Archive for the ‘real estate investing’ Category

How To Sell Houses Fast On Autopilot

Monday, January 23rd, 2012

To be successful in real estate investing, you must sell your houses fast.   This is quite important in a slow market where houses can sit for months with no buyers, increasing your holding costs.

Having a means to accelerate this process is therefore important, and whenever possible, employing every tool at your disposal to sell your houses fast is a must.

In this article, we look at how to automate the process of getting potential buyers for your houses.

You must first remember that real estate is a face to face game.  A buyer must come to see the house before they buy it.

But the process of acquiring those buyers can be automated, and the end result is that you can sell your houses much faster.

I highly recommend and use squeeze pages.  A squeeze page requests your name and email in exchange for something you need.

In general do not ask for more than name and email; the more information you request, the less the response you will get from your squeeze page.

You end up creating a list of buyers who have money and buy in your local market.   These people are likely to buy your next deals without more advertising.

Let us look at some simple examples:

Squeeze Page Example 1:
When wholesaling my properties, I set up a squeeze page that asks for name and email to access a list of highly discounted properties.

In order for them to view those properties, they must provide their name and email, and they are instantly redirected to the page with property listings.

This is how I built my first buyers list.  I advertised my properties on the local newspapers and gave them a website address instead of a phone number.  The website address had a squeeze page.

I ended up with a list of about 200 very responsive buyers.

They ended up buying a few properties from me.

Squeeze Page Example 2:
This type of squeeze page must be built into your real estate investor website.

Properties listed on your website show a summary page with a list of properties with the estimated market value, sale price, equity, etc.
The information is just enough to build their interest.  They must click “More Details” to see more information.  A squeeze form in a lightbox then pops up requesting for name and email to access full details.

This is my favorite and consistently gives me more potential buyers than the first squeeze page.

Autoresponders
Automation is never complete without autoresponders.   An autoresponder sends previously written email messages at pre-timed intervals.

For instant once they sign up, an instant email is sent saying something like “Thank you for joining our buyers list. We will be sending you deals that meet your needs as soon as we get them.”

Over the next few days, they will be getting helpful messages automatically.   This helps build rapport and provide more information such as phone number, areas they buy from, types of properties, etc.

This information helps you in your marketing, so that potential buyers keep getting the exact type of properties they need.

Learn how you can automate your real estate investing business with a real estate investor website fully equipped with all the tools necessary for selling your houses fast, as well as buying houses. The end result is that you close more deals using less time, money and effort.

How To Buy Houses At The Right Price For Real Estate Investing

Monday, January 2nd, 2012

In real estate investing, buy low sell high is a very common expression.   Though it sounds quite obvious, it is not always easy to buy houses at the right price.

Your buying price must be low enough to make you profits whether you sell them right away or keep them as cash flow properties.

So how do you determine the best price for your property?

A few years ago, it was not un-usual to buy a house at 80 cents on the dollar and wholesale it for a tidy profit because the market supported it.  In fact, you always expected the price of the house to go up within a few months.

In the current market, when you buy a house, you expect the price to go down.   Almost every home owner has lost some equity in the home in the last one year.

When buying a house, you must consider this fact.  Today, the regular price for wholesale properties is 60 to 65 cents on the dollar minus repairs.

Also, tenants have become more choosy since there are more houses to chose from, and are likely to go for a house with a pristine rehab job.

This has made rental prices more competitive.

When you are buying houses, it is necessary to make sure you let the seller know these facts.

So I always let a seller know that even though it seems like they are giving me a deep discount on their property, I have to fix it, then sell it, probably hold it for months and eventually sell it at a deep discount.

And probably I’ll not be able to sell it at all!

I explain that I might lose most of my profits when I hold it.  When most sellers understand these facts, most  of them relax.

I like to make this clear before I can make an offer.  I have come to learn that even though motivated sellers really need to get rid of their properties, they do not like to feel like they are being taken advantage of.

Once they understand the current market conditions, then I can make my offer – and it offer does not look too low-ball and the seller is likely to accept it.

Why do you need to explain all this?

In the current market, it means you must buy houses much cheaper than we used to just a few years ago since you also must sell low in order to sell it at all.

If you buy properties on terms such as lease options, it is also necessary to do this. You must remember that even though the price for properties that you buy on terms is usually higher, it must still be low enough to cater for the facts above.

This way, in a year or two when you try to sell it, the price at that price will support the sale.

When buying houses, it is necessary to to pre-educate motivated sellers so they understand how you buy houses. It is also important to generate leads and follow up with them automatically to convert them to motivated sellers automatically. Find out how an automated real estate investing website can attract, pre-educate and deliver motivated sellers fully pre-screened and pre-negotiated so you close more deals using less time, money and effort.

 

Wholesale Real Estate Investing: Contract Assignment

Saturday, December 17th, 2011

Wholesale real estate investing is an integral part of a real estate investors business when they buy  properties from motivated sellers.  This means that they buy them at a price low enough that they can sell them at wholesale prices to other real estate investors.

Contract assignment means that you assign the right to buy the property from yourself to another buyer, usually a real estate investor.

In other words, you simply change the name of the buyer to the real estate investor for an assignment fee.

Everything else on the contract remains the same.

How does it work?
The following simple steps describe the process of assigning a contract

1) Get the property under contract
Once you identify a property from a motivated seller, you put it under contract.  The contract must explicitly allow you to assign it.

The easiest way to do this is put the buyer with “and or assigns”, e.g. “My Company Name and or assigns”.
Without this little clause you might be unable to assign the contract.   It is very important that you let the seller know that you can assign the contract to another investor.

I also tell them that I could partner with another real estate investor.   They must understand that the contract and closing will not be changed, and that at the end of the day, you will make some profit out of it.

2) Get title work done
The closing agent is usually a title company or closing attorney.

3)  Sign the assignment contract
Once you have identified a real estate investor buyer, you then sign a simple contract for them to take over your contract.

You must collect earnest money when you sign the contract.   The title company usually keeps the earnest money.  Usually I credit the earnest money to the deal at closing; if they do not close the deal they stand to lose it.

4) Close the deal
The new buyer then goes through the process of funding the transaction for closing.   You walk home with your assignment fee at closing.

Advantages and disadvantages of contract assignment
In contract assignment, the need to close two transactions with two closing costs is eliminated.

The assignment fee stated in the contract is what you walk home with.
You must show the assignment fee in the contract.

The final closing statement also includes the assignment fee, meaning that all parties know what you make in the deal.

Be careful not to lose the deal because some seller or buyers could develop cold feet when they see how much you are making. To eliminate this risk, I only do assignment of contract when I stand to make little money.   I use simultaneous closing when I stand to make $5000 or more in the deal.

Some deals also cannot be assigned, such as those involving a Realtor or REOs. Such contracts usually specifically disallow contract assignment.

The biggest advantage is that even with little to no money, you can make a deal happen and walk away with a profit.

Wholesale real estate investing requires that you sell your houses fast to keep it successful . Learn how an interactive real estate investing website can help you sell your properties faster by building your buyers list and using the power of social media to reach more buyers.

How To Overcome Objections By Motivated Sellers In Real Estate Investing

Tuesday, December 13th, 2011

In real estate investing, having all the numbers is crucial to evaluating a deal and making a good offer that gets accepted and makes you a profit.  Most often when I talk to motivated sellers, I find they are not willing to provide some of the information I need to evaluate the deal accurately. Usually they do not want to discuss the mortgage balance among other issues.

So how do you overcome these objections and get all the information you need?

In my real estate investing business, I only deal with sellers who are motivated. By being motivated, they must be willing to provide most of the information I need without pressure. Generally I am not interested with sellers who are luke-warm and are just shopping to see if they can let you buy their house.

Most of my motivated sellers submit their information through my real estate investor website. In this case, the website does the job of pre-screening them and pre-negotiating with them, so I just need a few minutes to tell whether it is a deal or not.

Here are a few common objections and how to overcome them:

Mortgage balance:
Once in a while when you talk to motivated sellers and ask them their mortgage balance, they might tell you it’s none of your business, or if they are polite “why do you need to know?”. So I have come up with a simple statement:

“In order for me to able to evaluate the deal and make a fair offer that makes sense both to you and me and pay off the outstanding mortgage when I buy it, I must know the mortgage balance owed on it.”

Then I go completely silent… say nothing!

Usually they will consider it and give the information.

You must let them know that without mortgage balance, you will be unable to make any offer. If they are really motivated, they will provide this information. If they do not provide it, you have no business talking to them.
A motivated seller will tell you anything in the world to sell you their house.

Repairs:
Do not be surprised that their estimation of repairs is always on the lower side. In my business, I always assume that I will need to do paint, carpet, bathrooms and kitchen.

Before I ask for repairs my conversation goes something like this:

“How long have you lived in the house?”

“Have you done any remodeling on it?”

“So what repairs does the house need?”

Usually I will ask about carpet, paint, kitchen and bathrooms. When you take your conversation like this, you are likely to get more accurate answers that you can rely on.

Asking price:
This is usually the toughest part to negotiate. Of course, you must know the mortgage balance before you can ask this question, or even make an offer.

My question goes something like this:

“If I can buy your house all cash and close quickly, what is the least you can take for it?”

Once they give an answer, I usually just say, “Hmm…”.

Then I go silent.

Not a word until they speak.  In most cases, they will talk themselves down without me saying another word. Sometimes I will still follow up with “Is that the best you can do?”.

In most cases, this technique works like a charm. Good luck in your next real estate investing deal.

Simon Macharia is a real estate investor in Dallas Texas, and uses the an interactive real estate investor website to pre-screen and pre-negotiate with motivated sellers.  Learn how you can close more deals using less money, time and effort with a real estate investing website.

How To Identify Motivated Sellers For Real Estate Investing

Monday, November 21st, 2011

One of the most important things that determine the success of real estate investing business is availability of good deals. Unless you can buy properties cheaply, you are unlikely to make profits with most real estate investing business models.

Motivated sellers are my best source of great deals. When you are buying houses, you will come across all types of sellers. You must be able to identify the motivated sellers who drive your business.
Of course the more targeted your marketing is, the more motivated sellers you will attract in your business. I am particularly fond of targeting people with legal trouble who own real estate. These are most likely to be motivated sellers.

If you also do general advertising such a classified ads, bandit signs, and so on, you are likely to attract all kinds of people looking to sell their houses.

So how do you identify the motivated sellers? The easiest way to do this is to divide them into categories.

1) Unmotivated seller
This is the person that thinks their house is the best in the sub-division. They have taken great trouble to make sure it’s perfect for the next owner occupier.

They have probably tried to list it with their Realtor, or even for sale by owner, but have not been successful. In most cases they are looking the the full market price.

They will not be willing to discuss details and numbers, such as their mortgage balance.

Of course, you will never make money from these type of deal, so you are better off forgetting it.

2) Luke-warm seller
This is the type of person who calls you and says he might be willing to let you buy his house, and asks you to explain how you work.

He will listen keenly, maybe ask questions, but again is not very forth-coming with necessary information such as mortgage balance.

He will probably tell you he has been trying to sell it for say, $150,000 and ask you to make him an offer. He will probably ask you to go see the house first before you even know the numbers.

Even though he will show the interest to be flexible enough to negotiate, you are unlikely to get a good deal from him.

Of course if you are a savvy real estate investor, you never make an offer unless you have all the numbers such as the fair market value, repairs, mortgage balance and so on.

You could end up wasting a lot of time driving to see many such properties and not get any deals out of it.

Usually I ask him to give me a call with all the numbers before I can make him an offer.

3) Motivated seller
This is the person who really needs to sell their house. Maybe they are behind on their mortgage payments or even facing foreclosure.

Probably they have tried to sell and see no other way out. They will give you all the information you need without hesitation. Most of them just want to get out of the mortgage.

In my business, most motivated sellers submit their information through my real estate investor website, so by the time I call them, I already know whether I can make the deal happen or not.

If I pre-screen such a seller on the phone, the conversation is likely to take less than 5 minutes and they provide all the information I need.

This is the only type of seller I deal with in my business. This is the only type of seller where you are likely to get great deals that can make you a lot of money.

Successful real estate investing requires that you pre-educate potential motivated sellers about how you do business to close more deals. Learn how an interactive real estate investor website can pre-educated motivated sellers for you, pre-screen them and pre-negotiate deals for you saving you time, money and effort allowing you to close more deals.

Importance of clean title in real estate investing

Saturday, November 5th, 2011

I recently made a novice mistake that cost me over a thousand dollars even though it sounds very basic. Generally I only do a short sale if I see the potential of creating a lot of equity to justify spending all the time and effort involved in negotiating a short sale.

I am particularly fond of properties which have more than one mortgage, because the holder of the junior lien mostly stands to lose everything in the event of a foreclosure. For this reason, they can negotiate pennies on the dollar in a short sale.

It is not unusual to negotiate 20 cents on the dollar on a second lien. If you can also negotiate the first mortgage, it means you can end up creating a lot of equity and potential for a good profit in your deal.

This is the type of deal I got a few months ago, and instantly identified it as a having high potential. The first mortgage balance was low enough, almost 50% of the value of the house,  but there was also a small second mortgage. Even if I had to pay off both mortgages, I would still have had a good deal.

All the owner wanted was to get rid of the property without foreclosure. We did all the necessary paper work for both short sales and within a few weeks had both my offers accepted.

The house needed some repair, but no structural damage like foundation or roof. There was also a lot of junk to remove and touch-ups I had to clear before I could wholesale it to another real estate investor. The yard was overgrown; there was tons of trash to haul off, and general cleanup. I ended up spending over $1000 cleaning things up and got it ready for wholesale.

I was pretty sure I was going to flip it easily and quickly lined up a buyer with cash.

In the meantime my title company started the closing process including title work. It turned out there were two other liens the seller did not disclose!

Both were mechanic liens attached to the property. One of the liens was easy to track down, but the other one had been sold twice and none of the contact information on the lien was working. In short, we had no way of negotiating one of the liens.

This means I could not own the property free and clear unless contacted all lien holders and agreed on a pay-off. Those liens could only be wiped off through foreclosure.

I ended up giving up on the short sale after spending weeks negotiating both short sales and spending over $1000 getting the property more marketable.

This experience can serve as a word of caution if you buy houses directly from motivated sellers. Even though motivated sellers have probably the most profitable deals on the market, they are also more likely to have multiple liens and judgments on their properties or other title related issues.

Make a point of checking the title before spending money to make sure the property is marketable. In my business, I do not pay for any title work because I have closed many deals with my title company. Even if you have to pay for title work, it is likely it is not as expensive as the time and money you would lose without checking the title.

Simon Macharia is a real estate investor in Dallas Texas, and specializes in buying and selling houses. Learn how you can automate most aspects of your real estate business with a database-driven real estate investing website saving you time, money and effort, while closing more deals by increasing your efficiency.

How To Identify A Good Deal For Real Estate Investing

Tuesday, October 18th, 2011

The current real estate market continues to deteriorate and house prices continue to go down.  More and more people need to sell their houses or lose them to an already saturated market.

We are likely to continue seeing this trend for a while, which means house prices will continue going down.

So how do you identify a good deal that will hold its value until you sell?

Most home owners looking to sell their houses now understand that the value of their house is quite unstable.

They understand that their houses are losing value every day, and that they cannot rely on prices just 2 months old.

They also know that they can no longer sell their house at market value any more.

Too many houses are sitting in the market that you can almost certainly negotiate the price down on most properties even if the asking price is well below market value.

Motivated sellers know that you must also give a discount when you sell your properties, so they do understand the discount they give you will be passed on.

If you buy, fix and sell for instances, you can end up holding your houses for as long as 6 months.

How much value will the house lose in this time?

If you do not answer this question before you buy, you are likely to end up paying too much for your investment properties.

Even if you wholesale houses, you still need to answer this question.   How much will your buyer need to discount the property when they sell?   As a general rule, you can only wholesale houses if you leave enough money for the wholesale buyer to make money also.

Lots of investors have previously been quite comfortable buying houses at 70 cents on the dollar less repairs.  Some real estate investors still use these numbers.   In this market, 60% minus repairs is barely enough.

If you buy properties to hold as rentals, then these numbers can work perfectly.

If you fix properties to sell them on retail, then your numbers must cater for long holding costs and associated price drop.  Naturally you should cater for the discount you will give when you sell!

These days, a discount of as much as 15% to 20% is not uncommon.   Is that enough to make you a profit?

Motivated sellers understand this quite perfectly, and I find it easy to use it to negotiate my prices.   Of course, the discounted dollar figures they give you might look big.  Any good real estate investor knows that we work with percentages, not dollar figures.

Once I explain my numbers in percentages, they can easily see how it small my margin really is.  Once they realize you are not taking advantage of them, they will sell their house to you at a price that makes you a profit.

Have you seen a drop in profits in the current market because you see to be out-priced by the drop in house prices?  Get more in-depth articles in our real estate blog and find out how you can run your business from an interactive real estate investor website that automates most of your business so you make more while spending less time, money and effort.

How To Handle Second Mortgages When Doing Short Sales

Sunday, October 2nd, 2011

Short sales can be complicated and sometimes frustrating. From convincing a home owner that a short sale may be the best way to go to collecting paperwork and endless phone calls, the process can become tiresome.

It gets even more complicated when there are junior liens, such as a second mortgage. So how do you deal with junior liens in a short sale? This article shows you how you can make lots of money negotiating junior liens.

As a real estate investor, you probably come across houses where the owner owes more than the value of the property. Actually these properties seem to have become more so common in the current real estate market they seem to be the majority of homes for sale.

If the owner has more than one mortgage, it is possible to negotiate a short sale for both liens separately. This presents a huge opportunity when you are able to negotiate these junior liens.

The owner of a junior lien mostly stands to walk away with nothing in foreclosure. They are therefore more than willing to accept a small fraction of their mortgage balance in a short sale negotiation. Do not be surprised if you pay $5000 for a $50,000 lien.

In the meantime, the holder of the first mortgage an negotiate as must as 15% to 20% of the mortgage balance. You end up creating a lot of equity by negotiating these two liens, creating an opportunity where none seemed to exist.

What challenges do you face in these negotiations?

1) Motivated sellers
The first challenge is convincing the seller that a short sale may be the best way to go. Even though every lender lets defaulting home owners know about foreclosure options, home owners may not have any idea how to do a short sale.

Secondly, short sales can take a lot of time, so the home owner must be willing to wait this long.

They must work with you to provide the tedious paper work required for a short sale, especially when they have to replicate this effort twice.

Of course, they also need to know that short sale may not get approved, and their home could go to foreclosure if negotiations fail.

2) Banks
You must be ready to submit two complete short sale packets. You must be ready to follow up and make sure the paper work has been received. You must be ready to make all the phone calls to each lien holder  and stay close to the process at all times.

If the property was already in foreclosure, you must make sure the lender will stop foreclosure process as you negotiate the short sale. It is not uncommon for a property to be foreclosed in the middle of  a short sale negotiation.

You have to remember that approval of just one of the liens may mean the deal cannot work as investment property.

3) Closing
Lenders usually give some time to allow for closing. Before a short sale can be approved, thy need to see proof of funds. This can be a pre-qualification letter from a lender.

You must have the money to close within the time allowed by the lenders or the property goes back into foreclosure.

Ultimately, you can create a lot of equity by negotiating junior liens which can in turn create big profits for you.

How To Sell Your House Faster With Owner Financing

Sunday, August 28th, 2011

In today’s real estate market, we are seeing more and more properties for sale flooding the market, but fewer and fewer buyers for these properties.  The result is that the house prices keep going down every month.

Real estate investors therefore find it harder and harder to sell their properties like they use to.
Likewise, if you are looking to sell your house even if you are not a real estate investor, you find yourself stuck with properties that generate little or no interest from buyers.

In this article, we look at how seller financing can generate interest from buyers resulting to a quick sale even at a higher price.

What is seller financing?
In seller financing, the seller agrees to carry part or whole of the financing for his property.   The seller probably has no mortgage, or probably owes a mortgage on it.

In either case, you may need advice on how to structure the deal and close it properly.   Make sure you talk to your CPA and real estate attorney.

When the seller accepts to owner finance the property, the buyer pays a down payment.   The seller then receives monthly payments just like a bank.

Why seller financing?
The days  when just staging your property was enough to sell it are long gone.   Why should a buyer choose your property when there are numerous other properties in the neighborhood  are selling for a lower price?

Before a buyer ever comes to see your house, they will have to be attracted to it by the terms you have set for the sale.  seller financing attracts a lot of attention for your properties.

With the banks tightening their lending procedures, most people can no longer qualify for a conventional mortgage.   Lots of people have also ended up with bruised credit.  These buyers can only own properties through owner financing.

As a seller, this makes owner financing a great way to generate a lot of interest and possibly even end up selling it at a higher price.

The best price is estimated from comparable sales in the area.

It is important to be careful which properties you use as comparable sales.  Properties that have been sold with seller financing carry a higher price than others sold in the conventional way.  Therefore, its price may not reflect the true value of similar properties.

With seller financing, you end up selling your house faster, even at a higher price.

In a market with so many properties for sale and few buyers, real estate investors that adapt to changing trends are the ones that continue to make profits.   seller financing allows them sell their properties faster where others cannot.

Search Engine Optimization (SEO) For Real Estate Investing

Thursday, August 11th, 2011

Search engine optimization involves making changes to a website so that it ranks highly in the search results of all search engines including Google, Yahoo, Bing and Ask. This means when someone goes to look for the services or product you offer, your website appears as among the top (or the top).

This can continue bringing you business and profits naturally for years to come.

In this article, we look at the techniques you can use to boost your search engine rankings.

On-site optimization
SEO starts with making sure your website contains the keywords that you target. Ideally the keywords should be included in

1) Title – Page title in found in the meta tags. You can see the page title on top of the browser. When you do a search in the search engines, the title is the one that comes out in bold. This is usually a short sentence that describes the content of the page in 250 words or less.

2) Description – this is also in the meta tags. The meta description can be longer than the title and provide more information.

3) Content – the keywords should be included naturally in the content for the human eye as well as the search engines. Do not over-exaggerate by putting the keyword too many times.

4) Domain name – if at all possible, if the domain name contains the keywords, you will rank better than a domain without those keywords.

Offsite optimization – link building
Offsite search engine optimization involves building links from third party websites to your website. A website with many websites linking to it is considered by the search engines as being more popular, and is ranked higher than less popular websites.

As much as you can, the anchor text you use to link to your website should be a keyword.

You should be careful not to build links too fast, or the search engines could sandbox (blacklist) your website as a spammer.

Building links involves several activities:

1. Articles
When you post content in article directories, they allow you to put a link back to your website. There are hundreds of article directories that can provide permanent links back to your website.

Writing articles will not only bring you lots of business, but will also boost your search engine rankings.

2. Profiles
Whenever you open accounts if websites, such we social networking media like Facebook, Twitter, LinkedIn, etc, they allow you to provide a profile inclusing a link back to your website. There are hundreds of such sites available.

3. Web 2.0 properties
Always post your articles in web 2.0 properties and blog sites like WordPress, Squidoo, Blogger, etc with links back to your website.

4. Classified directories
There are thousands of directories that allow you to post short classified ads with a link back to your website.

5. RSS Directories
Whenever possible, if your websie allows an RSS feed, you should submit this feed to RSS directories. This allows your content to be re-distributed to other websites, with a link back to your website.

6. Videos
Video marketing has become very popular. Be sure to distribute your videos to all video sites for best results.

7. Bookmarks
There are hundreds of book mark sites that allow posting your link and a summary of your content. Search engines love these sites, and can boost your search engine rankings within a few days.

8. Blog and forum commenting
If done right, this can be very beneficial, providing drastic search engine benefits. Unfortunately this method is abused and can lead to most of your comments being deleted as spam if not done right.

These are the most popular search engine optimization techniques that are likely to boost your search engine rankings drastically. At the very least, your real estate investing website should be optimized so it continues bringing business for you naturally for years to come.