Real Deal REInvestor Network

There are two main theories about finding buyers that I've noticed.  

One is the "if you build it they will come" theory which is that once you have a good deal, buyers will find you through your marketing.

The second is the "find the buyers and get what they want then sell it to them" theory that says build your buyers list and get as much detail from them as possible, then market in those areas to buy deals for your buyers.

Both theories have merit, but I've got to tell you that it's a lot more comfortable to have a buyers list in place before you get a deal.  Of course, you might not know if they're good buyers until you actually have a deal and they perform.  As an aside, you can do all of the things I mention for free.  

 Let's talk about the first theory.  You've found a great deal and you have it under contract.  Make sure you've given yourself plenty of time to market the deal.  

1. Go to every real estate investor's group in your area and pitch your deal.  Make sure that you have flyers to hand out.  Get the interested people's email addresses and phone numbers in case you don't have enough flyers.  Oh, and if no one comes up to you, either your deal isn't good enough or you haven't shown the other investors the benefits of the deal.  Make sure that at a minimum you show them the price you are asking, how much repairs will be and the after market value of the property.  Do mention how much fat is in the deal.  Never leave it up to someone else to figure out that it's a good deal.  Tell them what you want them to know.  And don't be greedy.  A buyer who loses money will not be a repeat buyer.
2.  Contact other wholesalers in your area and offer them part of the deal to pitch it to their lists.
3.  Use postlets.com to make a pretty little flyer for your deal and post it for free to all their sites, as well as Craigslist.
4.  Go to the housing authority in your area and get a list of section 8 landlords.  Call everyone on the list to see if they are interested in buying your deal.  You can generally get more money from your deal by selling it to someone who wants to hold it.


Now let's talk about the second way to find buyers. 
1.  Go to your title company (if you don't have one yet, what are you waiting for?) and ask them for a list of cash buyers in your area for the last 6 months.  Contact these people, ask them if they are interested in buying your wholesale deals and get their buying criteria.
2.  Talk to hard money lenders in your area and ask them if they'll give your information out to their list, or if they'd introduce you to the players in your market.  They are also a great source of which real estate investor association meetings are the best ones for experienced investors to go to.
3.  Talk to the heads of the real estate investing associations in your area and again, ask them to introduce you to the real buyers in your area.  They know everyone and will often be happy to help you if you bother to show a little initiative.
4.  Talk to your fellow investors at  your real estate investor association meetings.  Get their buying criteria.
5.  Call bandit signs and ask them if they're interested in buying your deals.
6.  See #4 above.  Section 8 landlords are a great source of buyers.
7.  I've seen it advised to put an ad in the paper or on Craigslist saying that you have a deal and when people call tell them that it's gone, then asking if they want to be on your buyer's list for the next deal.  I don't like this method because it seems dishonest and there are so many other ways to build a list. 

I hope these ideas help you out! 

I'd like to talk about ways that I've actually found sellers as well as ways that others have told me they like to find sellers.  

For instance, I hear that bandit signs are good, but my 100 bandit signs are still sitting in my garage on wooden stakes, ready to go.  My husband asked me what I was going to do with them the other day... and was terribly skeptical when I told them I was going to put them up.  I probably shouldn't have nailed in the stakes until I was actually ready to put them out, because they didn't used to take up so darn much space.

Now, I know that Chris Chico's postcard to absentee owners is a great one to use, because that's how I found my wholesale deal.  I used his Real Estate Voodoo System, which is no longer available, but it's the same information that's in his Virtual Wholesaling system.  I got my list of absentee owners from my title company.  They are a vital member of your team, so go forth and find yourself a title company that is familiar with double-closings, create a relationship with them and they'll give you farm lists.  I can order mine online.  I just picked a zip code in my city that's got lots of mid-range properties and sent out the postcard using click2mail.com.  I sent about 600 postcards for $170 and got 30 calls.

I've gotten my short sale leads by networking.  One was referred to me by a divorce attorney that I met in a class on real estate investing.  The others are people that I know who want me to do a short sale for them for various reasons.

I've had magnetic car signs on my SUV for a while.  They don't get very many leads, but it doesn't take that many.  The first leads I got, I completely blew by talking about myself and my kids (there's a free lesson - don't talk about yourself, listen to them and talk about them and solutions to their problems).  I've also gotten a lot of calls from contractors and buyers because of my car signs.

I also have 12 bus benches that scream "We Buy Houses" set throughout the city on busy streets.  They've been a massive waste of money.  I'm thinking the message is wrong.  Perhaps "Cash for Your House" would be better - again talking about the seller instead of the buyer.   

Some of you can get probate information online and if you can, go for it!  But, for goodness sake, DO NOT call obituaries.  Let me repeat that - DO NOT call obituaries.  It's too soon and they aren't ready to settle the estate yet.  When they are ready, they will file probate in the county where the deceased lived.  In my counties, we actually have to go to the courthouse and they print up the probate records for $.25 a page, then you have to search the owner's name to find if they have any property.  It's good that it's such a pain, because it cuts out competition.  Remember this, the less competition you have, the more likely you are to get the deal.

Another great way to find leads is the county foreclosure list.  In my area, all this information is available online from the counties themselves.  You could pay some service $50 a month to get you this info, but unless you can't get it for free in your county, it's not worth it.  Even if your county doesn't provide these records online, you can always go to the courthouse and get them for free.  Don't let lack of money stop you from getting leads.   Now, this is a high competition list, but a way that you can cut the competition is by going to these houses and door-knocking... scary sounding I know, but trust me, these people need our help.

And here's the last thing I'm going to suggest.  Driving for dollars is what I've heard it called.  Basically, this means that you drive around blue-collar neighborhoods looking for vacant properties.   If you don't want to do it yourself, put an ad on Craigslist, print up some criteria, have a meeting at Starbucks to explain the criteria to the people who answered your ad and set them loose.  Pay them $5 or $10 for the lead with pictures and make them find the owner information for you too.

This should give you somewhere to start finding motivated sellers (outside of Craigslist)... As Terry Wygal says, "Go buy a house!"

If you haven't read "Influence" by Cialdini, you're missing much of your marketing boat.  After you read it, you'll be amazed at how many of the principles are being used on you in sales letters, webinars, indeed almost everywhere where there is something to be sold.  This is truly a must read book.  I am a voracious reader and have read dozens of books on marketing, yes, even those not required by my college courses, and this was a huge eye-opener.

Robert Cialdini is actually a professor of Psychology at Arizona State University, so he has spent a long time studying and analyzing social influence.  The book is engaging (on purpose - they were trying to make it a best seller, not just a textbook) and fascinating. 

 Chapter 1 talks about "Weapons of Influence."   He uses an example of how mother turkeys have a built in recognition system of a sound to recognize their babies and how they will embrace any creature who makes that sound.  It's a study in subconscious patterns of recognition.

Chapter 2 is called "Reciprocation:  The Old Give and Take... and Take."  It explains the theory of reciprocation, how you can use it to influence others and how you can fight it when it's used against you.

Chapter 3 is about "Commitment and Consistency:  Hobgoblins of the Mind."  It explains that we look for patterns, much like the turkeys mentioned in chapter 1 and how once we make a commitment we look for reasons to justify it.  Again he talks about both ways to use it and ways to defend against it when it's used against you.

I'm sure that almost every reading this got a ton of the "scarcity principle" with Preston Ely's release of Freedom$oft!  This is covered in chapter 7.

While I'm not going to bore you by going through every single chapter, suffice it to say that this book has entirely changed my thinking.  If you're interested in marketing, which of course you are, you need to read this book. 

I just closed my first wholesale deal at the end of January 2010.  Some things I did right and some not so much, so I thought that sharing the lessons I learned might help you too.

1.  You can build your buyers list before you ever have a property under contract.  I went to my local REIA groups and talked to the founders of the groups, other people in attendance, people who had booths...  and I built a buyers list from that.  When I had my deal under contract, I called up the people I'd met and presented the deal at an REIA meeting which is how I wound up finally selling the deal.

2.  Don't be embarrassed to make a REALLY low offer.  The owner of the property that I purchased had the property listed for $250,000.  However, I had sent a postcard to owners who didn't live in their properties and he called me directly from the postcard.  At first, he told me that $190,000 was the least he would accept.  When I ran the numbers, I really didn't want to offer more than $108,000, but I offered $120,000 and he said he'd accept $130,000.  If an owner really, really wants to get rid of their property, they will sell it to you for a low price.  You don't know their motivation.  Even a low price is a win for someone who is dying to get rid of a property. 

3.  Keep marketing your property until you have money in hand.  This was a huge mistake I made.  First, I called up one of the top guys from a local REIA and he was interested but couldn't come up with the money for some reason.  And I thought for sure he could deliver, so I stopped marketing for a week and a half, which is a long time when you have a 20 day time limit on a contract.

4.  Don't give the buyer until your last day to close.  This was another mistake I made.  Give your buyer a week and don't tell them the end date on your contract.  If they can't perform in time, at least you have a few more days for them to come up with the money or to find another buyer.

5.  Get someone as a backup and give them the same deadline as the first buyer.  Tell your backup buyer that they need to have all their ducks in a row to close the same day as the first buyer so that if the first buyer backs out for whatever reason, the 2nd buyer is ready to roll.

6.  Know your market!!!!  This is another one that I did well on.  I know my market backwards, forwards, inside and out.  I knew that I had a good deal.  The tax value on the property was $266,000.  I bought it for $130,000 and was offering it for $150,000.  Repairs were between $22,000 and $30,000 depending on what the buyer chose to do.  Section 8 rents were $3,366 monthly, so the property would not only make a good flip, but would make an excellent cash-flowing rental.

7.  Don't let your buyers change your assignment contract.  If they want to change it, they're probably not going to be good buyers.  I found this one out the hard way when my first buyer backed out.  He didn't like the clauses in his hard money loan either, so he chose not to take the loan, even though the hard money lender's appraiser said the ARV on the property was $300,000.

 All these lessons wound up costing me over $8,000 to learn.  I hope that they help you so your deal goes smoothly!

This is a review of one book you can get on Amazon for less than $20 and of two programs that are considerably more expensive. 

If you are on a tight budget, start with Dwan Bent-Twyford and Sharon Restrepo's book "Short-Sale Pre-Foreclosure Investing."  You can find it on Amazon for less than $20.00.  You may even be able to check it out at your local library.

Dwan and Sharon have been doing short sales and wholesales for around 20 years.  Dwan has completed some 1,200 transactions, so she really does know her stuff.  She also has what I find to be a very approachable style.  And, Danny and Rick should appreciate this - the book starts with a section on setting goals, getting motivated and basically breaking out of your old thought patterns.  In 208 pages, they explain:

1. short sales, 
2. strategies to find distressed homeowners and distressed properties (some of them free) 
3. preparing your offer
4. dealing with banks
5. negotiating with 2nd or 3rd mortgage holders
6. the foreclosure process
7. what to do when the bank accepts your offer
8. exit strategies
9. closing
10. expectations for your first year, etc.

It's a great little step-by-step book that will take you from nothing to your first short sale deal.  I had to laugh because one of her more recent testimonials is from a man who worked his first short sale using her book and made over $100,000 profit (nice, huh?), and is now a coach for a different short sale guru.  Dwan & her husband do all of their coaching themselves, so they don't hire other people to do it for them.

The other two programs I'd like to talk about are almost identical because one of the authors was coached by the other.  These guys sell their programs from $500 to over $1000.  They also offer coaching from $97 a month to $997 a month.  And I don't believe they do their own coaching, at least not anymore.   The people are Chris McLaughlin and Nathan Jurewicz who offer the "Short Sales Riches System" and Josh Cantwell who offers the "Short Sale Success Blueprint."

Both systems are incredibly detailed, though I have to say that Josh's is more detailed and I just went to his website and found that he's offering his most current system for $47.  I don't know if this is a forced subscription, too, but for $47, it's a darn good deal.  http://www.shortsalemoneymachine.com/index_money.html
The contracts are almost word for word in each system (and yes, I read them over), so if you're interested, grab Josh's at that price.  Last time I saw Nathan and Chris's system, they were charging around $500, but I just went to their website, http://www.shortsalesriches.com/, and they're charging $997 for it now.

As an aside, Josh has changed the name of his system since I read and listened to it. 

You should also subscribe to Josh's email list even if you don't buy his program because he has regular webinars with Jeff Watson who is a brilliant attorney who specializes in short sales. His calls are always full of up to the minute information on things like the most recent FDIC regulations.  Jeff doesn't just regurgitate the latest thing that all the other gurus are spouting either.  He always gives well thought out advice. 

I would also recommend getting on Chris and Nathan's list because Chris McLaughlin, who is an attorney and real estate broker, sends out very informative emails about what's currently going on in the market.  Nathan's fun and all, but his emails are mostly sales pitches. 

I hope this helps. 

First of all, I want to thank you guys for offering all of us this exciting opportunity to be a part of your Menternship Program.  It's obviously taken a lot of your time already to set up the program, create a contest and begin the process of choosing the finalists.  I was very excited to see that you chose me to be one of the 90 candidates to go on to the next step in the contest.  So, thank you.  This is awesome.

I deserve to win because I just completed my first deal.  I finally got past the fear of doing anything and really powered through this deal.  I marketed, negotiated with the buyer and locked up a property for a great price.  While I made money, I also made a lot of mistakes, mistakes that were probably avoidable.  I only made about half what I should have because of them.   

You can help me build a system.  I'm an excellent student and am very willing to listen and implement what you tell me to do.  Since you've read my blog, you know that I've accumulated a lot of education about many different areas of real estate.  It's all floating around in  my head and I need you to help me pull it all together.  I'm not a one trick pony.  I need coaches who have more than one strategy to put together and from what I've seen, I believe that you fit the bill.

You'll get some exposure from coaching me.  I have thousands of followers between my Facebook (4350) and Twitter (7500) accounts, many of whom are very interested in real estate investing.  I also have a blog, www.realestateinvestormom.blogspot.com, which hardly has any followers - but I get a lot of comments on it outside of the blog itself, so it seems that more people read it than are obvious.

I have big dreams and know that you can help me reach them.  This past year has been very hard.  My husband lost his job in February 2009 and found another in June that pays half what he was making before.  Until I closed this deal last week, I thought we were going to be some of the millions of people in foreclosure and bankruptcy - we were that close to the edge.  

I've been using my kids college funds to make up the difference between my husband's salary and our expenses.  I've literally cried every time I had to make a withdrawal.  I don't want to do that anymore.  I want to put money in to their college funds.  I want to build a strong real estate empire and be a great example for them.

Now that I've done the first deal, I absolutely believe that creative real estate investing works and I need to put a system in place so that I have a funnel of leads and am not out hunting down deals one at a time.  

Even during my first deal, before I had it completed, people were asking me to help them get their investing business started.  It's been very interesting to see how many people have wanted my help.  I've pointed them in the direction of books, programs and people that I've found helpful... and once I get a few more deals under my belt, I'll be able to offer much better advice to the people who approach me.  I love to help others and believe that there's plenty of room in the world for everyone to succeed.

So, pick me!  I'll be a great student.  I'll do what you say and I'll make it succeed.  In turn, I'll let others know how you've helped me and I'll help others as well.

Thanks for reading.  I look forward to hearing from you.