Karen and husband, Jim got started by driving neighborhoods “Drive4dollars”. FSBO’s, talking to R.E Agents.
Back then The Market was good, so their goal was to pay 5-10% below retail, get it to Cashflow about $200/month so it would cover maintenance/repairs.
They bought 5 homes. Karen quit her job and did R.E Investing for 18 hours/day for 2 1/2 years. Jim would help after work. They accumulated 25 houses. Then Jim quit his job.
Jim and Karen would argue about ‘good debt’. He would say, if we sell tod, we can make $15k, if we sell in 30 years, we can make $350k. Karen’s argument was, so we can buy groceries.
You better make kitchen, master bed and bath look good because it’s what the woman looks at. Garage looks good for man cave.
Karen approach was always, I wanna solve your problem, never aggressively trying to close the deal. ‘What do you need and how can I help you.”
That’s how she learned the business. People would tell her “This is what I’m looking for, this is my pain point, this is my issue. Karen would say “Lemme see if I can figure out a way to fix that for you.”
Then she would get back to them. “I may not be your best solution, but I am a solution, here’s what i can do & if it doesn’t work for you I just wanna keep helping you. Feel free to call me, ask me questions.” (Mothering)
Issues: They didn’t want people walking through their house; a for sale sign in their yard; they wanted to move when they were ready to move; needed to move quickly because of new job.
Karen “Ok, I can do that.” And they were willing to walk away w/less equity. Don’t have to be desperate need.
If you get too many loans in your and your wife’s name. For 4 years, they bought Subject To, utilizing other’s financing.
Explain to people why we can pay more if we didn’t have to get our own financing. Like a Land Contract. Verify they aren’t locked into i.e “First time home buyers contract w/bank”, as they may not be legal to sell their home. Make me out a check for the difference. Send payment directly to the bank. Except w/Subject To, sounds like they do for length of the whole loan?
Tell them if bank ever calls note due, mortgage will be paid down and any repairs made, you will have a chance to rescue the loan. Karen “Our priority was to always make their payments first, so it never did.”
Read up online about Subject To, find attorney, have seller sign in 2 places “I understand you are not ultimately responsible to make my payments. And attorney have own paperwork “now you know these buyers are not ultimately responsible to make your mortgage payment”.
Create a form that starts w/sellers asking price – closing costs, repair costs, etc = Offering price (so seller could see the break down)
Then explain, “This is what i can pay if i take over your existing financing. (better price) Let me explain what that means, lemme explain why. If get my own financing, it will cost me more and I can pay less and if they want ca$h they were goona get even less.
Favorite is Post Cards, her own neighborhood and then 2 others @ price point, age and condition she was looking for. “We buy houses, if you know anyone who’s selling a house, plz have them contact us.”
When they call us, they know we’re a company, not an end user and that we not goona offer retail.
Mail out every 6 weeks for 4 years, then 2-3 months.
Karen thought she was going to prison. She analyzed woman’s condo, told her you’re asking full retail, if you list it for this, you could probably sell it. She asked Karen if she wanted to buy it. Karen offered her .65 cents/dollar. Woman said “Honey, i’ve owned house for 6 years, ur offering me less than I owe. “Yeah I know i might not be best offer, if you have more questions going forward feel free to call me. W: “If we do this deal w/you, how do we do it? K: Explained the paperwork, how she was taking over existing financing and you’d have to write me a check for $9,200. W: Called back next day, “we want you to buy our property”.
It had been listed on the market for months, so fresh paint, carpet, 2 story stone fireplace, Karen owns it to this day. She spent the 9,200 on marketing.
Favorite book: Secrets of Millionaire Mind
Focus, stick w/it. Fuck the shiny objects.
“We help, buyers, sellers and tenants & get paid for it!”
1. Find a coach/mentor in your area to whom you can turn for guidance, successfully doing what you want to do and talk with others they’ve helped (references).
Your Experienced Team (saving you T&$): attorneys, CPAs (real estate investing), contractors, subcontractors, real estate agents, title companies, closing attorneys, inspectors, appraisers, etc.
2. Get involved with a peer group that knows more than you. Go to all the local REIA meetings (find on NationalREIA.com). Also check out MeetUp.com and any local landlord association meetings. Landlords can be a great source of info as well as potential buyers and sellers to work with.
3. Set goals. Make a plan. How many houses do you want to buy in the next 12 months? How much do you want to be worth in 5 years? As you write out your goals, include strategies for accomplishing them. Want to buy 10 houses in the next 12 months? Break that into pieces to figure out what you need to do every month to make those goals a reality.
4. Buy real estate. If you haven’t started yet, start! If you’re buying, buy more. If you don’t, 10 years will have passed and you’ll be kicking yourself for not buying all you could today. The way to truly learn is by doing. Books and seminars are great, but you learn by experience.
Adjust your methods and your strategies depending upon the economy and where you invest, everyone works, shops, and lives somewhere.
Get an education, hook up with a mentor, make a plan and buy real estate.