Kyle Hockersmith - Journal

Forward:

To date, I have purchased the manuals by Dean Graziosi over the internet, based on a IM on TV. I have always been interested in REI but knew that I needed to learn much. I am a resourceful individual, but with the internet as my main source for information, I was swamped and the accuracy of the information is always an issue. I feel I have the best source of information, NOW, and am so excited to begin!

Materials Completed:

Audios:

The audios, DISC 1 & 2. I listened to these in the car on my drives to work and college. I enjoyed these audios because it motivated me to take action. Although the information on these two discs was primarily DG's story and simple self help tips, I feel it was important to know. DG and I have a similar story. I too dreamed of the cool shoes...NIKE...after I finally bought a pair, I realized it was wasted dreams. Today, my dreams are for so much more.

Foreclosures made easy, was good to hear as well. I enjoyed hearing of the success of individuals who had nothing and were able to overcome the obstacle...excuse...of no money to put down.

Manuals:

Tax Sales:

I have read through the tax sales manual in its entirety. The information here excites me greatly. Although there is a initial challenge with this method of investing. The initial challenge is that many states differ in the nature of tax sales. I have overcome this challenge by doing research via internet in my home county. My county does public auction sales at the sheriff's office. If you win the bidding process, you are given a sheriff's deed. You will receive the title to the property after a right of redemption period which varies based on homestead status and type of property such as commercial or residential. I am sure you can use a lawyer to complete paper work with the previous owner in default and expedite the waiting period to obtain title to the property. My initial search in my area found some pretty good deals on undeveloped land. This method of REI really excites me because of the WIN-WIN nature. If the previous owner, who is in default, wishes to exercise his/her right of redemption, they must repay you all of your expenses to date to aquire the sheriff's deed and also interest on said amount of around 25%. I still need to determine the actual percent my county pays but it sure beats 3-5% for CDs and money markets. If the previous owner does not exercise his right of redemption before the period of time allowed expires, you recieve title to the property which you should have equity in which far outweighs the expense of aquisition.

Foreclosures:

I have read through 1/3 of this manual. This subject excites me as well. It seems as though in this market, with a huge number of foreclosures on the market, banks are becoming REIs as well. What I mean is based on my experience and the information from an experience realtor, banks are not selling the REO properties at as great of discounts as before. I quote, "they are holding on to the properties...they are expecting the bailout to help". So, I am working on my problem solving skills...thinking outside of the box...to try to figure out a way to still make money with these properties.

Actual Experience:

I am working on a deal...YES...a deal. I was so excited after listening to the first two audios I was bouncing of the walls. My wife was laughing at me. She has know for some time know...years...that I wanted to do this. I live in a lower rent district and a home became a foreclosure across the street from me. This particular home used to be a rental and the rental price was $900/mo. The home is valued at 100-110k and is one the market for 80-85k. Upon intial investigation, much work is needed: new roof, new skylight, new water heater, new carpet through out, foundation repair, new appliances, new paint int. and ext. My approximate calculations are around 20k in repairs to make the property rentable. I will bid no higher than 65k for the property. Cross my fingers...!

Another excuse for this deal, is that I am only able to get a 80% loan and need to find a way to get the 20% plus closing costs of approximately 6k. I am trying to get my father to loan me the money at 6%. We will see if he agrees. I am also looking at the bottom line and I can foresee a positive cash flow from the property as long as I do not exceed 80k total expense in aquiring and rehabilitating the property. I should net a minimum of $100/mo after all monthly expenses at that aquisition expense.

So we shall see how things proceed. I may keep looking at the market. Seeing as how this is my first deal, I may not realize that there are other good deals out there that will require less work to get rent ready.