What You Missed - January 2010 General Meeting
By Robert Davis

Andy Heller

We started out the new decade with Andy Heller, a National Speaker who is an expert on buying bank-owned properties. He said more millionaires are made via real estate than from any other endeavor, and investors who buy properties in a down market do well. He tries to net a minimum of $25,000 in equity when buying an REO. Andy claims his methods work everywhere, no license is required, and virtually no money is needed. He said we have to buy low, rent smart, and sell high; that’s the strategy of his “Regular Riches” program.

Buying from distressed sellers seems to be a tough job. It requires a lot of time, making many contacts, and it can create a depressing feeling for us. He said the number one reason most people give up on real estate is because of the time involved.

Dealing with bank REO’s is a better way to acquire real estate according to Andy. There is no litigation with REO’s. Banks generally have a lot of money to lend, and investors need a lot of money. He said a great part of all sales in Florida last year were banks selling REO’s. He said we have to talk to the REO managers of banks, and this can be nearly impossible with larger banks. He suggests we start with local or regional banks. We often can buy directly from them. The larger banks use agents to sell their REO’s. The main thing to keep in mind is who we are dealing with, and how much time we have to spend to buy a property. With individual sellers, we have to do a lot of thought about what each seller really wants, and what we can do that will work for each seller. Once we have purchased an REO from a bank, we can go back to the same bank for another and another and deal with the same people. This seems to be a much easier way to acquire properties.

Since now is the time to acquire and hold properties, he suggests it is better to do a lease to own on our homes. He has tenants sign a minimum of a three year lease. His tenants accept responsibility for all repairs as if they owned the property. He says he converts about 25 to 30 percent to buyers eventually. To find tenants he has a 3 line ad he runs, he has a script he uses to interview prospective tenants over the phone before meeting them, and he has a check list for accepting tenants. Being a good property manager is an essential and learned skill. The one thing his tenants have in common is 100 percent are convinced they will buy the home they are renting. He said when a tenant has to give up a property for some reason, they usually have improved the property in some way because they thought they were going to own it.

Of course each property must be evaluated before purchasing. Some properties we may want to just flip to another investor or sell to a retail customer. But with the lease to own, we will probably earn a higher selling price. The current market is depressed. Inflation most likely will go higher in a few years and so housing prices will rise as well as our selling prices. If a tenant’s option time runs out, we can have them do a renewal contract. Andy says he has one tenant who has been in the same rental for nearly two decades. That’s a great tenant! Yes, they could have purchased the house but have chosen not to. What is their reason not to purchase the home? He says he doesn’t know or care as long as they are happy and he is happy. Happiness is a good cash flow and we may attain that be using the strategies and methods Andy Heller teaches in his “Regular Riches” program.

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