Archive for April, 2014

Be A Pro

I know when folks are getting started in real estate investing it’s easy to treat it like it’s a hobby. And it might be for some – especially if you have another career and investing is a side business. But with Wholesaling, you need to treat it like a job and a business, because it is.

Buying rental real estate is a great way to earn passive income and we should all strive to earn as much passive income as possible in our lives. But there is nothing passive about Wholesaling. It’s work and that work needs to be taken seriously. That’s why you need to be a “Pro” when it comes to your Wholesaling business, or else it probably won’t work out for you.

A “Pro” or Professional does the work and takes it seriously. And more than likely a “Pro” is consumed by striving to be successful. To use a football analogy, think about Tom Brady and Peyton Manning, those guys are “Pros”. They are consumed by winning and being the best. They wake up and eat, drink, and sleep football. They game plan meticulously with their coaches and teammates. They watch game film. They practice their plays, over and over and over. They are focused on learning and getting better. They are role models and leaders for their teammates because they are usually the hardest working guys on the team. They put in the time it takes to be a “Pro”. Would you agree? Hopefully you know who Tom Brady and Peyton Manning are.

So to turn the analogy back around to a Wholesaling business, we know we better step it up if we are going to be “Pros”. We need to get up earlier and work later if we have to. We have to consistently be putting out our marketing – which is the lifeblood of our business. More marketing = more deals! Whether it’s letters, postcards, bandit signs, door hangers, internet marketing – we are focused on getting that marketing out every week. We always need to be networking and building our buyers lists. Get in front of as many people you can and let them know what you do and what you are looking for, and how you can help them as well. We need to be meeting with sellers and buyers regularly. We need to be out looking at properties and finding and analyzing deals.

Be sure you are motivated enough to commit to being a “Pro” by having your “end” in mind (see last month’s article). Write down your goals and aspirations and then work the plan to get there. Your goals and aspirations should motivate you to get out of bed every day and want to kick some butt in real estate. In Wholesaling you really need to have a big “Why” because it’s not easy in the beginning. You will need to fight thru the early bumps and “learning on the job” and stay consistent with your marketing and networking. If you commit to being a “Pro” in Wholesaling and stick with it, you will find success. So commit to it now if Wholesaling is what you want to do. There is no ‘just dabbling’ in Wholesaling if you want it to work out. Nobody wants to be a Wholesaler their whole lives – so kick butt now, make a bunch of money, then put that money to good use. Buy real estate ideally – anything to produce passive income. Good luck and let us know how we can help!

Matt LarsenMatt Larsen started buying and selling real estate in October 2012. In the last few months, he and his wife Courtney have done over 40 wholesale deals with no prior real estate investing experience, very little cash and none of their own credit. Now they are both full time real estate investors, work on their own schedule and report only to each other.

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Follow Up – Part 1

Last month we discussed presenting offers. This month, we’ll talk about the next step which is follow up; the fourth in our five steps to success. There are actually three times when you’re going to need to follow up so we’ll discuss each one.

The first is when you’re dealing with a prospect after you prescreen them, which means, that it’s a yes on the property information sheet yet we’re not ready to complete a deal today. This means this prospect should be followed up on because a lot of these will be converted to deals at a later date if you do the follow up, which I will confess, most won’t.

The second type of follow up you’re going to need is on the hot prospects where they say yes now and now you’ve got a few things you’ve got to get done to get it under contract.

The third type of follow up is the follow up after you get them under contract. Follow up is such a neglected portion of the steps that are required to make money in any business. If you will master this, you’ll make a lot of money where a lot of folks won’t and you’ll find the deals that you do get will go better because you took care of the details along the way. A small detail left out can create a large problem, and has many times prior. Honestly, most people have no system whatsoever to do the follow up; they rely too much on memory and therefore issues come up that really could have easily been avoided.

Let’s talk about the first of our three types, which is a prospect that you’re not going to buy from today but is worthy of following up on later. Here’s a real simple system; get yourself a file box with files in it, 52 of them, one for each week of the year. Don’t put dates on them, just put ‘June Week 1’, ‘June Week2’, ‘June Week 3’ and so forth so they never go out of date. So here you are with a file box with 52 files in it and the month and the week of the month, so now it’s simple when you’re discussing a property with a prospect today and you can’t get it to a conclusion because they’re not ready yet, you just decide in your mind, ‘Alright, when do I want to follow up with them?

What did my conversation dictate how long that would be?’ and just stick that property information sheet in whatever applicable week that is. Now, when that week arrives you should have them sitting there waiting for you to call and you don’t have to remember anything. Yes, I know that’s an archaic system, but it still works. If you’d rather do one of your own electronically, go right ahead, but the key is do not waste these leads. Remember, all seller’s minds will change with time and circumstance so don’t take a prospect that’s not ready today and discard them because a lot of your deals will come from the follow up.

The next of the three types is when you are at a point when the seller says, “Yes, I’m ready”, so now you’ve got to go through the steps I’ve described in the prescreening section in last month’s article to get out to the house and get it under contract. If you didn’t read last month’s article go back and do it now because it literally will take you through all the steps of the follow up required to get to the contract.

The third type is the follow up after it gets under contract. When you leave the house, you should leave with a signed agreement.  Of course, if you didn’t, now you have another follow up step and that’s to go back when you and the seller agree and get a signed agreement. Honestly, I don’t go back to the house, I make them bring the contracts to us, but I’m fully aware in your early years you’re so eager to get the deal you’re going to do whatever you have to do. Regardless of who’s going where or when you still have to follow up to the point to where you pick up that contract or all of the work you’ve done up to now is for naught.

 Once you get that contract signed, the next step is to probably do a title search. If it’s a purchase agreement, I will always do a title search before I go any further because I’m going to buy it and I would not buy a house without doing a title search.

However, if it’s a lease option agreement requiring a tenant buyer before it’s actually a deal, then I very well may not do a title search until I get the tenant buyer located and committed and at that point we run a quick title search. In fact, that’s exactly what we do here around my office. Once we know we have a deal, we run a title search just to make sure we are not going to have any title problems and put the buyer in a bad position. Our next lesson will be on closing the deal and in this case that means we’ll get a contract signed so we are going to talk more about that then.

Of course, if you leave the house with a signed lease purchase agreement you have closed the purchase of it because there are no further steps required to continue, except do a title search as I just discussed. Once that agreement is signed by that seller you control that asset and your five steps to buy are complete.

You also want to be prepared in case the type of deal changes after you arrive at the house during your conversation. For example, you assume that when you get to the house it’ll be a lease option deal, but after you arrive and start having a conversation with the seller, you discover the seller would rather just deed the house away and sell it instead of lease optioning it to you. That means you will switch from the lease option agreement to take possession of the house, to a purchase and sale agreement that says you’re going to buy it and take over the debt subject-to. Ask yourself, “What kind of an agreement would I need regardless of what situation I get in to?” Again, think that through before you get there and be prepared for the possibilities. After a while, it’ll be second nature to you.

OK, that’s enough for this lesson. Next month, we’ll pick up where I left off and continue discussing the follow up.

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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