The Real Deal Real Estate Show with Larry Harbolt

Raising money through private lenders is crucial to your success. This is why Alan Cowgill is back on the podcast, he’s on the show to share his tips on raising private money for your real estate deals in a way where everyone wins.

There are a number of ways that private lenders can benefit from having a way to invest their money outside of the traditional vehicles. The average person knows about the stock market and things like CD’s and the pitiful or risky returns that they offer, but they probably don’t understand real estate and how they can get a substantial return that is life changing from them. That’s where you as the real estate expert comes in.

One of the best parts is that you don’t need a mortgage broker license in order to do this. In many states you can get a private lender in the next 10 minutes. Think about what having your own private bank would do for your business and your life. Even when you understand seller financing, there are still advantages to having access to private money so that you don’t miss out on deals.

If you follow Alan’s scripts on how to talk to private lenders and knowing how this process works, can put millions of dollars in your pockets. The key to remember is that private lenders loan you money based on trust, which is why having the scripts memorized is crucial. 

If you want to contact Alan Cowgill and find out more about his systems you can reach him at 937-390-0816 or [email protected]. You can also check out his website privatelendingmadeeasy.com.

Times are changing, but the techniques and strategies that make real estate investors successful are timeless. Every one of us needs to be diversified and learn as many ways to structure deals as possible to stay alive in the real estate investing business.

Too many people today believe there are only two ways to buy real estate, buying with cash or getting money from an institutional lender. The truth is you don’t need either. Any fool can buy real estate if they have a large sum of money available to them, that doesn’t mean they are making good deals.

To be diversified, you have to be able to buy any property that you go by, whether it’s up for sale or not. Being a one trick pony is not going to get you where you want to go financially. Anything you can use to provide value to the seller can be a form of currency that can allow you to make a higher profit. 

This is a very important concept to understand since if you don’t know how to make offers once the market turns and you can’t access that money, you’re business is going to dry up.

Don’t get hung up on being technique driven, learn to be diversified in the skills that allow you to make offers, no matter what the market is doing or the state of the overall economy. There is no silver bullet to investing success, but by diversifying your skills you can thrive in any market at any time.

Real estate investing is like putting a puzzle together. To get a clear picture of what you need to do you need to use all of the pieces of the puzzle if you want to be a successful investor. I talk to many investors who don’t go through the seven steps of every deal and then wonder why they aren’t doing very many deals. If you leave out any important piece of the analyzing process you stand to either lose money or not make as much as you thought possible. In this episode I go through the seven steps every investor needs to address to ensure they always do profitable deals. My best advice to every investor who continues to push through the process with no strategy is, “stop trying to push a rope uphill”.

Carefully go through every step to guarantee your success.

Systems are the missing link in most real estate investors strategies. There are better things to do than waste your time and the way you avoid chaos in your business is with systems and checklists.

When Alan got into real estate he didn’t have any systems in his business, so he looked around the world for direction on what to implement. He found Michael Gerber’s E-Myth Academy and after spending five years working with Michael’s team Alan had streamlined systems for every part of his business. 

There are 30 steps that you should always walk through when buying a house, which is why the checklist is so important. Skipping a step or doing them out of order will cost you money every single time. During this episode Alan goes into several different systems that he uses to reduce chaos in his business and accelerate the purchasing process including how he organizes his paperwork, how he hires people, and how he saves time making decisions about which property to buy.

When you implement the systems that are keys in your business it will change your life for the better. Without them you eroding your bottom line and creating chaos in your business that is very hard to overcome. You only have so much time in the day and implementing systems is how you become not only more efficient, you become more effective as well.

Go to privatelendingmadeeasy.com and click on Real Estate Management Made Easy to find out more about how you can implement Alan’s systems in your real estate business. You can also reach out to Alan at [email protected]

Today I am hearing all too often is, so many investors are telling me that the reason they aren’t making many offers to buy houses, is because they feel  current market conditions are just too risky for them not knowing what direction the market is going.

Believe me I understand why those inexperienced investors are having little or no success as a real estate investor.

I get why they aren’t actually making very many offers to buy property, if they are making any at all. I remember those days when I was afraid to make offers. I was broke and if I got an offer accepted, I had no way to close the deal. I had no money and I had lousy credit.

I would set up half the night praying the sellers would accept my offer. This was because, if they did except my offer, I had no way to close the deal. It took me years to overcome this fear.

 Listening to this podcast will show you why it won’t take you years to overcome your fears of making offers. Learn what to say and what to do to eliminate your fears of market conditions you think are too risky to buy real estate today.

I am constantly talking to all too many investors who are worried about what the real estate market is going to do in the near future. Any savvy real estate investor should know that market conditions only affect a certain part of real estate investing business, but not all areas. I talk to inexperienced investors almost every day who believe the real estate market is going to slow down and prices are also going to also go down. This may be true in some areas.

Having personally lived through several economic cycles over my 40+ years in the real estate investing business I have experienced several market changes where some markets went up in price, and some markets the prices went down. Today’s podcast is about how to read the real estate market and every economic cycle to be sure you make money in any economic cycle. How some parts of real estate investing are affected, and why other parts are not affected by market conditions and economic cycles.

When the real estate market prices go up and up, you can make money retailing properties, but you need to be aware, when house prices continually go up, fewer people can qualify to buy a house to live in. When this happens those people, who are unable to buy usually become renters.

 When the market prices go down the intelligent investor knows that if they plan to sell the properties they buy at a retail price, may not work as well as planned to make as much money as the investor thought they were going to make when they bought the property.

If you want to magnify your real estate profits you must start thinking like a seller instead of a buyer. There are a number of reasons why a person may want to sell their home and for each reason you have to customize the way you structure your offer if you want them to sell to you.

If you’re only thinking about creating a deal that’s good for you, you’re going to have a very short career in real estate investing. 

Take the idea that sellers always want cash for their property. That’s not the whole truth, sellers don’t really want the cash, the want what the cash will do for them. If you dig into the desires, hopes, and dreams of the seller and offer them a way to get those things you are much more likely to win that deal.

There is one important principle you have to keep in mind when it comes to real estate. If you do what everyone else does, you’re going to get what everyone else gets. You have to get creative with your offers and consider what the seller needs from the situation. 

Asking them “what are you willing to accept other than cash?” is a great way to start the conversation and figure out what the seller is looking for so that you can structure an offer that gets them what they need. 

If you understand the four parts of making an offer; the purchase price, the interest rate, the length of the payback period, and the payment amount, you can always create an offer that will get the seller what they want.

Ask questions, find out why they’re selling and what they really want, and you will be able to do more deals than you thought possible simply because you are thinking like a seller.

When it comes to buying properties, there are a number of things you have to think about in order to make the best decision for your business. 

Knowing the highest and best use of a property is probably one of the most important factors that will go into your decision making process on whether to buy a property or not. Is it the kind of property that you buy and wholesale the deal to someone else? Is it one that you’re going to make beautiful and sell retail? Are you going to hold it long term and keep it as an income property?

Once you figure that out, you also have to assess the desirability of the property as well. Is it a property that even after fixing it up it will never be a family friendly property because of the neighborhood it’s in? 

The highest and best use of the property is what will determine the kinds of repairs and renovations you’re going to want to do, if any. If you get this part wrong and don’t calculate your costs accurately it could mean losing money instead of making a profit.

For properties you intend on holding on to, one of the best tips I can give you is to spend some time looking at higher value houses to see what kinds of amenities and materials they use so you can incorporate them into your property. Being cheap on the repairs can cost you later on in the price you can charge.

If you plan on doing some sort of rehab on your property in the future, my Tricks of the Trade course will give you the tools you need to make sure you don’t get ripped off. 

Get your free phone script on how to negotiate with sellers over the phone by going to larryharbolt.com/register

Most people don’t have a clue how important it is to inspect a property they are interested in buying before they buy it. If you wait until after you purchase a property to actually take a look at it you run the risk of discovering something that could completely wipe out your profits and end up losing you money on the deal. Something we definitely want to avoid.

If you want to be a successful investor with the ability to make large profits you must know what the repair costs of every property you look at will be. It doesn’t matter what you plan to do with the property, the repair costs will always factor in, whether you think you’re going to wholesale it, sell it retail, or rent it out.

This is why I bring a walkthrough inspection sheet to every property that I look at. You can get your copy by checking out my course Tricks of the Trade. Anything that needs to be addressed gets checked off on the inspection sheet and then I use that sheet to work with the contractors that will be doing the repairs. This keeps everyone accountable and on the same page for what needs to be done.

When doing the inspections, you need to give careful attention to the outside of the property as well as the inside. I take two walks around the exterior before I take a look at the interior of the property and I’m always asking myself a series of questions about what needs to be fixed. 

You have to answer these questions for every property you look at because they all impact your ability to ultimately make a profit. And by documenting everything that needs to be addressed, you are also protecting yourself from being taken advantage of by unscrupulous contractors.

There is one key thing that I always want to hear when one of my coaching clients calls me up to talk about how to structure a deal they are considering. I want to hear why they are trying to buy that property and specifically what they plan to do with it if they close the deal.

The reason you need to make plans for a property before making an offer is that there are four types of houses: bank owned houses and foreclosure properties, houses you don’t personally want, houses that you can fix up and sell retail, and houses you’re going to hold long term as rental properties.

For the first type you’re probably going to have to come up with the cash or use an institution to fund your deal. You’re also going to have to factor in repair costs to make sure you can actually make a profit on the deal. Typically I don’t look for these kinds of deals because I don’t want to have to use an institution for funds. There are better ways to finance your deals.

For houses that you wouldn’t personally want to live in, they are perfect candidates to flip the purchase agreement to someone who does want it. The secret to being a good wholesaler is making sure you take care of the buyer and set them up to make a profit. You have to factor in all the costs involved to make sure the buyer can make money too, if you don’t you’re not going to be in the wholesaling business very long.

With houses you plan on selling retail, again, you must factor in repair costs and holding costs into the deal. If your numbers don’t work out, that property is not one that you want to buy.

The last type of property is calculated differently than the rest. You base what you can pay for a property on the rent you can get from it. It doesn’t matter what the seller wants for it, the house has to pay for itself. Paying more than what the house can generate is not how you and your family can get ahead.

For each property type, it’s vital to be realistic when calculating your costs and running the numbers. You can’t be out to lunch on your numbers or you’re going to run into major problems down the road. The most important part of the plan is calculating how much you can afford as a payment, since every rental property is a business unto itself. You have to get the price that will work for you, or the terms. If you can’t do that, you don’t buy that property.