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Category Archives: Strategies

What Do You Want? Pain Points

It’s a dog-eat-dog world out there. But these guys are actually a team, working together. What a great idea!

Have you noticed that everyone and their uncle is now a “flipper”? Certainly all the uncles in the Austin area are, and an amazing number of them are buying homes at retail to fix up and resell, which cuts down on our possibilities, because we aren’t retail buyers; it’s not our model.

We’ve been thinking of ideas for ways to help the real estate investment community these days, as part of our process of evaluating our own needs. Maybe we could help all those uncles out, rather than trying to compete?

There are lots of us out there, investors, contractors, project managers, admins…we all have parts of our job we just can’t get to. Maybe if we could make things easier for others (or find our own help, for that matter), we could stand out among the sea of people waving money around.

Now, we have a lot of back end services, thanks to being members of the FortuneBuilders group, and we’re darned glad of that. Their Realeflow system is amazing (almost worth the money of joining the group). But many of you are doing this on your own and not finding yourself able to do all the things you need doing.

One possibility for taking care of your real estate redevelopment needs is to hire virtual assistants. This has worked out GREAT for many people (the link will give you lots of ideas, if you haven’t thought of this yet). We’ve even used them ourselves. Sometimes our relatives can help out with things like writing postcards, like I mentioned yesterday with my sister helping us out. It takes a while to get these kinds of assistants up to speed, but it can help.

But what if your need can’t be met that way, where do you turn?

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What We’re Doing

We are even evaluating VERY tiny homes (this one is at a nursery in Waco).

Wondering what we’re doing right now? We are evaluating houses and looking for leads. Russell has been doing “MLS Monday,” where he sees if there are any hidden gems in the areas where we like to do work. Then we discuss them, and if we agree, make offers. We have to move quickly!

Carol has been using her own system to find potential houses. It’s a race to get them before the many, many other investors do. We were first with Oak Ridge, but not with some others lately. The deal is, you keep trying.

Lee is always running the numbers and checking out the quality of the leads. As we’ve mentioned before, we are being more cautious now, because we are unsure about the market. Any house we get right now will have a couple of exit strategies other than resale, just in case. Lee also evaluates foreclosures and lets us know if he finds anything good.

I also have my own searches I run, plus I evaluate wholesale opportunities I receive. I answer any questions we get on our Facebook pages, as well. The Internet never sleeps.

What We Need

We need YOU, our friends and fans, to be our eyes and ears. Let us know if you see a house that might be good to look into. Tell us if a friend or family member has a property that they would like to sell quickly in its current condition. Most of our projects have come through networking. Let’s network! 512-807-8777!

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Self-Directed IRAs

What is a self-directed IRA?

An IRA (Individual Retirement Account) is used to save for retirement and to facilitate withdrawals after a certain age.  A self-directed IRA (SDIRA) is an account that gives you complete control over your investment choices. Designed for DIY investors, they allow the owner to invest in a much broader range of investment types than a traditional or Roth IRA.  Unlike other IRAs, you’re not limited to stocks, bonds, or mutual funds.  Self-directed IRAs can invest in real estate, private market securities and more, although the IRS still forbids some types of investments including collectibles and life insurance.

Investments of an SDIRA are held in an account administered by a custodian or trustee.  The account itself is managed by the plan owner and can function as a very broad investment portfolio. Therefore, it requires greater initiative and due diligence on the part of the plan owner; the custodian doesn’t vet the investments you undertake.   That’s where the “self-directed” part comes in. It’s your responsibility to conduct the due diligence on the securities and other assets you buy.

Once you find a custodian, you’ll open an account and contribute money to it, just as you would with any other IRA.  One potential blunder to avoid is neglecting the “no self-dealing” rule, which prohibits you from borrowing money from your IRA, selling property to it, and other interactions. Your role must be entirely passive.  Think of your IRA as owning and operating the assets within it. In other words, your IRA, rather than you, must pay someone else to do the work.

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Wisdom…at any age

It takes a lot of effort to squeeze out all this wisdom. But at least I have my weird hair to fall back on.

So, Lee and I are both approaching major decade birthdays. Some folks are hesitant to admit it when they arrive at “late middle age,” like we are. But not me. I am pretty proud to have made it to my 60th year in really good health and with my brain intact. And I would not want to be younger! Sure, fewer things hurt, but wow, did I do some dumb things. I was full of the book learning, but lacked the experience it takes to have real “wisdom.”

Of course, I’m still learning, but now that I am old and wearing purple (hair and glasses, that is), I’m no longer thinking about things in terms of absolutes, I am way less judgmental of people of different backgrounds or ideologies, and challenges I’d avoid at all costs are now just interesting things to try. (Note: I am still not going sky diving.)

My younger readers may be saying to themselves, “Shoot, is getting older the only way to gain wisdom? Do I just have to sit here and marinate for a while?” And if you are a real estate investor, I’m sure you want to be getting deals and building your wealth NOW, if at all possible.

Jump starting wisdom

Whew, it’s okay. Hey, you may be one of those lucky individuals who are just born wise beyond their years. Maybe your deity just handed out wisdom to you, or you learned a LOT in that past life.

Granted, that’s probably not the case with most of us. How can you work to become not just smart, but also wise, starting early? Here are my ideas, from the top of my purple head:

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Predicting the Real Estate Market

1. Base Industry 2. Support Industry 3. Residential 4. Retail

Economic Base Theory holds that basic industries and support industries are requisite for the population growth that spurs residential and retail development.

When I wasn’t watching the rat race or helping prepare for the educational events at the Dallas conference this week, I was taking notes on what the speakers were saying. My biggest takeaway was to learn about economic base theory (EBT). Economist Robert Murray Haig first put forward the theory in 1928. It essentially says that jobs lead the economy both when it is getting stronger and when it is getting weaker. This is something that we all have intuited, but it was good to have this feeling stated overtly and have the underlying science behind it explained.

I won’t go into all that, but I do want to provide the sequence and define some of the terms used in the theory.

EBT holds that development happens in a specific order for specific reasons.

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