Let's Talk Real Estate Investing with Sharon Vornholt

Today I want to talk about 10 myths about probate investing. These are common misconceptions that I hear all the time.

Most of you know that I have specialized in the niche of probates for over a decade now, so I know this niche well. There are also a lot of investors who are reluctant to work in this niche, and it's almost always because they just need a little more education. They don't quite have the knowledge they need to succeed as a probate investor.

My goal today is to bust those myths about probates and to show you why now is the perfect time to add this strategy to your investing business.

10 Myths about Probate Investing

#1. It's a myth that there is a never-ending supply of leads.

#2. You have to know a whole bunch of legal information to work in the probate niche.

#3. The probate process is complicated, so investors should just forget probates.

#4. Investors are taking advantage of people that have to sell the property in the estate.

#5. You need to be an attorney to understand the terminology or the language of probate.

#6. I can never get up the courage to talk to people that have lost someone close to them. It's just creepy.

#7. Probate investing is hard or there is so much to learn, I can never learn it.

#8. Myth: The personal representatives don't have to sell the house.

#9. Now is a terrible time to decide to work in this niche since we are still in the midst of Covid-19.

#10. It will take me forever to become a probate investing expert.

Want to Learn How to Become a Probate Investing Expert?

I hope by now you know that there never was a better time than right now to add probates to your business. If you feel like you need a little more knowledge about this topic, I have something for you.

My course Probate Investing Simplified that will be opening this week for a short time, then it will be closing down again. This is my promise to you; you can definitely become the "go-to" probate investing expert in just 6 short weeks if you complete my course.

To learn more, go to Probate Investing Simplified. If you want free resources, you will find those on the Louisville Gals Real Estate Blog.

People think it's tricky having conversations with executors of estates, but that really isn't true. Today I want to put your mind at ease when it comes to having these conversations and give you 10 tips for working with executors of an estate. After all, that's exactly what it is; you really are just having a conversation with an individual that has a problem. They have a house that is part of an estate that they need to sell.

To List or Not to List?

There are two scenarios here. The first one is that the executor decides to list the property with a Realtor. Some of the properties will definitely be listed on the MLS. Today we are definitely in a seller's market and the inventory is low. What that means is there are more buyers than there are houses for sale. In many areas there are multiple buyers competing for each property.

However, a lot of the properties in estates will be sold to investors. That's why it's critical that you get good at working with executors. This means you have to be comfortable talking with them, and if you're having a problem with that, it's most likely one of two things; either it's a mindset issue, or you don't feel fully prepared yourself. But first, let's clear something up.

What's the Difference in an Executor and an Administrator of an Estate?

These two terms are confusing for a lot of people. The executor and the administrator are also jointly referred to as the personal representative. I like to call this person the "decision-maker" because they are the only person that has the right to sell any property in the estate.

So, what's the difference? The difference is only how they got to be the personal representative. If there is a will, the deceased will have chosen the person they want to be in charge of their estate. This person will be named in the will as being the executor. In the absence of a will, the court will appoint an administrator. I want to point out that the duties and responsibilities are the same for both people regardless of their titles.

10 Tips for Working with Executors and Administrators

I have put together 10 tips that will help you confidently talk to the family members and the personal representative. Having a thorough understanding of these principles covered in this show will help you become the obvious choice for the seller.

1. People are looking for a solution to their problem. You want to be the solution to their problem.
2. Clearly understand your role in this process. Once they have opened the estate, they are ready to move on with the "business" of settling the estate.
3. Selling the property in the estate is something they must do.
4. The importance of working on your mindset so that you feel comfortable talking with these sellers.
5. Be compassionate as they work through this process.
6. Why showing up as the expert will put them at ease so that they choose you.
7. The reason these motivated sellers really welcome our help.
8. Understanding why the personal representatives have put off selling the property gives you have a distinct advantage over the next investor.
9. Simply asking them, "what else do you need that will enable you to move forward with selling the property" sets you apart from your competition.
10. Sometimes they need to think about things.

Final Success Tip for Working with Executors

You have to show up as an expert to stand out from your competition!

This means you need to understand the probate process, you need a basic knowledge of the terminology used in probate, and you need to be able to communicate clearly how you can help these sellers.

Remember, it's just a conversation and you are there to solve their problem. This niche my friend is pure gold when it comes to leads. You will never run out of motivated seller leads.

Be sure to stop by the Louisville Gal's Real Estate Blog and pick up your freebies!

Most of you know that I specialize in the niche of probates as well as marketing and branding. I want you to get great results from the time and money you spend on marketing.

What I'm finding is that investors have stopped working probates altogether. They have shut down their marketing campaigns. Today I want to put an end to all those stories you're telling yourself about why you should wait; why now is a bad time to be working in the niche of probates, when it's actually a good time. I also want you to know, that there are people out there ready to buy your deals.

If you're a rehabber that's been sitting on the fence, worried about selling your flip, the inventory is still really low in most areas so there are definitely buyers out there. Now, if you still want to wait a bit to start another rehab and you come across a probate deal, wholesale the property. Trust me when I say that if you have a deal, there is a buyer waiting so it's time to ramp up your marketing, and there is no better place to start than with probates.

Unlike a lot of other niches, now is actually the perfect time to invest in probates.

Why is that? There happen to be a number of very good reasons, but here is the #1 reason.

Probate is a niche where you will never run out of leads. For those of you that are worried about working in this niche while we are in the midst of Covid-19, you don't need to be concerned about that, and here's why.

At the time I'm recording this, the courts have been closed for over 3 months in most areas. In my area, they are just beginning to open up again. This means, there is a huge backlog of probates due to the courts being closed. So, any probates coming up were ones where the person passed away many months ago before Covid-19 or possibly even a year ago. In many cases, these personal representatives were ready to take the steps to open the probate when the courts suddenly shut down.

Remember that when the estate is opened that is a signal to you that they are ready to sell the property in the estate. A lot of these people have been waiting a long time to get the estate settled so they can move on with their life. Which means these folks will likely be very motivated sellers.

Why it's Always the Perfect Time to Invest in Probates

There really is no wrong time to start investing in probates and here's why. It's due to the natural cycle of life.

Babies are born every day, and people pass away every day. It's just the way life works. There is no other niche in real estate where the actual cycle of life itself determines the number and the quality of your leads you can bring into your business while helping so many people. Remember that if a house is in probate, it must be sold.

What that means to real estate investors, is that right now; today; is the perfect time to position yourself to help these folks at what is undeniably a very difficult time in their life. That's what probate investors do. They help people that find themselves with an unwanted sell that property move on with their lives. This may or may not be a distressed property. It's likely that it will be a distressed property. However, in many cases there is a totally different motivation that makes the seller look for a quick, hassle free sale.

This my friend is really big. These executors and administrators have to deal with the "business" of settling the estate. This is a job for them. As real estate investors, we have the honor and the privilege of helping these folks with the sale of the property so they can get back to living their lives. When I say that I love working with these folks I mean it. When I tell you how much these people appreciate our help, that's the truth. They are so appreciative!

What's Next?

I've put together a series of these articles and podcasts to help you understand why this really is the perfect time to invest in probates.

Get my "Probate Investing Starter Kit"

I've just updated this FREEBIE, so be sure to download it today to use as a resource. You'll find it immensely helpful in understanding the process. You can get here at this link. Just Click Here.

Next Up

Next time I'll have some tips for working with the personal representative in the estate (that is the executor or the administrator), and we'll talk about the differences in those 2 terms.

Today we are going to focus on the 8 cities where real estate is expected to recover the quickest after Covid-19, and the 4 factors that will likely determine why they are the first to recover.

The shutdowns from Covid-19 began around the middle of March in most areas. So, it has been about 3 months since this crisis began as I write this. Real estate has been severely impacted by almost every major city across the country. Investors are wondering what their business will look like 3 months, 6 months, and even 1 year from today. These are very uncertain times.

My guest today is a Chicago investor, Andrew Holmes. Andrew is the founder of Chicago REIA, and he is an active investor with more than 240 rentals in his portfolio. Not only has he been in this business for a long time, he is also a very data-driven person. Listen in as we discuss what he believes will be the determining factors in the recovery process during the next 12 to 24 months.

Show Notes

Here are some of the things we covered in this show.

• How retail real estate has been affected both in the short-term and the long-term
• How investors have been impacted as a whole
• The recovery will be different depending on your investing strategy.
• Breaking it down: how each one of these strategies is affected differently.
  1. Wholesalers
  2. Rehabbers
  3. Buy and hold landlords
• The long term effects the Cares Act as it applies to real estate investors
• 4 factors that will determine how fast cities recover from the effects of Covid-19
  1. Density of the population
  2. Reliance on tourism
  3. Educational level of the area
  4. Workforce type
• The top 8 cities that will recover the fastest
• Pending legislation across the US, and how it will affect buy and hold investors going forward

Is it Still a Good Time to Invest in Real Estate?

Absolutely! You just might have to pivot and do things differently than how you are used to doing them. I will have more shows coming your way on how to navigate this new landscape.

What's the best way for people to reach you? ChicagoREIA.org

Be sure to stop by the Louisville Gal's Real Estate Blog and pick up your freebies!

So many small business owners are struggling now, and that's certainly true for real estate investors. It's almost as if they are frozen in time. Do I buy, or do I wait? There is no easy answer. Today I have put together a few tips on how to set yourself up for success in the last half of this year.

You may be wondering exactly how do you get back on track after Covid-19 (or any other life event for that matter) that derails the goals and the plan you laid out for your business at the beginning of the year? I mean, who could have predicted we would be in this situation on January 1st of this year? If you are struggling, if you've lost your focus, or you just need someone to point you in the right direction, you're in the right place.

We All Crave Success

It's human nature for us to want to be successful at everything we do in business and in life. Even though you may have some setbacks along the way, if you prepare yourself for the road ahead and really visualize what you want to accomplish, then the only person standing in your way of success is you. Ultimately, it's up to you to set yourself up for success.

Know this; there's no magic potion or secret formula for success. Even business-people or celebrities who seem to be overnight sensations worked hard for many years before reaching their level of success. The goals you set and the processes you put in place to make those goals a reality are two very big parts of this puzzle, but first, you have to get started.

Work through the process, pivot along the way as needed, and you WILL set yourself up for success both in business and in life.

Getting Started

It's almost certain that business as we knew it before Covid-19 has changed dramatically for a lot of folks. People are working from home that has never done that before. Simple things we used to take for granted like strolling through the office supply store or looking at occupied properties haven't been possible in many cases. A lot of investors are struggling when it comes to their business. However, there are also a lot of people that are doing better than ever. They pivoted, they made changes in the face of uncertainty and started to do things differently and that has made a huge difference for them.

I have put together 3 steps for setting yourself up for success in your business in the last half of this year.

Step 1. Create New Goals Even though you may be thinking, "I already did this a few months ago and it sounds like a lot of work", you need to ask yourself how you "intend" to finish out the last half of this year. Creating these new goals takes you off the hook for your original goals. Now, make no mistake, I'm not saying to completely abandon the original goals you set for this year. I'm just saying that rather than living in this state of overwhelm, you may need a new plan that puts you back on track so that you can accomplish your original goals or pivot and make changes as needed.

Once your big goals are broken down into smaller goals, they're not so overwhelming. This may mean putting together a plan to achieve your goals in a shorter period of time. If that's the case, maybe your need to increase your marketing so you can bring in more leads in your real estate investing business. Or it could mean that you need to simply set more realistic yet attainable goals for the last half of the year. At the end of the day, this is something only you can decide. The 12 Week Year If you've been around me for any length of time, you'll know I love the book "The 12 Week Year" by Brian Moran. The premise of this book is that by taking your big goals and breaking them down into 12-week segments, they will be less overwhelming and easier to accomplish. (I'll put a link at the bottom of this article so you can check out my original book review). Instead of looking at those giant goals, you made like "double the number of deals I did last year" or "double the amount of net income in my business in the next 12 months", break that big goal down into something smaller that is easier to accomplish. For example, if your goal was to do 12 deals this year, how many deals would that normally be in each 12 week period? The answer is of course 3 deals.

Since we have less time left in this year, ask yourself this; how many deals do I need to do in each of these remaining 2 quarters to catch up? Next, what do I need to accomplish each month? Break the tasks down so that you know what you need to do each week to meet your goals. Your small goals should guide you toward your next action steps so that you ultimately reach your big goals.

Step 2. Decide Who You Need to Become

This is a big one. Much like identifying your ideal client which in your case would be the group of motivated sellers you target in your business, put into words the type of person YOU want to become. Even better, who is the person you need to become to accomplish your big goals? Once you have that answer then identify what that type of person does differently than you.

For instance, let's say that you want to run a multiple 6 or 7 figure real estates investing business. What are some habits and behaviors that other investors that have built those businesses have? Do they get up earlier? Do they have a morning routine that they are committed to? How did they get to be the CEO of their business? If your goal is to build this same business, you need to think and act like them. You certainly don't need to copy exactly what these people are doing, but you'll need to add some behaviors and habits to your routine that put you on the path to becoming that person. These people definitely have different habits and behaviors than other people.

Step 3. Create Processes to Set Yourself up for Success

The processes you create to reach your goals are much more important than the actual goal itself when it comes to accomplishing the goals. While the goal keeps you focused on a direction, the process is all the action necessary to achieve that goal. I want you to take a look at your business as it is today. What processes do you have in place today that will help you move closer to your goals? If you're like most small business people, creating processes are often an afterthought rather than something you do proactively. Processes are one way to make your life easier and they help you set yourself up for success at the same time.

Be Mindful of How You Spend Your Time You must know how you're spending the hours in your day before you can make changes. In the beginning, you might consider following a checklist for your daily tasks with a time limit for each task. This will help you get your focus back. For instance, start with a morning routine. Those are the steps you take to start your day each day. This morning routine will look different for everyone. I'm a big fan of Hal Elrod's book "The Miracle Morning", but I know myself and I'm not getting up at 4:00 am each day. Figure out what your morning ritual or routine looks like and commit to starting each day the same way. We're creating habits here. Once you figure out a productive way to start your morning, managing the rest of your day will get easier. Focus on one thing at a time.

What do You Need to Stop Doing to Set Yourself up for Success?

Maybe you need to ask yourself this question before moving on. What do you need to STOP doing? Maybe that is turning on the news the first thing in the morning to listen to as you get ready for your day. Let's be honest; how many times have you stopped for just a minute to watch something on the news and realized that the one minute segment turns into 30 minutes in front of the TV?

Maybe it's something like checking email the first thing in the morning that derails your entire morning. Instead of checking email the first thing in the morning, allow yourself 10–15 minutes to check and respond to emails at a set time of the day, then sign out of email for a few hours. Time blocking works really well when you need to focus on one task or one client for a certain amount of time. One example is to set aside time to tackle your marketing. Next, set aside time for the next thing that really needs to get done. Remember, you're trying to get your focus back and get your business back on track.

Some people like short bursts of work, but I much prefer 90 minutes to 2 hours of focused time on a big project before I take a break. Someone once said that once a task is interrupted, it can take up to 40 minutes to get back on track. Interruptions have a huge impact on your productivity. The point here is to figure out something realistic that will work for you. Set a timer then get to work. Refine Your Processes

If you feel like your processes aren't working, focus on improving the processes instead of changing the goals. Maybe you need to add or subtract a step or two or add more time to complete certain tasks. Your goal can be static, but your processes are meant to be more fluid and open to change.

Every single living, breathing person has the opportunity to create the business of their dreams with these simple steps. I can guarantee you the road won't always be easy and everyone will have a different timeline for reaching that success. It's Covid-19 this year that has had a huge impact on our businesses; it will almost certainly be something different in the future. But with focused, hard work and a desire to succeed, you'll soon recognize opportunities as they arise that will move you toward your ultimate goals.

More on "The 12 Week Year"

To learn more about the principles behind the 12 Week Year and why you should implement them in your business now more than ever, you can check out the book review I did here on the blog. JUST CLICK HERE. It will change the course of your business.

I hope this show helps you to set a new direction for your business in the last half of this year. It is definitely still possible to reach your goals. Pick up a copy of my "Marketing Plan Template" over on the Louisville Gals Real Estate Blog.

Have you ever wondered what it would feel like to be starting over with not one but two real estate related businesses? That's what we're going to talk about today. Rebuilding two businesses with San Antonio rehabber, Danny Johnson.

Danny is a veteran house flipper, and he was a software developer before becoming a real estate investor. He is the creator of LeadPropeller real estate investor websites, and he has a brand new updated version of his CRM FlipPilot.

After focusing on the software for several years, he's becoming active in real estate investing again.

Show Notes

• How Danny's boss "helped him" leave his full-time job
• Why he chose rehabbing as his investment strategy
• How one business became two
• Scaling up; creating a flipping business and a software business
• Building teams and systems so you can grow
• What effects Covid-19 will likely have on real estate in the next 12 to 18 months
• How investors can prepare in the upcoming months so that they thrive rather than just survive during the next year or two
• Starting over…
• Marketing; what he's doing now
• The newest version of FlipPilot CRM and lead management software
• The features FlipPilot offers; what makes it unique
• Why investing in a good CRM actually make you money?
• Danny's final advice for investors that want to build a successful rehabbing business

Learn More About LeadPropeller and FlipPilot

To learn more about these two products specifically designed for real estate investors just click the links below:

LeadPropeller

FlipPilot

Be sure to stop by the Louisville Gal's Real Estate Blog and pick up your freebies!

Have you ever wondered if there was a way to play a much bigger game in real estate investing? If the answer is yes, have you ever considered specializing in syndication?

Listen is as my guest Monick Halm tells you exactly how she went from single-family homes and duplexes to multifamily syndication. Monick is a "recovered attorney" who has 14 years of real estate investing experience which also includes mobile homes, commercial property, ground-up development, and (this is one of my favorites), RV parks. She is also the host of the Real Estate Investor Goddesses Podcast and a wife and mother of 3.

One thing I really love about Monick, is that she has built her business on a powerful mission. That mission is to assist 1 million women to achieve financial freedom through real estate.

Show Notes

• What made Monick trade in the field of law for real estate investing
• The person that was Monick's inspiration to become an entrepreneur
• Why a duplex was her first purchase
• Single-family homes; why she decided they weren't for her
• Lessons learned from her first deals
• What Monick wishes she had known right from the beginning
• What her mix of rentals looks like today
• The different ways you make money in syndication deals and the ROI
• How her law background has helped her build her business
• How to make money in RV parks; one strategy that is really hassle-free
• The areas of real estate investing she thinks will flourish over the next few years
• Monick's final advice for anyone sitting on the sidelines or not playing full out
• Her favorite book (which just happens to be one of mine)

You can reach out to Monick through her website, REI Goddesses

Be sure to stop by the Louisville Gal's Real Estate Blog and pick up your freebies!

.

Let me ask you this; are you using any creative financing strategies in your business today? If your answer is no, what is holding you back? It's probably because you don't understand the different ways you can do this. Your ability to use creative financing strategies will change your business because you will no longer have to depend solely on traditional funding sources for your deals.

The two biggest problems real estate investors everywhere have, are finding deals and funding their deals. Finding deals is all about marketing. If you do consistent, targeted marketing you will have leads coming in the door. However, once you've found a property, where do you get the money to fund the deal? That's what I want to talk about today. The importance of adding creative financing strategies to your real estate investing business.

Learning how to structure your deals creatively will give you so much more opportunity. In fact, closing on a property will never be a problem once you understand these strategies and know-how to implement them in your business. Your ability to quickly find a way to fund a deal, will likely "make or break" your business over time.

Don't Be a "One Trick Pony"

If you are relying solely on banks for funding your deals, that's exactly what you are. You only have one way to close deals.

Now don't get me wrong; investor friendly banks should always be one of your go-to funding sources. However, I can promise you that one day that door will be closed when you need it. You will find yourself in a position where you won't be able to get a loan from a traditional lender. Their decision might be based on the economy, the mix of property that you have in your rental portfolio, or one of many other things. Having a good understanding of creative financing strategies will completely eliminate that problem when that day comes (and it will come).

Learning from the Past

One thing I learned in the 2008 real estate crash was that it was essential for the survival of your real estate investing business to have more than one way to close your deals. Investors that were only using banks and commercial lenders at that time were in trouble. To survive, they had to get creative; they had to learn creative financing strategies.

From a purely practical standpoint, could you do more real estate deals if banks weren't your only source for financing? The answer is definitely yes! What if you could double or triple the number of deals you are doing now without relying on banks or using any of your own cash? What would that look like for you? How would that change your business?

I'm going to go over 8 creative financing strategies today that you can use in addition to traditional investor friendly banks. But before I do that, let's talk about the situation we find ourselves in today, and what the future of real estate may look like on the other side of Covid-19.

The Future of Real Estate

Today is a unique time in history where no one really knows for sure what the real estate market will look like 12-18 months from now. Most people have never experienced anything like Covid-19 and this pandemic in their lifetime. However, we can make some predictions based on what has happened historically after other major events like the real estate crash in 2008. This timeline was a little different in some areas. For some people, it was 2007, while others didn't fully feel the effects of the market crash until 2009.

In the next few months, you may not see a lot of change. Houses today, are still selling for top dollar and they are getting multiple offers in many instances. That is on the retail side of real estate.

However, there is another side to this. Lenders and landlords are working with people that can't pay their rent or their mortgage, in part because you cannot foreclose or evict someone for non-payment at this time. The government has enacted laws that prevent landlords and mortgage companies from doing these things. This will likely go on for a few months at least, and it has put landlords in a tough situation. I'll talk more about that in a minute.

Stimulus Packages

There are several government stimulus packages that have been put in place as well as new unemployment insurance programs designed to cover more people that are unemployed due to Covid-19. But the sad reality is that a lot of people either don't qualify for these programs or they haven't received these benefits. People are struggling just to survive.

Here is another reality. As the states begin to open up and try to get people back to work, there will come a time when these programs designed to help people and to get the economy back on track will go away. I believe this is when you will begin to see a huge shift in the real estate market. People that were already struggling will likely reach a breaking point.

Finding the Opportunity in any Real Estate Market Requires You to Solve Problems

Our job as real estate investors has always been to be a problem solver. It has been a strong seller's market for quite a while now when it comes to retail sales. This has made it challenging for real estate investors to find good deals. In the upcoming months, things are going to begin to change. There are some ways you can position yourself to help sellers during this challenging time.

First of all, ask yourself, "How can I help these people"? If you can do that and you end up making money in the process, that's a win-win for everyone. Here is what I believe you're going to see:

• Many people that own investment property will be hurting financially and they will get out of the business. This will be true for folks that have a W-2 job that invests part-time, as well as full-time investors that own a rental property that now have unpaid rent and /or vacant units. They need that income to keep their businesses afloat. You can expect that some investors will just get out of the business; they will throw in the towel. Some landlords will be looking for someone to buy these properties. Since they are investors themselves, they may be open to some type of creative financing strategies.
• People that were financially stable before Covid-19 who never imagined themselves without a job and stable income will need to make difficult choices regarding real estate and the lifestyle they have become accustomed to. People in this group will be looking for solutions that simply provide relief; that allows them to move on. Once again, in times like this, they may be more motivated to accept a solution other than all cash at least in the short term.
• The courts have been closed for several months so there will be a significant backlog of probates that couldn't be filed. Remembering the probate process, these properties must be sold before the estate can be closed. The personal representatives of these estates have seen this process drag out much longer than normal, and they will be anxious to settle the estates and move on with their lives. There will no doubt be a huge opportunity when it comes to probates. These will need to be cash sales.
• Foreclosures and evictions have been delayed. Where you live will determine how this will play out in your area. For instance, in some states, the foreclosure process is relatively short. It could be as little as 8 or 9 months start to finish. In other areas, foreclosures can take several years or more. In these states where foreclosures take longer, the opportunity to help sellers will span out over a longer period of time. There will be people willing to sacrifice their equity in their property to try to salvage their credit when possible. If they can work things out with other creditors like credit card companies, they will be many people ready to sell their homes to prevent foreclosure on their credit report.
• There will no doubt be a lot of REO's or bank-owned properties as well. Again, depending on where you live and the level of foreclosures in your area, this will vary from city to city.
• There will be more bankruptcies and divorces. Our current economic environment will push many people into one or both of these situations. Once again since the courts are closed. there will be a surge in divorces and bankruptcies.

Remember….

Your reputation is everything in this business. Don't throw that away by taking advantage of people who are in dire straits. Be the person that looks for an ethical solution for each one of these motivated sellers you come across. OK. Let's talk about creative financing strategies.

8 Creative Financing Strategies

Here are 8 ways to close a deal in addition to using traditional investor friendly banks:

1. Wrap Mortgages
2. Buying "Subject-to" the existing mortgage
3. Seller Financing
4. Lease and Options (where you control the property)
5. Transactional funding
6. Hard Money Loans
7. Self Directed IRA's
8. Private money

1.Wrap Around Mortgages

Here is the definition of a wrap mortgage: "A wraparound mortgage, more commonly known as a "wrap", is a form of secondary financing for the purchase of the real property. Under a wrap, a seller accepts a secured promissory note from the buyer for the amount due on the underlying mortgage plus an amount up to the remaining purchase money balance". As an example, if the seller is asking $100,000 for the property and there is an underlying mortgage of $80,000, a new second mortgage would be created for $20,000. The buyer would be responsible for both mortgages.

One disadvantage of a wrap mortgage would be if the buyer fails to make the payments on the wrap-around mortgages. The seller could lose the money on the second mortgage (for the $20,0000). And, if the seller is unable to pay the original mortgage, this could result in foreclosure of the seller's home.

2. Subject-to

When a property is sold "subject-to" the original mortgage, this loan stays in the seller's name but the buyer gets the deed and is in full control of the property. If the new buyer fails to make the mortgage payments, the seller is still responsible for the original mortgage and it is their credit that is damaged in a default. You may the risk of the lender calling the loan if they find out about this situation.

I bought a property subject to the existing loan when the couple was getting divorced. They had a 100% VA loan on the property, so there was little equity in the property. There only real option was to let it go back to the bank or sell it subject to the existing mortgage.

3. Seller Financing

I love seller financing. This simply means that you agree to buy the property, and the seller provides the financing. This arrangement can be good for both the buyer and the seller. The buyer doesn't have to get traditional financing, and the seller gets monthly income and can avoid paying capital gains on the sale of investment property until a later date. The buyer may or may not have to put money down or money into the deal.

4.Lease Options

For someone that is not able to buy property today, a lease option gives them a very viable route to owning property. There are two parts to this. The lease and the option. A lease is just that. A lease or rental agreement. The option gives the person leasing the property the option to buy it at a future date for a set amount of money. Lease options are also one-way investors can control a property with little money out of their pocket.

When is a lease option a good strategy? Here is an example. If someone has experienced some type of hardship that prevents them from buying a house today, it is a way to find a property, live in it for a time, then buy the property down the road typically in 18-24 months. They would "exercise their option" to buy the property and get a new mortgage. A lease option is attractive to a buyer if for instance they got a divorce and their credit "was dinged". They might have a good job today so they're able to pay the monthly rent, but they need a year or two to clean up their credit.

5. Transactional Funding

Transactional funding is short term financing, and it is hard money lending. This timeframe for this type of loan is usually 2 to 5 days. It's often used when a wholesaler has an end buyer lined up, but they don't have the ability to close on the property with their own funds. There can be various reasons why a wholesaler might have to close before selling the property, but here are a few. Transactional funding can be used for transactions like short sales, or in other situations like REO's where banks don't allow assignable contracts. In these cases, you must close on the property before selling it to your end buyer. Typically, these two transactions are performed as simultaneous or double closings.

6. Hard Money

Hard money loans are funded by private investors (rather than traditional lenders), and they are short term loans. The term of these loans is typically around 12 months, but it can be extended in some cases depending on the lender. Hard money loans are secured by real estate. One thing to note is that hard money lenders are more concerned with the profitability of the deal rather than the credit of the borrower. They will certainly want to know that you are able to refinance the property at the end of the term of the loan so they can get their money back, but their main concern is the property itself.

7. Self-Directed IRA's

Having a Self-Directed Roth IRA is one of the best ways possible to build wealth if you are a real estate investor. You can buy property using the funds in your IRA, and the money you make on those investments can grow tax-free so long as you follow the rules. There are certain types of properties you can't purchase with your IRA such as vacation homes or your primary residence. There are also a lot of other rules, so consult with a professional so that you don't make mistakes that could cost you money or cause your IRA to be disqualified. This is no time to "DIY".

8.Private Money

Today I want to focus on what I think is one of the absolute best funding options for investors and that is private money. I also want to give you a couple of tips for how to talk to private money partners about the "opportunity".

Raising Private Money

Raising private money is a big topic, but I want to touch on that just a little bit today. Having a source of private money for your deals gives you a huge advantage over other investors. It allows you to confidently make cash offers and as we all know, cash is king. What holds investors back more than anything when it comes to raising private money is their mindset.

There is an art to inviting people to invest with you that makes it so appealing they just can't wait to give you their money. To do this, it's critical that you start to think about this process a little differently. Look at these folks as private money "partners". When you have a conversation with a private money partner, you're not asking for money. You are giving them an opportunity to make much higher returns on their money than they're currently getting (in almost every case), that is safely secured by real estate. Can you see how different this conversation will be once you adopt this new mindset? It changes everything.

Where Can I Find Private Money Partners?

Private money partners are everywhere, but these are the 3 most common sources.

1. Your sphere of influence. Most people start out asking someone they know. This might be folks like your: • Friends • Family members like your parents • Accountant • Attorney • Doctor • Dentist

These are people that move through your daily life. I would also say this; don't pre-judge people by their looks, the car they drive or the home they live in. You never know who has cash sitting in the bank. Wealthy people often live frugal lives. These folks may have no idea this type of opportunity exists unless you tell them. Here's that word again; opportunity.

2. The next source of private money is other real estate investors. They are also a good source of seller financing.

You will find investors willing to loan money in every REIA across the country. This is just one of the many reasons to belong to your local REIA. Some of these investors loan money in addition to building their own rental portfolios.

It's also common for investors to sell one of their own properties to finance the deal for you. Why would they be willing to sell you a property at a discount and loan you the money? The reason is that it's good for them. They get rid of unwanted property, they will get a down payment in most cases, and in this process, they create an ongoing stream of passive income. It's a win-win situation for everyone.

3. The last source of private money is individuals that have the cash they want to grow but would rather be lenders than landlords. They just don't want the hassle of owning property. Or possibly, they own property, they have additional cash to invest, but they don't really want to add more properties to their portfolio. Becoming a private lender is not only more attractive to them, but it's also very lucrative.

Let's recap. Here are 8 ways to close a deal in addition to using traditional investor friendly banks:

1. Wrap Mortgages 2. Buying "Subject-to" the existing mortgage 3. Seller Financing 4. Lease and Options (where you control the property) 5. Transactional funding 6. Hard Money Loans 7. Self-Directed IRA's 8. Private money

Final Thoughts

I hope you have found this information helpful. Remember that great deals aren't found, they are created!

Be sure to stop by the Louisville Gals Real Estate Blog where you'll find more great information and some cool freebies.

Today I want to talk about how to find property with code violations in your area, and I've actually made a video on the exact process in my area.

Do you know what the best thing is about a code violations list? You can often get this information without spending a dime. This is one of those lists that is almost always sourced locally. And, in many areas, all you have to do is hop on Google and do a search to find the information.

Getting the List in My Area

I remember a time several years ago when I had to really do some detective work to find this list. It wasn't easy to find. I had a student tell me that they had a similar experience recently in their city. They spoke with someone at their local code enforcement officer who refused to give them any information on where they could find the code violations list. Well, folks, this is a great list so keep digging until you find it. Like I said, Google is definitely your friend.

How Does Someone End up on the Code Violation List?

People can end up on this list for a variety of reasons, but typically it's due to one of two reasons. It's either financial reasons or lazy landlords that just don't take care of their property. Sometimes the owner just cannot afford to do the needed repairs, so the condition of the property deteriorates. What happens next is the property owner gets sited for these maintenance issues.

Initially, they might just get a warning with a specific amount of time to cure the problem. However, if the issue isn't corrected during the specified time, the property owner will get a fine. If the problem isn't corrected and the fine is ignored, code enforcement will continue to add additional fines which can quickly add up. If these fines aren't paid, eventually they will put a lien on your property. These liens will have to be paid before the property can be sold.

I have bought properties over the years that had these types of liens on the property. As I said before, there are some property owners that not only can't afford to do the repairs, but they also can't pay the fines assessed for the property. This often adds one more layer of motivation to sell the property at a discount to an investor.

Tenants and Landlords

Landlords generally fall into one of two categories; those that take care of their property to protect their investment, and those that let their properties fall into a state of disrepair. Landlords that don't take care of their property tend to attract less-desirable tenants.

The quality of your rental determines the quality of your tenant.

There is another reason a rental property might have code violations that has nothing to do with the property owner, and that is the tenant. The tenant's actions may cause the owner of the property to be cited. This can be due to junk in the yard, tall grass, weeds along fence lines, house numbers that are missing, and vehicles parked in the yard just to name a few things.

Understanding the Information on the Site

Once you have figured out how to get the code violations list for your area, what information are you likely to find on the typical code violation site? Here are a few things you might see:

• Code Enforcement Board Case
• Property Maintenance Case
• Property Maintenance Demolition
• Property Maintenance Foreclosure
• Property Site Visit
• Public Nuisance

Each area of the country will be a little different. What you are looking for are property owners that have been cited and/or fined for a maintenance problem.

Action Steps….

Do a search today to find out how to get a list of properties with code violations in your area. You only need to get a few properties each year to make this a worthwhile strategy to add to your investor's toolbox.

Have Questions?

You can reach out to me at [email protected].

Be sure to stop by the Louisville Gals Real Estate Blog where you'll find more great information and some cool freebies.

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Entrepreneurs and small business owners are generally focused on growing a profitable business. However, during times of crisis, our focus has to pivot to the survival of our small business. Forget business growth; survival is the name of the game.

My guest today is my Australian friend, Alison Vidotto. Alison knows a lot about small business survival during times of crisis having experienced this several times herself during her career. Alison and her husband have 2 businesses. Listen in as she tells you how she managed to save her business when things looked like they might lose everything.

Alison is the CEO of Vidotto Group & Push Training. She is a business mentor and strategist, a professional speaker, and a published author. Alison is also the founder of the Australian Children of Vietnam and the mother of six.

Show Notes

• How Alison went from education to the CEO of her business
• Successfully leading her companies through multiple national disasters
• What she has to say about small business survival especially for those experiencing a crisis for the first time
• The Stockdale Paradox
• Tips for time management when you have lost your focus, and you are working from home rather than an office
• Why you should continue marketing during this crisis, and what will happen if you don't
• Actionable tips for surviving this crisis
• How people can stay motivated when they are worried about the future
• Doing the "hard stuff" even when you don't want to
• How setting out to help one person became the Australian Charity for the Children of Vietnam

Final advice for small business survival during Covid-19 or any other crisis

Be sure to stop by the Louisville Gal's Real Estate Blog and pick up your freebies!

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