Make Money Smart

2007-08-02T17:25:00.000-07:00

Flipping Houses For Dummies

/by Roberts, Ralph R., 2007/


Signs of an Attractive Fixer-Upper

  Located in desirable neighborhood with good schools
  Ugly duckling (утенок) in the neighborhood
  Vacant
  Priced to make money for rehabbing
  Good bones – good structure
  The return on investment is 300 to 500% of the cost of repairs
  Taxes are owed on the property
  Absentee (уклоняющийся) landlord
  Probate (по завещанию) property
  Foreclosure property
  Owners facing bankruptcy
  Owners getting divorced
  The work needed is something you’re capable of doing yourself
  Documents related to house turn up nothing unusual
  Reliable title company verifies paperwork
  Great floor plan
  Rooms with character and class
  Hardwood floors hiding under carpet
  Roomy kitchen with an inviting layout
  Roomy master bedroom
  Two or bathrooms, at least one of which is roomy

Signs of a Potential Money Pit

  Water stains on wall board
  Water stains on ceiling and sheetrock sagging
  Foundation building in or out
  Mold in the attic
  Mold on walls
  Knob and tube wiring or aluminum wiring
  Rotting windows with water stains down walls
  Standing water in crawl space
  Sagging floors
  Sagging roofline
  Neighbors from hell
  More cats than humans in residence
  Located in a high-crime district

House Staging Checklist

Staging a home can add 7-10% to the sale price.
  Mow and edge the lawn
  Sweep the entryways and lay down new doormats
  Scrub the house right before showing
  Hide family photos, religious icons, or political paraphernalia
  Clear the clutter off the countertops
  Furnish rooms with attractive furniture (no vacancies)
  Keep the toilet seat cover down
  Fling open the windows and turn on all the lights
  Set out attractive bouquets of fresh-cut flowers

Cosmetic Job Checklist

  Painless landscaping makeover
  Trim trees and brush
  Pull weeds and dead plants
  Plant fresh shrubs and flowers
  Declutter the yard
  Mulch the flower beds
  Mow and edge the lawn
  Fill driveway and walkway cracks

  Quick curbside facelifts
  Remove any window air conditioners
  Repair or replace windows and screens
  Apply a fresh coat of paint (except on brick)
  Paint the front door and threshold
  Repair and paint or replace the gutters
  Replace the front and rear storm doors
  Replace exterior light fixtures
  Replace the mailbox

  Interior beauty tips
  Thoroughly clean and scrub the house, including the windows
  Replace all wall-to-wall carpeting (unless it’s covering a beautiful wood floor)
  Apply a fresh coat of paint (neutral tones only)
  Repair doors and doorknobs
  Install new window blinds
  Install or update light fixtures
  Replace all faceplates (on light switches and outlets)
  Replace heat registers
  Install new smoke detectors


  Quick and cheap kitchen makeovers
  Install a new stainless steel sink
  Install a new faucet
  Replace damaged or out-of-date countertops
  Paint or refinish the cabinets and install new hardware (knobs and hanles)

  Bathroom brush ups
  Install a new vanity (cabinet and sink)
  Install all new fixtures
  Replace the toilet seat
  Replace the shower curtain
  Caulk around sinks, toilets, tubs, and showers
  De-mildew the shower or bath

  Cellar sprucers
  Sweep the cobwebs out of the rafters
  Seal all cracks in the walls
  Whitewash concrete or cement-block walls with a sealing paint
  Paint the floor using a gray or beige
  Stuff pieces of new insulation between the joists where the joists meet the outside wall

Tips

  If you can’t get a house for 25-30% or more below what you estimate to be its market value, keep looking!
  Holding cost (=mortgage interest + property tax + utility bills + maintenance cost) ~ $100/day
  PURCHASE: Secure financing before you go house hunting.
  REHAB: Jot down a list of improvements you want to make to the property when you first see the house, and schedule the work BEFORE you close on the purchase.
  SALE: As soon as you know your closing day, determine the date on which you want to put the house back on the market.

Making Money in Any Market

Total investment = purchase price, closing costs, renovation costs, holding costs, selling costs
Market Total investment/Estimated resale value
Increasing < 80%
Flat <70-75%
Decreasing <60-65%



Maximum Purchase Price:

Estimated Sale Price:   $______________
Closing Cost:                -$______________
Renovation Cost:            -$______________
Holding Cost:                   -$______________
Costs to Sell:                     -$______________
Maximum Purchase Price:  = $______________

Tacking underlying problems first

1. Repair or erect the underlying structure
2. Install new ductwork. If needed, for heating and central air
3. Replace any water pipes or sewage lines
4. Run new electrical lines
5. Drywall or plaster the walls and ceilings, install flooring and cabinets, and perform any other final renovations.

How to Sell Your Home in 5 Days

2007-05-23T20:45:00.000-07:00

/by Bill G. Effros/

THE METHOD

How to Sell Your Home in 5 Days gives you step-by-step instructions:

Pricing (Pre-sale)--how to use "magic" numbers and price points to reach a large pool of potential buyers

Preparation (Pre-sale)--what to fix, what not to fix, tests, inspections, and more

The Ad (Wednesday)--how to write and place a classified ad that will change your life

The Phone (Wednesday-Friday)--tempting buyers, keeping a log, and the Rule of 25

Open House (Saturday & Sunday)--final touches, informational handouts, bidding, greeters, and the closer

The Close (Sunday Night)--how to conduct a simple round-robin and reach your best deal exactly 5 days after your ad appears

Sale House by Owner

2007-05-15T15:24:00.000-07:00

For Sale by Owner: Sell Your Own Home and Save Thousands

1. Make your house selling plan
2. List pre-sale maintenance. – Decide if more time and money should be invested:

Area / Work Details / Time / $Cost

3. Determine the earliest date you can complete the sale.
4. Locate all legal documents
5. Your property particulars statement:

Property description and restrictions
Improvements
Assessment of speculative value
External and internal features
List distances to essential services and amenities
List home ownership expenses
Conduct a neighbourhood analysis
Assess your competition

6. Agreement of purchase and sale – get it, study, print some copies
7. Choose a lawyer
8. Set your asking price

Visit similar homes for sale in your area. Drive around your neighbourhood and jot down all addresses and phone numbers shown on the “for sale” signs of homes similar to yours. Contact each responsible person to obtain the following:
- Selling price,
- Dimensions of the lot,
- Building size and type,
- General condition,
- Special features, and
- The approximate length of time the property has been on the market.
Set the information in the journal. After personal inspection of each home, make your comparison
The next strep is to contact three separate real estate offices in your area and ask about estimation price for comparable homes either recently sold, currently on the market, or both. Agents should be able to tell you the average length of time it takes to sell your property under a multiple listing service.
The tree estimated selling prices plus your research should provide a market range.
Consult professional appraisers. Contact at least two, determine their fee for providing a written appraisal report, and choose one. The cost to obtain the detailed report is under $300. An appraisal report impresses potential purchases because it gives them some assurance that the value is there.
Now you have 4 estimated prices. Determine your price according to the closest grouping of figures, then allow a slight amount for negotiating.

9. Advertising program:

Word of mouth
Prepare an advertising hand out: letter size document with a good photograph of the front of your property and short (about 75 words) description. Make copies for friends, neighbours, co-workers and potential buyers.
Consider using your “hand out” as a flyer. – Place the flyers underneath the windshield wiper of all the vehicles parked in a lot where a target group is congregating.
Place the flyers in factories, shopping malls, Laundromat, and other places supply bulletin boards.
Purchase a “Private for sale: sign and place it on your front lawn so that is visible from both direction.
Spend wisely on paid advertising. (local classifieds for example)

10. Open House:

Purchase as many open house signs as necessary to direct the main flow of traffic to your residence.
Create a pleasing atmosphere, with soft, low music, air fresheners, coffee brewing in the kitchen.
Provide you visitors ”hand out” info
Have a quest register handy for each person to enter their name, address, and phone number, so if someone becomes more interested as the tour progress, you will be able to call them later and to ask what they think of your home and if they are interested in seeing it again at a private showing.

11. Negotiating

Point out the provision in your agreement for getting buyer’s lawyer’s signed approval before it becomes binding.(section 7 of the agreement of purchase). Point out this protection given to the purchaser, because it takes a tremendous amount of pressure off their minds.
Decide who will conduct the negotiating. Having more than one person representing the vendor is cumbersome. As well, it works to your advantage, especially with contentious issues: write the issue into the agreement and pointing out that is subject to your partner’s approval.
Negotiating price
Negotiating the deposit (try getting 3-5% of the purchase price)
Negotiating the financing condition
Negotiating fixtures and chattels. List the fixtures to be excluded from the deal and chattels to be included.
Negotiating the closing day

12. Close the sale

Removal of the purchaser’s conditions. The first condition gives the purchaser’s lawyer a right to object and cancel the sale agreement. This is only achieved by the lawyer forwarding a letter directly to you within 7 days of the acceptance date. This condition is worded so that if you don’t receive a reply from the purchaser’s lawyer in the tome prescribed, the condition automatically is waived, and you can assume everything is satisfactory.
The Waiver Form is a written document used for removing conditions in the agreement of purchase and sale. It’s used to waive the financing condition.

Resources:
For sale by owner : sell your own home and save thousands /by Walsh, Edward M. (Edward Michael), 1941-Self-Counsel Press,1994.

Rich Dad Poor Dad

2007-05-08T07:46:00.000-07:00

/Rich Dad Poor Dad by Robert Kiyosaki/

Very inspirational and easy to read. It took me only two days to read the book from cover to cover. The main lesson - we have to change the way we spend our money, we should get more assets (something that brings you money), not liabilities (something that takes your money). It's better to be Business owner or Investor rather than Employee or Self-Employed.

More about Robert Kiyosaki

2007-01-14T17:27:00.000-08:00

/Additions: Your Guide to Planning and Remodeling /

Nice book. Lots of color before and after photos and floorplans. The book is useful before you begin spending money on a contractor, architect or supplies. Read this book before doing any additions.

Good advices:

You shouldn't add on if the work will make your home significantly larger or radically different in appearance from pther neighborhood homes.

The new version pf your home should be as suited to its surroundings as possible.

2006-12-18T08:27:00.000-08:00

/30 Days to Happiness: Setting Yourself Up to Win in Life/

30 Days to Happiness: Setting Yourself Up to Win in Life

A life transforming book! This program of daily processes will guide you step by step into a new, fulfilling life.

Listen Podcasts:

POD: Brad & Mary's Expert
Interview Millionaire Calls
with Liah Kraft-Kristaine - "How to Quantum Leap Your Life!"
published on http://www.millionaireriches.com/teleseminar/LKreplay-02.html:
Below are the Top 10 Quantum Leap Lessons taught questions covered on the call.

1) The 5 most important elements of success

2) What emotional intelligence is, and why experts claim it is a far better
success predictor than I.Q.

3) Precisely why some people are far more “lucky” than others

4) Why your self-image is keeping you at a certain level of success – and how
you can take a Quantum Leap forward

5) How you can use the power of the “Placebo Effect” on your subconscious
mind to put your business in “fast forward”

6) 5 habits that can destroy your ability to attract success - and how to keep it

7) How Liah increased her net worth $500,000 with just one house by following
her intuition, trusting herself, and taking huge risks

8) Why stress can scramble your ability to function mentally - and 5 things
you can do about it before it goes too far

9) 4 ways to increase your physical energy so that you can do more in your
business and feel fabulous, and

10) How to avoid misusing (and how to use to your best advantage) the single,
most POWERFUL mental tool you possess

To Play or Download the MP3 Recording
To Download the Enhanced Call Transcripts

POD: Larry Goins Weekly Brain Pick A Pro Teleconference: Liah Kraft-Kristaine - "Quantum Leap Your Life"
/published on http://larrygoins.libsyn.com/index.php?post_id=116479/

POD: Getting in Your Right Mind

Do-It-Yourself Financial Counseling

2006-11-29T18:45:00.000-08:00

/Creating Wealth by Robert G Allen/

Step 1: Determine what you are trying accomplish

Knowing where you're going is more important than how much you have at the start.

Step 2: Once you are know where you are going, focus all of your resources to accomplish your objective

Financial Resources:
1. Cash and "near cash"
2. Credit
3. Financial statement
4. Cash flow

Nonfinancial Resources:
1. Time
2. Knowledge
3. People
4. Courage

Step 3: List all feasible alternatives to reaching your goal using your resources
1. If you don't have it, you can get it.
2. Try to use your own cash last.
3. When you resort to borrowing, always borrow the cheapest dollars first.
4. If you do borrow against your equity - in your home, for instance 0 only borrow an amount with monthly payments equal to the amount you can afford to repay out of your present monthly income.
5. Start out slowly when using leverage.

Tenants

2006-11-29T15:26:00.000-08:00

/Creating Wealth by Robert G Allen/

How to find a good management company
Look in the yellow pages under "Real Estate Management" and follow two basic rules:

Don't ever believe a word the management company says, or anything you read in the monthly reports it gives you. Question every number. Don't let the company spend more than $500 without your OK. Ask it about vacancies, since every vacant day costs you money. Look at the ads it runs to attract new tenants.
Inspect your property at least once every month.Just walk through and see if the unit is vacant or rented. And see if the tenant is the kind of person you want living in your property. The inspection can be a regular day of the month, so the tenant can prepare. You can learn a lot about your management company from your tenants.

Tenant Selection
The key to any good management system is finding good tenants.

Take an application from every prospective tenant. Credit references. Job information. Present ans previous addresses.
The tenant fills out the application and leaves a small deposit.
Make calls to verify employment. Call to previous landlords.
All of this takes an hour or so. You should check out each item on the applicant and inform the prospective tenant of your decision within a day or two.

Deposit - A must
Try to get the first and last months' rent and a security/clearing deposit equal to at least half a month's rent. The deposit is never to be applied to rent. There are always minor repairs to make when a tenant moves out, and you may have to take care of the tenant's unpaid utility bills out of your own pocket. For this reason, return a tenant's deposit 15-30 days after he vacates.
Property Inspection
You should inspect the property before, during, and after a tenant's stay. The tenant should be present each time. Before he moves in, walk through and fill out a property-inspection form. This protects both of you if a dispute should arise concerning who is responsible for damage. It will save you many a trip to small claims court.
During the tenant's stay, make regular inspections, perhaps around rent-collection time.
Discount Rent Program
A prospective tenant would be told that the rent would be $100 less upon two conditions:
1) Rent is due on time. Part of the discount is for prompt payment. If the rent is late, the discount doesn't apply.
2) The tenant will do all minor repairs and pay up to $50 in cost of materials per month.
Utilities
A tenant has to pay all utilities.This way he deals directly with the utility company and bears the brunt of all increases.
In single-houses rentals tenants take care of the yard also. You can offer to cut the lawn for them for a $20 fee every two weeks, but they usually decline (good).

Happy landlording!

The Win-Win Philosophy: How to Achieve Win-Win Wealth in a Win-Lose World

2006-11-29T15:05:00.000-08:00

/Creating Wealth by Robert G Allen/

Principle 1:
If both parties can't win, don't play.

Principle 2:
Since the essence of win-win is mutual problem-solving, don't negotiate with people who don't have problems.

Principle 3:
Male friends with the seller - he will be more apt to enter into problem solving with a friend than with an enemy.

Principle 4:
You can't solve a problem unless you understand it.

Principle 5:
Once you understand the problem, search for alternative win-win solutions.

Principle 6:
Optimism is the root of persistence.

Find a motivated seller

2006-11-29T14:59:00.000-08:00

/Creating Wealth by Robert G Allen/

Keywords to find a motivated seller:

nothing down
low down payment
seller will carry
owner financing
flexible

Find a good appraiser

2006-11-29T14:48:00.000-08:00

/Creating Wealth by Robert G Allen/

To find a good appraiser:

Check "Real Estate Appraisals" in the Yellow Pages. When you call, ask if the company does appraisals for FHA or VA.
Call up any savings and loan association (yellow pages under "real Estate Loans") and ask one of the loan officers to recommend a very conservative FHA or VA appraiser.
Go to https://entp.hud.gov/idapp/html/apprlook.cfm, type in this city or zip code and see an online list of credited appraisers in this area.

Property Selection Grid

2006-11-29T14:01:00.000-08:00

/Creating Wealth by Robert G Allen/

Buy a property that scores in the 12 to 15 ranges:

Click for a large images.

Target Property

2006-11-28T08:24:00.000-08:00

/Creating Wealth by Robert G Allen/

A three-bedroom detached single-family house or an attached condominium or townhouse that is located in a stable neighbourhood within a 50-mile radius of your own home;
priced at less than the median price in your city and worth at least 10% more than your cost;
can be bought with less than 10% down and
terms that allow the buyer to rent out the home with no negative cash flow.

Buy homes only in the bottom end of the price pyramid:

How to Find the Right House

Area with large numbers of middle-class houses in the lowest-priced category.
Property: three-bedroom house
Price range: you should buy houses prices much less than the median-priced house in your area.
Rent fee: Check the rent fee for two and three-bedroom apartment in the area. Your rent fee should be equal your mortgage fee with 10% down payment or up to 10% more.

Money Making TV Shows

2006-11-23T15:49:00.000-08:00

Dragons' Den where entrepreneurs pitch the Dragons (five Canadian business moguls) for investment. - Wednesdays
8 pm EST on CBC Television.

The Apprentice 5.
The Apprentice 6 - Sundays January 2007 on NBC

Flip That House: This half-hour reality series brings the viewer into the latest trend in "buy-sell" house renovation known as "house flipping." Each episode will follow the transformation of a different house, each with its own "flipper/host" familiar with home renovation and real estate.
TLC Television

Flip This House - Tackling one of the most exciting aspects of today's high-stakes real estate market - the transformation of an eyesore into a profit-making beauty
A&E Television

The Big Flip,
HGTV

Please add your favorite "Money making TV Show" in Comments below

4 specific stages in the wealth-building trajectory

2006-11-22T14:35:00.000-08:00

/Creating Wealth by Robert G Allen/

/I think any successful project has the same 4 stages./

Stage 1: The Prelaunch Stage
This is the time to set goals and write them down.it's the time to prepare yourself mentally for the liftoff.

The will to prepare to win is more important than the will to win.

Stage 2: The Liftoff, or the Struggling Stage
RA: "... a minimum goal: you should be prepared to buy at least one single-family house per year for the next ten years..."

"If you will spend two years working as most people refuse to work, you will be able to spend the rest of your life in a manner which most people will never be able to afford."
/Wade Cook, "How to Build a Real Estate Money Machine"/

Stage 3: The Powerful Pre-Orbit Stage

Stage 4: The Automatic-Pilot Stage

Wealth-Building Principles during the first three Stages of Wealth:
1. Always think in terms of profit after taxes and inflation.
2. Sacrifice to invest in things that go up in value. Avoid consumer items.
3. Don't diversify; concentrate your eggs in the right basket.
4. Be on the offencive, not the defencive.
5. Have your assets growing steady at wealth-producing rates. That means debt and leverage.
6. Choose investments that are both powerful and stable.
7. Maintain maximum control over your investments.

During the forth stage, the above principles will be reversed for a time.

Wealth-Perpetuating Principles during the Forth Stages of Wealth:
1.Jettison the debt!
2. Lower your compound rates of return from wealth-producing rates (above 25%) to wealth-perpetuating rates (below 25%).
3. With lower growth rates, you will need to do more careful tax and inflation planning.
4. For a time, you will think defensively, not offensively.
5. You will be more prone to diversify your assets than to concentrate them.
6. Pay less attention to need for sacrifice. If you want something nice, buy it. You've earned it. You can afford it. Who cares if it goes down in value?
7. Less control over your investment...
8. During the first three wealth-building stages, you will probably want to keep your present job and do your investing on the side. Once you put your investments on automatic pilot, this may change. If you don't enjoy your job, quit. Your investments can now carry you.

7 Wealth Principles

2006-11-20T06:09:00.000-08:00

/Creating Wealth by Robert G Allen/

Wealth Principle 1
Don't count your dollars until they have passed through the strainers of taxes and inflation

Wealth Principle 2
Make Maximum use of your assets and sacrifice to invest in things that go up in value

Wealth Principle 3
Don't diversify! Concentrate all of your eggs in the right basket!

Invest heavily in your strong investment.

Wealth Principle 4
Wealth seekers are always on the offensive, not on the defensive

Wealth Principle 5
Money must multiply at wealth-producing rates of return

Wealth Principle 6
Choose investments that are both powerful and stable

Wealth Principle 7
Control is essential

A fool and his money are soon parted

Do you have Investor Skills?

2006-11-15T18:17:00.000-08:00

/Creating Wealth by Robert G Allen/

Take a few minutes to complete the questionnaire to check your investor's skills.

If you were to receive from an inheritance $100,000 tax free, what dollar amounts would you spend in the next year in the following categories:

---------- Gold, silver
---------- Recreation
---------- Reduce debts
---------- Bank savings
---------- Commodities
---------- Bonds
---------- Collectibles (antiques, stamps, art, etc.)
---------- Stock market
---------- Money market funds
---------- Vacation
---------- Mortgages
---------- Medical/dental
---------- Precious gems
---------- Automobile
---------- Buy own home
---------- Treasury bills
---------- Recreational vehicle
---------- Charity or church
---------- Go into business
---------- Give to family
---------- Mutual funds
---------- Down payment on real-estate investment

---------- Price

Here is a listing with annual projected growth rates:

Hard assets:

Gold, silver - 15%
Precious gems - 17.5%
Collectibles - 15%

Liquid money

Bank savings - 3-8%
Treasury bills - 3-6%
Money market funds - 3-9%

Passive capital

Stock market - 10%

Growth investments

Bonds - 10%
Commodities - 25%
Mutual funds - 10-13%
Discounted mortgages - 15-25%

Active capital

Buy own home - 10%
Real-estate investment - 10%
Business - 15%

Consumer

Vacation - 0%
Medical/dental - 0%
Reduce debts - 0%
Recreation - 0%
Recreational vehicle - 0%
Automobile - 0%

Nonmonetary

Give to family - 0%
Charity or church - 0%

Give a man a fish, and you feed him for a day. Teach a man to fish, and you feed him for a lifetime

Developing a wealthy mind-set

2006-11-14T05:15:00.000-08:00

/Creating Wealth by Robert G Allen/

Wealth does not reside in material possessions.
Wealth resides in the mind.
Wealth is not a thing, it is a thought!

Step 1
Set realistic goals and write them down

Step 2
Visualize your goal

Step 3
Affirm yourself

Step 4
Replace luck thinking with probability thinking

Step 5
Take action

9 most prevalent faulty assumptions about wealth

2006-11-13T08:39:00.000-08:00

/Creating Wealth by Robert G Allen/

# 1
Having a job is good and leads ultimately to Wealth

“Wealth is when small efforts produce large results. Poverty is when large efforts produce small results.”

The answer is not to work harder, but to work smarter.
A job should be looked upon as a temporary inconvenience.

# 2
Saving your money is a good Investment

# 3
Debt is bad – Avoid it
You can never become wealthy without going into some form of investment.

# 4
Security is good
Risk is an essential part of progress.

# 5
Failure is bad
Failure is part of success.

# 6
Wealth is measured in material possessions

Broke is a temporary condition.Poor is a state of mind.

# 7
The government, my employer, or someone else is responsible for my financial well-being.

# 8
Acquiring wealth is a win-lose game.

# 9
It takes money to make money.