All Forum Posts by: Rich Urban

I absolutely agree...As with any business, continuing education is crucial to your success if you want to stay competitive.

I'd recommend studying some great marketers like: Dan Kennedy, Bill Glazer, etc....You can take their marketing strategies and plug it into House Buying.

You need to keep up with laws, tax changes (even if you have a CPA), and different real estate investing strategies. Even if you go to educate yourself on a real estate investing topic that you already know "Everything About" you will probably pick up ONE LITTLE TID BIT OF INFORMATION that could make you an extra $20,000...$30,000 that month.

This is such a great message board...it's so nice to see so many New Investors soaking up as much knowledge as they can. I've made it a goal of mine to help the many new "Wannabe Investors" quickly become investors. So here's my question to you -

What is your biggest stumbling block(s) and challenge that you're coming across when breaking into the "Real Estate Investing World"?

Why do you think you're not making money in real estate yet?

I'm curious to see what responses I get...I'll respond to your challenges with my advice and let's see if we can mold you into a Full Time Real Estate Investor!

The problem is that you are doing all of the things that don't make you money in real estate. Going around with a realtor, looking on the web....is a major waste of time. That's just keeping yourself busy..spend that time knocking on the doors of homeowners in foreclosure. If you don't put yourself out there...YOU'LL NEVER GET A DEAL!

What you're doing is looking for deals on houses & not looking for people that need their problems solved. No one sells their house at a serious discount unless they HAVE TO. As investors we buy houses from people that NEED TO SELL, not want to sell. When you're dealing with a Realtor, 9 times out of 10 they're going to show you pretty houses in pretty neighborhoods. I hardly ever deal with Realtors...They know that if a killer deal comes along, I can close with cash and that's when they call me. I wouldn't go around looking at houses with them...they'll surely tell you it's a great deal even if it's not to get that commission (I'm sure I'll catch crap for that statement)..:).

There's a few things that you need to be looking for..THESE are the things that will lead you to the good deals that you're looking for:

1. Divorce
2. Imprisonment or Court Costs
3. Loss of Job
4. Bankruptcy
5. Death
6. Job Transfer
7. Bad Tenants

Most of these types of people can be searched by looking through the public information on your local courthouse records. Depending on your location, most of the time these are available online. Situations like Loss Of Job would be discovered by looking through the foreclosures and knocking on their door. You need to focus your attention on people with these types of situations.
These people usually have serious issues that need to be solved. They at one time had the cash to pay for their mortgage and the expenses associated with it. Now due to circumstances beyond their control, things have been through out of whack and they need someone to get everything reorganized for them. That's your job...Solve their problem and you'll get a good deal.

I've picked up beautiful houses that needed NO WORK at SERIOUS discounts because I solved the sellers problem, and figured out way that I would get paid in the process.

One of my favorite methods is looking through the eviction records and calling all the landlords that are kicking out tenants. Many times people become landlords because they can't sell their home and those are people that have no clue about how to manage a rental property...by the time you contact them, they'll be so fed up with the process that they'll practically give you the house. You'll get a steady supply of deals out of that one if you stick with it.

If you credit is bad & you have no cash, you're going to need to use one of the following strategies until you can increase either your cash supply:

1. Wholesale properties - Locate great deals, put them under contract and sell the contract to an investor with cash or great credit. If you do a few of these you'll be buying houses for cash in no time. I generally make from $10,000 - $20,000 per flip depending upon the equity spread.
**THIS IS THE BEST SCENARIO FOR A NEWBIE WITH NO MONEY

2. Go through a Hard Money Lender (you can find them at a local real estate investing club) and rehab the property and sell retail. Hard money lenders will usually lend up to 70% of the After Repaired Value and base their decision on the property values not your credit. Hard Money Lenders are usually real estate investors that have amassed a ton of capital and need to make an easy return on their money. Keep in mind, you'll pay for the nose for a hard money loan and I wouldn't use them for anything that I was planning on holding for more than 3 - 4 months total. Like I said, they're expensive but if lack of funds is what's standing in the way of a nice profit, it's well worth it. What's the cost of NOT doing the deal?

3. Purchase the property Subject to the existing financing with a promise to pay the owner's portion of the proceeds in 90 - 120 days.

Example: Owner owes $50,000 and you agree to purchase the house for $62,000. You have the owner deed their property to you and you continue to make their payments every month. In 90 - 120 days when you sell the property or can Refinance (it's easier to refi then to obtain a new loan) the homeowner will get their lump sum check for $12,000.
OR....you could negotiate with the seller to receive that $12,000 over a five year period and you would just make the payment each month to them. REMEMBER--- EVERYTHING IN LIFE IS NEGOTIABLE!! This would be the best bet if you plan on using the property as a rental.

4. Find an established investor in your area and arrange a partnership on a "Deal By Deal Basis". If you locate the properties, manage everything and handle any needed work & the other investor puts up his money you'll split the deal 50 / 50. Don't be shy about contacting other investors with this proposition. BELIEVE ME, if you have a good enough deal they'll want in on it. This is a great scenario because aside from having a financial backing, you'll also be taking advantage of the years of experience that the established investor will be bringing to the table. Believe me, even though you'll be managing everything, the other investor is going to be keeping you in the right direction. After all, he wants to make money on that deal...he'll have a vested interest in it. So you'll be getting a free education to boot! You just want to make sure that you have everything in writing to ensure that there are no misunderstandings when it's time to split the proceeds. Write out exactly what is expected of all parties involved and you shouldn't have any problems.

As a side note, if the investor tells you that the deal is garbage...IT'S GARBAGE..:) I've had newbies come to me with some bad deals and it seems like they are so anxious to do their first deal that they try to make make a bad deal into a deal. A pro investor will gladly put their money up for something that has a good return. That's how we eat....:)

There are a few other strategies that you can use, but I would stick with those 4. After that it gets to complicated..:)

Personally, I would focus more on networking with your LOCAL Real Estate investors.

1. If you're a wholesaler it's mandatory that you join your local real estate investing club...every area has them. That's where your buyers are.

2. Place ads in your local classified that would attract a wholesaler.
Ex: Investor Special
3 / 2 - Worth $100k
$55k For Fast Sale

3. Look through your local property appraisor's website and see who owns many properties. These are your landlords..Call them all..They pay top dollar..:)

4. Find out when your city has Foreclosure auctions. They're usually right in front of the courthouse or inside the courthouse. Network with the investors there...they're cash buyers. (They'll be a few lookie-lous in the bunch but they'll be real investors there too)

5. Place bandit signs around town saying something similar to your classified ad.

6. Build your power team - Start talking with Title companies, mtg brokers, realtors....they'll be bound to know some cash buyers.

Basically, if you have a good deal and you tell enough people in the right social circles, the vultures will start to appear...:)

If you can solve people's problems age is not a factor. I started out young as well and once I stopped THINKING about my age it stopped being a problem.

Actually, it somewhat of a benefit. I always found that people wanted to do the deal with me because they were helping some "Hard Working - Young Kid Make Money"...rather than the "old rich guy" ..:)

I started out at 21...broke...bad credit...and no clue on where to begin. First I wanted to do Probates, then Subject-to's, then the next cool "Buzz Word" that I heard about..:)

I started going to my local real estate investing club and just soaked up as much information as I possibly could. I also networked with the top guys in my area. The local real estate clubs are your best asset, you're putting yourself in a room with a ton of people that are currently doing what you want to do, and like to talk about it! Network Network Network...:)

I took many of the guys out to lunch and kissed their butt, while at the same time getting their Real World Advice on what I should be doing. They'd always say things like, if I were starting over, I'd do this....and so I'd do it..and eventually I started making a ton of money..:)

I partnered up my first deals with the president of my local real estate club and my experience began to grow from there.

As a matter of fact, I have my first check sitting on my desk right next to me..It's a check for $14,000 on a wholesale flip that I found through the foreclosures. I went door knocking and struck up a deal with the owners...the President of my real estate club had a HUGE database of investors and he found a buyer for the property..He also helped me with paperwork, and all the "little stuff along the way"..In return, I split the deal with him 50/50...We each made $14,000 & I walked away with one hell of a free education. After that, it was just a matter of replicating the process over and over again.

Finding buyers is definitely tougher, especially in South Florida. It just takes a little bit of ingenuity and you can get them..:)

Here's what I did:

1. For investors that you're wholesaling to. Price is king...create a big list and email them: PICS, COMPS, NEEDED REPAIRS
That's all I care about when I'm analyzing a deal. You need to show them that they're going to make money.

2. For properties that I want to put End-Buyers in (Non-Invesors), I have started focusing on turning renters into homeowners. You need to find a VERY good mtg broker that understand all of the current programs available to first time home buyers. I went through quite a few until I found one that can get deals done with the Mtg. Crunch. You need to learn about what programs are available in your local area for first time home buyers as well. Go to: cccsatl DOT org and find out when the next Consumer Credit Counseling class is. They're free and it's a non-profit organization. Sit in and you'll be amazed by how much money is available for first time home buyers, at least I was..:)

Once you have a way to make things happen, I create fliers saying, "Why Rent When You Can Own" and have neighborhood kids put them on the cars of Walmart, the mall, etc...

I also put up a few different ads on "Craigslist" directed towards renters. Here's how it usually reads:

===============================================
SUBJECT: Uncle Sam Wants To Give You Money To Buy My House...

Call 555-5555 Before This Deal Slips Through Your Fingers....
Buy My Nicely Updated 2 Bedroom House In Port Saint Lucie and pay under $500/month
(THIS IS LESS THAN WHAT IT WOULD COST TO RENT THIS HOUSE!!)

On Top Of That -- Down Payment Assistance Programs Are Also Available!

The Home Purchase Program is designed to help local residents that would not otherwise be able to own a home, purchase a home by providing assistance for down payment, closing costs, prepaids and/or repairs.
In addition, Florida Housing also offers up to $14,999 to assist eligible borrowers with their down payment and closing costs!
I want to see that you take advantage of EVERY PROGRAM THAT YOU ARE ENTITLED TO!

Who is eligible for this Special Financing Program?
Households are eligible for assistance if they meet the following guidelines:
(CREDIT IS NOT A MAJOR FACTOR)

A) Must meet income guidelines - For This Particular Property, you must make $800 per month ($200 per week).

B) Must have worked at the same job for at least 1 year, OR within the same field of work within the last 2 years.

D) Must be able to contribute at least $500 - $1,000 toward home ownership.

================================================

3. Also, I created a website that has my properties on it with pictures & info for "Deal Hunters" that aren't quite investors. Before they can see the properties, they must enter their name and email...this allows me to market my future properties and stay in touch with them. These are wholesale pricing and I advertise the website as such. I don't say that these are my properties, I just give the impression that it is simply a listing service for people that are desperate to sell their houses. The buyers look and see "DESPERATE" and figure that they're getting a good deal. The website explains that the buyer will be getting them so cheap that they'll be stealing houses...Keep in mind that the prices are usually wholesale, so they really are good deals. If you want to copy what I've done...feel free...:)

I prefer door knocking when it comes to individuals in foreclosure. Most of the time you won't get them on the phone because they screen their calls, expecting you to be a bill collector. Plus, there's a good portion of them where you won't have their phone number.

Plus, I really enjoy door knocking..:)

Here's what you do when you get to the door:

YOU: Hi, My name is ...... I noticed that you were experiencing a challenge with XYZ Bank. Have you been able to get it taken care of?
[NEVER SAY PROBLEM...NEVER SAY FORECLOSURE...NEVER SAY AUCTION or REPO]

Here's where they'll either spill the beans and tell u everything about their life OR Say "oh yes...ya, that's taken care of."

If they tell you everything, get as much info out of them as you can, but don't go out of your way to close the deal right there. BUILD RAPPORT! Get their trust...tell them that you may be able to help them...and keep asking questions..."When's the auction date"..."Are you working right now"..."Do you have any kind of game plan".."Have you considered selling it?"..."Have you spoken with the bank"....

If they get defensive, hit them with:
YOU: Oh, I'm so glad to hear that. You know, it's weird I was just down at the court house speaking with [Insert name of Judge's assistant] and she said that the bank was still pursuing your file and that I should stop by to talk to you. Do you think that their may be some kind of mistake? [Then Shut Up]
....Let me do this...I'm going back down that way today, lemme get your phone number real quick and I'll double check for you. I'll give you a call when I'm down there. [ I say "Mistake" because you don't want to call them out and say "You just lied to me..:)"...Also, don't ASK for the #...Tell them to give it to you. After all, you're doing them a favor]

Now that you have their number, you've built Rapport --the person trusts you...and you have their permission to call them making you different from the other clowns that are just cold calling them. Call them back and say, yeah, "The bank is being really ridiculous on this one. They want to move forward.....and move into your pitch."

If you want the easy, no hassle approach I would reccommend going with "Investorpro". We used them for years and they've been great. Of course, with ease comes extra expense. I believe it's like $60/month

If you're looking to save money, I'd head over to "rentacoder dot com" and fill in exactly what you want done. Those guys will bid on your project and you can choose the most qualified / price for the job.