Archive for October, 2013

Locating Prospects

Last month, I said we were going to spend the next few issues going through an ACTS or Sandwich Lease Option deal. The first step is locating prospects, and that’s what we’re going to cover here.

Actually, this is one of the easiest steps in the multiple steps of getting through a deal and getting your first check. Today, my team does nothing but call FSBOs to get more leads than we can handle, and in fact, recently have added more manpower because we can’t cover all the leads we get from calling the ads that sellers run online and from some off line sources as well.

Now, when I say my team, that’s actually one virtual assistant (VA) calling For Sale By Owner ads she finds online on a handful of websites. She does the research to find the websites like Craigslist and a few other sites where For Sale By Owner ads are run in our city. Then she calls them and fills out the property information sheet located on the Gold Club under Resources/Forms and Agreements. And in fact, you’ll also find a 17 minute video there under Training/Residential Real Estate/Lesson 74 where I went through the property information sheet with the purpose of you sending it to your virtual assistant to train them on how to properly fill out the form.

The best way to find these sites is to go to Google and put in something like, “I want to buy a house in Jacksonville.”  Up pops a whole bunch of sites where people who have a house for sale can run a classified ad. I’d leave it up to your VA to find out which one of these sites are valid and has relatively new ads on them such as Craigslist.  It’s true some of them are worthless because the ads are on there for months, and no one takes them down. Once you have developed a list of the sites for your area, it’s likely your VA will not be able to keep up with the number of FSBO ads that are placed on them, especially if you take the action that I’m about to describe to you here in a minute.

Now, I’ve got to tell you it is your responsibility to do everything you can to make sure your VA has enough leads to call. What you can’t do is sit around and wait for your VA to run the front of your business for you. If you don’t get enough leads, it’s your fault not his/her fault. If the property information sheets aren’t getting filled out correctly, it’s your fault not his/her fault.  If you can’t find enough leads online, then it’s time for plan two.

Someone in your organization, possibly you, should be riding around looking for FSBO signs in front of houses. This is actually a great source of active leads of people you know have a house for sale. Simply instruct them to take out their cell phone, snap a picture of the house with the sign in the pictures and forward to your VA to call.  When you get to the point where you can’t handle more leads, just have your VA slow down.  If this is done on a regular basis, your VA will easily have 10, 15, 20 leads a week just from the people you hang around paying attention to the signs in front of houses as they ride around through neighborhoods. And of course, this will become a major source of leads for you and possibly even the only source.

Now, I know that sounds like a simple way to generate leads to build an entire six-figure business, but honestly that is what we do at our organization. Granted, there are a few other things we do, but none of them are significant compared to the amount of leads we get from calling FSBOs.

I do have a big truck with an “I buy houses sign on it.” You know the one I gave away at the convention and then bought back?  It doesn’t get many calls, but the ones it does get are pretty good.  We just got a contract this week from our truck.

The problem here is really not getting leads; it’s more of a follow-up issue because getting leads is easy and almost free.

In our organization we spend zero time getting leads. All of Scott’s time is spent calling the FSBO sheets after the virtual assistant has filled them out and dealing with the people who give us the yes answers. For example, in our case Scott gets somewhere between 15 and 30 leads per week and out of that, almost half of them have a yes answer on the property information sheet. That means that somewhere between 10 and 15 people have said, “Yes, I will lease option or owner finance my house or sell it for what I owe on it.” Now Scott has to call these people back and verify the information they have given the virtual assistant is correct and then set an appointment where applicable. If you think about it, that’s only a handful of calls per week, but by the time he goes out and sees the house and sometimes goes back for second trip or has the seller come to him, sometimes a few days have gone by.

Don’t forget he also has to handle the selling process and all of the details that go in the middle, and now he’s managing a couple new guys we’ve hired to clone him.  To be honest, sometimes I do wonder what he actually does do all day.

So, what it all boils down to is…how many leads can you handle per week if you get yes answers before you’re overloaded?  I know the answer is going to be only a few.

The only other thing we do is run classified ads on several free websites. Of course, we have our VA run these ads on the same sites we use to buy houses from. They cost nothing, and they do produce calls and e-mails.

We make it a point to publish a phone number and a URL website address. We drive the phone number to PATLive’s 24-hour answering service. They take a few important questions so we can determine if we have a prospect or a suspect, the most important of which is, do you have a house for sale? Then, they forward this information to us, and we forward on to our VA to call the property information sheet for us. If the seller goes directly to our website, the property information sheet is located there for them to fill out so the VA doesn’t have to call them. That way, you have the seller responding in the way by which they want to respond.

So, to recap, we only do three things. One, have VAs call online ads. Two, send FSBO signs to VAs to be called. Three, run classified ads to get sellers to call us. Except for the cost of the VA, all of these items are free.

Now, I know, of course, you’re wondering, “Where am I going to get a VA?” Well, good news! Global Publishing has started our own virtual assistant company, and we are now hiring VAs to make these calls for you. We will find, train, monitor and pay them for you!  To get the details, call VIP Services at 888-840-8389 or email Info@eaglevirtualassistants.com

Let’s do a little math here.  I don’t know what your cost per lead will be, but let’s just say it’s about $20 in VA services.  Heck, let’s make it $30 to satisfy Murphy.  If you get 10 fully filled out Lead Property Information Sheets a week, that’s $300.  We get a third to half with a “yes” to they will owner finance, lease option or sell for what they owe.  Murphy says you only get two yeses, so that’s two people per week you call and make an appointment to see with intent to get a contract.  Only one goes through.  So, you got one deal.

Nah, I know this Murphy guy. Make it 20 leads to get one deal.  That’s a $600 investment if using a VA, and your numbers suck.  Now, you put it on the market with some free ads on Craigslist to attract buyers and find one who’ll gladly give you the $5,000 to assign your lease option contract to them (ACTS).  So, the question is, will you pay $600 to get $5,000?

If the answer is, “No, I can’t afford it,” you can call the FSBOs yourself and have no money invested.  That’ll get you through your first deal, but is not something you will do for long.  If you can afford it, let us get you a VA now and seriously consider adding a personal mentor while you’re at it to greatly increase, no almost guarantee your chances for success.  Just tell us what you want to accomplish and how quickly, and we’ll help you fill in the blanks.

Next month, we’ll deal with the next step, which is prescreening prospects. This is the one that will take a little time for you to absorb, so I will cover it in detail and try to make it easy enough for you to understand even if you have not been through any of my training. I would urge you strongly again that the fastest way to learn how to get through your first ACTS or Sandwich Lease-Option deal is to get my course called “Control Without Ownership.” 

Ron LeGrandRon LeGrand is the world’s leading expert in residential quick turn real estate and a prominent commercial property developer. Ron has bought and sold over 2,000 single family homes over the past 30 years, and currently owns commercial developments in nine states ranging from retail, office, warehouse, residential subdivisions and resort

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IMPORTANT: Private Money and Cash Flow

One of the most important rules to remember is that…
Cash Flow Starts and Stops a Business

As my career has matured, I have realized that the best way for me to grow my business is by making others wealthy — making YOU wealthy. I want you to learn from my mistakes and enhance your life and your business. I know that you can do it with certain essentials in place.

This is why I want to share with you some fundamentals about how to get private money.

First:  Qualify Them

Not everyone is an investor, and you need to know who will be the best prospect for you. Here are some qualifications to look for in potential lenders: 

  1. They have cash in their bank accounts.
  2. They want to participate in their wealth development.
  3. Ideally, they will be over 50 years of age. Investors over 50 have different needs and may be conservative. Most investors in their 20s invest in a higher, more risky investment.
  4. They know what they are looking for: Dependability in dividends? Investments of one year, two years, five years?
  5. They must be willing to let you run your business. They must trust that you know how to use their money well.

Note: I typically give a lender control in these areas: reduction of risk, a prospectus, a track record, a stake in the investment, a good rate of return, and an investment vehicle. 

Second:  Help Them to Build a Dream

When I talk to people about investing in my company, I never say “borrow” or “lend.” Instead, I talk about how they can invest in their future.

I talk about how they can earn enough to pay for their children’s college education, go on luxury vacations, and retire early and comfortably — if they build their wealth now.

I build a dream of what their money could be doing for them and the great returns that they can get in an investment other than a CD or 401k.

I make sure they know that I want to support them in achieving their dreams by giving them opportunities.

Third:  Talk About Risk

You’ve qualified the lender. You’ve shown them the possibilities. Now it’s time to earn their trust by being honest: talking about risk.

Lenders want to know that you have integrity and morals, that they can trust you.

They want to know your track record so that they can see your successes. But what if you don’t have experience? You can still demonstrate your morals and integrity. If you can show this, the funding will follow.

They want to know that you have done your homework, that you are confident in what you know. Be able to show them that your knowledge of loan to value, distance, area, and exit strategy will reduce their risk.

They want reduced risk and a payment forecast.

They want to know that you are thinking about the future. For example, what will happen with their money if something were to happen to you? You need to be able to answer this question with a solid plan.  

The Private Money Presentation

Another way to allow lenders to feel comfortable with you is to talk about the ways for you to reduce their risk and provide a secure investment.

When meeting with a possible lender, you must remember:

The lender is buying a dream. The lender is buying a future.
Your presentation is about their needs, not yours. 

Here is a Quick Start for your Private Money Presentation: 

  1. Ask if they have any extra cash that is not working for them.
  2. Ask if they’d like to make their extra cash work for them.
  3. Ask about their needs and desires.
  4. Find out how much risk they are willing to take to achieve their goals.
  5. Find out if they have ever invested in real estate.
  6. Talk about the high rates of returns that you are currently getting in your real estate business.
  7. Give an example of a great deal that you are looking to close in the near future.
  8. Follow-up over a number of weeks so that you can maintain a relationship. Update them about the deals that you have spoken to them about. This way, they can see the growth and progress of your abilities.
  9. Talk about how they can create their dreams by supporting yours. Show them that you are working for a common goal.

If you’re in Atlanta, join me and other successful investors at the Atlanta REIA Creative Deal Structuring Subgroup on the first Wednesday of each month at 7:00 PM at the JAYA Center located at 3845 N. Druid Hills Rd, #101 in Decatur, GA. Let me coach you to learn the market and find your niche!

I am looking forward to meeting you and helping you on your way to success!

Russ HinerRuss Hiner is an active real estate investor, coach and mentor. Russ is currently the leader of the Atlanta REIA Creative Deal Structuring Group and co-leader of the Atlanta REIA Mastermind Group. Russ also teaches several Atlanta REIA Workshops throughout the year on a variety of real estate investing topics such as Negotiations, Wholesaling 101, Wholesaling 401, Real Estate 101, Property Management and more.

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