Bill O'Rafferty's daily info of importance

thanks for the great tips on getting to know your area and to work expired listings. Banks are so hard to work with at times, and pre-foreclosures are tough too. I will try out the expired listings.

Happy Investing!

Stuart

RE post 185 above, you contact the owner of the expired listing (go to your county recorder/tax collector web page and you can find the name of the owner in the public records) tell them you are an ivestors working with buyers and want to know how much they want for the home, their timeline for selling, etc. Always ask whey they think it did not sell while listed - throw the lisitng agent under the bus if it looks like they did not do something you could do in terms of marketing - always be honest, but many agents just list properties and wait for offers to come - tell them you will aggressively market their home to a specific list of buyers (if you have a list of buyers).

Once you have their name use google, white pages dot com (my favorite) my space, facebook or whatever. This is hard work but if it were not hard work, others would beat you to the deal.

Good luck.

This is great stuff Bill!

If you want Bill's take on almost anything, send me a personal message - I totally enjoy the input, questions and the like. Many blog topics come from PM questions. I never blogged before the DG site but now I check it early in the AM and late in the day - good luck to all.

I have noted two items this month that clearly show a change is coming in residential real estate. Private individuals are selling again. The have recognized the market is going to rise slowly and are offering homes for sale. They realize there will not be a bump in prices but rather a show increase over time. This greatly impacts the reo market which is up in almost every region as reo properties compete with the traditionally higher priced regular sales. The second item that affects the market is buyers are jumping off the fence in an effort to capitalize on both low prices and low interest rates. Many buyers see either one might go up or maybe even both (interest and prices) going up. It is likely. Get between buyers and sellers and gather as much of the profit as you can.

I work with many investors that are trying to either flip for a small profit or buy and hold as much as they can to take advantage of the increase in price that is absolutely coming. As part of any good portfolio, I recommend investors holding property get some units that will flow some cash monthly also. Buy a low dollar property and pay it off so you have $500 or $1000 per month cash flow - over a decade, you could find your self with 2-3K per month coming in and that is the beginning of independence. Once you have 4-5K per month coming in you become financially independent to the point that you work for the things you want because the things you need are paid for from your investments. Your investing should stretch you at some point, but allow for catch up at other points - one need not always be in a building mode. Cash flow is king in this business.

Bill, you stated - work your buyers over and see if the seller will pay you a commission or referral for making the connection between buyer and seller.

****************

Are you talking about getting the house under contract and then doing an assignment of contract to end buyer ? Otherwise, wouldn't one need a RE license to collect a commission for hooking up a buyer and seller ?

Thanks,

Tom

If you negotiate contracts for buyers and sellers, you need a license. If you market a property and make an introduction, the sale is between buyer and seller and you have no part in the sales transaction but for the introduction of the buyer and seller - Marketing performance is not a licensed activity. If you bring a potential buyer to a seller with an agreement that your connecting them by advertising for seller will result in a payment to you there is no licensing activity involved. The sale might go and it might not, buyer and seller have those discussions. Marketing activities and finders fees could be fine as long as you do not engage in activities for which a license is required.

Thanks Bill

Tom

Bill,
I have been receiving emails over the past 4 days about ?new system that has been around for the past 4 years called Open Road 3x. Can you tell me if you have used OPEN ROAD 3X and whether you think it to be as great as it sounds. I ask because we are employed executives with major time constraints. I would invest are very limited cash flow into this system if you or other DGer have knowledge that it performs as advertised. Thanks for your input.
ASh

Great info Bill! Im glad I found this posting!

no experience with this.

If you went shopping in a grocery store and picked up the last water mellon the store had to sell and pushed it through the store in your shopping basket, you would have gained the right to purchase that mellon as long as the seller and you agree to a price. If Fred (or Susan or whomever) comes along and says, "hey we want a water mellon for our picnic and you got the last one - I will give you a dollar for possession of the mellon such that I can purchase it," you would have made your first dollar on an assignment. Fred or Susan could include in the deal that they must be actually able to make the purchase in order to give you the dollar. Then they buy the mellon from the store, give you a dollar and everybody wins.

Facts are these: you never owned it, you had a rigth to purchase it, you yielded that right for some money, someone else purchases it.

Easy as 1,2,3

Someone buys a property, makes some improvement to it and sells it for more than they paid. Done

Some flips include $25 worth of paint and some are $250,000 remodels but the basics are the same.

If you buy a property and sell it for more without doing anything to it, that is not a flip - it is just an equity sale.

No. Some agents can help you sell property better than others as they work with buyers. Some agents are investor minded like me and can help you locate flips and good purchase deals. Some agents, like me, have 5 buyers calling them every week looking for a deal that can make money on and other agents only sell 2 homes per year and have all day long to look for deals for you and only you because they have no buyer but you. The more agents you have looking for the specific kind of deal you want to do the greater the chance you will find the deal.

A buyer's list is a list of buyers with what kind of property they want to buy. A list of realtors is a number of folks that can help you look for what you want in various venues. Loyalty to one agent is usually returned but not all agents can know or learn about every deal. Two or three or four sets of eyes multiplies your chances of getting the deal that will make you a buck.

That definitely answered my question. So the RE agent knows from the start that they are not the only agent I will be working with. Just like I know they could possibly be working for other investors as well. Right?

town - I want as much loyalty from a client as I can get but I understand if I cannot deliver the property a buyer wants they will look until they find it elsewhere - No harm done as long as your realtor of choice has the chance to meet your needs.

Hi Ash,

Dean has worked with the same company that has developed this system to create the Set For Life System. It is basicly the same with Dean's have a few added features. See Carol Stinson and Joe Jurek's posts on the system.

Prof. Bill, I love the way you read the market and present it to us so clearly. It makes us wiser and think outside the box. We all appreciate an benefit from your advise!

Prof. Bill, I love the way you read the market and present it to us so clearly. It makes us wiser and think outside the box. We all appreciate an benefit from your advise!

Seller carryback - seller financing - hard monies to purchase that basically come from no where. I am proposing a deal where a guy wants 50K cash for a parcel of land and while I could give it to him, the market is slow and no one is rushing out to pay him 50K in this market. It is totally worth the money but cash is short for land as land is a long term investment at this point. So I offered him 20K now and he will carry a non-interest bearing note for a year at which time I will give him the 30K remaining. He might have the property on the market for 3-6 more months and get less at that time, so I think if I were his agent I would tell him he is a fool not to take my money. I get a hard money loan from him (he owns the land so there really is no loan there just is no payment until later) and he has a sale. I will rent out the crappy mobile home on the land for $500 per month and at the end of the year I need only come up with 24K as I have 6K in my pocket from rent that I got while I used his equity at no cost to me. I rent the trailer for a couple more years at 6K per year and when the market comes back, I trash the trailer and build a nice little house and sell for a big profit.

Do not be afraid to ask the seller to carry back a note - I do this whenever I can and you will be amazed how often sellers will do so, and at little or no interest.

If you are calling around looking for info in general and use various scenarios (stories) I think there is no harm done. If you lead agents, buyers or others to believe something is true that is not true (your intentions, your listings, etc) you will never win in the long run. Workers in real estate businesses sell their time which is how they pay their bills. Taking their time to show you something you do not intend to purchase has deprived them of the time to work with someone that might purchase something. If you are always up front you will win respect from all and in the long run, respect will get you more deals than leading someone astray one time for one deal. We do not need to be deceptive to be successful.

Prof. Bill, I am looking into a service "Find cash buyers now.com". Looks very promising, but wondered if you had any information or experience with them? Also, I want to thank you for the excellent advise on REI, and also for your posts about the important aspects of managing our lives. PRICELESS..

I do not have experience with these folks but I will say there are a few legit organizations out there that can help you as an investor but most are not going to be able to deliver what you want but will take your money anyway. People buy lottery tickets every week betting on the impossible but I do not. I would ask to see results first, then decide if you want to spend your money to be referred to someone that is likely just a hard money lender looking for a property at 50% of value - I will be your cash buyer if you can get me properties at 50% of cash value. I do not mean to be negative but making decisions correctly most of the time is the first necessity of being an successful investor. You can find a list of hard money lenders on line for free and I suspect this is what they will offer you for a fee.

You can assign a contract any place in the world as long as the seller will allow you to do so. Most of the time banks will not allow assignments with reo properties but most other sellers do not care and will allow an assignment.

All title companies will do double closings (when assignments will not work) as long as the escrow sends them the deeds to record. You need to find an Escrow Co that will do a double closing and almost all will - call around - there are thousands of escrows hurting for cash right now - any escrow in the state can be your escrow any where in the state.

You can be paid out of escrow as a vendor, you can be paid a finder's fee, you can be paid a marketing fee - non licensed folks receive compensation every day for helping along the sale in ways that do not require licensing. Be creative and find a good agent that has done investing - they will lead you through the deal.

Google hard money or use any web browser and you will find many advertising hard money loans. Make a spread sheet with requirements when you talk to or read about the lending they do. The columns (across) should be: Up front costs, interest rates, term (length of note), fees, timelines, appraisals, Loan to Value (both at purchase and after repair value), Finance repairs?, liquidity (do you have some of your own money to invest), inspection required, purchase in whose name, etc. Fill out the rows downward in your spreadsheet with info they provide and you will have an easy reference as to which lender works for which kind of properties. Make a spreadsheet just like this for buyers and sellers. Match up buyers and sellers to your deals like you match up funding sources to purchases.

Good luck.

In the past 2 weeks banks have been accepting every short sales that makes sense financially. Whether they have been sitting on the application for 7 weeks or 7 month, the upper level decision makers told the adjusters and mitigators to close the short sales before the end of the year. If you have been working on a short sale, or 6 in my case, you will have some presents under the tree this Christmas. It has nothing to do with your application or the seller's hardship but rather the financial position of the bank.

Looking for logic, systems that are logical, consistency - good luck with that but I will say if you can put a short sale together quickly your chances of getting approval immediately is better than at any time in the past 3 years. I have been working a half dozen potential deals since April and I have 4 approvals in less than 10 days - it will be ho, ho, ho at my house this Christmas - best wishes

If you gain title to property and rent it out there is one thing you must do. Be arbitrary, be absolute and mean what you say. I am not saying you should not be fair, keep the property up and the like but tenants are most often the kind of folks that have always been and will always be tenants. You need to tell them the rules and stick by that at all costs. If you have to go weeks without rent so be it - if you have to evict, get it done. Tell them if the rent is not paid, you will evict and they will have all kinds of trouble getting a new rental with an eviction on their credit - tell them they need to believe you. Also tell them if they come to you before the rent is due you will work with them but if you have to chase them, the deal is off and they are out. If you believe it they will believe it. Landlords create much of their own problems by failing to follow up on their own rules, hoping the renter will catch up but they never do - let them fall one month behind and you will NEVER see that money.

Sound tough? If I have extra money this month to pay someones rent it will be my family not theirs - I want the best for all but I should not have to pay for someone else's poor planning or family crisis. Do not be lazy, do not be overly hopeful, run the rental like a business. If you miss your payments will the bank say, oh he is having a tough time? No - you will be out and that must go for renters as well. If you cannot or do not run the rental like a business, get out of the rental business.

I truly thank you for all the information in your journals. I didn't get a chance to attend the EDGE this year. So I'm looking forward to next year. I've found a title company that says that they will complete assignments and double closings as long as everything is disclosed. How does not go about disclosing everything. I understand what is means to tell both parties what's truly happening. Is there a disclosure document already created? If so, where can I find it?
Michelle W
"Great Expectations"

Full disclosure means all aspects of the deal are in writing and available to each party, buyer, seller, all agents, escrows and banks. If you use a real estate agent, they will fully disclose in the contract - if you just have an escrow with no other contract, escrow will put in writing everything you ask them to include. What must be included is EVERY CONTRACT ITEM AND EACH STEP TO BE EXERCISED TO EXECUTE THAT CONTRACT. Who will purchase, for how much, where will funds come from, where will it go, any agreement in place for after closing, occupancy, and on and on. Full disclosure means restful sleep. Always be honest and up front and sometimes folks will still take you on but you have a defense to allegations of wrongdoing when the average person believes you did the best you could do to be forthright.