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borderline deals???


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#1 timmym22

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Posted 17 August 2009 - 09:01 PM

I have had a lot of what i call borderline deals. I have talked to people about what i do, CA's and they are ready to go. Then after i follow up with the contracts they back out. Most of them i talk to what to keep their options open and feel that signing a contract with me limits their options. Also, most of them post their own ads on craigslist which is how i market as well. I guess they are not that motivated yet, correct?
1. on your initial call with the seller, is it better just to talk about the overall benefits of a lease purchase and not bring out your tricks of the trade until its time to sign the contracts?
2. I feel like i am running people off by telling to many of the details, how do you not spill all the beans but yet answer any questions they have?

thanks for all the help

#2 jhanson8

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Posted 17 August 2009 - 09:53 PM

I have had a lot of what i call borderline deals. I have talked to people about what i do, CA's and they are ready to go. Then after i follow up with the contracts they back out. Most of them i talk to what to keep their options open and feel that signing a contract with me limits their options. Also, most of them post their own ads on craigslist which is how i market as well. I guess they are not that motivated yet, correct?

Been there brother! Read some of my other posts to see how "interesting" things can get with these almost deals. :angry: I would suggest mentioning that the contract is non-exclusive, so these people can sign a contract with you while "keeping their options open" or signing with a Realtor or whatever. It sounds like the objections you're getting are pretty vague, which suggests to me that they are not motivated enough. Follow up with them in a few weeks and see if anything has changed.

1. on your initial call with the seller, is it better just to talk about the overall benefits of a lease purchase and not bring out your tricks of the trade until its time to sign the contracts?
2. I feel like i am running people off by telling to many of the details, how do you not spill all the beans but yet answer any questions they have?

MC has said this over and again on this forum, but it's worth repeating: keep things simple. Bringing out the "tricks of the trade" will only confuse people, and confused people always say no. Many people we deal with have legitimate questions, and we should of course answer them honestly. However, keep your answers short and to the point. These people don't need to know the entire process; only how it will benefit them. If they're still asking procedural questions they probably want to learn the "tricks" for themselves. :(

#3 MichaelC

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Posted 18 August 2009 - 08:18 AM

Timmy, what jhanson said. If you give away the store, what does the homeowner need you for? You've just put them in business for themselves.
Highlight the benefits of how a CA works for them. If they ask specifics, such as, "Where do you advertise?", don't send them links to your ads. Instead, say something like, "Online, offline, newspapers, flyers throughout the neighborhood, mortgage brokers I network with, Realtors I network with, and every other way I can think of". This will wow them and overwhelm them. They'll be thinking, "Damn, this guy is great! We can't do this ourselves. Where do I sign!" :angry:

#4 SteveK

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Posted 18 August 2009 - 04:25 PM

Had three of those myself lately. I can sure do a good job on the phone of selling the concept and getting them to see the light, but then when I pull comps from any one of the title companies I have been using and run the numbers I see there is about a 100k loss from the time they bought the home until now and when I send out the short offer I never hear from them again.

I think that even if someone has a ton of equity in their home, the 100k loss is just too much to take. Such is life in So Cal. I may need to start branching out to other states til this market turns around out here

I have had a lot of what i call borderline deals. I have talked to people about what i do, CA's and they are ready to go. Then after i follow up with the contracts they back out. Most of them i talk to what to keep their options open and feel that signing a contract with me limits their options. Also, most of them post their own ads on craigslist which is how i market as well. I guess they are not that motivated yet, correct?
1. on your initial call with the seller, is it better just to talk about the overall benefits of a lease purchase and not bring out your tricks of the trade until its time to sign the contracts?
2. I feel like i am running people off by telling to many of the details, how do you not spill all the beans but yet answer any questions they have?

thanks for all the help



#5 MichaelC

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Posted 18 August 2009 - 05:29 PM

Steve, I feel your pain, as your market and mine are quite similar. A lot of homeowners taking it on the chin. There are two approaches you might consider. One is what you already said: to look outside your immediate area where the boom and bust cycle hasn't been so dramatic. The other possibility is that these folks might need to just rent their property for a year or more until the market stabilizes. I suggest that now all the time if the numbers don't work.

#6 SteveK

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Posted 19 August 2009 - 01:28 PM

When you suggest that to them do you offer to find a tenant for them? Just lookin for some more ways I can make money while it's down around here

Steve, I feel your pain, as your market and mine are quite similar. A lot of homeowners taking it on the chin. There are two approaches you might consider. One is what you already said: to look outside your immediate area where the boom and bust cycle hasn't been so dramatic. The other possibility is that these folks might need to just rent their property for a year or more until the market stabilizes. I suggest that now all the time if the numbers don't work.



#7 MichaelC

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Posted 19 August 2009 - 03:16 PM

Absolutely, Steve. It's a way to parlay your know how into money. You won't make a killing doing these type deals, but I'm a glass half full kind of guy. Trying to take advantage of what the market is giving us these days, when I run into a homeowner in a situation where renting might be their best or only option, I offer to help them find a tenant of their choosing. Not all will go for it, wanting to save a buck and do it on their own. But some will bite and, when they do, I charge them one half to one month's rent for my help, depending upon what I think I can get them to go for and whether or not I'm the one doing the showings.
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#8 jhanson8

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Posted 19 August 2009 - 04:21 PM

I'm getting the upside down sellers like crazy here in central Cali. Something else I'm seeing a lot of is sellers who literally can't afford to move, but can't afford to stay either. They have major negative equity, so they would have to bring a huge check to the table if they sell. They can't buy another house and rent out there current one because they can't get a loan. Plus, their mortgage payments are almost double market rent. If they lose a job their pretty much done.

I really felt bad for a couple I spoke with last weekend. They bought in 2003, they're now upside down, and they have no option other than to stay in their home, hope prices go back up, and pray they stay employed and healthy. They even thought about moving to an apartment and doing a sandwich LO through me, but they couldn't afford the monthly rent plus the extra $700 to cover the difference between their LO rent and their mortgage payment.

I used to have no sympathy for the people with these "toxic" loans. They were the ones who got in over their heads. Sure, the predatory lenders deserve blame, too. But, more and more, I'm seeing responsible people who did everything right get screwed because they bought at the wrong time (pretty much anytime from 2003 to 2005). Now the "experts" are predicting prices in this area won't climb for another year or more. I really wish I could help these people, but it looks like a lost cause.

#9 SteveK

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Posted 19 August 2009 - 04:38 PM

Can't tell you how many times I've seen all you mention down here in San Diego. Unfortunately, outside my immediate area is Orange County (birthplace of the subprime loan), Riverside County (foreclosure capital of So Cal), and LA County (nuff said). to the east is Phoenix (prices have dropped almost 50%) and to the northeast is Vegas which is the same as Phoenix. Are you in Ventura County or further north?

I googled "cities least effected by the boom/bust cycle" and got a list of top ten where homes have remained rather stable and I'm trying there for now. Go east my friend!

I'm getting the upside down sellers like crazy here in central Cali. Something else I'm seeing a lot of is sellers who literally can't afford to move, but can't afford to stay either. They have major negative equity, so they would have to bring a huge check to the table if they sell. They can't buy another house and rent out there current one because they can't get a loan. Plus, their mortgage payments are almost double market rent. If they lose a job their pretty much done.

I really felt bad for a couple I spoke with last weekend. They bought in 2003, they're now upside down, and they have no option other than to stay in their home, hope prices go back up, and pray they stay employed and healthy. They even thought about moving to an apartment and doing a sandwich LO through me, but they couldn't afford the monthly rent plus the extra $700 to cover the difference between their LO rent and their mortgage payment.

I used to have no sympathy for the people with these "toxic" loans. They were the ones who got in over their heads. Sure, the predatory lenders deserve blame, too. But, more and more, I'm seeing responsible people who did everything right get screwed because they bought at the wrong time (pretty much anytime from 2003 to 2005). Now the "experts" are predicting prices in this area won't climb for another year or more. I really wish I could help these people, but it looks like a lost cause.


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#10 MichaelC

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Posted 20 August 2009 - 05:57 AM

Go east my friend!

Hehe. Easy there, Mae. You best stop your wagon when you hit the mighty Mississippi. Much further east than that and you'll find conditions quite similar to your own. :blink:

#11 jhanson8

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Posted 21 August 2009 - 09:26 AM

I'm further north in Tulare county, just south of Fresno (farm country). The real estate market here is double bad because we have all the bad loans and foreclosures like everywhere else, but this area also had the largest amount of new home construction in the nation. In my city alone there is enough land set aside for new homes to cover 14 years worth of growth. What were these builders thinking? Now, the builders are selling these brand new homes for way less than existing homes can sell for, which only drives down the market and kills equity. I'm definitely branching out to other states, because California is going to be bad for years to come. I'm just worried about dealing from so far away.

#12 SteveK

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Posted 22 August 2009 - 11:52 AM

I know exactly where you're at. And I do remember all that building they were doing up there during the boom. I just read the ther day that 43% of mortgages in SD are underwater and 60% in Vegas! I too have my worries about dealing from far away (collecting $$$ mainly). For every "no" I get I've been responding with an offer to rent their home for them and save them the time and hassle. At least rents here are high so if I get half or all of $2k it's something to chew on

I'm further north in Tulare county, just south of Fresno (farm country). The real estate market here is double bad because we have all the bad loans and foreclosures like everywhere else, but this area also had the largest amount of new home construction in the nation. In my city alone there is enough land set aside for new homes to cover 14 years worth of growth. What were these builders thinking? Now, the builders are selling these brand new homes for way less than existing homes can sell for, which only drives down the market and kills equity. I'm definitely branching out to other states, because California is going to be bad for years to come. I'm just worried about dealing from so far away.



#13 MichaelC

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Posted 23 August 2009 - 10:23 AM

Don't let the distance scare you, boys. Most folks you deal with will be honest and ethical. And you can always do a lot to protect your position with a well worded agreement between you and the homeowner. My thinking is that until I see being screwed over is the norm and not the exception, the USA is my backyard.

#14 jhanson8

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Posted 23 August 2009 - 11:40 AM

For every "no" I get I've been responding with an offer to rent their home for them and save them the time and hassle. At least rents here are high so if I get half or all of $2k it's something to chew on

I'm not understanding what you're offering. Do you offer to manage the rental or find a tenant? Or do you actually rent it from them and then sublease? I've been up since 2am with a sick infant, so the mind isn't as sharp as usual. :unsure:

Don't let the distance scare you, boys. Most folks you deal with will be honest and ethical. And you can always do a lot to protect your position with a well worded agreement between you and the homeowner. My thinking is that until I see being screwed over is the norm and not the exception, the USA is my backyard.

Does the fact that you're not local cause any problems? I've only spoken with a handful of sellers from outside my area, and they cooled considerably when they found out I wasn't nearby.

#15 MichaelC

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Posted 23 August 2009 - 11:55 AM

I'm offering the same thing I offer a local homeowner: a CA. I do everything except the actual showing. I explain to them that I don't have a local rep in their area, but if they can assist with the showings, I'll do the rest. I tell them, "You sell the house, I'll sell the deal". Not all agree to this, of course. But some will, and you'll get a deal where you otherwise wouldn't have.




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