I'm offically making myself accountable to the Naked forum!

[vballdarin 1]

Darin, for starters I would concentrate on Cooperative Assignments for the time being. The numbers can be much more forgiving since you're not in the middle of the deal. For example, if the property isn't cash flowing, (no surprise these days), that is the homeowner's concern, not your's. And by working with the homeowner and not negotiating against them, you'll find it much easier to have them sign on.

You mentioned that you're having trouble finding homeowners willing to do a CA. This I find surprising. So my question is what approach are you taking with regards to this, and where are you finding these homeowners?

 

I'm not as familar with working a deal as a CA. I've been studying SLO's and Sub2's and these are what I offer to the sellers. I do understand the basic principles of CA's but having my RE License creates other hoops I have to jump through to make sure I'm doing everything correctly. And I can't get an attorney who is worth 2cents to work with me.(another hurdle).

 

I may have study up on CA's until I have it down cold and then tweak my schpeal when talking to sellers.

[BEV! 0]

Darin,

I hope you can work out the CA instead as it is in my opinion the "recession proof" technique to use on FRBO

Is easy to get a landlord's attention on a CA. ... How? There are two magical words that gets every landlord's (under the sun) 100% attention.

These are not new words, these are only magical to landlords (and in some cases helpful to some FSBO if at all).

What are these two magical words?

.

.

.

"Quality Tenants"

 

Every landlord's dream is to have quality tenants in their rental homes... period!

I guarantee you if you use these 2 magical words early in the phone conversation (or email) on a landlord, you will get his/her 100% attention and they'll be begging you to tell them about how they can go about getting their hands on "Quality Tenants".

This is when you take over and you're in control. Now is up to you at this point to give it your best shot, do this several times and you'll learn fast.

 

How many landlords do you think will answer an ad that reads .......

 

" FREE Quality Tenants For Your Rental Property "

 

The reason I add the word "Free" on the example above is not only because is true but is also because I don't want landlords to think I'm a property manager.

If they think I'm a property manager, they'll also think I will charge them a fee to provide them with these "quality tenants".

 

Oh, and by the way...............

 

Sometimes I feel like I'm NEVER going to find a deal. And I need to get one soon as my checking account is going to go negative come this November! Every deal I look at doesn't seem to have the numbers working out. I can't get anyone to call from my Newspaper Ad: (Home not Selling?....Behind on Payments?....Relocating? We Buy & Lease Houses xxx-xxxx) and I can't put up any Bandit signs, none of the Realtors or Leasing agencies even reply to an email, Between being a caddy and Investor, I'm working 7 days a week/12 hours a day trying to market and find a deal. I realize it' just a numbers game but......UGGGGHHHHHHHH!

Usually, our battles seem the darkest just before the dawn. Just like a woman experiences birth pains right before the birth of her child, we too experience intense moments before breakthrough. Yet, we must not give up prematurely during these heated times.

Many times, we are closer than we think to victory. You’ve come too far to stop now. You are closer than you think to victory.

 

BEV!

[<Steve> 82]

Darin-

 

75% of what I do are CAs. I always start off with a seller explaining the deal as a SLO, but if there is no spread, a CA may work best. The way I move from talking about an SLO to a CA deal is to simply ask the seller how they feel about managing their own property and receiving the rents directly from the t/b (not a renter). They always ask "What do you mean?" Then I lead them into a CA. If the seller is open to one or both types of deals, I run the numbers and the seller will receive a short offer as either an SLO or CA.

 

I think FRBOs would be more willing to go for a CA as they are already managing their property typically; however, I run into the same attitude from FRBOs and preffer FSBOs. BEV! is the expert with FRBOs. And I agree that explaining how tenant/buyers are far better than renters is key.

 

Also, I always go with the 25=5=1 rule of thumb. 25 calls from potential deals to consider = 5 Short Offers = 1 Deal Today. And in a couple of months you will get return calls from a few of the original 25 calls ready to deal.

 

I would also let this seller know he is way above market in the rent amount and price. Why the big jump from his original numbers. It may be the 5 year lease term. Take a 2 year, try for 3. Don't close the door. Send a short offer of what you "can do" even if it is not close to what he "wants" and he may call you back in a month or two when he realizes he "needs" what you are offering.

[happyardy 0]

I do understand the basic principles of CA's but having my RE License creates other hoops I have to jump through to make sure I'm doing everything correctly. And I can't get an attorney who is worth 2cents to work with me.(another hurdle)...

 

Darin,

As a soon-to-be realtor, this is what I have in mind for CAs with private sellers(FRBO/FSBO). I'll need to iron out some issues after talking to my brokerage but you'll get the idea. Here it is:

As far as licensed salespersons doing their personal deals are concerned, I am told that DISCLOSURE is the key. After you have made an upfront disclosure to the FSBO/FRBO about the facts:

a] you are a registered salesperson b] you are doing this deal for your personal investment and may profit from it, you are good to go. After the disclosure, I am told that you could low-ball, negotiate etc., just like any normal buyer would do. Without going into the vital differences between a client Vs a customer relationship that they touch upon so many times in the real estate course, I would suggest you have the FSBO/FRBO as your customer & not your client.

I am assuming that licensed real estate business is the same in the US as we have here in Canada; I may be wrong.

 

So now, if the terms deal is a CA, you could ask the seller(FSBO/FRBO) to mention in the agreement that the option money payment will be given to you & will serve as your commission. Then you could pay a part of that to your brokerage, if required, according to whatever your split arrangement with them is.

Everyone is happy;

FSBO/FRBO: because their property moved quickly & they got a realtor's services free of cost. Wasnt that their original intention of going private; to save the commission costs?

You: because you got paid for your efforts(upfront option money)

Your brokerage: because they got their cut(split % from the option money)

T/B: He is getting your services(as as client or customer) without paying any commission. You could charge your T/B a small percentage if & when they buy the property. I am not sure if I would do that; it depends.

 

Thats my take on it. Similarly, as a realtor, you could do terms deals(SLOs, CAs etc) with listed properties too. You'll need a co-operative listing agent for that.

- RD

[GetSmart 0]

So my question is what approach are you taking with regards to this, and where are you finding these homeowners?

Every thought about recording call with you talking to sellers with slim marginal deals? If so this might help Darin out some. I know you won't buy that line, but it might help me out as well. hehehe

[vballdarin 1]

Usually, our battles seem the darkest just before the dawn. Just like a woman experiences birth pains right before the birth of her child, we too experience intense moments before breakthrough. Yet, we must not give up prematurely during these heated times.

Many times, we are closer than we think to victory. You’ve come too far to stop now. You are closer than you think to victory.

 

BEV!

 

Trust me....I WILL NEVER GIVE UP.(que up the Rocky Music) I will go play in traffic on Interstate95 or on a Los Angeles highway before I will quit. And I'm not going to be one of those naysayers who complain that "SLO's and Sub2's don't work in my area". They do but there may not be as many opportunities for them as there would be for CA's.

 

happyardy.........

And for being a Realtor doing CA's....My broker said that if I buy a property from anyone, I have to split the commission with them. Here is the key....(I'm) not buying anything! The LLC or RothIRA are the principles in the transactions, not me. I happen to work for the LLC. Hence...no commission will be payed to anyone.

 

MC.......

I'm officially going Naked. Your payment is on the way for your manual.

[vballdarin 1]

Dear Diary...

 

I finally sat down, put on my seatbelt, circled all the FRBO's in two local papers and started making calls for CA's. 16 calls in all. And guess what? I'm still alive!!! I guess the leftover feelings of rejection received during high school prom have no consequence when making calls to FRBO's.

 

Here are the totals:

 

Yes we would consider a Rent to Own - 8

No we are strictly looking to rent - 4

Left Message - 4

***Called 1 FSBO-ShortSale and eventually mentioned that i'm licensed. He immediately said, "So your just basically looking to get a listing huh?" I replied, "NO,NO,NO,NO....i'm not interested in listing ANY properties. I'll let the other 1300 local Realtors battle it out. I'm looking to actually help sellers by BUYING their house." We had a good laugh about that one.

 

Bev, Steve, Adam, MC and everyone else are completely right. The more I made it a "get-to-know-you conversation" instead of quizzing them on numbers and if it "will fit into our rent-to-own program"..... the more confortable the seller and I both felt. Make the first call, make the 2nd call, and keep the volleyball rolling till your finished!

 

Next up....I'm going to run some comps on all the possible "yes's", give them a call back and make some short offers.

And next Tuesday I'm attending my CPA's free seminar on Real Estate Investment Strategies where she is offering "strategies to establish sound financial decisions when considering real estate opportunities." **Alert**Alert** = networking opportunities!

 

P.S.

I hope you've all been watching the Men's&Women's Beach Volleyball Olympic coverage!