Chris
What’s the Difference Between Short Sales, Foreclosures and Traditional Real Estate
Residential real estate has been turned upside-down in the last 4 years. Purchasing a home was a fairly simple process. A buyer could find a home they like, make an offer directly to the owner, negotiate price and terms, then close within thirty days. Today real estate is a completely different world and the market is dominated by short sales and foreclosures ( up to 50% of all sales in some areas). However, there’s a lot of confusion concerning expectations and values between these types of sales. The largest differences between the three types of sales are price, timing, terms, and condition.
A traditional real estate sale will usually reflect the top price of the market. In most cases the owner has maintained the home and will quickly negotiate reasonable offers. In addition they will be open to fixing problems that come up during an inspection. This situation is ideal for a purchaser that wants to quickly.
Short sales are a type of distress sale where the owner can not keep up with mortgage payments or property maintenance. This type of purchase can take between two & six months before receiving a counter offer from the seller’s mortgage company. Most cases the seller will likely not make repairs to defects in the home. The typical discount when purchasing a short sale is 13%-30%. If you have time to wait and don’t mind making a few repairs this can be a great option.
Foreclosures are usually the deepest discount, but there are many unknowns. The home has been vacant for some time and an empty home in the winter has a high probability of frozen water pipes which then break. Repairs can be extensive and a buyer will need cash or a rehab loan. If the repairs needed are extreme, the home may not qualify for financing. A very thorough home inspection is needed to determine what type of repairs are necessary and how they will cost. Responses from the bank are usually quick and very from 24-72 hours. Closings can also happen quickly and in 30 days or less. This is definitely a “buyer beware situation.” If not planned properly a foreclosure could turn into a money pit.
When purchasing a home you must consider which option best fits your situation. Before falling in love with a home find out what type of sale it is and can it be financed. Realistic expectations are critical.
How to Pre-Screen Leads & Focus on the Best
If you market your services to people in foreclosure–or to any targeted list you are going to get leads. Please remember: Leads are not deals…yet.
Some may become super profitable deals that put thousands of dollars in your pocket, but you must be able to evaluate them and focus like a laser beam on the best leads and discard all the rest.
The temptation for new investors is when they start getting leads from their marketing, they get excited (understandably!) and start to contact everyone. It only takes a few days of this to understand another of my important axioms:
All leads are NOT created equal!
You will learn very quickly that you will never have enough time to contact everyone, so how do you quickly and efficiently evaluate and screen your leads?
I do it with a 24-hour recorded message, my website, and using a live answering service. Let’s focus on the importance of a good website and how I use it.
Almost all my marketing to people in foreclosure drives the prospect to one of my websites, and I do that for two reasons. One, because I know that people in foreclosure are scared and confused and much less likely to respond to a card or letter that asks them to call you, the investor, directly.
They think you are out to steal their house and that you have so much more knowledge than they do, that you will take advantage of them.
Secondly, and more importantly…
My website makes them qualify themselves!
I load up my website with audio/video testimonials from previous sellers, so the first thing a prospect sees is audio testimonial after testimonial of people I have helped by buying their home and stopping the foreclosure process–people whom I helped after their listing has expired, etc.
These are all real people who were in a foreclosure or had some other motivation and needed a quick sale.
After my prospects have seen the testimonials, I invite them to submit a form with all the necessary information to my office. I promise a response within 48 hours, but at NO time do I tell them that I will make an offer on their home.
The questions I ask on the form are well thought out and are REQUIRED information before they can send me their form. Every one of these questions is designed to get qualifying information, and just as importantly, disqualifying facts.
They must tell me what they owe, to whom, and all the standard questions you would imagine. But I also ask questions that “test the water” to see how motivated they are. Finally, I ask them to describe the situation that has brought about their current circumstance. This is the key question in many cases!
Here’s why…
If someone writes a whole lot on the last question, I mean two and a half pages in some cases, then that tells me something important about that person. If all the numbers work, I will put that on the top of the pile.
Why? Because it tells me that they want to tell their story to someone, and I’m a good listener.
If you let someone pour out their heart to you about all the tragic circumstances and bad luck that brought them to their present position, and you are able to be sympathetic and empathetic. Then when it comes time to present the deal, they are now on your side and it makes the negotiations much easier.
Conversely, if someone writes on the form, “I’m not taking one penny less than the full value of my house. My bother-in-law says it’s worth $250,000, and that’s what I expect,” why would you waste 10 seconds on that lead? (Note: This homeowner’s response will probably change as the date of auction gets closer!)
My website does almost all of the qualifying of each lead. I waste NO time on any leads where there is no deal to be made.
I have been blessed and have more money than most people, but I have no more time than anyone else! That realization has lead me to be vigilant about time wasters, and it has made me a better, more focused real estate investor.
Bottom line:
I recommend you establish a method of pre-screening and pre-qualifying your leads, preferably with a system like a website where the prospects screen themselves. This will make you wealthier–and a better investor in a much shorter period of time.
By: Marko Rubel
Interveiw with Real Estate Investor Sharon Vornholt
Sharon Vornholt shares some strategies of what’s been working for her in her Real Estate business for over 14 years. She talks about how she finds her motivated sellers as well as cash buyers. Even gives some knowledge on how she found a buyer from a simple well known blog website.
Click The Icon Below To Listen
Real Estate Investing is Just Like Weight Loss
It amazes me how many people start investing in real estate, only to fail when the going gets tough. As soon as people discover they can’t get rich in a week or two, they are on to the next “guru” secret. It’s the same as weight loss–everyone talks about it, many try it, but few succeed.
There are thousands of “get rich quick” and “get slim quick” gimmicks. No wonder both the real estate investing information and weight loss product industries make BILLIONS!
Weight loss isn’t easy; ask anyone who has tried it. However, the concept is very basic: Burn more calories than you ingest and your body will react accordingly. Unless you have a medical disorder, this formula works for just about anyone.
Simple as it may be, the formula is HARD, meaning it takes a lot of discipline and hard work. So the weight loss industry has offered us thousands of ways to make it easier. Many of these solutions do work, but they only work if you put forth effort.
How does having help and information help?
Now, let’s start with the premise you don’t need any of these solutions to make real estate investments OR weight loss work for you. You can eat fewer calories, go walking or jogging every day, and you will lose weight.
But having knowledge of the caloric content or carbohydrate content of different foods is relevant. Having the advice of a physician, dietitian, and personal trainer will help you prevent injuries and maximize your efforts.
Same principle applies to real estate investing: You can go out and make hundreds of offers to motivated sellers and find a good deal. However, having information about how to solve the sellers’ needs and construct an offer helps.
Having an attorney, real estate agent, or “guru” to assist you construct the offer and paperwork will make it easier. Having advice from other people who have already done hundreds of deals will also make it easier for you to learn from other people’s success (and failure).
However, whether it’s weight loss or real estate investing, the bottom line is not just knowing, but DOING. You can’t blame the diet if you don’t stick to it.
The key ingredient is you
Many people have successfully lost weight using “The Zone,” Weight Watchers®, Dr. Atkins, and other similar plans. Many people have succeeded with the famous plans, but many have failed, NOT because the plan isn’t effective, but more likely because they didn’t give the required effort.
Both real estate investing and weight loss are simple, but neither is easy. They take a lot of work. Having a proven system or plan helps only if you stick to it.
If the diet plan says to exercise 3 times per week, you can’t be sloppy about it and expect results. It’s like the people reading a book on the treadmill at the gym. If you can read a book, you’re not working HARD ENOUGH.
Likewise, people call newspaper ads and say, “Hey, you wouldn’t want to sell me your house cheap, would you?” This is not DOING; It is TRYING. You have to give 100% to a particular plan or formula before you say, “This stuff doesn’t work.”
Many people who are interested in weight loss join a gym or hire a personal trainer. From personal experience, I can say that both are great for weight loss. But, the weeks I didn’t show up, it was a BIG WASTE OF MONEY!
The same thing goes for a real estate investment training system or mentor program. If you don’t put forth any effort, it won’t work! And, of course, you’ll likely get bitter about all the money you spent and blame the guru. After all, it can’t be YOUR fault!
Real estate investing and weight loss scams
The “magic pills” that melt off fat are probably a scam. These snake oil salesman are offering the lazy and desperate people a solution–no work and results. Ha! If you bought into this scam you deserve to be parted from your money.
Likewise, any real estate investment guru who promises riches with no work is also a scam. My favorite promise is “no selling involved.” That’s the biggest lie ever told. No business can be successful without a certain amount of selling of the product or service–period!
So, while there is a dark side to the weight loss and real estate investing information businesses, most people fail at either because of their own lack of action, not the fault of the systems.
If you aren’t willing to work, another weight loss program or real estate seminar won’t get you any more results than you are currently getting. Save your money and take more consistent action.
However, if you are willing to work hard and take a lot of consistent action, a guru or program will likely give you more results. If you bought a book, course, or program and already have results, another program, course or book will likely give you tools to get MORE RESULTS.
I often hear about successes people have with my real estate investment programs, but a lot of them are not first time successes. They are most often people who have already been successful and, using my tools, became MORE successful.
If someone asks me whether my program will make him successful, I ask, “What other programs have you bought?” If he’s already spent thousands on other programs and has done NOTHING, I discourage him from buying mine.
Those people are looking for the elusive “holy grail” that all the other programs left out. More than likely, the missing element is lack of action on their part.
If you aren’t willing to take action, you won’t get more results by buying more products. If you have the discipline to work hard and take consistent action, then products and services will help you get there faster. Whether you are looking to get rich or lose weight, the bottom line is YOU!
By: William Bronchick
So Who Do You Think You Are?
You may think ‘I know who I am’… but I’m sure there are times when you think, feel and react in ways that you neither recognise, or want!
Of course we all have our own unique genetic differences – and our predispositions to certain character traits, our own preferences, our self-concept, and our degrees of introversion and extroversion.
Our brains aren’t mature until the age of 25 and they also have the ongoing capacity to change as needed in response to our experiences and the meaning we give to these experiences.
Our values, beliefs and needs change too – we are not a ‘constant’ and fixed entity – and that’s even before we go down to the Quantum level at which we are mainly empty space anyway!
We also have the added complexity of having a whole ‘cast of characters’ or ‘Sub-personalities’ within us. These came into being as a result of our earlier experiences – particularly traumatic ones; and the people who have influenced us; and the sense we made of these experiences at that time.
The ‘decisions’, about how to cope and survive your life, were made outside of your awareness and by your immature brain, and they have shaped your present-day life – usually not for the better!
Any one of these ‘characters’ can ‘jump into the driving seat’ of your life at the most inappropriate and unhelpful moments. This is different from Multiple Personality Disorder – also called Dissociative Identity Disorder, or Schizophrenia, which are much more profound mental disorders that require specialist psycho therapeutic help.
Perhaps your ‘Inner Critic’ and/or ‘Inner Saboteur’ keep making life difficult for you, by constantly nagging at you, and ensuring that you don’t succeed, or reach your full potential. There may be a Seducer, or a Tragic Victim, or an Aggressive Adolescent lurking inside you – waiting in the wings to jump on stage and take over the show! Maybe your ‘People Pleaser’ sub-personality has a convincing mask – and although you know it’s just a mask, perhaps people only seem to like you when you’re wearing it, and so you dare not even try to take the mask off.
Some people are so accustomed to wearing masks they have forgotten who they are underneath and live their lives as if the masks were real. They may then have some form of ‘breakdown’ or rather a ‘breakthrough’ when the real and authentic ‘self’ breaks through the fake personae and cries out to be seen, and to desperately try to get their needs for love understanding and belonging met.
Most of the time we are living our life like a child inside a ‘grown-up’ body; and the ‘child’ within us yearns for help, care and understanding. We may try to silence these deeper longings by using alcohol or drugs, by promiscuity, gambling, over-spending, over-eating, work-a-holism, self-harming and other ways of avoiding the real and deeper needs we have. Needs which we haven’t allowed ourselves to become fully aware of, or to find a way to have sufficiently met.
Although we appear ‘whole’ we are in fact more like a mosaic of fragments held together that give us the ‘illusion’ of solidity and predictability – some people being more cohesive and resilient to life’s pressures than others. Not surprisingly, our early experiences, and the meaning we ascribed to them, will have determined how ‘well-glued-together’ we are.
Without access to the insights of who we now are, and how we became that way; we are condemned to repeat old unhelpful patterns. We may have a conscious hope of changing the outcome of our familiar dramas – but we are doomed to keep repeating these until such time as we introduce knowledge, understanding, and the skills to make the changes we want. We may have to change the subconscious ‘Script’ of our life and create a new healthier and positive drama, and attract a new cast of people into it, too.
Isn’t it time you got to know more about who you are, and why?
This will have a significant effect upon your choice of partner, the health of your relationships, how you parent your children, and whether you succeed in your chosen job/career/life path.
Flipping Houses Works in ANY Market!
For years, hot-shot speculators made huge profits flipping condos in Florida and Vegas before they were even constructed. All the while, the naysayers in the ivory towers of Wall Street and academia warned of a “housing bubble” that was sure to burst as all bubbles do.
When Fed chairman, Alan Greenspan, said that the national real estate market was “frothy,” the writing was really on the wall, and anyone with half a brain could see that we were in for a “cooling” of the housing market, at best. Yet still, speculators continued to profit, and the real estate bull market marched on…
But the bulls aren’t marching now. Greenspan handed his matador’s cape to the new Fed chairman, Ben Bernanke, who continued the policy of interest rate hikes designed to deflate housing.
No longer accelerating at a break-neck pace, home prices have flattened like a pancake in many markets, and new the condo speculators who got in late are in for a world of hurt.
Clearly, the housing “boom” is over in many parts of the country. But contrary to the media hype, this is great news for flippers!
Flipping vs. Speculating
There is a difference between flipping and speculating. While speculators may be a subset of flippers, they are, at best, the amateurs of the real estate investing family. Flippers who have consistent success are more conservative and have a fundamental approach to real estate investing.
While it may not be as exciting as speculating, the rewards of more conservative flipping are nearly as generous, and they far less risky. The biggest difference between flipping and speculating is that flipping works in any market, whereas speculating only works in certain places at certain times.
From 2002 to 2004, Las Vegas was a great time and place to be a speculator. But if you were still in the market in 2006, chances are you got burned by more than the hot desert sun.
Basically, speculating often works on the “greater fool” theory that you can always find a greater fool than yourself to take a property off your hands in the expectation that he will be able to find yet a greater fool. Eventually, someone is left holding the bag, and that’s when the party is over.
Flipping, by contrast, relies on fundamentals. The idea is not to catch a shooting star in a rapidly appreciating market. Rather, the plan is to find undervalued properties, rehab them, present them in an attractive manner, and sell them for a reasonable profit. Not only is a rising market not a requirement of flipping success, it may even be a mild detriment!
After all, it is a bit harder to find bargain properties in booming areas. Sure, it can still be done, but the point is that even falling markets are prime for flipping since the holding period is generally too short for the value of the property to decline beyond the deep discount at which it is purchased. Assuming you add value through rehabbing, you almost can’t lose!
Exit strategies–Always have a Plan B
While speculators rely on the “greater fool” strategy, flippers tend to have one of two exit plans:
- Quickly flip the title to another investor, or
- Rehab and sell the property at the retail level
While the lion’s share of the profits go to the retailer, a quick wholesale deal can free up your cash (and energy) for the next deal. But what if neither strategy works? What if the market really crashes and the buyers disappear? Is all lost? Of course not!
For complex economic reasons, the rental property market does not always correlate with the housing market. In fact, they are often counter cyclical. Although most flippers aren’t terribly interested in being landlords, generating rental income from a botched deal is a solid backup plan.
Better yet, you can usually refinance the property after rehabbing it to get all of your money out. From that point forward, the bulk of your rental income will be pure profit, and when the market improves, you can make the sale. Even better still, you can offer your tenants a lease with an option to buy, which is attractive to many young families looking for their first home.
The media portrays real estate flippers as the investment world’s version of Wild West gunslingers. But in reality, nothing could be further from the truth. Compare the “worst case” rental income scenario of real estate flipping with the “worst case” Enron scenario of stock market investing. There really is no comparison!
If you take a fundamental approach to real estate rehabbing and flipping, your risk is limited and your profits are virtually limitless. It really is the best of all worlds.
By : William Bronchick
How Positive Affirmations Can Make You More Intuitive
Many people wonder why they should use affirmations. Some even say that affirmations don’t work. But the reality is that every thought you think, in fact is an affirmation. Repetitive thoughts become very strong affirmations because they get imbedded in your mind and shape you as a person.
Look at your regular thoughts. Are most of them negative or positive? If most of your thoughts are positive – then you’re already doing positive affirmations. If most of your thoughts are negative – then you should start doing positive affirmations as soon as possible to counteract the negative effect of bad thoughts on your health.
If most of your thoughts are negative then your intuition gets shut down also. Negative thoughts come from fear and fear is opposite to intuition. Fear overruns intuition. The voice of fear is always highly emotional, loud, minimizing and negative. The intuitive voice is subtle, gentle, reassuring and focus towards positive outcomes.
Positive thinking will help you to tune into positive events, attract them into your life and become more intuitive to the positive things around you.
I know some people who think that they are only intuitive to the bad things in life. And they attract them. Bad things and events follow them.
The explanation here is simple: their negative thoughts put them in tune with negative events. Therefore they attract them.
To change this negative circle they must start thinking positive.
Positive thinking not just affects your mind but affects the biochemistry of your body as well. Your body changes its functions under the effects of positive thoughts. And this is why you will become more intuitive to good things in life – because of the biochemical changes in your body.
Every morning when you just get up, start your day with the words to yourself: “You are wonderful.” Or “You are amazing.” And feel it. It doesn’t matter what happened to you yesterday, forget this – because today you are amazing.
And of course, you should act as if you are amazing too. Your intuition will thrive, especially if you add on daily mediation to your routine. You start seeing and sensing positive things and attract them into your life.
During the day remind yourself about how wonderful you are. Self-approval will make you listen and hear your intuitive voice – your Higher self.
Then you will achieve extraordinary results with anything you do.
Now, say a complement to yourself. Say it again and again and again… Feel it and repeat it later on also. Tune into positive things and see the results you will get.
How to Get Motivated Sellers to Call You
The key to success is finding good deals
Any experienced real estate investor knows the opposite is true. Finding great deals is one of the toughest jobs. Funding or flipping good deals is easy. The market is full of bargain hunters and private investors who have money. So the real key to real estate success is finding properties you can pick up at a great price or with great terms.
There are plenty of opportunities for those who are willing to do what it takes to find deals. But some methods require more grunt work than others. I discovered long ago that I prefer having customers call me asking me to do business with them. I don’t like knocking on doors unannounced or cold calling people on the phone.
Accelerate your success with a marketing plan
My answer was to learn effective direct response marketing techniques. On average, my company consistently buys three or four properties each month by marketing ourselves as home buyers. Sellers call us.
In order to build a lucrative real estate investing operation, you must treat it as a business, whether full-time or part-time. The goal of any business is to generate profits, and you can improve your chances of success by understanding the vital role of marketing.
Effective marketing is delivering a well-crafted MESSAGE to a targeted MARKET through the use of various types of proven MEDIA. The advantages of using marketing to get motivated sellers calling you are numerous. A few include:
- Everyone you talk to will be prescreened. That means they own a house, they’re thinking of selling, and they’re motivated enough to respond to your message. You leverage your valuable time by speaking only to prescreened prospects. And you will buy a higher percentage of the houses you find for sale.
- You can educate the seller about how you buy houses and the specific benefits you offer before they call. That way you’ll spend less time repeating your message to every prospect.
- You eliminate the need to call sellers. Homeowners with FSBO signs, classified ads, pending foreclosures, or expired listings will call you.
- You will talk to sellers who have not done anything to publicize their need to sell. That means less competition.
Develop your marketing strategy
To develop your strategy, break it down into three parts. First, clearly define your message. Next, identify who needs to get your message. And finally, decide what media you want to “test” to get your sales message delivered.
- Developing your message
What are you offering the sellers? What makes your program unique when compared to other options the sellers have? What are the most important benefits you can offer to a seller? What problems can you help a seller overcome? Why is it easy and safe to do business with you? Why should they call you now? What do you want them to do next? - Identifying your market
Who do you want to talk to (sellers)? Who can you help the most (flexible sellers)? Who has a demonstrated need for your services (foreclosure, divorce, transfer, landlords, etc.)? Who do you want to avoid (renters)? Where do you want to buy? Do you want to focus on certain types of property? - >Choosing your media
Classified ads, display ads, flyers, yard signs, web site, email, free recorded message, special report, letters, postcards, business cards, faxes, seminars, radio ads, TV ads, billboards, yellow pages, etc.
Your goal should be to develop the most comprehensive message you can by communicating everything that would be of interest to your targeted market.
Tell the whole story. Deliver the entire message when it’s cost effective (as with a detailed flyer or sales letter). When cost prohibited, use a two-step approach. For example, your sign or classified ad might direct sellers to call a free recorded message, or visit your web site, where they then get “the rest of the story.”
Most beginning investors have more time than money. And a marketing plan requires a regular investment. You can call sellers and knock on doors for free. And during the startup stage of your business, that’s OK. But consider this: A $15,000 profit from buying and selling one house can fund all your marketing for an entire year, even if you’re spending up to $800 per month.
If you know how to solve sellers’ problems by buying their houses creatively, apply some of these ideas to buy more houses with less work and make more profits.
by: Richard Roop
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