Posted by Mike on August 01, 2004 at 17:52:46:
Hehe. I was going to send you a follow up mail but alas, we share the same email address 
Delete some 0’s
0K0a0t0y0.0M0i0k0e0@0v0e0r0i0z0o0n0.0n0e0t
Mostly just curious at how expensive your money is from the lenders right now 
A rant to clear my mind - Posted by Tom Bazley, CPA
Posted by Tom Bazley, CPA on July 30, 2004 at 09:58:32:
I received a newsletter yesterday & it made me think of some things. So, I’m going to take this opportunity to vent & get some things off my chest. Take this for what it’s worth.
When I got into real estate in 1992 I, like many people, was looking for something to replace a job I couldn’t stand. But the winds of change veered me onto a different couse, & now that is no longer my goal. As a successful CPA, my main professional ambition is to further develop my accounting & tax practice. I still own a few rentals & I wholesale 2 or 3 houses a year, but I do it to fund my daughter’s college education & my retirement. I have no desire to be a full time investor or to create an “autopilot” business. Mostly my involvement in real estate is used to gain more accounting & tax clients.
When I started in 1992, on any given Sunday, there were perhaps 8 “I Buy Houses” ads in the newspaper. Now there’s no fewer than 30. You can’t go 2 miles in this city w/out seeing 3 “I Buy Houses” bandit signs. In the real estate investment club of which I am a director, the weekly classes are filled.
The problem is that most of the folks in the classes, running the ads, & placing the signs will never do anything at all in real estate. They seem to think it’s a get rich quick & easy business. I was a motivated seller of a house 2 years ago. I called on no fewer than 7 ads & signs & left messages. I got one call back. And he said he couldn’t make a deal of it.
But all of these wannabes have created a perceived competition for those of us who are really investors. There’s no sense running ads anymore, and bandit signs will only mix in w/ the million already out there.
I’m not compaining about folks who are trying to enrich their lives via real estate. It’s a great business & it’s done well for me. I guess I’m just venting about the wannabes, who outnumber the real investors by probably 10-1, who are making it far more difficult for those of us who truly are willing to work to make this business a success.
Does anyone else feel the same way? Or am I just some elitist jerkwad who doesn’t want anyone else making this gig too hard? I know the wannabes are in every city. My sister in Atlanta says the bandit signs are all over the place up there. How do you real investors deal w/ the increased perceived competition from the wannabes?
OK, rant over.
Re: A rant to clear my mind - Posted by Rob FL
Posted by Rob FL on August 01, 2004 at 14:13:55:
I’ve found that this group of Legrand/ Sheets/ Whitney/ etc. type of investors has been growing by leaps and bounds for years. The only bad thing for them is that very few service providers be it CPA’s, attorneys, Realtors, title companies, etc. understand what these folks are trying to do. Seems like most of these service providers can’t understand any form of creativity and think it’s all illegal. By catering to this growing group, there is alot of opportunity to take advantage of. Of course, you need to understand what their needs are and act accordingly.
Re: A rant to clear my mind - Posted by MM
Posted by MM on July 31, 2004 at 04:24:43:
Tom,
I think you answered part of your own question without even realizing it. You said it yourself there’s 30 I buy houses ads in the sunday paper , and a bunch of bandit signs. I would rather have that situation then everyone having a ad that becomes a brand in peoples mind. You need to distinguish yourself from all the other ads that compete with you in any business , but newbies down’t seem to catch that part because all the books and courses floating around push the i buy houses ads in their teaching.
I’ve never once used an i buy houses theam it’s very played out , and allows no room to become anything other then a part of the croud. Read up on copywriting ( aka the art of writing ad copy). Learn how to brand yourself , and more improtantly learn how to stand out from the rest. That takes care of the advertising crunch your in , but I know all those other leads such as public records have been visited and revisited. The great thing about a wannabe though is they only have at best a few ways to solve a sellers problem. You can use that as a vantage point when getting your foot in the door.
While every newbie on the block is trying to force fit a lease option , or what ever else that just couldn’t work for the deal , come in with your box full of ideas ask what they need , and then pick the right fix. Newbies only have a few tools at best some luck out and have the right tool for the job but thats rare.
lastly follow up. I don’t know many newbies with the money to follow up with a mailing campain, and the ones who have the money tend to over look following up , or never think of it in the first place. This probably won’t capture all the business a full time investor once saw , but I suspect you’ll get atleast a good number back doing those three things.
Until newbies start runing their investments like a business I really don’t worry about them much. the ones who use a business plan , marketing plan , research laws , and do the things any other business startup finds as common sence is the ones who are your competitors the others are just in the way.
oddly enough they we buy and i buy houses ads all around tend to promote an image of a large
company. people with problems from my experence prefer a one on one approch , not a aswnering service thats telling them to press a million numbers . So you see my ad, or all of there’s and usually when motivated pick the one who’s more likely to have a person on the other end.
thats how I deal with it here , and it works for me. Maybe you should start calling all those ads yourself , and promoting your CPA pratice. Under educated newbies in a business with a lot ot tax ramifications looks like prospects for a CPA to me
Re: A rant to clear my mind - Posted by Tom Bazley, CPA
Posted by Tom Bazley, CPA on July 30, 2004 at 20:49:20:
Here’s what I guess my point was. As I said, I have no desire to operate this real estate thing as a business. I did 2 wholesale deals last year that made me $11,000. Some extra cash to take a decent vacation & socked the rest away so my daughter can go to Harvard or Florida (GO GATORS!!!). Anyway, it’s getting harder & harder to find these deals because of the wannabes unless I decide to operate this as a full time business. I’m not going to do that. I’ll get out of real estate before I give up my accounting career. I make too much money as a CPA to give that up.
Re: A rant to clear my mind - Posted by DP (ON)
Posted by DP (ON) on July 30, 2004 at 18:33:46:
When you can buy any house on the market at or slightly below value, pay the seller cash, but have it financed 100% by the bank at these low interest rates. Turn around and finance it to someone with bad credit and stick $400/mo in your pocket…
There is NO competition.
Even if there was, you could never do enough deals to step on each other’s toes.
Re: A rant to clear my mind - Posted by John-Fl
Posted by John-Fl on July 30, 2004 at 17:41:39:
This is a true story…
After recently picking up my first rehab I drove my car to see the progress my crew has been making. It’s looking real good. I come home and take my wife and kids to eat at Smokey Bones (BBQ) and when I get to my vehicle I notice my car has a flat tire. I scratch my head and change the tire, drive to a tire shop and drop off my tire.
Next day, I drive to the pick up my tire and I hear one of the service men talking about how he’s going to be doing some drywall work and hopefully painting this weekend. I asked if he does this for fun or a side job? He grins ear to ear and says he’s a real estate investor and asks me if I do construction type work. I say not really but I have a crew that’s doing some stuff at a property. He turns to his buddy and says “See? I told you this isn’t b.s.” His buddy proceeds to ask me 20 questions and I answer as politely as I could and end with telling both of them that if they ever see a property… blah blah I’ll pay a $500 finders fee if I buy.
Competition?
Probably not. But who knows? Many others have started from worse.
I often get calls from other investors and I simply give them my bird dog pitch, get their name, number, e-mail address, add them to my buyers list and ask to be added to theirs.
Over the last 18 months I’ve picked up a few properties and “made a living” by replacing my salary. The most important thing is that I have now started to zero in on what works and what doesn’t when trying to find properties. Out of my last 7 deals they came from 3 different marketing mediums. I had been marketing “hardcore” with 5. So I’m thinking about dropping the ads that aren’t pulling and doubling up on the ones that are.
Learn your market, stop sweating the competing (recruit them when possible as bird dogs and add to your buyers list) and go make some money!
Re: A rant to clear my mind - Posted by Space Available
Posted by Space Available on July 30, 2004 at 17:18:51:
I don’t know about you but I am beginning to look at this crop of newbies as one of my next sources of deals. It seems that by their sheer numbers they will stumble over a house or two and not know how to market it. They will become the “motivated sellers” that more experienced investors will feed on. In the meantime cast your eyes about for the other forms of real estate that are out there - commercial, vacant land, even cemetary plots can be had without having a couple of dozen inexperienced “deal doers” bidding up the price.
Remember the old saying - "What happens when a man with money meets a man with experience? The man with experience winds up with the money and the man with the money gets the experience!
Re: A rant to clear my mind - Posted by Tim
Posted by Tim on July 30, 2004 at 15:27:44:
I don’t have any problem with the wannabes who won’t ever do a deal. The ones that get up my a** are the ones who don’t know what a deal is. In my area there seems to be a never ending supply of “investors” that are willing to buy non-deals. I’m talking about the ones that will buy a house for ARV minus repair costs, rationalizing it by saying they will “do their own work”. It is hard to compete with someone who is willing to risk a large sum of money to buy a weekend job that doesn’t pay half what their real job does. I’m not saying there aren’t any deals here, they are just a heck of a lot harder to find.
C’mon Tom… - Posted by Nike
Posted by Nike on July 30, 2004 at 14:31:28:
Are you suggesting that you’re having trouble finding 2-3 wholesale deals a year? You’ve been investing since 1992? How many offers have you made in the last 45 days? Have you called any of the We Buy signs to ask them to put you on their buyers list?–you can leverage off their marketing.
You wrote: “There’s no sense running ads anymore, and bandit signs will only mix in w/ the million already out there.” What? Market along side of your competition and you’ll get your fair share of deals. C’mon-you’re only talking about 2-3 wholesale deals a year.
Quit-complaining and get focused. You’re making it more difficult than is necessary. Focus on finding deals–if your goal remains only 2-3 deals a year be sure to cherry-pick the good ones. Good luck.
Re: A rant to clear my mind - Posted by Joe
Posted by Joe on July 30, 2004 at 14:02:08:
I couldn’t agree more. But here’s the rub. It’s not just newbies that drove me out of my tried and true methods for finding deals. It’s the franchises too. It’s funny, I was driving by my house, and noticed signs on the bus-stop bench. The benches in my city have roofs, and two places for large 6foot by 4 foot advertisements. On one side was “Ug Buys Houses” which is of course the silly ad for homevestors. On the other side of the same bench was “BuyAllHomes.com”
The truth is these signs and billboards are everywhere in my city. It does no good whatsoever to put bandit signs out. Running a little “I Buy Houses” ad in the main newspaper costs an arm and a leg, and there your ad is, with 20 other ads just like it.
I don’t like it. I remeber when my ad and maybe one or two others were the only ones. But I had to adjust. I went a long time without any quality deals, almost to the point of getting a real job (grin).
But I finally found a good solid niche that seems to be working very well. It took a lot of time and money to find it. I’m glad I didn’t give up.
I know in my heart that most of those that can’t figure out a niche or two will soon be gone, or will never generate the volume of good deals to quit their day job. It’s just not as easy as following the guru’s course anymore, like it used to be. One has to be clever enough to create new business, and I really doubt the majority have that ability.
Re: A rant to clear my mind - Posted by Jack
Posted by Jack on July 30, 2004 at 13:35:36:
I take and deface illegal ‘I buy houses’ Sleazeball signs that reflect negatively upon lawabiding investors such as myself.
Lower (a little) your expectations - Posted by Farlee
Posted by Farlee on July 30, 2004 at 12:56:11:
I hear you loud and clear and agree.
But, on the other hand,the world of real estate investing has changed (much as investing in stocks, etc. has changed). I think that any real estate investor needs to set the following expectations:
It’s like the local hardware store when Wal Mart comes to town. You can’t have a 40% profit margin anymore. What used to be a “thin” deal is now an average deal. Now, you need to have two deals to make the same amount of money.
Walk away from more deals. If you were getting one in twenty offers accepted, you may now get one in fifty accepted.
combine number one and two above, and you realize that you need to do more marketing. You need to get to deals first, which means more investment of time and money to find deals first.
For those of you who have read other posts of mine, you probably know how I end most of my posts. It is especially relevant to this one:
YOU MUST ADD UP EVERY MINUTE (YES - EVERY MINUTE) OF TIME YOU SPEND DOING ANYTHING RELATED TO REAL ESTATE INVESTING. TAKE THE MONEY YOU’VE MADE INVESTING (AFTER COSTS, TAXES, ETC. - EVERY COST…) AND FIGURE OUT HOW MUCH YOU END UP WITH. IF YOU CAN MAKE MORE MONEY BEING AN ACCOUNTANT, OR DRIVING A TAXI, OR SOMETHING ELSE, STOP INVESTING IN REAL ESTATE! IT’S HOW MUCH YOU END UP WITH THAT MATTERS.
Re: A rant to clear my mind - Posted by a
Posted by a on July 30, 2004 at 12:24:48:
Thanks for venting. My version is a depressed rental market coupled with the fact that “investors” are buying multifamily properties at prices that cannot be substantiated by the income analysis approach to property valuation (cash-flow analysis). Are they more sophisticated in thier approach? Maybe…but I am still scratching my head…
Perhaps the more seasoned landlords on this forum can clear up my confusion.
Re: A rant to clear my mind - Posted by Lazaro
Posted by Lazaro on July 30, 2004 at 12:22:32:
It is so true? differentiate your self? modify your business model? reevaluate your strategy? etc, etc. At the end it is the same, to find a way to get around the competition. I have a background on marketing so I am familiar with this train of thought.
I am a real estate ?WANNABE?, and I do want to succeed on this business. For the same reasons that you do: To build an egg nest for my retirement, pay for my kid?s college and depend less a job to pay the bills.
Remember that real estate is cyclical as well. Just as you saw the raise and fall of the dot-coms, you may see people jumping off real estate market in a not too distant future. I have been educating my self for about two years. Read a number of books and study a couple of real estate curses. I finally closed my first deal and cashed in on a healthy profit. I pray that God will guide my steps on this endeavor and allow me to accomplish this goal of becoming a ?real? investor just like you.
Re: You Pay For Your Sins!! - Posted by USA-1 (TN)
Posted by USA-1 (TN) on July 30, 2004 at 11:13:16:
How do you deal with the increased competition from wannabes? You thank God for it! I have to put down my Pepsi and tell you this one. I am closing next week on all of the properties from a first time landlord. He bought a duplex, house and trailer at an auction in 2000. He has paid on the loan for 4 years put 10K into the property and told me that he “just cant take it anymore”. When we settled on the purchase price for all he is writing a check for 3K to pay off his loan. I will have a rent ratio of around 1.7% on these. I thank him every day for investing in my future. Just be paitent, wait and keep your eyes open. James.
Re: A rant to clear my mind - Posted by jasonrei
Posted by jasonrei on July 30, 2004 at 10:33:26:
I think it IS a bit elitist to harp on the wannabes. It’s the result of frustration from things not being easier. I’m not immune to it.
The increased competition is real. Yes, a lot of new investors will overpay, and a lot of them will take a big enough hit that they’ll never get back into RE again.
A couple of my early sources of deals are no longer worth pursuing because too many people have gotten involved. I’ve had to go in a different direction.
That’s life, we can cry about it or deal with it I guess.
I was a beginning investor, once.
Re: A rant to clear my mind - Posted by Randy (SD)
Posted by Randy (SD) on July 30, 2004 at 10:15:40:
And a worthwhile to rant it was. “How do you deal with the increased competition from the wannabes”? You get up every morning, put your socks on and go to work. That’s all you can do, I could ask the same question for your profession for when I looked in this 4 inch high Yellow Pages directory on my desk searching for a real CPA there’s 35 pages of listings I’m quite sure some of the real CPA’s in my area would like to know how to deal with the other 34 3/4 pages of wannabes. Figure out what the competition is doing-and don’t do it! Find another way to distinguish yourself from the pack.
binoculars review - Posted by binoculars review
Posted by binoculars review on October 24, 2005 at 20:05:43:
cheap binoculars jason binoculars tasco binoculars hunting binoculars digital camera binoculars auto focus binoculars swift audubon binoculars roof prism binoculars binoculars com marine binoculars
following-up is a great source of deals - Posted by Kristine-CA
Posted by Kristine-CA on July 31, 2004 at 12:22:17:
MM: I agree that follow-up is where most newbies are lacking. Following up with that 3rd letter or 15th call is by far my best source of “leads.” Since I work mostly with out of state owners, communication is often limited. In the beginning I would stop communicating with people when I felt they weren’t ready to sell and left the ball in their court. You know, call me when you are ready to sell or if your situation changes, blah blah, blah.
In the spring I wrote letters to 3 prospects I had worked for several months and who I felt were really stuck on selling for a lot higher. Of course I hadn’t heard from them. My letter said I am still interested and really would like to work with you, so why don’t you let me know a price that would work for you. And wouldn’t you know two of them called asap and were ready to sell for my price. Waiting for them to call me without that letter would have resulted in 0 deals.
I have about 6 of those letters to write today, so I’ll sign off the message board now. Kristine