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Tuesday, January 25, 2005

I Love Passive Income - Part 2

I'm a bit bummed that I have't gotten some better leads, now that I have put out the call for birddoggers. Hopefully something will come soon. I'm just impatient.

The good news is yesterday I received another payment from the foreclosure investment company I first wrote about almost exactly three months ago. This time, the check was for just over $1,500. Nice! That brings my return in this second LLC to just over 18% annually.

The bad news is my car is in the shop getting $1,600 worth of repairs. Oh well. Easy come, easy go. But this does really illustrate the importance of cashflow. That investment just covered the cost of repairing my car, saving me from having to take a chunk of cash out of my checking account.

7 comments:

Matt J said...

Shaun,
Keep looking for birddogs in Phoenix. I'm sure there's got to be a ton there. Richdad.com seems like a good place to network with birddogs. If I was in AZ, I would be right there to help you out. I am a new birddog though. I've read your posting about the step by step guide to buying preforeclosures. I found it very informative, but I don't have any money to pay the fees mentioned in the steps. Would it be necessary for me to work a job to save up $X so I can cover the title report fees and incentives for a seller? Or is there a way to spend as close to $0 as possible to get things going? I find your postings very insightful and I will keep my eye out for Phoenix birddogs for you.
Sincerely,
Matt

Shaun said...

Thanks for the kind words! I think the fees you are referring to would be in step 5 - a preliminary title report. The reason I say preliminary is that it is not an actual, full blown title report. If you pick a title company to work with and get to know someone there, they should be able to run a preliminary title search for you at little or no cost. If you bring them business consistently, they will be happy to do this for free. Alternately, you can learn to do a basic title search yourself by checking documents at the county recorder's office. You can also just tell your investor you haven't verified the title. The investor will likely have the resources to do this.

Shaun said...

Oh..and regarding incentives to the seller. The only incentives some sellers may need is for someone to buy the place! Each seller's needs are different, so find out what they need and then worry about how to get it. If the deal is good enough, money will come to you.

Matt J said...

Shaun,
That makes sense to me. I can basically find out what motivates a specific seller and then show them how a short sale with me can help get them what they want. That way I can communicate with the seller in terms of what they want. I'm also curious about what is the best way to network with investors. Would it be best to find a real estate agent or broker who I trust and who specializes in connecting birddogs with investors? Or do you have other suggestions of ways I can find investors. I'm based out of Omaha by the way. I appreciate your clear and insightful responses. Not everyone I've met on richdad.com is as sincere and knowledgeable as you are.
Sincerely,
Matt

Shaun said...

I wouldn't bother with real estate agents. There is no money in it for them if they hook you up with an investor. You can try, but I wouldn't get my hopes up. (But if you can get one to send you the expired MLS listings, they can be a source of potential houses for you.) Try looking in the classifieds for "We Buy Houses" ads. Look for similar signs and call the number. Seek out real estate investors clubs in your area and attend one of their meetings. You can also place a classified ad yourself, saying something like "Investors wanted." When they call, you can say you don't currently have anything, but you can then find out what types of properties and what areas they invest in.

Matt J said...

Shaun,
My 2 best friends and I are doing real estate together. We haven't bought anything yet, but we will put our first offer in by the end of Feb. We are starting by doing short sales, mainly based on the information provided in the book "Making Money With Short Sales." We've read lots of books, read lots of posts, and have lots of knowledge. Now we're at the point where it would be silly not to jump in and start taking REAL action. Capital gains for now, cashflow by the end of the year. I was wondering if you are familiar with the book I just mentioned. If so, what are your thoughts on the accuracy of the approach it describes? How well does it coincide with your forum on preforeclosures? If you are not familiar with the book, I can give you an overview of what it contains. Again, I appreciate any advice or insight you have to offer.
Sincerely,
Matt J.

Shaun said...

I'm not familiar with that book. There are many ways to make money in real estate and short selling is but one of them. I do know people who use that method almost exclusively.

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