All Forum Posts by: Barbara Grassey

The speaking guru, they meet at a nice house on the water in your neck of the woods? If so I have been invited. I had better things to do, like trim my toenails

Hey Jeff,

Sorry, just checked back into this post. That would be a definite NO, but I am with you. It seems like only five years ago that particular guru was peddling crummy 2/1 frames in South St Pete.
You will be happy to know that at a recent event he sold 7 programs at around $2,500 and had 6 returns within two weeks. I always seem to be tied up when he has an event. Pity...

Barbara

Hi Alex,

I guess my first question is What is the average length of time on market for a house to sell in your area? A two month option is pretty short, but not impossible.

Second question, Is the house vacant or occupied? If it is vacant and in good condition, I would start my marketing using the five day round robin auction method. You will find out very quickly if the market will bear a $220k price tag. You may not sell the property, but you will garner a list of buyers for homes either in that area or price range or both which will help you market any future properties you auction. Also, if the auction method doesn't work, you still have plenty of time to try other, more traditional marketing strategies.

Both of these deals don't seem to have very much room in them but then again, you are not looking to make a killing which is a very good strategy in this market. On the second property, the deal looks too skinny to use a seller's agent.

You don't say how much money you are paying for the options and what the liquidated damages are if you don't exercise your option. That is another consideration of the deal.

If houses are moving fairly fast in your area, you may be carving out a very nice niche for yourself. Let us know how you do.

Barbara

Hi Will,

The main reason that investors use bird dogs is that they are basically free or very inexpensive labor. It is like hiring a commission salesman. Some bird dogs are lead generators; some are paid only if they bring a deal that the investor closes on. It is also better to have five people looking for good deals instead of just one.

I don't know of any investor who pays a bird dog for an MLS lead. There is no reason to do so. If a deal is in the MLS, a real estate agent is going to get a commission. Most investors have their own real estate agent looking for great MLS deals for them (or they have access to the MLS themselves). Why pay an extra fee?

The real value of a bird dog is that they can find either the specific type of deal an investor is looking for or deals that others don't know about. We are in a sellers' market right now and some people wonder why an investor would use a bird dog. But with so many people upside down in their houses and/or behind in their payments, true good deals are not as easy to find as an outsider would think.

Bird dogs turn in all levels of leads, from something as simple as an address and a few notes on the property to more detailed information such as the address, the owner's name and address, pictures of the property, and any other data on the property such as info from the tax appraiser's or tax accessor's sites. If the bird dog is working as a lead generator, he may be paid varying rates depending on the depth of information and whether or not the investor closes on a deal.

Can a bird dog just go through websites and find deals? Possibly. Most investors would rather spend their time negotiating deals instead of doing administrative work. Frankly, I can pay someone $10 an hour to do that; it is not something I would pay a bird dog for.

If you are going to bird dog, you need to first check the laws in your state to see if you can legally accept a fee for finding properties if you are not professionally licensed for real estate. There are legal ways around this, most notably putting a property under contract and assigning a contract.

I think bird dogging is one of the best ways to learn if real estate is the business for you. Of course, I am a little prejudiced -- I wrote an ebook on bird dogging. But, you can learn the market, make money without having to invest much more than your time and establish contacts with other investors who you can learn from. Give it a try.

Best of luck to you,

Barbara

Some very good comments. The main purpose of the 700 billion bailout was to ease the credit market between the banks, Wall Street, etc. Huge corporations like GE or governments -- state, county and city -- rely on liquidity in the credit market to grease their wheels. This bailout was to get the wheels of industry and government turning again. Most people did not realize that when the money came out of the market, it would effect everything from the former AIG chairmans retirement account to the street sweepers paycheck. This bailout was really not intended to help the real estate market per se.

That being said, 700 billion aint gonna get it. They will need trillions of dollars for this bailout. That means the government will start printing money and that means inflation. While housing values will keep dropping for a minimum of another year or two (or five, depending on how deep this goes), inflation is about to run rampant. So a house that has dropped in value to $100k in todays market, in two years will cost $115k - $130k just because the dollar is worth less. Or worthless to be more accurate.

The good news is that if you have fixed rate mortgages, the dollars that you pay in two to three years from now will be cheaper for you. Small comfort, I know.

On the plus side, seller financing will be huge in the coming years and investors who understand that can position themselves for great upside potential.

Barbara

Why buy now? Even if prices have hit bottom in your area, you are not going to see an upswing in values for several years. So now you are holding, which is good as long as the property is cashflowing. However, if all you are getting is cashflow, why not use long-term leases to control the property? Buying has any number of downside risks which leasing will avoid. When the market starts to move again, you are in prime position to buy the property -- with owner financing -- from the owner that you have been faithfully paying on time.

And for the record, we havent seen bottom yet. Strap yourselves in boys. Its going to be a wild ride.

Barbara

So 1324 sales in those four areas and 1210 foreclosures. So does that mean only 114 sales were non-foreclosures. Also, are those the sales figures for total sales in the area or just sales of those properties listed in the MLS.

We are always trying to figure out what is selling and there is no real break down of figures as to short sales, REOs and foreclosures. It is time for some sort of coding system to differentiate the sales. Tho right now we would argue that just about every sale is a distress sale in one way or another.

Barbara

Okay Pamela -- I actually wrote a book for women called Dont Make Me Slap You. It doesnt have to do with real estate but, and not to make you feel bad about that 30k you gave to Kiyosaki but... YIKES.

People, the guys selling the books and tapes for ten, twenty, SIXTY grand learned from a bunch of guys who learned the hard way. And those old guys dont charge that kind of money. You want to look into John Schaub, Jack Miller, Peter Fortunato, Jay Turner, the late Warren Harding. They arent slick and glossy and internet savvy. They just know, live and breathe real estate. They have been through market downturns and know how to handle them. And they dont charge you an arm and a leg.

Dont feel bad Pamela. I like Kiyosakis stuff. I just read the books. He doesnt need my money. Do me a huge favor. Read/listen to Johns book first. But dont leave the kiyosaki material sitting on the shelf. Go through everything. Learn as much as you can. And apply it. But before you buy any real estate, always ask yourself, What is my exit strategy for this property. If you cant get out of it profitably, dont get into it.

Best of luck to you,

Barbara

Hey Tyra,

He uses 50 - 100 bandit signs and the internet to help drive traffic to the open house. The signs are done in different colors --psychological buying reasons behind all of them. It has been a while since I read the book, but I think he has updated it for the internet and for this down market. I am not sure anymore what was in the book. One thing I know he does is not give out the address of the house until the day before the open house. That way, people have to show up when he wants them to. The trick is to get as many people there at one time so that people feel like there is something special about the house and it fosters competition among them.

I am pretty sure the book tells you to start the bidding at 50 - 60 percent of what you think a fair sales price would be. You do that because that brings people to your open house. It is the opening bid. Remember -- you dont have to sell the house if you dont get your price. You also put in there that you will take the highest and best price. In this market, cash is preferred over anyone who needs to get financing because financing is tight to non-existent.

My friends course sells for under 1,000.00 but if you are on a budget, the book will get you started. I dont think we are supposed to market anything on the forum so I wont.

The reason you start with an auction event is that it will at the very least give you a realistic idea of what your property will actually bring in an open market. You may not want to sell it at that price, but at least you know what you are dealing with. It also gives you a list of people who are at least interested in buying a property. Maybe the property they looked at isnt what they want, but you or your friends may have other properties you can show them.

Hope this helps you.

Barbara

Hey Jeff,

Are the inventories decreasing due to REO sales, listings expiring or straight sales? Our sales are up but the numbers include foreclosures and REOs which skews the results.

Short sales are FOREVER. I dont care what all the gurus say. It is easier to buy them from the banks. ;-) I am seeing REO pricing come waaaaay down as bank inventories go up.

Lehigh Acres is the surprise in your report. Someone may have decided to buy up the town and wait.

Kills me that Punta Gorda, Pt Charlotte and Ft Myers are being overlooked. That is one of the most beautiful areas of Florida -- nice homes, great beaches. Great time to buy there and sit if you can. Desirable, desirable area.

Will send your hello to Larry. That will put a smile on his face.

Barbara

On re-reading the topic, I had one more thought. It is a very good marketing technique to put in the contract that the student has to split profits 50/50. It makes the student BELIEVE that there will be profits. The large upfront fee is really what he is going for. The profit split is gravy -- 90% of people wont do a deal even after going through the program. People just dont follow through. The 50/50 is a distraction to give you greater belief in his system.

I know of a speaking guru who charges 30k for his program-- 5k down and 25k from the fees you will make when you become a fabulous, nationally-recognized speaker. When you get to his boot camp, he graciously allows you to buy out the 25k balance for 16k or so. It is the same method as your mentor but with a better twist for the guru. He gets the five thousand dollars, then he either gets another 16k or a trickle of money from people who actually get speaking gigs. A great method for extracting money from people; maybe not so great for the people.

Be careful out there....

Barbara