Gary (MO)

Doug, I guess I don't see Guest's point. If I understand what he is saying correctly, it is somehow the investor's fault or the L/O technique's general flaw that the t/b didn't exercise their option in a timely fashion or that the appraised value of the property decreased. That's simply ridiculous. Like MC pointed out with the stockmarket or anything else in life - there is risk and there is reward. We all have a choice with our actions - and we all must live with the results of our actions, good or bad. In this case all three parties have made poor decisions (in my opinion) and they are each going to have consequences accordingly. It has become too easy in America today to not take responsibility for your own actions . As MC pointed out that's how we get people suing for spilled coffee and it's that same mind set (apparently shared by Guest) that allows us to 'spin' an investment gone bad (or perhaps began bad) into a supposedly common theme of "the t/b is disposable" mindset when it comes to L/Os. It's that same mindset that is responsible for a decline in ob/gyns not being able to deliver babies any more and rising malpractice insurance costs for many providers. I could go on but I won't. What happened to people with a sense of integrity and dependable responsibility? I know Guest is entitle to his or her opinion and I'm sure he or she is a decent guy or gal. I must say though that the Guest and I are on completely different poles on this. Gary PS I'm not sure why this is such a hot button for me. It's not Guest's opinion that bother's me as much as his or her thought process and erroneous conclusions behind the opinion.

Mr. Guest. You imply that somehow the L/O technique is flawed and those that use it are somehow less than ethical. No technique is correct for every situation. Xenia admitted in her post that it was - in retrospect - "not a good deal". Who here hasn't made a mistake? Does that imply that she is slighting the T/B? Does that imply that the L/O technique is at fault here? Your suggestion, I thought, might work out - but - it also might not. Are you implying, then, that if legal action follows that it will be the fault of the L/O technique and some unethical behavior on Xenia's part (and anyone else who uses L/O as a tool for investing)? I guess I take exception to the generalness of your criticism and your lack of identity. Gary

Hi all, I know how motivating and assuring for me it has been in the past when someone - especially a Newbie like me - has posted their deals. I resolved a long time ago to share my story when it came that time. Welllllll.......IT'S TIME! I was becoming frustrated. It seems like every time I would have a "fish nibbling" I would do some Newbie stunt and ruin the deal. (Be a motivated buyer, not find a truly motivated seller, etc...) One day in the not too distant past someone posted a post inquiring about Michael's mentoring service(s). I'm thinking at the time, I didn't know MC did that! Well, I'm here to tell you he does and it works! IF YOU ARE A NEWBIE OR STUCK IN A RUT, I HIGHLY RECOMMEND MICHAEL'S MENTORING. Just like everyone else here in our 'community' Michael is kind and patient and very accessible when you need him. Most importantly though, he takes you by the hand, helping you focus on what's important and significant and teaches you what isn't. Michael also helps you with the details (nuances in the contracts, ways to analyze each deal and countless things you don't even know to ask as a Newbie). I don't mean to say this as a 'commercial' for Michael. I say this in the light of sharing with others something that has helped me tremendously. Is it coincidence that, after diligently marketing and searching since the first of this year that I sign two deals within three weeks of starting Michael's mentoring? On with the story! I was cold calling according to option8's challenge (I think it's on the Marketing board on this site) and ran across a lady who has 24 rentals in her portfolio. It seems that someone talked her into re-financing her properties last fall when the interest rates were low and she made the mistake of pulling out her equity. She is now having trouble getting them to cash flow and is becoming VERY motivated. First house: Appraised for $53K. She owes 48K. The problem is, the tenants have trashed the house to the point that it wouldn't show well and needed much repair (including a new roof). This Newbie would have walked since I was planning a CA. MC says there's still profit here - we'll now increase the length of the lease and market this as a "fixer-upper". With Michael's help I was prepared for our meeting last night. (We met ar Arby's Pete, since Joplin has no Perkins!) He and I reviewed the two contracts needed to complete the task and he made sure I understood each point and was comfortable with them before the meeting. Although she had some questions (which I was able to answer) she had no real objections and was very pleased when we were done. I'll get the keys once the dead-beat tenant is out and the locks have been changed. The lease doesn't begin until 8-1-04! Second house: Also appraised for 53K but in much better shape. A little (ok...a LOT) of trash hauling, painting and clean up and it should be ready to go. Approached this one as a CA. Optioned it at 59K with a $100 positive cash flow for her during the 12 month lease. This lease also begins on 8-1-04. It was neat to watch. At first she was "what's this" and "I don't understand that", etc...as we went through the first contract - but as each point was discussed and she saw that it was a win/win for everyone, she became friendly and not "cautious". She was actually signing the last contract and initialing it before I was done going through it with her. When we were finished they wanted to take me to see two more houses! She told me she has a friend who has 30 houses he has decided to sell - supposedly bread and butter houses for our area. She says, "if we buy them, will you sell them for us?" Now, I get to learn the other side of this; finding a T/B! MC says this is the easier part! I hope this has been encouraging to all of you but especially to all of you who haven't done a deal yet and are wondering if this is really possible or is it just a dream. Keep at it! Gary PS Who knows, maybe Adam's 72 hour turn around record is in jeopardy? (I don't think so this time Adam but..... )

Good for you Kez! It's what's on the inside that counts when we step out into the world and push ahead. From one newbie to another, Gary

Good job Pete! Way to go!

Hey Mark - Can you update us on the latest with this situation? Thanks! Gary

GOOD JOB Kurt! The coolest part is that you can do it again (and again, and again...)! Gary

That is VERY cool Adam....good job!

Hi Pete, This is part of an email the Merle Woolley sent to me. Merle has been investing for over 18 years in Springfield, MO (not too far from where I live). Hope this helps. Gary

Update on my progress with "the challenge": I'm finding that the cold calling has outproduced my newspaper ads. I called 14 FRBOs this morning and got 2 "leads" (sellers that were interested enough to request more info). I'm finding that they end up thinking "this is too good to be true - my asking price, positive cash flow, no maintenance or closing costs, etc... - so it must be flawed somewhere" They are VERY cautious about it...Anyone else experience this? Again, one guy owns "several" rentals and is "tired of it" and thinks he's ready to get out. HE told ME, "I bet we can work something out!" I'm sending him the LPA while he "thinks on it". Gary

Jason, I'm still a newbie yet to complete my first CA but I've sure made lots of cold calls and I'm willing to share my 2 cents worth... When calling the FRBOs I simply ask them if they would be willing to SELL their rental property. That weeds 'em out pretty quickly - less than 15 seconds. If I get a yes, then I ask them if they'd consider selling on a lease purchase - which then gives me the opportunity to expound on the virtues of L/P vs traditional sale. When calling FSBOs I start with the "would you be willing to sell on a L/P"? and go from there. Again it takes less than 15 seconds to get a yes or no. What really helped me was taking the time to dissect in my mind the pros of a L/P to the cons of a traditional sale from the sellers perspective. Once I "owned" that in my own mind, I was able to better communicate it to the potential seller. It's like if I were to say to you, "Jason it's 40 below out there" and you say "yes, I know", you then go outside and, shivering, you say "man it's COLD out here!" That's what I mean by the difference between knowing something and "owning" it. Guys like MC and Adam and probably option8 could do this in their sleep (heck, Adam probably has!) but we (you and me) have to get where we too could do it in ours. I hope this helps! Gary

Hey Doug, Can you use the 20K repairs needed as a bargaining chip to further reduce the price and then flip it to a rehabber? Or....simply take the deal to a rehabber for a 'finders fee'?

Good for you Doug! It sure wouldn't take too many deals like this one to make you a very nice living! I think I've got my first CA in my sites...thanks to option8's "cold call challenge"! After talking to her tonight, here's the numbers: It's a 3/1.5 that 'appraised' (Sept last year) for 53K and she owes 48K. Her payment (PITI) is $439. She is currently evicting a tenant whose rent was $495 (and apparently hasn't been paid in a couple of months). Her first comments to me tonight were, "you know, I just need to list this house with a realtor - I need a sign in the yard and fast". I then remembered (after that initial wave of panic at losing yet another "first" deal) MC's line out of the Manual that I just read again over the weekend...and told her "look, if you list it with a realtor you will lose 6-8% right off the top for commission and closing costs. Couple that with the fact that it will probably take another 2 to 3 months to sell." I then said, "If I could get you your asking price, didn't take a commission and got the property to actually cash flow would you be interested?" She said, "Oh man!" I then said, "plus you would have no maintenance under $200. and no closing costs would you be willing to lease it to a T/B with an option for them to buy the house?" She's mailing me the appraisal and we'll go from there. The best part is that she has 23 other properties in her rental portfolio and very few of them are cash flowing right now! Gary

Good job Doug! Did the agent bring this deal to you? With a spread like that you could probably pay the agent their 4% on the back end...hey, it's better for them than a 'dead' listing.

Thanks Option8. I'm still calling...left messages when I got a machine, talked to people when they did answer. I've had one call that seemed promising but nothing has come of it yet...we'll see. I'm continuing the challenge.... Gary

Good job Pete! Did you buy this home owner finance? How did you find it? Was it a result of your billboard? (Enquiring minds want to know!) Back to Perkins!!!!!! Gary

Now THATS an interesting idea! What you say is true...if we can't easily say what we do how can we expect our customers to grasp it? Another excellent idea option8. Thanks! Gary PS Are you still happy with the results of your web site - is it still producing quality leads for you?

Hi Derrick, Hey, someone somewhere once said that it isn't wise to place flyers on peoples cars or on their mailboxes. Of course, it is totallly up to you.... Hope your deal is profitable! Gary

COOL!!!! Good job Chris&Kez!! Did you find it "warm" calling on the "challenge"?

I know we're probably discussing minutiae here but, I wouldn't lie to the other landlords. Heck, if someone would have shot straight with Mark when he checked this guy's references, he probably wouldn't be having this headache right now :ph34r: . Gary

A good idea...I think I'd stop short of giving this guy a good reference though!

Hey Christian, If the 3 cars bring in 50+ calls per week, where do the other 150 calls per week come from? I've noticed that it's hard to differentiate yourself in the newspapers, etc... Hey Pete, Will you keep us posted as to what kind of draw your billboard gets? Thanks guys, Gary PS Hey Pete, did you get Perkin's to help sponsor the billboard?

Good Job Pete! Congratulations!!! Hey...are you closing it at Perkins?

I've made about 15 "warm" calls since the paper came out this morning (FRBO). I just talked to a lady that has 24 rentals that she says are not cash flowing because she re-fi'ed last year. Most are 3/1or2 with a couple of 2/1s and a mobile home. She is getting "desparate" and is considering listing them with a realtor! We talked about CA as an option for her and she likes the idea since she really can't afford to sell them (or to keep them?). Her only problem was that she couldn't afford to have them vacant while I looked for a T/B willing to live in her houses. My last words to her were (after she gave me her monthly payments and amount owed on 7 of her "worst ones") give me a couple of days to sort through all of this information and I'll email you or call you. Gary

Hey guys, I gotta ask...what's Merle 'famous' for? Everyone but me had heard of him (until Doug mentioned him last week) and he lives in my "neck of the woods"! I don't understand - with interest rates pretty well the same all across the country - how can one market be a "hot sellers market" and another be a buyers market? What's the variable that I'm missing?