I found myself checking out the Knoxville MLS on Saturday when I stumbled across what appeared to be the deal of the century.

A 2800 square foot home that is only 7 years old on the market for $122,000.  The kicker was that the mortgage note on the property is for a staggering $355,000!  The asking price is close to just 30% of what is owed…you have got to be kidding me!

Was this the gold mine deal that I have been looking for?

Of course my thought was that if you have $80,000 in repairs and holding costs, who cares.  Put the property on the market for $300,000 and you still stand to make a cool $100K!

Not so fast my friend!

Upon further examination of comps and research about the area, it appears that the home is priced a little bit below market value…but not much.   I found two homes on the same street that are on the market.  One for a little over $100,000 and the other for just under $150,000.  The cheaper home being built in the 70,s and the more expensive home built around the same time as my subject home.  Upon further research I have concluded that the property in question might sell for ~$180,000…but that is probably tops

I have no idea how the property deserved a mortgage for $350,000, but I am pretty positive they made a huge mistake.  I have some theories about how this could happen, but the whole point of writing this is to say that you cannot take the numbers on a property for face value.

What I mean is that you must always do your due diligence and research.  You can bet that I went and did my research the moment I stumbled across this property.  And boy am I glad that I researched the property because I was ready to jump all over the deal and make a full asking price offer with no contingencies.

Lesson: Do Your Research Before Making Any Offers!

Ross Treakle

It has been over two months since I have started making offers on properties in my hometown of Knoxville, TN.  I have not made as many offers as I would like but I have made enough to gather some very important information.

One thing I have noticed, something that really irks me, is that a lot of REO agents never change there listings from “Active” to “Pending” when they have an accepted contract.

I could understand if they want to continue to show the property but when you call they say “We have an accepted offer on the table” and imply that you should not waste your time to go in the house.  Sure a lot of pending properties fall through the cracks and can be hijacked by the experienced and sneaky investor.  But if you are going to tell me not to waste my time then you might as well list the property as pending.

The reason I am really irked about this is because of one property in particular.  It was the property that forced me to get a letter along with my proof of funds stating that business A (my money guy) agreed to loan my business the funds to buy a property.  We called the listing agent and she told of this along with the fact that they had already received an offer that day and that we needed to get our offer in by the close of business….which we DID NOT!

I could not get the paperwork together fast enough and thought…ok, lets move onto the next.

So a week or two has passed and I see the property still listed as active and I call up my realtor.

“Let’s go look at property A and B and submit an offer on the property we saw before.”

So my agent called the Realtor and she said to send the offer over…so we did.

A few hours later we get a call from the listing agents office and are told that the property is already pending with an accepted contract.

There are certainly some extenuating circumstances that played into this scenario but if the property was marked pending, like it should have bee, then my Realtor and I never would have wasted 45 minutes drawing up all the paperwork!

Just writing about this gets me worked up…..

Ross Treakle

I am out the door to grab a few drinks with friends before going to a birthday party for my Realtor!

Enjoy your New Years!

I have heard those words from my Realtor several times over the past few weeks as I have been submitting offers on bank owned properties.

“Ross, they are asking for highest and best.”

That is usually how our conversations start.  I will be the first to admit that it is getting a little frustrating and my wife is starting to pull her hair out as she exclaims “Are you ever going to get a property?”

I look at it a little differently and want to convey my thoughts because I think it is good news.

When I hear highest and best, I no longer think “well, I am most likely going to lose out on another.”

I think…”Everyone says the economy is terrible and that no one is making any money, you better tell that to the investors who keep buying all these properties!”

I do lose out because I am looking for the home run, I do not want a property with small margins…I want a property that has a guaranteed return!  That is why all of my highest and best offers have not been high enough.

When you get down and start asking yourself if anyone is making money in real estate, all you have to do is be making a few offers a week (which you should be doing) and you will quickly see that there are a lot of people out there making money in real estate.

These people are not the “guru’s” on the internet we always turn to for information, these folks are the real deal.  They are out in the real world making real offers and buying real property to fix and flip!

so the next time you hear your Realtor tell you “The bank has come back and is asking for highest and best”.  Don’t put your head down, smile and realize that you are taking action and that accepted offer will come shortly.  Just keep making offers!

I hope you have a great holiday and enjoy time with your family and friends!

Cheers,

Ross Treakle

I am able to relate to a lot of folks out there who are getting started in real estate investing.  It has been several years since I closed my last deal because I fell in love with internet marketing.  But because I am ready for a change, and I am feeling the call of real estate once again, I am going through some growing pains.

It does take some time to get back in the saddle of things.  I am broadening my MLS search to all of Knox county.  I feel comfortable with this because I have studied many of the areas and I know what is going on throughout the county.  I know where to invest and more importantly, where not to invest.

But the times have changed and because my old strategies were based off of generating leads from bandit signs, I am having to change my business as well.

I am finding out just how difficult it is to deal with the banks, although you would think they would be making things easier.  It is a little ironic that they have enormous inventories of bank owned homes yet they are reluctant to sell them to investors.

The first problem I am noticing is that in my area most bank owned real estate is priced wrong.  It is as if no one has stepped foot in the home to verify the condition so lets just price the property based on the area comps.  Maybe we just have our fair share of lazy REO agents in our area.  Every now and then their is a property that comes along and is priced right…and it will only last on the market for a few days tops.

The next issue is just how difficult it is to work with the banks.  I know I have complained about this before but I just do not get why the banks think that they should be doing the same things today that they were doing 60 years ago.  The market has changed!

I guess I can chalk all of this up to learning the game.  And whenever I get some more insight I will let you know.

I really just wanted to complain a little bit!

Ross Treakle

I have made several offers over the past few weeks and the three Fannie Mae properties have all had different requirements!

The only similarity between any of them has been the requirement of a 10% EMD.

Property #1

Offer was submitted with all required Realtor forms along with Proof of Funds and EMD.

After offer submitted they came back and asked for highest and best because they had multiple offers on the property.  I lost out because I was not willing to go higher than my predetermined amount.

Property #2

Offer was submitted with all required Realtor forms along with Proof of Funds and EMD. In addition I had to sign the 15 pages of addendum’s provided by Fannie Mae.

I am still waiting to hear back on this offer.  I do not expect them to accept my offer, rather I think I will go into negotiation.  I have my predetermined offer and I am not willing to go any higher.

Property #3

Offer was submitted with all required Realtor forms along with Proof of Funds and EMD.  No addendums were required but the Realtor has requested that I have a letter from my lender saying they will provide the funds.

This is a little bit of a strange situation.  I am buying the property into my LLC and the funds are coming from a separate business.  They have said that my proof of funds must match up with the buying LLC.  OR…I can get a letter from the business who is holding the funds saying that they will provide $X amount of funds for the purchase of 123 Street.

I am noticing that there are a ton of hurdles to jump through when offering on a Fannie Mae property.  Some are easier than other and all of them may require something a little different.  I am not sure why this is but it is a good learning experience and all I can do is learn and continue to make offers.

I already have my eye on several other properties and plan on continuing to make offers until I can get a few under contract.

The last two are still up in the air and I will keep you posted.

The point of this post is to let you see some of the differences that you may encounter while dealing with Fannie Mae owned properties.

Good Luck and Happy Investing!

Ross Treakle

The past 7 days it seems like things have dragged out for one reason or another.  What is good about that is that I am starting to build momentum as I am approaching buying my first investment property in a few years.

My thoughts have shifted from doing one home at a time to doing multiple.  My brother, who has been an active real estate investor for many years is switching his focus off of short sales due to the recent legislation and he is going to be practicing the same investment strategy as I am.

He told me last night that his goal was to buy, fix, and flip 20 homes in 2010…I immediately responded that my goal is 21.  It is nice to have someone to push me and if you can find someone to push you than I think your chances of success increase.

Right now I can feel the momentum building as I have overcome some of the initial deal funding hurdles as well as contract issues (Fannie Mae) that had to be dealt with only once.  I can see that I am getting streamlined in my efforts to make offers.  I have properties lined up to go see and make offers on the minute I get word back on the properties I have already submitted offers on.

I am building momentum!

To start the ball rolling it did take me longer than I would like, but I have slowly picked up speed and things are starting to happen.  It took me years to find an investment strategy I was truly comfortable with, but now I have chosen and I have taken action.  I have followed the recommendations, making a few tweaks here and there to fit my personality.

I am working on getting the guys behind the course to let me offer it to anyone who wants to read and follow along with me as I take my journey.  The course is closed right now and it is rare that they take on new members these days.  But the course did click with me so I hope that it will click with you as well!

I am building momentum and I am going to be a successful real estate investor!

What is your path to success and are you building momentum?

Ross Treakle

I have a few updates and other things I would like to share…

Last week I told you that I was getting back into the real estate investing game full time.  This involves first screening properties and making offers.  Last week I was hoping to make two offers on bank owned properties but I was only able to make one.  I will tell you why in a second but first let me tell you about the offer I did make.

The property is a Fannie Mae owned home that is listed above what the home would be worth if it was completely fixed up.  I have noticed that a lot of bank owned properties in my area get listed purely based on comps as opposed to the actual condition of the property.  So our offer comes in significantly below asking but it is the price that makes since for an investment property.

As an investor it is important to note that you make your profit when you buy, it is when you sell that those profits are realized.  Buying at the right number is the #1 factor dictating your success.  If you buy too high, your profits will quickly go away.  In my area that means I am having to make a lot of offers, many of which will get rejected, but the goal is to land an accepted offer enough to have a successful and profitable real estate investment business.

I have not heard word back on this property, but if we go into negotiations I expect to get a 20 page set of addendum’s from Fannie Mae which will trump the initial contract I signed.  This is just one of the many guidelines that Fannie Mae has and there is nothing that an investor can do to avoid.

Why did I not make a second offer last week?  Because Fannie Mae requires that the first 15 days one of their properties is on the market that only home owners may make offers.  After day 15, then investors can step in and make offers.

Another Fannie Mae guideline is that your Earnest Money Deposit ( EMD), must be greater than or equal to 10% of your offer price.  So on a $50,000 offer your EMD must be $5,000 and on a $500,000 house your EMD must be $50,000!  This certainly helps to weed out the pretenders from the investors who actually have the cash lined up to make a real offer.

On the second property I plan on submitting my offer on Wednesday of this week.

In addition, I am going to give my Realtor a call after I post this to go look at three (3) other properties, all of which are priced a little closer to where my numbers need to come in and order them in priority.  My goal is to increase the number of offers I make each and every week until I land a deal or two…maybe even three.

You will never get a deal if you don’t first make an offer!

Cheers,

Ross Treakle

First off, thanks for taking a few minutes to read this blog post.  This is a blog that I had setup several months ago to help me sell you crap about real estate investing.  I guess that jumps right into “Yesterday” so lets get started…

For the past four years I have been an internet marketer who has dabbled in real estate investing.  I enjoyed having email lists and sending out something and watching the money come in.  The problem was that I was servicing an industry that I had very little personal experience in.  Sure I had bought and sold a few properties, but I hardly consider myself a real estate investment expert.

But that was alright, I did not position myself as the guru, rather the promoter of the guru.  And I will be the first to tell you that it was a good run!  It is really sad that I know a lot of “guru’s” out there who have not done a real estate deal in years!  Those guys were never people that I promoted but they do exist.

One of the benefits from being a promoter is that I was sent course after course of educational materials to screen before promoting.  So I probably have the education that actually surpasses many guru’s…but they have me beat in real world experiences hands down.

A quick recap of the last few months looks like a business sliding into the deep depths of despair…but I look at it like a blessing.  My online marketing has dried up and I am no longer adding new subscribers to my database.  Thus, my subscribers have stopped buying and the revenues have slowly dried up.  I will continue to promote but not as hard core as I did before, my focus is FIRST on becoming a full time real estate investor.  SECOND, serving anyone and everyone who will read my blog by sharing my journey from real estate novice to full time investor.  And THIRD, being involved in a few promotions from time to time but not until I have had a chance to fully screen and approve of the material being offered.

Now today…where am I today?

Today I am actually writing this while I am waiting on my Realtor to call me back and go walk through 5 homes.  My guess is that three of them have potential and I am going to figure the cost of repairs, take into account my desired profit margins and come up with an offer.  I think I am going to prioritize the offers and just go down the line.  I made an offer the week before my wedding and it was an adrenaline rush.

The home had been reduced over the weekend and my Realtor called up the listing agent.  He was able to get some intel and we realized that I could offer significantly below asking price and get my offer accepted.  Well, we did that except so did about 4 other investors and we start playing the highest and best war.  That is when the seller comes back and asks for everyone to submit their highest and best offer.  I raised my offer to my predetermined price and not a dollar more.  We were outbid!

But there is a very important lesson in what I just shared.  Investing is about the numbers, you cannot let your emotions dictate your actions.  If I did that, I would probably have a property to flip, but I would also be working with slim margins, which is not where I want to be on my first deal as I am getting back in the saddle!

And tomorrow…by that I mean the future.  I am going to continue to look at properties and run the numbers.  Make offers and I am going to get a property here very soon.  The more offers I make, the better my chances of getting one accepted.

I have a guru friend who says real estate is not about location, location, location…it is about making offers, making offers, making offers.  That could not be anymore true.  In order to make offers you have to have first studied the market.  That means you know the best areas to invest, what properties in that area sell for when in good condition, you know everything there is to know about the area.  I have spent several weeks driving around my target area before making my first offer!

My investment philosophy is not about buy one property, fix it up, resell, repeat.  My strategy is to buy one, continue looking for others, fix it up, start looking really hard for others, and then resell.  I want to have at least one more property being worked on before the first property sells.

And then I want to snowball the business.  Sure I could survive doing one deal at a time…but why do one deal when you can do multiple?  The funding…that is a topic for later discussion.

I gotta run because my Realtor is buzzing and it is time to hit the pavement and check out some potential investment properties!

Remember…Educate, Act, Prosper!

Ross Treakle

I have been following a guy by the name of Tellman Knudson for many years as I have grown from an unemployed college kid to a young entrepreneur.  Tellman is someone who I have learned from and now I want to share something he is doing with you.

Tellman is going to RUN ACROSS AMERICA…BAREFOOT!

I know it sounds insane but if anyone can make it, Tellman is the guy who is up for the challenge.

The best part about this is that Tellman is making this insane run to raise money for Homeless Youth across America!

He starts the run on 9/9/09.  If you are interested in finding out more information about this great cause and this insane guy, visit them and keep up with the trek over at…

http://RunTellmanRun.com

Cheers,

Ross Treakle

P.S. Just this past Sunday he was interviewed by the ABC affiliate in New York (where he is starting his run) and the video is up on his website…

http://RunTellmanRun.com

Have you tapped into your full potential?  I am sure that I have not and I plan on doing the little things over the next few months to continue to grow and become a better entrepreneur.

I have to be honest, it has been a while since I have been in the real estate investment game.  But just as many of you reading this right now, I am working towards closing a deal soon and putting some much needed money in my wallet.

I will tell you more about my story over the next couple of days but in the mean time, I want you to check out a video from a few people who I look up to and respect.

They are Tony Robbins, Frank Kern and John Reese.  These three people are legends in their respective fields and they sat down to talk about potential.  They see a problem with so many folks who buy good information to make money, and then fail over and over again.

This is a big problem in the real estate investment community as well as the Internet marketing community (my main area of business).

This is a very powerful video that I have already watched several times since its release last week and I plan on watching it several more times before they take it down (although I am not sure when that will be).

Watch The Video!!!

Cheers,

Ross Treakle