New Beginner wants to know .....

[Kester Usonegbu]

Hi! folks. I am a new member who is lost in the web of so many confusing theories about how to make REAL money in Real Estate. I have read various books and bought into many programs that have not fetched me the desired INCOMES advertised prior to my buying them. In short, I HAVE LOST MONEY!!! However, I am still willing to keep trying and therefore I am open to any meaningful assistance that might be cost effective in REALLY getting me started in this very exciting field of business.

I have ALWAYS known that REAL ESTATE IS IT!!! But, I am honestly still in the dark as to how, where and when I will be able to cut my own share of the pie.

Thank you Mr. Dan Auito for replying to my e-mail. I have joined this forum with the hope that I will finally be able to find TRUE light at the end of the tunnell. I think I need a MENTOR and some kind of assistance in learning the ropes.

I have recently moved from Nashville, TN to Las Vegas, NV and I hope to pitch my tent here for a while. But, I have come to find that things are becoming harder for me in every step of the way. I NEED A BREAK!!! I AM DROWNING IN THE SEA OF DEBTS!!!!!!! CAN SOMEONE OUT THERE HELP ME?

I want to know too: How does bird-dogging really work? What options does a total novice like me who is at the same time financially handicapped have to START and SUCCEED in Real Estate Investing? :SM062:

I will like your some contribution from you'll.

Kester U :SM031:

[Dan Auito]

Ah Kester your my kind of client, You have been through some initial training and probably understand more than you give yourself credit for.

Unfortunately your in one of the hottest and most inflated markets in the country right now, Vegas prices have skyrocketed with houses that sold for $175,000 two years ago now going for $275,000 that's huge appreciation and someone with little dough and poor credit is definitely in an underdog position.

Fear not brave warrior all hope is not lost, as I explained in the e mail reply you can certainly become a bird-dog for the highrollers, this entails your attending some local investors meetings to get some names of the buyers in the market, also look in the investment properties wanted section of the classifieds of your largest local paper, those are investors looking for undermarket deals from bird-dogs like you!

Then while holding down a steady job and restructuring your debt you continue to look hard at finding distressed properties that you can lock down with an offer to purchase contingent upon partners approval, this is how you lock in your position to contol the property long enough to assign the contract to the investor for a fee.

There is a ton of ways to find the deals but it takes dedication and persistence as you will follow a lot of dead ends to find the jewels.

I'm going to do something I don't ordinarily do and I'm not setting a trend here but I am going to e mail you the e book that is for sale on this site, you my friend need this information and I can't with all conscience withhold this compendium of advise and avenues of approach from you.

Sometimes people need a helping hand to get out of the rut, I hope together the folks on this site can work with you to get you on the road to the promised lands.

Make sure you give us progress reports on what you are encountering and doing in your travels this way we can continue to guide you and support you along the way.

I hope others on this board will help out where they can and offer their support and advise as well. Stand by Kester, here comes the book! Dan

[Kester Usonegbu]

Ah Kester your my kind of client, You have been through some initial training and probably understand more than you give yourself credit for.

Unfortunately your in one of the hottest and most inflated markets in the country right now, Vegas prices have skyrocketed with houses that sold for $175,000 two years ago now going for $275,000 that's huge appreciation and someone with little dough and poor credit is definitely in an underdog position.

Fear not brave warrior all hope is not lost, as I explained in the e mail reply you can certainly become a bird-dog for the highrollers, this entails your attending some local investors meetings to get some names of the buyers in the market, also look in the investment properties wanted section of the classifieds of your largest local paper, those are investors looking for undermarket deals from bird-dogs like you!

Then while holding down a steady job and restructuring your debt you continue to look hard at finding distressed properties that you can lock down with an offer to purchase contingent upon partners approval, this is how you lock in your position to contol the property long enough to assign the contract to the investor for a fee.

There is a ton of ways to find the deals but it takes dedication and persistence as you will follow a lot of dead ends to find the jewels.

I'm going to do something I don't ordinarily do and I'm not setting a trend here but I am going to e mail you the e book that is for sale on this site, you my friend need this information and I can't with all conscience withhold this compendium of advise and avenues of approach from you.

Sometimes people need a helping hand to get out of the rut, I hope together the folks on this site can work with you to get you on the road to the promised lands.

Make sure you give us progress reports on what you are encountering and doing in your travels this way we can continue to guide you and support you along the way.

I hope others on this board will help out where they can and offer their support and advise as well. Stand by Kester, here comes the book! Dan


THANK YOU so very much Mr. Auito! I am very encouraged by your EXTRAORDINARY ASSISTANCE in responding to my request for help. It is people like you who make someone like me regain strength and hope in life.

I sincerely hope that this relationship will continue to flourish and grow!!!!

Please, feel free to send me any information you feel may be useful to me in the future. Especially, since you are very familiar with our market situation here in Vegas. Also, in case you know of anyone who could be a genuine MENTOR and/or INVESTOR like you, please, do not hesitate to introduce him/her to me.

Thanks again for your KINDNESS!!!!!!

Kester Usonegbu :praise:

[Dan Auito]

Kester you have found your mentor. quit searching! I'm right here and so are the rest of the 187 members, not all will answer up but there are plenty who will. Feel free to ask whatever you need to and we'll work on getting you the support you need.

Do read the book and the tutorials at the bottom of the homepage and I'll send you a couple more files to boot, you can also have a look at page 2 of the following thread to read up on what Keith suggests as far as good and bad courses, the bird-dogging note should be of interest!

http://www.magicbullets.com/forum/showthread.php?t=147&page=2&pp=10

Read up and prepare yourself to be in a position to take advantage of opportunities that will come your way once you get into position to take advantage of them.

Here come the files Kester! Dan

Note to the members, here is your chance to help a deserving individual, if you can offer your support it would prove that the concept of helping others works, lets help our man Kester jump these hurdles together! Jim, Brian can you send him a course or file that would help?

P.S. Folks by clicking on the posters blueline icon near their name the dropdown menu will appear allowing you to e mail or private message them in addition to other options.

[Keith(CA)]

THANK YOU so very much Mr. Auito! I am very encouraged by your EXTRAORDINARY ASSISTANCE in responding to my request for help. It is people like you who make someone like me regain strength and hope in life.

I sincerely hope that this relationship will continue to flourish and grow!!!!

Please, feel free to send me any information you feel may be useful to me in the future. Especially, since you are very familiar with our market situation here in Vegas. Also, in case you know of anyone who could be a genuine MENTOR and/or INVESTOR like you, please, do not hesitate to introduce him/her to me.

Thanks again for your KINDNESS!!!!!!

Kester Usonegbu :praise: Usonegbu...I'm sure my pronunciation does not do your name justice, but I'm curious where your heritage is from?

Anyway, I'm afriad I don't have much to give you other than to point you in a couple of directions. I'm still a newbie and have to take care not to overstep my bounds.

If you know nothing (or next to nothing) about real estate in your state (Nevada?), you wouldn't go wrong finding out what classes you need to take to become a real estate agent and then taking that class (or classes), or at the very least take the time to read the textbook if you can find it at a library. Knowing the fundamentals before digging into the investor materials will lay the foundation of knowledge upon which to build your investor training. I wished I had done this first as it would have saved me months of misunderstanding things. The point is not to go get your real estate license, but to learn the basics first.

As far as I'm concerned, Barry Grimes wrote the definitive source on bird-dogging (he calls it real estate jobbing). The course can be found at http://www.realestatejobber.com/real_estate_jobber_course.htm. His price did go up not too long ago, but it was at the same time that he released his bigger/better version. The cost was about $97 last time I checked, and you could order it on CD and read it on your computer. He has added a new, 5th volume to the course to help you make the transition from bird-dog to investor. (Just checked his website...price is the same, but looks like you can download the books immediately instead of waiting for a CD to arrive by mail).

Finally, stick around here as Dan will be an excellent mentor and guide. If you want someone local to chat with, you should look up Bill Guerra. You can find him here http://www.willbuyanyhouse.com. He just started in the last couple of years. As a student of Steve Cook, he has done very well as a wholesaler of properties. Now that he's mastered that, he's branching out into sub-to purchasing.

Wishing you the best! :thumbsup:

Keith

[Dan Auito]

Folks I went out and retrieved this post from the Dallas Fort Worth investors website that Kathy runs with outstanding proficiency. Thank you in advance Kathy and another round of applause goes to Rob for writing it!

I am sorry to have to dust off this old topic again but after receiving several emails and calls (thank you for thinking of me) regarding various "deals" I felt it was necessary to once again post what I feel everyone needs to consider when evaluating a deal. This is the same for those assigning a contract as well as those planning to Rehab.

With that in-mind I believe that folks looking to assign "deals" are getting as frustrated with the current state of the real estate investment market in the DFW area as many rehabbers are. I understand that many of you are professionals who take the time to look at a deal from the perspective of the rehabber and only put a contract on a house that has enough room, after your assignment fee, repairs, holding costs and selling costs, for the rehabber to make a decent profit (typically 15 - 20% of sales price). I also realize that many of you are frustrated because you will assign a good contract to a "rehabber" who tells you they can close, who then turns around and assigns your contract to someone else who may or may not be able to close. The process takes the profit out of the deal so that if it ever is shown to a "real" rehabber...there is nothing left in it for them...no one closes you don't get paid and you wasted your time.

Another problem that I see happening all to often is that new folks that don't have a good understanding of this business yet are out-bidding the "pros" for the property without taking into account all of the cost associated with rehabbing/selling the property. Then, what could have been a good deal for all ends up either not closing, because a Hard Money Lender (HML) will not fund enough or a "real" rehabber will pass on it for the same reasons listed in the preceding paragraph...no profit.

With all this being said I want to try again to help the new Real Estate Investors and those "pros" that are getting frustrated because their contracts are not closing, see what they can do differently to ensure that most if not all of the properties they place under contract will be assigned and will close.

Assigning Contracts 101 - Is a Deal a Deal?:


Treat this like a real business: This means you may have to make an investment in your business in-order to make money. If you want to earn a $2000 - $3000 (or more if the deal warrants it), assignment fee you had better do the legwork required for a rehabber to quickly evaluate your deal.
You need to be able to est. repairs accurately (within 20%). If you can't, then how will you know if a deal IS a deal?
You need to know how to "comp" a deal. This does NOT mean that you grab the other "For Sale" listings in the neighborhood and call those prices "comps". It means you will need to use the Dealinator or other MLS driven service to see what the recent SOLD Comps in the SUBDIVISION are and what is the avg. Days On Market (DOM). When you est. the selling price (to see if there is enough room in the deal for everyone) please use the Lowest or Average selling price per square foot NOT the top end. "Real" Rehabbers will want to sell the property fast (at a discount) since they are often paying HM rates...that means they will look at the potential selling price based upon the Low to Avg. Selling price of the Comps.

Also note that I said "SUBDIVISION" level comps. I know that many of you believe it is easier to pull comps based on 1/4 mile radius. This is NOT accurate. As any lender or Appraiser will tell you...comps are based up houses "most closely resembling your house". That means SUBDIVISION level comps.

Understand how Holding Cost effect a deal: If I am buying the house for $100,000 plus your $2500 assignment fee + $7500 in repairs that means I may be trying to borrowing upto $110,000 from a HML. At 14% Annual Interest that house will cost me $1283.33 every month I own it. This is why the DOM is so important for you to know when you are evaluating a deal. You need to know that if the Avg. DOM is 90 days....your rehabber will need to spend $3850 in loan payments (using the above example). That amount needs to be calculated in the deal.
Only assign your contract to a "REAL" Rehabber not someone who is going to flip it again. If it gets flipped again the odds are good that you have wasted your time and the deal will not close.
Use a TREC contract. WHY? Because the rehabber will probably need to borrow the funds to purchase/repair the property and the HML/Bank will want to see a REAL real estate contract.


I know that many of you think that I am asking too much of you. You want us to pay you $2000 - $3000, or more, dollars for finding a deal. We want you to only bring us deals worth looking at otherwise we have both wasted out time. I have spoken to many "REAL" Rehabbers over the last few months. People that can and do actually close on deals every week/month. We are all frustrated by the type of deals that are being offered to us and consequently these deals are NOT getting closed...by anyone! All we are asking of you is that you spend an hour or less doing your "Due Diligence" before you put a contract on a house that you want to later assign. Treat this like a business and don't try to assign something that no-one wants to close on.

A typical deal by the numbers (this is how I and many "real" Rehabbers look at a deal)

Max Selling Price* : $150,000.00
Acquasition Cost** : - $7,500.00
Repairs (estimated) : - $9,000.00
Four month Average. Hold Cost : -$4,900.00
Min Profit (15%) : - $22,500.00
Misc expenses (5%) : - $7,500.00
Cost to Sell*** (5%) : - $7,500.00
Max Purchase Price : $91,100.00
Additional out-of pocket amount : $7,500.00
(Not covered by loan)

FYI: Max HM Loan amount**** $105,000

* based upon selling it fast and based on the low to avg selling price/sqft
** Title work, Dwelling Ins., Loan Fees & assignment fees
*** Listing with someone like MyCastle.com for 3% plus $500, Closing costs, etc.
**** Hard Money Lender loan amount based on a max of 70% ARV

If you are not doing this math on every deal you are considering putting under contract then you are not earning your assignment fee. This is a business. Like every business you are only paid when you sell your product or service. Make sure you sell every one of your deals by only doing deals that can be bought by a real rehabber.

This post may seem a bid harsh to some of you. I don't want to insult anyone or hurt anyone’s feelings. You may not agree with what I have said but believe me when I tell you if you want to sell a deal to me or 99% of the other "real" rehabbers that can close...you will need to keep what I have said in mind. I do this same math on EVERY deal I look at buying...if it doesn't work...I walk!

There is a GREAT spreadsheet that someone took the time to develop that is a great tool for evaluating a potential deal. If you would like a copy, check out the link below. I have modified this spreadsheet a bit to better reflect current market realities.

Good Luck!

Rob
DHLC, Inc.
http://www.dhlc.com

Go to www.dfwrein.com and pay those folks a visit : Here's the thread that will allow you to download the deal evaluation tool
http://www.dfwrein.com/megabbs/thread-view.asp?threadid=131&start=1

Attached file : Deal Evaluator.xls (17KB - 168 downloads)

[REIaddicted]

I hope the following steps will get you started.. Good luck and enjoy :)

BEGINNING STEPS

You can get tons of information from this program and others, but the best teacher is experience.

You have to get out and take a few steps.

Below you will find a list of activities that will get you up and running.

As you take action you will learn what you know and what you do not know.

Be sure you dedicate a specific amount of time each day or week for investing in real estate.

If you get into the habit of looking at properties each week, you will find a property.

1. To get a feel for the prices and market begin picking up the real estate magazines.

2. Review and circle classified ads that have the motivated seller phrases such as desperate, VA, assumable, focusing on FSBO (For Sale by Owner). Reviewing the ads will give you a feel for the marketplace and you will begin to see opportunities. Keep a file of properties.

3. Drive through local neighborhoods focusing on FSBO signs. Take down the phone numbers.

4. You will have the opportunity to make dozens of phone calls and notes on properties in the upcoming weeks. Have a stack of 20 or so phone inquiry sheet made up and ready to use.

6. Review any telephone scripts and repeat them out loud several times. Make a few phone calls to homeowners and see how much information you can obtain. Initially don’t try to schedule an appointment. Concentrate on trying to get your forms filled out the best you can. If you miss something or don’t say it right the first time it’s okay. You will get it all in time.

7. Check with an office supply company or the Board of Realtors to acquire a local contract for purchase of real estate. Be sure you have an addendum form.

8. Invest in business cards and letterhead to let people know you are a serious investor.

9. You will want to pass out 1,000 business cards per week your first 30 days.

10. Prepare a contract or an agreement. Check figures and clauses. Be sure you have a couple of ‘out’ clauses such as ‘subject to partners’ approval’. Submit your offer to the homeowner and see what happens. The homeowner could ignore the offer, let the deadline expire or counter offer. In the event the homeowner does not respond to your contract put them in a database with a note to contact them again in 30, 60 or 90 days. Things do change over time!

11. After you have contacted 10 – 20 homeowners by telephone, make an appointment to review their property.

12. Get accustomed to viewing property and filling in the property evaluation form. Take a clipboard, notepad, pen, and flashlight before going out to the property. Do not attempt to negotiate.

13. Evaluate the property and look for the opportunities. Could the property be assigned? Acquire the property through assumption of the financing or structure limited money down deal. You might consider touching base with a professional to have the situation reviewed for opportunities.

14. Call rental properties from the newspaper focusing on individuals who are looking to rent their property. Concentrate on why they are renting. If they answer, “I couldn’t sell the property” you have an excellent prospect. Always ask, “Would you sell the property?”

15. Examine your credit profile and increase your available credit.

16. Check out the ‘money available’ section of your newspaper. A number of the individuals could be a good source of contacts and properties as well as ‘cash’.

17. Let your banker know you are beginning to invest in real estate. Ask him for timely information regarding interest rate changes, bank properties, areas to invest in the local market and potential investors he might know. The rapport you build with your banker is just as important as this information.

18. Inform your friends, associates and peers that you are looking for properties, providing an incentive if necessary. “Offer a carrot.”

19. Using a Brokers’ script, contact local brokers and establish a good contact. Try to find brokers willing to work with you or those brokers that specialize in distressed properties.

20. See a real estate lawyer or stop by a title company. Inquire about volume discounts and the general process as well as their fees and services.

21. Stop by the courthouse and research a property. It is not a scary place and you might be surprised how friendly it actually is. Start by researching your own property or a friend’s. The first time or two the clerks will help you in your research or in pointing you in the right direction. While you are there also check out the Recorder’s office. Inquire about the office that handles tax and mortgage information.

22. Be present at several foreclosure auctions just to learn the process.

23. Develop a database of buyers and spread the word among your contacts. You might consider passing out business cards, posting flyers or ads to acquire buyers’ database.

24. keep the commitment to spend a specific amount of time examining real estate, studying strategies and learning more about the industry.

25. Look at a minimum of 100 properties per month.

26. Set up a mailing campaign to:

a) Other Investors
b) Expired Listings
c) Homeowners facing foreclosure
d) Homeowners facing legal problems
e) Homeowners facing law suits
f) Homeowners behind on property tax
g) Probate announcements
h) Engagement announcements
i) And the list goes on

27. Drive a new way to work or to the store and look for real estate.

28. Never let lack of money stop you!


Your mission, if you choose to accept it is too never stop, never give up!

Lisa

[Kester Usonegbu]

THANK YOU! Lisa,

I appreciate your kind, pointed and very thoughtful contribution to my enquiries.

You sure must have given the subject on this agenda a very candid and serious thought!!! The way you itemized the steps that I need to take, speaks for itself. It also shows that you are A PRO in this matter.

I sure appreciate reading from you. Please, do not hesitate to share whatever useful information you may have for a BEGINNER like me in this field. I MEAN, WHATEVER YOU KNOW CAN INCREASE MY KNOWLEDGE OF THIS VERY WONDERFUL FIELD -- REAL ESTATE!!!!!!!!!!!!!

THANKS again for your assistance!!!!

Kester U. :SM049:

[brian-gibbons]

Kester you have found your mentor. quit searching! I'm right here and so are the rest of the 187 members, not all will answer up but there are plenty who will. Feel free to ask whatever you need to and we'll work on getting you the support you need.

Do read the book and the tutorials at the bottom of the homepage and I'll send you a couple more files to boot, you can also have a look at page 2 of the following thread to read up on what Keith suggests as far as good and bad courses, the bird-dogging note should be of interest!

http://www.magicbullets.com/forum/showthread.php?t=147&page=2&pp=10

Read up and prepare yourself to be in a position to take advantage of opportunities that will come your way once you get into position to take advantage of them.

Here come the files Kester! Dan

Note to the members, here is your chance to help a deserving individual, if you can offer your support it would prove that the concept of helping others works, lets help our man Kester jump these hurdles together! Jim, Brian can you send him a course or file that would help?

P.S. Folks by clicking on the posters blueline icon near their name the dropdown menu will appear allowing you to e mail or private message them in addition to other options.

Dan, send me what you sent this young person?

And I'll send something valuable?

And Jim, maybe on the Sub2 forefront?

Here is a generic but EXCELLENT article of the MINDSET you need as a CREI:
================================================== =

Make Six Figures Solving Other People's Problems

by by John Carlson (aka "JohnBoy")

Here are a couple of ideas that should help you get started in the right direction and answer how you can do a no money down deal with no cash, no credit, no income, no nothing, except having some general knowledge backed with a desire to succeed by going out there and taking ACTION!

The key to finding a lot of deals in this game is to look for the motivated sellers.

Forget about looking for houses;

that's a waste of time and requires way too much work.

Narrow it down to dealing only with motivated sellers and make fewer offers that result in getting more offers accepted.

What is a motivated seller?

Motivated sellers are those that have been trying to sell, but haven't been able to for one reason or another.
• They may be facing foreclosure.
• They may be in a divorce situation.
• They may have been transferred with their job and need to move.
• They may have lost their job and can't afford the payments.
• They may have purchased another home and are now stuck with two mortgage payments.
• They just need to get out from under their mortgage payments.
================================================== =====
What is a motivated buyer?

Motivated buyers just need someone that will sell to them. They can't get a bank loan, or some just "think" they can't get a bank loan.

Motivated buyers only care about two things:

1. How much down?
and
2. How much per month?

If they can afford the payments and have enough to put down in order to allow them an opportunity of owning a home, price doesn't matter to them as much. They just want to be able to buy a home.

The way most people make money in this game is by using creative techniques to solve problems while being able to structure the deal to make a profit.

Be a problem solver
Your job is to find the solutions to fix someone else's problems.

Sit down with these people and find out what their problem is.

Once you figure out what their real problem is, you now know what they need.

They all WANT an all cash sale, and they WANT full price.

But your job is to find out what they really NEED.

Once you determine what they really NEED, your job is to come up with the SOLUTION, get them what they NEED, and SOLVE their PROBLEM!

That's how good deals come together.

Get the motivated sellers to call you

The best way to find the motivated sellers is to get them to find YOU.

Get the word out that you buy property: any property, any condition, any price, any time.

It doesn't matter.

Just present the property to you, and you will figure out a solution to solve the Sellers' problems to get them what they need.

Get a bunch of business cards printed up.
Put them out everywhere you go.
Hand them out to everyone you meet.

Get flyers made up.
Post them everywhere you can.
Put them in Laundromats, bowling alleys, advertising boards in supermarkets, car washes, etc.

Then get some poster signs made up.
Post them anywhere and everywhere you can, like telephone poles. Nail them to a stake and post them in the ground on every intersection in town.

Let the world know that you buy houses for CASH.
Just give you a call!

NOTE HERE FROM ME: GET PRIVATE INVESTORS TO GIVE YOU CASH!
See http://www.creiu.com/creiu2/PrivateMoney/A_Home_Page.htm

Eventually people will start calling you.
Most won't be motivated, but some will.
When they call you, that's when you screen them over the phone first and determine their motivation.

Then you go visit them and get face to face with them and build a relationship with them.

You want them to get comfortable talking to you.

They may want to talk about their dog for all you care.

Let them!

Get comfortable with them.

Let them build some trust in talking with you.

Whenever they talk, you SHUT UP and just LISTEN!

Listen, listen, listen :box:

THIS IS MY COMMENT HERE: SHUT UP AND LISTEN!! BRIAN :SM052:

Listen to everything they say.
The more they talk, the more information they let out.

The more information they let out, the more you learn about their problem.

The more you learn about their problem, the more you will be able to find out what they really need.

Once you got that information you can now figure out a solution that will solve their problem by being able to give them what they need.

Your solution to their problem gets them what they need, and you make a profit for your problem solving skills.

You're a problem solver. :SM032:

You are the doctor of solutions, Dr. Buyer, the master of problem solving!

Example

Let me give you an example on buying a house for full market value, with no money out of your pocket, picking up a quick $5k up front, some positive cash flow every month, and a nice payday on the back end.

Plus, we're talking about dealing in NICE homes. No junk properties!

Mr. Seller has a newer home he purchased about two years ago.

When he purchased the home, he put about 5% down and was able to qualify for 95% financing.

After closing cost he had hardly any equity left.

Mr. Seller ended up buying a new home a couple years later.

He's been trying to sell this home before he has to close on his new home.

He can't even afford to list the home with a realtor (agent) because he doesn't have enough equity in the property to even cover the 6%-7% commission he would have to pay a real estate agent.

Now the seller's new home is finished, ready to be moved into, and he needs to close on it.

He closes and figures he'll sell the old home soon, but soon enough doesn't seem to be coming.

Now the Seller is starting to have some financial problems because he has to start paying two mortgage payments until someone buys the old home.

The seller has a problem now because he can't afford to make two mortgage payments.

If something doesn't give pretty quickly, he's going to fall behind on the payments on the old home.

He's going to pay the new homes mortgage first.

But he doesn't want to be late or get behind on the payments of the old home either.

The Seller is worried about damaging his credit if he misses any payments.

I come along to solve his problem.

I can put a stop to the seller's worry and stop the bleeding today.

All the seller needs to do is agree to my TERMS and I'll even pay him what he owes on the property, which is pretty close to full market value.

The Seller knows he wasn't going to get any money out of it after paying off his mortgage and closing costs, so all the seller wants, and all he needs, is to get out from under his mortgage payment.

I agree to take over the seller's mortgage "subject to," (SEE JIM's POST) :box:

which means I assume the seller's loan without even qualifying through the lender that holds the seller's mortgage.

The seller will deed the property over to me.

I now own the home.

The seller is still on the loan that has the lien against the property.

The seller remains responsible to the lender for that loan until I pay it off, usually within a few years when my tenant/buyer ends up exercising the option that I will give to them under a lease option agreement.

I won't be liable to the lender for the loan on the property.

The seller's bank can't come after me if something where to go wrong.

The loan is in the seller's name, not mine.

However, I will be liable to the seller to perform on our contract agreement to make his payments and pay off that loan eventually, but my liability is to seller, not his bank.

(THERE IS AN ISSUE OF ETHICS HERE. MAKE SURE YOU PAY THE PITI PAYMENT TO THE BANK, INSUR CO AND TAX DEPT, EVEN IF THE TENANT BUYER SCREWS YOU!)

The seller deeds the property over to me.

The house is worth $150k.

The seller's loan balance is about $145k.

I agree to start making the payments in 30-60 days from today!

Now I have 30-60 days to market the property before my payments start.

The payments are $1400 PITI.
===============================================

Selling the property

What is the FASTEST way to sell a property?
Sell on terms.
So I run an ad in the paper.

NO BANK QUALIFYING!!!
RENT TO OWN
NICE! 4bd/2ba House
Call xxx-xxxx

The phone starts ringing off the hook!

I find a potential Buyer that has $5k to put down and says he can afford to pay $1700 per month.

I agree to give them an option to buy the home for $165k in one or two years.

Similar homes in the area would rent for $1200-$1400 per month, so getting $1700 a month on a $1400 rental when offering an option to buy is premium rent.
================================================== ==
WARNING HERE: THE FHA (mortgage qualifying) WILL NOT GIVE CREDIT UNREALISTIC BOGUS RENT PAYMENTS DIGUISED AS RENT CREDITS.
THIS IS A RIGHT WAY AND A REALLY WRONG WAY TO SELLER FINANCE!

Email me for free report. brian@creiu.com
================================================== ==
People will gladly pay it because no one else will even finance them because of one reason or another.

You get a premium on the sale price because you're offering TERMS.

What's in it for me?

I collect the $5k up front as "Non-Refundable Option Consideration" and if they exercise the option, the $5k will be deducted from the purchase price of $165k, leaving my Tenant/Buyer with a balance owed of $160k.

(NOTE: PLEASE DO NOT SPEND ALL OF IT. IF THE TBer DOES NOT PAY YOU, YOU NEED TO MAKE THE PAYMENT TO THE PITI PEOPLE)

If they don't exercise the option, the option money paid is non-refundable and is lost.

I get the $5k up front, plus first month's rent of $1700.

Since I was lucky and found this tenant/buyer in the first week, I get to keep 100% of the first two months rent since my payments won't start for 60 days.

So I collect $5k + $1700 first month rent up front, for a total of $6700.

The following month I collect the full $1700 for rent and the 10 months after that I collect $300 per month positive cash flow.

At the end of the year, IF the tenant/buyer exercises their option, they will pay $160k. After paying off the underlying mortgage of $145k remaining on the Seller's mortgage, I'll collect another $15k at closing.

So lets see, that's....

$5k option money up front
$1700 first months rent
$1700 second months rent
$300 x 10 months rent = $3k
$15k at closing ($160k - $145k = $15k)

That's $26,400.00 over 12 months total PROFIT!

What if my tenant/buyer doesn't exercise the option?

WONDERFUL! Now I get to start all over again.

I get to collect another option fee, raise the rent after a year for inflation, and get a higher selling price for the option the next time around.

I just keep repeating the process over and over again until someone eventually exercises the option.

Assuming all the tenants exercised their options in the first year, how many deals like this would you have to do each year to make $100k?

Just FOUR deals like this one and you're making $105,600 per year!

(SIDE NOTE: YOU TAX PEOPLE ---- LOOK UP IRS SECTION 1234 OPTIONS: ARE ALL OPTION CONSIDERATION PAYMENTS TAXABLE INCOME AS RECEVIED OR TAX DEFERRED?)

How many hours would that work out to be to find and structure a deal like this and get a Tenant/Buyer in the property? Not very many!

How many hours per week would you have to put into working at your job to make $105,600.00 per year?

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Please rate this article as EITHER valuable OR not valuable IN AN EMAIL TO ME.

BRIAN@CREIU.COM

Best Wishes,

Brian Gibbons

[Dan Auito]

I'll be rating this article 5 STARS right here buddy. You laid it out very clearly, nice job! Thought I was reading Pete and Dave here! Hey if possible maybe you could put a lease option contract in the attachment area of the post. That would be cool! :SM144:

[brian-gibbons]

I'll be rating this article 5 STARS right here buddy. You laid it out very clearly, nice job! Thought I was reading Pete and Dave here! Hey if possible maybe you could put a lease option contract in the attachment area of the post. That would be cool! :SM144:


Dan, there are PROBLEMS with alot of GURU LO contracts.

I draft them here to NOT BE RE-CHARACTERIZED BY THE IRS AS INSTALLMENT SALES.

as per JOHN T REED

And, theres a SYSTEM of agreements I use, especially an ESCROW AGREEMENT to tell the ESCROW TITLE CO what to do and when and how.

Warm Wishes,

Brian

[JerseyGirl]

This information is great but isnt it a bit much to take in for a bird dog?

This seems like its geared more towards those who have a bit more experience

Dont get me wrong, I love all of the info! I'm saving it to my hard drive for future reference but for those of us (ok maybe just me) who hasn't even done a deal yet it can be a bit overwhelming

Isnt this for wholesalers &/or rehabbers only? :eek:

[Aldo]

Yes, much of this is way over your head, so to speak; but, then, a doctor needs to learn a lot about the human anatomy before reading manuals about heart transplant surgery. Reading about complex R.E. issues will only serve to confuse you. I do recommend scanning through the more advanced discussions, but only to seek info that relates to your current situation. As someone once said, "You must learn to crawl before you can walk."

[Dan Auito]

Tee, believe me when I say that this site is for YOU! That's one of the nice things here, it really is an uncomplicated place, if you want to really pull your hair out have a look at www.thecreativeinvestor.com That's a good site, maybe I should say great site, but a lot of people aren't ready for that yet, That's why you have a place to learn, right here. Just ask and we'll help you get started! :SM123:

[JerseyGirl]

Tee, believe me when I say that this site is for YOU! That's one of the nice things here, it really is an uncomplicated place, if you want to really pull your hair out have a look at www.thecreativeinvestor.com That's a good site, maybe I should say great site, but a lot of people aren't ready for that yet, That's why you have a place to learn, right here. Just ask and we'll help you get started! :SM123:

I have looked at that site & WOW is all I can say! :shocking:

I guess my first 2 questions would be:

1.) How do I learn to spot a really good deal?
My investors (God Bless 'em!) are ok with me just writing down addresses, giving them brief descriptions & moving on that way, but that just feels too random for me

I'd like to make money just like they do, so its in our best interest to be able to know its a good deal before I pass it on

2.) I'd like to know how I can get motivated sellers to come to me?
My budget is limited right now & one of my investors has a HUGE farming area that I won't be able to get to right now due to the storm which is another issue :SM031:

I'm here in Jersey & if its not freezing, its snowing which can make traveling dangerous...I don't want the weather to take too much time away from making deals, so I need to find ways to make things happen even when I can't farm.....does this make sense?

I'm trying not to crawl before I can walk here but I am known to push myself further when I feel things are a bit stagnant :SM121:

[REIaddicted]

Tee, in the gifts section of this forum, there are some great getting started books. Also there is a bird dog book in the catagorie fo free e-book links on this forum.

http://members.cox.net/jettonmeador/index.html
http://www.magicbullets.com/forum/showthread.php?t=75
http://www.magicbullets.com/downloads.php

[JerseyGirl]

Thats alot of info :SM101:

[REIaddicted]

Thats alot of info :SM101:
:SM118:
We aim to please ma'am. As you go through the info, please feel free to shoot questions here.
You may get so many replies you'll need a paper bag cuz your hyperventolating.

[JerseyGirl]

I think I'm already hyperventilating...I might stop asking questions...I don't want to be confused....again :SM070:

[Aldo]

Never, ever stop asking questions. It seems that the more I learn, the more I realize how much I don't know.

In answer to your two earlier questions, I'll say this.

1) Spotting a good deal will become easier as you learn what to look for and what your investors want you to find. Do they want a good price on a good house or do they want a good price on junk they can fix and flip? You've got to know R.E. prices in your area for the type(s) of properties you are looking at. I don't mean the assessed values or the asking prices. I mean the amount the property is really worth in its current condition. With experience you'll learn to peg a property quickly as being for Investor A or for Investor B, etc.

2) Getting motivated sellers to come to you isn't an easy task. There are "We Buy Houses" ads in the paper every day and many of those bird-dogs or investors have signs posted on utility poles and at grocery store exits. To get them to come to you, you will have to: A) Offer something the others don't; B) Do something a bit bizarre to get their attention; C) Place flyers in mailboxes (don't tell the USPS) in areas likely to have people wishing to bail out of their homes; D) Watch "For Rent" ads closely to identify repetitive ads which could signal a landlord having trouble renting his/her units and may want to get out of the business due to being unable to find tenants. NOTE: I started with two ideas and as I was typing one, another would occur to me. This could go on forever, so I'll let your imagination take over from here.

A word of caution. While you sat at home or wherever due to the weather, there were die-hard bird-doggers and investors out there in their 4 x 4's.

[Dan Auito]

Just a little bump for the newbies!:clap:

[Pasquini]

Kester,

If you are still around I could use some help on the ground in Las Vegas. Let me know if you are still in the game. We'll make arrangements to talk, and see if it is a good fit.

Jim

[Dan Auito]

Jimbo, Kester is indeed still in the game. I just mailed him a book TODAY! He will be a good partner, he is determined to succeed. I hope you will show him the way. Email him or PM him Jim. I'm sure he would be delighted! Dan

[fortune_seeker]

Ah Kester your my kind of client, You have been through some initial training and probably understand more than you give yourself credit for.

Unfortunately your in one of the hottest and most inflated markets in the country right now, Vegas prices have skyrocketed with houses that sold for $175,000 two years ago now going for $275,000 that's huge appreciation and someone with little dough and poor credit is definitely in an underdog position.

Fear not brave warrior all hope is not lost, as I explained in the e mail reply you can certainly become a bird-dog for the highrollers, this entails your attending some local investors meetings to get some names of the buyers in the market, also look in the investment properties wanted section of the classifieds of your largest local paper, those are investors looking for undermarket deals from bird-dogs like you!

Then while holding down a steady job and restructuring your debt you continue to look hard at finding distressed properties that you can lock down with an offer to purchase contingent upon partners approval, this is how you lock in your position to contol the property long enough to assign the contract to the investor for a fee.

There is a ton of ways to find the deals but it takes dedication and persistence as you will follow a lot of dead ends to find the jewels.

I'm going to do something I don't ordinarily do and I'm not setting a trend here but I am going to e mail you the e book that is for sale on this site, you my friend need this information and I can't with all conscience withhold this compendium of advise and avenues of approach from you.

Sometimes people need a helping hand to get out of the rut, I hope together the folks on this site can work with you to get you on the road to the promised lands.

Make sure you give us progress reports on what you are encountering and doing in your travels this way we can continue to guide you and support you along the way.

I hope others on this board will help out where they can and offer their support and advise as well. Stand by Kester, here comes the book! Dan



hey dan can you email me that ebook also?

thanks,

chris

[InvE]

I'm collecting everything I can and I'm scared about taking that first step of actually buying. I'm afraid I dont know enough. Dan,if you dont mind, I can get that course too? Thanks in advance.

A Scared Newbie