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All Posts by Carole Ellis

About the Author

Carole Ellis is the host of Real Estate Investing Today, a popular 9-minute daily podcast focused on educating real estate investors about the important topics that will make their investing SAFER, FASTER, and MORE PROFITABLE. She's also the editor of the Bryan Ellis Investing Letter. She has more than a decade's worth of experience in and reporting on the real estate industry and, additionally, has written dozens of courses on the topic. Carole lives in Kennesaw with her husband, Bryan, and four children. She believes wholeheartedly that your best investment is always your OWN education.

Jul 08

the ONE THING that GOOD LENDERS are really looking for | Episode 91

By Carole Ellis | REI Today Podcast

Wouldn’t you like to know the ONE THING that a truly GOOD LENDER looks for that will very nearly GUARANTEE YOU FUNDING for your real estate deals? I got on the phone WITH A HIGHLY INFLUENTIAL REAL ESTATE LENDER to get all the details, and I’ll tell you what she said in today’s episode. I’m Carole Ellis. This is Episode 91.

So wouldn’t you like to know anytime you asked for a loan for a real estate deal that you already basically HAD IT IN THE BAG because you were giving the lender exactly what they are looking for? If you’ve always wondered how real estate money gets from underwriters to YOUR DEALS, then you’re going to love today’s episode. I got on the phone with Heather Dreves, director of funding for Secured Investment Corporation, a real estate lender present in 90 percent of the U.S. that specializes in real estate lending (so you’re not dealing with someone who doesn’t understand your business like you probably have if you ever tried to get funding from a private lender or a mega-bank), to find out exactly what makes her underwriters approve a loan. The answer was surprisingly simple, as you’ll see.

Here’s what Heather told me:

In the end, we’re looking at the “whole story,” she said, noting that a good loan not only will have a borrower with “skin in the transaction,” meaning that the borrower has a vested interest in making the deal work, but will also have some education under their belt. Here’s the interesting thing: just because Heather’s underwriters require education does not mean that if you’re not already a seasoned investor, you can’t get a loan. In fact, Secured Investment Corporation actually has training that they offer to investors to educate new investors about buying properties and rehabbing them. “That way, we know we’re dealing with someone who knows what they’re doing because, well, we know what we’re doing!” Heather told me. I like that: a lender who is going the extra mile to make SURE your deals are good and that they succeed instead of just assuming that they can foreclose on you and still make good if your deal falls through on your end.

I asked Heather about credit as well, since we all know that real estate investors don’t tend to have the greatest credit because so many of us have multiple mortgages, have our credit pulled regularly as part of the financing process, or have more than one project going at once. “We do pull credit on most of our borrowers,” Heather told me, but she added that in her experience, using credit alone to evaluate a borrower is “skewed.” She said, “We’re not looking for a credit SCORE, we’re looking for a willingness to make payments and good payment habits.” That means that if you have late accounts all over the place going back 10 years or so, you may have a problem, but if you have good payment habits and just a so-so credit score, your borrowing “story” as Heather refers to it, is still a good one.

“We call what we do storybook lending,” Heather told me, “because we really want to know the investor’s story. What’s going on, where you came up with the amount of money you need, and what your experience is.” She added that these things don’t all have to be perfect because they are looking at the total picture, the WHOLE STORY, instead of just a few isolated pieces. And here’s an interesting side note, folks: you can see that Heather’s company does some FANTASTIC due diligence on their lending investments, and YOU can benefit from that due diligence in another way if you have money you want to INVEST in lending with someone who clearly takes care of their lenders’ interests as well as their investors’ interests. You can learn more about how to get involved with Heather on the lending side by checking out the show notes in the REI Today Vault. Let’s just say they’re basically the “Amazon.com of real estate lending” when it comes to full service for their lenders…

Now, I think you’re probably starting to see what an INCREDIBLE ADVANTAGE it is to have a real live lender on speed dial, as it were, to talk to you about your deals, your borrowing, and your strategies. This is only the tip of the iceberg, folks. Heather told me SO MUCH MORE than I could ever fit into a single podcast, so I strongly recommend that you read the entire, uncut interview in the REI Today Vault and check out a special REI Today Report on Secured Investment Corporation that lays out, in three EASY POINTS, the three BIGGEST MISTAKES Heather encounters investors making on a DAILY BASIS that cause them to lose out on funding for deals that SHOULD be good ones. We’ve also got an exclusive training from Heather and her colleagues at Secured Investment Corporation in the vault, it’s called “6 Steps to Getting Your Money to Outlive You,” so head over there right now to claim yours at www.rei.today/vault. Don’t delay, and if you’re not yet a member, don’t worry! You can become one right now by texting REITODAY no spaces, no periods to 33444. When you do, I’ll provide you with fast, immediate access to these reports and trainings as well as a lot of other timely, insightful, PRACTICAL information that will help make your investing safer, faster, and more profitable.

And folks, remember, when you join the Vault you join our community, which means you have the opportunity to network with me, my guests, and your fellow listeners across the country. So go ahead right now and text REITODAY no spaces no periods to 33444 or visit us online at www.rei.today/vault.

REI Nation, thanks for listening in and please always remember this:

Your best investment is your own education.

Jul 08

THIS BAD WORD can cost you MAX FINES when your buyers SUE YOU | Episode 90

By Carole Ellis | REI Today Podcast

Wouldn’t you want to know if a certain word that YOU thought was covering your bases in your marketing materials was actually setting you up to pay MAXIMUM FINES AND PENALTIES if your buyers know to sue you over it? I’ll tell you the word and the court case in today’s episode. I’m Carole Ellis. This is Episode 90.

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So a certain word is very popular in real estate marketing materials, and although you’d think it would protect you, in reality it could land you squarely on the losing side of a lawsuit if your buyers opt to sue. A recent case out in California set the precedent when a judge awarded a buyer the maximum amount he requested (and probably would have received more) when the seller of a certain property used the word “approximate” to describe the size of a condo in a listing. While the seller believed that the use of the word approximate covered his bases when it turned out the condo was 78 square feet smaller than advertised, a small claims court judge did not agree and said that the seller made a quote “material misrepresentation about the property’s square footage” end quote and the seller had to pay the buyer exactly what he demanded, $4,999, for the error. The judge would have fined him more but that is all the buyer asked for, erroneously assuming that was the maximum amount he could demand.

Here are the details so you don’t make a similar error:

A homeowner in Glendale, California, paid cash for a condo in the area when he bought it in 2011. Later that year, he discovered that the condo was not, as he had believed and had been advertised, 1,338 square feet, but rather 1,260 square feet. He had not been aware of the discrepancy earlier because he did not have the condo appraised before he made the purchase (he didn’t have to because he paid cash, but I think you guys can maybe see a bit of a lesson here as well…)

Anyway, later in the year a neighbor trying to finance a condo discovered HIS unit was smaller than advertised and so the plaintiff in the case checked out his own unit and discovered a similar issue. He then took the seller, developer Americana, to small claims court over the issue and received the response that square footage in sales materials had been labeled as “approximate” and there was no issue. The judge in the case, however, sided with the plaintiff, who says now he overpaid more than $30,000 for that extra 78 square feet. He could have gotten right at a third of that from small claims court if he’d realized he could ask for it.

The condo owner told the Los Angeles Times that he’s not so upset about the money he didn’t get in his case as he is glad about his “moral victory,” which he says will protect other consumers from the misleading advertising. Want a list of other potentially problematic words that could hurt your marketing? We’ve got in the REI Today Vault at www.rei.today/vault! Not yet a member? Become one! join right now by texting REITODAY no spaces no periods to 33444. When you do, I’ll provide you with fast, immediate access to the report as well as a lot of other timely, insightful, PRACTICAL information that will help make your investing safer, faster, and more profitable.

And folks, remember, when you join the Vault you join our community, which means you have the opportunity to network with me, my guests, and your fellow listeners across the country. So go ahead right now and text REITODAY no spaces no periods to 33444 or visit us online at www.rei.today/vault.

REI Nation, thanks for listening in and please always remember this:

Your best investment is your own education.

 

Jul 05

the TRUTH about FAST-TRACK FORECLOSURES (which state is accelerating RIGHT NOW) | Episode 88

By Carole Ellis | REI Today Podcast

 

Something that SCARES THE PANTS OFF homeowners and makes them HATE INVESTORS is coming our way, and it’s actually GOOD NEWS FOR EVERYONE INVOLVED! I’ll tell you all the details about why there are going to be MORE DEALS and MORE APPRECIATION in a certain state in the second half of 2016 today. I’m Carole Ellis. This is Episode 88.

So, wouldn’t you like to know what state just DRAMATICALLY CHANGED its housing regulations to RAMP UP APPRECIATION and give YOU better access to great deals? Oh, and why it’s actually going to make everyone HATE YOU until the media buzz dies down? I’ll tell you all about it in just a minute, but first, I’d like to mention something that’s smart, REALLY SMART: a certain city in the Midwest. This city actually just won $50 MILLION because it’s so smart about housing and development, and you could directly benefit if you know the details and are involved in real estate investing in the area. Check out all the details in the “Real Estate Investing News” Section on www.rei.today. The title of the report is “Smartest City in the Country Snags $50 Million.” You’ll love what they did to show off their brains for sure.

Now, back to ramping up appreciation, bad media buzz for investors, and how you can take advantage of the situation to turn higher, better profits…

Here’s what’s happening:

The state of OHIO has recently passed legislation to FAST-TRACK FORECLOSURES, something that most people tend to sneer at because it feels like the big bad lenders are going to be throwing people out of their homes with government permission (you remember “foreclosure-gate” in Florida back in the wake of the housing crash and the whole robo-signing fiasco? Well, that’s what most people think of when they fear foreclosure fast track, and who can blame them? That was some dirty, dirty dealing all the way around…)

But in Ohio, the situation is seriously different, and this foreclosure fast track is actually going to be a great move because it is only pushing ABANDONED homes through the system, which means that the faster those properties get foreclosed and then either torn down or renovated and sold, the better property values around them are going to be and the less blight there will be. A lot of states struggle with the issue of whether or not to bite the bullet on foreclosure fast tracking because it has such negative connotations, but with abandoned homes sitting around like zombies for more than two years in Ohio, changing that timeline to six months will make the market a far, far friendlier place for investors, homeowners, and sellers.

Here’s how it works:

A home must not only be in default, but it must show clear signs of abandonment in order to qualify for the program. This could be physical deterioration, disconnected utilities, and, most importantly, NO ONE IN RESIDENCE. Once an inspector has certified the home abandoned, the accelerated foreclosure can begin and that ZOMBIE FORECLOSURE now has a future once more, possibly in YOUR real estate investing portfolio as a renovation or a tear-down, for example, which will be great for local property values as you can imagine!

One of the best things a real estate investor can do is keep an eye out for states where the state government clearly has the markets’ best interests in mind instead of just getting a good spin on a bad situation, because states with GOOD fast-track foreclosure laws actually recover their markets far more quickly after downturns than those that either forego these laws or actually try to legislate AGAINST foreclosures without taking the time to distinguish between a good foreclosure and a bad one. Want to know which states are foreclosure fast-track friendly and which ones are literally out to get their own housing markets thanks to BAD legislation that might sound good in a media bite but really hurts housing? Get the list in the REI Today Vault, it’s labeled with today’s episode number, 88, at www.rei.today/vault. Not yet a member? you can join right now by texting REITODAY no spaces no periods to 33444. When you do, I’ll provide you with fast, immediate access to the report as well as a lot of other timely, insightful, PRACTICAL information that will help make your investing safer, faster, and more profitable.

And folks, remember, when you join the Vault you join our community, which means you have the opportunity to network with me, my guests, and your fellow listeners across the country. So go ahead right now and text REITODAY no spaces no periods to 33444 or visit us online at www.rei.today/vault.

REI Nation, thanks for listening in and please always remember this:

Your best investment is your own education.

Jul 01

the MONSTER EATING HOUSING STOCK in the country’s best markets | Episode 87

By Carole Ellis | REI Today Podcast

There’s a MONSTER out there EATING UP HOUSING in today’s hottest housing markets, making it nearly impossible for homeowners and even investors to participate. This isn’t a rant against BIG REAL ESTATE folks, the monster is actually teeny tiny and, some say, DEADLY. I’ll tell you all about it in today’s episode. I’m Carole Ellis. This is Episode 87.

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There’s a monster out there, and it’s not under your bed. In fact, it very well could be living right out in the open next door. According to a new report, certain NEW factors in real estate are driving homeowners and even RENTERS right out of the equation. This method of investing is working SO WELL for certain investors that certain sectors of city and state governments are actually looking for ways to SHUT IT DOWN before things, according to them, get out of hand. I’ll tell you all details on both sides in just a minute, but first I want to take 30 seconds to mention something that is probably on your mind right now as you hear this scary story: OPTIONS.

In this world we live in, things are constantly changing. And even though real estate always has been and always will be the best, most reliable and effective route to lasting financial security and wealth (and that’s not my opinion, folks, that is general, educated consensus), the real estate world is always changing as well. One thing that doesn’t change, however, is the demand from a growing population for somewhere to LIVE, and you can bet that when real estate gets expensive (and it’s getting expensive, more on that in a minute) owners start looking into their own options, specifically renting. That’s why multifamily real estate is such an attractive, hot topic these days. The sector is ready to boom, and there is SO MUCH MONEY looking to get into commercial properties that simply having the ability to put these deals together can be worth WAY MORE than actually doing half a dozen single-family residential deals. If you like the sound of six-figure profits on FLIPPING commercial buildings, then you understand the value of having options. Get all the details at www.rei.today/IMPORTANT in our free training on this topic. It’s IMPORTANT to have options, so start building them out now with this free training at www.rei.today/IMPORTANT.

Now, let’s get back to that monster living next door, because THAT is a pretty important trend too…Here’s what’s going on:

According to a new report just released by the Housing Conservation Coordinators (that’s HCC to their friends, but I’m pretty sure we’re not friends), Airbnb is eating up as much as 10 percent of housing stock in popular destination cities like New York City. The study focused specifically on the Big Apple, noting that average rent increases have doubled in desirable areas of the city and that there are more than 8,000 FEWER available housing units in the area because investors are buying properties and then listing them on Airbnb instead of renting them to tenants. New York is not the only major city in which this trend is becoming “problematic” for renters; a number of West-Coast cities also are dealing with this as are hot destination spots across the country.

So what’s the big deal? Well, for investors, Airbnb is a big deal in a GOOD way. In fact, investors who own more than one housing unit on Airbnb reportedly pulled in more than $317 million in 2015, and that is with occupancy at only about a third since most Airbnb rentals only are occupied 11 days a month, meaning that there is likely a lot less strain on the facility and the maintenance budget. However, the HCC (I’m going to go ahead and call them that) and local city governments say that this is a big problem because Airbnb is making housing unaffordable to actual residents of the city, and that furthermore, more than half of the listings on Airbnb in New York, at least, violate short-term housing laws that strictly limit time of occupancy for short-term rentals.

Folks, here’s the deal: Airbnb represents HUGE opportunity for investors who can get properties in hot markets and rent and maintain them effectively, but you MUST be aware of local legislation and how friendly any given municipal government is likely to be to your activities. You’ve heard me say it before, guys, the government is NOT your friend! But…you do have to work with them, so you might as well make sure that they can’t ultimately SUE YOU FOR YOUR PROFITS or SHUT YOUR BUSINESS DOWN because it doesn’t suit THEIR NEEDS. Get all the details on where this is happening to Airbnb investors in the case files in the REI Today Vault, and start protecting yourself! Not yet a member? you can join right now by texting REITODAY no spaces no periods to 33444. When you do, I’ll provide you with fast, immediate access to the report as well as a lot of other timely, insightful, PRACTICAL information that will help make your investing safer, faster, and more profitable.

And folks, remember, when you join the Vault you join our community, which means you have the opportunity to network with me, my guests, and your fellow listeners across the country. So go ahead right now and text REITODAY no spaces no periods to 33444 or visit us online at www.rei.today/vault.

REI Nation, thanks for listening in and please always remember this:

Your best investment is your own education.

Jun 30

where housing is LESS AFFORDABLE THAN EVER

By Carole Ellis | News

If you fear that you may never be able to afford a home, then you’re not alone. According to National Association of Realtors (NAR) chief economist Lawrence Yun, “People who are currently renting and want to convert into ownership [are facing] major difficulty” due to quickly-rising home prices and slowly-rising (or stagnant) wages. Yun added, “What happens when the rates begin to rise?” and noted that affordability is the main contributing factor to the relatively slow national housing recovery.

“While housing should be pushing overall economic growth, it is not, due to the meager activity in home construction,” said Diana Olick in response to the same numbers. She noted that rental demand is fueling construction activity, but that the single-family home inventory is still quite tight. Olick also noted that multifamily housing starts are also likely to slow in coming months because the supply for “higher-priced, urban rentals…is now high.”

While the experts certainly don’t have the brightest outlook on the housing market these days, the good news for real estate investors is that there is a ready, willing, and eager market hoping to buy but presently priced out of conventional home purchases. Buying options that allow for creative financing could open up an entirely new buyers’ market for investors willing to work with buyers looking for lease-options, subject-to options, and seller financing.

Lesson Learned:

When the market becomes unaffordable, get creative to get in.

Point to Ponder:

Are you concerned about the lack of affordability in our national housing market?

Thank you for reading REI Today!

Your comments and questions are welcomed below.

 

Jun 30

REALITY TV gives real estate a BAD NAME?

By Carole Ellis | News

According to the St. Louis Better Business Bureau (BBB), reality television personalities sponsoring real estate seminars are a red flag for consumers. The BBB recently published an official warning about these free seminars, where attendees learn basic information about real estate investing in exchange, usually, for their time and contact information. At the events, however, the BBB stated, attendees are asked to “buy advanced education courses that cost up to thousands of dollars.”

Of course, real estate investors understand better than just about anyone how valuable the right knowledge can be when it comes to improving their bottom lines, and that is why you will often find experienced investors and brand new investors side by side at the same events and trainings, working hard to maximize their knowledge, and most investors have no problem paying for education and training that they believe will help them make bigger profits. However, some reality real estate stars are earning themselves a bad name, said the St. Louis BBB, citing Scott Yancy of “Flipping Vegas” in particular. They gave Yancy an “F” rating because buyers reported requesting refunds after their purchases did not, they said, pay off as promised.

We don’t know the specifics of those complaints, but we do think it’s worth noting that Yancy got that failing grade not because he didn’t refund the money (he appears to have done so) but because buyers requested refunds. While investors may “need to understand that these seminars are sales presentations,” as the St. Louis BBB president said so patronizingly, investors also should be aware that paying for a service that is actually delivered (we have no idea what happened and whether it was or not in the Yancy case) is a valuable move that can revolutionize a business.

Lesson Learned:

Listen to your BBB’s warnings, but take them with a grain of salt and use your own common sense!

Point to Ponder:

Do you like attending free real estate seminars?

Thank you for reading REI Today!

Your comments and questions are welcomed below.