Where To Find Foreclosed Properties

There are many homes for sale that are classified as bank owned or government owned.  This has crested many sites that list these homes.  Some of the sites are run by government agencies and others are private for profit sites.  They are both worth looking into.  This way you have many more choices.

www.ocwen.com                                                                         

http://www.homesales.gov/homesales/mainAction.do   

www.foreclosure.com

www.resales.usda.gov

http://www.buybankhomes.com/

http://www.firstpreston.com/

http://www.hud.gov/homes/index.cfm

http://www.homesteps.com/hm01_1featuresearch.htm

http://reosearch.fanniemae.com/reosearch/

http://www.lendersreo.com/

http://www.countrywide.com/purchase/f_reo.asp

http://www.pasreo.com/pasreo/public/propertySearch.do

http://reosearch.fanniemae.com/reosearch/ReoSearch.jsp

How to Sell Your Properties Using Lease-Options

How to Sell Your Properties Using Lease-Options

Selling one of your properties on a lease-option gives you the biggest benefits of renters and buyers without the downsides that normally go along with selling or renting out your property.

When you lease-option your property you get the best parts of having a renter: monthly streams of cash-flow, tax benefits of maintaining ownership, loan amortization, and a healthy chunk of the future appreciation. You get all this without having to deal with the headaches and hassles of traditional renters.

When you lease-option your property you get the best parts of having a buyer: a large chunk of money as an up-front option payment, someone else who will take care of the day-to-day maintenance of the property, and a large profit when your buyer gets a new loan on the property and cashes you out.

Here are the four steps to sell your property using a lease-option:

Step One: Spread the word

There are three magic words to help you find your tenant-buyer for your property. These words go in bold, large print in all your advertising for the property. They are: Rent to Own. People instantly know what “rent to own” means and they also know they want it.

The two best places to invest in advertising your properties are your local newspaper and in signs around your property. Place a small classified ad in the “For Sale” section of your local paper. Also put a large “Rent to Own” sign in the front yard of the property. And put twenty to thirty signs around the neighborhood on all the major access roads leading past the property. These signs can be professionally printed, but chances are they won’t last long so do them as cheaply as possible. I have found that handmade signs on inexpensive posterboard work as well as the more expensive signs.

Both your classified ad and your signs should have the phone number of a voice mail box where you have recorded a 60-90 second message singing all the biggest benefits of the property and how easy the rent to own program makes for them to be able to own it. Use your voice mail as a screening device-ask callers how much money they have to work with as a down payment. When you run a “rent to own” ad your biggest problem will be getting too many calls! By screening callers through a voicemail box you will spend your time calling back only those who have a healthy sized chunk of cash to give you as their up-front option payment.

Step Two: Calling back prospective tenant-buyers to set up a group showing

Have you ever been faced with a prospective buyer who just won’t make up his mind about whether he wants the property or not? Or have you ever raced over to one of your units to show it to someone who just didn’t show up? There is a better way of doing it-group showings.

Whenever you can get several prospective tenant-buyers all to look at the property at the same time your property just became more attractive. You are creating a competitive environment and that means the person who wants the property needs to act fast or they will lose out to someone else. This competition will be your biggest aide to closing the deal.

The biggest mistake you can make when you are calling back the people who left their name and phone number on your property voice mail box is to invite them to a “showing” for the property. Instead set a definite “appointment” with each person to meet them at the property to have them take a look. Simply set each individual appointment all at the same time! This way not only are you creating that competitive situation, but you are also protecting your time since if two out of the nine people scheduled to meet you don’t show you still have seven people to show the property to.

Step Three: Get them to fill out an application on the spot

Some people won’t want to hurt your feelings by saying no. Instead they will ask for an application and tell you they will send it in later. Don’t fall for this common pitfall. Simply tell them that if they are really serious about the property then they should take a few minutes and fill it in right there. Also make sure you charge $10-20 for each application. Not only will this pay for your credit check of each applicant, but it will also screen out those last few people who are not truly serious about the property.

Step Four: Choose the best person and call to give them the good news

Speed is of the essence here. If you have someone who wants to have the property who has a healthy option payment and good monthly income I recommend that you get a non-refundable deposit from them to hold their position to rent to own your property. You should collect this deposit as soon as possible. Of course you will make this agreement subject your satisfactory approval of their application (if they don’t pass your evaluation your deposit agreement should say you will return their deposit to them and cancel the agreement.)

This is how you market your property as a “Rent to Own” property. Next month I’ll explain how you can get above market prices and cash-flow for your properties. You’ll learn exactly how to price your “rent to own” property so it sells fast and makes you a large profit.

Wealth Without Risk

Wealth Without Risk
by Peter Conti

Would you like to learn the insider secret about how you can create wealth without risk in real estate? Actually there are three secrets, and you are going to learn all three powerful wealth-creating strategies right now.

The benefits to you once you have mastered these concepts are clear: less risk (or even zero risk!) in the deals you do and the confidence to go out and buy more property. How? Because once you learn how to invest risk free, you’ll be making a lot more offers and a lot more money. It is that simple.

Remember, the good deals go to those who take immediate action. The best way to motivate yourself to take decisive and intelligent action is to invest with the absolute minimum risk. Here are the three secrets that will allow you to do exactly that.

Secret #1: Make all your offers without risk.

You are going to find motivated sellers who will allow you to control their property with 3 percent or less as a down payment. You can do this by either using a lease purchase or by getting the owner to carry back financing on the home. In a moment you’ll see why this is such a powerful way to limit your risk, but first I want to share with you one of the most under-used yet powerful tools you have as an investor: the “subject to…” clause.

From now on in all the offers you make you are going to insert a subject to clause. This means that your offer is contingent upon some other factor such as a final inspection, or a partner’s approval. It isn’t so important what the condition is as long as it allows you to write your offer and tie up a property while at the same time you have an escape hatch from the deal.

Of course you will treat the seller with respect and make your final decision about the property in a timely fashion, but because you have locked in your deal with the seller while maintaining the right to walk-away, you can sign up a deal with total confidence. After all, if after you do your due
diligence the deal doesn’t look promising, you can pass on it. Can you see what a powerful position this puts you in.

Secret #2: Make sure the deal is profitable BEFORE you go through with it.

Once you’ve signed up and locked in your deal, it’s time for you to do your due diligence and to discover whether the deal is going to be profitable or not and also how you are going to get out of the property.

Planning your exit strategy before you get into a property is the simplest and easiest way to make sure that you won’t get stuck with a property you don’t know what to do with. This is the second step of investing without risk.

The best way I’ve found to map out an exit strategy is to find an end buyer before I commit to the property. It’s easy to do if you offer the property as a “Rent to Own” home (i.e. finding a tenant-buyer to lease purchase the home.) Because you won’t do a deal until you already have a signed agreement with the end buyer you have guaranteed profits without risk when you do the deal.

Secret #3: Keep your up-front investment on any deal to zero.

Of course you realize that the less money you have in a deal up-front the less risk you have with the deal. Therefore you will always negotiate to have zero up-front money in a deal. However, you may need to offer some sort of earnest money to help the seller feel like you are a serious buyer. What you’ll do is be careful to only give things as earnest money that you fully control such as:

Promissory note, due at closing

Promissory note, due after all contingencies are removed

Check to be cashed at closing

Check to be cashed after all contingencies are removed

Cash in small amount ($10.00 to $100.00)

All of these ideas keep your up-front money down. Remember, you can bring money to closing (although you should still negotiate to keep that to an absolute minimum too) because by then you already have the deal profitably passed on to an end buyer.

I do this by finding a tenant-buyer before I go through with a deal. I collect 3%-5% of the property as up-front option money from them. Once I have this in hand I feel good about going ahead with a deal.

Investing this way is almost like being on that old game show Let’s Make a Deal and sneaking backstage to look at what really is behind the three doors. Obviously when you see the old goat behind door number one and the $25,000 cash behind door number three your decision is pretty easy. That’s what applying these concepts to your investing will do for you. They will allow you to know exactly which deals are money-makers and which to walk away from. This is the essence of creating wealth without risk.

How to Buy Apartment Buildings With Nothing Down

How to Buy Apartment Buildings With Nothing Down
by Peter Conti

In order to buy apartment buildings with nothing down you’ll need to take three steps. Step one is the same as buying a nice home with nothing down. You’ll need to find a motivated seller who will be open to your creative offer.

We heard about Carrie from a real estate agent named Tim that we had established a relationship with. Tim was out fishing for listings when he found a 24 unit apartment building owned by a gal named Carrie who needed some help.

Carrie had worked hard all of her adult life looking after and managing this 24 unit apartment building that she owned. As she cleaned, fixed, and rented the units over the years I’m sure she had a good feeling of comfort knowing that all of her hard work would allow the apartment building to support her in her old age.

What an unpleasant surprise was in store for Carrie. At the time that Tim, the real estate agent heard about her, she was 88 years old and living in California with her children. She had come down with Alzheimer’s disease and needed to go into a nursing home where she could receive special care. The problem was that this apartment building wasn’t producing enough money to pay for the nursing home. Despite hiring three different management companies in three years, the building was only making about $2,000 a month after paying the management company and all of the expenses.

Tim offered to list the property and sell it for Carrie’s Trust which was how the property was set up due to Carrie’s declining health. Her kids didn’t want to sell the property outright because a large part of the money from the sale would have to go toward paying capital gain taxes. Tim called us because he knew that we are always looking for situations where property owners are motivated and he knew that he was unable to help Carrie himself. (We in turn send Tim properties that don’t work for a creative nothing down offer but work great for a listing and a sale for him)

Step two when buying an apartment building for nothing down is to “run the numbers” to see if you’ll be able to make a profit. You’ll want to know with certainty that any property you get into is going to make you money, not cost you money. The best time find this out is before you commit to a deal. We looked closely at the income and expenses from the building to see if there was any way to improve the cash flow. We knew right away that because the management fees were close to $1,000 a month that we could pay Carrie the $3,000 a month she needed. The question was, could we make a profit?

We felt certain that we could at least break even, and were fairly confident that the upside was pretty big. (We used a nifty little shareware computer program called the “Cash Flow Estimator” which you can get off the internet for free at http://www.resultsnow.com) The rents seemed to be on the low side which meant that there was room to increase the cash flow in a positive direction after taking control of the property.

Step three to buying an apartment building for nothing down is creating an offer that uses the cash flow from the property to pay for the deal. We offered Carrie a “master lease”, one of the seven purchase option techniques, that would meet her needs. (and ours too!!) In return for our monthly payment of $3,000 (which would be paid from the rents from the property) We received the opportunity to purchase the building for $450,000 which was it’s current value based on the rental income it was bringing in. We would be able to exercise our option when Carrie passed away which was structured to save Carrie’s family some taxes.

We immediately began increasing rents. Rather than increasing everyone’s rent at once we sent notices to 1/3 of the building each month for three consecutive months. Some of the tenants moved, others griped a bit about the rent increase and decided to stay. Within 4 months of taking over the building, after raising rents to market levels, we were able to increase the rents an average of $85 per unit. This meant the total income from the property increased from $7,100.00 a month to $9,182 a month.

This is a monthly increase in cash flow of $2,082. We were thrilled to realize that we had just created an annual income of $24,987. This is as much money from one property as many people work 40 to 50 hours a week all year to make.

The really exciting part is that because income property in the area sells at a 10% capitalization rate, any increase in cash flow from the property increases the value of the property by ten times. This means that the annual increase in cash flow of $24,987 makes the building worth $249,870 more than it was worth just four months before.

The nice thing about great cash flow like this is that you can afford to hire a property management company to run the property while you sit back
and wait for it to go up even more in value. This is exactly what we did with this property and you can too if you take the three steps toward buying apartment buildings with nothing down.

First, find a motivated seller. Next, run the numbers to make certain you’ll make money each month. Finally, create an offer that uses the cash flow from the property to cover your payments and expenses each month.

You will probably have to sort through quite a few properties before you find one like this. Once you do you’ll know two things for sure. You’ll know that it’s definitely worth the effort and you’ll also know that you want to do more deals like this again!

How to Get a Seller to Say YES to Your Creative Offer

How to Get a Seller to Say YES to Your Creative Offer

– How can you determine the real needs of the seller?

– How can you meet the seller’s needs and maximize your profits at the same time?

– Here’s how to get a quick decision from the seller—a decision that works for you and works for the seller.

Most beginning investors walk in to meet with the seller and hand them the completed, written offer and sit back and wait for the seller’s response. The trouble is that most sellers will tell you they need to think it over, or that they need to speak with a friend/spouse/relative/etc. before they can agree with it. This puts the average investor in a very weak negotiating position. They are in what I call “chase” mode—chasing after the deal.

You are going to do things different. Instead of laying your offer at the seller’s feet and hoping they do you the favor of giving you the deal you are going to qualify the owner before you do them the favor of presenting them with an offer to solve their real and pressing real estate problems. I’m sure that sounds pretty good to you, but you might be wondering just how you are supposed to do that. Here’s how:

What you are going to do is leave your offer in your folder, or better yet in the car. You are not going to present the actual offer until the seller “qualifies.”

To qualify for your offer you and the seller both need to agree on four key areas. The powerful thing is that when you finish with all four areas the offer is basically all negotiated. And it is at that point that you can present your pre-written offer, or get out a blank form and just fill it out on the spot.

Of course if you and the seller cannot come to agreement in each area then you simply stand up, thank the seller for his time, and start to walk out.
Nine times out of ten the seller will plead with you to stay and present your offer—their curiosity alone will get them to ask you to stay to finish working through the four areas and to present your offer. This is the ultimate tool for putting you in the role of the reluctant buyer. We have found it to be the easiest, most effective way to help the seller feel good about talking us into giving them an offer on the property. And this will help you to smoothly transition the seller to say yes to your offer.

The first area is called the “Up-Front Agreement.” You simply explain to the seller that you are a straight forward type of person and would appreciate either a yes or a no answer from them. In return you will give them your own yes or no decision. The key in this quadrant is to let the seller understand that you will take any “think it over” answer as a NO.

The way that you do this is to tell the seller that you will respect his and your time by giving a yes or no answer and you are asking for the same courtesy in return.

Area two is where you are going to talk about the seller’s needs. Ask the seller what they were hoping you could do for them and then be quiet and listen. As they bring up areas of concern the very best thing you can do is to draw out those problems in an innocent and gentle way. For example, if a seller’s problem is that he hates being a landlord you can say something like, “The good thing is that you probably enjoy working with renters and putting the time in to care for your rental property.” Because you say this in a caring tone of voice the seller will most likely pour out his guts about how he hates dealing with renters. This approach is radically different from most investors where they will argue with the seller over all the problems the seller faces. All that does is put the seller on the defensive.

Area three is about money. You are going to go over some specific dollar amounts with the seller before you ever get your written offer out. This could be the monthly payments (on a lease, or owner carry-back), and the sale price. This way you know what the seller’s real financial needs are and whether you can meet them and still make a profit for yourself.

Area four is the “What If?” step. Rather than give a seller your offer and hope they will say yes, you are going to make sure they will accept your offer before you ever officially give it to them. How can you do this? By using the two magic words in all negotiations: WHAT IF

“Mr. Seller, what if I were to cover your payments for two years and then cash you out of the property? Would that work for you?”

“Mr. Seller, what if I were willing to give you $212,000 for the house, would you be willing to carry back a second?”

These magic two words lets you make your offer in a completely hypothetical manner. Then when you finally come up with the winning “what if” scenario you simply write it up and get them to sign right there and then.

Now you know how to get a seller to say yes to your creative offer.

How to Find Motivated Sellers Now

How to Find Motivated Sellers Now

“I’ve purchased Carlton Sheets course and every creative offer I’ve made has been rejected” Al said. While Al wasn’t able to become one of the few
people I work with personally, I was still impressed with the incredible desire I saw in his eyes. “Sit down Al”. I instructed. I’ll give you an essential secret in the five minutes I have before I have to go catch my flight.

“You see I used to be right where you are.” I said. “I wanted to create financial freedom but I just didn’t know how. What I’m going to share with you right now is a big reason that I’m able to put together deals 8 out of ten times when I go to meet a property owner… these days.”

Al pulled out a notepad and wrote ‘8 out of 10” at the top. “The secret of being able to close deals is to get more and more careful over time who you are willing to make offers to.” I said. “In the beginning, when you are first getting started investing, you should really go out and make as many face to face offers as you can. You’ll be talking to sellers who aren’t highly motivated but that’s OK because you’ll be doing this just to get comfortable talking to sellers and also to practice your negotiating skills.”

“Don’t even try to get a deal for the first 10 or 20 offers.” I continued as Al looked over at me quizzically. “If you happen into a deal when you are
practicing then good for you, just don’t be over eager in the beginning. After meeting with 10 to 20 sellers in this fashion you’ll be ready to start qualifying sellers at the next level.”

“You’ll want to find out as quickly as possible whether or not you are dealing with a motivated seller who is open to a creative offer. Truly motivated sellers make up a small portion of the market.” I shared. “ Trying to make a creative offer to a seller who isn’t motivated is like trying to teach a pig to sing… It not only won’t work… it also annoys the pig.” Al laughed at this point thinking about the reaction he had gotten from some of the sellers he had made offers to.

“As an investor, you’ll want to make a profit on every home you invest in.” I explained. “There are two basic ways that you can do this. You need to get either a good price or good terms. A good price means buying at a low price so that you can resell today. Good terms means that you get to control the property without putting much money up front and you wait for the property to go up in value.”

“Buying low tends to leave the seller a bit upset, Al.” I continued. “ I’ve seen sellers cry when I told them how little I was willing to pay them.”

“I’ve found that it’s easier to find motivated owners who are open to terms. As long as they get their price, even if they have to wait a few years for it.
They’re happy.” “Is it important for you to feel like you are helping other people to be happy?” I asked Al. “Heck yea!” responded Al.

“The secret to doing this without getting frustrated is in the questions you’ll ask in the first few minutes on the phone.”

“The first question to ask is “Do you need all of your equity out of your home to go and buy another home?” I said. “You see Al, If the seller needs all of
his equity up front, he’ll need to find a retail buyer to sell the house to. This means that this house is not for you, just wish the seller luck and get on to your next call.”

“If they don’t need their equity out of the property, then continue with your phone call. Does this make sense Al?” “Sure does Peter.” Al responded as he furiously scribbled notes on his pad.”

“The next level of qualification means the seller is open enough to be willing to look at a creative offer. Do you know the best way to find this out, Al?” I
asked. “No, please tell me.” Al responded. “You ask them.” I said.

Al seemed suprised that it could be this simple. “When I’m serious about qualifying a seller, I’ll say, “I invest in a variety of ways and I’m not sure which of these methods might be able to help you. Sometimes I’ll lease a home for a year or two and then cash the seller out at the end of the lease…Will that work for you?””

“If the seller answers yes or maybe then he’s worth a visit. If the seller says no I wouldn’t ever do anything like that, then you gently and quickly get off the phone.”

“To fully qualify a seller you’ll take the conversation a bit farther. A common mistake that beginners make is to race right to these final questions before asking the initial questions I’ve just shared with you. The problem with this is that without the initial questions, you’ll sound too eager.” I said. “Go slowly but surely and you will be successful, Al.”

I continued. “Your final questions are going to involve laying out a possible deal right over the phone. Saying things like, “I don’t know if I could offer you this exact deal or not, obviously I’ll need to see the house. But if I were to offer you rent of… and a price in 2 years of… Is that something that would work for you? If not, what did you have in mind?”

“You see, Al, what you are really doing is roughing out the negotiating arena with upper limits for what you might possibly pay. You’ll hopefully be able to
negotiate down in person from the numbers mentioned on the phone.” I said.

“Now if the seller seems inflexible or just wants way too much then you should save time by moving on, quickly, to your next possible deal.” I said with a wink. “Which reminds me. I need to catch my flight. Use these ideas to get started and then call me for more help. I might be able to take on another student by the time you call.”

How to Cash In On Your Real Estate Contacts

How to Cash In On Your Real Estate ContactsMany investors make the costly mistake of considering real estate agents as competitors. They incorrectly see themselves out in the market competing for a limited number of deals-fighting it out with local agents and brokers to make money. This costs them time, and it costs them thousands of dollars from lost deals.The truth is that as an investor one of the most profitable relationships you can ever develop is with a real estate agent. Think about it for a moment. As an investor your market is motivated sellers who don’t need all cash at closing (and are willing to be flexible on the terms of sale) or who are willing to deeply discount the price of their properties for an immediate sale.

But the majority of sellers you talk with as you do your lead generation are NOT motivated sellers. As many as 90% of the sellers you talk with are not motivated enough to be flexible on price and terms like you need them to be. Most investors toss these sellers into the round file, and this mistake costs them dearly.

Instead, pass those sellers you cannot help onto your real estate agent ally. He will be able to turn these sellers into a steady stream of commissions as he lists, then sells their homes.

Remember: most agents spend tremendous amounts of time and money to find the very people you turn up in such great numbers-homeowners looking to sell for all cash and who have the time to wait for a top dollar offer.

If you can help your agent friend get just one more listing a month you are adding tens of thousands of dollars to his annual income!

So what’s your payoff? Actually, you don’t just get one payoff, you get five!

Payday Number One: Expired Listings

A listing is an exclusive agreement a seller signs with an agent giving them the right to sell the home for the seller. This agreement is typically for 3 to 6 months and many times an agent is unable to sell the house within that time period.

Have your agent ally search the MLS (Multiple Listing Service-a database of properties for sale that only real estate agents have access to) looking for properties that didn’t sell and whose listing has expired. These owners are far more likely to have grown motivated and are ripe for you the investor to call and put a deal together on their house.

In many cases the expired listings will not have a phone number for you to contact the owner. That’s good! If it were too easy then another investor would have beat you to the prize. Simply take the information and do your own research. You can use the street address and a reverse directory to look up the phone number. (One such directory is called the Cole’s Directory and is probably available for you to use for free at your local library.)

Once you find the phone number, give the owner a call and see if they are flexible enough for you to buy their property.

Payday Number Two: Listings Search

Have your agent friend do a search of the MLS for key words that indicate motivated sellers. The agent simply searches the comments field for words like: “lease-option,” “flexible terms,” “owc,” “moving,” “transferred,” “estate sale,” or “contract for deed.”

If a listing has these words in it chances are pretty good the seller is worth a phone call. Then you contact these owners and see if you can put a deal together.

Payday Number Three: Straight Referrals

Just like you are out there sorting through sellers, so too is your real estate friend. And when he finds an owner he can’t help but who shows signs of being motivated, your agent can refer the seller to you. Better yet, ask your agent friend to pass along the owners name and phone number and give the owner a call yourself. This is a great source of deals that no other investors will know about!

Best of all, when you get this third party referral you are getting a huge boost to your credibility. In essence the real estate agent is recommending you to the seller. This makes things much easier for you to put a deal together than if you were just coming in cold.

Payday Number Four: Fast and Free Access to Property Information

When you’re out there putting together deals, wouldn’t it be valuable to be able to call up your real estate contact and ask him for information like sales comparables, market rents, and rates of appreciation?

If you’re passing on several good leads a month to your real estate friend you will be amazed at how fast he will get back to you with this information he simply pulls up from the MLS. After all, if he isn’t fast, there are many agents out there who are dying for your leads who will be much faster…

The most important thing to remember when you are putting together this relationship to begin with is to always be willing to give value first. This means pass leads on to your agent friend for a short while BEFORE you ever call them up asking you for a favor. This will help you build trust into the relationship and cement your agent to working with you.

Over time this relationship will payoff handsomely for you. When you get the relationship going strongly you’ve just added a helper who is working with you to help you make more money.

One of my students used this idea of networking with real estate agents to find a six year lease option on a $200,000 property with nothing down! If he can do it, so can you.

Making Money With Out Of State Owners

Making Money With Out Of State Owners

You are about to learn about one of the best-kept secrets in creative investing. This hidden source of motivated sellers can be one of your biggest money-makers ever!

People who own property in your home town but who live out of the area are great leads for you to talk with for three reasons. First, they are having to deal with the property long distance as either a rental property or as a vacant property. This means more headaches, hassles, and bills for them to deal with.

Second, they already have another place to live in their new location. This means that they don’t absolutely have to have all their equity out of the property you are negotiating on. The real benefit to you is that they seller can be flexible on the terms of sale. You can structure a long-term lease option, owner carry financing, or a land-contract.

Third, most times you are the ONLY person talking with them about buying their property. And any time you are the only buyer around the price always drops and the terms always become more flexible. This means you will be able to structure a win-win money-making deal.

The best part about out of state owners is that they are easy and cheap to find and contact. You just need to find a property in your town where the tax bill is being sent to an address far away. This usually means that you’ve found yourself an out of town owner. The best part is that on the tax records, which are public records, you will usually find the owners phone number too! You can do your own research in your local county records (too time consuming in my opinion.) or you can just buy the names, addresses and phone numbers you want.

Simply call up a local information source provider (you can find one in your yellow pages.) An information source provider is a business that has gone to the effort of putting all the county property information onto a huge database that is easier for you to access. You can dial in to this pool of information and download it over your phone line and into your home computer. Or you can simply call the company up and ask them to create a list of out of state owners for you that you can buy from them. Typically this costs between 10-15cents a name. When you find out how much money you can make by buying properties at incredible prices and terms you will realize that this is the greatest bargain you’ll have ever made.

When you get your names you can send out a letter or postcard to entice interested owners to call you. If you choose this route feed these incoming calls into a “24 hour recorded message.” This message should be 60 seconds of the biggest benefits you can offer to an out of area seller. The sole purpose of this message is to motivate the seller to leave their name and phone number so you can call them back.

The best way to turn your list of out of town owners into cash for you is to pick up the telephone and call the owners direct! Your conversation will go something like this:

“Hi this is David. I’m an investor in (your home town) and I have your number here as someone who might be interested in selling a property in the area. Is there a reason for us to spend a few minutes talking about that or probably not? Oh, there is… can you tell me about your property…?”

The biggest objection you will get on the phone is, “Where did you get my phone number?” Just tell the truth: “I hired a researcher to find me the names and phone numbers of people who owned property here that met my qualifications. They gave me the list and your name and phone number were on it. Is there a reason for us to spend two minutes talking about me buying your property, or probably not?”

Of course you’ve noticed the use of the negative sell with the “probably not’s” used. I’ve found that this approach will give you the best results.

The final secret to putting together a deal with an out of town owner is to slow the whole thing down. Make sure you don’t ask to many detailed questions on the first phone call. Things like what the loan balance is and what the monthly payments are are better left to the second phone call. The first call is just to find someone who is motivated to sell. Once you find that person get off the phone with them fast. Tell them you’ll drive by the property if you have a chance and give them a call back in a day or two. Then on your second call you can get into the details. This allows them time to get to know you and feel comfortable working with you.

So just how effective is this strategy? One of my students used it and found a retiring landlord who sold my student THREE properties worth a total of $480,000… and all three of these deals were nothing down owner financed deals! So what are you waiting for?

How to Find and Close Your Next Deal In 72 Hours Or Less

How to Find and Close Your Next Deal In 72 Hours Or Less

Back in December of 1997, my partner and I followed through on a dramatic press challenge. We had challenged the press, “Send us to any city with a group of three beginning real estate investors, and in three days time each of these investors would either own or control a minimum of $250,000 worth of real estate using none of their own money.” The challenge was accepted and on December 8-10, 1997 we went down to San Diego, California to make good on our challenge.

During this 72 hour period Peter and I and these three beginning investors picked up over $1.5 million dollars worth of real estate with only $37 down. That’s right, we picked up ten separate properties ranging in value from $90,000 to $500,000 and the most we put down to control any of the properties was $10. (The best part is that these ten properties are now worth well over $2.5 million!)

Since that time I’ve been asked many times how we did it, and how someone else could do the same thing. Taking what we learned on the original San Diego Challenge, I want to share with you how I would find and close a deal in any city in 72 hours or less-and how you can too!

Step One: Getting your leads together-Fast!

My first step would be to visit the local library and collect all the local paper’s real estate for sale and for rent ads for the past 2-3 months. I would go through the for sale ads and create a phone number list of the for sale ads that satisfy two conditions. First, they must be for sale by owner ads (you don’t want to be talking through agents if you need to close a nothing down deal fast.) Second, they would need to be at least 1-3 months old. Next I would list the phone numbers of all the properties for rent that are between 2-3 weeks old that look like they are NOT controlled by a property management company.

Step Two: Sorting through the leads

Step two would be to find a phone and start making calls. The biggest benefit of listing the numbers on a separate sheet of paper rather than calling out of the classified ad section itself is that the newspaper will only slow you down. All the information about the house doesn’t matter until you find the right seller-a motivated seller. Then you spend time checking out the details of the house.

Since you have aged the classified ads you are calling time will screen out many of the NON-motivated sellers for you, leaving you with a more concentrated pool of motivated sellers to talk with.

How long would I spend on the phone calling property owners? Until I set up 4-6 quality appointments to meet with sellers. Your goal from your phone call is to find a seller with both a situation you can help solve and who has the motivation to sell. Once you find a seller like this set up a time to see the property and talk things over.

One of the biggest mistakes many investors make is to try to explain your offer over the phone. Don’t do it! Instead, if the seller presses you for an offer tell him, “Look Mr. Seller, I don’t know if we have a fit here or not. It might very well turn out not to be a fit. Before I know what I can offer you, or even if I can offer you anything, I need to know a lot more about the house and your situation. The next step is for you to invite me out to see the house and for us to sit down and talk things through.” Notice how you are being a reluctant buyer here. The other benefit you get from this approach is that you never have to try to explain your offer over the phone before you’ve met with the seller (which is always an uphill road to climb.)

Step Three: Meeting with the owners face to face

The final step to get a deal closed in 72 hours would be for me to go out and meet with these 4-6 sellers. I would build rapport, listen and draw out their real needs, and find a win-win solution to meet their needs and make a profit for me as the investor. From these 4-6 appointments you would close the deal.

There you have the specific game-plan to find and close your next deal in 72 hours or less. Still seem impossible? We’ll we repeated that San Diego Challenge two months after the first Challenge. And with three different beginning students we picked up three more houses, worth approximately $750,000, with nothing down. These steps work. The only question is will you.

How to Be An Investor Without Becoming A Landlord

How to Be An Investor Without Becoming A Landlord
 

I spent the first few years of my investing career finding and buying properties that I could get into for little or nothing down. Many of these properties had been neglected by the owners and were in desperate need of fix-up and repair. I was able to increase the value of these older properties by doing several things:

Raise the rents. Many of the properties that you will come across have rents that are either slightly below or way below current market rents. I give 60 days notice so that the tenants have time to check around and realize what a great deal they have even at the higher rent. At the same time the rent increases go out, make some obvious improvements to the property like painting the exterior, or sprucing up the landscaping. This helps the tenants to feel like they are getting some value for the extra dollars they are paying in rent. One thing we used to do was give the tenant a choice at the time of the rent increase of either having the carpets cleaned (which helps prolong the life of your carpets) or having one room painted.

Paint, clean, and improve when a tenant moves out. When you raise rents, some of your tenants are going to move. Take advantage of this by going in and painting the entire place in bright white paint. Either clean or replace the carpets. Look for someone who deals in used carpeting. You’ll save half the price of new and the tenant moving in will think that the carpets were installed new a year ago. Lay down new vinyl floors over the existing worn out flooring. New countertops are fairly cheap and easy to put in.

Transfer the fix-up duties to your tenants using either this method or the method described in number 4. When you rent out the property again, advertise the rent $50.00 higher than you expect to get. While showing the property, let the prospective tenant know that if they are willing to pay the first $50.00 of any repair, and the rent is paid on time, then they can receive a $50.00 discount off of the rent each and every month. This will eliminate all of the little repairs that take so much of your time, and will encourage your tenant to pay promptly!

I made a fortune using these three simple ideas, but I was getting tired from doing so much fix-up work. I found that it wasn’t too long before I moved from a position of making $100-$1,000 an hour by using a pen to write creative offers to buy real estate, and what happened was that more and more I was forced to put down that pen and made to pick up a hammer.

Each time I picked up the hammer my income plummeted from what I could make as a real estate investor down to what I could make as a handyman. Even though I got to a point where I hired other people on and crews of people to do the work, I was still in the position of having to look after their work, making sure that the fix-up work had been done properly, and was billed correctly. At one time I realized I was so busy fixing and repairing that I hadn’t bought a new property in over two years time!

After brainstorming with some of the best minds in the country, I found that I could completely eliminate fix-up and repair work forever. You see I discovered that “Owners” of homes like to do fix-up work because they feel like they are investing in the future value of their home. Tenants on the other hand tend to care less because they don’t have any future interest in the property. I shifted my focus and started buying and controlling homes in nice areas that didn’t need fix-up work.

4. This is even better. Now when I rent out a property, I always offer an option to purchase along with the lease. I then collect money up front as an option payment that I get to keep if the tenant doesn’t buy the property. (This is usually 3 to 5 times the size of a normal security deposit) The price that the tenant can buy the property at is usually the current value plus 75% of the amount that I expect the appreciation to amount to. So if you had a home worth $100,000 and the appreciation in your area has been averaging 10 percent, then your tenant’s option price would be $107,500 for a one year option.

This allows you to have your tenant thinking like an owner rather than a tenant. “Mr. And Mrs. Tenant, since you’ve got the opportunity to buy this house we would expect that you’ll treat it just like you own it. Because of this we expect that you’ll take care of any repairs that cost less than $200.00 per repair” (This covers 95 percent of all repairs) “If something costs more than that, as long as you’ve provided us with several bids, we’ll pay the amount above the first $200.” Using these ideas you can begin to focus more on using your pen to make money rather than a hammer. You’ll make more money and if you hit nails like I do your thumbs won’t hurt so much.