CA Challenge

[Adam King (MI) 1]

Hey all,

Just wanted to quickly (because of the darn time) share something that has been working this week to get me closer to the other 9 deals. I have not sent one LPA or other mailers, but have put two ads in the paper. (Sunday only) The ad reads;

 

Rent To Own

3 bedroom homes

City/City/City

877 xxx xxxx Ext xxxx

 

This has brought in over 40 calls. I call the people back and pre-qualify them to see if they have a certain amount down, how long on the job etc. Once they're pre-qualified, we tell them we need to set up an appointment to have them fill out a rental application (To run their credit) and criteria agreement. (I only charge $35.00 a person, but that number is maxed from experience and it does add up when you sign up a lot of people) So far we have signed 4 people up since Friday securing more than $25K. We also have meetings covering the whole rest of the week and will start looking for properties for these people tomorr...uh, today.

 

Again, I have NOT put out any bandit signs, mailers etc. I am going after the buyers first.

I am really scrambling to get this challenge met, but other deals are showing much greater profits and I don't want to lose them. Either way I thought I would share what's happening to get the CA's out of the way.

Regards,

Adam

[Jason (AL) 1]

Cool, Adam

 

 

A few questions:

 

1.) What are you telling the potential buyers (T/Bs) if you do not have a house for sale? (I think I already know, just asking for the benefit of the forum)

 

Looking at your ad, it seems to be "generic," in the sense that you're publically building a buyers list. So I'm assuming it's a pretty smooth conversation with the people looking for homes. They do know before-hand that this particular ad wasn't REALLY for a specific house, rather to get a pool of buyers. (correct?)

 

 

2.) By finding the buyers first , is this somehow going to help you find more sellers willing to do a CA?

 

I mean, you can have all these buyers, but no "CA friendly houses/sellers" to fill them with...

 

3.) If by finding the buyers first doesn't somehow get you more CA-willing sellers, then what are going to do to get more seller calls?

 

Thanks,

Jason

[Adam King (MI) 1]

Jason,

Yes, I am publicly building a buyer's list. And because of the fact that it's so generic is what's making most of the calls "good and motivated prospects". There have been very few people that have not qualified. I realize that I have said that 40 people have called and we have only signed up 4 so far, but if you could see the meeting schedule for the rest of the week you would see that it's working.

 

1.) What are you telling the potential buyers (T/Bs) if you do not have a house for sale? (I think I already know, just asking for the benefit of the forum)

 

I am telling them that I am a consultant that has a list of properties from my clients (which I do) and the ability to get them into just about anything that realistically fits their criteria if I don't have a property. They have been very pleased and excited with the service. Of course, I tell them that I will not show them even one property until they fill out the application, pay the fee and I run their credit. THIS IS A BUSINESS!

 

2.) By finding the buyers first, is this somehow going to help you find more sellers willing to do a CA?

 

What do Realtors ALWAYS say when they call FSBOS? I may have someone interested in your property. Do they? Usually never. Do I? Just think leverage....

 

3.) If by finding the buyers first doesn't somehow get you more CA-willing sellers, then what are going to do to get more seller calls?

 

First off, if I can't find a property to do a CA with, I'll buy one by making a low offer directly with my Realtors and put the prospect tenant/buyer into it. That way I'll get an assignment fee twice by flipping it to my investors.

I don't wait for the phone to ring from sellers, I work with my network to get leads from motivated sellers. This is no joke, but I have been averaging more than 30 a week from my clients. (This week way more than that) These are from all of the normal marketing techniques that almost everyone teaches. Mailers, signs, expired listings, websites etc. Most of the calls come to me as their consultant. If I can't do the deal with my client and it's doable, then I'll take it myself and get them a referral fee.

Regards,

Adam

[Golflover 0]

What service do you use to check credit? Does it just give you their FICO score or their whole credit history? How much does it cost? Is it per request, week, month, year?

 

Or do you figure if they are serious enough to fill out an application and pay the fee, then they are serious enough for a L/O?

[Adam King (MI) 1]

Golflover,

If they're serious enough to make an appointment, we've got em. The $35 fee is the cost for processing the application and also shows their level of commitment.

 

I use Onlinemortgagereports.com to run credit. You need a physical building as an address to run credit though. I also use my main broker MichelleWilson.net.

Regards,

Adam

PS Quick update. Since I posted last night, we have made 11 appointments today.

[Doug Pretorius (ON) 9]

Adam, at this rate you'll soon be making more in app fees than CAs! I think you've just uncovered a new niche, LOL

[Golflover 0]

Adam,

 

So, it costs you the $35 dollars per application check? If so, I would charge $50, at least this way your making a little profit

 

Also, if they raise a stink about the charge, you can always tell them that you'll take it off of the sales price of the home. If they dont buy, they get no money back...if they do purchase the home, then your making out like a bandit on the back end and $50 wont even make a dent in your profit

[Gary (MO) 0]

Adam

Yes, I am publicly building a buyer's list. And because of the fact that it's so generic is what's making most of the calls "good and motivated prospects". There have been very few people that have not qualified. I realize that I have said that 40 people have called and we have only signed up 4 so far, but if you could see the meeting schedule for the rest of the week you would see that it's working.

 

Perhaps it's my area. I've run exactly the same ad, gotten probably 75 calls and had a total of 3 people that actually had option money saved. (None were interested in the house I had )

[Doug Pretorius (ON) 9]

Gary, now if you had set up appointments with those 75 (probably about 120 applicants) at $35 a pop, that's $4,200 and you haven't even sold a house yet. Of course 72 of those would be rejected because they didn't have any money. That leaves you with the 3 to find houses for. Like Adam said, those app fees add up!

 

Check with your broker, mine will do checks for under $5.

[Adam King (MI) 1]

Gary,

 

So, it costs you the $35 dollars per application check? If so, I would charge $50, at least this way your making a little profit

 

We have tried it at $50, but a number like $35 seems to never scare anyone. I just need to get in front of them and make sure I'm not wasting my time and a $35 commitment hasn't failed yet. I actually met someone on Friday and as soon as I said "$35 a person", the wife told us they were only there to meet us and see what we're doing. I told her that I didn't come to hear myself talk, I came to sign them up. And that's what we did.

 

One thing that may make me seem successful, is that I don't "think" about what I'm "going" to do. I do it and then examine what I've done. I did the "thinking" thing for two years before my first deal and that got me no where. Instead of thinking of what I could have done today, I have had a productive day, deposited over $200 of nonrefundable applications fees, secured another $20K or so, have my team doing credit checks and meeting appointments as I write this, and I'm still here at 5PM in my damn shorts. That's what it's all about.

 

Don't get me wrong, I'm still busy. But at least it's under my terms.

 

Perhaps it's my area. I've run exactly the same ad, gotten probably 75 calls and had a total of 3 people that actually had option money saved. (None were interested in the house I had  )

 

It's not the area. I bet you $100 I could get at least 10 appointments from those $75 calls. My minimum is $3K down although the average so far is $5K down. That too will add up if you do a lot of them.

Hope that helps a little,

Adam

PS Doug's right about making money with these appointments. I'm also trying to sell pre-paid legal memberships to every one I meet. I make about $100 up front and residual income after that. That right there could easily put me over $1,000.00 a week if I never did a deal again. Something to think about.

[Golflover 0]

Adam,

 

I'll let ya slide this time It wasnt Gary that wrote about the $50, it was I...the lover of golf. Now that my feelings are completely distroyed, you didnt answer my original question

 

How much does that website charge per credit check?

[Gary (MO) 0]

Certainly a lot to ponder over Adam...

 

One thing that may make me seem successful, is that I don't "think" about what I'm "going" to do. I do it and then examine what I've done. I did the "thinking" thing for two years before my first deal and that got me no where.

 

I believe you are right. It almost seems that a person who is umemployed with lots of time has a better shot at getting going in this business than does someone who is employed full time. (Of course, that could be me telling myself another excuse too! )

 

Instead of thinking of what I could have done today, I have had a productive day, deposited over $200 of nonrefundable applications fees, secured another $20K or so, have my team doing credit checks and meeting appointments as I write this, and I'm still here at 5PM in my damn shorts. That's what it's all about.

 

Exactly.

 

It's not the area. I bet you $100 I could get at least 10 appointments from those $75 calls.

 

OK...7 of the 10 don't have any money for an option fee. Why would you schedule appointments with them? How would you pick those 7 from the other 72?

 

Thanks Adam!

 

Gary

[Adam King (MI) 1]

Golflover,

 

Adam,

 

I'll let ya slide this time  It wasnt Gary that wrote about the $50, it was I...the lover of golf. Now that my feelings are completely distroyed, you didnt answer my original question 

 

How much does that website charge per credit check?

 

Dooh...I knew that. I was posting between catastrophes. I get charged $12.50 per credit check from OnlineMortgageReports.com, but Michelle charges me nothing. I haven't ran any myself in some time. That way it all goes towards my fees. I.e. total profit.

[Adam King (MI) 1]

Gary,

 

I believe you are right. It almost seems that a person who is unemployed with lots of time has a better shot at getting going in this business than does someone who is employed full time. (Of course, that could be me telling myself another excuse too! 

 

Man, you hit that one on the head!!!

 

OK...7 of the 10 don't have any money for an option fee. Why would you schedule appointments with them? How would you pick those 7 from the other 72?

 

If you're getting people calling with no money, then you need to change your target market, or your negotiating. I market in areas where most of the houses are $100K and up and everyone tries to see what the minimum is to put down.

I was just saying that you need to know what to say, or stick to your target market. There's too many people that say that they only have $2K or so, I don't hang up the phone right there I just tell them to call me back when they have $3K or more (Soon to be higher) and I'll help them. They almost always quickly change their tune. Don't forget, no one wants to put out the number first, so that's why they may say they only have X amount to put down when they really have much more.

Once I get a figure that works for me, I have then put it into writing. That way they're obligated for their own benefit if I find them a property.

Regards,

Adam

[Gary (MO) 0]

Adam,

 

If you're getting people calling with no money, then you need to change your target market, or your negotiating. I market in areas where most of the houses are $100K and up and everyone tries to see what the minimum is to put down.

 

Through all of this experience with these two houses, I suspected this. I had a $53K house that attracted folks who weren't of the buyer mind-set. In fact, this was one of the assumptions I was making that I knew I had yet to test. MC says there's an old saying "ugly houses attract ugly tenants"...

 

Thanks Adam