REAL ESTATE VULTURE (RESIDENTIAL)?

This method  (this page)applies to both residential property in most aspects aside specifics on commercial property which you can learn by clicking this link. Before I start power-training you, do yourself a favor: Begin to act as if you have an unlimited amount of CASH available to buy as much real estate as you can find, OK? I know that you may have NO MONEY right now and it may be hard to act as you are a Multi Millionaire, but you'll soon see how simple it is to have the CASH available to buy Estate for pennies on the dollar. It doesn't matter if you are flat broke, up to your ears in debt or have NO credit! Please be coachable and master your one pagers.

The Bottom Line: 

  1. 1) You will learn how to establish how much a property is worth in repaired condition.
  2. 2) You will learn how to estimate how much it will cost to repair a property for resale.
  3. 3) You will learn how to get the CASH to buy Real Estate for pennies on the dollar

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Because all you need to effectively bring in deals is: 

  1. To know how much a property is worth in repaired condition.
  2. To know how much it will cost to repair a property for resale.
  3. To have a couple of money partners (the cash to close).

So every time you find a LEAD:

  1. Get the Fair Market Value (In Repaired condition), guesstimate the repairs.
  2. Evaluate it to see if it makes sense by running the Formulas.
  3. If the numbers make sense, go to the property and establish the repair cost.
  4. Line up the cash to close.
  5. MAKE THE OFFER!
  6. Once an offer is accepted, IMMEDIATELY begin to market the property. Sell the properties using Real Estate agents, the Marketing materials and newspaper advertisements enclosed in this manual.

Overview & Examples

  1. Locate (Finding a Lead)
  2. Evaluate (Evaluating a Real Estate Lead)
  3. Inspect (Estimating the Repairs on the property)
  4. Get The Cash To Close (OPM or Lender)
  5. Buy (Putting it under contract and buying it ALL CASH
  6. Sell (Getting rid of it and CASHING IN THE PROFITS)

The system is simple: Locating leads (Step# 1) is nothing more than generating (finding) leads to evaluate in Step# 2, which if the deal makes sense, has to be inspected (Step #3) and then bought in step #5, and sold in step #6. I know that I will go too fast for you, I WANT to make you grow faster than nature (and even yourself) ever intended. You are "in MY gym" now, I will turn you into Mr./Mrs. UNIVERSE in record time... but only if YOU let me. And the best part, it is so easy, you will want to "learn more". However, "learning more" is nice if you want to waste time.

THE BASIC “FLOW”

  1. Get the Fair Market Value (In Repaired condition)
  2. Guesstimate the repairs. (Before you go to the property)
  3. Evaluate it to see if it makes sense at this point (run the Formulas).
  4. If it makes sense, go to the property to get the actual repair cost, take pictures, and drive the comps. (Verify the Repair Cost & FMV)
  5. Run the formula(s) using the ACTUAL REPAIR COST and the ACTUAL FMV to establish the highest amount you are willing to OFFER. (run the Formulas AGAIN)
  6. Line up the CASH to close (Lender or OPM).
  7. MAKE THE OFFER! (Start Low, don't exceed your maximum)
  8. Once an offer is accepted, IMMEDIATELY (within the hour) begin to market the property.

PLEASE treat all leads alike and let your calculator decide to buy or pass on the deal, ok?

Do it this way and it will get your business going. You will be amazed with the results! And if you don't do what I just thought you, you'll regret it forever, I guarantee you will 🙂 I assume that the reason you are here is to MAKE A LOT OF MONEY... And you want to make it RIDICULOUSLY FAST, am I right?

Then, let me share something with you, everything you need to "master" is in this section. All that "other stuff" people may tell you but I don't cover... please... just don't bother with it.

"Information overload" does nothing more than cloud your mind. Makes you lose focus on what matters. And by gosh, YOU MUST FOCUS HARD. There are so many distractions out there, and you will meet so many "new friends" in the field, that you may "forget what Dario Busch told you" in The Money Manual and start listening to Mia House, which has been an agent with REMAX for over 10 years, but barely makes $150,000 in NET profits a year, capicce? There are "mermaids" allover the place. Be warned. Remember: This is HOME 🙂

I BUY REAL ESTATE ALL CASH, AS IS?

Yess, buying ALL CASH, AS-IS, is the "COOLEST WAY" to buy Real Estate! Buying Real Estate ALL Cash, As-Is and without a financing contingency is simply the BEST way to buy Real Estate at rock bottom prices. There are No Money Down books out there that ask you to beg the seller for mercy or "get creative" somehow. But I've had "those students" come and go because they have NO CHANCE against real CASH buyers such as us. There is only ONE way to buy Real Estate and that is with CASH. There is NO WAY around it. Even flimsy No Money Down techniques require CASH from "somewhere". So rather than sending you to HUD or some "home buyers program", I am going to show you how to line up $1,000,000, $5,000,000, $20,000,000 or more just for the asking, without a credit check and without one single monthly payment you have to pay. Sounds incredible? I bet that's what you think, right? But yes, ALL CASH it is! After all, CASH TALKS, right? (Hey there... WELCOME TO "OUR WORLD" 🙂

RIGHT! CASH TALKS!

Forget "No Money Down" techniques you see advertised on TV, grants don`t work either. No money Down is for "doo doos".

ALL CASH RULES!

However, I don't want you to even THINK about "getting your own credit going" or "doing one or two on your own". Going "on your own" will only LIMIT your CASH power. With ALL CASH, AS IS OFFERS, you can buy any type of real estate WAY below wholesale price and flip it, wholesale it, or sell it retail for a huge profit. It takes little effort but demands surgical accuracy. Buyers like you and me are most commonly known as a "Speculator", "Cash Buyer", or simply "An Investor". But technically, you are a WHOLESALE REAL ESTATE CASH BUYER (that even buys in bulk).

You buy Real Estate ALL CASH, AS IS, NOT CONTINGENT UPON FINANCING, and can close within ONE DAY if the deal calls such urgency (I like 30-day closings). If you are coachable, you can put yourself in a position where YOU CAN NOT RUN OUT OF MONEY TO BUY REAL ESTATE WITH in less that 6 months (I did it in 2). How "cool" is that? 🙂 Magic? NOT AT ALL! Just be CONSISTENT and follow THE SYSTEM I'm about to share with you.

Really... DON'T THINK ABOUT IF IT IS RIGHT... JUST DO AS I SAY (be coachable) AND YOU'LL GET THERE, I GUARANTEE IT 200%, remember? lol 🙂

Besides, you know I'm only a message away if have questions , doubts , or if a $879,000 decision is giving you insomnia 🙂 (See contact section in your member area). Look... there is simply NO BETTER GIG in the Real Estate World than doing it "my way". I'll put it next to ANYTHING... and I mean ANYTHING available out there as I have seen it all.

How profitable is it?

Well... VERY PROFITABLE.

6 to 7 figures, and maybe 8, 9 or 10 by "stepping up" to SGB (Unless you are blind and forgot what we "evolved into"). But so that you get an idea of the profitability,

Here is an example:

As you know, being a Licensed Real Estate agent or Broker with a Big Name Franchise such as REMAX, Century 21, Keller Williams, ColdwellBanker, is considered to be a GREAT JOB... right?

RIGHT!

They ALL belong to the "Multi Million Dollar Club",... right? 🙂 RIGHT! 🙂

Driving nice cars, right? RIGHT!

Well... check THIS out... agents and brokers make PEANUTS compared to guys like us.

Every time a licensed agent makes $5,000 on a deal they bring me, on house they sell for me, I can make $35,000... or $50,000... or $132,000... and many times, much more, especially on commercial property.

And hey, that Agent does all of the hard work for you.

Thus, freeing up your time to DO MORE DEALS AND MAKE MUCH MORE MONEY THAN ANY LICENSED AGENT COULD dream of at a 7%, 5%, 3%, or 1.5% commission rate 🙂

Heck, if you are a licensed Agent/Broker (or if you know an Agent/Broker that you can ask)...

Just look at the HUD STATEMENTS when a Investor Client such as myself (cash buyer/speculator) sells his/her homes and buildings (rehabbed and/or As Is).

Once on the HUD statement, look at THE SALES PRICE (on the buyer's end) and then look at THE PAYOFF (on the seller's end).

Now... grab a calculator... now... enter THE TOTAL SALES PRICE minus THE SELLER'S TOTAL PAYOFF (on the seller's end).... what does it say? 🙂 🙂 🙂

See... now... do the same thing on another file.... what does it say? 🙂 🙂 🙂

See?... I told you! 🙂

Let's do one more so that it "sticks".....what does it say? 🙂 🙂 🙂

See what I mean?

Yes, this means that we YOU can now make 10, 20, 30 TIMES MORE THAN IF YOU WHERE JUST A LICENSED AGENT/BROKER!

Did you understand THAT?

Welcome to the elite, feeling at home yet?

Make sure that you LEARN ALL 6 STEPS and then "go get em'! You will notice that I do THE SAME thing OVER AND OVER again , the only thing that varies are names and addresses. I treat all deals alike. Be coachable, PAY ATTENTION TO DETAIL. The system is simple to grasp when READING about it, but it can become "a very different animal" when you are "in the middle of the game". Compare it to WATCHING a quarterback play the "Superbowl" on TV vs. PLAYING THE SUPERBOWL as a quarterback. Another analogy: Watching a war movie vs. being IN a war. Get the picture? An no, I didn't use the words "superbowl" as a sales pitch or to "impress you", you're wrong. I'm simply subconsciously preparing you for what is to come 🙂

YES.. THIS IS the "Superbowl Of Real Estate"... and you... YOU ARE THE QUARTERBACK!

However, this is not about "winning the lottery", this is serious business It can even get sweaty at times 🙂

I will NEVER promise you WEALTH without HONEST EFFORT.

I will always give you the truth right between the eyes.

This manual was originally used to train MY Buschworld TEAM here in St. Louis. My only interest when I wrote it was for my "new guys" to take it home and READ IT TWICE in one day. Then, they would come back the next day and we EXPECTED them to know exactly what to do. Yes, that simple. The Money Manual's Real Estate Speculation System is designed to CREATE TOP PRODUCERS, period.

I do suggest you kick but and make it BIG TIME! NO COUCH POTATOES ALLOWED!

Being THE BEST is about KICKING SERIOUS BUTT, RUNNING CIRCLES around your competition, and beating EVERYONE to the punch while providing exceptional performance for all parties involved (must be a win-win-win-win deal or I'm out).

You are about to become an ELITE MEMBER OF THE REAL ESTATE INDUSTRY.

And an ELITE member with SO MUCH CASH BUYING MUSCLE, most Agents, Brokers, and Investors that you deal with will wish that they where YOU 🙂

However, this is a world where YOU NEED TO BE ACCURATE 100% OF THE TIME.

A small mistake, such as screwing up on the comps or repairs, cancost SERIOUS TIME AND MONEY just AS EASY AS A QUICK PHONE CALL CAN MAKE YOU $60,000.

So please, pay attention to detail, ok?

IF YOU REALLY WANT TO SUCCEED, you WILL be coachable.

I say that because that is the hardest part you will experience.

BEING COACHABLE IS HARD for some people, but ABSOLUTELY NECESSARY! To be coachable, you must submit to the system or simply not get started at all. You can only submit to the system if you are coachable. You can only make it if you're coachable. I know that nobody wants to "do as they are told".

I HATED it 🙂

But when BEING COACHABLE made me 5 and 6 figure weekly checks, I was VERY, VERY coachable 🙂

The system is simple. I can do it in my sleep. You will as well, soon. The "hard part" is to run 100-300 deals simultaneously.

To do so, YOU MUST have a simple system that focuses ONLY in what maters. And, a simple system that FOCUSES ONLY on what matters is exactly what you now have here. But if you don't run the simple system EXACTLY AS EXPLAINED on every single lead you approach, you won't be able to run more than a few properties simultaneously, 10 TOPS 🙂

All you need is a Cell Phone, a Laptop, a car, a printer, this manual, honesty and ethics, BULL-HEADED DETERMINATION and CONSISTENCY.

Good news is: There is NO INVENTORY to manage and you can buy AS MANY PROPERTIES AS YOU APPLY THE SYSTEM TO. And hear THIS... you will never... AND I MEAN NEVER... pay a penny in holding costs (regular monthly expenses such as mortgage payments, grass cutting, taxes, repairs, or any other monthly fee) on the properties you buy, so it doesn't matter if you are FLAT BROKE RIGHT NOW. You can STILL get started RIGHT WAY and put yourself in the position where you can "buy seven $476,000 houses BY TOMORROW" in just s few months (or even weeks). WHEN YOU WANT TO QUIT... WHICH AT SOME POINT... YOU WILL... . JUST DON'T!

You must promise me not to quit. No matter how "hard I go at you¨.

Just as if I was your personal trainer that MUST make you lose weight to avoid a heart attack, I MUST make you successful.

I hate failure, and training you just to have you quit in the middle is nothing I want to be involved with.

IF I trained someone, that someone needs to be TOP GUN, period.

That's MY reputation. If you can't promise me to be coachable, I want you to close this manual RIGHT NOW and ask for a full refund and delete your account. This is NO JOKE. Because sometimes, "the road towards success" will frustrate the living heck out of you. And if you can't "hold on"Waiting for HUGE checks while "your belly is hungry" can break down even the though ones.

And to add to the misery, you friends and family may even tease you because "you haven't got paid in 6 months".

Forgive them, they don't know what they are saying... They don't understand what you are doing... they have no clue. They don't know that SUCCESS DOESN'T JUST HAPPEN... IT IS MADE ON PURPOSE... AND YES IT CAN EVEN BE HARD AND/OR TAKE TIME TO "MAKE IT".

Most people have NO CLUE about that fact.

Then again, most people think that it is safer (and more real) to make $5,000/month that to make $1,000,000+ a year. How can people think that $60,000 a year is better than A MILLION DOLLARS? Is it just because the $60,000/year is paid in "convenient" monthly installments of $5,000 each?

Is THAT better? 🙂

These type of "issues that make you wanna quit" WILL arise WHILE YOU ARE WAITING FOR THAT FIRST FAT CHECK... which will seem to "take forever" 🙂 But once that check is in your pocket, the rest of the deals you've been reeling while you wait for that first check will begin to close faster and faster. $12,000, $32,000, $26,000, BAM!, BAM!, BAM! No matter how much YOU WANT TO QUIT, DON'T QUIT, ok?

It is NOT WORTH IT TO QUIT... really!

I say this because I ALMOST QUIT MORE THAN 7 TIMES, so I know 🙂

But I ALSO KNOW WHERE YOU CAN GET IN LIFE by doing this, and I would HATE to see you "give it up" without AT LEAST A REAL GOOD TASTE of the fucking pie.

If you NEVER QUIT, I WILL SALUTE YOU FOR STICKING TO IT!

Obviously, I didn't have this manual as a guide or a "day-job" to pay the bills when I got started in the business. Therefore, it took me 13 months to figure all this stuff out, establish myself with CASH POWER, buy, and CLOSE MY FIRST BIG DEAL while I deal with "my loving skeptics" 🙂 You, don't have to figure ANYTHING out. And believe me, it was hell to wait for that first check. There where times in EVERY SINGLE ONE OF THOSE 13 MONTHS when I just wanted to quit and give up. Everyone around me said "get a job, you can't pay the bills with a pipe dream". Some of "my people" and family members (I call them "my loving skeptics", they just didn't know better) repeatedly said "BULL" when I said "the money is coming, the money is coming... because I kept answering the question"WHEN" with the 2 dreaded words: really soon 🙂 🙂

Obviously, and without the confidence of A LOT OF CASH IN MY POCKET TO PROVE THEM WRONG at that time, I started to THINK and began to doubt what I was doing. I even cried a few nights... broke some things too 🙂 But one day in my 4th or 5th month, I was ready to quit. But, LISTEN to what my main (at the time) "money partner" said to me after hearing my complaints: "Knock it off Dario... you have TONS OF MONEY IN THE BANK ALREADY, the only issue you have today, is that you can't touch it yet. I know everyone is bugging you about it, ignore them, be patient and stop crying about it, welcome to the real world, be a man, or get out of my face!". Those words, I now pass on to YOU. Remember these words JUST BEFORE YOU QUIT, and I pray that you have grace Under Pressure.

To quit or not to quit is not a question. nor is it an option for you.

There IS a light at the end of the tunnel, A BIG GOLDEN SHINY ONE!

You have to be patient, NO MATTER WHAT!

And don't take offense if I'm too straight... I say this with love. My "money partner" surely did say it to me "with love", even though it HIT ME RIGHT BETWEEN THE EYES EVERY TIME. That was the FIRST time I wanted to quit, but it wasn't the last. Every month or so, we had similar "keep Dario on track sessions" 🙂 And EVERY TIME we had this conversation , the dollar amount referring to "Dario's money" in his "pep-talk" kept getting HIGHER, and HIGHER, and HIGHER. That made it even more "unreal" for my "loving skeptics, but it gave me the strength to be patient.

I accepted that Real Estate is a YEARLY INCOME generator and NOT a MONTHLY salary

I also realized that those that loved me, tried to stop me because they loved me and didn't know better.

I realized that I had to stop all negative input, let it bounce of me, give it the cold shoulder. I know that NOTHING ELSE THAN A PILE OF CASH will make them understand, and when the CASH came in, it was fun showing the check to them. They though was FAKE... until the check "went through" 🙂

YOU MUST UNDERSTAND THAT IT WILL MOST LIKELY HAPPEN TO YOU TOO!

And when it does, JUST KEEP GOING... TAKE ACTION... Yes, ACTION WILL make you money, thought WILL NOT. Action is the enemy of thought... REMEMBER THAT! When things get tough FOCUS ON ACTION. Had I quit, switched gears, sat down and waited (stalled), listen to those friends that "care for me", or moved back home to mommy's... you wouldn't be reading this because I would probably be delivering pizzas or playing cover songs in a smoky bar. Look, I went at it without looking back, I AM COACHABLE, I "cooked the steak the way they liked it", and so do you at this point. Don't quit on me, you are screwing up! Don't be selfish. Quitting is for losers! BE PATIENT, BE A WINNER. Besides, you will love to see the faces of "your loving skeptics" as you hold that check up and say "How much does it say here?... Who is it payable to?... What's MY NAME? 🙂 🙂 🙂 Yes, my life changed thanks to the 6 simple steps that I am now sharing it with you. So don't quit, hang on, it is worth it... I've been there,... I've done that.. I've gone through it... more than once... and so can you! Now, before I give you the examples, let's review my 3 favorite methods of "moving" Real Estate. HERE FOLLOWS THE TYPES OF DEALS I LIKE THE MOST

  1. WHOLESALE DEALS Wholesale is the CORE of our business. We focus to wholesale 80%-90% of all properties we are involved in. When we "wholesale" a property, it means that we are buying it AS-IS and selling it AS-IS,….. in the same condition that we bought it in. (Ok,…ok!…maybe we clean it a little). The reason we prefer this method as our FIRST priority is because it moves FAST! Sometimes, you can sell it the same day you buy it (simultaneous closing/flip). All you need to do when wholesaling is find and market a property rather than get involved in the rehabbing of a property. The profits are generally smaller per deal. But the volume you can do by eliminating the rehab process is much greater and appealing. In the example below, you make a smaller profit, but you DID NOT do ANYTHING to the house besides BUY it and market it to a few people.
  2. RETAIL DEALS Retail is when we buy a property to completely rehab and sell it at FAIR MARKET VALUE (FMV). This is the most common way to DEAL Real Estate, buy low, fix and sell high, but retailing can only be done in areas that will support a RETAIL sale. It also calls for a buyer with good credit and money down, which is a lot easier to find in better areas. Retailing also applies to selling homes to VA and FHA approved buyers since VA & FHA loans are 97% Loan To Value. When dealing with homes in the low, lower and lowest income areas, don't expect a Retail sale. You will find more success Retailing in higher income areas. Make SURE that the house is in a good, stable and retailable area and make QUALITYrepair estimates if you expect your buyer to pay Full Market Value.
  3. SELLER FINANCING / SELLING WITH NO MONEY DOWN This example means that we can put homeowners or Investors in the property at very reasonable terms and we assist with the financing by either holding a second deed of trust, and/or a first deed of trust and/or other consideration (such as trades) when selling the property. When you get familiar with the Mortgage Lending industry by reading the Mortgage Brokering Section of The Money Manual, you'll understand how easy (and profitable) it is to do 80/20, 90/10, 70/30, 60/40 or whatever other combination of little or no money down financing terms you deem appropriate.

The Speculator (YOU)

Speculation should not be confused with gambling, which is to take a risk in the hope of gaining an advantage or a benefit through foolish behavior. The difference between speculators and gamblers is that speculators make a move based upon evidence. While gamblers engage based upon chance.

A gambler's only asset is luck, while the speculator relies upon facts. The dictionary explains the word speculate as follows: 1. To meditate on a subject; reflect. 2. To engage in a course of reasoning often based on inconclusive evidence. 3. To engage in the buying or selling of a commodity with an element of risk on the chance of profit. Learn to MASTER the system so it feels like second nature As you will see, this manual is put in a VERY simple format. The "mystery" has been "banned" and the hype took a hike. Imagine "hanging out" with a real cash buyer while he tells you EXACTLY what he does and what he thinks when buying houses, 2 and 4 family properties. That's exactly what's about to happen. It will take a few weeks for you to get into the groove", but once it becomes "second nature" for you, it's just like riding a bicycle. You will never forget, you won't be able to ignore it. Be coachable and stick to the system! The more times you "flush" Leads through this system, the more properties you will buy and the more money you will make (As easy as 1-2-3).

Don't get stuck with impossible or marginal deals as your time is what is valuable.

REMEMBER, you are running a "factory", a buying machine.

There are so many prospective deals out there that "the trick" is not "finding" a deal, but ELIMINATING those deals that make NO sense and will waste your time. I will show you how to put hundreds of prospective deals in front of you and how to eliminate the "sour apples", resulting in YOU, bringing in a heck of a lot of AWESOME DEALS that will make you money!

Buying ALL CASH, AS-IS, is the "COOLEST WAY" to buy Real Estate!

Buying Real Estate ALL Cash, As-Is and without a financing contingency is simply the BEST way to buy Real Estate at rock bottom prices. There are No Money Down books out there that ask you to beg the seller for mercy or "get creative" somehow, even apply for grants, lol.

I see "students" come and go every day because they have NO CHANCE against cash buyers such as us.

There is only ONE way to buy Real Estate and that is ALL CASH - AS IS.

There is NO WAY around it. Even flimsy No Money Down techniques require CASH from "somewhere".

So rather than sending you to HUD or some "home buyers program", I am going to show you how to line up $1,000,000, $5,000,000, $20,000,000 or more just for the asking, without a credit check and without one single monthly payment you have to pay. Sounds incredible? I bet that's what you think, right? But yes, ALL CASH it is! After all, CASH TALKS, right? RIGHT! With ALL CASH, AS IS OFFERS, you can buy distressed real estate WAY below wholesale price and either flip it, wholesale it or sell it retail and make a juicy profit on that deal with very little effort. Buyers like us are most commonly known as a "Speculator" or "Investor".

You are basically a WHOLESALE/BULK REAL ESTATE CASH BUYER.

You buy Real Estate ALL CASH, AS IS, NOT CONTINGENT UPON FINANCING and can close within 30 days or less (cool huh?).

And also... A seller in a distressed situation tends to accept an ALL CASH, As-Is offer even if it is less than another offer that requires a mortgage, city inspections or has contingencies in it. If a SELLER accepts an offer with a mortgage, code compliance or other contingency, the property goes "Under contract" and is taken off the market. Then, the mortgage or code compliance, or other must be approved. If the mortgage is rejected for whatever reason, the SELLER has lost valuable time, exposed the property to added liabilities such as vandalism and the SELLER must start the selling process all over again. If the property is in poor condition, the SELLER must "bring the house up to code" in order for the buyer to obtain financing and that can be an expense (Make sure that the SELLER knows). In such an scenario, an ALL CASH, As-Is offer may be exactly what the SELLER needs.

"ALL CASH", "As-Is", opposite to offer contingent on financing that requires a loan, are guaranteed to the seller.

Make realistic offers, but ALWAYS meet the profit requirements and ratios. The important thing is to get a foot in the door as early as possible with an offer high enough for them to accept it, yet, low enough to create a sweet profit margin. ALL cash, As-Is offers are the most powerful offers that you can make, but please, DON'T end up looking like an amateur trying to bail out of a contract or doing "stupid things" just because you didn't "do your part" correctly, ok? To save you from "such pain", I recommend you READ this entire manual section at least twice to get familiar with the business and THEN FOCUS on the "cookie-cutters" as that is what I do all the time. The cookie-cutters are designed to help you quickly "handle" common situations in a professional and efficient manner. Ok then, let's "plunge straight into it" ... I know that I'm going a bit fast, but rather than give you endless "black board" examples of make belief scenarios and pump you full of information, let me show you some actual deals that I did.

  • I chose this house because it seemed vacant (and it was).
  • When still in front of the property, I called the tax assessor to get the owner and property information and 411ed to get the owners phone number.
  • I called the owner and asked him if he was interested in selling, I told him that I was a CASH buyer and that I would buy it AS-IS.
  • He said, "Yes, I want to sell it". When I asked for his Asking Price he said: "I would like $58,000 but I'm open for Offers if you pay cash".
  • I told him that I was standing in front of the property and asked if he could come down and show it to me now.
  • He said: I can be there in 20 minutes.
  • I said: Fine! While I waited for the owner, I pulled comps. (I called a "friendly real estate agent") and drove by the comps to establish the FMV of the property.
  • When the owner arrived, I made my Property Inspection.
  • I made an offer @ $43,000, he countered at $46,000, I waited for about 2 minutes and pretended to be running numbers in my head and walked around the kitchen again (not to seem too eager) and then I calmly said; "I think that I can make $46,000 work, but I can't close sooner than three weeks.
  • He said, "OK", so I wrote the contract and he signed it.
  • I bought the property for $46,000 and it appraised for $120,000...wow!
  • It only needed about $10,000 in repairs.
  • We sold it (AS-IS) within 12 days to an 80% Borrower! We even credited them $5,000 paint and carpet allowance. We also assisted with the closing costs. We made over $30,000 on this deal, selling it wholesale. This deal ended up a lot better than I expected. Keep your eyes open for wild scenarios in the future.

File Name: Murdoch

The Seller responded to an "I buy houses for cash" ad that I had placed in the "Real Estate Wanted" section of the Sunday paper. He told me that he was getting divorced and needed cash quickly. I gathered the information and told him that I would call him back in 20 minutes to set up an appointment to look at the house. The Seller told me that he had a 3 bedroom/1 bath brick house and he wanted $49,000 cash for it. Since I was in my car,… I called one of my associates that has access to the MLS, gave him the property address and asked him to pull some comparables within the map coordinate and on the subject street and call me as soon as possible with the results. I promised that if I bought it, I would give him a $500 fee when I sold it. Within minutes, my associate called me back to tell me that the property was worth between $95,000 - $100,000. I said thank you and asked him to fax me the comps. I called the seller and we agreed to meet the next day. When I got back to my house, I retrieved my faxes and went over the comps and I evaluated the deal (As explained in Step #2). After reviewing the comps, I established that the property could be worth up to $110,000 if fixed up REALLY nice. The next day, I drove down to the property and started to inspect it. The seller was next to me at all times and we had a nice, friendly conversation. When I was finished inspecting it I said, (like I ALWAYS do) "How much were you asking for the property?,…… and BINGO!!!! He made my day!!!! He said: Well,… I was looking for $49,000 but the best offer I have is $36,000. Can you believe he said that???? Well,… he did! And I had estimated the repairs to only $8,500. Without sounding to eager, I said to him, "If I could go all the way up to $37,000,…. Would you sign it up today?". He said "YES" and 10 minutes later I had a $100,000 house under contract for $37,000. (Not bad!). I called one of my Partners and explained the deal, and of course,… they agreed to put the money up. Immediately, I started calling my associates to tell them about the deal and found that 3 people may have somebody interested. I also told them that I could probably get them in at very good terms and with a very low or no down payment. 2 of the 3 found someone for the house and we went with the one that offered the asking price. Here's what happened:

  • We bought the house for $37,000 and begun to market it before we closed on it.
  • We received an offer of $105,000 on the house.
  • The Buyer was able to take out a 85% LTV loan (about $89,250).
  • We were to hold a second deed of trust of about $15,000 on the property.
  • We assisted with up to 3% in closing costs (or about $2,700).
  • Since these terms were very favorable to the buyer, we agreed that the buyer was to complete the repairs at his expense, which reduced our cost by $8,500.
  • We netted approximately $89,250 at closing.
  • We owed 37,000 on it.
  • The total NET profit was Approximately $33,000 (after expenses) plus a $15,000 second mortgage on the property.
  • The buyer ended up with a "No Money Down" deal on a great house and we moved inventory (WIN - WIN).
  • The deal closed 3 weeks after we bought it and I shared my profit 50/50 with my associates/partners.
  • I used NO money out of my pocket and spent only a couple of hours on it.

File Name: Ray

The Seller responded to an "I buy houses for cash" ad that I had placed in the "Real Estate Wanted" section of the Sunday paper. He told me that they were moving and needed cash quickly. I gathered the information and told him that I would call him back in 20 minutes to set up an appointment to look at the house. The Seller told me that he had a 3 bedroom, 1 bath brick house and he wanted $30,000 cash for it. Since I was in my car,… I called one of my associates that has access to the MLS, gave him the property address and asked him to pull some comparables within the map coordinate and on the subject street and to call me as soon as possible with the results. I promised that if I bought it,… I would give him a $500 fee when I sold it. Within minutes,…. My associate called me back to tell me that the property is worth between $55,000 - $65,000 I said " thank you " and asked him to fax me the comps and I evaluated the deal (As explained in Step #2). I called the seller and we agreed to meet the next day. When I got back to my house,.. I retrieved my faxes and went over the comps. After reviewing the comps,… I established that the property could be worth up to $65,000 if fixed up REALLY nice. The next day,… I drove down to the property and started to inspect it. The seller was next to me at all times and we started a very friendly conversation. When I was finished inspecting it, I said (like I ALWAYS do) "How much were you asking for the property?,…… They said $30,000. After running the numbers in my head,… I established that $20,000 was the highest I could go according to my $10,000 repair estimate, so I told them. They did NOT accept my offer at that time,… but they called me a week later and said: "Are you still willing to do $20,000?" I said yes,…. We met and signed it up. I called one of my Partners and explained the deal,…. And of course,… they agreed to put the money up. Immediately,…. I started calling all my associates to tell them about the deal and found 2 people that may have somebody interested. I also told them that I could probably get them in at very good terms and with a very low or no down payment. 2 of the 2 found somebody for the house and we went with the one that offered full asking price. Here's what happened:

  • We bought this house for $20,000 and begun to market it before we closed on it.
  • We received an offer of $67,500 on this house.
  • The Buyer was able to take out a 85%LTV loan ($57,375) and we were to hold a second deed of trust on the property and assist with up to 3% in closing costs.
  • The buyer ended up with a "No Money Down" deal on a great house and we moved inventory. (WIN - WIN)
  • The deal closed 8 weeks after we bought it and we netted approximately $48,000 (After costs). We owed 20,000 on it.
  • The total NET profit was Approximately $26,000 plus a $10,000 second.
  • I shared my profit 50/50 with my associates/partners.
  • I used NO money out of my pocket and spent only a couple of hours on it.

File Name: Whitby

The Seller responded to an "I buy houses for cash" ad that I had placed in the "Real Estate Wanted" section of the Sunday paper. He told me that they were moving and needed cash quickly. I gathered the information and told him that I would call him back in 20 minutes to set up an appointment to look at the house. The Seller told me that he had a 5 bedroom, 4 bath brick house and he wanted $200,000 cash for it. Since I was in my car,… I called one of my associates that has access to the MLS, gave him the property address and asked him to pull some comparables within the map coordinate and on the subject street and call me as soon as possible with the results. I promised that if I bought it,… I would give him a $1000 fee when I sold it. Within minutes,…. My associate called me back to tell me that the property was worth between $275,000 - $290,000. I said "thank you" and asked him to fax me the comps. I called the seller and we agreed to meet the next day. When I got back to my house,.. I retrieved my faxes and went over the comps and I evaluated the deal (As explained in Step #2). After reviewing the comps,… I established that the property could be worth up to $295,000 if fixed up REALLY nice. The next day,… I drove down to the property and started to inspect it. When I was finished inspecting it I said (like I ALWAYS do) "How much were you asking for the property?,…… They said $200,000. After running the numbers in my head,… I established that $185,000 was the highest I wanted to go, so I told them. They did NOT accept my offer at that time,… but they called me 20 minutes later and said: "If you can give us more than $192,500 we'll take it". I said "how about $193,000",….. They said OK,…. I turned my car around, went back to the house and signed it up. I called one of my Partners and explained the deal,…. And of course,… they agreed to put the money up. Immediately,…. I started calling all my associates to tell them about the deal and found 4 people that may have somebody interested. I also told them that I could probably get them in at very good terms and with a very low or no down payment. Two of them found somebody for the house. Here's what happened:

  • We bought the house for $193,000 and begun to market it before we closed on it.
  • We got an offer for $245,000 for it AS IS. We did NOT have to fix it up.
  • The buyer ended up with a GREAT deal on an AWESOME house and we moved inventory. (WIN - WIN)
  • The deal closed 12 weeks after we bought it and we netted approximately $240,000. We owed 195,000 on it.
  • The total NET profit was Approximately $45,000.
  • I shared my profit 50/50 with my associates/partners.
  • I used NO money out of my pocket and spent only a couple of hours on it.

File Name: Robinwood

The Seller responded to an "I buy houses for cash" ad that I had placed in the "Real Estate Wanted" section of the Sunday Paper. He told me that they were moving and needed cash quickly. I gathered the information and told him that I would call him back in 20 minutes to set up an appointment to look at the house. The Seller told me that he had a 3 bedroom, 1 bath brick house and he wanted $30,000 cash for it. Since I was in my car,… I called one of my associates that has access to the MLS, gave him the property address and asked him to pull some comparables within the map coordinate and on the subject street and call me as soon as possible with the results. I promised that if I bought it,… I would give him a $250 fee when I sold it. Within minutes,…. My associate called me back to tell me that the property was worth between $60,000 - $65,000. I said "thank you" and asked him to fax me the comps. I called the seller and we agreed to meet the next day. When I got back to my house,.. I retrieved my faxes and went over the comps and I evaluated the deal (As explained in Step #2). After reviewing the comps,… I established that the property could be worth up to $69,000 if fixed up REALLY nice. The next day,… I drove down to the property and started to inspect it. When I was finished inspecting it, I said (like I ALWAYS do) "How much were you asking for the property?,…… They said $30,000. After running the numbers in my head,… I established that $20,000 was the highest I wanted to go, so I told them. They did NOT accept my offer at that time,… but they called me 4 MONTHS later and said: "If you can still give us $20,000 we'll take it" I said, "when do you want to meet?". We met on a Saturday afternoon and signed it up. I called one of my Partners and explained the deal,…. And of course,… they agreed to put the money up. Immediately,…. I started calling all my associates to tell them about the deal and found 6 people that may have somebody interested. I also told them that I could probably get them in at very good terms and with a very low or no down payment. Three of them found somebody for the house. Here's what happened:

  • We bought the house for $20,000 and begun to market it before we closed on it.
  • We got an offer for $29,000 CASH for it AS IS. We did NOT have to fix it up.
  • The buyer ended up with a GREAT deal on a house and we moved inventory. (WIN - WIN)
  • The deal closed THE SAME DAY we bought it and we netted approximately $9,000.
  • I shared my profit 50/50 with my associates/partners.
  • No one used money out of their pocket and only a few hours of time was spent.

File Name: Utah

This is a Bank Owned (REO) property that came to me as a referral. This was a 2 family residence with the potential of converting it to a single family. The asking price was $19,900. I called one of my associates that has access to the MLS, gave him the property address and asked him to pull some comparables within the map coordinate and on the subject street and to call me as soon as possible with the results. I promised that if I bought it,… I would give him a $250 fee when I sold it. Within minutes,…. My associate called me back to tell me that the property was worth between $70,000 - $80,000. I said, "thank you" and asked him to fax me the comps. I called the seller and we agreed to meet the next day. When I got back to my house,.. I retrieved my faxes and went over the comps and I evaluated the deal (As explained in Step #2). After reviewing the comps,… I established that the property could be worth up to $85,000 if fixed up REALLY nice. The next day,… I drove down to the property and started to inspect it. When I was finished inspecting it, I went to a fax machine and faxed my offer to the listing agent. After running the numbers and considering $20,000 in repairs ,.. I started low at $8,000. My offer was countered several times,.. but we finally settled at $13,500 and we had a contract. I called one of my Partners and explained the deal,…. And of course,… they agreed to put the money up. Immediately,…. I started calling all my associates to tell them about the deal and found 2 people that may have somebody interested. I also told them that I could probably get them in at very good terms and with a very low or no down payment. One of them found somebody for the house. Here's what happened:

  • We bought the house for $13,500 and begun to market it before we closed on it.
  • We got an offer for $33,000 for it AS IS. We did NOT have to fix it up.
  • The buyer ended up with a GREAT deal on an AWESOME house and we moved inventory. (WIN - WIN)
  • The deal closed 4 weeks after and we netted approximately $19,500.
  • I shared my profit 50/50 with my associates/partners.
  • I used NO money out of my pocket and spent only a couple of hours.

File Name: Oregon

This is a Bank Owned (REO) property that came to me as a referral. This was a 2 family residence with the potential of converting it to a single family. The asking price was $24,900. I called one of my associates that has access to the MLS, gave him the property address and asked him to pull some comparables within the map coordinate and on the subject street and call me as soon as possible with the results. I promised that if I bought it,… I would give him a $250 fee when I sold it. Within minutes,…. My associate called me back to tell me that the property was worth between $80,000 - $85,000. I said, "thank you" and asked him to fax me the comps. I called the seller and we agreed to meet the next day. When I got back to my house,.. I retrieved my faxes and went over the comps and I evaluated the deal (As explained in Step #2). After reviewing the comps,… I established that the property could be worth up to $85,000 if fixed up REALLY nice. The next day,… I drove down to the property and started to inspect it. When I was finished inspecting it, I went to a fax machine and faxed my offer to the listing agent. After running the numbers and considering $10,000 in repairs ,.. I started low at $18,000. My offer was countered several times,.. but we finally settled at $22,500 and we had a contract. I called one of my Partners and explained the deal,…. And of course,… they agreed to put the money up. Immediately,…. I started calling all my associates to tell them about the deal and found 3 people that may have somebody interested. I also told them that I could probably get them in at very good terms and with a very low or no down payment. One of them found somebody for the house. Here's what happened:

  • We bought the house for $22,500 and begun to market it before we closed on it.
  • We got a $39,000 offer on it AS IS. We did NOT have to fix it up.
  • The buyer ended up with a GREAT deal on an AWESOME house and we moved inventory. (WIN - WIN)
  • The deal closed 8 weeks after and we netted approximately $16,500.
  • I shared my profit 50/50 with my associates/partners.
  • I used NO money out of my pocket and spent only a couple of hours on it.

File Name: Bella Clare

The Seller responded to an "I buy houses for cash" ad that I had placed in the "Real Estate Wanted" section of the Sunday Paper. He told me that they inherited a house and needed cash quickly. I gathered the information and told him that I would call him back in 20 minutes to set up an appointment to look at the house. The Seller told me that he had a 4 bedroom, 1 bath brick house and he wanted a cash offer for it. Since I was in my car,… I called one of my associates that has access to the MLS, gave him the property address and asked him to pull some comparables within the map coordinate and on the subject street and call me as soon as possible with the results. I promised that if I bought it,… I would give him a $250 fee when I sold it. Within minutes,…. My associate called me back to tell me that the property is worth between $45,000 - $50,000. I said, "thank you" and asked him to fax me the comps. I called the seller and we agreed to meet the next day. When I got back to my house,.. I retrieved my faxes and went over the comps and I evaluated the deal (As explained in Step #2). After reviewing the comps,… I established that the property could be worth up to $55,000 if fixed up REALLY nice. The next day,… I drove down to the property and started to inspect it. When I was finished inspecting it I said, (like I ALWAYS do) "How much were you asking for the property?"…… They wanted me to make an offer. After running the numbers in my head and according to the $10,000 fix up,… I shot $10,000,……. It was DEAD quiet in the room,… the seller replied, "can you do $11,000?",…and I said, "YES." Ten minutes later,… I had a $50,000 house under contract for $11,000. I called one of my Partners and explained the deal,…. And of course,… they agreed to put the money up. Immediately,…. I started calling all my associates to tell them about the deal and found 2 people that may have somebody interested. I also told them that I could probably get them in at very good terms and with a very low or no down payment. One of them found somebody for the house. Here's what happened:

  • We bought the house for $11,000 and begun to market it before we closed on it.
  • We got a $34,000 offer on it AS IS. We did NOT have to fix it up.
  • The buyer ended up with a GREAT deal on a house and we moved inventory. (WIN - WIN)
  • The deal closed 18 weeks after we bought it and we netted approximately $23,000.
  • I shared my profit 50/50 with my associates/partners.
  • I used NO money out of my pocket and spent only a couple of hours on it.

STEP #1: LOCATE

Main Index

My FAVORITE (and most effective) way is:

  • Word Of Mouth (Tell everyone that you BUY HOUSES FOR CASH and SELL HOMES BELOW MARKET VALUE. Everyone needs a home, or at least know someone that needs/wants one. Example: If you are a renter, YOUR LANDLORD is an Investor that may want more rentals. Don't discriminate, tell EVERYONE!
  • Pay CASH FOR REFERRALSevery time some one gives you a lead and you end up buying it. The $2,500 referral fee I offer motivates even "gang bangers" to feed me leads. Tell everyone, even your friends! 🙂

ADVERTISING (if you MUST. NOTE: I have not placed a Real Estate ad since early 1998) Advertising is a great and easy way to get leads. You want the following "hooks" to CLEARLY appear on ALL advertising: (See the Templates).

  • I BUY REAL ESTATE FOR CASH
  • I BUY VACANT HOUSES FOR CASH
  • AS-IS, No repairs or city inspections required
  • Quick Close
  • CASH PAID FOR REFERRALS THAT WE BUY
  • Your phone number and web site..

Where to advertise:

  • NEWSPAPERS This will get you a big response. They are cheap and will keep you very busy.
  • Bill-Boards are like newspapers, but they generate much more volume. However, a Bill-Board costs $1,250+ a month.
  • FLYERS/Direct Mail are great! You should be doing a lot of Direct Mail and other FLYER activities if/when you have the budget for it. (Use your imagination)
  • Internet, Phone & Fax Blasts are used to most effectively advertise our services and generate clients. This way we can effortlessly, and almost for free, let a lot of people know that you are around. Get familiar with software to mass market.
  • TV & Radio are the big volume producers. You should use media to mass-produce leads because it does work. As with Newspapers & Flyers, you must be properly trained to effectively handle the kind of volume produced by TV & Radio and Mass-Mailing. Therefore, make sure you're ready for it.

Examples Of Ad Content $1,000.00 CA$H PAID FOR REFERRALS THAT WE BUY! We Buy Houses for CA$H - AS IS - No inspections or repairs required %name% - %phone% or I Buy HOUSES for CASH AS IS - No inspections or Repairs Required - AS IS Fast CASH for YOUR PROPERTY NOW! Up to $1,000 CASH paid, for referrals that we buy %name% - %phone% or Do you have the house we are looking for? If so, We will beat any legitimate ALL CASH offer made by our competition or pay you $100! We Buy HOUSES for CASH AS IS - No inspection or Repairs required - AS IS - Just Fast CASH NOW! %name% - %phone% or I BUY VACANT HOUSES! %name% - %phone% or I BUY VACANT REAL ESTATE! %name% - %phone% get creative, stick to the facts... Real Estate Agents Prepare a list of all Real Estate agencies within your area and choose which ones you want to work with. IF POSSIBLE, find an agent that is money hungry and very coachable. If you do, it doesn't matter if he started the business YESTERDAY as YOU will be telling him/her what you need (as explained below on THE MLS). Your networking efforts and professionalism will increase the likelihood that agents will contact you about profitable properties. All agents are listed at realtor.com). When they give you a lead, ask for comps, evaluate, go inspect it and shoot an offer. What to do if you find a house that is LISTED ® If there is a Realtor® sign on the yard of a property that fit in to any of our "guidelines" i.e.: Vacant, in need of repairs, in foreclosure, bank owned (REO), on the market forever, etc., at least we know that the property is for sale and may be worth a shot! Call the number on the sign right away, and ask to talk to the Listing Broker/Agent (Name on Sign). Ask for the price, condition and Value in FIXED UP condition (comps). Ask for the lock box combination needed to access the property or make an appointment if it is on SUPRA. If you are going to meet the Agent, ask if he/she could bring you some comps! You MUST level with the Broker/Agent! After all, they are making money, too. MAKE FRIENDS! THIS ISVERY IMPORTANT! Find a Comfort-Zone! If the agent feels comfortable with you, he/she will bring business to you on an on-gong basis. In addition, it is a GREAT source for comps. Remember the "friendly agent" pulling comps for me?

  • If "YES, I can get you comps", ask for the comps specifically like this: "Please bring me a Quick print out of the TAX ROLL on the street, ALSO, please bring me a print out of the SOLD properties WITHIN 1/4 - 1/2 mile radius.

Take a look at the property and inspect it thoroughly Drive by the comps and establish the FMV. When your inspection sheet is complete, say "I will go home and run my numbers and will get back with you as soon as I can. Ask for his/her fax number and say "thank for your time, and please let me know if you have some more properties. Bye". WARNING: There are a lot of listed homes out there, only a handful fit our guidelines, screen them well. Do not chase impossible deals, TIME is money!REMEMBER: A Broker/Agent MUST, by law, submit any and all offers presented, an assist you regardless of price or terms you offer. That's their JOB! THE MLS If you are a Licensed Real Estate Agent, or if you have access to a licensed agent (Friendly Agent), use the MLS as a source for leads. Select a school district or area, and leaving the price blank, search for ALL AVAILABLE residential and 2-4 family properties in that area. Once the results are displayed, begin looking from the LOWEST asking price to the HIGHEST. The lowest ones will most likely be REOs and Fixer Uppers at deep discount. Gather information, pull comps, evaluate, go inspect it and shoot an offer. ONLINE It’s the information age; you can get information about EVERYTHING on the WEB. If you go to www.foreclosureworld.net and get an access code, you will have REO (Bank Owned) properties available 24 hours a day by becoming Member. If you don’t have access to the MLS, you are going to LOVE www.realtor.com to look for AS-IS bargains and REO’s listed with a Realtor (REO’s on the MLS are here). Once you have your leads selected, gather information, pull comps, evaluate, go inspect it and shoot an offer.

VACANT PROPERTY

Vacant homes and 2-6 family buildings are everywhere and easy to deal with. Every time you go to see a property, spend 15-25 minutes driving around the neighborhood. You will be surprised; there are a lot of VACANT properties out there. If a house is vacant, the owner is doing the maintenance on the property, and paying the taxes on it. If the owner moved to a new house, he/she may be paying two house payments. It could also be an inheritance and be free and clear. All this affects the seller’s motivation! Keep your eyes and ears OPEN! Use your "What to do when a house is Vacant" cookie-cutter to effectively locate all information necessary to strike a deal. PS: You will also find " for sale by owner" (FSBO) and listed property while driving the neighborhoods. Once you find a vacant property, gather information, pull comps, evaluate, go inspect it and shoot an offer. What to do when you find a VACANT home You will find several vacant homes "Just sitting there" when you drive the neighborhoods or when inspecting leads. Look for the following:

  • Tall Grass (No footprints in snow during winter)
  • Boarded up windows and/or doors
  • Stickers on front door
  • Electric meter not moving

So, you found it, now you have to find the owner to see if the property is for sale. You MUST know that the owner wants to sell it before you spend a lot of time into this lead. Here is how to find the owner of your lead. DO NOT leave without attaching your business card on the front door, the owner or a relative may come by and see it. Look at the TAX records. They have a web site, usually within the city's web site, that you can do a property search or a property look up on. All you need to do there is to type the address and the property's record will come up. See where it says OWNER and it will list names and mailing addresses. Or if you don't have access, Call your local TAX ASSESSOR and ask them over the phone. When your call is answered say: Hi, my name is %name%, I have an address which I need some information about.

  • They will ask you for the address, City and ZIP.
  • They will ask you; what kind of information do you need?
  • YOU NEED: Owners Name & Mailing address, Room count , TOTAL appraised value and any recent sales.

Now you know file name & Address of a person that owns a vacant property. Call 411 if local address or (area code) 555-1212 if outside your area. Now you are ready to make contact, Pick up the phone, call and say the following: Hi, My name is %name%, I'm looking for (Owner's Name). Wait for Owner to get to phone then say: I am calling you in reference to your house on ( Lead Address). Do you have a minute to talk about it? Hopefully they'll say YES. Then proceed to ask: "Are you by any chance looking to sell it? I pay cash and close quickly". (Wait for answer)

  • If NO, Say: Thank you for your time and make sure to leave your phone number
  • If YES, You've got a fish on your hook, Let's reel it in.

Ask them to tell you what they know about the property. Find out as much as possible; ask your questions and let them do the talking. LISTEN! Do NOT sound like you are reading a sheet. Here is where your conversation skills come to play. SOUND NATURAL & CONFIDENT. Make them feel comfortable with you. Your job is to gather information about the property and, of course, their level of willingness to sell. NOT to strike a deal right there & then. Make an appointment to see the inside! Take a look at the property and inspect it thoroughly Drive by the comps and when your inspection sheet is complete, go to the next step.

FSBO (For Sale By Owner)

This means that the SELLER handles the sale and no Real Estate agency is involved. This is usually indicated by the for sale sign saying FOR SALE BY OWNER. There are many web sites where FSBOs are listed so go to google.com and do a search on FSBO or for sale by owner in your area. If you are looking for FSBO’s in the paper, look for "tell tale" signs in the ad. Ex: For sale by owner, Motivated, Need Cash, Need fast sale, Seller Flexible, etc. etc. If you are driving the neighborhoods, look for FSBO signs on properties that are in some need of repair. Ex: roof is bad, needs landscaping, stickers on doors, the interior needs repairs (if looked through window), seller needs fast CASH, etc. Once you have located an FSBO, gather information, pull comps, evaluate, go inspect it and shoot an offer.

PRE-FORECLOSURES This is the most sought after and hardest market to deal with.

(Only the elite play this game). When somebody is in FORECLOSURE, it means that they haven’t made the mortgage payment for several months and the bank is to SELL the property to the highest bidder at the set sale date. If a property goes through the foreclosure sale, not only is the (ex-) homeowner’s credit destroyed, but also they get evicted within 30 days by the sheriff. This situation leaves most homeowners with two simple choices: Borrow money and KEEP their home or sell the house. Since we buy homes and do loans, foreclosure is a great field to find deals. In order to effectively work the foreclosures,… you must find a service that provides such lead service in your area. DO NOT go to the courthouse and do your own research, it is NOT worth it. If you can not find a lead service, skip foreclosures all together until you find one. Due to the nature of foreclosures, they are considered to be the hardest field in our industry.

It requires CASH and KNOW-HOW. If you establish yourself in the foreclosure field, you’ll be playing with the best. Use your "How To Approach A Foreclosure" cookie-cutter to get into these deals. If you can not get in the property and strike a deal before the auction, get prepared to attend the sale to bid on it. Once you find a foreclosure lead, evaluate the information, pull comps, go inspect it and shoot an offer. How to approach a pre-FORECLOSURE When you are ready to tackle foreclosures, do not be afraid to call or knock at the door! The lead must be called and/or visited if you intend to get this deal! If you get nervous in the beginning, it’s OK, I was.

But the more you do it, the easier it gets. You MAY want to consider doing a few vacant and listed deals so that you feel comfortable with yourself before approaching foreclosures as they require you to do everything 10 times faster than nature intended, ok? However, once there, the most important thing is to make them feel comfortable with YOU.

Find something in the house to talk about, look around and start a friendly but short conversation. Then tell them the reason you are there. RELAX: Your job is to gather informationabout the property and, of course, their level of willingness to sell or save the home, NOT to strike a deal right there & then. At the door or if you call: Hi, my name is (YOU) I am looking for (Names on lead). Nice to meet/talk to you, I hope this is not a bad time, do you have a couple of minutes and some privacy so we can talk about the problem with your bank? (Wait for the answer)

  • If answer is "What do you want to talk to me about?" say: I understand that your bank wants to foreclose, and looking at your records, I think I can help you.
  • If answer is "NO" or "Not Interested" say: I understand. If you change your mind, I'm willing to help you out, so please take my card and give me a call.
  • If answer is "YES", GO IN, you have a 50% Chance to strike a deal. explain that you understand that his/her bank wants to foreclose and that you want to help.

Inside the house, once the "SERIOUS" part begins: Ask: "What would you like to do, are you looking to keep or sell the house?"

  1. If "I want to sell", ask to take a look around AND FILL IN YOUR SHEET, run your numbers and put them under contract. Husband & wife must sign.
  2. If "I would like to keep it" then firmly ask: "Ok, great, let me get you a loan then. I understand that your credit is bad right now but I deal with private money which is easier to lend. There are NO up-front fees or any obligation. All fees are paid by the loan but only IF you get it. If you do not, you owe me nothing at all, fair enough? I know it sounds good, but if I can help you take care of this problem, will you be able to pay the money back?" IF "NO" Tell them that they should consider selling to you and revert to option 1 above and inspect the house to make an offer. BUT IF THEY SAY "YES, WE WILL BE ABLE TO PAY MONTHLY PAYMENTS ON TOP OF MY MORTGAGE", then say "Then I will try to fix this for you. Do you know how much you owe your bank? "Do you know how much it would take to reinstate your loan and bring it current?" "Can you please complete this application so I can check your credit and this Release to obtain your Reinstatement amount from your bank?". Have them complete AND sign a credit application and a payoff & reinstatement request! Check for LOAN NUMBER and Bank’s TELEPHONE NUMBER, IT’S IN THE PAYMENT BOOK. Refer to the advanced sessions manual for exact details on Emergency Loans and other techniques for "saving their home".

That's IT, thank them for their time! It's time to go home and get the deal rolling! DO NOT LEAVE WITHOUT SIGNED PAPERS! NEVER EVER leave an "open" contract (signed by you but not by them) with them to "think about it". If you leave an open contract, the next "guy" will come, offer $1,000 more and steal your deal. If you EVER encounter a seller with an open contract, beat the deal and take it to close! Capicce? 🙂 Remember: People in foreclosure tend to be a little edgy at times, so make them feel comfortable. Be a friend! After all, you will save them from losing it ALL. If you are asked about how much your fee is, simply say that you don’t know at this time but you will let them know before they commit to anything. Remember: This is a very competitive business, where you have to get in the door before the competition. From time to time you will find stationary & literature of others at the property, use discretion. Drive by the comps and when your inspection sheet is complete, go to the next step. PROBATE SALES Probate leads are usually bought from local service companies. Ask your courthouse or investment club for more information about this service. Use your "PROBATE cookie-cutter" to generate BUSINESS. DO NOT go to the courthouse and do your own research, it is NOT worth the time. If you can not find a lead service, skip probates all together. How to approach PROBATE leads As with foreclosures, you MAY want to consider doing a few vacant and listed deals so that you feel comfortable with yourself before approaching probates as they require you to do everything 10 times faster than nature intended, ok? With PROBATE I use the same script that I use when talking to owners of vacant property, but go VERY easy, after all they just lost somebody dear or close to them and you are trying to buy the home they left behind.

SILK GLOVES! DO NOT STEP ALL OVER THEM!

Once you know the name & number of a person that is in charge of a property, you are ready to make contact with the person responsible for the house (The personal rep.). Pick up the phone, call and say the following: Hi, My name is (YOU) , I’m calling for (Personal Rep). Wait for Owner to get to phone then say: I hope I'm not calling at a bad time, this is in reference to Mary Rose's house on 123 Any Street, do you have a minute? Hopefully they’ll say YES. If not schedule a later time to call them back. Then say: I noticed that you are in charge of the house and I wonder if you are looking to sell it.

  • If NO, Say : "Thank you for your time", and make sure to leave your phone number.
  • If YES, You've got a fish on your hook, Let’s reel it in. Ask them to tell you what they know about the property's condition. Find out as much as possible; ask your questions, then let them do the talking. LISTEN! Make them feel comfortable with you. Your job is to gather information about the property and, of course, their level of willingness to sell, NOT to strike a deal right there & then. Always make an appointment to see the inside,… NEVER make an offer without viewing the inside of the property.

VA and/or HUD

Where a qualified veteran borrows money under the VA program, the loan is made by a conventional lender and then guaranteed by the VA. In the event of a default or foreclosure sale, the lender may receive the property back if no Investor bids an amount higher than what is owed to the lender. When this happens, the lender may keep the property or convey it to the VA. If the VA receives the property, the agency assigns it to a local management company (a real estate broker), who then prepares the property for sale. This preparation includes evicting anyone living in the property, making the needed improvements or repairs, etc. The property is then offered for sale to anyone, veteran or non-veteran. As a rule, you will not be able to buy VA properties for 40 or 50 cents on the dollar.

You should not waste too much time submitting offers on VA owned properties. You can find these properties at: www.firstpreston.com Or at www.hud.gov DIVORCE When people get divorced, there is often a need to sell Real Estate. Most of the time, and especially, if the loan balance, if any, is low, you can get fantastic deals within the divorce industry. There is usually a high level of motivation from the SELLER, which is good for YOU. You can find these leads from local services that advertise in the local legal papers (where the legal notices are usually posted). You can also go to the courthouse and ask the clerk how to search for the divorce files.

And, of course, any time you "over hear" that anyone is getting divorced, tactfully inquire about the house. Once you find a Divorce lead, gather information, pull comps, evaluate, go inspect it and shoot an offer. Lenders/Banks Once a property is foreclosed on, it then belongs to the institution that filed the foreclosure action. (R.E.O.) All Lenders and Banks (big and small) take property back through foreclosure. That’s a fact. Many list their property through Real Estate Agents; you’ve got to find those Agents and Network. When possible, try to establish a relationship with the Lenders Assets Manager. That way you will have the opportunity of buying STRAIGHT from the BANK. Once you receive a list of properties, gather information, pull comps, evaluate, go inspect it and shoot an offer. Back to index

STEP #2: Evaluate Main Index

AVOIDING BUYING FEVER

At this point, you need to see if the lead you are working on is worth your time. Your time is MONEY, don’t waste it. In order to become a successful Evaluator, you must do what the numbers tell you to do and NOTHING else. (This is the MOST IMPORTANT section in the whole manual) The SELLERS emotions, feelings, or asking price does NOT ever affect the way we run Our Numbers. Please, NO exemptions. The reason for this is simple: The number ONE reason MOST people fail in the Real Estate Speculation BUSINESS is because they buy the wrong deal due to: BUYING FEVER. This is how to find out if you suffer from BUYING FEVER:

  • When you are working on this deal that you know doesn't really make sense, but… it’s HERE, and you "TRY & TRY" to make it work. (you may even be considering to buy it "for more than your calculator tells you should buy it for).
  • When the Numbers tell you: "Offer $20,000" and you raise your bid to $25,000 just to satisfy the SELLER's wishes, or just because "you feel "$25K will take it".
  • When you think that the Asking price is the lowest a SELLER will accept and offer the asking price, even if your calculator tells you,…. NO! NO! NO!

YOU'VE GOT BUYING FEVER I agree, it does sound funny, but it is not funny at all. It is a very dangerous situation that you must avoid at all cost. NEVER, EVER, MAKE AN OFFER WHILE SUFFERING OF BUYING FEVER. Always make sure that ALL your numbers areaccurateand stick to what the calculator tells you! If you don't and a mistake is made, REAL money will be lost. Please Be Careful! Don't make mistakes and let "the fever" take over and spoil it for you. You have to master the formulas and the CASH BUYER SYSTEM (and control YOURSELF). By the time you have finished this manual, you'll know exactly when to buy and when to pass. Evaluating a prospective deal

  • If you were to tell me that you have a single family home on 5150 Profit Street, it needs some carpet and paint, the roof may pass, the ceiling needs minor repairs, the area is up and coming, the owner wants to sell it fast so you think that we can take it, I can't help you much. In fact, nobody can, not enough information.
  • But, if you were to tell me that you have a $90,000 house, it needs $4,500-$6,000 in Repairs and the Asking Price is $58,000 CASH. You can easily assess the potential of any deal without even seeing it.

So, in order to ACCURATELY evaluate a property, you must know 3 things:

  1. How much can it sell for?
  2. How much in Repairs?
  3. How much can you buy it for?

You should to know this BEFORE you physically go the property and especially before submitting ANY offers. EXAMPLE: Asking Price: $58,000, 5150 Profit St. 63123, For Sale By Owner This is the address that we will use for our examples. However, the NUMBERS are taken from a REAL deal. At this point, all that we know about the property is:

  • Address
  • Asking Price
  • Seller's phone number

We need to find out

  1. How much you can sell it for
  2. How much will it cost in Repairs
  3. How much can you buy it for

1) HOW MUCH CAN YOU SELL IT FOR? (Getting the Fair Market Value - FMV)

  1. Ask the Seller if they have a recent appraisal.
  2. Ask a friendly Real Estate Agent to pull comps for you. Comparable sales (comps) are simple MLS records of recent sales in the immediate area of your lead. Usually within 1/4 - 2 mile radius from the subject property. (Offer to pay $250-$1,000 LUNCH MONEY to the agent if they pull comps from you and you buy.
  3. Pull comps yourself on the MLS. (If you have access).

Pulling Comps on the MLS (Authorized MLS members only) If you have the right to access the MLS or know somebody who is, (like your "friendly agent"), let me show you how to get an accurate FMV/Appraised value. This is exactly what an appraiser would do. Be sure to make the search as "tight" as possible to match the subject property. If the subject is a 3 bedroom then only look for 3 bedrooms 2 bath homes and so on.

  1. Your FIRST step is to look up the TAX RECORDS on the street. This will pull up the history of all properties on the selected portion of the street. Limit your search to 3 blocks in either direction (ie: If subject's address is 5150 Profit Street, then search for 2000-8000 Profit Street). This will give you an educated idea of the FMV. Sometimes it won't be easy to find an obvious FMV/Appraised on the same street and within a few blocks. If so, using a map as a guide, pull 4-5 Streets surrounding your SUBJECT Street and find COMPARABLE SALES. You will see that there may be MORE SOLD properties on the TAX records than on the MLS. This is because not everyone uses a Realtor to sell their home and if a Realtor is not used, it never hits the MLS. All the sales are recorded in the TAX RECORDS.
  2. The SECOND step is to look in the ACTIVE, PENDING, and SOLD MLS LISTINGSwithin 1/4 - 1/2 MILE RADIUS of the subject property (Appraisal can go out to 2 mile radius). This search will pull up all ACTIVE, PENDING, and SOLD listings within the desired RADIUS.
  3. The THIRD step is to "matching apples with apples". (NOTE: Active listings tell you WHAT OTHERS ARE ASKING FOR SIMILAR PROPERTIES, PENDING listings tells you how much SIMILAR PROPERTIES ARE UNDER CONTRACT FOR, and Sold listings tell you how much SIMILAR PROPERTIES actually SOLD for). Look over the comps and compare them to the subject property. For the appraisal's sake, bank on the SOLD listings and hope for the Active/Pending. So, WHICH 3-5 SOLD PROPERTIES are SIMILAR to the subject property and what is the AVERAGE sales price? Make sure to pull COMPARABLE PROPERTIES. If your lead is a Brick 1 story 7/3/2 with 1750 square feet and built in 1925, your comps should consist of Brick 6/3/1s TO 8/3/2s with 1500-1900 square feet and built 1900-1950. A GOOD comp is a property as similar as possible to your lead (Preferably IDENTICAL). For example: If there are 4 homes SIMILAR/COMPARABLE to the subject property and they sold for $165,000, $167,000, $159,000 and $162,000, I can confidently say that the subject property has a Fair Market Value of $$160,000 - $165,000, right? That's how simple it is to evaluate comps 🙂

At this point, You should have:

  • "Checked through" over 15 homes that recently sold in your LEAD’S area.
  • At least 4 homes that are within a 1/4 - 1/2 mile radius of your LEAD (Same street is preferable, use mapquest.com or other software to exactly pinpoint your comps)
  • Established a +/- $5,000 ACCURACY in your FMV/Appraised Value

2) How much will it cost to Repair? (Guesstimating the Repairs) Before anything else, ASK THE SELLER if he/she knows how much it will take to Repair/Rehab the property. Some sellers have gotten bids (especially on larger rehabs) and chose to sell it for CASH after realizing the work and money involved in a total rehab. To get an accurate Repair Cost Estimate you have to actually go down to the property and inspect it using the Property Inspection Sheet. This is the most time consuming part of the BUSINESS, that's why you want to GUESSTIMATE FIRST and if the deal is "close", THEN, go inspect the property. But to make things a little easier, I will tell you that MOST of the properties I've Bought & Sold (that didn't need complete rehab) required between $10,000 $20,000 in repairs. Complete rehabs on an average home can become expensive (About $60 per square foot on average). Don't be scared of total rehabs, there's a LOT of money in total rehabs for everyone involved (You, your partner, the investor buying it, and the end user need to see a decent profit)! By

GUESSTIMATING THE REPAIRS

You will be able to PRE-RUN your numbers AT HOME, without going to the property. This will allow you to quickly see if it is worth your time going to the property at all, which in turn, will make your time spent extremely effective. If, after running the numbers ON PAPER, it looks like there MAY be a deal to be made, THEN, go down to the property and INSPECT IT (see STEP #3 INSPECT for details) 2) How much can we buy it for? (Checking if the asking price is too high) Well, the asking price can be used as a guideline, but it is IRRELEVANT to your offer. Sometimes, the asking price will be CLOSE to the OFFER that works for you, and sometimes, the asking price will be FAR AWAY from the OFFER that works for you. Either way, STICK TO THE FORMULAS! Running The Formula Now that you have the FMV, the Repair Cost guesstimate, and an idea of how much you could buy this property for (asking), you need to run THE FORMULA to establish the amount you are going to OFFER. Let's assume that the FMV is 90,000, the Repairs are 10,000, and the asking price is $58,000.

THE FORMULA:

FMV multiplied by 0.85, Minus Repairs, Minus Profit, equals the amount to Offer. EXAMPLE OF FRONT FORMULA ON 5150 Profit St. FMV $90,000 x 0.85 - Repair Costs $10,000 - Required Profit $20,000 - OFFER $46,500 Now that you have ran THE FORMULA:

  • If the deal does not make sense at this point (asking price to high),….. let it go! (or give the seller your best GUESSTIMATED OFFER). Always follow up in 7,14 and 21 days. They may be ready for your offer then (?)
  • If the SELLER is too far away from the PRICE you plan to OFFER (asking price too high),…..…let it go! (do give the seller your best GUESSTIMATED OFFER). Always follow up in 7,14 and 21 days. They may be ready for your offer then (?)

If the numbers DO make sense (close or right on your OFFER) Go take a look at the property ASAP and inspect it in order to get an accurate repair estimate. (Don't forget to drive by and look at the comps to tighten up the FMV). Lock it up under contract as soon as possible. Why do we "shave 15% off the top"? The Answer is: "Soft Costs". Soft costs are expenses such as Real Estate commissions to agents, closing costs, holding costs, Interest, utilities, grass cutting, etc. By the time it is all said and done on a retail deal (front formula), about 15% of the sales price is practically gone. In the BACK example, the reason we use 80% (or whatever the LTV may be) is because since we are taking back a second mortgage instead of receiving the down payment, we will have to wait a few years to get paid the balance (on top of the new first mortgage). Either way, don't worry to much about that at this point. Your money partner will handle the up front soft costs. Just stick to the formula and we'll discuss soft costs after your 10th deal, ok?

A TEN MINUTE PROCESS

When you feel comfortable with the system the evaluation process should not take more than ten (10) minutes to complete. (In fact, I do it in 5 from my cell-phone). You will be able to have a pretty good idea of how much to pay for and what to do with ANY house. All you need to FOCUS on is answering to 3 simple questions (FMV? Repairs? Price?). Now, You have to STREAMLINE the evaluation process in order to maximize your time and buy more deals. By FOCUSING on what matters, you will effectively compress your time and be able to evaluate more homes that you thought possible.

Back to index STEP #3: INSPECT Main Index

Introduction To Estimating the repairs Forget guesstimating the repairs now. Now you have to "become better" than a general contractor and figure the EXACT REPAIR COSTS so you can accurately "run" Your Numbers using the formulas. Otherwise, you will be gambling with your buyer's money (especially if he/she is an investor). Start your Property Inspection Sheet on the outside of the property and work your way to the inside. All information must be entered onto the Property Inspection Sheet so that you don't forget it. SERIOUS MISTAKES can be made in this section "if you forgot", right? So please, be thorough with your inspections and write EVERYTHING DOWN.

Once you have mastered the inspection and are 100% sure of yourself, you can go through a building in 10 minutes, run all the numbers in your head while talking on the cell-phone negotiating a different deal (that's how I do it) and just write the total repair costs down when you get back to the car. Beware, it will take you years before you get to that point! Until then, DOCUMENT your data, use a calculator, triple check your numbers and be your own biggest skeptic, ok? Over-estimate rather than under-estimate the repairs, but don't kill the deal unless it needs to be killed (too much work)! Always aim for exactness. Once you can estimate a rehab within +- $1,500, "you're getting there". Until then, practice on EVERYTHING you see, even if you don't intent to buy it. Practice makes perfection. Keep your eye out for features that are potential problems and features that enhance the property marketability. Also, look for things that deteriorate the sale of the property such as, bad block, vacant properties in area or any other issues that would make YOU stop and think: "would I feel proud and safe living here with my children?"

Your first step is to evaluate the exterior of the property Landscaping How would you like your house to be landscaped? With that in mind, check for tree branches that overhang the roof. Overhanging tree branches can damage the roof and prevent the roof underneath from drying. Dead trees can endanger the occupants if it blows down in a storm. A termite nest in any dead tree could mean that the house is also infested. Trees too close to the foundation have the potential for damaging the foundation wall or affecting the entire basement. Check if any fencing on the property and if not, determine if it is needed. Patio/Deck When inspecting a patio or a deck, be sure it is pitched/provides proper drainage. Also check for any cracks warping. A poured cement patio is more durable than one of bricks or blocks laid over a sand base. Decks should generally be constructed of pressure treated lumber or recycled plastic lumber.

Check for signs of rotting or warping on any wooden patio/decks. Pool A pool can be an attractive feature to some buyers, but it generally detracts from the marketability of a property. Potential buyers, especially those with children, are often scared of a pool because of the potential for their children drowning while playing in the back yard. But then again, not everyone has this opinion, so when inspecting a pool, check the liner for wear and tear, and the foundation for visible signs of stress or cracking. Check the pool area and the condition of the plumbing and filter. If in doubt, get bids. Driveway If the driveway is mostly either concrete or blacktop.

Check for cracks or erosion along the sides and on the surface. If the driveway is badly cracked, some sections may need repairs or replacement. If the entire driveway has to be replaced, the cost could be thousands of dollars. If the driveway is crushed stone or gravel, see if it is washed away or has standing water. If so, the driveway may require re-grading. If in doubt, get bids. Foundation One of the most important things to examine when inspecting a house is the foundation. The age of the house will generally determine if the foundation is stone, concrete block, poured concrete, or brick. It may even be a mixture of the above if an addition has been built onto the house. Check the foundation for deterioration.

This could require expensive repairs. Check for uneven settlement that makes house and or/floors/walls "lean to one side or the other". Look at the door and window frames and make sure that they are square. If the window and door frames are not square, the foundation may be shifting. If the foundation has bulging side walls or a large separation (huge crack); there may be serious damage and you should most likely pass on that deal. If in doubt, hire an engineer and get a bid to rectify the issue. Roof If the floors inside the house are wet, there must be a hole in the roof, right? Also, look for water damage in the interior ceiling of the property. Water damage on a ceiling indicates a leak on the roof. Examine the roof covering and take note of the pitch or slope and the "squareness" of the roof tiles/shingles.

A roof with a good pitch or slope is less likely to leak than a flat roof with roll roof covering. Check the flashing around chimney and stack vents. Look for general signs of aging. If the ridge of the roof is sagging look for patched or damaged sections, or different colored shingles to find repaired areas. Determine if the roof has more than one layer of shingles. If only one layer, repairs may be limited to putting a new roof over the old. If two or three layers of shingles are there and in poor condition, it is likely that a new roof is needed.

Wood exterior The wood exterior on a property generally consists of window trim, doors and door frames. Examine the condition of the exterior to determine if scraping, painting or replacement is needed. Check if rot or any other signs of deterioration are at the bottom of doors and door jams. Exterior Walls And Siding The exterior of a house has many forms of siding including brick, stucco, aluminum, vinyl, wood, asbestos, etc.

  1. Brick - When inspecting an exterior brick wall, check for cracks in the bricks. Also, check the wall for bulges. Check the pointing of the brickwork to see if it is intact, loose or crumbling. Look for bowing walls, look at "squareness" of the building.
  2. Stucco - Many older homes have stucco exterior. When conducting your inspection look for cracks in the stucco, this is a sign of foundation shifting or moisture between the stucco and the wall. Look for spots where the stucco has "pulled away" from the wall. (bulging). If the bulge is small, the problem is not likely to be severe. However, if an entire wall has bulged, the foundation may be suffering. This condition requires closer examination by trained professional. Get at least 1 bid.
  3. Vinyl, Aluminum and Steel - All forms of siding have advantages and disadvantages. Whatever the form, the current siding should not be replaced unless it is in excessively poor condition. Determine that all siding is secured snugly to the side of the house. Loose siding may indicate that the wall behind the siding is damaged or that the nails used to secure it have come loose or fallen out. Also, check to see if the siding is level. If not, this may indicate a problem with the exterior wall under the siding, or a settlement problem. Attempt to determine if the siding was used to cover up a deteriorating exterior wall.
  4. Wood Siding - A large number of homes have what is called beveled clapboard siding. Usually this type of siding is painted. Examine the condition of the existing paint, and determine if scraping, priming or painting is required. Stand at each corner of the property to see if the siding is level or has any bulges or waves along the exterior walls. Check for pieces of damaged or rotted wood. This may be a sign of water migration behind the siding or insect infestations.
  5. Asbestos Shingle - Make certain the general condition of the siding is good and free of loose or missing shingles. Determine the need of repainting. Cracked, broken or missing shingles require replacement. Since asbestos is a known carcinogen, shingles must be removed by a certified asbestos removal company. This can be costly.

Porches The porch is the area most vulnerable to decay and insect infestation. It is important to examine a porch closely to determine if it can be repaired. Use a screwdriver to check the railings, balusters and porch posts for rot. Poke at the base of posts, or wherever two members join and/or water might settle. Test the floor for weaknesses by jumping on it. Examine the condition of the floorboards for obvious visible signs of poor maintenance. Closely examine any wood members in direct contact with the soil. If the porch is in a generally deteriorated condition, it needs to be completely rebuilt or removed. Replacement or removal of a porch can be quite expensive.

Garage Inspect the general condition of the structure and make certain that it is relatively free of any major cracks or settlement problems. Examine the construction of the concrete slab floor and determine its general condition. Look up at the roof rafters for evidence of water entering through the roof covering. Use a screwdriver and probe for rotted or damaged wood. This could indicate water damage or insect infestations. Check the condition of the garage door and how well it opens and closes. If the garage has an electrically operated door opener, make certain it operates properly. If the garage is wood constructed and free standing, it may be considered a fire hazard and a violation of local fire safety codes.

It is important to note the type of garage construction on your Property Inspection Sheet. If a detached garage is in to bad condition,… simply tear it down. ($1,000-5,000) Foundation Only a trained professional can accurately determine the costs associated with a foundation requiring extensive repair. Even minor repairs can cost up to several thousands of dollars. Do not be concerned with estimating the cost of foundation damage. Make certain to note this on the Property Inspection Sheet and contact two - three qualified contractors to obtain bids. GO INSIDE THE PROPERTY TO INSPECT IT Windows Check all windows for a snug fit, and the lashes and sills for decay, also check to see if the windows open and close without binding. If many windows are broken or in poor condition, note on the Property Inspection Sheet whether repair or replacement is required. Also note the existence of storm windows, and their condition.

Replacement costs for non-standard sized windows are significantly higher than standard sizes. Carpeting/Hardwood floors Determine the general condition of any and all carpeting in the house. Where carpeting needs replacement, pick up the carpet, then determine if the floor is plywood or hardwood. If the floor is plywood, carpet replacement is necessary. Hardwood floors do not always require new carpeting because they may be refinished. When completing the Property Inspection Sheet, note the type of floor underneath the existing carpeting.

Examine the general condition of hardwood floors. Areas in poor condition that are cosmetically unappealing, or have uneven floorboards, will require complete refinishing. Areas with stains or watermarks can easily be restored through light sanding and one application of polyurethane. The floor’s location in the house will determine if it should be refinished or carpeted. Pet Urine The problem of pet/urine odor should be taken very seriously. Make sure to note the existence of any pet/urine odor on your Property Inspection Sheet. Pet/urine odor can be almost impossible to eliminate completely. All carpeting must be removed and may even require the sanding and refinishing of the flooring underneath the carpeting. In extreme cases the walls may need to be replaced, and the studs primed and sealed to completely remove the odor.

The costs to eliminate pet/urine odor can be quite expensive. Walls & Ceilings If they have not recently been renovated, older homes will have plaster walls and ceilings. If a home is fairly new, the walls and ceilings are drywall. Examine all plaster walls and ceilings thoroughly for damage. Taping and spackling can repair minimal damage very easily. If the damage is extensive, complete removal and replacement of the area may be required. Tap several areas to ensure that the plaster walls are firmly set, and that no deterioration is apparent. Examine the areas around all doors and window frames. Check for water stains, which may indicate leaks from the exterior. If the walls are wallpapered, several layers may be present. Often, wallpaper has been applied to plaster walls to hide imperfections.

As a rule, all wallpaper needs to be removed and the walls prepared for a fresh coat of paint. This can be easily overlooked if painted or primed. When inspecting a house with drywall, check for any exposed nail heads. Also note any exposed tape where drywall sections are joined. These may be signs of settling, excessive vibration or moisture in studs. Such sections can usually (not always) be patched with joint compound wherever they are damaged or loose. If walls are paneled-sheets, make sure to check if the paneling is firmly nailed or glued in place or if there are any bulges. Examine the ceiling for any signs of water stains. Such stains indicate leakage from the roof, gutters or exterior walls. They may also be caused by leakage from a bathroom or kitchen on the floor above.

Paneling is a good cover up for bad plaster. Bedrooms The number, design and layout of the bedrooms, as well as how they function and flow throughout the house, play a key role in positively influencing homebuyers. If bedrooms are too small or without adequate closet space, the house can be considered functionally impractical. Ceiling height is a key factor in attic style bedrooms, along with a functional closet per room. This problem adversely affects the market value and marketability of the property. Many older homes suffer from this shortcoming.

It is important to note this problem because it influences the determination of the FMV. Kitchen Depending on its condition, the kitchen can either greatly add to or detract from the property’s marketability. Be sure to check the walls, floors and ceiling for cracks or water stains. Check countertops for signs of wear & tear, burns or stains. Inspect the sink for cracks, chips and stains. Depending upon where the property is located, a severely cracked or chipped sink may violate local building codes and require replacement.

Check the cabinets to see if they require minor refinishing, repainting or replacement. If a kitchen is old and obsolete, modernize the entire kitchen to enhance marketability. Plumbing and electrical work should be inspected as outlined in the SYSTEMS section. Bathrooms Check that the bathrooms are adequately sized. Look for cracks or stains on the walls, ceilings and floors.

Make sure the fixtures are tightly installed and sealed. Inspect the tiles, grouting and caulking around the shower or bath. Plumbing and electrical work should be inspected as outlined in the next section. An obsolete bathroom should be modernized to enhance marketability. Renovations of kitchens and bathrooms generally provide the best return on your investment. Note: most bathrooms and kitchens require water shutoff valves and a GFI outlet. Family & Dining Room (and Den) Not all homes enjoy the luxury and benefit of a dining room, family room or a den. However, if the house you are inspecting has any of these luxuries note the approximate size of the rooms and how well they flow or function together. For example: A living room or den should accommodate average size furniture.

If not, this will definitely affect proper marketability. These rooms should not suffer from functional obsolescence. Attic Note on the Property Inspection Sheet if it is a full-size or crawl space area. A full sized attic may be finished or unfinished. With an unfinished attic, check for appropriate insulation, usually 6 - 12 inches. Inspect for water damage or signs of leakage. This could indicate the need for roof repairs especially if the evidence is clearly recent. Check if repairs have been done and that the attic is vented. Make sure the plumbing vent line doesn't end in the attic. If the attic is finished, check the type and adequacy of heating for the area and that the ceiling height is at least 7 feet 10 inches to be considered living area.

(ex: Bedroom) Complete the rest of the inspection following the guidelines listed under Bedrooms.

Basement The basement is the most important area of the house to inspect. Most visible signs of structural or system problems will reveal themselves in the unfinished portion of the basement. Check exposed foundation walls for cracks, bulges or separation. Look for signs of seepage or dampness. A musty odor usually indicates a moisture coming through cracks or the foundation material. Visible water stains on foundation walls may be evidence of prior flooding problems. If a sump pump is present, test for proper operation.

Exposed floorboards from the level above may show signs of insect infestation. Poke a screwdriver into sections of the floor boards or sill plate. If the screwdriver penetrates these areas, or if the wood appears to be generally soft, this is a clear indication of rot or insect infestation. If the basement is finished with sheet-rock or paneling, be sure to check at the base for flaking or water stains. Dropped ceiling panels may also exhibit signs of water damage. If finished, are there any beds, baths, family room or other?

INSPECTING THE SYSTEMS

Plumbing It is not uncommon to find a combination of galvanized piping, brass piping and copper tubing when inspecting an older house, especially if it has at some point been modernized. Old obsolete forms of plumbing require complete replacement in order to comply with the newer, more stringent code standards. Use a magnet to locate galvanized piping. If the magnet adheres to the piping, it is galvanized! Brown or rust colored water coming from the faucets also indicates the presence of galvanized pluming. Do not confuse galvanized pluming with the black iron pipe used for the gas service.

Water pressure is the first thing to check when inspecting the plumbing system. (If possible) Check several faucets and all showers for adequate water flow. A lack of water pressure may indicate a supply problem or leaks in the supply pipes. While inspecting the pressure, check for proper drainage and note the condition of pipes below the sink. Checks for any leaks, rust repairs or pipe replacement. Flush all fixtures to inspect for appropriate drainage. The main drain line (stack pipe) is visible in the basement, look for signs of deterioration or leakage.

Drain lines may be made of galvanized, cast-iron or plastic piping. ($700-$1,000 to replace) Do NOT touch the rusty looking "Boils", Its NOT rust!,……. Inspect for leaks, signs of corrosion or sections that have been replaced. Take notice of any hint of sewage smell in the house. This usually indicates damaged or deteriorated vent pipe. If a house has been vacant for a long time, and the plumbing system has not been properly winterized, or the water has not been drained from the entire system, you can anticipate damage from frozen water lines.

Inspect all plumbing for burst pipes. Always expect the worst! Electrical Very often, in older houses the electrical system must be updated. These houses usually have a 110-volt, 30-60-amp system, which is inadequate to accommodate today’s appliances.

This service is housed in a fuse-box instead of a circuit-breaker panel box. To determine electrical capacity count the number of outlets and switches installed throughout the house. It is not uncommon to find only 1 or 2 outlets per room. Very often, the electrical current is carried through obsolete knob and tube wiring. This type of wiring is extremely thin, with sections held together by ceramic knobs.

When this type of wiring is present, anticipate the need for complete rewiring. Generally, you are required to upgrade to a minimum of 100 amps and install a circuit breaker panel box with a main shutoff breaker. If a panel box is present, check to see if circuits are overloaded with an excessive number of outlets or fixtures. Appliances such as air conditioners, washing machines, dryers and refrigerators should each have separate outlets. Examine electrical wiring wherever possible. Turn lights on and off. Check outlets (bring an alarm clock or similar) Sections of exposed wiring can be located in the attic or basement. Wiring should also be checked at wall receptacles or fixtures.

Any deteriorated or damaged wiring will need to be replaced. Make certain that the electrical ground is connected to the cold water main.

Count the number of outlets in each room. The general rule of thumb is that a minimum of one outlet should be located in each wall. Kitchens and bathrooms should be equipped with ground fault interrupter (GFI) type outlets. These rooms also require a larger number of outlets to accommodate the use of several appliances. If extensive renovation is anticipated in an older home, local code enforcement may require the electrical system to be completely upgraded to meet new safety standards. The decision to upgrade may be determined by the municipality's electrical code enforcement. Heating Determining the type of system and what type of fuel is being used for heating is important. The heating system is one of the most expensive systems to replace in a house. Heat is conveyed by steam, hot water, or forced-hot air.

The boiler is fired by gas, oil, or electricity. Hot water is produced in a boiler or in a domestic hot water heater. Steam/Hot water heating systems Look for water stains, water on the floor, broken gauge glass and signs of extensive corrosion on the outer cover of the boiler. If the floor shows stains or signs of water, this could indicate a leak or a crack in the internal section of the boiler.

This damage may result in the boiler's replacement. Look for maintenance tags attached to the boiler to determine the last date serviced and the types of repairs completed. Examine the condition of the cement connecting the flue pipe to the chimney walls. Look for large cracks or broken pieces of cement. If the house is occupied, turn on the boiler to determine its condition.

Oil Fired Heating Systems When checking oil fired systems, determine if the oil burner gun is old or new. Make sure the heat exchanger is not cracked or broken. The airflow across the heat exchanger should be uniform with the flame centered.

Gas Fired Systems To inspect a gas-fired forced-air heating system, take the front cover of the furnace off to look at the heat exchanger while the furnace is operating.

Look to see if any section of the heat exchanger is cracked or damaged. If there is any damage, tell the owner to shut the system off immediately because this is a dangerous condition. Advise the owner that he must have it repaired before it is put back in operation. If the volume of air is not uniform, a section of the heat exchanger may fail. If the furnace is not functioning properly and if there is a low volume of air over a section of the heat exchanger, the temperature in the heat exchanger wall will build up and cause it to fail. Look again at the combustion section and see if flames from the burner are heating the bottom of the heat exchanger. These flames should be centered in each section of the heat exchanger. If they are not centered, a section of the heat exchanger may be overheating.

Electrical Heating Systems

If the heating system that you are inspecting is an electrically fired forced-air system, the heat will be produced as soon as the owner adjusts the heating thermostat. When inspecting an electrically fired forced-air system, get an idea of where the furnace is located in the house. The furnace should be centrally located in the house so that the ducts, which supply heat throughout the house, can be as short as possible. Shorter ducts will reduce heat loss in the house. Regardless of the type of system used, or how the system is fired, it is important to measure the level of efficiency and consistency of the heating system’s performance. Whenever possible, allow the heating system to run not less than ten to fifteen minutes to provide adequate time to monitor the systems performance on a room by room basis.

Carefully examine the general condition of radiators or baseboard heating elements located throughout the house. When inspecting a property that has been vacant for any length of time, it is reasonable to assume that the heating system will need replacement. This is also true for any heating system that you are unable to test adequately. Central Air A central air conditioning system uses a forced hot air heating systems ducting. An air conditioning unit consists of a compressors condenser coil and evaporator coil. The condenser (located outside the house) is the component that disperses the heat removed from the living area. When inspecting this component, look for signs of rust or deterioration.

Be sure it is securely mounted to an adequate base. Always try to turn the system on to determine how well it functions! Sewer/Septic A septic tank is used to collect and dispose of sewage in a house not served by a city or town’s sewer system. It is important to note the type of system being used on your Property Inspection Sheet. A septic tank system is composed of a tank, pipes and a drainage field. If the septic tank has not been properly maintained, it could require extensive repair or replacement.

If the property you are inspecting has a septic system, hire a professional to determine if it is functioning properly. Whenever possible, determine the tank capacity and the date it was last cleaned. Replacement of a septic system is veryexpensive. A permit and a formal inspection by the township are usually required. In certain areas, the city code enforcement requires architectural plans to be prepared and submitted to city officials for approval. Well If city or town does not serve houses water, a well with a water pump delivers water from the ground to the house. The system should be thoroughly checked for functionality with an emphasis on water pressure.

If the system does not provide adequate water pressure it usually indicates the need for service or replacement. If the well is old, a new one may need to be drilled. As a rule, it is wise to test well water to define if it is suitable for human consumption.

ESTIMATING THE REPAIR COSTS

(What it costs to repair) (this is just an average)

Exterior

  1.  
    1. Landscaping1. General Clean-up, Mowing & Shrub Trimming …………. $ 100 - 3502. Lawn Renovation ………………………………………............. $ 150 - 5003. Large Tree Removal ………………………………………......... $ 200 - 500
    2. Patio & Deck1. Repair Patio (size permitting) ………………………………... $ 250-1,2002. New Patio (removal & replacement) ……………………....$ 1500-30003. Repair Deck ………………………………………………............ $ 150 - 5004. Replace Deck (average cost per square foot) ………. $ 10 - 13
    3. Pool
    4. General Repairs and Maintenance (depending on type) $ 500-2000
    5. Driveway

1a. General Repairs & Seal …………………………………….........$ 150 – 500 1b. New Driveway (depending on size and type) ……………$800 – 3000 1c. Miscellaneous ………………………………………………................. $ 100 – 250

  1.  
    1. Foundation - Only a trained professional can accurately determine the true costs associated with a foundation requiring extensive repair. Even minor repairs can cost up to several thousands of dollars. Do not be concerned with estimating the cost of foundation damage if extensive. Get a few bids from professionals.
    2. Roofing 1. Replacement (if one layer is present) ………………….... $ 1300 - 1500
  1.  
    1. 2. Replacement (if two or more layers are present) …… $ 2500 - 4000
  1.  
    1. 3. General Repairs ………………………………….................... $ 500 – 1500
    2. Wood Exterior 1. Window/Frame Replacement (per unit) ………………..... $ 150 - 250
  1.  
      1. 2. Door Replacement ……………………………………............... $ 200 - 500

    3. Pre-Hung Door Replacement (wood) …………………....... $ 500 - 800 4. Pre-Hung Door Replacement (steel) …………………........ $ 375 - 500

  1.  
    1. 5. Eve/Soffit Repair or Replacement ……………………......... $ 300 – 500
    2. Siding 1. Exterior Painting (depending on size) …………………...... $ 1000 - 2500
  1.  
      1. 2. Brick Siding (general repair) …………………………............ $ 350 – 500
      1. 3. Brickface/Stucco (general repair) ……………………......... $ 500 – 1000
      1. 4. Aluminum Siding (general repair) …………………...........… $ 500 – 1000
      1. 5. Wood Siding (general repair) …………………………............ $ 500 – 1000
      1. 6. Asbestos Siding (removal) ……………………………............. $1000 – 3500
      1. 7. Vinyl Siding (total replacement per square foot) …….... $ 2.50 – 3.00
    1. 8. Vinyl Siding (general repairs) …………………………............ $ 300 - 500
  1.  
    1. Porches 1. General Repair (depending on size and type) …………..... $ 250 – 600 2. Replacement (per square foot) ………………………….......... $ 2.25-3.50
    2. Garage 1. Roof Repair ……………………………………………..................... $ 300 - 500
  1.  
      1. 2. Roof Replacement (depending on size) ……………….......... $ 500-1000

    3. Wall/Roof Framing (per square foot) …………………........... $ 2.25-3.00 4. Gutters and Downspout (per foot) ……………………........... $ 3.65-4.00 5. Garage Door (general repairs) …………………………............. $ 150 - 300 6. Garage Door (replacement) …………………………….............. $ 300-1000

  1.  
    1. 7. Windows/Fire Door ……………………………………................... $ 180 – 250
    2. Miscellaneous (exterior only) ……………………………........... $ 100 - 500

Interior

  1. Windows1. Glass Replacement (avg. window) ………….............………….$ 15 - 302. Window Replacement …………...................................... $ 150 - 2253. Window Sills ………………………………………………................... $ 200 - 3004. Storm Window Replacement (per unit) ………..............……$ 80 - 1205. Screen Replacement ……………………………………............…… $ 30 - 40
  2. Carpeting1. Cleaning (per room, depending on size) ……..............…… $ 25 - 402. Replacement (per square yard) ………………………………....... $ 10 - 14
  3. Hard Wood Floors1. Floor Refinishing (sand, staining, & urethane per foot) …. $ 1.50-2.00
  4. Walls and Ceilings1. Taping/Spackling (general repairs) …………………………....... $ 150 - 4502. Sheetrock Replacement (per square foot) ………………….... $ 0.55 - 0.653. Plaster (general repairs) ……………………………………............ $ 150 - 2504. Plaster (removal/replacement per room) ……………………......$ 350 - 7005. Wallpaper (roll, measured in yards) …………………………....... $ 25 - 356. Paneling (per sheet) …………………………………………............. $ 45 - 557. Ceiling (replacement per square foot) ………………………...... $ 0.55 - 0.65(average room 10' x 12') …………………….............…………….. $ 100 - 200
  5. BedroomsLook for any of the same defects that you may find in other parts of the house. Usethe prior information to obtain prices relevant to the necessary repairs.
  6. Kitchen1. Cabinets (general repairs) ………………………………...........… $ 100 - 2002. Cabinet Replacement (depending on size and quality).... $1500-30003. Countertop Replacement (per square foot) ……………….....$ 354. Replace Sink ………………………………………….................….. $ 100 - 3005. Vinyl Floor Replacement (per square foot) ……………....... $ 2-36. Faucet Replacement ……………………………………............... $ 150 - 2007. Lighting Fixtures ……………………………………................…… $ 50 - 1008. Entire Modernization (depending on size) ………………..... $3000-6000
  7. Bathrooms1. Replace Vanity ………………………………………...............…… $ 200 - 5002. Replace Toilet ………………………………………...............….… $ 150 - 2503. Replace Tub/Shower ………………………………………............ $ 500-10004. Floor/Wall Tile (general repairs) ……………………...........… $ 300 - 4005. Floor/wall Tile (replacement per square foot) ...........… $ 1.85-2.256. Lighting Fixtures (replacement) ……………………...........… $ 50 - 1007. Replace Medicine Cabinet ……………………………..........…….$ 100 - 2008. Sink Replacement …………………………………………............. $ 150 - 2509. Faucets/Fixtures ……………………………………………............ $ 100 - 200
  8. Attic1. Insulation (per roll) …………………………………….................$ 30 - 502. Ventilation (per roof vent) ………………………............……. $ 85 - 1003. Finishing Attic (per square foot) …………………............… $ 0.85
  9. Basement
    • 1. Waterproofing (per 100 square feet) …………………........ $ 50 - 75

2. Sump Pump Installation ……………………………............... $ 200 - 500 3. French Drain ………………………………………….................. $1000-2500 j) Miscellaneous ……………………………………………....................... $ 250+ Systems

  1. Plumbing1. General Repairs (kitchen/bathroom - per hour of labor) $352. Entire Modernization ………………………………………........... $ 3500-5500
  2. Electrical1. General Repairs (per hour of labor) ………………….......... $352. Upgrade System ……………………………………............……… $650-10003. Entire modernization ……………………………………...........… $2500-5000
  3. Heating1. Hot Water Heater (new) …………………………………...........$ 275 - 5002. Heating System (repair, gas - per hour of labor)........ $ 353. Heating System (replace gas) …………………………........…$1800-28004. Heating System (repair, oil - per hour of labor).......... $ 355. Heating System (replace, oil) ……………………….........……$1800-28006. Heating System (repair, electric - per hour of labor) .. $ 357. Heating System (replace, electric - per hour of labor). $ 358. Oil Tank Removal …………………………………….............…… $ 500-15009. General Repairs (duct work, pipes, radiators) ..........…$ 500-1500
  4. Central Air Conditioning1. General Repairs …………………………………………............... $ 250 - 5002. Replacement ………………………………………..............……… $1500-2000
  5. Sewer/Septic1. Clean Out …………………………………………................……… $ 2002. General Repairs …………………………………………............... $ 500-20003. Replacement ………………………………..............……………… $3500-7000
  6. Well
    • 1. General Repairs …………………………………………............... $ 250-1000

2. Replacement ………………………………………..............……… $3500-7000 Back to index STEP #4: GET THE CASH TO CLOSE Main Index Now you have:

  1. An ACCURATE FMV/Appraised
  2. An ACCURATE Repair Cost Estimate
  3. The highest amount to OFFER

But before you shoot an ALL CASH, AS IS offer, you need to get the cash to close. There are two ways to get the cash to close.

  1. If your credit is excellent and/or you have money: Unless you take me on my suggestion to utilize OPM, you may want to visit your local bank, credit union, or other lending institution and obtain a loan to buy all your properties. If your credit is good, banks have no problem lending you, for example, $25,000 on a $60,000 property. Simply walk into the bank/lender and explain the deal on their application forms or with the Property Inspection Sheet. If you do qualify for financing, it is recommended that you carefully use it to the maximum. Even though it involves borrowing money, your return will always be greater on all deals that you find when you use your BANK's money to fund your deals. Once you have a good deal, call your lender and tell them the same thing as on the example above. You are testing the waters to see if they would even consider funding this deal. If they are and when they ask for more information, send them the Property Inspection Sheet, COMPS, and picture of the FRONT, BACK, and street on the Subject Property. If you are using financing, I suggest using OPM. You have ore money available to buy more properties without the overhead associated. Even though you will be profit sharing by using OPM, it is well worth it. I highly recommend it. NOTE: In the beginning, they will probably want to see the property and look at all supporting documents. Take them to the property, get them inside, share your comps, talk about the Property Inspection Sheet. If your evaluation is accurate and you've ran your numbers right,… your deal will be funded quickly, without a credit check, as long as the numbers make sense. It is THAT SIMPLE!
  2. If your Credit is BAD or non-existent and/or you don't have ANY money (which is probably the reason you are reading this manual), you need to use OPM, which is what I'm about to show you. In fact, EVEN IF YOUR CREDIT IS A1+, you should utilize OPM (Other People's Money) anytime possible. I use OPM all the time, I gladly split the profits with those I partner with and I don't think I'll EVER give up using OPM or "switch" to borrowing money. In order to obtain the cash to close through OPM, all you have to do is to form friendly relationships with 1-10 Real Estate Investor(s) in your area. Once you have a good deal, call your "money partners" and explain the deal until one of them agrees to do it

The best way to explain the deal to your money partners is like this: "I have a 3 bedroom brick at 5150 Profit Street. It is conservatively worth $90,000-$95,000 all fixed up and it needs $11,000 in repairs. They are asking $59,000 but I brought them down to $46,000. I need to close by the last day of the month (or whatever date is applicable). "I have all the comps and detailed repair list right here. Do you want me to go ahead and put it under contract or do you want to see it first?" If your "money partner" is interested in your deal,… tell them that you are faxing the information and to get back with you with an answer so you can "lock it up" ASAP. If your "money partner" want to see it first, hurry, you don't want a competitor to get there first and shoot an offer the seller will accept, right?

Fax them (or e-mail) the Property Inspection Sheet WITHOUT THE (COMPLETE) ADDRESS.

When you have a committed YES, email the Comps, Pictures of the FRONT, BACK, and STREET of the Subject Property. (After a few properties, they will feel comfortable with you and they will give you a "YES" over the phone, you will have an ALL CASH commitment in less than 5 minutes, you're set to close) How to find "MONEY PARTNERS" Now that you know the basic concept a little bit, let's talk about where to find your "money partners". The fact that you are getting the property at a very deep discount makes it very easy to obtain the CASH to close whether it is Lender financing, Joint Venture or OPM. Most people think that we refer in this money manual to "special programs", grants, or government money, but that couldn't be farther away from the truth.

In fact, most financing sources and government programs facilitating the purchase of Real Estate work so bad (or slow) when implemented to the REAL world that only guys like us have a chance to act quickly enough to be a " real player". This is a world where you may have to "cough up" $487,000 by "tomorrow at noon", so regular financing wouldn't even work here. You best and ONLY chance is "money partners" and The Money Manual. If your are coachable, follow these instructions, and if you've ran your numbers right,… your deal will be funded quickly. Eventually, "they will fight each other" for your deals. NOTE: In the beginning (your first 5 deals or so), your money partner(s) will probably want to see the property(ies) and look at all supporting documents (comps, pictures, Property Inspection Sheet).

They need to "feel your pulse"... make sure you know what you're doing. This is normal. Take them to the property, get them inside, share your comps, talk about "FAIR MARKET VALUE MINUS REPAIR COSTS MINUS PURCHASE PRICE EQUALS PROFIT" and don't talk too much about anything else or you may talk yourself out of the deal. Your time is a s valuable as your "money partner's time", they must feel it, you have more appointments to attend. If appropriate, take them to a quick lunch or have a beer, then split to your next appointment 🙂 Now, how simple is that? So, I am assuming that you will NOT use lender financing and will focus on OPM as I SUGGEST YOU DO.

You MUCH rather make $10,000 using someone else's $100,000 than make $20,000 using your own $100,000, right? And your "money partners" much rather make $10,000 on their $100,000 on a deal that was delivered "on a silver platter" than to make $20,000 on a deal that have to "hunt down", "kill", "clean", and sell on their own. That's just good business sense from both parties involved.

Your "money partners" have MONEY AT WORK, which you will get to enjoy from eventually, if you are coachable. So, the bottom line of OPM must be to make friends with OTHER INVESTORS in your area. Yes, make friends, they last a lifetime! That's exactly what you MUST do! Of course, you can use ANYONE'S money, even your own mother's, BUT as a suggestion, I want you to do business with SEASONED Investors that are already buying and selling in town at first. I suggest this because the LASTthing I want to hear is that you used "a friend's cash" on your first deal, which you may have bought while suffering from BUYING FEVER 🙂

And now, that "old friend" of you's is chasing you with a shotgun... and YOU KNOW that you screwed up due to BUYING FEVER:-) .... with me? 🙂 Once you have control over the system (after 10-15 homes or so), I don't care if you use "your grandmother's" life savings, I would do so proudly, you will make them more money than any other passive investment out there, such as stocks, 401Ks, IRAs and similar traps. But at first... talk to the PROS! FOCUS on professionals as they not only have the cash already lined up, but they can be a GREAT safety net when you are just getting started in your town. And besides, they are already buying Real Estate for cash, but they can't "get it all" before it's sold to someone else. Therefore, they will be glad to strike a deal with you if you present the deal on a SILVER PLATTER.

In fact, if you have a deal in St. Louis, CALL ME right away! All you need to do is to get to a fresh deal BEFORE them, "beat them" to the punch, lock up the deal and call them saying, for example, "I got 123 Any Street for $32,000, it is worth $95,000-$100,000, and only needs $16,000 in repairs, are you game?". If you call ME with a good deal like that IN ST LOUIS, MO, just like the Investors you are about to meet, I will partner with you in a New York second! When you have the person (buyer/investor) on the line Introduce yourself and tell the investors that you have noticed that they buy property in the area.

Tell them that you also buy property, but "your pockets" are not as deep as theirs. Tell them that you come across more good deals than you can afford to buy and ask them if they would be interested in doing a few deals with you if they make sense to them. Tell them that you will do all the groundwork and present the deal on a silver platter for their review. All they need to do is to look over the information you give them and tell you "yes" or "no". MAKE SURE THEY KNOW that you are NOT looking for ANY type of salary or "draw", you will not ever be an expense to them, EVER! You are an asset. They only see you when you have a deal and they only pay your share when your deals are SOLD!

At this point,… They will either say yes, that they want to talk more about it, or choose not to do business with you at all. If they are flaky or indecisive, say "Why don't you let me show you a deal and we can take it from there? Do you want me to fax it or come down to your office?".

If they still procrastinate, set up the meeting, there's nothing like a one on one to "force them" to say yes. But then again, most likely, they will say "Ok, just call me or fax me the information and let's take it from there" on the first or second call. How much do you wanna make? If they ask (and they will) how much YOU want to make on a deal (Which means "how much money/what percentage do you want), consider that your goal is to establish a 50/50 (or better) partnership in all your deals (YOUR DEAL - THEIR MONEY - 50/50 Split).

Title will be held in THEIR name and you will have an agreement signed if you don't believe in hand shakes (like I do). However, on a 50/50 deal, YOU are expected to do EVERYTHING! All they do is to write a check, YOU manage EVERYTHING, from the purchase to the rehab to the sale just as if it was your money. Once the deal is closed, you and them (your partner) split the profits 50%/50%.

However,.. If you don't want a 50%/50% split because all you want to do is to bring the deal in. Or, if after trying with SEVERAL people it seems impossible to get a 50/50 split (they get greedy) this early in your career, NEGOTIATE TO THE BEST OF YOUR ABILITY. You may have to settle for less than 25% or even a flat fee of $2,500-$5,000 at first. If that's the case, JUST DO IT. GET IN THE DOOR! MINGLE!

Bring in more and more properties. Once you've done it a few times and the deals have closed, you have something you didn't have before. That something is CASH VALUE (How much did you generate for your money partners?). Now, you ARE a valuable asset that can be "taken" by the competition, which by the way, will be watching you and most likely "take you to lunch" to recruit you (It happened to me NUMEROUS times). At that point, you can RE-NEGOTIATE or "make a move". Remember that you should have a couple of investors lined up to properly support your growth.

You are looking for 10-20 people/companies with at least $500,000 each available to play with.

Now, you are probably wondering where to find these cash investors, right? There's few ways to do this: (If you have a deal in the St. Louis area, CALL ME!)

THE SUNDAY PAPER:

Pick up the local Sunday paper and find the "Real Estate Wanted" section. If you live in a major city like St. Louis,… you'll find many investors (20+) buying property for cash in your area. Call the numbers and ask to speak to the "buyer" or the person responsible of the buying of a property that you have in mind. Make your proposition.

  1. INVESTMENT CLUBS/COMPANIES: Do research and find local Investment clubs and Real Estate Investment companies. If Real Estate is in their investment criteria, you want to call them right away and make your proposition to the person in charge of the inventory and/or the acquisition and sale of their inventory.
  2. THE PHONE BOOK: Look for Real Estate, Contracting, Management and other Real Estate Investment and Mortgage related companies and network with the Agents. They may have or may know about one or several Investors in the area. They will make a commission when you make deals with "their" Investors, so it is to their benefit to "hook you up" with them.
  3. THEIR ADVERTISEMENTS: Always act upon "We buy houses" ads and grow your network. This way, you can cover any and all criteria of the business as different investors "like" different things. Maybe you have a guy that likes 2 and 4 families only and another guy that likes single families only. Associating yourself with both enables you to buy single families AND 2-4 families, right?
  4. ADVERTISE YOURSELF! You can put an ad saying something like:"Multiple properties at deep discount, CASH ONLY" or something like:"DIRT-CHEAP Property , NEED CASH". When they call... you know what to do... right? 🙂

So now... You may be sitting there either reading what I'm telling you and thinking, "this guy is NUTS", but if you do this, and as long as you keep bringing in good deals, you can gain access to MILLIONS of dollars just for the asking, without a credit check or any of your own money! This is OPM, or Other People's Money, and by far, my favorite way of doing business. The return on investment is infinite, which beats the heck out of "just incredible". YES,… you do have to split the profits, SO WHAT? If you pick up a deal that generates a $20,000 profit and make a $10,000 cut without spending a penny, would you say NO? This is like finding $10,000 bills on the sidewalk! Would you bend down to pick it up or would you just pass it by? And remember, there are A LOT of $100 bills in a vacant house just sitting there "on the sidewalk"! I mean, how many deals can you "flush" into your pipeline when you have access to CASH? You're right, as many as you can handle! The cash will be there if you have a DEAL, NEVER forget that. Focus on THE DEAL, it HAS to make sense, it has to make money. When you have established a committed relationship with one or several backers, go get some leads and work the system HARD. Run the numbers on the formulas and aim to IMPRESS your new partners. Grow your business faster than nature intended you to and you will always be better than you were yesterday. Always OVER DELIVER! Make "them" DEPEND on your deals coming in and you will NEVER go hungry! When you can afford it, you can go to "hard money lenders" or any private lender for short term loans for your projects. In general, these loans are more expensive than conventional loans and at a much higher interest rate (20%). But because the numbers still make sense and it is a short term loan, I recommend using them in the event that you decide to go the financing route (After all, it's your choice). It looks pretty simple huh? I know, it is. It's just like riding a bike, scary and foreign at first, and then, "look mom, no hands". I know that you are probably excited now and ready to make offers on everything you see, right? But before you do, remember to read THIS ENTIRE SECTION , Real Estate Speculation, at last twice so that you are 1,000% SURE of what you are doing. This is a business where you need to pay attention to DETAIL because ONE mistake can not only cost you money, but friends and backers. I do NOT want to hear that you messed up because you are "in a hurry" or "didn't do your due diligence". STEP #5: BUY Main Index The next step is shooting your offer and THE WAY to do this is:

  1. In writing, without contingencies, and with an acceptance deadline of 48 hours to accept. (Fax the contract to the Broker/Agent if there is one involved). If you have a buyer's agent working for you, make sure that you ask your buyer's agent to submit the offer for you (so that they earn the buyer's agent's portion of the Real Estate Commission.
  2. Verbally at first and if accepted then put it in writing and have the seller sign it ASAP. if you are dealing with an owner selling the property, NOT a Realtor). Never, ever leave an "open offer in writing OR open contract" (Only signed by YOU) when dealing directly with the sellers, they will probably use it to get a higher offer somewhere else (SHOPPING). We are not the only ones trying to beat the competition, you know? You competition is trying to beat you all the time! This is a "big boy game", play accordingly 🙂

USE THE SAMPLE CONTRACT Here is a sample contract that you can use, reference with, or customize to your geographical location. I have used this contract on thousands of offers. You need to understand your contract and know what it says. You will eventually (hopefully soon) get an offer accepted and have to explain the contract to the SELLER before he/she signs it. Spend 2 hours with the sample contract and read it section by section and doing NOTHING else but concentrating on the CONTRACT. (2 SOLID hours, That's IT!) Make sure that you understand what it says and develop a way to easily and CONFIDENTLY explain it to ANYONE at ANYTIME! Making an offer when dealing directly with the SELLER When you call the seller (during THE FOLLOW-UP session) to give your firm offer, simply tell them your number. For example: (After brief chit-chat about whatever)

  1. "Mr. SELLER, the number that I am looking at is $43,000 CASH. My offer is firm and we can close within 30 days" (3 second pause) Now,.. Will that work for you?"
  2. If "YES": (Or if he/she says a number we can work with that is WITHIN your range, make an appointment and get to wherever he/she is ASAP (without showing your excitement) and put this deal Under Contract. (Expect to haggle for a bit before he/she accepts, remember, stick to your numbers)
  3. If "NO" then ask: "Well,… what kind of number were YOU looking at?"
  4. "Peter Seller" - I want no less than $58,000 Mr. Buyer
  5. "YOU (Buyer)"- "Well,.. see,… that is too high of a number for a CASH buyer like myself. I could maybe tighten the numbers and bring my offer up a bit, but I don't think I could be THAT high, if I paid ALL CASH. Let me ask you, what is the LOWEST OFFER you will take Mr. SELLER? Remember that I pay ALL CASH, I will buy the property AS IS, and I close within 30 days.
  6. Peter Seller - "I couldn't go lower than $46,000 Mr. Buyer"
  7. If the $46,000 in this example is good for you, say: "Let me run the numbers and see if I can make it work. How long do I have to get back with you? (Whenever that is, say, "ok", wait 2 hours, call them back and say "Ok Mr. Seller, I can do $46,000 CASH. Can we meet right now and sign the contract? (Get the deal under contract)

Submitting your offer through a Real Estate Agent When you submit an offer to a listed property, the agent will have to submit the offer in a "board of realtors contract". Don't be "Sloppy". The Contract will be completed by the Realtor and faxed/emailed to you so that you can sign it. Make sure that you include your phone, email, & fax number. The Realtor will get back with you to tell you if the contract got accepted, rejected, or countered. At this point, one of two things will be established.

  1. They are asking too much for the property. If their LOWEST number is TOO HIGH FOR YOUR BLOOD on this deal, give the seller your Highest and Best offer and stick to it. Example: "$46,000 is more than I can pay for your property Peter Seller,the BEST I can do is $44,000 CASH. Is that a number you can live with? If so, I say we should put it in writing.
  2. They are NOT asking too much for the property. If their LOWEST number is OK, get the deal under contract ASAP!

What you just read is the way I handle all of my "offer making" activity It doesn't matter if it is over the phone or in person, when talking to SELLERS, I say THE SAME THING to every SELLER I talk to, only the address and figures are different. It works well! Copy exactly what I say until you develop you own style. Back to index STEP #6 SELL Main Index To complete the chain of events, we need to get rid of the property we just worked so hard to get. In Real Estate, you make money when you BUY but realize it only when it SELLS. The faster the property SELLS, the faster you get PAID. So, the first thing to do is to create a REPEATED BUYER LIST. This list contains THREE kinds of BASIC buyers:

  1. Investors
  2. Wanna-be Investors
  3. Homeowners

Investors You are looking for the kind of Investor that wants to buy, fix, and sell, or buy, fix and rent for profit. They will have CASH (or extremely good financing/credit). When you find a BUYER that is able to pay us CASH or has EXCELLENT CREDIT, you've got a good one. You can use Investors for selling wholesale to, do same day flips with, and even use them as your "money partners" 🙂 Power Messages for Investors

  1. I help Real Estate Investors make more money and free up their time.
  2. I sell equities in the secondary market (are you looking for EQUITY in your properties?)
  3. I have a great deal if you have the cash to close by the end of the month.
  4. Do you like properties that make money or do you pay to play?
  5. need $300,000, do you have any cash available?

You can also run an ad similar to the one below: Are you looking to buy dirt cheap property? Do You Have CASH? Looking to profit re-selling/renting out homes? Call: %name% - %phone%. CASH investors are easy to deal with since they know what they are doing. In addition, one of these may very well become your next money partner. It is just a matter of letting them know the address and specifics of the property over the phone or fax and letting them into the property. If they like it, they will buy. Cash Investors are very valuable as they are REPEATED BUYERS! Wanna-Be Investors I know, I know, no harm intended, but I don’t know any other way to classify them. These are BUYERS that most probably bought a book or attended a Real Estate seminar and are out "testing the waters". Believe it or not, these are my FAVORITE kind of buyers! WHY? Well,… When you find someone who is looking to get into the Real Estate business and don't REALLY know how to, YOU can do 2 things:

  1. Assist them in buying your inventory and/or partner.
  2. Recruit them as your "bird-dog".

HELP WANNA-BEE INVESTORS structure their deals,… don't wait for THEM to pull the trigger (they are new). If your "food" is tasty enough,… they'll eat it…... And the more money they make by buying from you, the more they will come back. And the BEST way to find these "wanna-bee" investors, is to attend Real Estate seminars every time they come around to your town. (Watch Late Night TV for dates and locations and reserve seats). Where else will you (for free) have 50 to 150 people, eager and willing to buy and invest in Real Estate and that WILL need mortgages in the near future ????? This is a field that you must cover to BEST expand your network of customers and recruits! While attending the seminar, make sure that you talk to as many people as possible and get their contact numbers for FOLLOW-UP. (Clients and/or recruits). Wanna-bees will also respond to any kind of "little or No Money Down" ad that you would place in the Real Estate section and they will also respond to the Real Investors ad. As soon as you hear that a person is "getting into" the Real Estate business, make him yours. Power Messages for Wanne-Be Investors

  1. I teach people how to make money with Real Estate.
  2. I help people become Real Estate Investors .
  3. I help people to make more money and free up their time.
  4. I sell houses BELOW MARKET VALUE. My buyers like to buy from me so they can re-sell the property for a profit.
  5. I am looking for someone to find properties we can buy using our money.
  6. I have $7,000,000 CASH available to buy houses with, want to help me spend it if I show you how?
  7. You need $300,000 IN CASH so I can make you $100,000 in 3 months or so. If you have $300,000, GREAT! If you don't, I can get the $300,000 FOR YOU!

Homeowners Here is another great market that I like. When somebody wants to buy a house, they need one of two things from me:

  1. A House
  2. A Loan

So, any time you talk to someone looking for a home to live in, market 2 things:

  1. A House
  2. A Loan

If they like the house or TERMS, SELL it to them! If they don’t like the house, attempt to SELL them a LOAN for whatever house they may find. Either way, you're in BUSINESS. So the trick is to KEEP A CONSTANT FLOW OF HOMEOWNERS through your pipeline and you will do fine as far as "Retailing" and Loans are concerned. HOWEVER, when you sell a property RETAIL, you may want to hire an agent to sell the property. This will MINIMIZE your headaches and it is up to the agent to show the property and chase buyers. As a rule of thumb,… If you buy a property to fix it up and sell it for FULL MARKET value (Retail), use an Agent. IF YOU LIKE TO ADVERTISE (Personally, I prefer Networking), you can get more than enough calls, by running the following GENERIC ad in the paper:(Sunday's & Wednesday's Real Estate Classifieds). LOOK AT THIS DEAL! Nice house, Little or NO money down possible, seller will consider holding a second and will assist with closing costs. MAKE AN OFFER, SELLER IS NEGOTIABLE. For more info. call: %name% - %phone% or... HOUSES BELOW MARKET FINANCING AVAILABLE! %name% - %phone% or... BUY A HOME WITH LITTLE OR NO MONEY DOWN! I'M FLEXIBLE AND VERY MOTIVATED TO SELL NOW! %name% - %phone% or... ***** WHOLESALE TO THE PUBLIC ***** HOMES FOR 30% - 60% BELOW MARKET LITTLE OR NO MONEY DOWN POSSIBLE! %name% - %phone%

Back to index

IN SUMMARY

Now, lets re-cap what you've learned. Don't get stuck with the mechanics and be sure to RUN THIS SYSTEM. Remember that you are Running a factory, a Buying Machine… so if the deal doesn't make sense, DROP IT. But if the deal makes sense, get all over it! All you need to effectively bring in deals is:

  1. To know how much a property is worth in repaired condition.
  2. To know how much it will cost to repair a property for resale.
  3. To have a couple of money partners (the cash to close).

So every time you find a LEAD:

  1. Get the Fair Market Value (In Repaired condition)
  2. Guesstimate the repairs. (Before you go to the property)
  3. Evaluate it to see if it makes sense at this point (run the Formulas).
  4. If it makes sense, go to the property to get the actual repair cost, take pictures, and drive the comps. (Verify the Repair Cost & FMV)
  5. Run the formula(s) using the ACTUAL REPAIR COST and the ACTUAL FMV to establish the highest amount you are willing to OFFER. (run the Formulas AGAIN)
  6. Line up the CASH to close (Lender or OPM).
  7. MAKE THE OFFER! (Start Low, don't exceed your maximum)
  8. Once an offer is accepted, IMMEDIATELY (within the hour) begin to market the property.

PLEASE treat all leads alike and let your calculator decide to buy or pass on the deal, ok? Do it this way and it will get your business going. You will be amazed with the results! And if you don't do what I just thought you, you'll regret it forever, I guarantee you will 🙂 Don't let this knowledge "just sit"... just do it! I welcome to the Real Estate Speculation Business! Main Index