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abohlig

My First 90 Days / 1yr

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I thought that I would do this to a) Hold myself accountable and :lol: Hopefully help the next guy that summbles down this path and wonders what the first 90 days might be like.

 

Why did I choose 90 days? I originally thought I would do 30 days, but I know there is no such thing as a "get rich quick scheme" Everything worth while takes a lot of effort and time. I also read this quote this morning by William Bronchick "People are lured to real estate because of the quick buck it promises. Don't hold your breath; you won't get rich quick. An "overnight sensation" usually takes about five years. More than ninety percent of the people who take a real estate seminar quit after three months." I reasoned that 90 days would be a fair trial.

 

I have never done a journal like this before, but it seems like a good idea and no one else has done this on this site so here goes. I really like some of the posts that Bev has made, but clearly she did not start her diary right at the beginning of her RE career as she starts her first post on Oct 6,2004 with "Dear Diary, Today I put another house under contract."

 

I am going to start with a little background on myself. I have a very limited amount of knowledge or experience in Real Estate Investing. I technically can't say zero because I do own my own house, (not free and clear) and at one point I did own a duplex. The Duplex I bought in 1991. At that time I was 25 and had no idea that this would be anything other than a cheap place to live. I lived there for two years and then held on to it for another 4. I wound up selling reasoning that I could use the cash for another purpose and it had become somewhat of a hassle. It turns out that the investment in that little duplex way back then was by far the best investment that I have ever made!

 

The past 8 years I have struggled to make ends meet with several different endeavours. I feel like I have given each an excellent effort, however, the end of the check still comes before the end of the month.

 

About a month ago I decided that I needed a way to generate some cash flow for myself. As I mentioned above I always seem to be short every month. I have borrowed against the equity in my house to come up with the shortcomings but this has to STOP! For the past month or so I have been doing some free research on the web about different ways to generate some income with an emphasis on Real Estate as that is what has worked best in the past so why not go back to it again.

 

Recently I have not been able to get that darn duplex out of my head. If only I had taken that money that I made on it and invested in several more...... What would have happened? Well, I know that I would be way ahead of where I am today. Water under the bridge, but this is why I stumbled across this web site and Michael's course.

 

On Tuesday Dec 7, 2004 I came across this web site. Needless to say I got lost in the forums for about 2 hours and after all that reading I decided to go ahead and buy the manual.

 

Between Wednesday and Thursday I probably put in another 6 hours of reading in the Forums. Yesterday after reading a bunch of threads on Cooperative Assignment and Marketing I decided that this is really something that I could do and that I was going to start the Journal as soon as the manual arrived.

 

To my surprise, the manual arrived in this morning's mail. Hence, the writing.

 

My Goal:

 

1) I am going to try and write at least once a week in this journal. I know that I will have many questions at first, so I have not decided for sure if I will ask them in this thread or separate ones. If someone has an opinion, jump right in.

 

2) Within 90 days turn this into a viable full time business. Solve my cash flow problem. Currently I have other responsibilities that will limit my activity to about 20 hrs per week max. To put a dollar amount to it I am going to make it my goal to get my first deal done in the next 30 days and have a minimum of two deals in the second month. Furthermore to meet my gaol I need to generate at least $10,000 profit in the last 30 days.

 

My 90 Days is up on March 10, 2005

 

3/30/05 Update:

 

The title "My First 90 Days" has been changed to "My First 90 Days / 1Yr"

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Welcome to The Naked Investor. Thank you for taking the time to post your journey. Use this forum as much as you can. There are a lot of great helpers that generously give thier time to help others.

 

2) Within 90 days turn this into a viable full time business. Solve my cash flow problem. Currently I have other responsibilities that will limit my activity to about 20 hrs per week max. To put a dollar amount to it I am going to make it my goal to get my first deal done in the next 30 days and have a minimum of two deals in the second month. Furthermore to meet my gaol I need to generate at least $10,000 profit in the last 30 days.

 

It can be done!

To let you know, my manual came about the 25th of October. I have only been putting 5 - 10 hours a week into my marketing efforts (due to my job, family duties and let's be honest, a little dose of procrastination :lol: ) but with this I put my first deal under contract on Tues. Dec. 7th and I am currently marketing for a T/B.

 

You can reach your goals, just put a game plan together, stick to it and visit this forum every day for a little Q & A. :lol:

 

Keep us posted and go make some phone calls.

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Hi Everyone,

 

I just finished reading the manual. That sure was an easy read! I think that I had picked most of this up in the forums.

 

As I thought, I will be doing the CA's first. My plan is to market by e-mail and by calling FSBO and FRBO as discussed in many of the earlier posts.

 

Questions:

 

What happens a year down the road when the tb decides not to buy? Isn't this a concern of the homeowner? If the homeowner calls me again is it reasonable for me to charge another option fee?

 

Michael mentions that he charges $20 to do a credit check on the tb. How do I go about running this credit check? I did a google search for credit check and there are a million places that will do it for a fee. Does anyone have preferences? Does it matter?

 

 

Alan

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What happens a year down the road when the tb decides not to buy? Isn't this a concern of the homeowner? If the homeowner calls me again is it reasonable for me to charge another option fee?

 

If the T/B decides not to buy and the seller would like to work with you again to find another T/B everyone wins. The seller (and you) can increase the rent rate and also increase the purchase price resulting in more cash flow and a higher net purchase price to the seller. The best part? Another option consideration pay check in your direction. :lol: This is one of a few reasons that making the seller happy with your services can be worth more in the future.

 

Happy investing :lol:

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What happens a year down the road when the tb decides not to buy? Isn't this a concern of the homeowner? If the homeowner calls me again is it reasonable for me to charge another option fee?

 

Michael mentions that he charges $20 to do a credit check on the tb. How do I go about running this credit check? I did a google search for credit check and there are a million places that will do it for a fee. Does anyone have preferences? Does it matter?

If the tenant/buyer decides NOT to purchase, the homeowner has the exact same options as they do currently: list with a Realtor, sell it themselves, auction the home either with an auction company or a DIY 5 day sale deal, work with you to get another tenant/buyer, etc. They may have decided it makes a good investment and want to keep it. Most of the time in that year, their property will have increased in value. Should they desire to do another lease option or a straight rental, rental rates have probably increased as well.

 

As you've already been told, you would be charging another "Assignment Fee" -- an "Option Fee/Consideration/Money" is what the tenant/buyer pays for the priviledge of having the OPTION to choose whether or not to buy the house within a set period of time -- for setting up another entirely new deal.

 

As for the credit check, some place local or whatever online service you are comfortable using, it doesn't really matter as long as you get a quick turn around time.

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Abohlig,

 

What happens a year down the road when the tb decides not to buy? Isn't this a concern of the homeowner? If the homeowner calls me again is it reasonable for me to charge another option fee?

 

Don't even worry about that now. Worry about getting that first deal. I could tell you what happens, but it may not happen with you. You may do more homework on the t/ber's than I do.

 

Here's some advice. (Yes, advice)

Holding yourself accountable is a great idea, but having someone else hold you accountable is a necessity. I don't care who it is, but if you can't listen to them whether they're right or wrong, you wont make it.

 

This business is a dream come true, but it can be a nightmare the second your ego takes over that dream. You'll have decisions to make that you wont understand, and tough choices to make that will be uncomfortable. The best advice I can give here, is do what you learn with as little emotion as you can. I'm not saying don't feel proud about your accomplishments, but get ready for an ego pounding.

I was told today that a few people complained about a seminar we did last night. My partner said they were disappointed about what we were offering and that I was about to lose the entire 500 of them due to some things we said. I said, okay. No biggy. He couldn’t believe it. What do you mean okay? He said.

I mean, no big deal. I thought we did a great job and I also thought everyone was extremely excited about what we offered. If they weren't, we'll move on to the next 500.

He told me he was joking, but he was extremely encouraged from my positive attitude.

 

You can take this business to any level you want, but just make sure you're ready for a change. I'm not saying it's a bad change, but in 90 days if you're not looking back going "Oh my God, I had no idea", then you didn't do anything.

Hope that helps. Definitely keep up the posts and the questions. From what I've seen so far on this site, there have been VERY few people that have not done deals.

Regards,

Adam

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I would have to agree with adam I am a newbie and soon closing my first deal never would I have believed this could happen yet I am almost there so keep up the work and boy is there some work to do at least in the beinning. <_<

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Why did I choose 90 days?.........More than ninety percent of the people who take a real estate seminar quit after three months." I reasoned that 90 days would be a fair trial.

Than you should have gone 91.... <_<

 

Me on the other hand it took 6 month before my first l/o deal (SL/O), this was back when there was not much mention of CA's on the board MC later told me he just didn't want to bias the board with his prefrence. But, the evolution moved that way.

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Excellent post, abohlig. I think if you are serious about this, holding yourself accountable publicly can only serve as a tool to spur you on.....or to acknowledge your shortcomings publicly. Both serve a purpose.

I am going to try and write at least once a week in this journal. I know that I will have many questions at first, so I have not decided for sure if I will ask them in this thread or separate ones. If someone has an opinion, jump right in.
I suggest you post your questions separately, Alan. Otherwise, they run the risk of being "buried" in the middle of this thread.

Perhaps you can use this thread to return to weekly and post any progress or problems you have encountered during the past week since you last wrote.

Within 90 days turn this into a viable full time business. Solve my cash flow problem. Currently I have other responsibilities that will limit my activity to about 20 hrs per week max. To put a dollar amount to it I am going to make it my goal to get my first deal done in the next 30 days and have a minimum of two deals in the second month. Furthermore to meet my gaol I need to generate at least $10,000 profit in the last 30 days.
All reasonable and achievable goals, with one caveat. If you don't take action, you'll find yourself watching from the sidelines still, and 90 days older as a result.

This stuff isn't microsurgery. The concepts we utilize and discuss here aren't secretive and aren't difficult to understand. The biggest reason for failure in this business, from my own personal perspective and experience, is lack of effort. That is the usually the only thing that separates those who do deals and those who don't. Good luck, Alan. I'm pulling for you. And we'll do all we can to help. But it starts with you.

It can be done!

To let you know, my manual came about the 25th of October. I have only been putting 5 - 10 hours a week into my marketing efforts (due to my job, family duties and let's be honest, a little dose of procrastination  ) but with this I put my first deal under contract on Tues. Dec. 7th and I am currently marketing for a T/B.

 

You can reach your goals, just put a game plan together, stick to it and visit this forum every day for a little Q & A. 

 

Keep us posted and go make some phone calls.

Right on, JC. And I like a man that can look in the mirror and admit to "a little dose of procrastination". And keep pushing that first deal to fruition.
What happens a year down the road when the tb decides not to buy? Isn't this a concern of the homeowner? If the homeowner calls me again is it reasonable for me to charge another option fee?
Wash, rinse, repeat. :lol:
I did a google search for credit check and there are a million places that will do it for a fee. Does anyone have preferences? Does it matter?
They're a dime a dozen, Alan. Contact a few and see who gives you that warm, fuzzy feeling.
Here's some advice. (Yes, advice)

Holding yourself accountable is a great idea, but having someone else hold you accountable is a necessity. I don't care who it is, but if you can't listen to them whether they're right or wrong, you wont make it.

And good advice indeed. Adam is right with this. Having someone else who knows you, supports your new endeavor, and is counting on you to do well, is usually great motivation to push the envelope.

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Welcome abohlig!!!

 

Make sure you keep focused on the goals you have set. Do not deviate from them! Do not increase your output until you have a good grasp of what you are doing.

 

I signed my first seller on November 20th and have been actively marketing the property. I have fielded about 70 calls (some serious some just kicking the can) I do have a TB in mind, but they dont have all of the option deposit. Sucks for me. Ill keep on looking and see if I can find them another home that would fit their budget...

 

Be PROACTIVE!!! For example: I have fielded all those calls about the home..but the home I have was a little out of the TB's range. If I found a home in the same area for about $20K less, I could fill it quickly with the people who couldnt qualify for the more expensive home. Keep an ongoing list of your TB's and go out and find homes to match their needs.

 

Details of first Deal:

 

Purchase Price: $162,000

Term: 12 months

Monthly Rent: $1,000

Rent Credit: 50%

Option Deposit: $5,000-$6,000 (Split 50/50)

 

While that one is in the works, I went out and found another seller that was motivated.. Should have those contracts signed by the end of the week.

 

Details of second Deal:

 

Purchase Price: $396,000

Term: 24 months

Monthly Rent: $1,800

Rent Credit: 50%

Option Deposit: $15,000-$20,000 (Split 50/50)

 

 

Advice: Your on track....Keep on reading, learning, asking, and doing...

 

This is a very helpful team here and I think we will be all successful because we lean on each other for success. Again thanks to the Naked Investor Forum Members and guests....

 

Happy Holidays....

 

Akin

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Hey, Akin, you've been keeping a low profile and I wasn't aware you were rocking and rolling like you are! Good for you. Finding a qualified t/b should prove to be the easier part of the equation for you. Are these deals sandwich leases or CA's? And what sort of cancellation clause do you have in place?

The thing you must be diligent about is marketing for your t/b's. That's where you pay day is, so be dogged in your pursuit of them. And you might want to be open and flexible to a lesser amount of option money. I don't know your market per se, but some option money is better than none. And if stick to your guns and try and get twenty grand, you may find yourself with nothing to show for your troubles. Let the market tell you what you can receive.

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Nothing wrong with a little option money now...and a little next month...and the next month...and the next.

 

WHY NOT CREATE SOME PAPER FOR YOURSELF??

 

If you've got a hot prospective T/B who has $5K and can aford $200 - $300 a month (or whatever), get some $$$ now, create a note and accept his payments until the option $$$ is paid off.

 

Now, keep this idea in mind and do it several times and suddenly, you've got a nice cash flow out of thin air !

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THANKS MC!!! Yeah I have been reading, listening, and taking action. I have learned a lot from you, the manual, and of course the many successful people on this board. The 2 deals are CA's. I am definetly willing to take a lesser Option amount just to get the deal rapped up. If I have to lower the Option amount that works for me. Just going by #'s, and have to correct my math...I would be shooting for about $12K for the second deal not $15K-$20K.

 

Sold..some money is definely better than none. If I can get more..I sure will take it. LOL :xbiggrin: I do have a note contract just in case the owner/me (in a sandwich deal) would have to carry some of the option money for a short time at 0%.

 

I will begin to put signs up for the second deal this weekend. I have already began posting ads on the internet for it. Just trying to wrap up the first deal then get on to the second and the third......and so on.

 

I am also meeting a builder next week to discuss some of the benefits of a LP vs. selling it conventionally. I am putting together some docs that clearly state what the builder would net working it both ways. Keep my fingers crossed on that one.

 

SOME GOOD NEWS

I talked with a couple who would rather buy the property outright (first deal). The seller has agreed to a 2.5% commission for me on the sale. I will be talking with the buyers tomorrow to negotiate the terms. The purchase price should range from $145K-$147K. Not a bad pay day.

 

Regarding the cancellation clause. I pretty much used your (MC's) contracts which have a cancellation clause which gives me the right to cancel at anytime before the start of the lease. I also added in a sellers right to cancel clause which states (not exactly): If the seller finds a Tenant / Buyer or end tenant before me they would have to pay a set fee ($2500). If the seller finds a TB interested in a rent-to-own, they would refer them over to me to complete the transaction.

 

Any comments?? Thoughts??

 

More to follow...

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Excellent point, Rich, and one I overlooked mentioning. Nothing wrong with some cash flow. But, do be careful. I have done my share of deals like that. And what I often find is a direct correlation between how much option money is put down upfront and how many ensuing problems there may be later on. More money to lose for the t/b, less problems with the deal...and vice versa. If you accept two grand down with a note to collect five more over the next six months, you're asking for trouble.

Akinwale, what can I say except u da man! :xwink: Seriously, way to hustle and make things happen. And that cancellation clause you drew up for the homeowner is great. You protect your interests and put something in your pocket for your time and efforts if they should decide to cancel.

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Thanks MC. I am trying to get things done..LOL :xbiggrin:

 

Everyone has been great. The more I do this the more I love it!!!

 

I like to play by the straight an arrow and would rather collect what I can upfront and be happy with that. I dont want to have to leave it up to the owner to collect the remaining option money and I definetly dont want to have a headache dealing with collecting the remaining balance if the TB decides not to pay. I had an offer for $2K and I told them they would have to come up with more than that. I will be patient for some time and hope I dont have to resort to excepting that $2K.

 

Talk to all later..

 

Akin

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