What can you do in today’s real estate depression?  How can you still make money as a real estate investor?  What works?

I know a lot of you are probably wondering about the answers to these questions.  The nature of real estate investing is very different than it was just a few short years ago.

If you want to find some answers and learn how to do profitable deals in this market you should check out this webinar this Thursday night at 8 PM EST.  I will be talking with Kris Kirschner about the current real estate market.

We’ll be looking at what techniques actually work RIGHT NOW and what you can do in this market.

There will be no sales on this webinar – it’s all about info.

This is a very special webinar and one you don’t want to miss.  Kris Kirschner is a genius in real estate who knows what is working right now in the market and how to invest even if you have no experience at all.

Space is limited for this webinar, so you’ll want to register now.  The webinar is free so if you are interested in real estate investing in today’s market you don’t want to miss this.  It’s this Thursday, October 29th at 8 PM EST.  To register go to https://www2.gotomeeting.com/register/582785938

See you there! – Wendy

Real estate agents know of a dirty 4 letter word in real estate.  They cringe whenever they hear it because it means all of their hard word, all of their advertising, all of their time will have been for nothing.  They hear this horrid 4 letter word when a seller has a home that’s been sitting on the market too long.

The seller grows impatient.  They want their home sold and they are running out of time.  That’s when they call their listing agent up and say “Realtor, if you don’t sell my home soon I’m going to have to RENT it!”

Rent is that dirty 4 letter word.

If you are a real estate agent you need to learn not to fear this.  You can still get your full commission from this seller because now they are a prime candidate for a lease option sale.  One of the biggest hurdles sellers often have to overcome with considering a lease option is the idea of having tenants in their home.  But they’ve just told you that they are now considering just that.

Selling on a lease option is obviously not the first choice, but it sure beats losing the listing or just renting the home and not getting paid squat!

Real estate investors who are trying to find real estate agents to work with need to keep in mind that real estate’s dirty 4 letter word is your key to networking with agents.  Most agents don’t know what to do when they hear the word “rent.”  You can show them how you can help both the home seller and the agent.  Plus if you let the agent double dip when you find the tenant-buyer the agent is really going to appreciate you.  You did all of the work finding the buyer, they come out looking like a hero, and everyone gets what they want.

I became a licensed agent in 1986. Why?  I had started to invest in real estate and realized that I had to rely on a Realtor to get me in to see some of the properties I was interested in purchasing, and then I had to wait for them for the comparables.  Comparables (aka Comps) can best be found on the MLS (Multiple Listing Service). Only Realtors have access to the MLS in most parts of the country.  There are other websites and systems that have comparables in some parts of the country, but nothing is like the MLS.  That is where the true sales information lies.  After I purchased my first several homes, I decided that I did not want to wait for or rely on a Realtor to buy and sell my own properties.

Becoming a Realtor, as a real estate investor, will give you many advantages. There are no disadvantages that I know of.  Investors tend to be adamant one way or the other about being a licensed Realtor.   I am definitely on the side of becoming licensed.  Being licensed has been one of the best tools that I have as an investor.  Being licensed allows access to your database of ‘comps’ or comparables.   This is the data you need to buy and sell real estate – with good information.  If you have a great Realtor, or you can get access to the MLS (Multiple Listing Service) without being licensed, great, but I still think it is better to be licensed than not.  I personally like to do my own comparables. (maybe that is the controlling part of me J ).

Some investors say it gives them more liability to be licensed.  I have two answers to that:

1. What are they doing to create liability?
2. Don’t they think a judge is going to consider them as an ‘expert’ when they find that you buy and sell real estate for investment purposes?

Some investors say that sellers won’t sell to you if you are licensed. I find the opposite is true. Most sellers are happy that I am licensed and “know what I am doing”.  If you are licensed you will also get commission on each deal you buy or sell (if it is listed on the MLS). Every office is different on how they split the commissions received by the office.

My recommendation is to GET LICENSED!!!

When becoming a real estate agent you must work directly under a licensed broker. To become a broker, each state has their own requirements.  I have been a broker since 1997.  When you are a broker you can have other Realtors work underneath you, but becoming a broker should not be the “be all end all”, unless you really choose to own a real estate company.  There are many expenses when you own your own office.

As I travel all over the country, I am asked frequently how to locate a good broker.  This is always an important part of working as a licensed Realtor. You will want to work in an office environment that encourages creativity, investing and entrepreneurship. You will also want an office that provides exceptional real estate training.  The company that I have found to be the best overall, in all states, is Keller Williams.  I personally owned 4 real estate offices prior to joining Keller Williams.  I am now an associate broker in a Keller Williams (Keller Williams) office, as well.  Why?  For the above reasons.  Keller Williams has a fantastic training program along with several other key ingredients.  Keller Williams is open and focused on real estate investing and entrepreneurship.  The founder of Keller Williams, Gary Keller, along with Jay Papasan and Dave Jenks, co-authored several books on real estate investing.  I was featured in their book, “Millionaire Real Estate Investor”.  Gary Keller also endorsed my book “Investing in Real Estate with Lease Options and Subject Tos”.  Much of my investing strategies and techniques have personally been focused around working with Realtors. Being part of an office will give you access to listings and relationships with other Realtors.

Keller Williams hosts a radio show on Mondays called “Millionaire Mondays”.  I have been on that show many times now.  Keller Williams is the fastest growing real estate company in the U.S. and they are currently the 4th largest, with over 600 offices.  Gary Keller invented a system that no one else has been able to reproduce.  There are many companies that have tried.  It is essentially a multi-level marketing company. Each person you recruit becomes part of your “downline” and you start to receive a small part of the commissions they earn as well as the ones you earn. It does not matter what office (market center in Keller Williams) they are a part of, you will be rewarded on who they bring in and how much they buy or sell.  It is a fantastic approach to becoming a Realtor which gives incentives for Realtors to recruit other Realtors.

Some of the best advantages to becoming licensed are:

1. The training that comes with becoming a Realtor – especially in Keller Williams
2. Access to the MLS – to get comps
3. Part of the commission on each purchase or sale you make
4. A network of Realtors (many opportunities might come to you before anyone else even knows about them)

I recommend you become licensed and consider Keller Williams as an office for you.  I will gladly sponsor you and also assist you in working as a Realtor.  I can help you get started in the right direction. I have been licensed over 20 years.  Let them know I am your sponsor and we can work together to help you as an investor and also to assist you to recruit other investors (Realtors) in your team.  Please email me to find the closest Keller Williams office to you.  Wendy@WendyPatton.com or call me at 248-394-0767 and I will assist you in making a great choice for your future.

If you are a real estate investor and are thinking about becoming a real estate agent or becoming a Realtor, I strongly recommend it.  There are tons of great advantages for real estate investors, whether you do lease option investing or other types of real estate investing.  In my article on becoming a Realtor I go into some of the advantages and why I think it is so beneficial for real estate investors to have their real estate license.

I’m going to focus on one of the key advantages of becoming a real estate agent here for lease option investing.  One of the biggest advantages in my opinion is the creditibility you get with other real estate agents.  If you want real estate agents to bring you lease option deals time and time again the best way to get through to them is to be an agent yourself.  It gives you instant credibility, especially if you are an agent with a well-known office.  Other agents will be much more likely to trust you and send you those lease option deals if you are a real estate agent yourself.  Sometimes being a real estate investor has a certain stigma attached to it in the eyes of some real estate agents, they don’t necessarily trust us or like us, so you have to overcome that opinion to do deals with them.  But if you are a real estate agent instead they’ll look at you in an entirely different way.

As I said, it also helps to be an agent with a respected office, but most of us investors don’t want to be in an office where we have to do ‘regular’ real estate agent stuff, like floor time and so on.  It pulls us away from our real estate investing focus.  If you are thinking about becoming a real estate agent drop me an email at wendy@wendypatton.com and I can refer you to a respected office in your area that is real estate investor friendly.

I, Wendy Patton, have had a website for some time now.  But it was really just this year that I started learning about SEO – Search Engine Optimization.  Most real estate investors don’t realize the importance of SEO for their website, but it is key for gathering your leads.  When you are doing lease option investing or rent to own investing, or really any other type of real estate investing you want your site to be on the front page of Google for your area so that when those potential leads do a search on the internet they find you.

Real estate agents need this too.  When home buyers and home sellers go online and do a search for there area, you want your name to be the one that comes up on the front page of Google.  This is a great way to capture leads.

The great thing about SEO for real estate investing or real estate agents is that it is really extremely powerful free marketing.  You can do it yourself and really reap the rewards with all of your extra leads.  I’m certainly no expert in SEO, but I’ve really come to realize the importance of it for my rent to own business.  I strongly recommend you take the time to do some SEO for your website.

Here is a short little clip I did while at a SEO training event I just went to.

I hope everyone had a good Memorial Day weekend. I spent mine in Houston, Texas getting training for SEO.
I’ve been getting emails from some of my lease option real estate investing students lately about numbers on their deals and some of you are willing to pay too much right now for your rent to own deals. Many areas of the country are down real estate markets and if you pay too much you are going to find yourself upside down when the time comes for your tenant-buyer to purchase your lease option deal.

It’s very important to stick to your guns about buying right in these kinds of real estate markets with your rent to own homes. Use the profit calculator I have in my lease option investing course so you can make sure your numbers work. Remember, you don’t get paid until you sell and if you are upside down you aren’t going to be able to sell your lease option investment.

When Wendy Patton first got started with real estate investing she thought no money down meant using credit cards to make the down payment.  Take a look at this video to see just how many real estate investing deals she did with credit cards early on.

It took a few years but Wendy Patton learned better.  No money down real estate investing is much better done with lease option or rent to own deals.  Now Wendy Patton is one of the nations leading authors and trainers in no money down and low money down real estate investing with lease options or rent to own.  In fact she has a lease option training bootcamp coming up in June that will cover in depth training in lease options and other soft market real estate investing techniques.

Any real estate investor, home owner or home buyer that does a rent to own deal needs to understand the process involving the appraisal of a lease option home when it comes time for the end buyer to purchase. The purchase price is agreed upon at the onset of the rent to own.  Because the sale of a rent to own home takes place over time the home may go up or down in value by the time the end buyer is ready to purchase their lease option home.   When it comes time to buy the rent to own home the buyer’s lender orders an appraisal.  Three things can happen with that appraisal.

1. The lease option property appraises for the amount of the agreed upon purchase price.  If this is the case everything can proceed forward without problem for the real estate investor, the home seller and the home buyer.
2. The rent to own home appraises for MORE than the amount of the agreed upon purchase price.  In this case as long as the buyer has lived up to all of their obligations in the option contract, the home seller or the real estate investor MUST sell for the agreed upon purchase price.  The buyer benefits from the extra equity.
3. The lease option home appraises for LESS than the amount of the agreed upon sales price.  Of course we hate to see this happen, but sometimes if real estate markets are in decline it can.  If this is the case, the home owner and the real estate investor are only obligated to sell for the original sales price.  The buyer wouldn’t be able to qualify for a mortgage at that price so the deal would fall apart.  While the home owner or the real estate investor are not required to sell the rent to own home for a lower price they may choose to.  Let’s face it, the home has gone down in value, so they won’t be able to sell it to anyone else for more.  The may want to drop the price to the appraised value so the buyer can complete the sale.

These terms are part of the lease option contracts that are so important when doing a rent to own sale.  I explain them in great detail in my books, Rent to Buy, and Rent to Sell.

Also, take a look at this video where I talk about the appraisal versus sale price.

When buying lease option or a rent to own home, either as real estate investing or for your own home there are several steps you need to take during the process.
I’m going to look at 2 of them here.
The first step I want to focus on when buying rent to own homes is verifying the rental rates. As a rent to own home buyer you want to make sure the rental rates are both realistic for the area you are looking in and affordable to you personally. As a lease option real estate investor you need to know the rental rates for when you are finding tenant-buyers for the home.
One of the best ways to find out market rental rates for your rent to own home home is by looking at the local newspaper as well as the rentals online in sites like Craigslist. See what other properties in the area are renting for. Of course you need to make sure they are reasonably comparable to the lease option home you are interested in.

Another important step in the rent to own process is checking the title work. You want to make sure that whoever is on title is actually the one selling the home! This seems pretty obvious, but it sure can lead to big problems if you don’t make that verification. This means that everyone who is on title is selling the rent to own home. If a husband and wife are both on title they BOTH need to sign everything. You also need to make sure that the title is clear and can be sold, which we’ll talk about another time.

Take a look at this video where I talk about both of these steps to buying lease options.  Here is a lease option article too, if you want more information.

Wendy Patton will be the first to admit that there is more to real estate investing than just lease options.  One of her other favorite real estate investing techniques is rentals that cash flow.

Many real estate investors are constantly knocking on doors and diligently working the numbers after they find a possible deal.  They are constantly trying to get their investment properties to cash flow.  It is one of the most elusive, yet the most prized accomplishment by real estate investors across the country when it is actually achieved.

If you only knew the countless times Wendy Patton has listened to other investors go through a deal they structured.  After spending countless amount of hours and energy structuring the deal in the end, they end up with a deal that cash flows $100 per month or less.  $100 per month???  If you have one month of vacancy during the year that will wipe out your whole year of cash flow!

The challenge with cash flow is it is hard to get a quality property in a desirable location, and have the numbers work.

Why is that?

For the most part if you are working with a desirable location and house, the purchase price along with the taxes and insurance make the numbers completely out of whack.  So at the end of the day most real estate investors will not achieve the desired results.

Wendy Patton has a solution to this problem.

On Thursday, May 14th at 8 PM EST, Wendy Patton will share with you how you can get quality real estate investment properties with outstanding cash flow, a great exit strategy with a potential HUGE back end value!  This webinar is free but you need to register quickly as space is limited.  Join Wendy Patton on this Cash Flow Webinar