It's Time To Make Lemonade

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By: Pete Milano

Before I get into the story here are a few things that can help you keep from failing.

Regardless of your situation the following does apply. Did you keep a running up-to-date record of all costs associated with your flip? If not, either get on the ball or get out of the business. You will FAIL!!!

Purchases
When it comes to tracking expenditures I'll give you the best piece of advise to get you on the right track. A credit card purchase should have either the "flip" items or not. Never mix for the same purchase on a CC. Get an online account at the banks where you have credit cards and use the download transactions option. You will now have the exact amount of each purchase and the vendor. For stores like LOWES they will have the store # listed too. You can open the downloaded file with your spreadsheet software.

The Story
I purchased the foreclosure well below market, fixed it up doing all the "right" things and at way below the going rates and costs. I contacted a knowledgeable broker who was recommended to me by my mentor. The broker and I sat down and reviewed our findings of area comps. Since the nearby homes are all different with none to compare to we decided to use "price per square foot" of the home sales to determine an asking price. Then I listed the house for sale at a great price (for this house). The listing company is a major brand name nationwide real estate firm.

Before I go any further let me tell you about the property. Great curb appeal. The lot is considered a "double lot". Very large size (just under 10,000 sqft) with plenty of room for anything one might think of doing with it. This property is a corner lot, with one large shade tree, new porch, solid foundation, and fairly recent aluminum siding. That's just to name a few of the positive things.

So the property gets listed and we have one showing the first weekend. Unfortunately, since the showing we have not realized any bites or interest. A week or so passes and now it's time to think this over. Taking into consideration the expected financial situation of the profiled buyer I lowered the price and I offered to pick up $5,000 of their closing costs. Granted there are many houses in the area that are for sale but they are either in a need of rehabbing or priced $30k+ above my price. So, another week or so passes without any activity. It is now time to roll up my sleeves and get creative so I prepared and sent out individual packets using high quality paper, colored picture of the property and an offer letter to every Church in the zip code (over 40 mailings). The letter presented a very generous donation offer to the church (1% of the sale price) if anyone from the church or referred by the church purchased the house. Still no bites! What gives?

Now I'm getting serious about the matter at hand. It is no longer a pricing question for me. Of course I want to find out if the price is too high but maybe it is that people are not looking to purchase a house at any price? First thing is I talk with my broker and he just happened to have spoken with another broker who focuses selling and buying homes in my area. I tell my broker to call the other broker and offer the house during the current week at a ridiculously low price that is way below value and even a steal for another investor. Mind you, this house is picture perfect and almost all new inside too. New kitchen, plumbing, bathrooms, 2-zone HVAC, electrical, washer/dryer, prepaid 3 year security system, and more. Calls are made by my broker and still no bites. But just wait a minute. Didn't I just say "way below value and a steal for an investor"? I'm an investor, ain't I? Like Da!

It's time for the Indian story
Like the Indian who stayed up all night to see where the Sun came from. It finally DAWNED on him.

No thanks there will not be any extra helping of Stupid at breakfast for this guy

And, to think I was almost going to sell the house at any price! I was going to NET $126,900.00 at the "fire sale" price. Yes, I would be making a nice profit for a flip that took me just 7 weeks. But, just wait till you see how the numbers work out for me. I've used realistic and representative dollar (I rounded) values so we all can see how this works. First, I would like to add a kind word here for my mentor. As my mentor said to me some time ago, "the way to get rich in real estate is to never sell, only buy". Yipes! He was right.

As you too will read from many other investors, "it's all in the numbers". So here is a table to reference and see where and how much I win. All of these numbers are proportional to the actual numbers. I just rounded to make it easier to demonstrate.


Description - Total Amount - Commission - Net before taxes
Property Purchase price $ 50,000.00
Property Improvements $ 50,000.00
Associated Additional costs $ 15,000.00
My Original sale price $ 165,000.00 $ 9,900.00 $ 155,100.00
My Reduced sale price $ 145,000.00 $ 8,700.00 $ 136,300.00
My Fire sale price $ 135,000.00 $ 8,100.00 $ 126,900.00
Description Monthly PMT 12 months
One year rental lease with 100% POC's $ 850.00 $ 10,200.00
Renter's purchase price $ 145,000.00 $ 4,350.00 $ 140,650.00
Monthly PMT
I Mortgage the property $ 125,000.00 $ 790.00

It's time to make lemonade
I decided to rent and offer 100% POC's (Purchase Option Credits) of the rent towards the purchase of the property at the end of the 12-month lease. At six months into the rental agreement I will start asking the tenant to think about the option and if they will be exercising it. I should note here that I am using a Property Management firm and within two weeks of contacting them they signed up a tenant and had them moved in. That means I have revenue at 4 months after I closed on the property.

Since I purchased the property with cash and funded the rehab I now need to get some working capital for my next project. At the six-month mark I will apply for a mortgage. To keep the cash flow positive I will go for $125k that I will put in my pocket to use for my next investment. Now, I do think that $125k amount covers my TOTAL investment of $115k. I can put the extra $10k aside and use it to make the monthly $790 mortgage payment or use the tenant's monthly rent for that purpose. It's all up to me.

Summary
Let's say the tenant exercises their option to purchase. I will then receive $145k minus the $10.2k Purchase Option Credit, minus the $4.35k commission, minus my mortgage of $125k, which comes out to $5.45k. I will wind up somewhere near $125k plus $6k for a total sales price of $131k. Now for the fun of applying depreciation, revenue, taxes and such. So, here you have just one "real" example of what will most likely occur for me. I hope they decide not to purchase as the house will most likely sell come early 2010 and I would expect somewhere between $155k - $195k.

From my point of view this lemonade sure tastes good to this person.

Good luck on your next investment.

Pete Milano is a real estate investor, rehabber, renovations and ...

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Time Management For The Real Estate Investor

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By: Dennis Henson

Time is important!!

Whether you are the world’s richest person or broke and out of work—time is your most valuable asset. By eating right, exercising and driving carefully, you might increase your time on earth by a few years, but only a few. So in order to achieve the things you want to achieve in life, it is important that you manage the time you have wisely.

The foundation of a time management program is daily planning.

Over 30 years ago, at the beginning of my business career, I read books and listened to many tapes on how to be better at sales, motivation, negotiating, etc. On one of those tapes I heard a story that has had a great positive impact on my life. Within that story was a time management technique that impressed me so much that I immediately adopted it for my own use and have continued to use it to my advantage to this day. It’s called…

“The TWENTY FIVE THOUSAND DOLLAR Idea”

The story took place around the turn of the last century—about 1900.

At that time the..

Average yearly income.........................................$703
DOW Average.......................................................$49
New Home (median price)..................................$2,200
New Car (average cost).....................................$1,157
Milk (quart)............................................................7¢
Bread (loaf)............................................................4¢
Steak (pound).......................................................15¢
Stamp...................................................................2¢

Around 1905, Charles Schwab was President of the then fledgling Bethlehem Steel Company. The small steel company was struggling due to its inefficiency and poor sales.

Mr. Schwab was of course a very busy man and had little time to waste with sales people. One day Mr. Ivy Lee (a business consultant) made a call on the company and asked if he might have a few minutes of Mr. Schwab’s time. He was met with reluctance but persisted and was granted a short interview with the busy business executive.

“Ok” Mr. Schwab said “What do you have in mind?” The optimistic Mr. Lee told Schwab that he would allow him to spend only fifteen minutes with him and each of his managers he (Lee) could increase the efficiency of his entire company and that Schwab and his managers would learn to “manage better."

The indignant Schwab said, "I'm not managing as well now as I know how? What we need around here is not more "knowing" but more doing, not knowledge but action! If you can give us something to pep us up to do the things we ALREADY KNOW we ought to do, I'll gladly pay you anything you ask."

“By the way, what do you propose to charge me for your services?" asked Schwab. Mr. Lee replied, "Nothing, unless it works. I will provide the service and in three months you can send me a check for whatever you feel it was worth to you." Mr. Schwab, thinking he had little to lose, shook Lee’s hand and the deal was made.

Lee indeed spent only about fifteen minutes with Schwab and each of his executives. At each meeting Lee asked each manager to do the following:

At the end of each day they were to:

• Write down the six most important things for the next day.

• Mark the most important item with a number one the second most important with a two and so on until all were marked.

• First thing the next morning, begin working on the task marked number one and upon completing that task, check off the completed item and immediately start on the next number until all the items were completed.

Only a few weeks passed when Lee received a letter from the Bethlehem Steel Company. Inside the envelope, Lee found a check in the amount of $25,000.00 and a note from Schwab saying the lesson was the most profitable from a money standpoint he had ever learned.

Do you think that possibly efficiency and sales had increased at Bethlehem Steel? In the five years that followed, Schwab turned the unknown Bethlehem Steel Company into the largest independent steel producer in the world and Schwab became a millionaire a hundred times over. Charles Schwab became the best known steel man alive at that time.

Wow, was I impressed when I first heard this story. I thought if Charles Schwab, one of the smartest businessmen of his day, was willing to pay so much money for this advice then why shouldn’t I use it also and I’m in good company.

When I was doing time management research in the early 1990’s and living in Carrollton, Texas, I was searching for the "$25,000.00 Idea" story but was having a difficult time finding it. At that time the internet was not available to me but a friend told me that Mary Kay Ash often told that story in her speeches. The Mary Kay Company was just a few miles from my apartment and I passed by it every day going into Dallas. So I picked up the phone and called Mary Kay’s office. I did not get to speak to Mary Kay but I did get to explain my problem to her assistant.

Mary Kay was kind enough to fax me a copy of her notes about "The $25,000.00 Idea". Years later in her book “You Can Have It All” Mary Kay referenced the story and stated the following:

"I decided I would follow it, too. Each night, I put together my list for the following day. If I don't get something on my list accomplished, it goes on the next day's list. I put the hardest or most unappealing task at the top of the list. This way, I tackle the most difficult item first, and once it's out of the way, I feel my day is off to a good start." Not only did Mary Kay use this time management system but she encouraged her thousands of sales people to put it to use also.

One final note

Dr. Robert Schuler had a simpler version of time management that simply says… "Ask yourself what is the most important thing you need to accomplish, and what are you doing about it today?"

For more articles on real estate investor training and to sign up for free reports, articles and e-books please visit my website at http://www.dennisjhenson.com. Also visit http://www.turbo-bidder.com for great real estate investor tools. Good luck with your real estate investing. Dennis Henson

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New Video: Short Sale Package: Authorization to Release Information

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Check out our new video on our YouTube channel. The video is about the Authorization to Release Information. If you are doing a short sale, loan modification, loss mitigation, subject to, or any other type of real estate transaction that requires you to talk with the seller's lender, you will need this document. Richard will show you what it is, how to use it, and how you can get it for FREE.

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Ultimate No Money No Credit Strategy Subject To...

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By: Tom Bukacek

Regardless of your experience level or finances, the best type of real estate investment is the type where you invest as little of your own capital and risk as little of your own credit as possible. One of the best strategies out there that meets these criterions is known as 'subject to'.

Every purchase agreement has a subject to clause. A ‘subject to’ offer simply means that the buyer is willing to purchase a piece of property ‘subject to’ some specific circumstance. Usually that circumstance will be subject to an inspection, or subject to new mortgage or something of the like.

But for the sake of this article, the use of the term ‘subject to’ is in relation to purchasing a property "subject to the sellers existing mortgage remaining in place.” This phrase means that at closing, the property is titled in the buyer’s name, but the loan is still in the seller’s name. Therefore, you are buying the property ‘subject to’ the sellers existing mortgage payments.

This statement means that you are not assuming the loan. The terms you create with the seller are between the two of you as long as you follow to the letter the terms set up when the loan was conceived.

Why on Earth would someone just give you the deed to his or her home? Many motivated sellers are willing to trade EQUITY for Peace of Mind. If someone is finically strapped and doesn’t want a foreclosure on their record, or their job is being relocated and they don’t wish to be landlords from afar, or they are going through some other personal hardship, they may be willing to sell their home as quickly as possible in whatever way possible and as low a price as possible in exchange for the relief of not being responsible for the debt any longer.

For example, I recently purchased a property ‘subject to’ from a gentleman in Pflugerville, TX, for $126,000. The property value was $145,000. The house was less than 2 years old and was in immaculate condition. Why did he sell to me subject to? Because his job was transferring him immediately to Georgia. He did not feel comfortable being a landlord from afar. He also felt (accurately) that to sell his house quickly, he’d have to drop the price. After closing costs and fees, he’d probably be upside down. This method of selling his house to me ‘subject to’ the existing financing remaining in place achieved his goals of ridding himself of the property quickly without coming out of pocket.

Purchasing their house ‘subject to’ can provide the motivated seller with instant debt relief and help them out of their situation immediately.

Once you acquire the property in such a manner, what exit strategy should you use? The best strategy in this situation is to find a buyer and finance the transaction. You, as the investor, now become the BANK, and like a bank, you create multiple money making opportunities for your business.
How does owner financing work? Suppose you come across a family that has cash, a FICO score in the mid 600’s, and has been at their place of employment for 1 year. Can this family get conventional financing in this current market? No. Would YOU be willing to seller finance this property? Yes. So with this strategy, you can help a family who cannot purchase a home using traditional methods. Plus, your owner financing fee that you will charge them will be less than typical closing costs.

How do you as the owner of the property make money when owner financing? There are four ways:
1- Make money with the owner financing fee. Typically, as the owner, you can charge between 4-7%. This fee is non-refundable.
2- Make money with the monthly spread. When you take over a mortgage with a 5.25% interest rate, you are not going to charge a 5.25% interest rate to you new buyer. Rather, you will probably mark up the rate to 8-12%. On average, you will want to make a minimum monthly profit of $200.
3- Make money when you sell the property. If you purchased ‘subject to’ and the loan amount was $120,000 and then you sold for $150,000, when the buyer refinances the mortgage with another bank 2-3 years later, you will profit the difference.
4- Tax benefits such as depreciation and interest deductions.

So as you can see, purchasing subject to is a ‘Win-Win-Win’ for all parties involved. It is a ‘Win’ for the motivated seller because they have peace of mind. It is a ‘Win’ for the buyer because they can now move into their dream house. And this strategy is a ‘Win’ for the investor because they add a profitable transaction to their portfolio without using their own money or credit!

With Subject to, are you assuming the loan? NO. When a property owner sells his home ‘subject to’ the existing mortgage, the buyer must make the payments on the mortgage or get foreclosed on, like a traditional mortgage. However, since the buyer is not legally obligated to the bank to make payments, the foreclosure will not have a negative impact on the buyer's credit where it will have an impact on the seller’s credit.

Does this mean that the buyer has no pressure to make payments? Absolutely, unequivocally wrong! First off, if you purchase the property and sell it correctly, and manage each property as its own business entity, then you will never have any reason to miss a payment. But even more than the business reason, the investor has a moral obligation to both the seller he purchased from as well as the buyer to whom the property was sold to make those payments. Your word is the most important thing you have. Keep it.

Finally, the most common question asked by the investors is "What about the due on sale clause?" This one concern often times keeps numerous investors from purchasing properties using the ‘subject to’ method. So what does that due on sale clause actually say?

Typical due-on-sale language states that, “the Lender may, at its option, declare immediately due and payable all sums secured by the Mortgage upon the sale or transfer, without the Lender’s prior written consent, of all or any part of the Real Property, or any interest in the Real Property.”

First and foremost, people say that due to this clause, performing a ‘subject to’ is illegal. The due on sale clause is a clause in a contract. This is not a government statute! If the lender chooses to execute this clause, you will not go to jail. There is nothing illegal about purchasing a property ‘subject to’.
Second, the word that stands out is the word may. For a rule to be absolute, the language must be definitive. The due on sale using the word ‘may’ means that this rule is subjective and not absolute.

A reading of the language shows that the term, ‘due-on-sale’ is misleading. In fact, the mortgage may be called in if there is any transfer of any interest in the real estate, and not just a sale of the property.

For example, it is possible that even a long term Lease will allow the Lender to accelerate their mortgage, especially if the Lease contains an option to purchase. But any Lease that contains an option to purchase will be sufficient to call in the loan if it contains an option to purchase the property, regardless of the length of the Lease. Have you ever heard of a lender calling a note due because the owner was renting or leasing the property? Of course not. The same scenario holds true for purchasing properties ‘subject to’.

In reality, very few due on sales clauses are ever called in. Between my own deals and those of the people with whom I work, I have not heard of any instance out of over 600 transactions where the due on sale clause was invoked.
Why? Understand that the job of a lender is to collect payments. They loan out money at a higher interest rate then they are paying and create their cash flow from the difference on that spread. Why stop this profitable process?

Banks are not motivated to ever take a performing asset and turn it into a non performing asset. When an asset is performing, they are allowed to lend 9 times its value and collect interest on that amount. When the asset is not performing, they cannot loan out eight times the amount loaned.
Example. Let’s say you purchase a property ‘subject to’ the existing finance staying in place. The loan amount is $200,000. As long as the asset is performing, the bank can loan and collect interest on $1,800,000. Now, if they decide to execute the due on sales clause, then the bank would not only stop receiving money on that loan, but they would put it into the ‘bad debt’ category and not be able to loan out $1,600,000 until the bad debt is resolved.

As you can see, there is little motivation for the bank to ever evoke the due on sales clause.

In conclusion, purchasing homes ‘subject to’ is a creative, quick, low risk, and financially rewarding way to add to your real estate investing portfolio. Under current Fannie Mae guidelines, an individual may own up to 10 homes before being considered overleveraged. With this strategy, you may own as many homes as you can buy. I know and work with a gentleman in Austin, TX, who currently owns more that 90 properties, each cash flowing over $300/month. Would this passive cash flow change your life?

The ‘subject to’ method of buying homes allows the investor to achieve financial freedom with little risk and great rewards. It takes little money to get started buying homes 'Subject To' and, is quicker and easier to sell a home when the banks are not involved.

ABOUT THE AUTHOR: Tom Bukacek is a real estate investor with properties in both Arizona and Austin, TX. For more information on how to get started with Real Estate Investing as a business, please go to http://www.austinmillionaireblueprint.com. For more information on his real estate website, go to http://www.endurablesolutions.com.

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TheRealEstateDealer.com Participates in the 16th Annual Chicago Cares Serve-a-thon

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Members of the TheRealEstateDealer.com team took time out of their busy schedule to give back to the community.

TheRealEstateDealer.com's team gave a helping hand when they participated in the 16th Annual Chicago Cares Serve-a-thon. According to the Chicago Cares website:

"On the second Saturday of every June, thousands of Chicago Cares volunteers create positive and inspiring learning environments for Chicago's children at the annual Chicago Cares Serve-a-thon - the city's largest day of service. At schools throughout the city, volunteers paint bright murals, organize libraries, brighten classrooms and hallways, create line games on playgrounds to encourage play and activity, and beautify school grounds with landscaping and planter benches. Children and community members are proud of their schools and volunteers see an immediate change in their community."

A group including the TheRealEstateDealer.com team went out to the Anthony Annex of the Burnham/Anthony Mathematics and Science Academy on the southeast side of Chicago. They helped to paint several classrooms and landscape. The group put in six hours of charity work.

The event was particularly gratifying to one of the team members, Richard Woodfork. Richard said, "I am always willing to give back in any way I can. This was a no-brainer for me because I went to kindergarten here. I remember 33 years ago sitting in this very classroom. It brings back memories."

That same day, the management team at TheRealEstateDealer.com proclaimed it will add a link to the website so that visitors can see what the team is doing in the community. Also, links to various charitable organizations will be added so that people can join and give back to their community.

The management team said the addition to the website should be completed during the first week of July, 2009.

If you would like more information about the Chicago Cares program, visit their website.

You can view additional photos from the event at our website.

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The Crucial Steps All New Investors Need To Take

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By: Jason Hanson

When I’m at networking events I always get multiple people who come up to me and ask me what they should do first. I then inquire if they have any real estate investing experience and determine how “new” they really are. Most of the people I’ve talked to have maybe read a book or two or purchased a course and that’s about it.

So, the first thing I tell them is to make sure they really want to get into this business and that they’re not just looking to get-rich-quick (you will make a lot of money in this business, but there is a learning process just like any new endeavor).

Of course most people quickly nod their heads and let me know they’re 100% serious and devoted to becoming a successful real estate investor. Next, I tell them they need to get educated (read and learn everything you can about real estate investing). Then I tell them they need to decide on their target market. What zip codes do they plan to invest in? (You want three bedroom, two bathroom properties in decent neighborhoods).

Once they have identified their market, they have to set up the infrastructure for the business. They need to form an LLC, they need to get a phone number, they need to order business cards, they need to create a website.

After a person has their infrastructure set up, the next thing to do is focus on marketing. They need to drive for dollars, send out letters, get on craigslist daily, and put out bandit signs. Once the marketing is started, the fun begins…because then the calls roll in, people learn to evaluate a deal and then eventually close a deal and receive a fat check.

So, after a person has their infrastructure in place they should immediately begin marketing and never stop. Marketing is the lifeblood of this business so please learn to love it because the most successful real estate investors invest the most time in marketing.

Jason R. Hanson is the founder of National Real Estate Investor Month, author of “How to Build a Real Estate Empire” and mentor to students all across America. To get a FREE copy of Jason’s Special Report “The Insider’s Guide To Buying Your First Investment Property in 83 Days or Less!” visit http://www.PrimoCoach.com or call 800-865-1702.

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Building Your Buyers List And Finding G.R.E.A.T. Buyers

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By: Matt Gerchow

Building Your Buyers List and Finding G.R.E.A.T. Buyers

Your goal as a Wholesaler is to find between 6-10 GREAT buyers. Go ahead and put your hand down, I know what your question is already. But Matt, shouldn’t we try to have as many buyers as possible? Shouldn’t we market all of our deals to everyone? The answer to both of these questions is no, but yes at the same time.

Let’s start by dissecting the word GREAT into the individual letters.
G is for Good
A GREAT buyer is good at what they do. They take their business seriously and want to succeed in real estate.

R is for Ready
A GREAT buyer is ready to buy. They will usually have two or three rehab projects going at a time. Paying one additional month of interest is merely a cost of doing business.

E is for Eager
A GREAT buyer is eager to close. They know that you don’t make any money unless you convert properties into dollars. The sooner they can close the sooner they can get their crew started on it.

A is for Accountable
A GREAT buyer is accountable to their word. You don’t have to wonder if they are going to disturb tenants or homeowners, will forget to order an appraisal or forget to show up for a closing.

T is for Timely
A GREAT buyer is timely and on time. If they say they will meet you there at 10am, they are there. If you schedule them to close at noon and your sellers at 2pm, there will not be a problem.

Now that we know what a GREAT buyer is, there are several reasons we want to work with a limited amount of buyers, many of which we learned the hard way.

You need to watch out for people that try to go around you on a deal. This has to be the lowest form of slime-ball that I have ever seen. If you are one of these people, put the book down and ask for your money back now. I really don’t want you becoming successful in wholesaling or any other type of real estate.

A “Go-Around”, happens when someone approaches the seller of the property, usually with your email in hand and attempts to undercut your assignment fee by offering them a few thousand more than you did. This started happening especially after we allowed people to automatically enroll themselves as one of our buyers through our website. The more people you advertise to, the better chance you have of this happening.

Here’s a way to fix this in a jiffy. Send an email blast to your entire group about one of your rentals. If you don’t have any rentals, advertise a friend’s house who works from home. If you don’t have any friends, well, that’s a different book.

Here’s what you do. Blast out a real juicy deal with lots of equity that will be hard for them to pass up. Make very clear instructions, “Do Not Disturb, Owner Living in House.” Instruct your tenant or friend to act like the owner and listen to everyone that stops by and tries to intervene in “the contract.” Pay them $20 for every name, phone number and email that they get. For a hundred bucks you’ll weed out your list in a matter of a week.

In addition, to “go-arounds,” working with many buyers requires you to educate each new buyer on how you do business. When I first got started Paul would hammer home the fact that whatever terms we agreed to on the first deal would set the precedent for every deal that followed with that Investor. This would include; the percentage of the assignment fee up front, who held the escrow and which title company conducted the closing.

Where else can you find GREAT buyers?


The County Courthouse

Try going to your local courthouse auction and see who is buying. Chances are they have a boatload of bank and private finds behind them. Keep in mind I said “buying.” The newbie Investor that has their heart set on Aunt Jenny’s condo that is in foreclosure is not your buyer.


Your Email Inbox

Search your email inbox for the person that originates an email about new properties. You have to be careful because a lot of these people are wholesaling everything and don’t have any real money for a closing.


Hard Money Lenders

Call every hard money lender you know. Ask them who currently has money and is looking for properties. Incentivize them by telling them you will direct the hard money loan back their way. They may not want to release the information but they can find out what they are looking for on your behalf.

Bandit Signs

We used to put signs out all over town that are totally different from the ones that you normally see. Most signs are yelling at you that they want to “’Buy Houses for Cash!” We have signs that say “We Sell Distressed Properties”. They then call a phone number and are instructed to enter their fax number and a list will be sent to them. Here’s a bit of logic to think about. The people we buy properties from usually do not live in the neighborhoods where we buy properties. They are landlords and what we term “don’t-wanters.” Investors are the ones driving these neighborhoods looking for properties that have the usual distressed markings, such as: overgrown grass, busted windows, bad paint, etc.

Website
You take your pick on how you want to gather the information, but the best way I have found so far is to direct them to a website. The reason being is you can squeeze them for information before they see any properties for sale.

Let’s face it in this day and age if someone does not have internet access, they probably are not your Buyer. Even as I write this I am sitting in a hotel room two hours outside of Bogota, Colombia and my high speed access is working just fine.

If you want to include a phone number, I recommend you using Kall8 for 800 numbers as you can reroute them very easily with an internet connection. This way you can easily transfer the calls to an office when your business starts to grow and you won’t have wasted a ton of money on advertising to your cell phone. Trust me on this one, I learned the hard way.

Fax-On-Demand or FaxBack
Another service that is great for building a buyers list is Fax-On-Demand. If you use a service to send them the current list of properties they enter their fax number or “opt-in” and then you are able to send them faxes in the future as well. Although I do not use this service any longer, here is a link where you can see a real example of a faxback. Use your bandit signs to promote this number.

Here are a few sites that offer this service. Corporatefax.com, Globalfax.com and Mast-ent.com are a few of the companies that can provide this service for you. This list is just to get you started. Try and find one where you upload a computer file vs. faxing in your ad copy, the quality will be MUCH better.

Direct mail to high end apartment complexes

These folks are usually on the cusp of buying their own home. They might have moved to a new location temporarily and have now accepted that they are going to be living in this new location and would like to start earning equity every year rather than dumping it into rent. I am a perfect example of this having lived in Seattle, New York, Miami and Bogota. Each time I move I like to rent before deciding on a property to buy.

This strategy is usually applied once you have implemented several other marketing techniques first.

Craigslist.org

Placing ads for investment partners is another great way to build your Investors list. Try something like this:

“Investment company seeks partner for several properties in the [your county] area. We have secured special access to non-listed properties that are direct to seller.

WHAT TO ASK FOR

So what type of information should you collect from a potential buyer? If you have visited several investor sites, you already know what to ask for. If you are like me and are ambitiously lazy, here is the information in concise format.

• Email address
• Company Name
• First and Last Name
• Company Address
• Preferred Phone
• Fax Number
• Type of property they are interested in: Single Family, Multi-Family, Commercial
• Approximately how much capital are they working with?
• Are they interested in loaning money on mortgages?
• What level of Rehab are they comfortable with?
• How many transactions have they completed in their career?

Remember... you only need 6-10 G.R.E.A.T. buyers to have a very successful career as a Real Estate Investor. Finding these 6-10 buyers is the challenge.

If anyone has any additional questions regarding the creation of their buyers list, please feel free to post them on this thread.


Hope this helps,

Matt Gerchow
Currently In S. America for 4-Months...Next Stop, Thailand for 6-Months


www.Real-Estate-Investing.com - Learn to Invest, set your business on auto-pilot and start traveling the world full-time. Your lifestyle could completely change, in a lot less time than you think.

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