All Forum Posts by: Max M.

Thanks, sounds like doing all cash with no agents could be a pretty good way to get houses if the numbers are right for my intended transaction. Good thing to think about for the future when I have several hundred thousand dollars lying around. Could be good to drive a sweet deal if necessary.

Let's say someone FSBO's a house and I buy it from them, all cash, for $300,000. What would it probably cost to actually close the deal?

1st of all I'd just like to express how nice it is to know a bigwig such as yourself has not forgotten about me. Knowing you are still paying attention makes me feel all warm and fuzzy inside I am impressed with your follow-up.

I found some really good stuff about dealing with sellers on the phone from Claude Diamond. I wanted to bounce an idea off of him and ended up accidentally joining one of his Skype mastermind group sessions which was pretty funny. One guy there once found a property which ended up having a human corpse in it that nobody knew about. We talked afterward and did a seller call roleplay which was really tough but also surprisingly fun and addictive. This he'll do for free with anyone for a little bit of time as a preview. I ended up getting some free ebooks from him, the most important of which was his GUTS sales method which is what I needed most because it really frames things properly when it comes to dealing with prospects of any kind. His specialty is "giving good phone." So if you ever want a good phonejob just call him.

Also by some weird twist of fate I ended up finding a few amazing resources for both lease options and live seller calls for these types of deals. Digesting some of it pushed my timetable back as I continued defining and then creating my database tables. It's easily years of content, but I just watched it when I was indecisive about my database and process of funneling from marketing all the way through to deal, as the database fields would all reflect this. Setting up this database got me thinking critically about many aspects of the process which I didn't consider before.

An e-mail from my mentor brought me back to present day reality. It was a video update where he was considering starting up a new 45 days to $5,000 challenge with the students if enough wanted to get on board. He was a bit hesitant about it because the last challenge started with 37 students, and only 6 completed it, many of the rest just disappeared during the challenge. He didn't like those numbers. He said this might be the last free one he does, because maybe it'll take some skin in the game to get people to take it more seriously. This got my attention. The 45 day challenge isn't really anything much more than the usual mentorship, except it's kind of a fun way to rally together and have a competition (and you must send in weekly report forms about your marketing and stuff, # of property info sheets sent in, # of 3 way calls etc), but since this new challenge was coming up at a similar time to my database completion I decided to step up on that because I want to compete and see how far I can go by the end of the challenge completely fresh with no previos marketing momentum.

Excellent news on the database front: Turns out having super functional, sortable and easy to use forms for my lists is much easier than I thought. By the time the 45 day challenge started, I had 3/4 list forms set up already which work perfectly and can easily be imported/exported to spreadsheets if that's ever needed, but not necessary as I can easily set up custom spreadsheet style forms for sorting with a visual overview. These things will make the mechanics of tracking and follow-up effortless. The only form I didn't complete is my retail buyer's list which is the most complex form (most of the fields won't be filled out except for the most serious buyer prospects and ones who actually ended up buying, since they relate to working on their credit.) I've already tested these forms with dummy data and they're awesome. Far better than any CRM for my purposes in my opinion.

I will focus exclusively on cold calling to start with since it's the most direct path to reaching out and touching prospective sellers and learning to deal with them. I do not fear reaching Realtors or management companies or other investors by accident. I look forward to learning how to deal with anybody and seeing what their angle is and what they want and need.

One piece of bad news. The day of the first challenge conference call (yesterday), about 20 minutes before the scheduled time, I punched what I thought was a pile of blankets super hard. Turned out there was a solid metal object underneath the top most blanket, and since my punch did not hit it square, I ended up seriously screwing up my right hand and wrist. At first there was just a little bit of pain if I moved my hand or wrist far, but after several hours I was in non-stop agony and any finger/hand/wrist movement or pressure of any kind was too painful to consider.

Now my right hand is out of commission :) Fortunately the pain has gone down in the past few hours and I have more freedom of movement in my right hand. However, my hand is still useless. For instance, if I attempt to use my computer mouse my hand and wrist will immediately be in agony. My right arm is for all practical purposes a chicken wing right now. 1 hour ago I noticed my hand is quite swollen. It's twice as thick in some parts than my left.

Had this not happened I would have been doing my first cold calls today. I'm hoping I will regain use of my right hand in 1-2 days based on the improvement I've seen so far. If not I will have to start considering doing this business one-handed (and not in a fun way)

on a potentially long term basis. Considering doing even the most basic routine things is difficult or impossible now, or very painful, this would not be desirable.

I'm considering posting about my progress in the 45 day challenge in my blog from time to time.

This post has been brought to you by my left hand.

 LOL that's sad. It's kind of funny, I always hear about shady real estate people, but in my research I've found nothing but ethical investors. Maybe I'm looking in the right places for my information too much? ;)

Good idea. Although rent credits can be a nice selling point, ultimately the numbers of the option fee, rent, or selling price can always be negotiated or offered in different ways with similar overall profit levels, depending on which terms would work best for the best buyer.

@Brian Gibbons Ah yes, of course, I forgot that the option fee is simply that, an option fee.

@Guy M.From what I've seen, carefully qualifying the tenant-buyers for loan approval within the time-frame of the lease option is standard procedure for lease option guys. But it seems like maybe it can still be a problem with rent credits?

Does the non-refundable front-end option consideration/assignment fee which is credited to the sales price count as making it a financing agreement under these laws?

Are some suburban single family house owning landlords wanting to dump some properties off their portfolio as a result of this?

By the way guys feel free to call me on my phone number or Skype if you want to shoot the breeze about this wonderful topic.

So in the past day or so I've started defining what lists I want to keep track of in my database, but before I can decide on all the fields and such, I realized that I'm not too clear on exactly what separates my marketing list from my leads list and prospects list. The idea is that the marketing list is the biggest list, followed by the lead list which would be a fraction of the size of the marketing list, followed by the prospects list which would be a fraction of the size of the leads list, etc.

My database for my motivated seller funnel will have 5 lists.

1. Marketing list (all the people/properties that get marketed to)

2. Leads list (my current definition: people who are in the market for a solution that I might be able to provide, but I don't know yet what their exact situation is or whether they'll deal with me)

3. Prospect list (people who seem to be in the market for what I have to offer, show interest in finding out more about what I have to offer, and dealing with me)

4. Pre-contract list (qualified prospects who seem to be looking to move forward to having me get their house under contract)

5. Under Contract list

Seems rather straightforward right? Here's the problem:

One of my primary marketing methods due to having zero money, will be contacting online FSBO/rental ads. Would a FSBO ad already be considered a lead, or just a marketing target? Let's say I call them up and they turn out to be a legit FSBO who isn't messing around and would like to get their house under contract (whether what I have to offer interests them, let's just skip for the sake of this example). Does that make them a lead? If they turn out to be a prospect do they automatically jump from marketing target to prospect, without really having to be a "lead"?

This may seem like a trivial, or academic nitpick, but I can assure you this is of prime importance to how I structure my database. The form must follow function, and the function must follow the discrete points of transition in the process of getting houses, from marketing to getting them under contract. Since my marketing/leads/prospects lists (assuming I still end up using all 3 as discrete lists, instead of combining it into 2 lists) will be the largest lists, they will require the most fine tuning of systematization.

Tell me more about that deal. Were you looking for a retail buyer, a traditional buy and hold investor, or a flipper?

Oh by the way, if you're looking for Brandon Turner, just mention he's looking particularly tall lately. That should bring him out of the woodwork.

Don't tell him I showed you this:

http://www.biggerpockets.com/forums/56/topics/159008-see-pic-brandon-turner-does-exist-and-he-is-much-shorter-in-person

@Clifford PalaNo business yet as I'm about to get started for the first time. Technically I'm not ramping up anything except how easily I will be able to go balls to the wall without drowning in my own disorganization. This isn't a hobby for me. Once I start marketing I plan on going H.A.M. and I DONT MEAN THIS KIND OF HAM!!

That's why I'm doing my little CRM, because once I start marketing I don't want to lose momentum dealing with administrative B.S. that could be relatively easily systematized. Of course there will be many things that need to be adjusted or added as I go along, but I figure I can get the bulk of the system in place and ready for actual field testing/tweaking in 1-3 weeks.

Since I have no money I'm using LibreOffice Base as my database software. I spent the last couple weeks learning the ropes. I decided that given my timetable and lack of expertise, I'm going to avoid setting up relations between the tables of my database. Instead I will use one table for each of my lists. Each list will have a unique function and unique combination of fields (in addition to the normal ones like name, property address, contact info, etc). I'm paying close attention to exactly what I want to know and keep track of in each list and how it affects and is affected by other lists.

Seller funnel (5 lists):

Marketing List > Lead List > Prospect List > Pre-Contract List > Under Contract List

If someone moves down the funnel from marketing > etc. they won't be removed from the wider parts of the funnel. Instead they will have a record in each list they make it to (their status field in the previous lists will be adjusted to denote how far they ended up going). This is for future analytic purposes so I can determine what % of 1 list resulted in 1 item of another list, etc. So I want redundancy between lists, but I don't want redundancy within each individual list.

Example: When I get someone's property under contract, it will be in all 5 seller lists in the funnel. This will not be automatic. I will have manually added their info into each list, and every time their status with me changed, I would manually update their status field on each list. This is a bit more work intensive than having it automatic by creating relational tables, but I don't have the time or expertise given my situation to implement such tables (especially the potential for disaster if I screw something up). Plus, since each successive table in the seller funnel gets smaller and smaller, I'd be HAPPY to manually add something and update something if it actually means getting closer and closer to getting a property under contract. If I'm worried about systematizing adding people to the last 3 lists, that's a high quality problem because it means I'm doing a LOT of deals! Ok, maybe the Prospect list could become problematic earlier than that, but still.

Buyer funnel (4 lists):

Retail Buyers List > Hot Buyers List > Pre-Deal List > Closed Deal List

Only the first list here will have a lot of action I suspect, unless I'm working with a few properties under contract at the same time, a high quality problem! The last 3 lists will have a field for specific properties, as they only apply to specific properties. Redundancy between lists and updation between lists will work the same as the seller funnel. Old records will be kept for analytic purposes. Status fields will be used of course.

Wholesaler List

Pretty simple list of wholesalers I'm working with.

Shiny Objects List

Random real estate stuff/people/properties that interest me outside of my marketing campaigns. For instance there are some houses in my neighborhood that I like the looks/location of, or that are for sale. I want to find out more about what's going on with them and see if anyone might be interested in selling. Two of the houses have been listed for several years with price increases and lowerings. They might be frustrated (or maybe they just don't care how long they have to wait to get a big payday). They obviously don't mind paying an agent fee, so they shouldn't mind not seeing 3-5% (or maybe even a little more) of their selling price go in their pocket if I lease option them. Plus with lease options, assuming their prices aren't retarded (didn't run comps yet) they actually can much more quickly and easily get their property under contract for maximum price, if they're willing to accept monthly payments before the tenant-buyers exercise their option to purchase. But this is all experimental/educational speculation on inefficient marketing strategies, hence shiny objects.

For forms I have 3 main functions I'll put in place:

1. Searching all lists simultaneously to determine if someone or something is already in my system (don't want to repeat contact someone, and always want to know what happened with them or a property with me before contacting them again)

2. Quickly finding, adding, deleting or updating records to any of the lists. Every time I direct market to a new person they get added to the list (when I start doing mailings in the future this will work a little differently, it will be a high quality problem because I won't be able to afford mailings until I do 1-2 deals).

3. Quick preset and/or easily adjustable searches/sorts of specific criteria in certain lists. This is so I can easily know what's going on with all my stuff, so I can stay on top of following up with everything without having to keep it all in my head. Standardized forms for checking marketing/lead/prospect/pre-contract followups, current deals, etc.

Queries

I've not yet defined my queries yet. I will do this once my actual tables are made and I'm creating the forms. The queries will be defined by the exact functionality I need for each form.

I might end up making some tables specifically to serve as objects for certain queries to simplify creating more complex forms. But I'm not going to set up any table relations per se. The query specific tables will only act as organizational placeholders for pulling specific combinations of info off one or multiple tables, for specific forms.