Hello again! I came across this great video and just had to share it. Enjoy!

Be sure to hit the Play button above.

Until next time, happy (and profitable) investing!

Doug Smith
Real Estate Investor and founder of myHouseDeals.com

Hi Folks,

Today I’ll be covering the topic ABC’s of Wholesaling with Walter Wofford.  Walter is a Jackson, Mississippi native.  In his 28-year investing career, Walter has bought and sold over 1,000 houses and has renovated over 200 houses, even upgrading entire neighborhoods at a time.  He is a real life real estate investor who works every day in this business and often teaches throughout the country.  He has averaged 10 houses a month for about 15 years or so.

Walter also does quite a bit of private lending and private borrowing; he opted out of the bank system about 8 or 10 years ago. According to Walter, “The only reason to go to a bank is to make a deposit and you can probably do that by mail or wire transfer now anyway.  Many people start out thinking they’ve got to suck up to bankers to make their career successful, but I can tell you that don’t have to do that.”

Here is Walter’s definition of wholesaling:  “Basically, it’s going and getting a house under contract on terms that are acceptable to you and the seller.  Then turning around and either assigning the contract or closing on the house with your own money, or the bank’s money, or private lending and turning around and selling it for a profit.  It’s usually a rapid turnaround. Wholesaling typically is not a year-long process, it’s more like a day-long process.  The wholesale business is not in the high end neighborhoods; though you can sometimes do that, that’s not where you’re going to get your volume.  You’re going to get it from going into the transitional neighborhoods; they’re where the money is made in the wholesale business.  It doesn’t always have to be that way, but that’s been true for a long time in our market.”

According to Walter, the amount of money a person can reasonably expect to make per year wholesaling properties is completely dependent on that person.  Walter has found that the most important ingredient to success is the desire that someone has – that they really want it, that they can taste it.  That’s not something anybody can give you, it’s something that you have and were born with.  So that being said, if somebody likes to sit in the chair all day long and not do any work, that person is going to have a very difficult time because they’re not a self starter.  There’s nobody saying, “Get up and go knock on doors” or “go meet somebody that you don’t know.”

Walter knows people that make $2,000 to $3,000 a month and also people who have made $10,000 to $12,000.  But he also knows people that make $100,000 a month wholesaling houses.  It’s not a matter of technique, it’s a matter of hard work.  That’s the secret, it’s just hard work!

Walter has had a tremendous amount of success over the years doing direct mail post card campaigns.  To be successful at this type of mailing, you have to figure out what you’re trying to accomplish and who your target is.  Walter typically sends out 1,000 postcards that cost about $.30 apiece and might buy one or two houses.  That’s a lot cheaper than going and having somebody else find that house for you and it also gets you face to face with the seller.  Although it’s important, many people in the wholesale business never develop the skill to go have eye contact when determining value, seller’s motivation, and getting ink on a piece of paper.  It’s really easy to say ‘I’ll take that when another wholesaler wants this for “x” amount of dollars,’ but it takes a whole different level of play to go and negotiate with folks.

Want to learn more about how Walter wholesales houses?  Walter covered a ton of great information in his interview with me that’s part of a much large package called the Vault.  The Vault contains in-depth interviews with expert investors from across the nation and covers topics ranging from rehabbing to subject 2 investing to private money and more.  Learn how you can get your hands on the Vault at a 36% discount by going to http://www.myhousedeals.com/thevault.

Until next time, happy (and profitable) investing!

Doug Smith

Hello again fellow investor!

By now, you know that I love to travel and that although I live in Houston, I can often be found roaming about the country (and sometimes the world) on many — if not most — weekends. But lately, my weekend softball league has me firmly planted right here in Texas. When it comes down to either softball and travel, I keep my priorities straight. I choose softball!

Staying in town has actually been quite nice. Last Friday evening, I had a chance to catch a local outdoor concert in a beautiful park. Lawn chairs, cold beer, kids running around, seniors dancing by the stage, a group of close friends by my side, the whole bit! And to top it off, the lead singer is a good friend of mine, so I was “in” with the band.

As the concert went on, something curious caught my attention. There was a man in a motorized wheel chair zooming around in circles and figure 8’s throughout the dancing area. Upon closer inspection, it became clear that he was paralyzed from the waist down, yet he was, in fact, DANCING!

Not only was he dancing, he was having the time of his life! He was high-fiving the adults, chasing the kids, flailing his arms about, singing, laughing, and pretty much having the time of his life. And so was his companion, which happened to be a cute little dog that sat on his lap.

As if this scene weren’t wild enough, he stepped it up a notch by dressing himself in the ultimate party goer’s wardrobe. Biker hat, cool shades, a smiley-faced shaved onto the back of his head, big red clown shoes, a bright red shirt with a tie, a wheelchair painted to resemble the American flag. The whole get-up! His dog joined the fun, too, sporting a biker hat, shades, and a USA bandanna. What a scene!

Below is a picture of him and his dog…

Gotta love it!

As I watched the two of them parade about, I couldn’t help but be amazed at this guy’s incredibly positive attitude. He has lived through what most people would consider to be one of their greatest fears, which is to become paralyzed. I know that’s near the top of my list! The amount of emotional pain and suffering that he must have experienced from becoming paralyzed must be incomprehensible.

But here he is, not just living a “normal” life, like most would hope. He’s living what appears to be an extraordinary life. One filled with unbridled passion and joy. A life that inspires others and encourages them to rise up above their problems and live life to the max. And it all goes back to his ATTITUDE.

So next time you get down on life, you begin to think that you were dealt a bad hand, and some of that “stinkin thinkin” creeps in, I want you to remember this guy. Because no matter what you’re going through, it likely pales in comparison to the challenges he’s faced and overcome.

And remember that work ethic, time management skills, people skills, determination, and all the other keys to success out there mean absolutely nothing without the right attitude. So keep your head up, stay positive, stay away from those “Negative Nancies”, and count your blessings.

Attitude starts with an A for a reason. It comes first.

Until next time, happy (and profitable) investing!
Doug

Hey folks,

Today I wanted to share with you an interview I did with my good friend, Eddie Gant.  Eddie is quite the successful real estate investor here in Houston, TX.  Many investors, including myself, consider Eddie to be the largest home buyer in Houston, if not all of Texas; he’s bought over 400 single family houses in the last 8 years.

Eddie also owns a mortgage company and a hard money lending company.  In short, Eddie knows the real estate investment business from the inside out.  He’s familiar with and teaches all types of real estate investing.  Eddie’s specialty is rehabbing and reselling properties for maximum profits; since he focuses almost exclusively on rehabbing, here is an excerpt of our interview and tips on rehabbing for maximum profits:

DOUG:  Eddie, why do you choose to rehab and resell properties instead of holding or wholesaling them?

EDDIE:  We elected a long time ago to rehab and resell what I call “retail.”  We sell properties for full market price.  When you’re wholesaling, for the most part, you’ve got to allow another investor some room so that he can make a profit or he’s never going to come back to you to get another deal.  So you’re only taking a piece instead of all of the profit.

The key is can you manage the contractor process?  I think that’s really the key difference between the rehabber and the wholesaler.  If you can manage the rehab process and the contractor, you probably need to be rehabbing.  If you can’t, you probably need to be wholesaling versus holding.

DOUG:  Do you have a formula that you use for buying properties and if so, what is it?

EDDIE:  I spend a lot of time on ARV (After Repair Value) when I’m looking at a house, and I go drive almost every comp.  And once I’ve established what I think the true ARV is, I subtract five things from that number:

• I subtract what my cost is to buy a house; that’s my portion of the titles fees and the fees that my bank charges me.
• Then I calculate and subtract my monthly holding costs.  They include interest, taxes, and insurance on the property plus a little bit for lawn maintenance and utilities.  I usually use 4.5- 6 months of holding costs on these houses.
• I calculate what my repairs are and subtract these from the ARV.
• I subtract the desired profit that I want to make on the house.  I don’t use a percent; I use a lump sum.
• And then I subtract what it’s going to cost me to sell this house.  That includes realtor fees, my closing costs, and maybe some seller contributions.

When I subtract those five things from my After Repaired Value, that number equals what my maximum offer will be.

DOUG:  Are there any types of repairs that make you want to stay away from the house completely?

EDDIE:    Yeah, there are a few things that will make me walk away just about every time.  If the house is on blocks up on beams, and those blocks are disintegrated and sunk and the seal plates (the 4 x 6 timbers around the perimeter of the house) are all sitting in the dirt and the mud, that means the whole house has got to be lifted back up.  That’s just too expensive.  If there is complete wood rot from top to bottom and the exterior walls are all out of square because of it, we’ll normally walk away from that, too.  If I see some serious structural issues above the ceiling, such as severe termite damage or wood rot again in the upper part of the house, we normally walk away from that.  That’s about it though.

DOUG:  Do you put an agreement between yourself and a contractor in writing?

EDDIE:  No, we only give them a scope of work, we don’t give them a contract.  Of course, we do agree on the number.  For the most part, except for specialty contractors, we only pay labor and we buy all the materials.  Most contractors are not very good at estimating materials, so they build too much fat into the number.  I’m talking about my painter/handyman here, not the carpet guy or roofer, they’re different.
We don’t have too big a problem going over budget, but finishing on time is tough.  The only way that you’re ever going to get the contractors to finish is if you’re holding back a substantial amount of their pay.  I’m talking 20% or 25% – we’re not going to pay that final amount to our painter/handyman until the list is done.

DOUG:  What’s the first thing that a new investor should do after reading this interview?

EDDIE:      You have to know where you’re going to get your money from.  Most of us got started with hard money.  If you’re getting your money from your own checking account or friends or IRA or wherever, get the money ready to go.

You also need to assemble your support team.  Title company, realtor, start finding some contractors, get a mentor, get a mortgage company, find insurance.  You might want to start with the construction manager; it may cost you a little more but you know it’s going to get done right.  They go out and bid it for you and get the repair numbers without you having a whole lot of risk.  You’re just going to have a slightly higher repair bill because you’ll be paying them.

Also, I would recommend joining your local REI club and start finding out who the other investors in town are using.

——————————————————————————

Well folks, that’s all I can include today.  There’s a lot more to this interview and it’s part of a much large package called the Vault.  The Vault contains in-depth interviews with expert investors from across the nation and covers topics ranging from wholesaling to subject 2 investing to private money and more. Learn how you can get your hands on the Vault at a 36% discount by going to http://www.myhousedeals.com/thevault.

Until next time, happy (and profitable) investing!
Doug Smith

Hello again fellow investor,

Hope you’re having a good week so far. Just wanted to give you an update on one of the goals that I made public on this blog in January. One of them read…

“Fund a scholarship at my old high school – When I was a senior in high school, I remember that there were hardly any local college scholarships available to me and my classmates. I wondered why only two or three out of thousands of alums were willing to give scholarships. Well, it’s my turn to step up to the plate! This year, I’ll give a scholarship to help someone from my old stomping ground get a good college education.”

I’m happy to announce that last month, I followed through on this goal and gave a scholarship in the amount of $750 to the valedictorian of the high school that I attended. It’s not much compared to some of the others, but every bit counts!

So who was the lucky, I mean deserving, recipient? Her name is Amanda Kitten, and she’s off to study at The University of Dallas. See below for her picture, followed by an amazing list of accomplishments. She’s one productive girl! Look for big things out of her in the future.

Amanda Kitten, Class of 2009

Organizations/School Activities

• Valedictorian (1 out of 163)
• National Honor Society, three years
• Student Council, four years
• Cheerleading, four years
• Varsity Volleyball, two years
• Junior Varsity volleyball, two years 
• Key Club, one year 
• School newspaper, one year
• Presidents Council, one year
• Fellowship of Christian Athletes, one year
• International Honor Society of High School Journalists, one year
• “Shattered Dreams” planning committee and participant, one year
• Junior/senior prom planning committee, one year
• Lubbock Volleyball Club off season traveling team, two years

Offices/Positions Held

• National Honor Society vice president, senior year
• Student Council teacher appreciation chair person, senior year
• Student Council historian, junior year
• Key Club editor, senior year
• Freshman class treasurer
• Varsity volleyball team captain, senior year
• Junior varsity team captain, sophomore year

Work Experience

• The Mud Room (November 2007 – present)
• Pottery Painting Studio (about 10 hours per week except during volleyball season)
• Job responsibilities include assisting customers in painting pottery, helping customers with design ideas, and handling money at the cash register.
• Spraying cotton for local farmers (Summers 2005 and 2006)

Honors/Awards

• Second place in editorial writing contest at 2008 University Interscholastic League (UIL) State Meet
• State qualifier in UIL editorial writing and ready writing
• Regional awards in UIL editorial writing and ready writing for one and two years, respectively
• Regional qualifier and multiple district awards in one or more of the following for the past three years: news writing, feature writing, headline writing, editorial writing, and ready writing.
• Miss Cooper High School (CHS) nominee (recipient to be announced in May)
• Nominated for Young Women Christian Association (YWCA) Women of Excellence Award 
• Nominated for Principal’s Award (awaiting announcement of recipient)
• Recipient of Daughters of the American Revolution (DAR) Good Citizens Award
• Nominated to attend Girls’ State in 2008
• District 1-3A 2008 Outstanding Setter of the Year award in volleyball
• Coaches’ Most Valuable Player volleyball award senior year
• District 2-3A 2007 Newcomer of the Year award in volleyball
• Coaches’ Newcomer of the Year volleyball award junior year
• Individual class awards including: Algebra II, Spanish, and English
• Citizenship awards for past three years
• National Honor Society homecoming queen nominee
• Voted “Most Scholarly” for senior class Who’s Who?
• Outstanding Performance annual cheerleading award
• National Cheerleaders Association (NCA) All-American cheerleading award for two years

Community/Church Involvement

• Writing articles for the Lubbock Avalanche-Journal newspaper
• New Century Leadership graduate (This is a program that introduces high school juniors to leadership, career, and civic opportunities in the Lubbock community.)
• Participation in church youth group, LifeTeen
• Attended Steubenville youth conference two years

Volunteer Service

• Week long mission trip to San Antonio to work with mentally challenged teens at Mission Road (2006)
• Annual church Jamaica volunteer
• Mini-cheer camp instructor as fundraiser for the Susan G. Komen Foundation
• Susan G. Komen Race for the Cure volunteer
• Ringing Salvation Army bell for past two years
• Fundraising for and promoting American Diabetes Association
• Student Council “Elf Drive” (shopping for Christmas presents for children in needy families)
• Teaching at volleyball camps
• Working Lubbock-Cooper Lion’s Club concession stand at middle school football games

Hobbies/Skills/Talents

• Writing, reading, gymnastics, painting pottery, listening to music, running, spending time with family and friends

Wow! Now that’s a long list, isn’t it? Kind of funny. My list would have read, “played baseball”. LOL. Maybe some of you can relate. But regardless of what you did or didn’t do in high school, I would like to encourage you to take time to give back to your community, particularly the people and the organizations that helped you become who you are today.

At the end of the day, it’s not how much money you make, as almost all hip hop stars and many business executives seem to think. And it’s not how much money you keep, as most financial planners would argue. It’s how much money you give that matters. Because that’s where true joy lies. It’s in the giving.

And if you don’t have money, time counts just as much, if not more. Whatever resources you have, be generous, and let’s all work to make this world a better place.

Until next time, happy (and profitable) investing!

Doug Smith
Real Estate Investor
Founder of MyHouseDeals.com

P.S. Congrats again Amanda! The readers of this blog and I all wish you nothing but the best in college and beyond!

Hello again fellow investor!

Hope you had a nice Memorial Day weekend! I sure did. Plenty of fun in the sun … but also plenty of time to goof around with my best friend Rocky. Click into the image below to view some YouTube videos of Rocky, the “official” myHouseDeals.com mascot. I recorded these videos for my own entertainment, but here’s a sneak peek into our world! My favorite is the one where he’s afraid of the ice. But too bad YouTube disabled the sound on that one. Apparently, my TV was playing some copyrighted song in the background.

And if you haven’t done so yet, be sure to to search for Rocky on this blog, and you’ll find several pics of him … and a few wacky stories too. Enjoy!

Do you have any pics of your pet that you’d like to share? If so, just leave a comment on this blog posting so that all of us can meet your best friend!

Until next time, happy (and profitable) investing!

Doug Smith
Real Estate Investor
Founder of MyHouseDeals.com

Hey folks,

With all the doom and gloom in today’s media, I wanted to take a moment to address the changes we’re seeing in the current real estate market. I honestly believe things aren’t as bad as some people are making it seem. Here are some examples of the positive outlook of the housing market:

Housing Affordability at All-Time Best (Barron’s)
Housing affordability (measured as the percentage of income needed to afford the monthly cost of a median-priced home) reached an all-time best in the first quarter of 2009! Areas with the highest levels of foreclosures showed the largest year-over-year increase in sales in the last quarter - 46% in Arizona, 80% in California, 25% in Florida, and 111% in Nevada.

Homes: Most Affordable in 2 Decades (CNNMoney)
The NAHB is also addressing the increasing affordability of housing. According to the Housing Opportunity Index, 72.5% of all houses sold in the first three months of 2009 were affordable to families earning the national median income of $64,000 (up from 62.4% during the previous quarter). Affordability scores are going up all over the nation.

U.S. MBA Mortgage Applications Index Rose 2.3 Percent Last Week (Bloomberg)
Lower interest rates are contributing to the rise in mortgage applications in the US. Rates for new mortgage rates and refinancing are still very near the all-time record low we saw back in March; this incentive, in addition to more affordable housing, is going to help the slumping real estate market because people are seeing how attractive it is to purchase a home right now.

Signs Of Housing Bottom Building (Investopedia)
Home building companies across the nation are seeing vast improvements in their stock prices (D.R. Horton is up 150% from their 52 week low). Several real estate based Exchange-Traded Funds have appreciated between 25-30% since March. According to this article, “Alan Greenspan, former Federal Reserve chief, recently suggested that the U.S. is ‘at the edge of a major liquidation; in the stock of unsold properties.  If that’s so, we should expect a recovery to be close at hand.”

The Housing Market Hits the Bottom (Huliq)
Almost half of Realtors surveyed by HomeGain.com expect home prices to stop falling and start rising in the next six months. Since the number of foreclosures entering the market have slowed, new home construction is down, and more buyers are now able to buy homes, the inventory of homes on the market is quickly dropping and therefore encouraging buying.

If you are serious about buying investment property, I highly encourage you to do it NOW. You must buy while prices are still low and fear is rampant. Once things start looking too rosy, bargains will be tougher to find. Don’t say I didn’t warn you!

Until next time, happy (and profitable) investing!

Doug Smith
Real Estate Investor
Founder of MyHouseDeals.com