I received this response to one of my posts and I want to share it with you...Again - this is why I dedicate so much of my time to teaching. God has given me a gift and a business I can share with others that can change their lives. Thanks for your support. Each time I read a letter like this, I thank God for the blessing of being part of your life and for you being part of mine...
Dear Dwan,
I am a real estate investor who for several years has done very well. I am a buy and hold investor as well and I, too, enjoy sharing and educating along the way. I had purchased rehabbed and then refinanced. This became my income and artificially produced a very high income I became accustomed too. Last year when the lending business changed overnight, my income was gone...who moved my cheese?
Since then, I have gone back to work in the industry I was in prior to becoming a full time investor. I have to say I love the work and the people, and yet I love the freedom being self employed gave to me and my beautiful wife. Unfortunately, I also had a property manager who has been less than 100% ethical. I have a total of 64 properties, of which 19 are building lots. The majority of my rental are with this one PM company. So I received a double whammy wake up. Instead of me getting my 14-15k per month I began getting 1k-2k per month.
I then began a short sale process to sell my properties. The real estate agent took so long to do their job (third one hired to do the short sale) that the properties are now being foreclosed on. I am reading your book, which I received when I attended a seminar in December. It is renewing my strength and confidence. And now with reading your subject to, and using land trusts to take possession of your rentals, this will be the direction I will head.
I am inspired and re-committed to get back to rebuilding my real estate, and your blog, your book and the stories within have been a direct catalyst.
God Bless you and thank you.
Wow! Thanks for the kind words. I do want to offer some advice right now. If you have 64 properties, sell some of them and pay off the others. Say you were able to sell off 50 - use that money to pay the other 14 off completely. This way you'll still have several rentals to start over with.
I realize that the market is down - but - did you know that you can do your OWN short sales. Call the bank, explain that you have 64 properties that are in foreclosure, get the bank to agree to accept a short sale and list them in the MLS - "subject to a short sale." You should get a ton of offers. If other investors by any of them from you, have them give you some cash at the closing. Use the cash to pay off the others or if there are any with equity, sell them in a package to pay off others.
Put them in smaller packages - maybe 6 or 7 in a group. Advertise them on www.craigslist.com. We have had great response buying and selling on craigslist. If they are bundled together, you might get some interest. Folks, if any of you are stuck with unwanted rentals, try this. You'd be surprised what you can come up with when you need to.
Sadly, markets like these can catch people with their pants down - there are hundreds of thousands of investors who got caught up in the pre-construction craze sitting with 1/2 finished properties that now require a payment. It's unfortunate...
The good news is that you can rebuild and be much better off. Did you know that Henry Ford went bankrupt 7 times? Think about this - started a company ... filed bankruptcy; started another company ... filed bankruptcy; started another company ... filed bankruptcy; started another company ... filed bankruptcy; started yet another company ... filed bankruptcy; started yet another company ... filed bankruptcy; started another company ... now it's getting painful just to read ... filed bankruptcy; started Ford Motor Company and many of you now pay him.
Think about what it must have taken to go bankrupt 7 times! All your friends thinking you are a nut for starting another company, people losing faith in you, you losing faith in yourself...what perseverance it must have taken.
So, when a market like this catches you off-guard, turn lemons into lemonade....
- Sell some of your rentals to pay off others.
- Rent to people in the Section 8 program.
- Use the Section 9 program - people with aids.
- Use programs for people with substance abuse.
- Use program for people just getting out of jail.
- Use special needs housing programs - handicapped people.
There are all sorts of programs where the government will PAY you HUGE amounts of rent. All you have to do is search them out and use them. ALL my tenants are from the Section 8 program. My rent is paid by the government and I am getting rent increases every year. Nothing is vacant and none of my rent went down during this housing market.
I like to think of government programs as "recession proof" rentals. There is no person elected into public office who would sign a bill stopping programs for the poor and handicapped. It will never happen.
Folks, this does not have to be the end of the world - change what you are doing and you will come out on top.
Hope this helped some of you. Rentals can make you very wealthy and can also cause you to lose everything. Even if you have lost everything because of rentals - do what I said the other day - use subject to's to rebuild during this market. You will come out on top.
Buy in places like the Midwest. Especially river front towns. Gambling boats are huge and anyplace along a river will soon have a gambling boat - which means more jobs - which means more hotels - which means more jobs - which means new industry will move in - and so it goes...
Have a Blessed Day,
Dwan
www.youtube.com/dwanbenttwyford
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