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Earnest Money

When you join the mob, they likely will ask you to kill someone, just to make sure are serious and not wasting their time.

In real estate, people also hate to have their time wasted. Lucky for us, though, murder isn’t required to prove our sincerity.

Instead, we rely on the earnest money deposit.

The earnest money deposit, also known as a good faith deposit or simply earnest money, is money provided by the buyer when an offer is submitted as a way of showing the seriousness of the offer. This deposit is essentially the buyer saying, “Look, I really want to buy this property, and I’m putting my money where my mouth is.”

The earnest money is pledged, and should the buyer not fulfill his end of the contract, the seller can keep the money. So yes, you can lose your earnest money! However, there are certain conditions that allow you to back out without losing it, which we’ll talk about.

But first, let’s talk about how much the earnest money deposit is.

https://www.youtube.com/watch?v=b3o4ll8Jh20

(Click to read on BiggerPockets…)

When I was a child, every Saturday morning was the same: Wake up early, pile into the minivan with my mom and three siblings and start looking for . . . garage sales! Yes. I was raised by a “garage sale mom.”

Because we didn’t have a lot of money, we bought nearly all of our clothes, furniture, toys and pretty much everything else from someone who no longer wanted those items. And, let me tell you — my mom was the master at those sales. She knew how to find the coolest gadgets, toys, games and appliances for pennies on the dollar. She could negotiate a 50-cent t-shirt down to 10 cents, and regularly did. She would even buy far more than we needed, just so she could resell those items at her own garage sales and make a profit to fund our family vacations.

Today, I do far less garage-sale shopping than my mom, but the lessons I learned from her haven’t changed. I still want to find a great deal. Today, however, instead of 50-cent t-shirts, I spend much of my time hunting down great real estate deals, because I’m a real estate investor.

Whether I plan to flip that house, hold the property as a rental or go for something entirely different: Everything begins with a great deal. Here are four simple tips you too can use to find better deals on your own real estate, whether you’re looking for an investment, a property for your business or simply a home for your family.

1. Consider buying a bank-foreclosed property.

When someone fails to pay a mortgage payment for an extended period of time, the lender will ultimately repossess the home and remove the occupants. Once the home is empty, the lender generally lists the house for sale on the market, using a local real estate to list it.

While the foreclosure, in itself, is of course sad (no one rejoices when someone loses a home), once the deed has been done, these properties can be some of the best deals you’ll find in real estate. Banks want to be in the business of lending money, not managing property, so they are often quick to offer large discounts just to get the deal off their books. Translation: You can get a great deal on foreclosed properties, if you know how to buy foreclosures right.

(Click to read on BiggerPockets…)

Flipping houses is just as fun and easy as it looks on TV, right? WRONG. Learn what you're up against by reading this eye-opening article.

When I first decided to flip houses, I was a bit arrogant.

I thought, “How hard could this really be? I mean, it’s just like the TV shows, right?”

Wrong.

I’ve spent the last decade buying both rental properties and doing house flipping, and I’ve learned a LOT. Sometimes I wish I could go back and give myself some advice. But I can’t. However, I can do the next best thing: I can share that advice with you.

Therefore, in this post I give you seven things I desperately wish I had known when I started flipping houses.

1. The Flip Doesn’t Begin When You Buy It

The first thing I wish I had known when I started flipping houses is that work doesn’t begin when you buy the property. It actually starts before that.

No, I’m not talking about breaking into the house and removing walls.

I’m talking about the prep work.

You see, what most people do (and I did for many years) is wait until the day after closing and then start planning for the flip.

Sure, that works, but you are missing out on some valuable time that could help your entire flip move faster!

During this “due diligence process,” you can use the time to line up contractors, create an incredibly detailed scope of work, open up a checking account for the property, pick out materials (though I would wait to actually buy them until closing), and more.

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2. The Scope of Work is Unbelievably Important

Perhaps the most important document you’ll use during the entire flip process is known as the “scope of work.”

Essentially, this is a detailed list of every single item that needs to be rehabbed in the home.

When I started flipping houses, I would jot down some notes as to what needed to be done — but it was far from complete.

I figured, “Eh, what’s the purpose of getting too detailed? Whatever problems we find are going to come up anyway, and I’ll just have to fix them. So who cares if they are written down? It’s not a big deal, right?”

Wrong! It’s a huge deal!

Because the more detailed your scope of work is, the more smooth and on-budget your entire flip will be. When you know everything about the property, you can get more accurate estimates from contractors, schedule people at the right times, reduce the number of “change orders” the contractors will try to charge you for, and reduce your stress considerably.

The scope of work is like a road map — it’s easier to follow when it’s detailed.

(Click to read on BiggerPockets…)

How Much Money Does it Take to Invest in Real Estate

How much money does it really take to invest in real estate?

Can you invest if you don’t have a lot of cash?

Isn’t that a big scam?

Well my name is Brandon Turner, author of The Book on Rental Property Investing and The Book on Investing in Real Estate with No (and Low) Money Down, and today I want to share with you the truth about no (and low) money down investing.

So let’s do this thing.

So first of all, let me tell you a story of a 21-year-old kid.

This kid decided that real estate investing was going to be his ticket to avoiding a life of slaving away at a nine-to-five job.

But he had one problem:

He had no money.

He worked a dead-end job, didn’t have great credit, and had no experience whatsoever.

But this kid didn’t let that stop him. He figured out a way to make it happen.

He used a variety of different strategies to acquire more than $2 million of real estate in the next several years, including a 24-unit apartment complex purchased with practically no cash out of pocket.

Well, if you haven’t realized it yet — that kid grew up some, grew a beard, and turned into… me.

Yes, that’s my story.

In fact, of the more than 40 units and dozens of transactions I’ve done in my life, I’ve hardly ever used my own money.

Related: When the Bank Cut Me Off, I Had to Get Creative With Financing: Here’s What I Learned

So to give a broad answer to the question of whether it’s possible:

Yes, you can invest in real estate if you don’t have a lot of cash. 

But should you invest in real estate with no money?

Should You Invest in Real Estate with No Money Down?

Well, that’s a more difficult question.

For me, it’s not as much about the amount of money I put down as it is about the kind of deal I can get.

If you think back to 2008, a lot of people lost their homes because they obtained no or low money down loans on properties, and then when the values dropped, they owed more than the house was worth — so they gave up.

I don’t believe in putting oneself in a risky situation like that.

Instead, I want to hustle to find a deal so good that I can use creative strategies to buy it and still have a ton of breathing room for security.

Here’s an example of what I mean.

Let’s say there was a house worth $200,000, and you used your own money and put a $50,000 down payment on that property, so you have a loan for $150,000. Nothing wrong with that — and that’s what most people do.

But now, what if I hustled and was able to buy that same $200,000 property for only $150,000 and I used a no or low money down strategy to buy it?

At that point, both you and I would have a house worth $200,000 and a loan for $150,000. But you put $50,000 of your own money into it, and I put nothing.

So who’s at greater risk?

I would argue we are both at the exact same level of risk, but you actually have a lot more to lose if something terrible happened because you have so much of your own, hard-earned money into the deal.

This is why I value getting a good deal far above the question of “how much should I put down?”

If you want to buy a deal with a large down payment, more power to you.

Just understand that it’s not the only way.

Next, understand that investing with no money down is NOT about being broke.

You see, if you are flat broke and hoping that some quick and easy no money down way to build wealth is going to be your financial salvation, think again.

Creative investing is about leveraging other people’s money so you can do bigger deals.

The irony is, for many investors, the more experience they gain and the richer they become, the less money they put into their deals.

So creative investing is for anyone, no matter how much money you have in your checking account.

Creative investing truly is a mindset.

(Click to read on BiggerPockets…)

3 Simple Words That Will Help You Build Wealth

We need to have a little chat — and it might get a little awkward. But those are the conversations that change us, so let’s talk. You see, you’ve said time and again that you want to build wealth. To achieve great things. To retire young, rich and happy.

You want to spend your active days exploring the world, raising incredible children and helping your parents age well.

You want things to be different from how they currently are. You don’t want to wake up, drag yourself out of bed and spend hours in traffic to sit at a job you despise. You don’t want to take advice from that boss you can’t stand, to live your life as a footnote in someone else’s book.

I get it. I’ve been there. But, let me be perfectly honest: That drudgery you currently call life will probably be yours forever. Let me explain why.

turnkey-problem

The reason you haven’t succeeded yet

Each week, you have a new idea. Each month, you shift focus. Every book you read tells you another way to make money. Every podcast you listen to, every dinner conversation, every blog post you read — each gives you more and more ideas for building wealth.

Related: 6 Easy-to-Acquire Habits That Will Help You Build Wealth

So, you keep changing your mind. You’ve contemplated ideas, such as:

  • Real estate investing
  • Multilevel marketing
  • Getting a better job
  • Selling products on Amazon
  • Selling information online
  • Inventing a product
  • Becoming a movie/rock star
  • Creating a “muse”
  • Saving your job income
  • Podcasting
  • Writing a book

. . . and probably 100 other ideas. You’ve probably bought educational courses on a number of these methods and not finished a single one. Each week, you have a different passion, something else that you are going to do to achieve financial freedom.

So, you pivot and, once again, ask me what I think of the idea. And this has been going on for years. But, it’s time to stop — because here’s the shockingly simple truth about building wealth. This truth is so simple, it can be summed up in three little words: “It all works.”

(Click to read on BiggerPockets…)

Here’s something not a lot of people know about me:

I work on my real estate business less than five hours per week, and I’ve done so for years.

Yes, there was a time when I put in 100-hour workweeks, but ironically, I buy a lot more real estate NOW than I did back then.

So what changed?

I shifted my thinking.

I stopped living reactively and started living proactively — and that’s exactly what I hope this post will help you do as well.

I want to share four life-changing tips that can help you build your real estate empire while working on your real estate business less than five hours per week.

But before I get to the four, let me invite you to something special that’s related to this:

1. Set Your Goal — Carefully

What do you want real estate investing to do for you? What’s your goal with this game?

Financial freedom?

Not good enough!

You see, a vague goal is going to leave you wandering in the wilderness, looking for the next opportunity that’s going to get you there.

But for those who have just a few hours per week to work on their real estate investing, you don’t have time to wander in the wilderness.

Related: 4 Side Income Streams to Sustain You As You Pursue Real Estate Full Time

Therefore, the first step in building a real estate empire while still working your full-time job is to specifically identify your goal — and it must be laser-focused!

For example, instead of the vague goal of “financial freedom” you might say, “I want to acquire 15 rental houses that each provide $200 per month in passive cash flow by April 2019.”

Now, with that laser-focus, you can avoid wandering the wilderness and focus on what really matters.

2. Make a Roadmap

Imagine for a moment that you are driving through a dense fog to get to a party out in the woods. You’ve never traveled on this road before, and you aren’t sure exactly how to get there.

And you forgot a map. No problem! You’ll just use the GPS on your iPhone. Nope — your phone is dead.

Uh oh.

This situation might sound silly, but it’s exactly what many people who are trying to achieve a real estate goal go through on a daily basis!

They might have a laser-focused goal (see step #1), but they lack the directions to get there through the fog.

So, the second step to investing in real estate when you have just five hours per week to dedicate to it is to have a clearly defined plan for how you will get there. Turn by turn directions!

This will help keep you on track, avoid time-wasting actives that don’t bring you closer to your goal, and ultimately get you there faster.

(Click to read on BiggerPockets…)

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