Investors are playing a vital role in helping the housing market heal. But who are these investors and how are they doing it?
To find out, The Real Estate Guys™ get face to face with the CEO of a distressed property wholesaling company that “re-allocates” over 200 houses a month.
In the radio ER for another heart-stopping episode:
- Your host and doctor of dialog, Robert Helms
- Co-host and bed-pan boy, Russell Gray
- Special guest, Econohomes CEO, Jeff Ball
It seems the last decade has more than its fair share of disasters, including Katrina, the Gulf Oil spill and the Japanese tsunami – to name just a few. And of course, how could we forget the Great American Real Estate Recession, which still seems to be years away from bouncing back.
What they all have in common is the human effort which plays such a vital role in cleaning up and rebuilding – and the fact that most of that “grunt work” goes largely unnoticed by the rest of the world. Still, slowly, over time, because of the tenacity and talent of the individual workers, eventually the rest of the world sees recovery.
Of course, those closest to “ground zero” get to see the progress first – and they know better than anyone how far and how fast the healing is happening.
So when it comes to real estate in America, and the housing market in particular, who’s closest to the action?
You could make the argument that real estate agents or REO portfolio managers for lenders are pretty close. But what about the individual investors who go into a devastated market and begin to buy, repair and re-sell or rent out abandoned and often dilapidated houses? Those brave souls are arguably the closest to the trend since it’s their own initiative, planning and resources that make everything else happen. But no one sees the fruit of their ambition until it shows up later as transactional activity. And because they’re mostly all independent small time operators, they themselves don’t even see the collective trend they are creating.
Fortunately, Econohomes CEO Jeff Ball commissioned a study of over 1,000 individual investors to find out who they are, what they’re doing and where they’re finding inventory. Listen in as Jeff discusses the report and what he sees for the housing market from his perspective. And if you listen all the way through, he’ll tell you how you can get a free copy of the report for yourself!
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We always say that every problems presents one or more opportunities. That sounds really good in a seminar or on the radio, but what about in the real world?
In our continuing quest to find resources to help real estate investors succeed, we came across an entrepreneur who looked at all the carnage in the low end housing market and saw a business opportunity. In fact, we were so impressed that after out first meeting we decided to fly to his office and look at his operation.
While we were there, we fired up the microphones and recorded an interview. Wouldn’t you like to hear it? We thought so!
Behind the microphones on location in Austin, Texas:
• Your host and lead explorer, Robert Helms
• Co-host, financial strategist and travel coordinator, Russell Gray
• Lawyer, entrepreneur, investment banker and CEO, Jeffrey Ball
Anyone who’s every watched a late night TV infomercial has probably heard the terms “REO” and “Wholesale”. And at 2:00 am, the idea of buying bank owned properties for pennies on the dollar SOUNDS easy to do. But anyone who’s every tried knows it’s a whole lot harder than it looks. So even if you’re well educated and adequately capitalized, getting into the deal flow can be elusive. Correction, getting into the GOOD deal flow is elusive.
Of course, most people only look at a problem from their own perspective. If deal flow is a problem for investors, what about the banks who are holding repossessed properties? Our guest points out that the banks have problems too! And he tells why the problem is worse on the lower priced properties.
Wow! If both the buyers (investors like you) and sellers (banks holding repo’d property) have problems, there MUST be an opportunity in there somewhere, right?
Once we understand the problems from both sides, Jeff reveals how he built a business around solving the problems. What’s most exciting is there is a role for individual investors to play. If you know there’s great deals in distressed property, but haven’t figured out a practical way to get into the deal flow, then this show is for you!
How to pay for college can be as important and difficult a decision as selecting which school to attend. With all the changes in the market, can real estate still help?
To school us on this important topic, plus provide a timely warning about an old law that has taken on new relevance in one of the largest real estate markets, we dialed up (for those old enough to remember a dial) one of the smartest attorneys we know!
In the classroom for College Funding with Real Estate 102:
• The Professor of Profit and Your Host, Robert Helms
• Teacher’s Aid and Co-Host, Russell Gray
• Professor Emeritus and the Godfather of Real Estate, Bob Helms
• The Dean of Decision Making, Attorney Jeff Lerman
After a quick stop at the campus coffee shop for some pre-class caffeination, we slid into our school desks behind the golden microphones and Professor Robert Helms calls the class to order.
Like many topics in school, the first thing we discuss is why this topic is relevant. Not everyone has children or wants to send them to college – or maybe all of that is in your rearview mirror. But we soon discover that this type of real estate investing is just a niche like any other – and there’s money to be made!
College is expensive and getting more so every day. And in a soft economy, finding creative ways to pay for some or all of it is more important than ever! As entrepreneurs, we get excited when there’s a problem like this in the market that we can solve – and this one is no different.
Since Jeff Lerman is an “A” student, while the rest of us are…well, not as smart as Jeff…we have him lead our study group. And like a typical “A” student, he starts talking about math and homework. Yes, there’s homework involved! But asking the right questions and doing the math is one of the secrets to success. Jeff takes us through his own real life analysis and the questions and answers he’s finding as he goes through this process himself.
Jeff explains how he uses the cost of on-campus housing as his baseline for doing the investment analysis. How can he get more value for the same cash flow? Great question!
This leads to a discussion about which advisors he calls on to help him. Yes, even advisors have advisors. We discuss who you need and how to work with them.
The very important topic of single family homes versus condominiums comes up, which opens up the door for a lively classroom discussion. Jeff reveals how his initial idea was contradicted when he got into the math. See? It’s true! Do the math and the math will tell you what to do! Of course, you have to do the right math – which includes accounting for all the variables. So we talk through all of this. Good stuff!
As we wind up the discussion of funding college with real estate, Jeff throws in some extra credit work – and tells us what every investor must know about the California Home Equity Sales Contract Act.
Never heard of it? Neither had we. But it poses some real risks to active real estate investors looking to cash in on today’s distressed property bonanza. And even if you’re not actively investing in California, you’d be wise to be aware of this legislation – because often times other states follow California’s lead on consumer protection. This is especially true in the currently distressed property market.
Before we knew it class was over. But as always, we learned a lot and had some fun. Many thanks to Jeff for another enlightening appearance on the show!
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