R/E INFO

There's no cookie-cutter method that works. What works is getting out into the market, investing the time to learn about the business, not neglecting your wife and kids (or day job), learning from your mistakes, making friends and getting advice from others as you move forward. Slowly, steadily and not particularly wealthy.


IDEA 1

Buy a big ol' home that needed quite a bit of cosmetic work: Paint inside and out, new carpet, new tile, landscaping--you get the idea. Find a group looking for fund-raising ideas and have repair parties! The whole group can come over to the property a couple of nights and the weekend. They can scrape, paint and even lay carpet or put down tile! Pay for all the materials (some may have their own tools, bushes, etc.) and then pay the "Team" for all their labor but at a good discount from what you would have paid a contractor!

They can be more careful with the details than you would if you did it yourself. Good for them and good for you. Buy them pizza and they will want to do your next house. I figure that you know local high school / adult sports teams or other organizations that are trying to raise a little money. This may not work for a traditional rehab but, on the cosmetic stuff, it can work great.


IDEA 2

This is a "no brainer" technique that allows you to gain access to more tired landlords and close more lease option deals.


Step 1:
Run an ad in the paper that says: Problem Tenants? Call the Eviction Specialists. Simple. Easy. VERY effective XXX-XXX-XXXX.

Step 2:
The phone will ring with people asking about your services. After gaining rapport, you set up an appointment with them to see exactly what their tenant problem is and how you can help them. The phone is NOT the time for details.
Step 3:
They show up and you sit down and LISTEN to all of their problems. No rent in four months, drug dealers trashing the place, etc. After you have all of the details, you can "pitch" them if you feel like it.


EXAMPLE:

YOU: "Mr. Jones, I am certain we can help you but I guess I have some other concerns here...and I know I may be overstepping my bounds so please don't be offended...but...What are you going to do the next time this happens? I mean this problem is bad enough but you know it often is part of the game. And I guess I am not sure if you are really enjoying playing the game anymore..."

Landlord: "I dunno..." OR "Well, it is not always this bad..." OR (smiling) "I'll just come see you!"

YOU: "Let me ask you this - why did you get into the whole landlord, property owner thing in the first place? Was it for cash flow? To secure a better future? Passive income maybe?"

Landlord: "Uhm, yeah."
you: (smile) "See right now we are kind of sucking eggs at all that, and I just thought you might be open to a method where you can get back to the space where being a property owner was fun again.

I'm talking everything on auto pilot--you never have to collect rent, or do repairs, or screen tenants, or anything other than just collect a check each month. That is why you got into Real Estate in the first place, isn't it?"

OKAY. So you can see how I do this. If they are interested I explain the lease option. I have the forms available. I agree to finish off the eviction for free. And another deal goes in the portfolio.

Sometimes, you get people who aren't interested or, when you "pitch" them, they respond negatively. If that happens you just backtrack like this.
YOU: "Okay, well what we need then is to get this eviction underway so you can go back to landlording!" (Note: contact them again in 6 months.)

And you help them with their eviction and pick up $200 bucks or so for your time. Easy enough. And that's the process. Easy enough? Here are some concerns:

How do you not practice law? In your service agreement the landlord signs, there is a statement that says we are not giving legal advice, rather the example forms we provide are merely that and if they are not sure of what they are doing they need to find legal representation.

Also, it states our fee covers the education of the eviction process and the calendar we provide showing them what to do when is an example only.

How do I know how to do an eviction? Well, if you are NOT an expert at this already, I would arrange to meet with an eviction attorney and pay him to answer everything. I would also contact a local investor's group and see if there are eviction packets you can learn from.

Or if they are not interested in a lease option, your affiliate (a lawyer) will finish the eviction for them.

IDEA 3

As most of us know, one of the toughest things to overcome for our buyers is the down payment. Especially when that down payment needs to be verified.

As you get calls from prospective buyers, I find out how much money they have to put down. When I have someone who seems to be credit worthy but does not have down payment money, you can tell them about your "earn your down payment program."

Ask your prospective buyers if they are handy. If they say "yes, î ask if they would want to do work to their own home on the weekends and get paid for their work. Tell them that you will put the money into an account for their down payment. Write a check out to them stating that it is for repairs. Go with them to the bank as they cash the check and buy a cashier check to give back to you. Make a copy of the check to them to verify their earnings and a copy of the check they gave back to you for down payment to establish a paper trail.
You accomplish a number of things by doing this. First, you don't have to fool with contractors to do the work. Second, they will work for less than contractors (you can set the price up or down to make the numbers work). Third, your buyers can't complain about the quality of the work (they did it themselves). Fourth, they earned the money (as opposed to me secretly gifting it to them). Fifth, you get to write it off as repairs (when we put money into someone's account to make it appear as though they have a down payment it is not a write off). Sixth, You made a sale that wouldn't have happened (they are hard to come by). And seventh, they tell their friends what you did for them. Of course ask your tax man about "write offs".

IDEA 4

Need a hard money-lender? Check in the recorder's office. If you find an individual who holds a mortgage on a property and that individual 1) is not the previous seller and 2) is not related to the owner (not the same last name), then there is a good chance that you have found a private hard money-lender.