ATW Blog Post

By atw

QUESTION AND ANSWER

Thanks to all investors and readers of our blogs that submitted questions. 
Will From Alabama
Question:  I’m currently dealing with a nightmare situation. I have a tenant that is 60 days late and now I’m looking at another 60 days to get them out! Is there anything I can do to hurry the process up?

Answer:
Will I don’t know Alabama’s tenant/eviction Laws so I would suggest you find them out. But I can help you with a few gentle suggestions. First off why did it take 60 days for you to see that the tenant was not paying? Our companies policy is the moment a tenant becomes late we send them a 3 day notice to pay or vacate. Depending on the communication they give us and the reasons for them being late we will allow up to two week s before we push eviction but that is it. Here in Texas it takes us about 21 to 45 days to get someone out so we know that if we start 15 days into them being late the worst were looking at is two months of nonpayment.  Another trick is to offer the tenant an incentive to leave. I have found that telling the non paying to leave the place spotless and in good shape and they will get 500 bucks and you have an eager person ready to leave your unit. (Yes I don’t like to reward bad behavior) but in this case the money and time you save makes it worth it.

Craig from Melbourne Australia
Question:  Here in Melbourne it is very common to own one unit amongst many others is that popular in the states?

Answer: Craig yes here it’s called Condo ownership. Condos can be popular depending on the city and the cities needs. For instance condos tend to be more popular in cities that do not have a wide sprawl to them. For instance in New York City Condos are all the rage. There simply is not a lot of room to expand. But here In San Antonio Condos are here but are not as popular. Simply put if you could buy a small home for the same price as a condo most people would choose the home and that is the case here.

Juwanna from Atlanta
Question: What is your Favorite book on business?
Answer:
Juwanna to be honest I cannot pick just one. (I know that is a copout answer) I will for these purposes keep it to a simple three
Trump the art of the deal
Carnegie How to win friends and influence people (IT IS A BUISNESS BOOK)
Kiyosaki  Prophecy (The first chapter)

ATW Blog Post

By atw

ASK TWO QUESTIONS BEFORE INVESTING

Recently, during one of my Real Estate boot camp events, we had a large number of investors that were going through some investments available for purchase; I had an interesting conversation with an investor that centered on my return policies. For those that aren’t aware of my return policy, no matter what kind of investment we’re doing, I focus predominately on two things.

The first thing is, “When Do I Get My Principal Back?

I’m often shocked that more investors don’t have this mentality. It’s not uncommon for an investor to enter a transaction and put a sizeable amount of principal into an investment and then pretty much forget about it and only focus on returns. To me, this is crazy! One of the things that is on the forefront of my mind before I enter into a transaction is how long does it take for me to get my principal back; and if the timeframe to get my principal back is unreasonably long, I won’t proceed with the transaction. I do this for one reason, Velocity of Money.

The true meaning of “Velocity of Money”

Many investors think of “Velocity of Money” as something that requires them to get loans so that more principal can buy more investments. I do not consider this to be the case. For me, a successful investment is one that returns my principal to me quickly, so I can use that money again and again (of course with a nice, hefty profit attached as well); or it returns my principal to me and once back, more return keeps flowing into me for a long, long time (investors who have been to my boot camps have an idea of what this looks like for me)

The second thing is, “What’s My Net Return of the Investment?”

It’s shocking how many investors decide to enter into an investment based on the gross return provided. I’ve found that the calculated model return used does not hold up in the long run, investments that are stated to be 15%-20% often lose money when ran on a net return model. It’s 100% imperative to only use net return models to look at the strength of an investment.

The conversation had with this particular investor stated that for several years he had invested into CD’S (Certificate of Deposits) the investment principal he had given was $100,000 dollars and his return was often $3,500 over a 12 month period. He was curious as to why his return was 3.5% annually and the return never changed, yet our investment returns changed EVERY year.

Any bank who offers this particular investment wouldn’t want an investor to look at their investment the way I outlined earlier, because the return would not benefit the bank and in this particular investors case, it would take him 28.8 years to get his principal back and once back would of course produce nothing further.

While this is a different way to look at investments, we encourage you to ask yourself the two questions outlined earlier: “When do I get my principle back?” and “What’s my net return of the investment?” that would not only make you more knowledgeable about your investment but it would also be beneficial to you, the person investing the money. Once you have a better understanding about your money and its return, you would be able to watch your portfolio grow stronger and produce much, much more money!

Happy investing and remember always to invest with PASSION!

Brian Payton

ATW Blog Post

By atw

INVEST SUCCESSFULLY IN ANY MARKET | THE GOLDEN RULE

In the current real estate market and in my position as President of ATW Investments Inc., I have the opportunity to see the actions real estate investors take on a day-to-day basis. Lately, I’ve noticed that many investors are shying away from the business. Based on my observations, I must say that the majority of Investors have forgotten the golden rule of investing.

THE GOLDEN RULE IS TO ROLL WITH THE PUNCHES!

Like any good boxer, investors must dodge the punches coming at them. In today’s market of subprime crashes, lenders closing doors and realtors looking for second jobs just to pay the bills, fear is motivating many investors to unload their properties. I’m wondering to myself, “Why am I the only one on the mountain top?” Below are my top three reasons for loving real estate right now:

1. When they stop buying, they start renting!

It’s a proven fact that real estate markets are cyclical. Sometimes they’re up and sometimes they’re down. What people don’t realize is that the market is also like a scale and when one is up, another is down. Well right now with the buyers’ market slowing, the rental market is gaining strength, which of course means higher rents and higher returns.

2. What else will get Uncle Sam off your back?

No matter where the market is, one thing that never changes are the tax breaks investing in real estate can offer. For instance, I may own a home that’s worth 10,000 dollars less than last year, but I still get the depreciation on the house. I still get to write off ALL of the expenses that are associated with the house in ANY way, which can make up many times over for the loss in actual value your property may have had.

3. How you buy matters–always.

Whether you’re in a high market or a low market you should always buy right, which is–AT A DISCOUNT. The truth is, in a market like we are presently in, it is much easier to purchase properties at a discount. Why, you ask? Well the answer is simple. More people are afraid and more people are in foreclosure and that means more people are willing to sell to you at a discount, a DEEP discount. So your job is even easier today than it was a year ago.

Investors–now is a great time to be in real estate! Deep discounts, motivated sellers and a growing number of renters–the only thing missing from this picture is you. And you’re missing a chance to make money! Don’t let fear stop you from overlooking opportunity. Remember the Golden Rule and you can succeed in any market!

ATW Blog Post

By atw

THE SECRET TO GETTING PREMIUM RETURNS

Do you want returns of 3% or 30%?

Investors- I wanted to take a moment to talk about one of the most crucial parts of investing in real estate. Those who already know this secret and practice it well, have and will consistently achieve returns in the 20, 30 and higher percentiles. Those who do not yet know this secret or plan to disregard it, should practice saying your prayers because you’re going to have to bank on your financial planner (also known as glorified sales agent) to get you high returns (which they don’t tell you is about 5%).

So I know what your saying, “What is this secret?”

The answer is: Effective Leadership.

You’re probably saying to yourself at this moment, “Huh? What does leadership have to do with investing?”

The answer is: EVERYTHING!

To succeed in real estate you must have a team (everyone knows this). What they don’t tell you is that you must be an effective leader for your team. If you cannot manage you team, they will either leave you or worse they will stay (which means there not worth anything to you).

Below are the three most common attributes to poor leaders:

1. The “I will do it all myself” guy.

At some point, we’ve all seen this guy, heard of this guy or turned out to be this guy. This guy will do the sheet rock, fix the roof, collect rents and market the asset for resale all by himself. This guy is so smart he can do it all.

The problem is YOU CAN’T DO IT ALL! Not to say you cannot possess the ability to do it all. Even if you could do everything yourself, did you get into investing to do sheetrock? I believe the reason someone would feel this way is because this type of investor is afraid to trust others and has a self-confidence problem. There is no leverage at all in doing it all yourself. When you calculate returns on a project like this, the amount of your time and effort put in needs to be considered and this poor guy has put in way too much of both.

2. The “I don’t know how to do anything” guy.

This is the investor who doesn’t know how to do anything and has no interest in learning at all. This guy knows nothing about materials, timeframe, procedure or cost. You’ll know who this guy is by his glazed-over look and excessive head nodding.

The issue here is this guy garners no respect from his team or for his team. Either the team takes advantage of him or worse just leaves. You have to have a base knowledge of the job to garner respect from your team and respect the work they do. Ignorance is not bliss-it’s just stupidity.

3. The ” My guy will take care of that” guy.

This investor is the one who’s too busy for everything-eating, sleeping, drinking. Surely, he’s too busy to lead a team (which in all reality takes maybe 1 hour a week when done right). This guy expects someone else to take care of managing his team.

Well it’s impossible to get your team to do what YOU need them to do when they’re managing themselves. I suggest that this investor either get involved or seek out a financial planner then pray and hope for those wonderful 3% returns.

The point is you must garner control of your team and manage your team. Your team is what produces the return. The team you build is what makes or breaks your investment. They must respect you and most importantly want to see you succeed. Effective leadership is the only way to make this happen and it is truly what separates average investors from great ones.

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ATW Blog Post
QUESTION AND ANSWER
ATW Blog Post
ASK TWO QUESTIONS BEFORE INVESTING
ATW Blog Post
INVEST SUCCESSFULLY IN ANY MARKET | THE GOLDEN RULE
ATW Blog Post
THE SECRET TO GETTING PREMIUM RETURNS