Monday, December 30, 2013

Guest Post- Dean Graziosi - Mom and Pops investors can compete with the big boys in Real Estate

Hi, my name is Dean Graziosi and I love Real Estate. I have a passion for investing and I make an effort to educated people about the process. I believe that everyone has a place in the world of Real Estate investing, they just need to be educated about the process. The education then gives them the information to know where they can get involved. There are a number of “mom and pop” investors who get discouraged because they don’t think they can compete with the big boys of Wall Street. For those Mom and Pop investors, here is some information that I think may be helpful. In August of 1981a 6-month CD generated an average of as much as 17.98 percent APY. Besides, it was insured by the FDIC and with high returns and no risk, it was a smart way to grow a portion of your savings. Unfortunately, it's not the place to grow your money anymore. CD rates have nosedived to below 1 percent since 2009. To earn over 1%, you'll need to deposit a minimum of $25,000 into a CD to earn a whole 1.05% in exchange for locking that money up tight for 12 months. Do you hear that? (It's the sound of me yawning with excitement). Well this is where the buy, fix and flip or buy, fix and hold solutions comes into the picture. An abundance of foreclosed properties and increasingly high rental rates have made buying single-family homes an attractive and profitable solution for everyday people with money to invest. For those who don't have money to invest, small fortunes have been made by people who become wholesale investors. They find great deals and pass them on to the Mom and Pop investors making a profit in the process. So how can the mom and pop investor compete? Simple...you don't. The private firms and big boys on Wall Street can't (or won't) use the same techniques that will work for you. So here are some ways to find diamonds in the rough and help you along your way. Use bandit signs- these are those 18"x24" plastic signs you see in the ground with wire stands. A handwritten message in black marker does the trick. Use Craigslist - With it, you can build your buyers list and find motivated sellers. Find buyers by looking for properties for rent that say "newly rehabbed"... this is an investor who buys and holds. Find sellers by looking for motivational key words... "for sale or rent", "lease purchase." Drive for dollars - Take a drive and look for distressed properties. Mail piling up out of mail box or on door step overgrown grass, hedges, and landscaping, excessive flaking exterior paint, rotted or exposed wood, lock boxes on doors, (railing, or poles) with no for sale sign in yard. Boarded up basement windows, outdated exterior design, zoning/municipal notices posted on windows and doors. You can look online at tax records to find an owner of a distressed property. Build a team - doing it all your self is possible, but I prefer to have rehab crews, attorneys and property management teams so I can focus on finding deals.

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