BakoInvestor

Hey guys, just a quick update. I closed one deal for a $3,500 option at the end of June, but dropped the other property due to a death in the family. I haven't been active since that time. I just wanted people who might come across this thread to know that Michael's system truly does work, and I will hopefully get back into it again soon.

Hi Rich, Your questions are kind of a mix of SLO and CA situations, and all of them can be answered readily, but they will only bring up more and more questions for you. So rather than fielding your questions now, I highly suggest you pick up Michael's manual. After 6 years and hundreds of dollars spent on other courses, I bought his manual (really as a last resort); and after only roughly a month of reading it and the board archives, I'm working on three CAs. If you put Michael's and the other board members' wisdom into practice, you will not regret it!

Absolutely right. Almost without fail when I tell people what I do, they begin asking me how long it took me to get my real estate licence, or they know someone who is an agent/broker/loan officer/circus clown, etc. - and they ALL do the same exact thing as me! Who would've thought!! But it's like what Michael said in a post I read recently; we are educators. Case in point, I had an email conversation with a FRBO yesterday that revealed to me just how ignorant people are about what we do. I sent Michael's first email about lease purchasing and the guy replied with a no. Well, I thought I'd take a chance, so I sent another email that said, "How about this; if I rent the house from you for the next year and all of my payments are on time, would you be willing to sell the house to me at the end of the lease?" And guess what - he responded that, yes, he would consider that. We talked some more over the phone about what I do and I'll be going to see the property later today. So I was pitching the LEASE PURCHASE to him and he didn't even know it! And this was a Landlord! I know this is probably old hat for you guys, but it really opened my eyes to the possibilities out there if we just educate people. By the way, Jon, you're another one of the regulars who've been a HUGE help to me. I've read through hundreds of your posts and really appreciate your contributions!

Michael - It was a great feeling! Doug - Thanks for the post! Your questions and concerns over the years on this board have helped me tremendously.

UPDATE Had a funny thing happen with one of those houses today. I got a call from the owner, whose son almost derailed the deal; he told her what I was doing was illegal according to an agent friend of his. I reassured her that it was perfectly legal and that I'd like her son's number and/or the number of the agent, so I could inform them regarding California's defamation laws. She said she would have her son call me, but that she was comfortable with my company and the process, so we're good to go. Everybody's a hero Aside from that, everything's moving along as planned, and my marketing is back in full swing!

This is where most lose their momentum and get frustrated. Don't quit the marketing process just because you've now got a couple of deals. What happens if these 2 deals fall through? Are you going to quit after 2 deals, even after they're completed and you've got the checks in your hand? Remember: Today's marketing = tomorrow's paydays Good point, Jason. I should have said as much myself. Thanks for picking up my oversight. And while it may not apply specifically to anyone in particular, I have seen this happen all too often. No reason why we can't continue to market for properties even though we already have two in hand. More inventory only increases your chances for closing some deals. Oh, it's definitely good advice, and I appreciate any that I get! I think, though, as you get to know me you'll find that I don't give up. I have a few failed businesses behind me, but the entrepreneurial spirit is strong in me! I hate paying for someone else's vacations

I'm looking to make $3,000 to $6,000 on each deal, and I'm following Michael's advice about letting the T/B talk numbers first. I've already explained to the sellers about the Option Consideration and they're both fine with me keeping it all. On one property I'm offering 25% RC because he's high on the FMV side and I couldn't talk him down. However, it's really not hard to sell the 25% RC to T/Bs anyway. I make it seem like I'm really breaking my bank by offering that. I'm also selling the "Lease Purchase Opportunity", as well as the possibility of building equity over the coming year (our market looks shaky for that, but we'll see). 50% RC on the other property, although I'll probably drop my RCs to 25% to 30% in the future unless I see a competitor offering any more. So far I'm the only one that I've seen who's even advertising RCs, and it's definitely been a huge selling point. I'm setting up open houses for both properties and giving all the T/Bs appointments at 10 minute intervals. And I don't know if it helps, but I've got a rather attractive lady friend who's agreed to show the houses for me

Thanks Steve! In that case, I'll be sure to throw some questions out there from now on I'm in Bakersfield, one of the hardest-hit markets. My leads came mostly from our paper, but I did get a few off of Craigslist. As for the paperwork, yes it was all from the manual, but with my own tweaks so that it flowed better for me. These are CAs, so I'm just following the CA contracts. Thanks Jason, but you'll find that I am not easily frustrated! I know it's a numbers game and I know by not calling/emailing that I'm drying out my pipeline, but I did this specifically so that I can concentrate on the Tenant/Buyer side of things, just get used to the whole process. If these two deals fall through I just jump on the phone, no biggie. That said, FSBO & FRBO marketing will be in full swing, starting Sunday, I assure you! Why on Earth would I do that?? This is my business now

Believe me, you've been a massive help. The manual and this board is what gave me that last push to actually give this stuff a real shot. And CAs are an entirely different approach to what I was doing before. It makes a lot more sense, not only to me, but to homeowners who are trying to get FMV or more for their house. I also never liked the hard sell mentality of buying at deep discounts. I know you can make serious money on that side, but I don't think I'm cut out for it. I like this relaxed approach to investing. The big seller so far seems to be the whole non-exclusive thing, which I picked up from someone here (pilot? rexford? king? I can't remember now). These two deals came from just those first few calls I made. After getting these two properties under contract, I actually stopped making calls to FSBOs; I want to concentrate completely on these two deals right now. I've had a lot of questions, believe me! But the archives are an absolute gold mine. Plus, I'm trying to save any favors for those last minute questions I may need to ask during a deal; that way I don't annoy you guys too much

Hey everyone, I don't want to take too much time, but just wanted to update you all on my progress. I currently have TWO properties under contract and am searching for Tenant/Buyers. Having a Blast! Thanks Michael for your manual. I've been trying this REI stuff since 2004... wish I would have found you sooner

Great point! From now on before I get too far into the conversation I'm going to ask if any other decision makers are present, and if so, could they pick up a line/put me on speaker.

Thanks Steve and Michael! I really appreciate the encouragement! I also really like the Short Offer idea for getting all of the numbers in place and having an overview of the deal; plus, it's simple for us math-challenged folk to follow! I sent the LPA to many of those Sellers last night (with permission) and will be calling them tomorrow. Something I forgot to add in my initial post that I think was really helpful. One objection I came across quite a few times was the, "I need to talk to my wife/husband about this." and I remembered from board archives how much of a deal-killer that is. So the moment they started in with that line, I replied loosely with this response that I had written down for just the occasion, "Absolutely! Tell you what, I know this is a lot take in so if I could, I'd like to email or fax you some information; it's just a one-page letter that you can read with your husband/wife that explains how all of this works, and it will help you point out to him/her all of the advantages we've been talking about. (Pause for affirmative reaction and collect either Email or Fax Number) And if he/she has any questions, I'm more than happy to answer them. I want everyone to feel completely comfortable with this process. And in the meantime, I'll look over the numbers and see if your property fits our families' needs." I'll know tomorrow if this approach has any effect. I wanted to be helpful, but also remind them that ultimately I need to be convinced to work with them. If I get the, "My wife/husband just doesn't feel comfortable with this." line, or something similar, I'm going to give one slight push to see if it's a cop-out or if it's just a matter of them being confused about something. I don't want to lose a sale because I did a bad job of explaining the system. "I completely understand. I know Lease Purchasing is new to some people, and I may not have done the best job of explaining just how powerful a tool it is for Homeowners. I think your house is perfect for our families, and so in their best interest can I just ask if there is anything I could clarify for your wife/husband?" So that's it for now! Thanks again for the advice and encouragement. I can't imagine how difficult this was for you Michael, and the other investor pioneers out there. I would definitely be lost without the manual and this board.

Okay, so I recently received Michael's manual, read through it twice, and have spent countless hours going through forum posts dating all the way back to 2003. I've watched the Naked Investor greats grow from my current position into successful REIs. What an amazing board! I didn't have much time with FSBOs today, but this was really just a trial run to get over the newbie call jitters. I decided to begin my investing career strictly with CAs, so I began my calls with these lines: Me: Hi Mr. Seller, I'm calling about the house for sale? Seller: Yes? Me: Well, Mr. Seller, I was wondering if you would be interested in selling your house for above Market price on a Lease Purchase? Seller: ............say what now? Haha! It was fun! Now, I know this doesn't follow the phone script, but I just wanted to see how that line would go over, and what's interesting is that it was kind of a shock to the Sellers' system. One of them immediately said NO, then almost as immediately asked what I meant With each Seller that gave me that "foot in the door" I went more along the lines of the LP advantages per Michael's script. I really emphasized the following: 1. Above Market Price 2. No Realtor Commissions or Closing Costs 3. Large Buyer Pool 4. Buyer pays my fee, no cost to the Seller 5. Buyer handles all maintenance and repairs 6. Tenant-Buyer vs. Tenant mentality 7. Buyer is thoroughly screened (I'll be screening using basic FHA guidelines, with a bit of flexibility on a case by cases basis) 8. Short Lease Period (12 months) 9. Able to fill the property quickly, and with the most qualified tenant-buyer available 10. Non-Exclusive Option (I am here to help you, the tenant-buyer, and myself, but I will be more than happy for you if you're able to fill your property before I do) 11. Seller retains homeowner benefits until Closing 12. Highest NET profit at Closing I didn't rattle these off all at once. I just peppered them into a relaxed, genial conversation. When the Seller would ask a question, I would answer it, but also slip one of the above points into the same sentence as sort of a "by the way!" comment. I also played up the Good Samaritan role because I want that to be an integral part of my business. Anyway, down to the numbers. I only called 16 FSBOs, and out of those 16 FSBOs can you guess how many said "no' flat-out? ONLY SEVEN! I'm currently getting all my ducks in a row to see what can be done with the Yes's/Maybe's. I jumped the gun a smidgen as I don't have a good grasp of the Contracts, although I know what I need and in what order to do a CA. I just want to go through the Contracts and be comfortable with them. Now, I don't know if my numbers are on par with everyone else's results, but it felt good because I was thoroughly expecting to get shot down every time. If you guys think it's wise, I'm thinking about starting out my Initial FSBO/FRBO email with that "shock" line. So I just wanted to post this and see what you guys thought about the approach. Should I change anything up/improve on anything? And I just have to say, it's actually kind of fun talking to Sellers! They're just human beings with stories to tell, and I'm there to listen -Adam

So I recently ordered Michael's manual. I've gone through it once and am going to go through it a few more times, as well as read the extras, etc. I've also been searching the forum for answers to various questions that have popped up during my first read-through. I just wanted to make a note of something. Not only have my questions been answered through previous posts, but I've gotten a feel for the mainstays around here and I am HIGHLY impressed. I don't mean to come into the fold groveling and such, but I'm honestly amazed at the warmth and friendliness you all show. If only I'd found you guys/gals sooner! Anyway, I just wanted to introduce myself (Hi, my name is Adam and I am an REI-aholic), and say thank you to all of the seasoned investors who take time to answer (and answer, and answer) the questions that you've no doubt seen a thousand times, as well as encourage the newbies and help them get out of the vicious analysis paralysis cycle; me included. -Adam