If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

“I don’t know what the secret of success is, but I know the secret of failure and that was trying to please everybody.” by Bill Cosby

Your never going to be able to please everybody every time. If you have done your best to please everybody in a real estate deal and someone is still not happy. Don’t let it eat you up.

Hans Anderson

Subscribe in a reader

This article goes into some of the ground rules that need to be set up prior to starting your investment club. All members should be made clear of these rules before becoming a member and not have accumulated a large number of debt loans.

Starting your own investment club should not be anything which gives you worries. Since you’ll be working with your family and friends you should be at ease with those around you in your club. You can be assured of having a successful club if you follow a few general and commonsense rules from the beginning.

One of the biggest mistakes that a lot of new club founders make is that they do not tell the club members upfront that they may lose money with their real estate investments or trades that they make, in the beginning. Not every real estate investment or trade that the club will make will be a winner, and this is especially true during the first few months of the club. Since many of the investment clubs which are created do not have many members who are familiar with buying real estate or making stock trades, it is a learn as you go experience for the majority of the club members. You must inform potential members before they join that the money they put up for investment should be money that they can stand to lose, and not suffer any hardship because of the loss.

While we are discussing money, you need to make sure everyone agrees upon what the contribution will be for each member on a monthly basis. The amount of the monthly contribution should not be more than what any one member can afford to put in monthly. If all of your members but one can afford to put $100 into the club account, and the one can only put $75 into the club account monthly, then everyone should only put $75 into the club account. All monthly contributions must be equal to sustain the equality of the group and its integrity. The most common monthly contribution amount used for investment groups is $20 per month, but you and your group are not bound by this amount by any means.

Make the club official by partnership agreement and have everyone who wants to be a member of the club sign the agreement. It is crucial to the success of the club for everyone to know what is expected of each individual, and the group as a whole. By having a signed membership agreement and a copy given to each member, there can be no disagreements later about what the club was built upon.

Do not try to start a large investment group. Having too many members can cause many problems, such as a greater risk for arguments and fragmentation of the group. For your group to work as a team, you need to keep your team to a manageable level of no more than fifteen. Most investment clubs do not exceed 10 members.

Starting your own investment club should not be something which makes you nervous or causes undue concerns. Concentrate on starting with people you know and trust and create a group that can get together and have fun, and you will see that your club will be a huge success.

These rules are the basic rules that need to be implemented into the club. If you have any other rules that you deem necessary make them aware to other members before you begin your investment club.

Hans Anderson

Subscribe in a reader

You may think you’ve found your dream house but what we see with
the naked eye can sometimes be deceptive.

This is why it’s important to have critical inspections done before anything goes to closing!

Your so-called “dream house” may be the money pit when all is said
and done and inspections can save you money and prevent you from
making an ill-advised investment!

Once you have a contract, it’s time to get inspections ordered and
completed in a timely manner!

Canadian Foreclosures

You’re probably just like I was when I was just starting out.
Absolutely clueless as to where to begin. What kind of inspections do you need?

Based on my experiences, I’d recommended having a termite, property and roof inspection at a minimum! Other inspections may be needed depending on individual circumstances. Different inspections could be necessary based on the property condition and location. Your real estate agent can usually help arrange whatever inspections that you or the lender may require.

I own my share of investment properties and I’ve ordered a ton of
different inspections! I’ve ordered termite, roof, property, pool,
spa, chimney, geological, well, septic, radon, lead, asbestos and
structural engineering inspections. And, in the future, I’m sure
I’ll order another type of inspection that I haven’t even thought
of!

Termite Vs. Property Inspections

These distinct inspections require different skills. The industries
are quite dissimilar. For example, termite inspectors estimate the
cost to cure Section I and II type work and usually solicit
contracts for the corrective work.

Property inspection firms don’t perform corrective work.
The purposes of termite reports and property inspection reports are
not compatible and should not be combined.

Termite Inspection

Most lenders require a termite clearance and most buyers want to
know the house they purchase is going to be free from infestation.
A termite report covers two areas of concern called “sections”.

Section I is concerned with actual termite or beetle infestation
and dry rot, caused by moisture.

Examples: Termites in joists and studs. Dry rot (spongy floor)
around the base of a toilet.

Section II concerns itself with preventive measures that could lead
to Section I type condition.

Examples: Dirt or wood in contact with wooden structures of the
house, allowing termites access. A slow plumbing leak that could
lead to dry rot.

Property Inspection

Along with termite inspections, property inspections are commonly
ordered. Property inspections differ from termite inspections in
that they concern themselves with the mechanical and structural
health of a
property.

The inspection includes a review of all major components from the
foundation to the roof, including electrical, plumbing and heating
systems.

Even if the house looks in good condition, the purpose of a
property inspection report is to evaluate the hidden components
most home buyers cannot properly judge.

Property inspectors typically are trained or have years of
experience in the construction related industries. They know what
looks right or wrong – what looks code complying – what looks
dangerous.

Having a property inspection is like taking a car to a mechanic to
check before you buy. A house investment is much larger making the
inspection more prudent.

Value of Being at Inspections

This is your opportunity to “check under the hood” of your new home inspections for the same day to utilize your time off.
Now is the best time to find where and how to turn off the “mains”
to the gas, water and electrical supply to the house in case of an
emergency.

The inspector can answer questions on the items that are addressed
in the report so you will better understand it.

I’ve had my share of experience at buying properties on the cheap,
sometimes in less than ideal condition, requiring all kinds of
inspections. I can’t tell you the number of times that inspections
have saved me from buying very troubled properties. So, don’t get
upset when this or that inspection is required, be thankful!

To Your Success!

Aiden Win

Mr. Foreclosure

Enroll In Foreclosure Insiders Club Today

ForeclosuresTaxSales.com

Subscribe in a reader

I thought I’d take this opportunity to explain what lenders are looking for before they will lend money. If you qualify they will finance your purchase.

THE FIVE “C’s” of CREDIT

Lenders are in business to make (not lose) money. Consequently when a bank lends money it wants to ensure that it will get paid back. To maximize the possibility of being paid back, the bank wants to make sure that there is sufficient assurance that a person can and will pay back a loan. The lender must consider the 5 “C’s” of Credit each time it makes a loan.

Character is the general impression you make on the potential lender. The lender will form a subjective opinion as to whether or not you are sufficiently trustworthy to repay the loan. Your educational background and experience in business will be reviewed. The length of time at your current employment and your current residence will be considered. The longer you have been at both, the higher you will score on the character scale.

Collateral is additional security you can provide the lender. In real estate transactions this generally means the property. If for some reason, you cannot repay the mortgage, the bank wants to know that the real estate the mortgage was taken out for, is good and marketable real estate. A real estate appraisal will determine the value for the property in today’s market. The appraisal will also indicate to the lender the type of property being financed and any deficiencies that may affect the ability to re-sell, in case of default. Generally, a property located in a North York sub-division is considered a better risk than a farm in rural Ontario. Simply, there are more buyers for the home in the city than for a rural farm and therefore is easier to re-sell.

Capital is the money you personally have invested in the purchase, otherwise known as your down payment. The more of your own money you invest as a down payment, the more likely that you will do all you can to maintain your payment obligations. This fact was evident during the recession of the 90s where a large number of the power of sale properties, were at one time, purchased with small down payments. Capital is also reflected by your ability and willingness to save money and accumulate assets. The higher your net worth, the more you have as a cushion for repayment in the event you run into a financial set-back.

Credit is the evaluation of your habits in performing credit obligations. The information about your credit history is stored at the “credit bureau” and indicates how well you paid your bills over the last 6 years. All major credit cards, auto loans, leases etc. are reported to the credit bureau. A lender will evaluate your ability to maintain your obligations and try and determine how well you live within your means. Some individuals make the mistake of not paying the minimum monthly obligations on loans and credit cards with the expectation of making a larger payment the following month. These missed payments appear on their credit report branding them as chronic “late-payers” for the next 6 years.

Capacity to repay the loan is probably the most critical of the five factors. The lender will want to know exactly how you intend to repay the loan. The lender will consider your income as it relates to the loan that you are applying for. Does the monthly carrying costs of the loan represent less than or equal to 32% of your total monthly income? If it is, the probability of you successfully repaying the loan is fairly high. Prospective lenders will also want to know about any other sources of income you may have to repay the loan, if your steady income stream is interrupted.

A traditional bank may not even lend to someone who is looking to purchase an investment property. Banks mortgage products are continuously changing with today’s economics. My suggestion is to use a mortgage broker and let them find a lender for you.

Hans Anderson

Subscribe in a reader

This is a great post by Jim Camp from Foreclosures.com explaining the mistakes investors should avoid during negotiations.

10 Biggest Mistakes to Avoid in Negotiations.

By Jim Camp

Everything you will ever have will come from a negotiation.

You are constantly negotiating: buying a new house or car, getting a new job or raise, deciding where to go for dinner or who will take out the trash, or closing a multi-million dollar acquisition.

Do you feel nervous, maybe a little out of control when negotiating for money, a project, a new client, or a job? Are you sick of compromising out of fear? Are you tired of losing a negotiation and not knowing why?

Check this list to see if you are making the most common mistakes when it comes to negotiating.

1. THINKING DECISIONS ARE MADE WITH INTELLECT.

Highly educated leadership and team members often think decisions are made with intellect.

Unfortunately it is the opposite. Decisions are made completely in an emotional arena of the brain.

Negotiating is about understanding human behavior — yours and your negotiation opponent’s — so you can navigate through emotions, clarify misunderstandings, articulate challenges, and help your negotiation opponent build a vision of his or her problem for which you, and you alone, offer the most optimal solution.

2. INVESTING IN EXPENSIVE PRESENTATIONS.

Organizations invest $100,000s in presentations that spew facts, figures, and logic. They think they are building credibility, when in fact they are weakening their negotiating position.

With each new fact, their opponents are thinking of numerous objections. All you manage to create with expensive presentations are objections to drive the price down

3. PLANNING TO COMPROMISE AS A CONTINGENCY.

Planning that includes compromise or fall back positions is the worst way to prepare for a negotiation and leads directly to deep compromise and unnecessary concessions. When learning how to negotiate, it’s essential that you get over your fear of the word “No.”

Children are not afraid of “No.” In fact, children understand that “No” is not the end of a conversation, but the beginning of a negotiation! When a child says “No” or hears “No,” he or she knows instinctively that a back-and-forth negotiation will ensue.

The same is true in any business negotiation. Start by inviting your respected negotiation opponent to say
“No.” Tell him or her that you will not take “No” as a personal rejection, but as an honest decision that can be discussed and perhaps reversed.

4. MEETING WITH THE WRONG PEOPLE.

Meeting with the wrong people is a terrible problem that too often, allows important information to go inthe wrong hands and in time, will almost always lead to needless compromise.

By giving the other side information, you provide them an advantage and the time to better prepare for a meeting of value.

5. PUSHING TO CLOSE, CLOSE, CLOSE.

Too often teams are trained to drive for the “Yes” with verb-led questions and to close, close, close. This drives deep concessions as fear of loss of the deal looms because they think “No” means failure.

Examples of verb-led questions include, “Do you think we should bring Mary into the loop?”, “Is this the biggest issue facing us?”, and “Does it fit into your needs?” Instead, open your questions to get more than a “Yes” or “No” answer, and listen!

“What is the biggest issue facing us?”, “How does Mary fit into this?” and “How does it fit your needs?” will generate volumes of great information from your opponent that you can work with.

6. USING A WIN-WIN STRATEGY.

Win-Win training drives team members to become unwitting agents. They falsely believe they must protect the relationship, so they eventually give up far too much information to the other side all in the name of protecting the relationship. You will see them battling internally for deeper concessions all in the name of protecting the relationship.

Do not try to be friends. Your negotiation opponent is not your friend. You are not seeking loyalty or a long-term relationship — symbols of neediness. What you want, instead, is respect and a fair negotiation agreement that accomplishes your negotiation mission and purpose, and fulfills his or her vision.

7. LETTING THE RFP PROCESS DRIVE THE NEGOTIATION.

Too often an RFP is accepted as truthful and all that is required to participate. This leads to an emotional roller coaster that eventually will produce concessions and compromise.

8. LACK OF VISION.

Teams are not trained to create vision that will drive full price decisions.

Every negotiation, whether it’s a phone call or a formal business negotiation meeting, needs a negotiation mission and purpose. Yours is to help your respected negotiation opponent see how your three or four top features will help him or her achieve key business goals.

9. BEING TOO NEEDY.

Emotions bog you down, cloud your ability to make clear negotiation decisions based on fact, and almost instantly give the advantage to the other side. Emotions are the number-one deal killer — and neediness is the worse culprit.

Your job at the negotiating table is to become a blank slate. You have no needs. You need food and water. You don’t need this raise, this sale, or this deal. Once you are clear about the difference between wants and needs, it will set you free.

10. NOT ADDRESSING THE ELEPHANT IN THE ROOM.

Identify problems standing in your way. Before the negotiation meeting, write down every problem you can think of that might come up, so you can bring them out into the open. Always address the elephant in the negotiating room.

When you can overcome these ten common problems, your will begin to see dramatic results in your negotiations.

To apply these negotiating techniques to successful wholesale foreclosure investing, in a hands-on training environment, read more at Seven-Steps to Mastering Foreclosures

Copyright © 2009 Foreclosures.com.
This article is available for free distribution under the following terms:
a) You may not edit, delete or add any content to this article.
b) You must maintain all links to Foreclosures.com.
c) This article must be distributed free of charge.
d) This Resource Box must stay intact.

Subscribe in a reader