With the current economy, we have had to adjust our buying model almost daily. Creativity is the key word today. I know it is a word from the past, but one that applies today. You need to be creative to adjust to all the changing markets. Flexibility is another word I would use to describe how we are working today. One day you may use direct mailings and the next you are looking at Foreclosed homes. You can't set you self up in one part of the market for long and hope to continue to grow.
The two markets that are working for us are Foreclosed house & high equity. Foreclosed because when you live in the foreclosure capital of the world you have to look. After a year of making offers to bank who are trying to sell homes that need $25k in repairs for retail, we are starting to see banks make an effort to move properties. House that we made offers on a couple of months ago only to be rejected are cutting prices to below our original asking price. A side note: I find it interesting that listing agents of these properties do not call investors back that made offers on the properties to see if they still want them. I think I would do that before I lowered the listing price, Hmmmm. Oh well that's just me. So we are going back to properties that we made offers on several months and seeing if the property is still available. If they are we recheck the comps (usually lower) and resubmit a price (usually lower). Our market is still dropping from 2 to 5% each month.
High equity homes can be really fun if the seller can wait for their money. Our definition of high equity is 60% and above (i.e. a house worth $100,000 and the owner has a loan on for no more than $40K). We have purchased many homes from sellers who need to sell but can't find a buyer and will provide owner financing. We frequently get that owner financing at 0% interest. How? By asking them for it. When that happens you can pay a higher price for the property because every payment is paying down principle.
Using this deal structure we frequently put a small 1st Deed of Trust, from a private lender, to pull money out of the property to run our business. The seller is in the 2nd position. Again you ask why would the seller do that, because we asked. So our private lender is in a very secure position, the seller is getting payments on a house they could not sell and we have a property that because of the deal structure we can repackage and offer owner financing to a buyer or a Lease Purchase Option (see previous post) and still make a positive cash flow. Throw in substitution of collateral and you have a sweet deal (But I will save that for another post).
See Ya,
Mike
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Showing posts with label Direct mail. Show all posts
Showing posts with label Direct mail. Show all posts
Wednesday, March 4, 2009
Thursday, January 15, 2009
Real Estate Course: Day Eleven of 30 Day Action Plan
Day 11
Your marketing through direct mail should be getting some calls from sellers. Take those calls live and talk to sellers. Get the information on the property and check for equity. How do you check for equity? Well let’s first define what equity is; equity is the difference between what the market value of the property and what the seller owes. It is not the difference between what the seller thinks its worth and what they owe. We have spent many an hour with sellers educating them on the changing market value. Sometimes it works and sometimes it does not. How do you obtain the market value? The best way is looking at comps from the MLS. That is why we are making contacts with Realtors they are a valuable asset so treat them well. (BTW a Starbucks gift card goes a long way) But if you can’t get a value from a Realtor in time there are several websites I use to get values. Be warned I use these sites as a check and I will frequently take the lowest one. They vary by a wide margin. Check back here on my Blog – I will post a video on the steps I go through for checking comps.
You should also be calling sellers who advertise on craigslist, rental signs in your farm area and properties that look neglected. You are collecting information for the property information sheet so you can check for equity. Work on structuring your deals and write offers. Writing offers is the name of the game and the game runs much smoother with private money.
See Ya,
Mike
- Talk to one person every day about your private money program
- Answering calls
- Talking to sellers
Your marketing through direct mail should be getting some calls from sellers. Take those calls live and talk to sellers. Get the information on the property and check for equity. How do you check for equity? Well let’s first define what equity is; equity is the difference between what the market value of the property and what the seller owes. It is not the difference between what the seller thinks its worth and what they owe. We have spent many an hour with sellers educating them on the changing market value. Sometimes it works and sometimes it does not. How do you obtain the market value? The best way is looking at comps from the MLS. That is why we are making contacts with Realtors they are a valuable asset so treat them well. (BTW a Starbucks gift card goes a long way) But if you can’t get a value from a Realtor in time there are several websites I use to get values. Be warned I use these sites as a check and I will frequently take the lowest one. They vary by a wide margin. Check back here on my Blog – I will post a video on the steps I go through for checking comps.
You should also be calling sellers who advertise on craigslist, rental signs in your farm area and properties that look neglected. You are collecting information for the property information sheet so you can check for equity. Work on structuring your deals and write offers. Writing offers is the name of the game and the game runs much smoother with private money.
See Ya,
Mike
Monday, January 12, 2009
Real Estate Course: Day Eight of 30 Day Action Plan
Day Eight
Day Eight starts exactly like the days before talking to someone on your list of people about private money. Do you see a pattern? If you do not have private money to buy your properties you will run out of money quicker than you can say “Bank Loan.” You will only get so many loans from a bank for buying single-family residences. Private money is absolutely critical to your success.
Study and get to know the process of buying property. Sure you may have purchased your own home once or twice but know you want to look at it from the business side. What are your responsibilities to the process, the seller, the private money lenders and what is the timing you need to have everything in place? Talk to a Title Officer – better yet, take them to lunch and pick their brain on the entire process. Even if you think you know, it will give you an opportunity to talk to one person about private money.
Next go to the county records office and ask how deeds are recorded and what documents you need to buy or sell a property. They will help you at the recorder’s office. The more lost and confused you look the more help you will get, so ham it up. The information can be invaluable when you need to record a document for a property.
Post an ad on Craigslist for your area. This is exposure for your business. In fact, review craigslist under the real estate section and see what others are posting. How is it written? How can you adapt it to what you are doing? I have looked at other items people are selling and how they worded their copy and adapted that to what I what from people – either buyers or sellers. You are posting an ad for motivated sellers. Do not expect much. You are just getting your feet wet. But it is free and you never know.
You should start to get some calls on your direct mail piece you sent out on Day 5. Start talking to sellers! Have a property information sheet and just go down the sheet. Remember, this is an opportunity to build rapport with the seller. They may have to sell their property, but they do not have to sell it to you. People want to do business with someone they know or like. So be friendly and upbeat. Be confident you can help them out of their problem. It helps to stand when you talk to someone on the phone. You will have more energy and that will come through the line. If you have never talked to a seller about their home, you will blow it big time. Just know that now. You will be nervous. You will worry that the seller will know you never purchased a home before, or closed a deal on investment property or that you wear different colored socks or shorts all the time (well maybe not the socks and shorts). You will imagine all kinds of things. By the time you pick-up the phone, the seller will be a cross between Superman and Houdini. Try to relax! This will all go away after you talk to 20 or 30 sellers. By then you will be a master of rapport building on the phone and that will allow you to concentrate on structuring the deal and solving the seller’s problems.
See Ya,
Mike
- Talk to one person every day about your private money program
- Get to know the process: talk to a Title Officer and mortgage broker
- Go to the county recorders office: How docs are recorded
- Post craigslist ad
- Review craigslist ad
- Talk to sellers
Day Eight starts exactly like the days before talking to someone on your list of people about private money. Do you see a pattern? If you do not have private money to buy your properties you will run out of money quicker than you can say “Bank Loan.” You will only get so many loans from a bank for buying single-family residences. Private money is absolutely critical to your success.
Study and get to know the process of buying property. Sure you may have purchased your own home once or twice but know you want to look at it from the business side. What are your responsibilities to the process, the seller, the private money lenders and what is the timing you need to have everything in place? Talk to a Title Officer – better yet, take them to lunch and pick their brain on the entire process. Even if you think you know, it will give you an opportunity to talk to one person about private money.
Next go to the county records office and ask how deeds are recorded and what documents you need to buy or sell a property. They will help you at the recorder’s office. The more lost and confused you look the more help you will get, so ham it up. The information can be invaluable when you need to record a document for a property.
Post an ad on Craigslist for your area. This is exposure for your business. In fact, review craigslist under the real estate section and see what others are posting. How is it written? How can you adapt it to what you are doing? I have looked at other items people are selling and how they worded their copy and adapted that to what I what from people – either buyers or sellers. You are posting an ad for motivated sellers. Do not expect much. You are just getting your feet wet. But it is free and you never know.
You should start to get some calls on your direct mail piece you sent out on Day 5. Start talking to sellers! Have a property information sheet and just go down the sheet. Remember, this is an opportunity to build rapport with the seller. They may have to sell their property, but they do not have to sell it to you. People want to do business with someone they know or like. So be friendly and upbeat. Be confident you can help them out of their problem. It helps to stand when you talk to someone on the phone. You will have more energy and that will come through the line. If you have never talked to a seller about their home, you will blow it big time. Just know that now. You will be nervous. You will worry that the seller will know you never purchased a home before, or closed a deal on investment property or that you wear different colored socks or shorts all the time (well maybe not the socks and shorts). You will imagine all kinds of things. By the time you pick-up the phone, the seller will be a cross between Superman and Houdini. Try to relax! This will all go away after you talk to 20 or 30 sellers. By then you will be a master of rapport building on the phone and that will allow you to concentrate on structuring the deal and solving the seller’s problems.
See Ya,
Mike
Friday, January 9, 2009
Real Estate Course: Day Five of 30 Day Action Plan
Day Five
Day five is the beginning of your search for private money. This will be the most important thing you do in your real estate business. Without money you cannot buy many properties. The bank will only let you buy so many properties and the climate we are in today (December 2008), they may not qualify you for any loans let alone one for a property that can be sold for a profit or has a positive cash flow. From your list you made yesterday, call one person and either let them know about the opportunity you have for them to make a higher rate of return on the phone or over lunch (in person). I tend to do it in person that way I can gauge their reaction and tailor my presentation of the opportunity. If they say no do not cross them off your list a No now does not mean a No later it just means they cannot at the moment.
Next you need to purchase a list of homeowners in your identified farm area. You can do this at www.listsource.com or www.melissadata.com. Both have search criteria you can use to shrink your direct mail to target a specific group of homeowners and sellers in the group. One of the cardinal rules in marketing is to hit the prospect multiple times before you move on. Your budget for your marketing campaign should be large enough to allow you to mail to the home owner at least five times. That will be enough times to give the prospective seller the opportunity to hear your offer.
Now that you have your list and your budget it is time to open your www.USPS.com account. This is a fantastic Web site. You can put together your marketing message on a postcard and mail it to your list of homeowners. In fact, within the span of a couple of hours, you can have a mailing going out to a 1,000 homeowners, amazing. You can also set that mailing to happen again in a month or 60 days or rotate it with another list or two and send it every 90 days. You can also use a virtual marketing company like SalesTeamLive. This company will buy the list in the target area you want and the budget you want and will send out the mailings without fail every month. Send as much or as little as you want, it is “Done for You Marketing.” Just visit www.salesteamlive.com and look at the opportunity.
- Talk to one person everyday about your private money program
- Buy a list of property owners
- Open USPS.com account
Day five is the beginning of your search for private money. This will be the most important thing you do in your real estate business. Without money you cannot buy many properties. The bank will only let you buy so many properties and the climate we are in today (December 2008), they may not qualify you for any loans let alone one for a property that can be sold for a profit or has a positive cash flow. From your list you made yesterday, call one person and either let them know about the opportunity you have for them to make a higher rate of return on the phone or over lunch (in person). I tend to do it in person that way I can gauge their reaction and tailor my presentation of the opportunity. If they say no do not cross them off your list a No now does not mean a No later it just means they cannot at the moment.
Next you need to purchase a list of homeowners in your identified farm area. You can do this at www.listsource.com or www.melissadata.com. Both have search criteria you can use to shrink your direct mail to target a specific group of homeowners and sellers in the group. One of the cardinal rules in marketing is to hit the prospect multiple times before you move on. Your budget for your marketing campaign should be large enough to allow you to mail to the home owner at least five times. That will be enough times to give the prospective seller the opportunity to hear your offer.
Now that you have your list and your budget it is time to open your www.USPS.com account. This is a fantastic Web site. You can put together your marketing message on a postcard and mail it to your list of homeowners. In fact, within the span of a couple of hours, you can have a mailing going out to a 1,000 homeowners, amazing. You can also set that mailing to happen again in a month or 60 days or rotate it with another list or two and send it every 90 days. You can also use a virtual marketing company like SalesTeamLive. This company will buy the list in the target area you want and the budget you want and will send out the mailings without fail every month. Send as much or as little as you want, it is “Done for You Marketing.” Just visit www.salesteamlive.com and look at the opportunity.
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