Incorporate the wow factor to grab the attention of your target audience

When you first start out in the real estate investing business, you might not know everything there is to know about creating effective online advertisements for your rental or resale properties. It takes time and research to understand when the best time is to post your ad, what key words you should use, and sometimes it even takes a few dud ads (which can cost valuable time and money) to help you get your ads crafted properly.

With online marketing, your property ads—posted on sites like Craigslist, Kijiji and Facebook Marketplace—should utilize the “wow factor” or rather the following 3 must-have elements that veteran real estate investors have identified, which include:

1. Post your ads at peak times: Many new real estate investors think they’ll get a jump on Craigslist by posting their property ad at 6:30am—or even the night before at 11pm. In reality, they are doing their ad a serious injustice. You see, when you post a classified ad, it automatically appears at the very top of the page and pushes older ads down towards the bottom. However, if you place your ad too early in the morning or too late in the evening—when no one is up searching for houses to rent or buy—you risk that your ad will never being seen. Instead, generate maximum exposure by posting around 9am to 10am on Saturday or Sunday when folks are just sitting down to their morning coffee and perusing the want ads. Other ideal times are near lunchtime or shortly after dinner during week days.

2. Get creative with your wording: Property ads always seem to use the same old language, for instance: “Beautiful 2 bedroom house, located on quiet dead end street, with large, fully-fenced backyard. Located within convenient walking distance to downtown. For more info, please contact Bob at 123-456-7899.” What’s wrong with this picture? It’s boring and it doesn’t have the “wow factor” that will cause your audience to take action. Instead, use a unique hook in your headline, for example, “Wow, charming 2 bedroom in the heart of the city!”, and then provide the standard details in the body of your ad.

3. Include a motivating call-to-action: This brings us to number 3—a clear call-to-action—that will spur the reader to respond to your ad first—over dozens of the same old ad. Sure, including Bob’s contact number (like we did above) is a call-to-action, but it’s a lukewarm, run of the mill statement that every ad will make. Instead, try one of these exciting calls-to-action for instant response:

• Affordable family homes are available in your area, contact us at…
• For a free list of foreclosures in your city visit our website at www…
• Email us today for a free listing of luxury homes in your area…
• Call us today to learn more about our first time home buyer’s incentive…
• Contact us today and get your first month at a discount…

Home-based real estate investors make their schedules work for them—not the other way around

1. Make your work schedule work for you – Working for someone else means one thing: your time at work is NOT your own. You have to meet deadlines and do things that don’t contribute to your ultimate success, but the success of the larger company and their bottom line. Just think: how many of those 40-hours a week at the office do you really spend complaining about your job? Stewing about a decision your boss made? Taking a long-hopefully unnoticed lunch just to save your sanity? Texting during a boring business meeting? Surfing Facebook during a conference call? Hating that you spend the majority of your day in an office and not with your family? That’s called wasted time, and it’s your time! When you work for yourself, for example, as a real estate investor with a home business, you’d be surprised how productive you can be when you’re hard at work for 20 hours a week—compared to when you’re half productive for 40 hours a week working for someone else.

2. You can let your freak flag fly – Or in other words, you can feel free to be yourself, no “corporate face” or “corporate monkey suit” necessary. Folks who run home-based businesses can wear the same sweatpants to work whether they’re subcontracting a renovation or booking time to go see a new property. The point is that you suddenly have the freedom to be yourself—meditate every hour, attend a Thai Chi class, dance with your cat to get your creative juices flowing about a new kitchen layout. ..but don’t dare try any of these at your company office or you’ll be ostracized, or worse, fired.

3. You can work from absolutely anywhere – How cool is that? Home-based real estate investors can spend the morning hours returning work calls or booking appointments such as house tours, meetings with contractors or home inspections all from the comfort of their kitchen table with a steaming pot of coffee and a plate of waffles. And if they’re out and about in the afternoon; they can simply pop into a coffee shop and do research on the areas homes from their laptop while having a quick bite to eat. It doesn’t matter if you spend the later afternoon commuting on a bus, train, plane or subways (both the chain restaurant and the thing that takes you from place to place). The point is that you’re not constrained to a physical office space, in a physical corporate building, in a physical city or state. You can be a real estate investor from anywhere, anytime as long as you have a laptop and an internet connection.

4. You can work at doing what you love – And the “love” can be the actual job—for example, if you run a real estate business from home—or it might be that your job allows you to do the flexibility to enjoy the hobbies, people, charity work, health pursuits or money that you love in your off time (keep in mind that many real estate investors get a start renovating houses as a hobby). Regardless, home-based businesses allow you to pursue what you’re passionate about.

5. You can live all funky-like – Meaning that if you do your best work at night, you can start the blueprints for a project renovation at midnight and work into the wee hours of the morning. Or maybe you prefer a split shift, working for 2-hours at a time (and going surfing in between) until you get your work all finished. Regardless, you’re blessed with the ability to live unconventionally. When you work for yourself you’re not bound by typical constraints and this gives you the freedom to live a funky lifestyle. Think about what kind of working situation makes you the happiest and most productive—and go for it!

6. You will save a lot of money to do the things you love – Unlike large companies who spend, spend, spend; you can keep your overhead low. For example, many real estate investors who are just starting out do most of the work themselves rather than hiring labor—such as mudding and taping, laying flooring and painting the homes they own. That’s why we hear about so many successful real estate investment companies that went from $200 in savings and working out of their basement, to making a billion dollars in just a few years. Work from home and have extra money to pay down the mortgage on your property investment, pursue a new hobby that you’ve always dreamed of, or pay for your kids’ education.

7. Live wherever you want – This is kind of the same as working where you want, but many entrepreneurs take this a step further and live where their heart takes them as well. Has your wife always wanted to live in Thailand? Do you think it would be a great cultural experience for your kids to learn Spanish? Well, it’s cheaper to start a business in Thailand or Costa Rica—especially if you’re getting paid USD or Euros. Think of the house you could buy!

8. It’s in your best interest to be healthy – We’ve all heard the doctor say, “Working in an office for 8 hours day at a desk is unhealthy!” In the cubicle corporate world you get bad lighting, uncomfortable chairs, uninspiring wall colors, stress and very little exercise (unless you take the stairs once a day). However, you can make time for exercise, a daily walk, set your own eating schedule and just spend more time feeling and looking good. It’s really a win-win for you and your home-based business because if you feel and look good, you’re confident, more productive and more energetic in your personal and work life.

9. You’re challenged to be creative – Chances are, when you’ve work for someone else in the past, you’ve coasted a bit, flown under the radar and maybe promised yourself that this job was just a temporary stepping-stone. Sound familiar? When you work for the big boss (you) you can’t fly under the radar, you’re forced to stay on top of things and maybe even improvise. This not only adds challenge, excitement and a solid purpose to your work life, it also renders great satisfaction and boosts self-confidence.

10. You can spend more time with those you care about – This might be your kids, your partner or spouse, your larger family, your pet or your friends. Working for yourself gives you the freedom to schedule your workday around your life’s priorities and to focus on what’s truly important.

Have our ‘10 Reasons Why You Must Work for Yourself’ convinced you to start your own home-based business? Discover more about becoming a real estate investor today!

Lifestyles Unlimited, the nationally renowned Education and Mentor Group for Real Estate Investing, congratulates member Ira Gross.

Ira has been selected the 2011 National Apartment Association Independent Owner of the Year, 101-500 units category. Mr. Gross joins a fine group of elite owner-operators from Lifestyles Unlimited who have received this coveted award.

Ira is a member in good standing with Lifestyles for more than six years. During that time, he has successfully purchased with his partners two apartment complexes, one in Stafford, TX and the other in southwest Houston. The first property, 175 units, which was submitted for this award, has had total returns of more than 150% to the partners. Mr. Gross had no prior experience in the apartment business and joined Lifestyles Unlimited for mentoring and guidance from founder Del Walmsley and VP of Acquisition, Broker, David Fantin. Ira also receives support from other members who are owner-operators.

In 2009, Ira was awarded the Houston Apartment Association Independent Owner of the Year.

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Wealth building through real estate investments begins with one house at a time. Often, when you hear people talk about real estate investing they are talking big numbers. You hear about the millions to be made in the market, especially now when everything is on sale. You hear stories about the people who own 50 or more single family homes or bought a package of 10 investment properties. What gets lost in the hype is that the vast majority of these investors began with just one house.

My story, like many successful real estate investors, begins with one small house in Texas. It took me awhile to buy this house. I made lots of offers before one was accepted, and I walked away from a few deals for a variety of reasons most of which had more to do with fear than with the numbers. Finally, one of my mentors looked me in the eye and said, “Buy this house.” So I bought a house that no one else would buy, held my breath (and my stomach because the butterflies were giving me a stomach ache) and signed on the proverbial dotted line.

Every successful investor has a story like this. Most of us are just like you, scared of making a wrong choice, but determined to change the financial future of our families. Finding a mentor you can trust and following their advice makes that first purchase easier and more successful.

Our first rental investment property in Texas was a diamond in the rough. Once cut and polished, we captured $36,000 in equity (based on a recent appraisal for a re-fi in March of 2010) and a cash flow after all costs of $429.00/month. This from a house that no one wanted to buy! I remember my mentor telling me, “Someone lives in every house on this street and someone will live here too. The question is, will you be the one who profits from it?”

The next house came shortly after with an equity capture of $21,000 (based on a re-fi appraisal in February 2011) and $324.00/month cash flow after all expenses.

The third house represents an equity capture of $27,000 and $290/month in cash flow. All of these properties have an ROI (Return on Investment) of 43%/year or more.

A picture is forming, right? For most of us, it is not one big deal that takes us from a J-O-B to retirement. It is taking the first step and following the correct road map that leads you, over a period of about 5 years, to the retirement you have dreamed of. I am not there yet, but I am well on my way and I am already enjoying the benefits of my real estate investments. I quit my J-O-B in January of 2010, in order to focus full time on my real estate related investments, and I am having a blast!

Just these 3 investments represent $84,000 in unrealized capital gains. Every month my renters increase this number by paying my mortgage. In addition, they provide $1043.00 in additional income for my family. Although real estate values may fall some more before they recover, my renters will not move out. They will continue to pay rent each month because they like where they live. I will not sell the properties until I can realize the capital gains I need to move to the next step of my 5 year retirement plan. In addition to my rentals, I have flipped several properties and I am a hard money lender (with an annualized return of 12% last year) helping others to get started in real estate investing.

My properties are the best product at the best price in the neighborhood so they rent quickly. My renters are happy to find such a nice home. The neighbors are delighted to have the blight in the neighborhood transformed into a beautifully updated home, increasing the value of every home in the neighborhood. The vendors who participated in the deal, from appraisers to roofers, are happy to have work in a time of recession. The social value in our model of real estate investing is priceless.

We plan to buy 6 more rental properties before the end of 2011. With a conservative estimate of $15,000 in unrealized capital gain in each property, and a cash flow of $250 a month, this will add over $90,000 to our net worth and $1,500 a month to our cash flow. We are perfectly positioned to sell our investment properties whenever the market recovers and roll that money (tax free through a 1031 exchange) into a multifamily investment that generates a solid return and requires minimal oversight as a passive investor.
We will continue to invest a portion of our funds in Hard Money Loans to others, generating a great return on our investment and providing others with the opportunity to get started in real estate investing.

Because we are teaching our 3 children (ages 20, 19 and 17) the business, we will flip several properties this year in order to help them make the money they need to acquire their own rental properties.

We are one year in to our 5 year retirement plan, and we are doing well. Where are you? Find a mentor you can trust, one who has successfully invested in real estate through up and down markets. Develop your own personal road map from J-O-B to the retirement of your dreams. Take the first step along your personal route to success by buying one property. Then buy another, and another, and another. Wealth building through real estate investments begins with one house at a time!

I began my multi-family investing career in 2002 and never before have I experienced the heavenly buying climate for real estate that currently exists today. Based on my personal research and experience, and that of many others who have been in the market for over 40 years, now is the best time since the late 1980’s to be investing in real estate.

There is no better time that now for you to finally take control of your financial destiny and invest in assets like real estate that provide positive cash flow and massive opportunity for doubling your money every few years. Every market statistic indicates that now is the time to buy. Prices are down, occupancy is up, rents are up, demand for rental housing exceeds supply, employment is up, interest rates are low, financing is available, etc. If you are on the sidelines waiting for the right time, well, THE TIME IS NOW. If you wait any longer, you will miss the boat.

If you still heed the advice of taking your hard-earned money out of your pocket every month and are sending it away to your 401(k), IRA, well-diversified mutual fund, or paying off your house early, check in with yourself and determine how those “investments” are working for you. We have been conditioned by the media, government, financial planners, parents, friends, etc. that a good “investment” is:

• Something that takes money out of your pocket
• Something that you buy and have no control over
• Something that you buy and hope goes up in value

And that you should work until you are 65 or 70, live below your means, stay out of debt, save your money, and accumulate a “nest egg” that you can live off of for the rest of your life after you “retire” from your job. Wow, it all sounds exciting, doesn’t it? No wonder so many people are depressed, on medication, seeing a therapist, etc. There has got to be more to life than this!

“Problems cannot be solved by the same level of thinking that created them.” -Albert Einstein

This quote in my own words is “To get what you never had, you got to do what you’ve never done”. And, for most of us, what you never had is financial freedom (i.e. cash flow that equals or exceeds your living expenses). And, what you have never “done” (up until now) was learning WHY and HOW to invest in real estate and taking ACTION. Simply stated, if you want to be rich, you need to think like the rich and take action like that rich. You see, the rich understand that the best “investments” provide positive cash flow and earn double-digit average annualized returns. The middle class go to work for cash flow, send money away to investments, and pray that they go up in value.

Right now, let’s redefine a good investment as

• Something that puts money into your pocket (positive cash flow)
• Something that you have control over
• Something that goes up in value because of your skill set (vs. buying and praying it goes up)

If you apply this definition to “traditional” investments such as the stock market, mutual funds 401(k)s, IRAs and your primary residence, all of these now fail the test.

Conversely, real estate provides all three. Real Estate provides positive cash flow from the fact that we can buy properties and rent them out for more than our total expenses including debt. We control which properties we buy, how much we pay for them, who finances them, who we rent to, who our partners are, who are contractors are, who manages them, etc. And the higher our skill sets are in locating, evaluating, negotiating, financing, and operating these properties, the more money we make!

Now that you know what makes a good investment, what will you do with that knowledge? Knowledge alone is not power… power is knowledge + action. Always take action after you learn something new. Find a deal. Learn how to evaluate it. Find some partners. Get the money. Make an offer. Find a mentor. All of these are actions that you can do, or commit to do, RIGHT NOW. Go ahead, make that call, send that email, write that contract, ask for the money…that’s right you can do it!

New to Lifestyles Unlimited? Make the commitment today and attend our free introductory real estate investing workshop in your area.

In recent weeks we have seen article after article on the fact that the 401(k) plan has failed the American people. This is one of the greatest examples of how having the wrong map (plan) can devastate your life no matter how smart you are or how hard you work.

You see, millions of Americans where told to scrimp and save their way to retirement. They were told that if they put 6% of their earnings into a 401(k) with the company match of 3% that would be enough along with social security to enjoy their retirement years. They were told that their golden years of retirement would be filled with travel, peace and romance.

You’ve seen the commercials from the different financial planners. The 60 plus couple walking the beach near crystal clear blue water. They show the same couple visiting grand kids across the country or driving Route 66 in a classic convertible. This is what people were told and are expecting out of their golden years.

What a bunch of bull.

After taking this advise and buying this sales pitch, families buckled down and did just what they were told. They scrimped, saved and invested in their 401(k) plan.

What is the end result? The median household headed by a person aged 60 to 62 has less than one-quarter of what is needed to retire and maintain their standard of living after retirement.

As Stephen Covey explained in the “7 Habits of Highly Effective People,” if you work harder, work smarter, care more and just do better than everyone else but you have the wrong map, all you can hope to do is get to the wrong place faster. That is what has happened to Americans.

The question then comes down to “Then what is the right map?” That is easy. With 90% of Americans retiring at or below poverty income levels, only 10% retire wealthy. Guess what the majority of that 10% own. They own income producing businesses and real estate.

That’s right. As my mentor so eloquently put it “It’s the cash flow stupid.” Yes, he said it just like that.

At age 27 I stopped trying to save my way to retirement and started building cash flow. The goal was to get enough cash flow that it met and exceeded my bills. By age 32 I was done. What was the difference? Am I just smarter than everyone else? Do I work harder than everyone else? Do I care more than everyone else? No is the answer to each of those questions. I simply had an effective map.

The best explanation of this concept is in a book by Robert Kiyosaki called “Rich Dad, Poor Dad.” In it he shows you the difference between what the rich are teaching their kids and what the poor and middle class are teaching. It will explain clearly why having the right map is of paramount importance in every aspect of your life.

Go out today and just try a new concept. Build cash flow not savings. See what a difference it will make in 5 years or less. Make a goal of generating enough passive investment income that it meets and exceeds all of you bills.

If you’re not yet a member of Lifestyles Unlimited. Sign up for our Free Workshop to see if real estate investing is the right map for you.

Have you ever wondered whether or not real estate investing is right for you? This is actually a level 2 inquiry, which means that you’ve already very likely overcome the basic question about whether building passive income streams with real estate is possible in the first place. Maybe you have heard the Lifestyles Unlimited radio programs for awhile or you’ve noticed that wherever you are you are surrounded by rental real estate; but however you got here you’ve arrived at this state of mind and you now believe that it works.

No, you are more likely in a different place, believing that real estate works but not sure if you have “what it takes” or if your “situation” might be holding you back… perhaps contemplating, “Is it possible for me?” It is my objective to persuade you that it most certainly is possible for you to succeed with real estate investing, and in fact urge you to summon from your gut some courage and take a step (or if you are really special, a leap) toward your first deal. In this respect your particular circumstances do not matter because there is a next step for everyone regardless of their situation. Even the people with stellar credit reports and fat bank accounts have to take a next step that is just as nerve-racking, if not more-so with presumably more to lose, than those of us who begin with little to our names. So please go through this article and ask yourself if the intangibles are already in place, because I for one am quite certain that they are.

The primary indicator that you aren’t ready is this: You don’t care about other people. This isn’t some hokey, touchy-feely sentiment about social justice either. This is the basic premise behind capitalism and has been mentioned on this website before. All honest business is about effectively helping and serving other people. Your real estate business MUST focus on this idea not just to thrive, but even to survive. Ken Blanchard in his book “Big Bucks” wrote that the first test that you must pass in order to earn substantially is the test of joy. It is joy that will sustain your ambition and I think the best place to find joy is to find how you can make a difference. Isn’t providing clean and functional homes that hard working families can afford a joyful mission?

Another warning sign that you aren’t ready to be a real estate investor is that you are indecisive. Now we certainly aren’t suggesting that you go sign off on a property without discretion or proper evaluation. However, let’s consider the usual scenario. You have negotiated an offer to purchase an investment property at a price that is $25,000 below what other similar properties in the subject property’s exact subdivision sold for even after rehab and projects around a 20% return on just cash flow. Additionally, your real estate agent has secured a 10 day period for zero consideration during which you will complete your due diligence by obtaining inspections, confirming contractor estimates, and additional contingencies for bank appraisals, surveys, and title reports. If this typical investor transaction falls in your lap and you can’t make a GO decision, … then you may as well pack your bags and move out wimp.

On the other hand, if getting control of this deal with no risk sounds like a no-brainer to you, then start looking to build your build your team. Yes, even though real estate investing isn’t rocket science, you will need help. Even my rocket scientist clients seek guidance for their real estate purchases, which leads to the third warning sign that you aren’t ready … you don’t think you need any help. Lifestyles mentor Robert Hammond recently stated on a radio program that this is the most important ingredient of a professional real estate investor’s paradigm, and he continually pursues mentors. This is especially notable because owns scores of houses, and could very easily yield to his ego and start believing that he has nothing else to learn. Keeping an open mind may sound obvious, but when you honestly apply that standard to yourself instead of just reading about a third party, the task becomes substantially more difficult. It can be tough to balance confidence with humility, but as is written in Proverbs, the best business book every written, “Fools are headstrong and do what they like; wise people take advice.”

I urge you to review this article once more and ponder these three warning signs for a just a moment. And I say just a moment because I don’t think you’ll need more than that to conclude that you do care, and that you can be both bold and humble at the same time. Once that is done the only question left is: Will you find the courage take the next step? In other words, will you execute? That might mean calling your real estate agent or mortgage professional. It definitely means calling your mentor. So will you?

Whether you are new to Lifestyles and haven’t purchased a property before, or are an active investor with multiple properties, the information contained in this document will save you money. In some instances, the savings will be several thousand dollars. I have personally saved tens of thousands of dollars and never hired a property tax consulting firm (which can charge up to 50% of the reduced amount), keeping all of the savings for myself. Some reductions were so significant, they effectively lowered the purchase price of the property. If this sounds like something beneficial, you may want to save this article for future reference. Before addressing the details, let me begin with an overview.

We have all heard the old saying in real estate, “You make your money when you buy” (meaning if you buy it right, it should return a profit). Those of us in the rental business know that in order to maintain an ongoing profitable return, we need to maximize rent and minimize expenses. By expenses, I am referring to any expenses related to the property itself, including, but not limited to, maintenance and repair costs (including capitalized improvements), hazard and liability insurance premiums, and county property taxes.

By following the Lifestyles approach of making your property the best product at the best price, you should be able to demand the maximum rent the market will bear. If you rehab the property correctly (meaning don’t cut corners), use quality, durable materials, you will generally keep your maintenance and repair costs to a minimum. By using a Lifestyles insurance vendor that specializes in rental properties, you can be assured of getting the best market rate for the coverage you require. Most Lifestyles members that I have worked with over the years are already doing these things. What most Lifestyles members are not doing is reducing their property taxes. The savings here should not be overlooked, as they can significantly increase both monthly cash flow, and overall cash on cash return, with just a couple of hours of work.

Let’s look at an example:

Say you purchased a rent house that has a current county tax assessed value of $100,000, with a county tax rate of 2.67% (about the average tax rate in the DFW metroplex). This gives you a tax amount of about $2,670/yr. If you purchased this property for $50,000 because it needed $20,000 in repairs, shouldn’t the tax value reflect the property in its purchased condition? Of course it should, but in most cases it will not. Why? Most property owners do not protest their property taxes.

If you protested the property taxes in the prior example and reduced the tax assessed value to the purchase price, that would lower the tax assessed value to $50,000, and you would have a tax amount of $1,335, or one half of the current tax amount. Let’s say the market rent for this house is $1,000/mo, principal and interest payments are $426/mo (based on a loan amount of $75,000, interest rate of 5.5%, on a 30 year note), and insurance of $50/mo ($600 per year).

Your positive cash flow before protesting would be $301.50. After protesting, it increases to $412.75. Your monthly cash flow has now increased by $111.25/mo! If you brought $15,000 as your down payment, your cash on cash return goes from 24% to 33%! For those of you who are new to protesting property taxes, let me start with the property tax timeline.

The Tax Season

Each April, in Texas, the county appraisal districts send the tax assessed value for the current year in a statement to each property owner. These are usually received no later than May 1st. If you own property, you have probably received this in the mail. Between May 1st and May 31st, property owners can set an appointment with the appraisal district (usually a meeting between you and an appraiser) to protest the value of their property. Just a note – the line gets really long the closer you get to the May 31st deadline.

If you purchased a property between January 1st and June 1st of the current year (or already own a property from a prior year), you can protest your property taxes during May. If you happen to close on a property at the end of May you can still go to the appraisal district and file that day (you will get a hearing in the June/July timeframe, if no one is available to see you immediately).

Effective Tax Protesting for Purchases Between January 1st and June 1st Upon closing and funding, call your county appraisal district (or go online) and see what their process is for protesting. If you closed in January or February, you will probably receive your tax statement in the mail, as this should be enough time for them to process your transaction. The procedures for protesting are listed on the tax statement. Most appraisal districts will have you make an appointment to see an appraiser in person to protest the value sometime during May. Prior to meeting with an appraiser, you need to have the following 4 items ready to make your case:

• Settlement statement (HUD-1) from the closing. This shows the appraiser
  what you paid for the property. A copy is fine as they do not need your original.
• Photos of the property that the appraiser can keep for their file. You will
  want to use pre-rehab photos. The uglier, the better. This illustrates why you
  were able to purchase at such a low price (“Mr. Appraiser, this property was a
  disaster when I bought it. Just look at these photos….”)
• Invoices of work performed. This shows the amount of work needed to get
  the property in livable condition. If you have an invoice(s), this helps prove your
  case as it shows how much you paid for work performed.
• Sold comparables (comps) in the subject’s area. You will need these for a
  current understanding of the market in your subject’s area. The tax appraiser
  will certainly be looking at them online, when making a decision on your value. However, they will not be weighted as heavily as the other items if your property needed significant work. If you are not familiar with how to get effective comparables, you need to get with a realtor or appraiser to help you. Remember, you need sold comparables, not active, pending, cancelled, etc.

At your protest appointment, your objective should be to get the tax assessed value lowered to the purchase price of the property (you cannot go lower than the purchase price). In most cases, if the property needed significant work, the purchase price is justifiable for the new assessed value. My advice is don’t talk too much. Less is more in these situations and the appraiser knows why you are there. Merely stating that you want the value lowered to a specific amount due to condition, will suffice. Submitting your HUD-1, ugly photos and/or invoices of work performed to the appraiser, will illustrate that you are prepared and will provide appropriate data to make your case. The appraiser (in most appraisal districts, and most situations)2 will lower the value, maybe not to the purchase price, but to some lower assessed value.

Take what you can get. However, if you are not happy and feel that you were not treated fairly, you can refuse to sign the adjusted value form, and take your case to the Appraisal Review Board (ARB). This is a separate hearing that has 3 members of the community and 1 to 2 appraisers. These hearings are by appointment only and can be very effective if you have the time and a case worth appealing. I have had success before the ARB in Dallas County and was able to recover $1,700 in property taxes (it took 2 1/2 hours out of my day, 15 minutes of which was the hearing itself). If this hearing does not go well, you can hire an attorney and sue the board. I know people who have done this and were successful (they were protesting several properties and could justify the legal expense).

Effective Tax Protesting for Property Acquired in a Previous Year In discussing “previous year”, I mean any acquisition date where a tax protest deadline has passed. If this scenario applies to you, your settlement statement may not have much significance, as it did in the previous section. If the subject property is in good condition, there is no need for photos or invoices of work performed. Sold comps will be the primary tool for building your case to protest the value.

When using sold comps it is important that you are comparing your property to other properties in similar condition, in the same area. Most likely this will mean removing foreclosures and other properties that need significant work. Use comps that sold for a lower value in the same condition. If your property has been overvalued, the tax appraiser will, in most cases, lower it to something more reasonable.

One thing to note is the appraisal district is required to provide you with the data they are using to assess your property. If you feel you need it, you should go through their process to get it. This will show you the comps they are using, along with any other data they have, which you can use for your pre-protest research. Also, keep in mind that “areas” can differ in the appraisal district world, to areas in the real world. This may sound strange, but it is a fact. You can have homes built 30 years apart, with different materials, in a completely different subdivision, yet the appraisal district is comparing your older property to a newer one (still common in certain areas of Dallas County). When this is the case, you can more easily make the argument, as you have their data to use against them.

Protesting Property Taxes After the Deadline

A few years ago, I learned something that saved me thousands of dollars. I had several rental properties that I had purchased during the summer, well after the May 31st protest deadline. What I discovered, was that I could still protest my taxes for the entire year under a certain section of the Texas Tax Code, as long as certain criteria was met. For any purchase after May 31st and before the end of the year, you can file your protest under the Texas Tax Code – Section 25.25(d)3 if it meets the following criteria:

• Property was purchased after the May 31st protest deadline
• The tax assessed value is more than 1/3 of the corrected value
• The protest is filed on or before January 31st of the next calendar year

If your property meets these criteria, you need to contact the appropriate appraisal district (or go online) and determine what their process is for protesting under 25.25(d). In Dallas County, you can write a short letter addressed to the chairman of the ARB, stating that you wish to protest under 25.25(d), as the tax assessed value of the property is > 33% of your purchase price. Be sure to include your settlement statement (HUD-1) to show proof of purchase price.

You can also send photos and invoices of work performed. You will be sent a hearing notification with a date and time to appear. Everything else in the process is the same. Be sure to bring the settlement statement, photos, invoice(s) (and even some sold comps in certain instances). You will probably not need all of these items, but it is always better to be prepared. If you are successful, your taxes will be lowered and there will be a 10% penalty
assessed since it is after the May 31st deadline. So, in our example, your penalty will be $133.50. Still worth the effort….

Over the years, I have had tremendous success getting values lowered to the purchase price, both during the protest window, through the 25.25(d) process, and before the Appraisal Review Board. Recently, I have had tax appraisers call me (from DCAD) following a protest letter sent, where they lowered the tax assessed value over the phone. In these cases, I sent a letter, HUD-1, photos and invoices. It appears they are now looking to save everyone time in the process. If you give them enough information, you will probably receive a similar experience.

As real estate investors, we all want the maximum return we can get from each property. I would highly encourage you to protest every property you purchase. Even protesting just one property can make a huge difference in your cash flow. If you have multiple properties the savings can literally be thousands of dollars. I look forward to hearing about your experiences. If you have any questions, feel free to give me a call. I look forward to assisting Lifestyles members in any way I can.

Mike Hanna is the managing partner of Investmark Mortgage, LLC. Investmark Mortgage is a leading provider of hard money financing in the DFW metroplex, and was recently named the Lifestyles Unlimited Vendor of the Month.

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In the March 2011 edition of success magazine a short article written by Mel Robbins – a syndicated radio host, TV Commentator and relationship expert – stopped me in my tracks. The article is titled “Lean IN” and is worth the price of the magazine.

It begins with the story of a man whose life has fallen apart and he has one of those light bulb moments, realizing that something has to change. He begins with his biggest fear, the fear of heights and finds himself in an airplane strapped to a sky diving instructor. The greatest realization of his life comes when he does not jump from the plane, but rather “leans IN” to the open sky.

Mel Robbins points out, “You think you have to figure it all out before you take a step. Instead, lean in…What matters is that you push through your feelings and start moving. Take action and lean in toward what you want without regard for how it will look or turn out. You don’t need to take a massive leap. All you need to do is “lean IN” and see what happens next. Make that tiny push, and then let gravity pull you through.”

I am a massive action kind of person. When I do something I want to do it big and all at once. This small article was a light bulb moment for me. Not just for my own life, but also for the way I mentor others. I like being fearless. When I am fearless I feel strong, and that feels good. The problem is that being fearless takes massive amounts of energy and control. When life throws me a curve ball, the struggle to keep my footing and continue to move forward is epic. Then, I am in danger of losing all momentum.

Something I have always known stands out now as perhaps the singular most important component of success, the ability to “lean IN”, to take small incremental actions through thick and thin that keep you moving consistently toward your goals. You don’t have to have the whole road mapped out. You don’t have to rally all your resources, talents and desires BEFORE you take the first step. All you have to do is determine the general direction you need to go and “lean IN.”

When I mentor others regarding real estate investing, I focus on getting them to buy that first property because I know that once they buy the first rental they will be hooked and buying the next will be easier and the next after that even easier. The problem is that it can take months, even years to mentor someone to that first purchase. Now I see that the most helpful thing I can do for those who come to me for mentoring is to teach them how to “lean IN.”

“Lean IN” to Real Estate Investing:

Put a networking date on your calendar

Don’t let anything prevent you from showing up to that event. If you get anxious and uneasy after the first 15 minutes you can leave; but make yourself get dressed, get in the car, drive, park, walk through the door, put on your name badge and say hello to at least 3 people first. Before you go, make a short list of 5 conversation starter questions. Commit to using 3 of them before you give yourself permission to leave the event. Smile and try to look like you are enjoying yourself! Gravity will do the rest. The people you talk to will appreciate your ability to get the conversation started and the night will flow.

Invest In Yourself

What one thing could you learn to help you be successful as a real estate investor? Look for seminars or topical meetings on that area and “lean IN.” Arrive a little early and see if you can talk to 3 people before the event begins. Take notes and ask questions. There are no stupid questions, for every question that gets asked there are dozens of other people who had the same question but were afraid to raise their hand. Stay after and talk with the speakers or just listen to the questions other people are asking and the answers. Read your notes again the following day, and share what you learned with someone else. This reinforces your new found knowledge and increases the probability that you will take further action.

Learn How To Evaluate Properties

Attend classes, work with a mentor, attend a road trip so you can walk properties with experts. The Lifestyles Unlimited Education and Mentoring Program provides easy access to all these activities. If you are already a member take a look at the online calendar and plan to attend the next event. If you are not a member, sign up for a free workshop and commit to attending. “lean IN”, it will change your life!

The gentleman we discussed at the beginning of this article took massive action to overcome his fear of heights only to realize that all he needed to do to have everything he wants out of life is to “lean IN”. None of us can sustain the massive action necessary to overcome all our fears. We can ALL realize the lifestyle we dream of, turning those dreams into reality, by leaning IN” every day, taking the small steps along the road to real estate investing success!