate office and find salesman with nothing to do.
5. How many salesmen and their clients give up if a client doesn't qualify for a conforming loan?
The simple truth!
1. Professional real estate people don't normally make anyone rich! They make the rich richer but rarely anyone rich, including themselves.
2. It's a very rare salesman, no matter how good, that has any security. Most salespeople mortgage and real estates, our experts, don't know an opportunity when they see it! Nor, where to look for one. They are trained, by their brokers, to generate commissions, opportunity to them means cash today! Not long term riches or security. Their employers are also part of the problem, they don't want their salesman distracted working their own account. Real estate brokers generally require commissions on any property their salesman buy or sell.
3. Because, they don't recognize or look for an opportunity mortgage and real estate sales people seldom own anything but their own home.
4. TV infomercial real estate gurus draw thousands of people to their so called real estate seminars that tell of the glories of having money. As many as a third of those attending will buy these course for $300.00 to $35,000. All most none of these dreamers will ever invest in a rental, or flip a house. You don't see real estate and mortgage salesman helping these desperate people, because they don't know how.
"One House At A Time / Finding And Buying Single Family Rentals" was written for beginning real estate investors and those who bought the infomercial programs and found them unworkable and / or morally repugnant. But, real estate professionals should read it, to understand your investor clients better and more importantly to secure your own fortune!
"One House At A Time / Finding And Buying Single Family Rentals" provides all but two of the infomercial programs, "One House At A Time" doesn't teach "tax sales" but it does teach you how to research tax sales. "One House At A Time" leaves out "note trading" because this requires a mortgage brokers license, in most states! "One House At A Time" is a lesson in real estate and life.
"One House At A Time / Finding And Buying Single Family Rentals" is available through http://www.reii.org .
I write these articles to promote my own work, but don't let that distract you! The point of this article is that all real estate people need "real estate investment" training! "Real estate investment" training is not the same as real estate education. "Real estate investment" training teaches recognizing opportunity, something sadly left out of traditional real estate education. Any "real estate investment" training is better than none, even Carlton Sheets or Ron Le Grand.
Follow "One House At A Time" with selected books from John T Reed. If you must over spend skip the TV Gurus, their programs are often morally repugnant and only designed to transform your earning into their wealth. If you must over spend donate your money to Baney Zick, he's over priced but very good.
Everyone wants to be rich, but few are willing to do what it takes no matter how simple. Real estate and mortgage salesman seldom buy real estate, for same reason a plumbers pipes leak!
Copyright 2005 William J Archambault Jr
William J Archambault, Jr has been in lending and real estate since 1969. A mortgage broker in Las Vegas, NV He writes about up to the minute real estate, tempered with the wisdom of our grandfathers. He is the author of "One House At A Time / Finding And Buying Single Family Rentals" available at http://www.reii.org e-mail: author@reii.org
Cat is shouting at me, I respond "what" the cat rushes to my head. Now standing four inches from my face he explains loudly in no uncertain terms that Brenda, our wife, is missing and his bowl is empty! I remember now, Brenda left an hour earlier, she'd be back about noon. I tried to explain, but cat got even more upset. It was clear, I had to get up.
Finally 12:15 and Brenda arrived. I kissed her, told her I loved her, and said I'm hungry. The cat demanded to know how dare she leave before his breakfast, and he's hungry, despite his half full bowl. She said lets go yard saleing and I'll buy you lunch. I was happy, and with a few strokes to his soft under belly the cat was placated.
Three disappointing yard sales and one garage sale later, none had really wanted to sell the yard, we reached Burger King. Hunger satisfied, we decided to drop in on our friend Jim Dixon. I write about Jim in "One House At A Time / Finding And Buying Single Family Rentals" he's the maintenance man for one of my real estate investment students. Leaving Burger King we had to wait for a speeding fire engine going our way. Finding two yard sales on our way to Jim's and still no yard for sale, we heard more sirens. Leaving the second sale we spotted thick black smoke, in Jim's direction. Jim lives in one of three houses one of our investor owns at that location and that's where the smoke is! No more distractions, we went straight to Jim's. Happily for Jim and our investor the fire was a block away.
Real estate Gurus, myself included, tend to write about the sexy parts of real estate investing. Good Gurus do teach the mundane but even we emphasize the exciting subjects. Smelling that smoke had me thinking about insurance! Most of us rarely think about Insurance, but we should!
Here in Las Vegas most homes have doubled in value in the last three years, yet very few home owners and investors have increased their insurance coverage. It's likely that your mortgage lender is covered by your insurance, they are very careful to protect their interest. But, are you covered for your liability and your equity?
A few things home owners and investors need to know about insurance:
1. You must have it! Insurance protects your liability, your lender, and your equity.
2. You must have an insurable interest, if you don't really own the property you don't have any protection for your (potential) equity. If you control a property, by a lease option, option, or sales agreement, you may have liabilities regarding the property but you don't have insurable equity.
3. You must be "named" on the insurance policy, if your name is not on the policy, you're not insured!
4. Don't depend on inflation protection! If your insurance company uses a inflation factor as opposed to a current appraisal you're probably way under insured.
5. Your lender is only concerned that you have coverage sufficient to pay off their loan.
6. Your real estate agent, your guru, your escrow agent, your attorney, and not even your insurance agent are responsible for you having sufficient insurance!
7. You've worked too hard creating equity to lose it through the careless acts of a tenet. Saturday's fire was caused by an octogenarian on oxygen who had to have a cigarette before getting out of bed.`
Notes to investors flipping houses:
1. You are liable even if you haven't taken or recorded title. The seller's insurance never protects you and may not cover the seller for monies you still owe him.
2. Vacant houses are an attractive nuance they draw vandals, squatters, drugies, and young lovers, like bugs to a light.
3. It's insane to have people working, for you, in an uninsured property. Your cheap help may get extremely expensive if they hurt themselves.
4. It's hard to insure a vacant property because the insurance companies know the risk. If the insurance companies think there is a big risk, how can you afford to be unprotected?
Flood insurance is not part of your hazard insurance! Lenders will require flood insurance if you're in the hundred year flood plain. Many of the recent floods were on land never included in any previous flood plan. Water runs down hill, so unless you live on top of a mountain, you maybe flooded someday. Flood insurance is a federal government program, so your insurance agent is not going to be reminding you, you need it. Flood insurance is priced based on the risk factor, if you're at a high risk it's costly but cheap. If you're in a low risk area it's inexpensive.
So check your insurance before you wake up and smell the smoke.
Copyright 2005 William J Archambauly Jr
William J Archambault, Jr has been in lending and real estate since 1969. A mortgage broker in Las Vegas, NV He writes about up to the minute real estate, tempered with the wisdom of our grandfathers. He is the author of "One House At A Time / Finding And Buying Single Family Rentals" available at http://www.reii.org e-mail: author@reii.org
How Not To Lose A Million Dollars In Real Estate
Five quick attention getting rules for new and experienced real estate investors! All to any of us have forgotten the wisdom of our grandfathers, or discounted it as from simpler times. This short article will not teach you real estate investing, but it will help you understand conflicting advice!
I recently saw an article "How to lose a million dollars in real estate" what a great title! Then I saw the author Verna Jones-Cox (real estate short sale expert) no wonder it had a great title. I met Verna about two years ago and I would have expected no less.
So with my apologizes to Verna, your title was to eye catching not to play on.
My own book "One House At A Time" is directed at real estate beginners and burnt out students of TV real estate gurus, the very people that can't afford to lose money. These are also the very people that are most likely to lose money, especially when miss lead as so many are.
"One House At A Time" is subtitle "Finding And Buying Single Family Rentals" the key words are "Single Family" most people should stick to what they know! Single family homes whether rentals or flips are just like the houses most of us have lived in all of our lives. Maintenance, improvements and day to day upkeep are the same as you've been doing ever since your mother first noticed you were big enough to push a broom. Buying and selling them is just like your own home.
New real estate investors have enough to learn, single family rentals are simple to maintain (just like your home), but you have to deal with tenants, rental laws, and contracts. Flips require different decisions retail or wholesale, paint or paper, landscape or simply clean, etc . . . Sticking to what you're familiar with will ease the learning curve and most new investors will make money, if only because it hard to make a big mistake!
Rule # 1. To make money expand upon what you know!
On the other hand even if a person has lived in an apartment for 30 or 40 years, walked on land, shopped in stores and worked in an office every day of their life there is very little relevant experience to owning and managing them! I attended a meeting of would-be real estate investors, a group I knew well. Their Guru (with little experience but more money that his audience) spent more than two hours urging the audience to liquidate their single family homes to buy into commercial projects! It wasn't until the very end that we learned he was pimping a $5,000.00 week end book camp on commercial investing! Most of these people had not yet mastered single family rentals! Some didn't yet have a home of their own. The only thing this program was offering was a chance to lose $5,000.00.
Rule # 2. Avoid pimps!
Most of you reading this don't yet have a million dollars! Your losses will accrue from inaction, delay, and procrastination. In today's real estate market most of you will not lose a million dollars. You will lose several million dollars!
Rule # 3. Buy houses! Now!
"NO!" That's the advice most often given if you foolishly ask anyone if you should do anything. There is never a risk telling you "NO." If you ask a friend should I and he says "yes" and you fail he lost a friend! If a friend says no and you succeeded anyway "you got lucky" everyone wins. If you lose, there's great bounding in commiseration, and great satisfaction in "I told you so!" You'll get the same "NO!" from your attorney or CPA, but they will send you a bill for bad advice. Strangers will say "NO!" because they don't want you to succeed. Family will say "NO!" because they don't want you to get hurt.
Rule # 4. Avoid third party advice.
Some people will advise you to "do it." They're the ones who get paid! We all know what you call someone who "does it" for money. Getting paid is good, I'm a mortgage broker I get paid when you "do it" just like your real estate agent. I'm also a Guru. Be careful, good advice is worth paying for, but whores are whores!
Rule # 5. Avoid Whores!
William J Archambault, Jr has been in lending and real estate since 1969. A mortgage broker in Las Vegas, NV He writes about up to the minute real estate, tempered with the wisdom of our grandfathers, He is the author of "One House At A Time / Finding And Buying Single Family Rentals" available at http://www.reii e-mail: wja@reii.org
Copyright 2005 William J Archambault Jr
For the same reason a plumbers pipes leak
In "One House At A Time / Finding And Buying Single Family Rentals" I write about why your real estate salesman can't make you rich, despite all their earnings very few have even made themselves rich. The real shame is active real estate and mortgage people see opportunities all the time and fail to recognize them.
Why real estate and mortgage salesman seldom buy
real estate!
1. When was the last time you heard of a lender or real estate salesman making anyone one rich? I mean clients not their brokers or ex-spouses!
2. How many salesmen do you know who have any security if they stop selling? What happens to them if the market changes?
3. How many people do you know that own any property besides their own home?
4. Why do the TV real estate gurus draw such large crowds? Yet, you can walk into a real estate office and find salesman with nothing to do.
5. How many salesmen and their clients give up if a client doesn't qualify for a conforming loan?
The simple truth!
1. Professional real estate people don't normally make anyone rich! They make the rich richer but rarely anyone rich, including themselves.
2. It's a very rare salesman, no matter how good, that has any security. Most salespeople mortgage and real estates, our experts, don't know an opportunity when they see it! Nor, where to look for one. They are trained, by their brokers, to generate commissions, opportunity to them means cash today! Not long term riches or security. Their employers are also part of the problem, they don't want their salesman distracted working their own account. Real estate brokers generally require commissions on any property their salesman buy or sell.
3. Because, they don't recognize or look for an opportunity mortgage and real estate sales people seldom own anything but their own home.
4. TV infomercial real estate gurus draw thousands of people to their so called real estate seminars that tell of the glories of having money. As many as a third of those attending will buy these course for $300.00 to $35,000. All most none of these dreamers will ever invest in a rental, or flip a house. You don't see real estate and mortgage salesman helping these desperate people, because they don't know how.
"One House At A Time / Finding And Buying Single Family Rentals" was written for beginning real estate investors and those who bought the infomercial programs and found them unworkable and / or morally repugnant. But, real estate professionals should read it, to understand your investor clients better and more importantly to secure your own fortune!
"One House At A Time / Finding And Buying Single Family Rentals" provides all but two of the infomercial programs, "One House At A Time" doesn't teach "tax sales" but it does teach you how to research tax sales. "One House At A Time" leaves out "note trading" because this requires a mortgage brokers license, in most states! "One House At A Time" is a lesson in real estate and life.
"One House At A Time / Finding And Buying Single Family Rentals" is available through http://www.reii.org .
I write these articles to promote my own work, but don't let that distract you! The point of this article is that all real estate people need "real estate investment" training! "Real estate investment" training is not the same as real estate education. "Real estate investment" training teaches recognizing opportunity, something sadly left out of traditional real estate education. Any "real estate investment" training is better than none, even Carlton Sheets or Ron Le Grand.
Follow "One House At A Time" with selected books from John T Reed. If you must over spend skip the TV Gurus, their programs are often morally repugnant and only designed to transform your earning into their wealth. If you must over spend donate your money to Baney Zick, he's over priced but very good.
Everyone wants to be rich, but few are willing to do what it takes no matter how simple. Real estate and mortgage salesman seldom buy real estate, for same reason a plumbers pipes leak!
Copyright 2005 William J Archambault Jr
William J Archambault, Jr has been in lending and real estate since 1969. A mortgage broker in Las Vegas, NV He writes about up to the minute real estate, tempered with the wisdom of our grandfathers. He is the author of "One House At A Time / Finding And Buying Single Family Rentals" available at http://www.reii.org e-mail: author@reii.org