TPSG, LLC

Okay, first congrats Christine... Second, I'm confused, are you guys asking me where I post these ads since those are my words or are you asking someone else...I'm tired

Just got a small bit confused. Your buyer is your "partner"? So just to be clear, you obtained the property through a 100% LTV at 70%? Not sure if I understand that one. Then after you purchased it, you refi'd it at 90%? I'm guessing you had no out of pocket money in this transaction? So you use the actual numbers from the house and put them into your equation: You bought the house for what and how did the loan numbers work. Then you refi'd the house at what exact amount since it was worth what... That would be helpful.

Adam, You've got some numbers for everyone yet?

Adam, Fair enough, thanks. So here's some more questions. Did you do all the work yourself, if not, what work did you sub out and what did it cost you per contractor, etc? Also, regarding the property, how long before you refi'd and what were the terms of the refi (percent LTV, payment per month, etc)? I think it would benefit people to understand what they are able to do with properties besides just hold them in terms of getting money out and then worry about renting them out, etc. I am taking it that you don't mind losing some money every month on the renting since you've already made money and will make money I'm guessing on the option when it's purchased, plus the option money? Thanks and nice work. I'll post my rehab/LO next week.

Adam, So $5K is all this took? Adam, please take a second to explain how (and what) you did all of this exactly for $5 grand. Also explain exactly how you setup each dealing, meaning purchase them and what are your numbers looking. And last, explain what you mean by leveraging the down payment, etc for everyone to learn. Best,

Of course I make a good point Yeah, I just know that often people are able to learn by reading through a scenario and understand it more fully. Just let me know what your excuse will be and I'll let you know what mine is for not calling you

Craig, Thanks for the nice words, appreciate them. Regarding the logo, the logo is not meant to attract the sellers, it's meant to make the seller's feel more comfortable which is why it is more blue themed. Now my signs and marketing on the other hand incorporates my blue as well as yellows and reds for attraction and emphasis. Thanks again, Chris

I completely understand what you are saying and don't care about the abrasiveness, but what I am trying to get across is that it all comes down to marketing, area, and the person doing the deals. I don't know how else to say this. It takes a person on average about 7-8 of seeing a piece of marketing before it sinks in or they act on it, plus depending on who the mailing is sent to and what times of year, etc factors in a ton. There are places in the world where bandit signs make a killing and there are places where newspapers ads are the only way to go, etc. My stuff works ONLY because I know my market, have good marketing techniques and go after the people I want. This DOES NOT mean my stuff would work in your market unless you have exactly the same demographics, market appreciation, home sales, age levels, and mind set. That is why so many people get varied results with courses like Carlton Sheets, etc all over the country because it all depends on the market and who else is already doing the same thing. BUT what I can tell you is what I know and what can improve dramatically your results. First one - color. Yep, color is the number psychological factor in a sign, in a response. You wouldn't be interested in a car you absolutely love if it was pink, you wouldn't eat a green steak even if it was supposed to be amazing, and you wouldn't pay attention to a "We Buy Houses" red and yellow sign if you are used to seeing these signs all over and all the time. So first you need to study up on color and how it affects peoples decisions. Second one - Psychology. The other huge factor. Human emotion is involved with every single decision you make, especially emotional ones. And buying/selling any type of property is an emotional decision for most of the people you will work with. So, if you really want to be effective and really get all the good deals you want, you HAVE to figure out what exactly is your target market. Who are you exactly trying to attract? What is their age? What problems are they having? What would stop them from calling you? What reservations could they possibly have? Do they instantly view your ads as a possible scam? All this leads you to understanding exactly who you are going after. If you don't want to do this, then you won't get good leads and easier deals, plain and simple. It's like hunting or fishing or golf for that matter. In any one of these sports, you HAVE to know the fish you are going after, what it likes, what it eats, when it sleeps, what it is afraid of, etc. If you don't know this then all you are doing is sticking a hook into the water. Same with golf, you have to know the terrain, know how you hit each club to understand exactly how to approach each shot. So in a sense you have to become and know your target in order to effectively market towards them. Pick up a couple good psychology and marketing books and go to town, you'll learn a ton. Third one - Effective repetition. Huh? It means that you effectively hit your target over and over again and the right times. Enough to not annoy them and spread apart so you are reinforcing their thoughts over time, not all at once. When do you people sell the most houses? When do people NOT sell the most houses in your area? What types of houses and areas are not moving so fast, etc? Most ads on TV and print are usually geared toward a specific purpose or time AND over and over again to retain in your memory. Convertible ads in the summer, vacation packages in the winter, diet fads in the spring and summer, blockbuster movies in December. They all have a purpose and they are all done effectively over and over again with specific intervals and certain areas to hit right target over and over. You want to hit your target over and over again but at the right times to keep you fresh in their mind somehow when they DO decide they need you. Fourth One - Knowing what the heck you are doing. I could throw 10 deals at a newbie and 99% of the time they wouldn't have a clue what to do. What good is a lead if you don't know what to do with it? The reason that people can't get great deals is that often they don't know how to create them. If you get 20 people calling you, then obviously they are interested and if you can't make deals out of least 5 of them then you need to work on your understanding of what you are doing and learn more until you get it right. If you are calling them, different story, that takes real skill to turn a cold lead into a hot one...but if you get people calling you? Man, there is no reason that at least 50% or more of those leads should be deals...no reason. But again, if your marketing is effective and to the point and targeted to who you want, then those calls are already motivated and prescreened customers. And to be truthful, there are hundreds of people out there who will tell you they have the best way to attract this or attract that...but the honest truth is that if you don't know who you are attracting and why and what you are going to do with them, then your efforts are wasted completely. You are essentially pissing away time and money. Learn your market, learn your customer, and learn your approach....you will be deadly. Be the ball Danny, be the ball.

Thanks and understood. Direct mail, especially saturation mailings can be very, very good if done right and for cheap.

That was my post, which brings me to a good point. Michael, is there anyway that it tells us we have to log in before we can post something? I think it would make more sense if everyone had to log in or have an account before posting, save a lot of trouble if you ask me. Just my two cents

Hey trust me...Ohio ain't no picnic. You don't exactly hear people going, "Hey, where should we go for our summer vacation...Yay!!! Ohio!!!!" The farther away I can get from here the better, I want the west coast. Tell you what though, nothing better than a Jersey sub...oh man, what I would do for a Jersey sub.

Hahahah, North Jersey and South Jersey is the like North Korea and South Korea....one place is great and one place I wouldn't exact want to be caught alone in I never understood why they call it the garden state till I stayed in South Jersey. It's gorgeous, farms forever and so many frickin nursery's. I consider North Jersey part of New York anyway...it's like New York's overflow house. But all in all, it's still an interesting place.

First...hey Second, can I offer one bit of advice...you know...that opinion stuff? You may have already purchased the Vistaprint cards with the "We Buy Houses" stuff, but even if you did...DON'T! If you are serious about Lease Optioning/CA's, etc then don't put yourself into the We Buy Houses crowd, in fact, don't even associate yourself with them. Personally, that drops you down a level in regards to credibility and deals you do. If you are doing LO's or SLO's or CA's (I'm lovin these acronyms by the way) then I suggest to make your cards, marketing, etc attract the people with those type of deals. Things like "CAN'T SELL YOUR HOUSE?" or "WHAT IF YOUR HOUSE WON'T SELL?" or "HOUSE DIDN'T SELL, NOW WHAT?" It's these types of phrases and marketing that will bring in the type of people that you want to attract and already prequalify them for these types of deals. I really should show you guys the pictures of my business cards...but that will cost you money But basically it is a double sided business card that has information to attract seller's on one side and info to attract tenants on the other side. It's perfect, it works great and it get's the point across. There is no reason to have your phone ringing off the hook if half or more than half the calls you can't do anything with. It's better (IMO) to have the phone ringing to deals that are more geared toward you and that you can work with. Hope that makes some sense, again just my two cents but I want you (as the other do) to do well. Oh yeah, where in South Jerz you from? Only reason I ask is that my grandparents live in Bridgeton on a farm...great place, you'd never think you were in Jersey.

Umm...not to cause any uproar here, but my opinion of Claude is completely different. I called him to ask a very basic question, even told him I was once a student of MC's and the first thing he said was, "Are you willing to pay for my time?" I said, "what?" He said "is your question important enough to pay for my time?" So I said, "not really, evidently you're not the man I heard your were" End of conversation. Just had to put that out there, I thought it was kind of interesting and pretty much helped me make up my opinions of him. This by the way was about two weeks ago.

Michael, Appreciate the response. Exactly how would you think about using a private lender to make this work as a partner? Email me off the boards when you get a chance so I can ask you some more questions. Thanks, Christian chris@tpsgonline.com

Umm, first...you copied my quotes and then you quoted me wrong, because I didn't say anywhere that I get 5 deals out of 1,000. And what's this about 5 houses per sale per 1,000? What farm area to do you live in? I can walk down the street and count 5 houses for sale. And yes, I do get that many people, but what kind of deals they are is what's important. When I send out 1,000 postcards to just renters to turn them into LO tenants, I easily get 30+ solid calls from people interested. When I send out 1,000 postcards to try to find houses around the area, yes I get at least 10+ solid leads from people interested in doing a lease option. So why is that so hard to believe? My marketing is damn good, my message is solid and I'm going after the people in the area that I do business in. More signs or more money does not equal more good leads...good marketing and smart thinking equal good leads. And last, you don't send out 10,000 postcards because you couldn't handle the business and would be going crazy. So the name of the game is not to see how many leads you can bring in...that's easy, the name of the game is how many quality deals you can do and live up to your reputation. I could easily bring you or anyone else 30 good leads a month but you wouldn't know what to do with them...heck, ask Adam if you don't believe me. I believe he had set his goals at "x" amount per month and realized that those numbers were unobtainable. And last, you either become a person who works for the hours or you make the hours work for you. Why spend 40-50 hours a week doing Real Estate when you don't have to. If you are doing that, then you might as well go to back to the job that you didn't like because you worked too long and didn't have time for anything else. I spend 10-20 hours a week on stuff, quality deals, and they make up for everything. Like I said, damn good marketing is the key, as well as living up to what you promise people. Hope that helps.

Time to do some math. How much do bandit signs cost you? How much time does it take to put them out? And how many deals per sign? Bandit signs are great but they are uncertain and don't reach the exact areas you want often or people. You send out 1,000 postcards with the right message for less than $350 and you are guaranteed to reach all the people in your target area with the right message. All I can tell you is that the deals I get for postcards are way more than 1 per 200. Good luck and give it a shot.

Here's the scenario I have: Bought a property for $145,000 in January 06 Spent so far about $6,000 fixing it up. Property is worth fixed up $195,000 (confirmed by appraiser) I need more funds to finish up the deal to LO it out. Appraiser said I can subject to refi and shouldn't be a problem. Well the problem is, I have to find a good...read Honest and Smart broker or lender that can help me refi the property with little to no seasoning. I am interested in doing something with low payments upfront like a Pay Option Arm for 5 years because obviously I plan on selling or LO the property. DO NOT contact me if you think you can do this deal or are just trying to make money. Only contact me if you can help.

Cash Rules Everything Around Me? How old are you? Because all I can think about is Wu-Tang

Well from my understanding, if you find the right lender, it should be treated as a refi...anyone on this? Also, if you apply the option money towards the purchase price (which I hear is not recommended), you need not prove anything. If your Contract will apply it towards a down payment, you simply photocopy the front and back (endorsed) of the cashier's check, keep the bank deposit slip, and also keep your monthly bank statement (with the transaction circled). This is if they decide to go conventional. Some of them have decent credit and will go to their own bank (who will likely have down payment requirements) for the lower interest rate. I have heard that good L/O investors have lenders, however, will treat it as a refi, so down payment is a moot point. And if this is true...could someone please explain exactly how they go about working with the bank to treat this as a refi?

Thought this was interesting, to those of you who might not know: Tuesday, February 21, 2006 One of the biggest problems dealing with FICO scores -- those all-important numbers that play such a major role in both your ability to get a mortgage and in the interest rate you'll pay for it -- is that some of what goes into them doesn't really seem to make sense. The key word is “seem.” Why, for example, would canceling a credit card lower your FICO score? Why should having someone just look at your credit history hurt you? And just what is a “de-duplication window”? There are some aspects of FICO “that to consumers seem counterintuitive, or oxymoronic,” says Craig Watts, public affairs manager for the Fair Isaac Corp., in San Rafael, Calif., which created the FICO scoring system. But, he says, “They do make sense once you understand how analytical modeling works.” Your FICO score is a complex blend of information gathered from five different areas. Your credit history is the most important element, and it is worth 35 percent of your final score. How much you owe compared to your actual credit limit is worth 30 percent. The length of time that you have had credit is worth 15 percent, and the types of credit you have and how often you apply for new credit are worth 10 percent each. With that in mind, canceling a credit card would seem to be a good way to increase your score. Watts says that some real estate agents and mortgage brokers who don't really understand how FICO works actually advise clients to do so. The problem, he says, is that “it changes your credit utilization rating for the worst. You are removing available credit from the table without paying down your total debt, so it appears on paper that you are closer to being maxed out from your open accounts.” Let's say you have five credit cards and a $10,000 limit on each of them, giving you $50,000 in available credit. Now let's say you owe $25,000 on them. That means you are using 50 percent of your available credit. If you had one credit card that you owed nothing on, you could cancel it. Doing so, however, would reduce your credit limit to $40,000, and you would then be using 62.5 percent of your available credit. That puts you “closer to the edge,” Watts says. You now have less available credit -- less room to move. This, however, does not mean that you should rush out and apply for new credit cards in order to get a mortgage. To get a new credit card, people would look at your credit score and, even though they might not do anything except look, that can hurt you. It depends on who is doing the looking and why. The three major credit-reporting agencies -- Equifax, Experian and TransUnion -- keep track of every credit inquiry. But not all those “looks” are counted when your score is calculated. So, it's a matter of figuring out which ones count and how they count, because some inquiries do damage your score. There are “soft inquiries and hard inquiries,” Watts says. When a company checks your credit history before sending you a “you have been preapproved” letter offering you a new credit card, it's a soft inquiry. Your bank will periodically check your credit history in order to help you manage your accounts. They also look for people with credit difficulties,” he says. This is also a soft inquiry, and soft inquiries do not count against you. FICO only pays attention to those inquiries resulting from the consumer's active pursuit of new credit. Those are the hard inquiries,” explains Watts. Consider, for example, people who are new to managing credit. They've had credit cards for a year. If they were to apply for 10 new credit cards all at the same time, those inquiries will lower the score. “That's because the consumer is behaving in a way that statistically is much riskier than others with a similar credit record,” Watts says. “When you look at millions of records, that behavior is similar to that of those who will have serious problems over the next two years. Another example would be someone with several recent delinquencies. If that person were to apply for five new credit cards within week, that's an obvious alarm bell. The risk of nonpayment has suddenly gotten worse.” Watts says, “The typical impact of a single hard inquiry on your score is less than 5 points.” But if you have a bunch, the impact is greater. However, when you are looking for a mortgage, you need to talk to a number of lenders -- at least three -- to see who will offer you the best deal. That's where the “de-duplication window” comes in. FICO used to look at your history for the last 12 months, and when it saw “two or more hard inquiries for the same type of mortgage or auto loan within a two-week period, it ignored all but one of them.” FICO assumed you were checking with a number of different lenders in order to make sure you get the best deal. No matter how many lenders you check with, you will probably take out only one loan. FICO doesn't treat credit card inquiries like that, because people don't shop for credit cards the way they do for mortgages and auto loans. FICO expanded the two-week window of opportunity to 45 days because “we observed that consumers are spending a lot more time shopping for the best auto and mortgage loans than they used to. We assume it's because the variety of these loans is so much richer than it used to be,” says Watts. If FICO had not expanded the window to 45 days, “we would be duplicating the hard inquiries for the same mortgage. Our analysts, being analysts, call this the de-duplication window.” De-duplication windows. Getting rid of credit actually hurting your credit. Inquiries into your credit hurting your FICO score. At first glance, they may not seem to make sense, but when you understand them, they just may help you get a better rate on your next mortgage.

The first day of the tenant being in the property, I would have them contact several of my mortgage people who know what I do. That way they could have an early start on understanding exactly what they will be working with and keep this in mind to find people and keep them updated. The more you educate your tenant/buyers like real homeowners, the more they are going to want to make everything work. I hate it when people leave the tenants to do everything for themselves, to me that's against the point. And another thing, I don't if this has been posted yet or you all have seen this but FICO is now adjusting their credit scoring system so that if you or a homeowner applies for several mortgages, even within a 45 day period, they are going to see that and only take one of the credit hits for your report, all the others are not applied. So that means you will/nor your tenants get penalized for searching around for a good mortgage, they will only get hit once. It's about time in my opinion.

Okay folks, Here is what I am proposing. It seems that everytime someone gets a deal done, they tell about the deal somewhat and that's it. I think that's great, but what would be perfect would be if you are working on a deal, and it is going well, and let's say you finish the deal. Take the time to post here and explain: Exactly how the deal went down What issues you ran into What things you had to say What things you had to do Marketing, etc. The whole point of this forum, and Michael, is to learn from each other so I figure this way, everyone can learn exactly what can be done, how people are actually doing them and understand more about the process. Just an idea, but I thought it would help others by learning what others have done.

Craig, To help others, explain all you can about this deal, how you did it, any issues you came across, what you are trying to do, etc. This will help people such as myself and many others understand different deals and how they are being done and give an opportunity for others to learn.

From my personal opinion, it depends on your marketing and it depends on your rental conditions/housing conditions around your market. Do you live in a hot market or a slower market? What are the typical rents your properties around your area and what are you charging in relationship to that? From my personal opinion, if you are in a buyer's market then it may be easier to get someone to pay a higher option fee and higher rents, but if you are in a seller's market especially with good interest rates you may have to lower your option fee in order to attract more buyers. Obviously don't turn your LO into a rental scenario by lowering the option fee to the point of a rental standards, make enough so that you are weeding out bad people, and still covering your butt in case of something going wrong. I think this number usually falls into your rent amount times 2 or 3. That way you have at least 3 months rent in case they leave or something goes wrong, etc. Again, just my two cents but often you do have to adjust your marketing first and then try adjusting your pricing till you find what works. Hope that helps.