Terri in Tulsa's Tornado Alley (A Journal)

Terri,

Abandons can be a great source of wealth builing in REI. I am currently working on my 3rd deal, not working on it to close it but rehabbing it right now. It was a 10 year abandon property and was actually very decent structurally on the inside. It needed alot of attention and alot of repair but its a great home and will make me a really great deal. It also came with several extra lots, in town.... that doesn't happen that often in my area so its a great bargain! I encourage you to go to the court house or talk to neighbors and find the owners, go ahead and buy, in my case it was a true "no money down" deal. I paid zero with a 20 year carry from the owner, there are many properties around here like this and I believe I could do it all day long!!!!

Take care and act on these opportunities asap! Let me know how you are doing with them, I would love to hear!

FOMAC

...I am so glad to hear from you. You sound like you are having a great time!

Doi I am such a newb. Of course! (A light bulb just went off.) I can think of one conversation with an owner,(so far I've only had 2 actually), that I totally blew. Perhaps it was because I wasn't thinking owner carry? Hmm...

Thank you, thank you!
Terri

Ok. Sound check time.
Testing, testing one two three. (I used to work in the film industry.)

I'm wondering if this post will be added to my journal entry, or added somewhere as a new thread.

For a person who used to run a message board based support group, ya think I'd figure out this website a little faster than most, But Nooooooo...

When I first was inspired to look into real estate investing, I took Dean's advice and joined a local REI club.

For the most part it's been a good experience, as the club does a good job of rounding up speakers and most of the time I learn a few tips that I wouldn't have thought of had I not attended the meetings. But there are times as well that I become discouraged by advice given the group.

Recently I listened to two men tell our REI group that in order to get an owner to drop their price on a home, you go into the home to do a mold inspection with a mold test kit. They went on to explain that we should go into the kitchen where even the cleanest of homes have the mold, perform the test and present the owner with the poor results that were sure to come back.

They then advised that you point out to the owner that they now had to legally disclose that the home in question has mold... convince them that no one would buy a home with mold, and that they should sell the home to you at a steep discount based on these findings.

I'm not sure what sickened me more, the idea that had just been presented to me, or the chuckle of approval from the audience in the room.

"Oh, I don't think so.", were the words that I heard escape from my lips before I could stop them. Blushing I got up and left the meeting. And although I was embarrassed about my outburst, I wasn't embarrassed about what I was thinking.

There are some real sleazy people out there, and I had just met two of them. Don't only beware of getting bad advice from people who have tried at real estate and failed. Beware of those who have tried, and succeeded unethically.

Any other stories out there like this one?

Welcome to the DG family. I'm sorry to hear about your REI group meeting experience but I commend you for your actions (you're comment and leaving) and ethics!! There are many good and honest investors out there but sadly there are also sharks. Something tells me you will do well because you care about people and want to help them

The BIG 50 HA! HA! I Just turned 50 this month and it didn't hurt a bit LOL! Happy birthday whenever it is/was.

Lea

As sometimes I do in my course of studies, I took a field trip to the Tulsa Housing Authority, to discuss the types of homes that might make useful government rentals, as well as the rules and regulations concerning them. The lady I spoke with was very nice, and appreciated that I had come to speak with her before I invested in properties.

During our meeting I asked what areas of town housing was most needed in. What number of bedrooms? Homes or apartments, that sort of thing. And learned that their department was in need of all types of housing. But when I pressed further, I learned that what they really wanted was simply clean, well kept and safe places for people experiencing hardship to live in.

As well during our discussion, I was told of a gentleman who had spent quite a few years working with them as a Section 8 landlord. Not only were his properties always rented out immediately upon becoming vacant, but he was admired by his tenants as well as the people who worked for the Housing Authority. One of the tips for success that he had shared with her, she shared with me.

In order to keep an eye on his properties, he revealed that every other month he visits his home to replace or clean the air & heat filter whether it needs it or not. And while there on that pretense the man will check for leaks under sinks, and any other repair problem that may have not been reported by the tenant, as well as any destruction that may have been caused by an undesirable tenant.

I was also told that, this landlord seems to take a personal interest in the people who live in his properties. And that occasionally he brings clothing and treats for children who live in the homes, as well as yearly Christmas turkeys for each families dinner table.

The positive result of his actions is obvious. This gentleman's reputation is such that he never has a vacancy problem. And just as importantly, repairs on his rental homes are much more manageable because he finds problems while they are still minor and less costly to repair. As well and quite probably due to this, he has good tenants who are thankful to live in a nice home and therefore take better care of his property.

Furthermore in the case that he finds a tenant who has abused his property he can take immediate steps to evict them, (with the Housing Authorities help by the way), before additional damage is done, and replace them with the other more deserving tenants on the Authorities waiting list.

Hi Lea,

I would love to say that 50 didn't hurt, but for my birthday I was very sick with a virus that my 8 year old daughter decided to call, "The Contagious"!

Fortunately a week later, I'm feeling much less 50 than I did the other day.
;->

Thanks for your kind and inspiring words. From looking through the initial days of your journal, I noticed that like myself you too were interested in assignments initially. And that you also had a "light bulb" moment that allowed you to realize further real estate investment possibilities.

When I started my research into RE investing, I would have told you there was no way I would ever be interested in owning rental properties, but now I'm thinking perhaps I may... perhaps I might. Perhaps being female is a good enough excuse for changing my mind?

Terri

happy belated birthday. I like the lanlord entry, that's the kind of lanlord I want to be.

Yes, it is your prerogative to change your mind along your journey. There are so many different routes that can be taken in REI and new opportunities present themselves. Would you go in the direction of section 8 rentals?

Thanks for sharing what you learned about section 8 and the landlord. The landlord sounds like a wise mand and I like that he gives his teants turkeys. This is a people business. We had 1 rental years ago. Whenever new tenants were moving in, the day before we put a 'welcome' letter on the kitchen counter and a gift certificate to the grocer store so they could pick up something quick from the deli. Moving day is such a bear and the refrigerator is usually empty. It helped to get things off to a good start. Before moving day we had a check list (and took photos) of the place and walked through the property with the tenant and gave them a copy of the list. This way they knew how the place should be when they moved out in order to get their full security deposit back. Our tenants always paid their rent on time and took good care of the place.

I'm glad to hear you are feeling better now.

Lea

Lea,

I think if I didn't see a more attractive alternative I would do section 8 rentals. Why not?

I think your rental tips are very thoughtful. As well as very thought out. I rented many homes before I became a home owner, and not once did any of the owners go through a check list with me. I never had any trouble, as I always deep cleaned before I left, but I can see how that process would work for the tenants benefit as well!

Curious if you do reference or background checks on your prospective tenants? If so, do you pay for a company to do it for you?

Terri

Am I correct in thinking that once a house has been through a courthouse foreclosure auction that the title is cleared by the process?

We don't have any rental properties now. We bought one in 03 and sold in 07. Yes, we did do criminal background checks, credit checks and called references on prospective tenants. We paid a company to do this for us. The plan was to charge tenants and reimburse the tenant who moved in (which we did.) To avoid people paying for a credit check and then not getting accepted we did one at a time and the first one was always good so we stopped there. Simply telling people we were doing criminal and credit background checks eliminated some that had something to hide and they ended the conversation. Today's world is very different and most people dont' have good credit through no fault of their own. A plus for section 8 rentals.

We met with a homeowner interested in selling his rental properties recently. When we got the comps on the properties we compared the comps to his properties. One of his properties was vacant when we first saw it. The day we drove by there was some kind of a 'legal' vehicle in the yard I think it was department of child and family services. When I spoke to the owner of this property I let him know our discovery. Turns out the guy living their is a sexual preditor. The neighborhood is up in arms and calling the homeowner to get him out. Legally he (the tenant) has paid his dues to society and can live wherever he wants. Since then the guy has ended up back in jail.

After talking to another DG family member I think section 8 is a great way to go for a lot of good reasons that make sense. After recently talking to a local property manager he said that in his 15 years of managing propeties he has only had to evict 2 section 8 tenants. They don't want to lose their vouchers so they take care of the place. When all is said and done I don't think there is a difference in the 'quality' of a tenant in section 8 or not. A person will take care of their surroundings or they won't and not much will change that. We always left the places we rented cleaner than when we moved in (cleaning baseboards, windows inside and out, ceiling fans, tops of kitchen cabinets, even sweeping the outside of the house off, etc! )

I can't answer your question about a clear title on courthouse foreclosure auctions but I'm sure someone else knows.

Terri, sorry this is so long winded, will end now.

Lea

For me, the hardest part about starting on the REI path has not been having negative friends and family around me. Although there are some, I find that sort of thing easy to ignore. The most difficult part has been having people in my life who already are investors!

As nice as the enthusiasm is that I get from this crowd, they have also been somewhat impatient with me. "Just go for it", I've been told, "Everything will work out". After all, all that I have to do is do what they do!

I've tried to explain but to no avail. Simply put, what they don't understand is that I am not who they are.

I'm not a rehabber, (Painting walls makes my back go out.), I'm a loner, (the idea of partnering makes me cringe.) I've little patience, (I think it's safe to assume short sales are out for me.)My husband is a computer geek with zero interest in real estate. (So it's a good thing I'm a loner!) I'm not an empty nester. (And my family has made it clear they don't babysit.)

I can't just jump into REI like I'm a single 21 year old man with no obligations, or a retiree couple with extra time on my hands. And what's more, I'm not one of those people who can take risks in real estate because I have nothing left to lose. I do have something to lose!

I have to take into account some very real personal obstacles. I didn't say impossible obstacles, just real ones. So I've continued my studies despite the fact that my lack of purchases has been mistaken for fear by my investor friends.

Recently however, and obviously because of my interest in D.G. something very important dawned on me.

What I can do = my REI strategy.

I never really looked at it that way before.

There had always been something not quite right about all of this for me. The missing keys as it has turned out, has been found in various ingredients of the non traditional REI methods I've been learning about here! Finally, (!) I think I've come up with a strategy that is going to work for me!

It's equal parts of Greg Murphy lease option and Rina refinance, with a dash of Indiana Joe...
... a little M. Larson inspired, Interview With A Lender, style phone calls and I'm cooking with gas now!

Can't wait to see if the recipe works!

just found your journal. welcome! i lived in Broken Arrow for years, raised my kids there and my daughters live in Bixby and Owasso. i will be heading back in a couple weeks because my son is deploying and he will be on his block leave. Tulsa is home to my kids and i love going back there. sorry to hear about the bad information you got at the REI club meeting, but everyone has their own way of doing things. i'm like you, i don't agree with that method, and i am one to voice my opinions, but hang in there. most investors are not like that and people may act like they agree at the time, then change their minds once they really think about it. just be yourself and do what you do best.

Lea your posts are great. Don't worry about length I enjoy them quite a bit!

You are absolutely right. It makes a lot of sense to let people know about credit and criminal background checks. Around DG.com, I've noticed that the notion of 'sorting and sifting', is a popular as well as practical idea when it comes to finding buyers and sellers of properties. Why not use techniques to sort and sift prospective tenants as well?

Re: Cleaning
I know what you mean. I even sweep the walls of those rental storage units before and after I use them. I know it is way over the top, but the things get so dusty! :->

And on that subject as well;
In my own search for a new home for my family I've looked at hundreds of homes, (have been looking for awhile...), and it never fails to amaze me the number of dirty homes I've visited. One vacant house even had clean squares on the walls where the paintings had been.

But I've started to look at dirty homes from the perspective of RE investment lately. Have you ever heard investors say 'mold is gold'? I think the dirt factor may end up playing a role in my investment decisions. After all, I can take almost anything, give it a good detail clean and make it look like new.

For example;
I've learned that a wall cleaned with general cleanser on a damp mop, more often than not eliminates the need to repaint.
That instead of reglazing, a $4 can of Scrubbing Bubbles may be all you need to polish up a dingy bathtub to a nice shine.
And further, that a can of Liquid Gold can upgrade the look of even the lowest quality wood wall paneling.

Do you have any tips you can add to this list?

But raising value on cleaning alone is not the only reason I can find for taking notice of dirty homes. When I see a dirty vacant home, especially ones with a few personal items left behind, I can only imagine that the owners have moved out quickly and may be very motivated for any number of reasons to sell at a discounted price. (Well that's my theory anyway!)

Best wishes as always,
Terri

After reading through quite a few posts here on the subject of titles in general,( wish they had a keyword search available in the forum sections), I'm starting to think that it is not safe to assume that foreclosure = clear title. Perhaps it has something to do with if it is a judicial foreclosure or not?

Which is a bit confusing, as I thought county courthouse sales of homes were judicial foreclosures... but could that depend on what state one is in? Yikes! I think that one is going on my growing list of questions I've been saving for an attorney.

Years ago I visited the home of a friend's parents. In the back yard of their home upon a couple of sawhorses was a canoe placed upside down on top of them. Although the canoe looked in good condition, there was something about the way it sat or where it was placed that made me think it had been some time since it had seen any use.

I had never been in a canoe, but my husband had enjoyed the activity and as we did not own one it occurred to me to inquire if it was for sale. I explained to our friend that I thought the canoe looked to be in fine condition, and that I didn't wish to embarrass his parents, but would they consider selling it to us for $25 dollars, as that was really all we could afford at that time in our life.

Truthfully my husband was the one who was embarrassed that I had asked. But I could only think to myself that they could only say no. As it turned out much to my husbands astonishment, that the family hadn't used it more that a few times and the parents had put off getting rid of it. They were happy to take $25 dollars for it.

Canoeing on a quiet lake is a lovely experience.

Well we will see anyway!

As I have mentioned, I have been looking for a house to move my family into for more than a couple of years. It is the sole reason I became interested in REI.

During this time I have met many a Realtor and agent, and although I must admit I didn't know the difference between any of them until recently, I was convinced that when it came to investment properties I didn't need one.

But after finishing The Edge 2010 Event DVD's, (yesterday), and studying Dean's books it has slowly dawned on me that there was no reason that I shouldn't work with one.

So in thinking about who out of all of these agents I had met might be a good match for me, my thoughts turned to a lady whom I had called about one of her own listings, (a short sale), a few months ago.

When she arrived at the home to show it to me, I was not only surprised that she was young enough to be my daughter, very tall and pretty, but that she was carrying a baby on her hip. I learned that her baby sitter had fallen through, she had three children, and that she and her husband were in the process of rehabbing an investment home. But what stuck in my memory the most about her was that she had encouraged me to offer anything on the home I was looking at, because as she said, "I'm not afraid to make low offers!". As I wasn't interested in that house, I declined and hadn't found a reason until recently to call her.

***

There is a home for sale here that I have fallen in love with just by looking at the photos of it. For two months, (why is this house still on the market?),I have dared not to go see it, not only because the asking price is $200K higher than our family can afford right now, but also because I was afraid I would fall in love with it in person too.

But recently I met a real estate agent who told me she wasn't afraid to make low offers...

... and years ago, I bought a good as new canoe for $25...

***

I've got an appointment with Jessica to go see that home tomorrow. And I'm going to find out if she really can make low offers. I may or may not get that house, (the latter seems likely), and I may or may not have found a team member, but if nothing else? It will be interesting to find out if I can drive with my fingers crossed and thumbs up!

Congratulations on your new discovery (What I can do = my strategy!) Having a plan in place keeps us to stay on track and focused. It sounds like the local investors you mentioned have found what works for them and they want to share that with you. As you find your niche, gain more experience and continue learning about REI you will become more confident in REI and what you do.

I know what you mean about some of the homes you've looked at. When we looked at the above mentioned rental properties I had my check list. In some of these properties I couldn't see the kitchen countertops because of all the pots and pans piled on top. Thanks for sharing you're cleaning vs. fixing tips. Wish I had more to add. A mixture of baking soda and vinegar can unclog a drain instead of using harsh, expensive chemical drainers. If I discover more I'll be sure to come to your journal and let you know.

That is awesome news about the REA!! I hope it proves to be a match made in heaven. I wish you the best with your offer. How did it go with the property you looked at today?

Good going on the canoe!

Lea

Hi Lea,

Any cleaning vrs fixing tips I've learned was due to the fact that my first home, (and my current home), was a Fannie Mae purchase that had been vacant for 3 years. As I had no money at the time with which to repair and replace, I simply had to make do with what I could do.

Another memory:
I pulled five extra years out of the old berber carpet that came with my house, simply by trimming the tufted snags off of it with scissors. After which it really did look fine.

Thank you for the great baking soda and vinegar trick to unclog drains. I'm sure I will find the opportunity to use it! And yes, if you hear of any other cleaning vrs fixing tips definitely let me know!

Oh Lea!

The listing agent had failed to call the owners to let them know that we would be there to look at the home that I had mentioned, but as it turned out it gave us the opportunity to get a tour through the house from the gracious owner. It was every bit as lovely as I had imagined, and unfortunately under contract as of last night.

Upon finding this out I surprised myself because any other time I might have felt disappointed about finding this out. But oddly enough I really wasn't. Yes I'll keep an eye on the contract, but truthfully? I think I could build a similar home that I would like even better than that home.

Which brings me to how I want to pay for that project!

I'm not exactly sure I would call our discussion on the driveway of that house an interview, because the minute I brought up the subject of my intention to purchase real estate investments, Jessica agent was explaining how she would go about helping me.

She didn't bat an eyelash when I told her how I wanted to proceed, talked me into looking at two additional areas of town near the one I am interested in, and for the most part even though I couldn't get many words in, I had a pretty good time just listening to her talk enthusiastically about a house that her and her husband were currently rehabbing for resale.

Before she hugged me like an old best friend, and hopped into her new Camero that she just purchased for half the going price, we set up a time to meet tomorrow afternoon and discuss things further.

It may be premature, but Lea I think I'm in business.
:-0

My new REA is a mind reader.
Met up with Jessica Agent yesterday with 3 things on a list to ask from her. And she handed them to me before I could ask her for them.

Alright then... (eerie sound bite)

Confidence is the by-product of knowledge. (And perhaps the help of good team members too?)

The night before I told Jessica the strategy I wanted to start with, I felt like you do before you tell your doctor that you drink or smoke. You know you need to do it, but you feel a bit timid about the reaction you will get when you do.

But oddly enough during our meeting, I found that talking about how I wish to proceed with Jessica was much easier than I had expected. That answering her questions was accomplished without thinking much about it. I can honestly say that I couldn't have done that before I studied the techniques of D.G. and his students first. (Thanks guys!)

What's more, before I left the meeting I heard myself sincerely say, "I want you to make money, I want me to make money, I want everyone involved to make money.". And I meant it.

Now it's time to start interviewing banks.

I'm happy for you about your REA and a 'psychic' on at that LOL This is a great accomplishment.

Also glad to hear that you have plans in place for the next house (while still keeping an eye on this one.) There are so many to choose from I just know you will find 'your dream house.'

About those great cleaning/fix up tips you've come up with - necessity is the mother of invention

Lea

I'm a bit stunned.

Decided to visit a little bank that just moved in down the street from my house, (never heard of them before), in my first attempt to interview and find a no/low season bank.

In house loans... yes.
Seasoning and turnover time... 2 weeks.
Loan to Value... 80%.
Drive by appraisal.
Ag loan limit 2.8 Million.
Rental income on financial statement... yes.
Report credit... yes.

Have an appointment to talk again with them on Monday. Plan to ask for their Assets Manager contact at the same time.

Now if I can just find one with "no" answers on my last two questions. But at this point if I don't, I'm not sure it's the end of the world!

Whoa.

If you are just starting to interview banks, there are some standard questions to ask them. But if you are at all interested in REO properties, the one thing you must ask especially if the interview is going well, is the name of their bank asset manager.

If the bank is so small that they don't have REO properties, ask them if they know of anyone who does. Keep in mind that the person you are talking with probably has worked for other banks in town at one time or the other. And if they have any experience at all they will also have heard which bank in town is currently holding the most bank owned properties.

Yes!

Today I have felt everything from self doubt to self congratulations.

Started the day off thinking, "What am I thinking!". Then I gave myself a "ROCKY", style pep talk, shook my fists like Scarlett O'Hara with a half eaten carrot in her hands, and came back to my senses.

Drove up to the bank for my meeting today, and thought, "I'm going to be nervous.", and then I decided I wasn't going to be. And I wasn't. In fact I felt totally confident, and the meeting went GREAT!

It's been a really good day.

Calling the asset manager that was referred to me tomorrow. (Deep breath)

Can't say enough good things about the concept of interviewing banks instead of being interviewed by them.

Very nice tip from Matt on the question about aggregate limits. Thanks guys!

Terri