Ok so I’ve been looking for ways of building a seller's list on DG website and i couldn't find anything that explain it in detail. so i went to Google and i found this information and surprisingly is from Dean...
and just in case the website doesn't open here is written.
A Simplified 3 Part Guide to Fast ProfitsIn Real Estate
By Dean Graziosi
Part 2: Building Your Sellers List
In this section you’ll learn how to find sellers with properties
you can lock up and pass on to your buyers or keep as cash
flow properties for yourself.
Finding Properties/Building Your Sellers List
Whether you use a computer based contact management program like
ACT, MS Outlook or you simply keep a list in Excel or on a yellow
legal pad, after you’ve built a buyers list of any size, or found
even your first buyer, you’re obviously going to need something to
sell them.
Building your sellers list is the next essential pieces to earning
as an investor. As in part one of this guide, we’ve compiled
information and simple strategies to help you build your sellers
list quickly.
As in part one of this guide, I want to state that the majority of
tips in this section come NOT from ME, Dean Graziosi, but from my
Academy Instructors as well as from many of your fellow students
and their posts at www.deangraziosi.com.
Where to search for a motivated seller!
Drew, one of the instructors from my Real Estate Success Academy www.deansacademy.com, offers this little tool for remembering
where motivated sellers can be found.
Remember the "4 D's"
• Disaster – loss of job, bankruptcy, fires, acts of “god.”
• Disability – injury or advancement of condition
• Death – including the loss of a loved one.
• Divorce, (check with the courthouse for divorce filings).
When people go through any of the above experiences there is
generally a house involved. In many of these cases, that property
needs to be sold, particularly in the dissolution of a marriage in
order to satisfy the divorce settlement. But what about disaster? In many areas the City Department of Code
Violations has to inspect any properties where the fire department
was called out to extinguish any type of fire. That becomes a
matter of public record and you can simply access those property
addresses that meet that criteria and mail to the owner listed on
county assessor's property records.
For example; in the first*
1
letter they receive it will go like
this:
Dear Mr. and Mrs. Smith,
I hope my letter does not reach you during a time of tragedy
and I do pray that everyone is safe. I am writing because I
noticed the other day that your property had extensive fire
damage.
I wanted to ask if you might consider the possibility of
allowing me to perhaps buy the property due to this
unfortunate event. I have no doubt you have some decisions
that need to be made.
It is not my intent to be intrusive to your personal situation
but rather to simply provide an option if you need it. I am an
investor and can close quickly if you have flexibility on your
price, terms, or both. I do hope to hear from you soon if your
situation needs immediate attention. If not, please keep my
name and number on this correspondence if another time would
be more beneficial for you.
Sincerely,
John Dough
555-555-5555 [email protected]
I have heard stories where investors had marketed to an owner of a
property with extensive fire damage and that owner did not have
insurance on the property. The owner also did not have the money
to repair the property and needed income. The investor was able to
1
I suggest sending at least 3 and 7 is better.come in and help at a highly discounted price. It turned out he
could have repaired it three times with the purchase price and
still be under 80% LTV (loan to value) on the property!
Even individuals with insurance may not want to repair after a
fire because the damage is too great for his taste. Even if the
damage is too great for you to oversee, you may still be able to
do a wholesale for a quick couple of thousand, making a profit
without having a time consuming extensive rehab project on your
hands.
Divorce filings are public record and can be found by visiting
your county courthouse. You can usually access these records
online by searching for your county courthouse.
You can periodically visit your county courthouse either
physically or online, if they permit access, to search for great
deals.
Let me give you a suggestion here. Many other investors may be
competing for the same property you find. Typically you will hear
this advice:
“Once you get the (Insert circumstance, i.e. divorce filing, etc)
information send a letter to the family/person/couple involved
letting them know that you are interested in buying their
property.”
That’s good advice, but you probably will not be the only one
doing this. If you are just another letter in a pile of other
letters, you have no advantage.
Do Something Different.
You want to do whatever you can to stand out from the crowd. So
maybe that means you use a colored envelope instead of white.
Maybe you go all out and create a standard “newsletter style”
piece with information on how to deal with the specific situation.
Say you create a newsletter targeting divorce. You could put
together a few articles on topics relevant to people going through divorce. There is an unbelievable amount of copyright free
information online that you can use to create a newsletter.
You can also email authors of articles you find for permission to
reprint in your FREE newsletter.
You could include lists of support resources in the newsletter
both local and national.
Sure, it’s a lot of extra effort compared to just copying a letter
from one of my books, but it will stand out.
You could even mail the “newsletter” inside a larger envelope with
a letter enclosed explaining why you are sending it and you hope
it will benefit them, and by the way if they are looking to sell
their house, you’re interested.
You could create one newsletter style piece for each of the “4
D’s” and then have them handy or ready to print from your computer
when you need one to send out.
You could also mail your letter in a small box so it stands out,
buy an appropriate greeting card and send it handwritten to the
person.
Be careful about this, and use good judgment. For example, just
because someone is getting divorced doesn’t ALWAYS guarantee the
parties are both unhappy about it.
How about sending a “lumpy” letter? Perhaps enclosed a pencil or a
pen and use a headline on your letter like:
“Don’t Write Off Your Chance to Sell
Your Home for Maximum Value...Here’s
How The Enclosed (Pen) Can Help
Guarantee You Sell Well!
Or
What about gluing a REAL single dose package of aspirin
to the top of your letter with a headline like: Here...If You Don’t Call Me Soon,
You May Need These to Manage the
Headaches Involved In Selling
Your Home
How about gluing 15 cents in coins to the top of your
letter and using a headline like:
How to Sell Your Home Fast, Without
Being Nickel and Dimed to Death!
Or
What about a bandage stuck to the top of your letter
with a headline like?
I Take the Hurt Out of Selling Your
Home So You Can Focus On Healing
Also, any investors who you might be “competing” with who do mail
letters, often send only one letter and quit.
I suggest sending at least 3 and 7 is better. Those additional
contacts don’t all have to be letters either. They can include
postcards, letters, copies of articles on coping with the
situation, etc.
How To Find Prospective Sellers to Contact
The most useful public records for Real Estate Investing are:
• Notices of default (pre-foreclosures)
• Real Estate Auctions (foreclosures and Tax sales)
• Wills (Probate Properties)
• Divorce Records ( Divorce Records)
Sadly, when anyone goes through one of the "4 D's" it can cause a
quick and desperate need to sell their property fast. This is a
time to be of help to a person and create a chance to profit in
doing so. The "4 D's" is an effective tool to remember. It can help you
locate sellers in places you’d least expect it.
But what are some additional and even more specific ways to build
your list?
Here is a quick list of tactics you should already be familiar
with from reading my books and doing your own learning, but this
is a list you can copy and put on the wall in your office,
bathroom , in your notebook, wherever you want, to remind you of
opportunities.
Use Newspapers
• Run ads in the major newspaper in any town you wish to invest
in.
• Buy ad space in the local penny savers, Thrifty Nickel,
Greensheet and other low cost or free local papers.
• Check newspaper for listings of Estate Sales.
• Search “For Sale by Owner” classifieds in newspapers and other
local publications.
• Check newspaper for Tax Sales and City and County sites.
Don’t Fly Solo
• Get a real estate agent who will regularly search the MLS for
expired listings, fixer-uppers and ugly houses for you.
• Network with service people (utility meter readers, newspaper
delivery persons, mailman etc.)
• Find or be a bird-dogger (people who get a referral fee to
find you fixer uppers.)
• Network with professionals (CPA’s, Attorneys etc.) and nonprofessionals, (plumbers, landscapers)
• Use other wholesalers who find properties and sell them to you
at a mark-up that leaves room for you to make a nice profit on
sale. Do Some Snooping
• Check court records for landlords who are evicting tenants.
Ask the County Clerk’s; it’s not hard if you ask for help.
• Find Owners, whose property has building or health code
violations; check City for list of violators.
• Owners of condemned properties, check tax records for these
owners.
• Owners of fire-damaged houses, check tax records for these
owners.
• Absentee landlords, check tax records for these owners.
• REO’s (Bank owned properties), call banks for listings.
• HUD and other government foreclosed properties, check their
web sites for listings.
Be Proactive
• Create flyers, Bandit signs etc and post wherever you can.
• Put Magnetic car signs on your vehicle, your spouse’s vehicle,
your mom, your dad, the teenager (hey, they want to drive, why
not make‘em advertise?) you get the idea...
• Get business cards and hand them to everyone wherever you can.
• Drive neighborhoods looking for vacant houses and FSBO's, Call
FSBO ads.
• Create door hangers and place them in targeted neighborhoods.
• Contact landlords with for rent signs, they may be tired of
being landlords.
• Make some “professional” attire (company polo “We Buy Houses”,
tee-shirts etc, ties.).
• Billboard or mobile billboard advertising, expensive but can
be very effective if placed in the right location.
• Online local internet advertising. Put your web address on
everything.
• Private Real Estate Auctions, check local auctioneers for
listings. Drive through your neighborhoods looking for vacant
homes and For Sale by Owner signs. There are several unique strategies to find a killer deal; you
just have to get creative in your search for these deals.
Direct Mail to Quit Claim Deeds
In divorces there is often a filing of a quit claim deed. It is
one way to transfer real property such as a house, land, or
certain mobile homes. The person who transfers the property by
selling it or making a gift of it is called the ‘Grantor’.
The person the property is transferred to is called the ‘Grantee’.
One of the most important differences between a quit claim deed
and other types of deeds is that the Grantor makes no guarantee or
promises that the property is free of debt and the Grantor makes
no promises that no one else claims to own the property.
The quit claim deed says, in effect, that the Grantor is signing
over whatever ownership interest he or she may have in the
property. It does not even guarantee that the Grantor has any
ownership interest at all.
Carol Stinson, one of my students, offered this suggestion:
Check out the public records in the County Recorder's office to
find quit claim deeds being executed on property. To find out,
check your county recorder’s office website. If they do not have a
website, you will have to call and then go there.
You can cross check the names on quit claim deeds with the filing
of divorce decrees to see which ones are from people going through
a divorce and mail them a letter expressing your interest. Many
times you will be contacted by the person who decided to keep the
house and now they can no longer afford it.
The best thing is that these are sellers that have likely been
trying to sell their house for a while and are now more motivated
than they were when they first listed their property.
They may have fallen behind in their mortgage and tried to sell
their house to prevent foreclosure. If this is the case than you now become a new hope to them and you get a chance to help someone
out while making a profit. You can offer these sellers another
chance to relieve their burden.
Again, if you have a Real Estate Agent on your team, have them
send you all of the expired listings in a particular area that you
have buyers in. Now go through the listings and pull out the ones
that say "Motivated seller", "Handy man", "Bring Offers" etc.
Contact them and see if the property is still for sale.
If it is, then go through the sample phone script below and
schedule a time to see the property. Remember to do as much
research as possible on the property before you get there. This
will help in your negotiations.
Phone Script for Cold Calls on Vacant Properties:
Hello, my name is… I am calling about the property located
at__________ are you still selling or interested in selling
this property?
If they say no, ask them if they can give you the owners
contact information then repeat the attempt with the owner.
If they say yes:
Are you the owner? Oh good. May I ask your name?
__________Nice to meet you over the phone___________, again
my name is________
Can you give me a little information about the property?
How long have you owned it?
_________________________________
How many bedrooms, baths? ________________
Is there a basement or an attic?
__________________________________
What kind of heating /cooling does it have?
___________________________
How is the: Roof _______________________
Plumbing _________________ Electrical ____________________
Furnace ___________________ Kitchen _____________________ Bathroom(s) _______________ Furnished ___________________
What are you asking for it? _________________________How
did you come up with that amount?
_________________________. Have you had it appraised and if
so how long ago? _____________
Is your home vacant? How long has your home been vacant?
____________________
Is it listed with a real estate agent? Who?
_______________. Have you had any offers? Any written?
____________. If I offered you all cash and could close in
30 days, what is the least you would take? (wait patiently
for them to answer) _____________________________
When did you get your mortgage? ____________ What is your
mortgage balance? ____________
Is it current? ____________ Do you happen to have the
totals of what your payments are:
a. Taxes ____________ Mo / Qtr / Yr?
b. Insurance ____________ Mo / Qtr / Yr?
c. Utilities ____________ Mo / Qtr / Yr?
Net Expenses _______________ Mo / Qtr / Yr?
18. Do you have any other mortgages? __________
a. Is it assumable? _______________________ c. What are the
payments? ___________ Fixed or Adjustable?
_____________________
b. When was it originated? ________________ d. Interest
rate? __________________________ f. Are the payments
current? ________________
Can we set up a time for me to see the property?
You have to search for deals where no one else is looking. The
best deals are those that are sitting right in your back yard.
Many wholesalers have day jobs and are not able to bird dog the
streets in search of a deal. This is why they search endlessly on
the Internet for their deals. I know your saying, "wait a minute I have a day job too". I am not
suggesting that you spend your whole day driving around.
Simply leaving 30 minutes earlier for work or taking another route
home to drive down side streets is enough to find a great deal.
Make sure you keep your camera in the car so you can readily take
pictures when you find a vacant property. Write down the address
and research the owner when you get home.
Get the owner's name from the tax records and hopefully their
address and phone number from one of the owner research resources
on www.deangraziosi.com or http://www.totalviewrealestate.com.
Research the ARV (approximate retail value) of the property to
find out what the property is worth. Many of the ARV sites will
also tell you how much they paid for the property and when they
purchased it.
This amount can change if they refinanced the property. So don't
depend on the purchase price being the amount they owe on the
property.
Contact the owner and find out if the property is for sale. Ask
them to give you the least amount they would take for the property
if you paid cash and closed in 30 days.
Once you get their price (don't agree on the price yet) ask to
schedule a time to see the property. Go look at the property,
estimate repair costs and tell them you will get back to them in
24 hours. Now go and put your deal together.
If it seems like it is a good deal then call the seller and Lock
it up with an option agreement.
Call every buyer on your buyer's list and tell them about your
deal. Post your deal on Craigslist and other classified sites. You
are now a cut above the rest with a deal that no one else knows
about. Hot off the streets!
Great information! Thanks Carol!
Online Ads / Networking:
Craigslist is popular as ever and growing more so every day. In
fact my team and I are working on a project dealing with using
Craigslist, but more on that later.
For now let me share with you some tips for maximizing your use of
the site:
To attracting sellers post in "real estate wanted" you can also
post ads in "real estate jobs" if I you are looking for bird dogs.
These ads that have worked for students:
We Buy, Sell & Finance Used Mobile Homes.
Affordable Prices – Flexible Terms. No Banks!
Call:
Behind on your mortgage? Facing Foreclosure?
I buy homes. No fees or commission.
Call:
HELP I NEED MORE INVENTORY!
I can't keep up with the demand of my investors!
If you have any properties please call:
Having trouble renting or selling your home?
Has your Real Estate Agents listing expired and you are
still holding a house?
Anxious to sell and move on but need the tax breaks for a
few more years?
Then WE CAN HELP!
We ARE NOT REAL ESTATE Agents. We help homeowners sell their
home and retain the benefits for 1-3 more years using our
Proven Method of Lease Options.For more information on this and other services we can assist
you with please (if using online say click on the link below
to be directed to our website...if in print add number to
call)
Anita reported that she used this ad successfully and did a
general agreement with the people that responded. It stated
that when she finds a buyer (tenant) for their home, she gets
a payment equal to one (1) months payment on said property for
her fee.
She posted it on craigslist and bokrin.com and the general
agreement she used was a revised and edited promissory agreement.
Stating they would pay me x amount for the referral and acceptance
of a qualified buyer/tenant in said property. Due upon signed
agreement with buyer.
GENERAL AGREEMENT
THIS AGREEMENT, made this _____ day of__________, 20 ____, by and between
_______________ (First Party) and ___________________ (Second Party).
WITNESSETH: That in consideration of the mutual covenants and agreements to be
kept and performed on the part of said parties hereto, respectively as herein
stated, the said party of the first part does hereby covenant and agree that it
shall:
I.
II. And said party of the second part covenants and agrees that it shall:
III. Other terms to be observed by and between the parties:
This agreement shall be binding upon the parties, their successors, assigns and
personal representatives. Time is of the essence on all undertakings. This
agreement shall be enforced under the laws of the State of
___________________________. This is the entire agreement.
Signed the day and year first above written.
Signed in the presence of:
______________________________ ______________________________
Witness Witness
______________________________ ______________________________
First Party Second Party Spot a Sellers Hot Prop
Be constantly on the lookout for deals. Be like a kid on a
scavenger hunt, or a detective on the case. Clues you are looking
for are anything that might potentially lead you to a flexible
seller.
These are some of the things that should catch your eye:
• Tall grass
• Spray paint
• Piled up newspapers
• Neglected notices or fliers on the door
• Broken or boarded up windows
• Disconnected utilities
• Structural damage
• Fire damage
• Peeling paint
• Rotten wood
• No curtains and bare rooms
Be alert to these clues as well as others you might think of or
notice. There is actually an art to spotting prospect properties.
Any time a house is empty and neglected it is most likely a drain
on someone’s finances, so such properties often represent golden
opportunities.
The ideal situation is a house that is vacant and accessible so
your buyers can inspect it freely, but very ugly houses may be
candidates even if they are occupied. A house does not have to be
advertised for sale to be a prospect.
You should also pay attention to things like garage sales, estate
sales, and moving trucks to turn you on to potential leads.
Soon you will start to notice these types of properties
automatically and be able to see the profitable house hiding
underneath the filth (if there is one). If you notice this
happening to you, take encouragement. Know What You’re Working With
Once you locate a seller, you don’t want to just bulldoze them
with your offer. The secret to finding out what kind of seller you
have without causing an upset is in the questions you ask in the
first few minutes on the phone.
The first question to ask is “Do you need (x amount/all) of your
equity out of your home to go and buy another home?”
If the seller needs all of his equity up front, they need to find
a retail buyer to sell the house to. This means that this house is
not for you, just wish the seller luck and get on to your next
prospect.
If they don’t need their equity out of the property, then continue
with your phone call. The next qualification is to simply ask if
the seller is open and willing to look at a creative offer.
“I invest in a variety of ways and I’m not sure which of
these methods might be able to help you. Sometimes Ill
lease a home for a year or two and then cash the seller
out at the end of the lease...Will that work for you?
If the seller answers yes or maybe then he’s worth a visit. If the
seller says “no I wouldn’t ever do anything like that”, then you
gently and quickly get off the phone.
To fully qualify a seller you’ll take the conversation a bit
farther. A common mistake that beginners make is to race right to
these final questions before asking the initial questions I’ve
just shared with you. The problem with this is that without the
initial questions, you’ll sound too eager. I said. Go slowly but
surely and you will be successful.
Your final questions are going to involve laying out a possible
deal right over the phone. Saying things like, I don’t know if I
could offer you this exact deal or not, obviously I’ll need to see
the house. But if I were to offer you rent of... and a price in 2
years of... Is that something that would work for you? If not,
what did you have in mind? What you are really doing is roughing out the negotiating arena
with upper limits for what you might possibly pay. You’ll
hopefully be able to negotiate down in person from the numbers
mentioned on the phone.
Now if the seller seems inflexible or just wants way too much then
you should save time by moving on, quickly, to your next possible
deal.
Sissy posted this on www.DeanGraziosi.com and it’s a great
technique.
HOW TO GET A SELLER TO SAY "YES" TO YOUR CREATIVE OFFER
by Peter Conti
Most beginning investors walk in to meet with the seller and hand them the completed, written
offer and sit back and wait for the seller’s response. The trouble is that most sellers will tell you
they need to think it over or that they need to speak with a friend/spouse/relative/etc. before
they can agree with it. This puts the average investor in a very weak negotiating position. They
are in what I call “chase” mode—chasing after the deal.
You are going to do things differently. Instead of laying your offer at the seller’s feet and
hoping they do you the favor of giving you the deal, you are going to qualify the owner before
you do them the favor of presenting them with an offer to solve their real and pressing real
estate problems. I’m sure that sounds pretty good to you, but you might be wondering just how
you are supposed to do that. Here’s how:
What you are going to do is leave your offer in your folder or, better yet, in the car. You are not
going to present the actual offer until the seller “qualifies".
To qualify for your offer, you and the seller need to agree on four key areas. The powerful thing
is that when you finish with all four areas, the offer is basically fully negotiated. And it is at that
point that you can present your pre-written offer or get out a blank form and just fill it out on
the spot.
Of course if you and the seller cannot come to agreement in each area, then you simply stand
up, thank the seller for his time, and start to walk out. Nine times out of ten the seller will plead
with you to stay and present your offer—their curiosity alone will get them to ask you to stay to
finish working through the four areas and to present your offer. This is the ultimate tool for
putting you in the role of the reluctant buyer. We have found it to be the easiest, most effective way to help the seller feel good about talking us into giving them an offer on the property. And
this will help you to smoothly transition the seller to say yes to your offer.
The first area is called the “Up-Front Agreement.” You simply explain to the seller that you are
a straight forward type of person and would appreciate either a yes or a no answer from them. In
return you will give them your own yes or no decision. The key in this quadrant is to let the
seller understand that you will take any “think it over” answer as a NO.
The way that you do this is to tell the seller that you will respect his and your time by giving a
yes or no answer and you are asking for the same courtesy in return.
Area two is where you are going to talk about the seller’s needs. Ask the seller what they were
hoping you could do for them and then be quiet and listen. As they bring up areas of concern,
the very best thing you can do is to draw out those problems in an innocent and gentle way. For
example, if a seller’s problem is that he hates being a landlord, you can say something like,
“The good thing is that you probably enjoy working with renters and putting the time in to care
for your rental property". Because you say this in a caring tone of voice, the seller will most
likely pour out his guts about how he hates dealing with renters. This approach is radically
different from most investors where they will argue with the seller over all the problems the
seller faces. All that does is put the seller on the defensive.
Area three is about money. You are going to go over some specific dollar amounts with the
seller before you ever present your written offer. This could be the monthly payments on a lease
or owner carry-back and the sale price. This way you know what the seller’s real financial needs
are and whether you can meet them while making a profit for yourself.
Area four is the “What If?” step. Rather than give a seller your offer and hope they will say yes,
you are going to make sure they will accept your offer before you ever officially give it to them.
How can you do this? By using the two magic words in all negotiations -- "What If".
"Mr. Seller, what if I were to cover your payments for two years and then cash you out of the
property? Would that work for you?”
“Mr. Seller, what if I were willing to give you $212,000 for the house. Would you be willing to
carry back a second?”
These magic two words let you make your offer in a completely hypothetical manner. Then
when you finally come up with the winning “what if” scenario, you simply write it up and get
them to sign right there and then. By just falling these simple strategies, the seller has said "yes"
to your creative offer. As an investor, you want to make a profit on every home you invest
in. There are two basic ways that you can do this. You need to get
either a good price or good terms.
A good price means buying at a low price so that you can resell
quickly. Good terms means that you get to control the property
without putting much money up front and you wait for the property
to go up in value.
Sometimes you need to buy extremely low to make the profit you
need, and in some cases that will leave the seller quite
upset...so it can be easier to offer terms.
As long as the seller gets their price they will be happy, even if
they have to wait a few years for it.
It is important for me to help people to be happy, hopefully you
feel the same way as an investor. – End Part Two - Dean
Ok so I’ve been looking for ways of building a seller's list on DG website and i couldn't find anything that explain it in detail. so i went to Google and i found this information and surprisingly is from Dean...
AGAIN THIS IS FROM DEAN NOT ME... JUST WANTED TO POST IT SO IT WOULD BE EASIER TO FIND..
(http://www.deangraziosi.com/dgs/sf/fs/findingsellers.pdf)
and just in case the website doesn't open here is written.
A Simplified 3 Part Guide to Fast ProfitsIn Real Estate
By Dean Graziosi
Part 2: Building Your Sellers List
In this section you’ll learn how to find sellers with properties
you can lock up and pass on to your buyers or keep as cash
flow properties for yourself.
Finding Properties/Building Your Sellers List
Whether you use a computer based contact management program like
ACT, MS Outlook or you simply keep a list in Excel or on a yellow
legal pad, after you’ve built a buyers list of any size, or found
even your first buyer, you’re obviously going to need something to
sell them.
Building your sellers list is the next essential pieces to earning
as an investor. As in part one of this guide, we’ve compiled
information and simple strategies to help you build your sellers
list quickly.
As in part one of this guide, I want to state that the majority of
tips in this section come NOT from ME, Dean Graziosi, but from my
Academy Instructors as well as from many of your fellow students
and their posts at www.deangraziosi.com.
Where to search for a motivated seller!
Drew, one of the instructors from my Real Estate Success Academy
www.deansacademy.com, offers this little tool for remembering
where motivated sellers can be found.
Remember the "4 D's"
• Disaster – loss of job, bankruptcy, fires, acts of “god.”
• Disability – injury or advancement of condition
• Death – including the loss of a loved one.
• Divorce, (check with the courthouse for divorce filings).
When people go through any of the above experiences there is
generally a house involved. In many of these cases, that property
needs to be sold, particularly in the dissolution of a marriage in
order to satisfy the divorce settlement. But what about disaster? In many areas the City Department of Code
Violations has to inspect any properties where the fire department
was called out to extinguish any type of fire. That becomes a
matter of public record and you can simply access those property
addresses that meet that criteria and mail to the owner listed on
county assessor's property records.
For example; in the first*
1
letter they receive it will go like
this:
Dear Mr. and Mrs. Smith,
I hope my letter does not reach you during a time of tragedy
and I do pray that everyone is safe. I am writing because I
noticed the other day that your property had extensive fire
damage.
I wanted to ask if you might consider the possibility of
allowing me to perhaps buy the property due to this
unfortunate event. I have no doubt you have some decisions
that need to be made.
It is not my intent to be intrusive to your personal situation
but rather to simply provide an option if you need it. I am an
investor and can close quickly if you have flexibility on your
price, terms, or both. I do hope to hear from you soon if your
situation needs immediate attention. If not, please keep my
name and number on this correspondence if another time would
be more beneficial for you.
Sincerely,
John Dough
555-555-5555
[email protected]
I have heard stories where investors had marketed to an owner of a
property with extensive fire damage and that owner did not have
insurance on the property. The owner also did not have the money
to repair the property and needed income. The investor was able to
1
I suggest sending at least 3 and 7 is better.come in and help at a highly discounted price. It turned out he
could have repaired it three times with the purchase price and
still be under 80% LTV (loan to value) on the property!
Even individuals with insurance may not want to repair after a
fire because the damage is too great for his taste. Even if the
damage is too great for you to oversee, you may still be able to
do a wholesale for a quick couple of thousand, making a profit
without having a time consuming extensive rehab project on your
hands.
Divorce filings are public record and can be found by visiting
your county courthouse. You can usually access these records
online by searching for your county courthouse.
You can periodically visit your county courthouse either
physically or online, if they permit access, to search for great
deals.
Let me give you a suggestion here. Many other investors may be
competing for the same property you find. Typically you will hear
this advice:
“Once you get the (Insert circumstance, i.e. divorce filing, etc)
information send a letter to the family/person/couple involved
letting them know that you are interested in buying their
property.”
That’s good advice, but you probably will not be the only one
doing this. If you are just another letter in a pile of other
letters, you have no advantage.
Do Something Different.
You want to do whatever you can to stand out from the crowd. So
maybe that means you use a colored envelope instead of white.
Maybe you go all out and create a standard “newsletter style”
piece with information on how to deal with the specific situation.
Say you create a newsletter targeting divorce. You could put
together a few articles on topics relevant to people going through divorce. There is an unbelievable amount of copyright free
information online that you can use to create a newsletter.
You can also email authors of articles you find for permission to
reprint in your FREE newsletter.
You could include lists of support resources in the newsletter
both local and national.
Sure, it’s a lot of extra effort compared to just copying a letter
from one of my books, but it will stand out.
You could even mail the “newsletter” inside a larger envelope with
a letter enclosed explaining why you are sending it and you hope
it will benefit them, and by the way if they are looking to sell
their house, you’re interested.
You could create one newsletter style piece for each of the “4
D’s” and then have them handy or ready to print from your computer
when you need one to send out.
You could also mail your letter in a small box so it stands out,
buy an appropriate greeting card and send it handwritten to the
person.
Be careful about this, and use good judgment. For example, just
because someone is getting divorced doesn’t ALWAYS guarantee the
parties are both unhappy about it.
How about sending a “lumpy” letter? Perhaps enclosed a pencil or a
pen and use a headline on your letter like:
“Don’t Write Off Your Chance to Sell
Your Home for Maximum Value...Here’s
How The Enclosed (Pen) Can Help
Guarantee You Sell Well!
Or
What about gluing a REAL single dose package of aspirin
to the top of your letter with a headline like: Here...If You Don’t Call Me Soon,
You May Need These to Manage the
Headaches Involved In Selling
Your Home
How about gluing 15 cents in coins to the top of your
letter and using a headline like:
How to Sell Your Home Fast, Without
Being Nickel and Dimed to Death!
Or
What about a bandage stuck to the top of your letter
with a headline like?
I Take the Hurt Out of Selling Your
Home So You Can Focus On Healing
Also, any investors who you might be “competing” with who do mail
letters, often send only one letter and quit.
I suggest sending at least 3 and 7 is better. Those additional
contacts don’t all have to be letters either. They can include
postcards, letters, copies of articles on coping with the
situation, etc.
How To Find Prospective Sellers to Contact
The most useful public records for Real Estate Investing are:
• Notices of default (pre-foreclosures)
• Real Estate Auctions (foreclosures and Tax sales)
• Wills (Probate Properties)
• Divorce Records ( Divorce Records)
Sadly, when anyone goes through one of the "4 D's" it can cause a
quick and desperate need to sell their property fast. This is a
time to be of help to a person and create a chance to profit in
doing so. The "4 D's" is an effective tool to remember. It can help you
locate sellers in places you’d least expect it.
But what are some additional and even more specific ways to build
your list?
Here is a quick list of tactics you should already be familiar
with from reading my books and doing your own learning, but this
is a list you can copy and put on the wall in your office,
bathroom , in your notebook, wherever you want, to remind you of
opportunities.
Use Newspapers
• Run ads in the major newspaper in any town you wish to invest
in.
• Buy ad space in the local penny savers, Thrifty Nickel,
Greensheet and other low cost or free local papers.
• Check newspaper for listings of Estate Sales.
• Search “For Sale by Owner” classifieds in newspapers and other
local publications.
• Check newspaper for Tax Sales and City and County sites.
Don’t Fly Solo
• Get a real estate agent who will regularly search the MLS for
expired listings, fixer-uppers and ugly houses for you.
• Network with service people (utility meter readers, newspaper
delivery persons, mailman etc.)
• Find or be a bird-dogger (people who get a referral fee to
find you fixer uppers.)
• Network with professionals (CPA’s, Attorneys etc.) and nonprofessionals, (plumbers, landscapers)
• Use other wholesalers who find properties and sell them to you
at a mark-up that leaves room for you to make a nice profit on
sale. Do Some Snooping
• Check court records for landlords who are evicting tenants.
Ask the County Clerk’s; it’s not hard if you ask for help.
• Find Owners, whose property has building or health code
violations; check City for list of violators.
• Owners of condemned properties, check tax records for these
owners.
• Owners of fire-damaged houses, check tax records for these
owners.
• Absentee landlords, check tax records for these owners.
• REO’s (Bank owned properties), call banks for listings.
• HUD and other government foreclosed properties, check their
web sites for listings.
Be Proactive
• Create flyers, Bandit signs etc and post wherever you can.
• Put Magnetic car signs on your vehicle, your spouse’s vehicle,
your mom, your dad, the teenager (hey, they want to drive, why
not make‘em advertise?) you get the idea...
• Get business cards and hand them to everyone wherever you can.
• Drive neighborhoods looking for vacant houses and FSBO's, Call
FSBO ads.
• Create door hangers and place them in targeted neighborhoods.
• Contact landlords with for rent signs, they may be tired of
being landlords.
• Make some “professional” attire (company polo “We Buy Houses”,
tee-shirts etc, ties.).
• Billboard or mobile billboard advertising, expensive but can
be very effective if placed in the right location.
• Online local internet advertising. Put your web address on
everything.
• Private Real Estate Auctions, check local auctioneers for
listings. Drive through your neighborhoods looking for vacant
homes and For Sale by Owner signs. There are several unique strategies to find a killer deal; you
just have to get creative in your search for these deals.
Direct Mail to Quit Claim Deeds
In divorces there is often a filing of a quit claim deed. It is
one way to transfer real property such as a house, land, or
certain mobile homes. The person who transfers the property by
selling it or making a gift of it is called the ‘Grantor’.
The person the property is transferred to is called the ‘Grantee’.
One of the most important differences between a quit claim deed
and other types of deeds is that the Grantor makes no guarantee or
promises that the property is free of debt and the Grantor makes
no promises that no one else claims to own the property.
The quit claim deed says, in effect, that the Grantor is signing
over whatever ownership interest he or she may have in the
property. It does not even guarantee that the Grantor has any
ownership interest at all.
Carol Stinson, one of my students, offered this suggestion:
Check out the public records in the County Recorder's office to
find quit claim deeds being executed on property. To find out,
check your county recorder’s office website. If they do not have a
website, you will have to call and then go there.
You can cross check the names on quit claim deeds with the filing
of divorce decrees to see which ones are from people going through
a divorce and mail them a letter expressing your interest. Many
times you will be contacted by the person who decided to keep the
house and now they can no longer afford it.
The best thing is that these are sellers that have likely been
trying to sell their house for a while and are now more motivated
than they were when they first listed their property.
They may have fallen behind in their mortgage and tried to sell
their house to prevent foreclosure. If this is the case than you now become a new hope to them and you get a chance to help someone
out while making a profit. You can offer these sellers another
chance to relieve their burden.
Again, if you have a Real Estate Agent on your team, have them
send you all of the expired listings in a particular area that you
have buyers in. Now go through the listings and pull out the ones
that say "Motivated seller", "Handy man", "Bring Offers" etc.
Contact them and see if the property is still for sale.
If it is, then go through the sample phone script below and
schedule a time to see the property. Remember to do as much
research as possible on the property before you get there. This
will help in your negotiations.
Phone Script for Cold Calls on Vacant Properties:
Hello, my name is… I am calling about the property located
at__________ are you still selling or interested in selling
this property?
If they say no, ask them if they can give you the owners
contact information then repeat the attempt with the owner.
If they say yes:
Are you the owner? Oh good. May I ask your name?
__________Nice to meet you over the phone___________, again
my name is________
Can you give me a little information about the property?
How long have you owned it?
_________________________________
How many bedrooms, baths? ________________
Is there a basement or an attic?
__________________________________
What kind of heating /cooling does it have?
___________________________
How is the: Roof _______________________
Plumbing _________________ Electrical ____________________
Furnace ___________________ Kitchen _____________________ Bathroom(s) _______________ Furnished ___________________
What are you asking for it? _________________________How
did you come up with that amount?
_________________________. Have you had it appraised and if
so how long ago? _____________
Is your home vacant? How long has your home been vacant?
____________________
Is it listed with a real estate agent? Who?
_______________. Have you had any offers? Any written?
____________. If I offered you all cash and could close in
30 days, what is the least you would take? (wait patiently
for them to answer) _____________________________
When did you get your mortgage? ____________ What is your
mortgage balance? ____________
Is it current? ____________ Do you happen to have the
totals of what your payments are:
a. Taxes ____________ Mo / Qtr / Yr?
b. Insurance ____________ Mo / Qtr / Yr?
c. Utilities ____________ Mo / Qtr / Yr?
Net Expenses _______________ Mo / Qtr / Yr?
18. Do you have any other mortgages? __________
a. Is it assumable? _______________________ c. What are the
payments? ___________ Fixed or Adjustable?
_____________________
b. When was it originated? ________________ d. Interest
rate? __________________________ f. Are the payments
current? ________________
Can we set up a time for me to see the property?
You have to search for deals where no one else is looking. The
best deals are those that are sitting right in your back yard.
Many wholesalers have day jobs and are not able to bird dog the
streets in search of a deal. This is why they search endlessly on
the Internet for their deals. I know your saying, "wait a minute I have a day job too". I am not
suggesting that you spend your whole day driving around.
Simply leaving 30 minutes earlier for work or taking another route
home to drive down side streets is enough to find a great deal.
Make sure you keep your camera in the car so you can readily take
pictures when you find a vacant property. Write down the address
and research the owner when you get home.
Get the owner's name from the tax records and hopefully their
address and phone number from one of the owner research resources
on www.deangraziosi.com or http://www.totalviewrealestate.com.
Research the ARV (approximate retail value) of the property to
find out what the property is worth. Many of the ARV sites will
also tell you how much they paid for the property and when they
purchased it.
This amount can change if they refinanced the property. So don't
depend on the purchase price being the amount they owe on the
property.
Contact the owner and find out if the property is for sale. Ask
them to give you the least amount they would take for the property
if you paid cash and closed in 30 days.
Once you get their price (don't agree on the price yet) ask to
schedule a time to see the property. Go look at the property,
estimate repair costs and tell them you will get back to them in
24 hours. Now go and put your deal together.
If it seems like it is a good deal then call the seller and Lock
it up with an option agreement.
Call every buyer on your buyer's list and tell them about your
deal. Post your deal on Craigslist and other classified sites. You
are now a cut above the rest with a deal that no one else knows
about. Hot off the streets!
Great information! Thanks Carol!
Online Ads / Networking:
Craigslist is popular as ever and growing more so every day. In
fact my team and I are working on a project dealing with using
Craigslist, but more on that later.
For now let me share with you some tips for maximizing your use of
the site:
To attracting sellers post in "real estate wanted" you can also
post ads in "real estate jobs" if I you are looking for bird dogs.
These ads that have worked for students:
We Buy, Sell & Finance Used Mobile Homes.
Affordable Prices – Flexible Terms. No Banks!
Call:
Behind on your mortgage? Facing Foreclosure?
I buy homes. No fees or commission.
Call:
HELP I NEED MORE INVENTORY!
I can't keep up with the demand of my investors!
If you have any properties please call:
Having trouble renting or selling your home?
Has your Real Estate Agents listing expired and you are
still holding a house?
Anxious to sell and move on but need the tax breaks for a
few more years?
Then WE CAN HELP!
We ARE NOT REAL ESTATE Agents. We help homeowners sell their
home and retain the benefits for 1-3 more years using our
Proven Method of Lease Options.For more information on this and other services we can assist
you with please (if using online say click on the link below
to be directed to our website...if in print add number to
call)
Anita reported that she used this ad successfully and did a
general agreement with the people that responded. It stated
that when she finds a buyer (tenant) for their home, she gets
a payment equal to one (1) months payment on said property for
her fee.
She posted it on craigslist and bokrin.com and the general
agreement she used was a revised and edited promissory agreement.
Stating they would pay me x amount for the referral and acceptance
of a qualified buyer/tenant in said property. Due upon signed
agreement with buyer.
GENERAL AGREEMENT
THIS AGREEMENT, made this _____ day of__________, 20 ____, by and between
_______________ (First Party) and ___________________ (Second Party).
WITNESSETH: That in consideration of the mutual covenants and agreements to be
kept and performed on the part of said parties hereto, respectively as herein
stated, the said party of the first part does hereby covenant and agree that it
shall:
I.
II. And said party of the second part covenants and agrees that it shall:
III. Other terms to be observed by and between the parties:
This agreement shall be binding upon the parties, their successors, assigns and
personal representatives. Time is of the essence on all undertakings. This
agreement shall be enforced under the laws of the State of
___________________________. This is the entire agreement.
Signed the day and year first above written.
Signed in the presence of:
______________________________ ______________________________
Witness Witness
______________________________ ______________________________
First Party Second Party Spot a Sellers Hot Prop
Be constantly on the lookout for deals. Be like a kid on a
scavenger hunt, or a detective on the case. Clues you are looking
for are anything that might potentially lead you to a flexible
seller.
These are some of the things that should catch your eye:
• Tall grass
• Spray paint
• Piled up newspapers
• Neglected notices or fliers on the door
• Broken or boarded up windows
• Disconnected utilities
• Structural damage
• Fire damage
• Peeling paint
• Rotten wood
• No curtains and bare rooms
Be alert to these clues as well as others you might think of or
notice. There is actually an art to spotting prospect properties.
Any time a house is empty and neglected it is most likely a drain
on someone’s finances, so such properties often represent golden
opportunities.
The ideal situation is a house that is vacant and accessible so
your buyers can inspect it freely, but very ugly houses may be
candidates even if they are occupied. A house does not have to be
advertised for sale to be a prospect.
You should also pay attention to things like garage sales, estate
sales, and moving trucks to turn you on to potential leads.
Soon you will start to notice these types of properties
automatically and be able to see the profitable house hiding
underneath the filth (if there is one). If you notice this
happening to you, take encouragement. Know What You’re Working With
Once you locate a seller, you don’t want to just bulldoze them
with your offer. The secret to finding out what kind of seller you
have without causing an upset is in the questions you ask in the
first few minutes on the phone.
The first question to ask is “Do you need (x amount/all) of your
equity out of your home to go and buy another home?”
If the seller needs all of his equity up front, they need to find
a retail buyer to sell the house to. This means that this house is
not for you, just wish the seller luck and get on to your next
prospect.
If they don’t need their equity out of the property, then continue
with your phone call. The next qualification is to simply ask if
the seller is open and willing to look at a creative offer.
“I invest in a variety of ways and I’m not sure which of
these methods might be able to help you. Sometimes Ill
lease a home for a year or two and then cash the seller
out at the end of the lease...Will that work for you?
If the seller answers yes or maybe then he’s worth a visit. If the
seller says “no I wouldn’t ever do anything like that”, then you
gently and quickly get off the phone.
To fully qualify a seller you’ll take the conversation a bit
farther. A common mistake that beginners make is to race right to
these final questions before asking the initial questions I’ve
just shared with you. The problem with this is that without the
initial questions, you’ll sound too eager. I said. Go slowly but
surely and you will be successful.
Your final questions are going to involve laying out a possible
deal right over the phone. Saying things like, I don’t know if I
could offer you this exact deal or not, obviously I’ll need to see
the house. But if I were to offer you rent of... and a price in 2
years of... Is that something that would work for you? If not,
what did you have in mind? What you are really doing is roughing out the negotiating arena
with upper limits for what you might possibly pay. You’ll
hopefully be able to negotiate down in person from the numbers
mentioned on the phone.
Now if the seller seems inflexible or just wants way too much then
you should save time by moving on, quickly, to your next possible
deal.
Sissy posted this on www.DeanGraziosi.com and it’s a great
technique.
HOW TO GET A SELLER TO SAY "YES" TO YOUR CREATIVE OFFER
by Peter Conti
Most beginning investors walk in to meet with the seller and hand them the completed, written
offer and sit back and wait for the seller’s response. The trouble is that most sellers will tell you
they need to think it over or that they need to speak with a friend/spouse/relative/etc. before
they can agree with it. This puts the average investor in a very weak negotiating position. They
are in what I call “chase” mode—chasing after the deal.
You are going to do things differently. Instead of laying your offer at the seller’s feet and
hoping they do you the favor of giving you the deal, you are going to qualify the owner before
you do them the favor of presenting them with an offer to solve their real and pressing real
estate problems. I’m sure that sounds pretty good to you, but you might be wondering just how
you are supposed to do that. Here’s how:
What you are going to do is leave your offer in your folder or, better yet, in the car. You are not
going to present the actual offer until the seller “qualifies".
To qualify for your offer, you and the seller need to agree on four key areas. The powerful thing
is that when you finish with all four areas, the offer is basically fully negotiated. And it is at that
point that you can present your pre-written offer or get out a blank form and just fill it out on
the spot.
Of course if you and the seller cannot come to agreement in each area, then you simply stand
up, thank the seller for his time, and start to walk out. Nine times out of ten the seller will plead
with you to stay and present your offer—their curiosity alone will get them to ask you to stay to
finish working through the four areas and to present your offer. This is the ultimate tool for
putting you in the role of the reluctant buyer. We have found it to be the easiest, most effective way to help the seller feel good about talking us into giving them an offer on the property. And
this will help you to smoothly transition the seller to say yes to your offer.
The first area is called the “Up-Front Agreement.” You simply explain to the seller that you are
a straight forward type of person and would appreciate either a yes or a no answer from them. In
return you will give them your own yes or no decision. The key in this quadrant is to let the
seller understand that you will take any “think it over” answer as a NO.
The way that you do this is to tell the seller that you will respect his and your time by giving a
yes or no answer and you are asking for the same courtesy in return.
Area two is where you are going to talk about the seller’s needs. Ask the seller what they were
hoping you could do for them and then be quiet and listen. As they bring up areas of concern,
the very best thing you can do is to draw out those problems in an innocent and gentle way. For
example, if a seller’s problem is that he hates being a landlord, you can say something like,
“The good thing is that you probably enjoy working with renters and putting the time in to care
for your rental property". Because you say this in a caring tone of voice, the seller will most
likely pour out his guts about how he hates dealing with renters. This approach is radically
different from most investors where they will argue with the seller over all the problems the
seller faces. All that does is put the seller on the defensive.
Area three is about money. You are going to go over some specific dollar amounts with the
seller before you ever present your written offer. This could be the monthly payments on a lease
or owner carry-back and the sale price. This way you know what the seller’s real financial needs
are and whether you can meet them while making a profit for yourself.
Area four is the “What If?” step. Rather than give a seller your offer and hope they will say yes,
you are going to make sure they will accept your offer before you ever officially give it to them.
How can you do this? By using the two magic words in all negotiations -- "What If".
"Mr. Seller, what if I were to cover your payments for two years and then cash you out of the
property? Would that work for you?”
“Mr. Seller, what if I were willing to give you $212,000 for the house. Would you be willing to
carry back a second?”
These magic two words let you make your offer in a completely hypothetical manner. Then
when you finally come up with the winning “what if” scenario, you simply write it up and get
them to sign right there and then. By just falling these simple strategies, the seller has said "yes"
to your creative offer. As an investor, you want to make a profit on every home you invest
in. There are two basic ways that you can do this. You need to get
either a good price or good terms.
A good price means buying at a low price so that you can resell
quickly. Good terms means that you get to control the property
without putting much money up front and you wait for the property
to go up in value.
Sometimes you need to buy extremely low to make the profit you
need, and in some cases that will leave the seller quite
upset...so it can be easier to offer terms.
As long as the seller gets their price they will be happy, even if
they have to wait a few years for it.
It is important for me to help people to be happy, hopefully you
feel the same way as an investor. – End Part Two - Dean