stumped.

General Real Estate Investing
1

So I was at the breakfast table discussing REI with my uncle. I asked for his feedback on some material and it lead to further discussion of my doorknocking on preforeclosures.

Now let me pause a second here and say that I have went out already, with the “Just Do It” mind set. I’d also like to add, I’m the type of person that likes to know every detail in a particular subject. So it took quite a push for me to go out and attempt this without knowing “everything”. I do agree that to learn you just have to go and do, however I also agree you should have enough knowledge so that you can portray the “professional” which you claim.

Continuing along, I’ve made many posts about how I would go about doing things I claim to these distressed sellers (ie/ getting them a forbearance etc.). Those replies have been informative and also mention…“just let them do the talking and don’t htink so much”. Ok, advice taken…but I’d like to address my scenario with my uncle…

As I was going through my routine (roleplaying) of how I’d like to get my foot in the door and how I could help these homeowners. My uncle asked “Ok, let’s say the homeowner says ‘Ok bail me out’, what do you do now?” and to my surprise I really didn’t have an answer for him which I felt comfortable with. It was along the lines of let me contact my partner and we’ll write up an offer of what we can give you for your home. What this scenario showed me is that, if I was lucky enough to get in the door to have these conversations with the sellers…I feel I would not have convincing (professional) answers to show that I am capable of handling this situation. My uncle added in that I should have a contract already to written up in a situation like this. I understand some (most?) do this but I don’t think I have enough experience to go writting offers at the kitchen table.

Still with me? (sorry for the long post)…Having that said, I’m trying to further prepare myself so that I can avoid an embarrassing situation like this and increase my chances of landing some deals. Should I be researching the leins, doing CMA’s before knocking on the door? Also, how do I handle situations if they want to sell the home and I say yes I can purchase this cash…umm well for how much?

I understand you will never know everything there is to know, but I feel some of these areas are key components and likely questions they will ask in which I don’t have the proper material. I’d like to hear some feedback…this has put me in a pause position (good thing i have a seminar tomorrow to hopefully give me a boost in which I need again).

Thanks all,
Ryan

2

Get a letter of authorization to speak with the bank/banks on there behalf and start the short sale process. Get the property down low enough and either play or pass it off to another investor For a profit!

3

rob, i appreciate your reply. i think my post was a little misleading it seems. i’m aware of the process and how it works. i’m more stressing the fact of how to convey this to the sellers during the discussion.

i need to better equip myself with knowledge (responses) as well as material (contracts). i feel there are many holes which i need to fill (see first post) and i don’t feel comfortable approaching sellers with these large gaps.

Ryan

4

You can get all the contracts you need if you are really nice to the title company!

Also keep in mind you should be able to Google search for the contracts in your state!

look under the department of real estate

5

I feel im digging myself a hole here and getting off what i’m trying to say.

My mother works for an attorney who does mostly closings. I can obtain all the contracts I need. As an agent I can obtain these as well. I’ll elborate a little more since this is one of the topics addressed originally. If i were to be sitting at the kitchen table and they said “we want out, make us an offer for the home”. I really wouldn’t know what to offer them. This is just one of the examples above in which I was role playing with my uncle to see how I would react to homeowner’s questions and concerns.

Hope this clarifies my issue a bit.

Ryan

6

well when talking with them you should be asking them ball park what they think its worth or if they were thinking of listing it how much they thought they would list it for. you should also be looking around and observing what repairs maybe needed and i think rob has said in the past in ball park figure 10,000 per 1,000 sq ft of house…now how much do you want or need to make to make this worth your time…formula i use 140,000 or under is
what they thought it was worth fmv * .7 - repairs - profit = what you can offer max now make that offer contingent on appraisel coming back at value they gave you …this is not the whole coversation but the lagist of how to get to where u can come up with a number also as rob has stated dont make your offer 140,000 or whatever it is a even number and how i do this is find out about what there payment was use that as caring cost for 6 months so this is part of the repair for me and u should come up with somethign more like 139,850.45 now instead of just coming up with number that they may think u just guessed at they think are more likely to think that u have reason and have don your homework to come up with a number like that and less chance they will counter your offer since rob told me to do this i have been able to get a lot more offers considered without them counter offering back.

7

Ryanpal,

Here is what I tell them when they call or at their kitchen table, especially If I had a customer that said “I just want out”

I can buy your property in two ways, CASH OR ON TERMS. If I pay all cash I will have to buy at least 60-70% below retail. And with terms I can buy your house in so many different creative ways. Tell them that you are a straight forward type of person and would appreciate either a yes or a no answer from them. And in return you will give them your own yes or no decision.

IF THEY WANT CASH
How much do you think your home is worth?
How did you get that figure?
How long has your house been for sale?
The only way I can buy your house all cash is if I bought it at 60-70% below retail, plus, minus any repairs.
Is this something you might be interested in?

IF THEY DON’T AGREE TO THE CASH DEAL
Ask them, “What are you hoping I could do for you” and then be quiet and listen
Ask them, “Would you be interested in agreeing to some kind of terms where we both are happy”?

ON TERMS
Ask them, Out of curiosity, why are you selling your house? Are you in a hurry to sell your house (any deadlines)?
What are you gonna do with the house if I don’t buy it, they will probably say “list it with a realtor” then ask them “how much are you going to list it for?” (WRITE THIS FIGURE DOWN)

How long do you think it will sit on the market? Ask what their monthly payment is? Then tell them that “most likely it will sit there for up to 5-6 months, and remind them they will have to continue to pay their monthly payment” (SUBTRACT THIS AMOUNT FROM THE ABOVE FIGURE)

IF a realtor sells it for you it will cost you an additional 6% off your selling price, then you’ll have to pay another 3-4% in closing cost on top of that. (SUBTRACT THIS AMOUNT FROM THE ABOVE FIGURE)

Ask them what repairs and/or cosmetics are needed. (SUBTRACT THIS AMOUNT FROM THE ABOVE FIGURE)

Tell them, As an investor I need to make money, how much do you think I need to make? (SUBTRACT THIS AMOUNT FROM THE ABOVE FIGURE)

From that final number work on agreeing to terms. Remind them that by selling you their home you are releiving them of six months of heartache and X amount of dollars of mortgage payments. (REMIND THEM OF THE DOLLAR AMOUNT OF THE MORTGAGE PAYMENTS)

Tell them, “I don’t know if I could offer you this exact deal or not, obviously I’ll need to see the house".
Ask them, “Do you need all of your equity out of your house to go and buy another house?”

That’s what I kinda say, just two days ago I had a owner say they wanted out. I told him to just deed me the house and I’ll take the payments over, and He did!!! Another deal I did yesterday I got them to throw in a boat.

You just never know Ryan, I dont use a script because every situation is different, Just listen and feel the owner out and meet his need. Don’t make it any more dificult than it allready is. Just simplify it and give them a solution. There looking for you to help, they need you more than you need them.

Hope this helps and I hope I didnt confuse you anymore than you are. Hell I shouldn’t even be giving advice I’m fairly new too.

Good Luck,
John

8

Man John that was good where did you learn all of that?

9

reading and ASKING!!! ALOT from you of course. ;D

John

10

i also use parts of what john was saying if u wanted anymore details on how they are using this look up tc & vickie bradleys course how to make money this month its basiclly word for word what john is using and they have a little more good insites to know

11

I got the above info. from reading posts on here and www.mentortolunch.com, some free info from Conti & Finkle, and others.

I just kinda put different ideas together and see how it works. I’ve never read any books or courses from Tc & Vickie Bradley so I couldn’t tell ya much about them. I do get e-mails from them and they do sound like good people.

John

12

yes i agree as i have read all the above you have read and use you have to read and find bits and pieces that are your style and make it into somehting that you can use and works for you and if anyone wants maybe a little more in depth of how they were using it feel free to pm me

13

excellent info John_NM. It is amazing how many different approaches you can take. I guess that is another issue, each time I read or hear something new, I see some things I can use but others in which would confict with the way i’d like to present myself.

i’d like to thank eveyrone on this board for all the help provided for free. i just came back from a seminar and although it was informative (somewhat), it can’t compare to the advice and knowledge gained here. I guess I can’t expect much from a $10 seminar, but I really didn’t want to pay money to be pitched another seminar I should purchase for $1500. So, once again I thank all of you, and I’ll post back with my results of how I make out with my next door knocking experience. It’s time to “Just Do It”. (wow that quote really does summarize REI)

Ryan

14

John,

What do you exactly mean by Terms? I thought Cash deal and Term deal is pretty much same to the seller. You either use your own money or get loan from lender, but it is same to the seller. The different is that the seller is able to close the deal quicker with cash, is that right?

Thanks,
JW

15

JW what you are referring to - cash from you or cash from a lender is the same to the seller.

What he means by terms though is some version of seller carry back notes, seller financing the whole deal, assuming the seller’s note, etc. Basically terms other than you give me a price and I pay you that price in cash (whether it’s my money or other people’s money doesn’t matter).

16

On a cash deal you buy the house straight out for what ever agreed price either cash or through a bank. The seller is paid full at closing. Yes you can close quicker with cash.

On terms, Whatever price you agreed upon you work out some kind of terms to pay the loan out to the seller in a certaim amount of time. You and the seller work out the down payment (if any), the monthly payments, interest rate, etc.
There are 100 different ways to buy a house on terms, just get creative. This works only with FSBO.

Hope this helps.

John

17

Thanks guys. It was very clear. I love this forum. :slight_smile:

18

i dont know if using fsbo in a general term john nm but landlords with recent evictions are a good way to get terms also

19

I found these discussion very interesting. I have a question for both John_NM and Whitewater Investments.

John_NM
How do you find these people to talk to? What kinda marketing do you do?

Whitewater Investments
You mentioned dealing with landlords with recent evictions, where and how do you get this information?

Thanks,

Joe

20

well for most your not going to be as lucky as i am i have state web site that i can look up foreclosures, divorce, probate, evictions and so on you get the point for my whole state WI but chances are you will have to go to the court house for the county your working and get the lastest eviction filings aka tired landlords