How to Profit at Lightning Speed

How to Profit at Lightning Speed

Every investor should have one or more ways to sell properties quickly.  Entering into a real estate transaction without knowing your exit strategy can be hazardous to your financial health.  It can be painful, frustrating and downright costly.

What will you do?

Do you plan to flip the property to another investor?  Are you going to fix it up and sell it retail?  Maybe you plan to do a lease option.  Before determining your best exit strategy you need to consider things like; how much money you are going to put into the property? How long do you expect to hold it? How long do you think it will take to sell?  How long might it take your buyer to get financed?  These are important questions you need to consider before you enter an agreement to purchase a property.

When starting out, many new investors sell their first few deals to other investors in order to build up their capital reserves.  If you learn to buy right, you can expect to make $1,000 to $5,000 per deal by simply assigning your contracts on your first deal or two.  You do not have to own a property to make money from it.

All you need to do is control the property by putting it under contract.  Once you’ve located a prospective deal and secured it with a purchase agreement, you can sell it to another investor for a profit.

Bargains for bargain hunters

Example:  You find a property worth about $100,000 in its current state. It requires $10,000 to renovate the property.  The After Repaired Value (ARV) of the property is $120,000.  You negotiate a purchase price of $75,000 and sign a purchase agreement with the seller.  Next, you find another investor who is willing to pay $77,500 for the property and do the necessary repairs. This allows you to sell your deal to another investor for $2,500 and walk away with a nice profit using no money of your own. The other investor will make a nice profit as well.

In this example, the property was purchased at a 25 percent discount from its current market value and a 37% discount from its ARV.  Discounts can vary widely, based on things like the neighborhood, schools, access to transportation, shopping, as well as, the level of renovation the property needs.

Your buyer will likely be a rehabber who will renovate and retail the property.  Be aware, that when they sell the property they will make more money than you will on the deal.  Effectively when you wholesale, or flip, contracts your buyer takes on more risk and earns a greater reward.  Do not let his bother you. There is margin enough for you both to profit.

Finding Buyers

One good place to find buyers for your properties or contracts can be your local investment club or association.  You’ll meet other investors including wholesalers, rehabbers, landlords, agents, brokers and lots of other people involved in the property investment business.

You can find a list of local investment clubs and associations from around nation at  You can also find local groups by Googling “real estate investment clubs” or checking out local Meetup Groups.  As you begin to network you can begin building your buyers list.  This way every time you put a property under contract you can quickly and easily send out an email to your entire list.

Another way to build your buyers list is by using classified ads both online and offline.  Offline ads will cost money you might not have whereas there are plenty of free online alternatives such as

Bandit signs are another great way to attract rehabbers, landlords and other investors (be sure to know your local laws regarding bandit signs).   As you build your list you need to learn and keep track of what each of your buyers is looking for so you can quickly and easily match buyers and properties.  Don’t spend too much time with inexperienced investors because many aren’t  able to perform quickly.

Prescreenng and qualifying

Here are a few tips on qualifying your callers:

  • How many houses do you buy each year?
  • What type of discount do you usually look for on properties?
  • Do you have your own cash to close or will you borrow it?
  • How big a renovation can you handle?
    • Paint and Carpet (Level 1)
    • Replacing kitchens and baths (Level 2)
    • Moving walls, Re-pipes, Rewires (Level 3)
    • Sinkhole houses, Burnouts, Re-engineering (Level 4)
  • If I find a bargain, how quickly can you close?

When you prescreen investor/buyers using these questions, you will quickly have a list of qualified investors to contact when a new project comes along.  If you don’t have an investor association in your area, check out groups on social media sites like Facebook or Linked-In.  There are lots of groups, check out Transaction Engineering Full Time on Facebook.

Retailing to the masses

Many new investors try to retail properties to owner occupants without a real estate agent to in order to save money on commissions.  While this may sound like a good idea, it usually isn’t.  Besides trying to avoid paying a commission, they usually neglect to account for the cost of an agent’s commission in their estimate of sales expenses for the resale of the property.

The primary benefit of using a real estate agent is to have your property listed in the Multiple Listing Service (MLS), which is used by all other real estate agents.  The MLS will give your property visibility to the largest segment of the home buying public. This will allow you to focus your efforts on finding more deals rather than waiting for buyers to show up at your property.  But in most markets commissions can run 6 or 7%.

In today’s market there are alternatives to the MLS; free online resources like,,, and my favorite is because it will automatically add your properties to the other property portals including Zillow and Trulia.  It also allows you to print very professional looking flyers complete with property description and pictures.

If you want to sell fast, you may need to pull out all the stops and MLS is still the big man on campus.  The more cost effective way to use the MLS is with a flat fee listing.  There are brokers/agents out there who will list your property for a flat fee ranging from as little as $99.00 to $500.  You will still have to pay a commission to the selling agent should there be one, but if you find your own buyer, no commission is due.

We use one locally that charges the members of our REIA $225 and as part of the service they add the property to and a number of other selling websites as part of their flat fee service.  They will even help you figure out the paper work when you’re just starting out.  This exposes our properties to the entire agent community as well as people who may be shopping but don’t have access to the MLS.

Since the listing agent/broker is only getting small flat fee, you will receive all the phone calls but there is an electronic lockbox on the property and you don’t have to waste your time showing the property.  Instead you can be out there making more deals.

What if it doesn’t sell fast?

Not every property can be resold quickly.  Occasionally, you may be stuck with a property for a few months. If you are disciplined and always do your homework, this will rarely happen.  If you can’t resell a property within 30 days, you probably made a mistake somewhere in your process.  Either you paid too much, bought in the wrong neighborhood or underestimated the renovation costs.

Other times you might be over-motivated and sign a purchase agreement on a marginal deal and have a difficulty reselling it.  Even though you are looking for quick cash, there may be other ways to earn a profit.   One strategy might be to take a promissory note from your investor/buyer for part or the entire purchase price (have an experienced real estate attorney or a knowledgeable closing specialist help guide you through this process).

The promissory note will be secured by lien against the property.  This will be accomplished by recording either a mortgage or deed of trust depending upon which is customary in your state.  The promissory note will contain interest, payment amounts and other terms.

Or you might even be willing accept a promissory note for the purchase price, with no payments due until the investor resells the property.   We have actually purchased a lot of properties this way.  A word of caution – before doing this you should confirm that the buyer has the financial resources and experience to renovate the property.

A third option can be to partner with the rehabber, which can work especially well when there are extensive repairs or a thin margin.  If you are flipping to an investor who will rehab the property, you might offer the property as your share of the partnership while he offers the materials and the labor as his share.  When you sell the property, you can split the proceeds.  You may have to take less than half of the net profit to make the deal work.  But a wise investor once said, “Half a paycheck spends a whole lot better than no paycheck!”

Whether it is flipping a contract or closing and reselling, the key is to know our way out of every transaction!  Why do you think there are so many clearly marked exits in life?  Safety friends, safety!  Be sure your deals have clearly marked exits too!

You can learn how to Wholesale properties on February 11th at Bird Dogging for Big Bucks! You’ll be on the path to mastering the simple steps to entering the real estate game and playing to win!  The best part is that you’ll be doing it in a way that won’t make you risk losing money or your future.

You will learn how to generate leads and negotiate agreements to bring to guaranteed, ready and waiting cash buyers who want to put money in your pocket! You never have to own the property, put your cash into the deal or handle any muss or fuss with the closing. It’s as simple as putting 1 and 2 together and generating real cash in the middle.

Hope to see you there!

To your success,


So You Want To Invest In A Condo?

So You Want To Invest In A Condo?

While I love investing in many types of real estate, for me, different asset classes have different exit strategies. As a general rule, I am not a holder of condos as long term investments but will, from time to time, buy them for resale. My concern with holding condos or town homes as long term investments is the potential for an HOA or condo association to hold too much control over my investment. I am sure there are many very successful condo investors out there so this is not an attack. The asset class just isn’t my first investment choice.

If you want to invest in condos and town homes the key is to recognize some of the potential risks and consider your options in advance. This way you can mitigate surprises before purchasing the unit.

Many people believe owning a condo or town home is easier than owning a single family home because you don’t have to worry about yard maintenance, roof repairs, etc. Compared to buying a single family house there are definite differences with condos. When purchasing a condo you are not only buying your unit. You are also buying an ownership interest in the common areas of the condominium project such as the lobby, grounds, building exterior, etc. With common ownership comes risk and respponsibility.

The following information doesn’t cover everything you need to know, but it is a good start.


It is usually a good idea to get a copy of the certificate of insurance, which is a summary of the condo association’s policy. First see if the replacement costs covered by the policy are an accurate reflection of the cost of rebuilding. You’ll want to make sure that the policy has a building-ordinance clause, which means that the insurance will cover the cost of bringing the building up to code if there is any rebuilding to be done.

This is usually more costly in terms of premium but is is much better than not being financially prepared for major repairs (especially when code related upgrades are required). On older buildings, there may have been many building code upgrades since the time of construction. As an example, over the years Florida’s hurricanes have wreaked havoc and many condo investors have suffered significant losses due to extended vacancies while waiting until their association and insurance carriers arranged for and completed repairs.

Finally, make sure that you understand exactly what the association policy covers and what you are responsible for. Typically property and liability insurance does not cover the interior of your unit, but rather the exterior of the building and common areas. You may need to buy your own insurance to protect your interior space and your tenant will need a renter’s policy to insure their belongings.


Take a look at the minutes of the condo association board meetings to see what the owners have been griping about. If everyone was complaining about the faulty electrical, plumbing or the landscaper’s absence, you know that the complex is having management difficulties. Even if there aren’t any complaints, reading the minutes will reveal the sorts of projects that are under way at the complex; projects the seller may have neglected to mention. HOA fees pay for expenses such as maintenance of the common areas, insurance (property and liability), non sub-metered utilities, if any (such as water for irrigation and pools or electricity for exterior lighting and gates), repair reserves and more.


I’m cautious of a condo complex whose owners manage the place themselves. Although many are operated efficiently, self-management can lead to more hassles for owners; especially non-occupant owners. If the condo development is professionally managed, check out the management company as thoroughly as you check out the association. Ask other owners. Ask people in nearby buildings. And be sure to interview the day-to-day manager directly. If you get saddled with a bad property manager, you can be sure of this: Your dream condo investment just might keep you up at night.


Be sure to ask what is included in the HOA fees and find out the delinquency rates of present owners. A portion of your HOA fees should be designated toward reserves and you should find out how much is allocated to reserves. You should also review the balance to confirm it is sufficient to cover things like roof repair and replacement, mechanical systems, façades, and other large capital improvements?

If people aren’t paying their association fees on time, it could be a sign of owner discontent or an indication that the association might be underfunded. Either way…it’s a red flag. If reserves are insufficient to pay for large expenses or capital improvements (or if reserves have already been designated for another planned expense) the HOA will assess an additional fee on the condo owners. This is called a “special assessment.” The seller should be able to tell you if any special assessments are planned, but do not rely solely on this information.

Ask to see all board minutes within the previous 12 months and ask to talk with the HOA treasurer. Find out if there is any pending litigation either by the HOA or against the HOA as these can often result in a special assessment for legal fees or damages. It is also a good practice to compare the association fees to those of similar nearby complexes. Are they too high or suspiciously low? Keep in mind that complexes with pools, gyms and other amenities may have higher maintenance and liability insurance costs.

High-rise comdominium towers typically have more complex mechanical systems such as elevators and HVAC systems that usually require extra reserves and maintenance fees. On the other hand, low-rise and single story developments may have extensive grounds that require landscaping and repaving. You might also ask to see two to three years of HOA fee history so that you can see how they are trending. Have they gone up significantly? Will they continue to go up? These are all good questions to ask of the seller or of the HOA treasurer. If the seller is a bank, you won’t learn much so talkig with the HOA Treasurer is a must!


If the fees are low in comparison to nearby complexes, ask why? In newer condo and townhouse projects, builders sometimes charge lower fees to entice buyers. Yet, once the units are sold and the property is turned over to the HOA, the fees increase significantly in order to cover the costs of maintenance and reserves. Ask if the community has done a reserve-fund review in the past five years.

According to Lester Giese, the author of The 99 Best Residential & Recreational Communities in America, he recommends the following formula: If the complex is one to 10 years old, the reserve fund should have 10% of the cost of replaceable items (roofs, roads, tennis courts, etc.). Between 10 and 20 years old, the repair fund should be at 25% to 30%. At 20 years, that amount should be 50% or above. Residents who brag that they don’t pay much in maintenance may be in a complex that either is not being kept up well or is living


One thing to be careful of is that the HOA may place liens on units for non-payment of fees and seek a deficiency judgment against any of the unit owners for non-payment. You could be on the hook for the seller’s delinquency. A title report should disclose any liens placed on the unit you are buying. Don’t assume, however, that the condo association will put a lien on all outstanding fees, and that it will therefore appear in the title report. You must get a guarantee from the seller that all fees are paid as agreed as well as an estoppel letter from the HOA. A good title company or closing attorney can help you with this but be sure to make the request.

Condo docs

State governments require condo developers to file a declaration with the local county, which describes the condominium project, establishes a homeowners association and either refers to or includes the bylaws. The bylaws govern how the association should be run, such as the number of meetings per year, required votes, and the election of directors and officers. The declaration may contain covenants, conditions and restrictions (CC&R’s) which are rules specifying how condo owners may use their property and the common areas. These rules are binding on all purchasers. Once the developer hands the project over to the HOA, additional rules can be added through voting (according to the bylaws established).

CC&R’s and condo regulations limit the rights of property owners, but with the intention of retaining and improving the value of the property in the subdivision or project. Possible restrictions could be pets, holiday decorations and home businesses.

You should be sure to get a copy of the declaration, the bylaws (if not included) and all rules and regulations established by the condo association to make sure you are aware of any restrictions that will conflict with your intended use of the unit.

A good friend failed to do this before his purchase and then learned that the association had to approve all new tenants, his investment unit sat vacant for over a year and a half because their requirements were so strict. He eventually lost the place because he could no longer afford to make payments on a vacant condo.

Renting, Resale & Financing

Not only should you make sure you are aware of and willing to accept the restrictions imposed by an HOA, you need to ensure that the rules are sufficient to maintain your investment objective and resale value of the unit. If the tenant population is over 10%, there should be clear rental policies, either listed in the bylaws or appended as an amendment. Will the management company find tenants for you? Are you allowed to find your own? If the management company does it, do they get enough good tenants? You might want to ask other tenants or owners about their experience. In addition, ask to see the association’s lease, and have a real estate attorney review it to protect you.

An important thing to consider is that an association can change its bylaws to prohibit or restrict renting at any time. The more owners who rent, the less chance that will happen. More importantly on resale, a lender may consider all units in a condominium project that allows too many rental units to be investment property. For example, if the complexes rules allow 30% or more units to be rented (even if they aren’t actually rented) lenders could deny potential buyers a home loan for an owner occupant and will instead offer an investment property loan that may require a lower loan-to-value ratio and a higher interest rate. If a rental restriction is not in place, or if there is room for the HOA to adjust the level of rentals, your ability to sell the unit later could also be impaired.

Caveat Emptor

Buying a condo or town home may seem easy compared to buying a single family house. But in many ways, it carries a higher level of risk and requires more due diligence on the part of the purchaser. Just as you might when purchasing a single family house, a home inspection by a reputable and knowledgeable in inspector is recommended. For owner occupants and tenants condominiums and town homes offer many benefits such as on-site amenities, low maintenance and convenience. Condominium and town home living often provides a desirable lifestyle for many given their tendency to be located in pedestrian-friendly neighborhoods or other urban environments. These benefits however, don’t always translate to an ideal investment. It is always up to the investor to perform their due diligence, examine the paperwork thoroughly, ask lots of questions in order make an informed decision before you buy.

After the fact is a tough time to learn and you don’t want to ever find yourself at the mercy of the Greater Fool Theory.

Happy investing,


How’s Your Investor Tool Box?

Transaction engineering for the real estate investor is akin to a carpenter having a well-equipped tool box or a surgeon having all the necessary operating instruments to get the job done correctly, safely, and in a way that everyone involved benefits. In our business it includes acquisition, property management, asset protection, negotiating, and tax planning to name a few. Today I want to introduce 10 no-money-down techniques (note: no-money-down means none of your money) that you can use alone or in a combination because no two real estate deals are alike.

I encourage you as you read this to think “how many techniques, how many tools, can I add to my tool belt that will allow me to deal with every opportunity that comes along?”

Don’t be a one trick pony…

Many investors use the same technique to do every deal that comes along – they are doomed. Only occasionally can they find an opportunity where they can employ the one technique they’ve learned.

When other investors don’t know what to do, you’ll be able to pull a different tool out of your tool belt, a different technique or a combination of techniques, and be successful when they weren’t. And when you master these techniques, you’ll recognize opportunities and complete transactions others can’t!

Build your buying machine…

To begin building your buying machine you need to learn how to generate leads, identify motivated sellers and then buy below market with deep discounts using cash, Private Money, or Hard Money.

Existing Financing is a powerful option…

Another favorite is to use existing financing by acquiring the property “Subject to.” With this technique, you take over the payments on existing debt without originating a new mortgage. Options and Lease Options are another pair of great techniques to control properties without ownership and still generate great profits.

Partnering with the seller…

Seller financing is my all time favorite. Sometimes it even presents an opportunity for creating a Deal After the Deal for increased profits. All of these transaction techniques can be structured as no money down. Consider Split Funding (some money now and some later); With or Without Payments; With or Without a Balloon Payment, or virtually any combination you can negotiate.

Now, sell it creatively…

When it comes to selling properties creativity is again your best strategy. How do you sell in a tough market? What do you do when the banks won’t lend? You become the bank! It is the most powerful way to build a fortune, while helping other people resolve their problems or achieve their dreams. And you won’t do it with adjustable rate mortgages or other exotic forms of financing that got this whole mess started.

Cash or cash flow? Your choice…

We can sell or lease properties to create either cash or cash flow. Lease Options and Rent to Own programs can help more people qualify for home ownership while reducing vacancies. Selling homes with Owner Financing, Wrap Around Mortgages, and Agreements for Deed can help you market properties to a broader buyer base than the traditional buyer who will get a traditional bank mortgage. These creative techniques also help you overcome seasoning issues and maximize cash flow.

Well there you have it, at least 10 creative ways to buy and another 5 ways to sell without using banks. All the traditional avenues remain available but doesn’t it make good sense to have alternatives that work in any market? Using these creative techniques in an ever-changing array of combinations can give you hundreds of possibilities.

If some of the terms above are unfamiliar to you, don’t worry, you’ll have an opportunity to learn about them and put them to good use during our Quick Start Workshop Series.

Join Us on June 16th at the Bohemian Hotel in Celebration from 9:00am – 5:00pm

Creating Your Real Estate Money Machine Workshop

“Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.” Dale Carnegie

To your success…


Save Seller Financing – Did You Post Your Comment? Do It Now!

Only a few days remain to post your comment on the proposed rule changes that could be the death knell for seller financing.  You can post your here  The comments I submitted can be found  below:

The SAFE ACT intended to protect consumers from big businesses and I applaud these efforts whenever they accomplish what they set out to do.  My concern is when unintended consequences arise and citizens, American property owners as well as future American property owners, can actually be harmed. I am requesting that private individuals be exempted from the proposed rules changes and submit the following comment.

1. The seller did not construct the home to which the financing is being applied.
2. The loan is fully amortizing (no balloon mortgages allowed).
3. The seller determines in good faith and documents the buyer has a reasonable ability to repay the loan.
4. The loan has a fixed rate or is adjustable after 5 or more years, subject to reasonable annual and lifetime caps.
5. The loan meets other criteria set by the Federal Reserve Board.

Under this Act the only buyers who will be able to use seller financing are the buyers who can already qualify for conventional financing with perhaps the exception of how much of a down payment they need.

Seller financing has always been the alternative to government regulated financing. It is a meeting of the minds between two private individuals who negotiate an arm’s length contract to purchase property using an installment sale.
Seller “financing” provides housing for millions who otherwise could not qualify for conventional loans.  It additionally, provides an outlet for properties that do not qualify for conventional or even GSE programs such as older manufactured homes that provide entry level and retirement housing for many Americans.

Homeowners are neither bank officers nor mortgage lenders.  By requiring them (many if not most of whom who take back a mortgage are older Americans) to qualify buyers using bank standards means they will simply refuse to sell with owner financing.  Thus millions of people will be deprived of home ownership.  This will have a near term negative impact on the current economy by reducing the number of sales which pay transfer taxes to our state and county governments and long reaching effects in terms of preserving property rights as well as one’s ability to freely buy and sell property.  Even the Wall Street Reform Act saw fit to allow up to 3 seller-financed transactions per year without MLO requirements.Why should a buyer be required to divulge their income and assets to the very person with whom they are negotiating the terms of a sale? This is not required when there is a 3rd party lender.  Requiring the buyer to turn over all their financial information to a stranger opens the door for identification theft and fraud.  It also deprives American’s, both buyers and sellers, to use their free will to honestly come to a meeting of the minds and transact the purchase or sale of a property in a manner beneficial to the principals (not a 3rd party lender who may have no vested interest).

This also opens the door to an additional risk; predatory borrowing. This is where an unscrupulous buyer knowledgeable about the Dodd-Frank Act leads an uninformed seller (and this will be the majority of sellers) into negotiations not in compliance with the ability-to-repay requirements. That buyer lives in the property trying to resell it for a profit and if they are not successful within three years they rescind the sale and get all their money back.  This will jeopardize the ability of many deserving people who may never qualify under bank standards (Federally mandated or not) to ever own their piece of the American dream because no one would accept that risk.

By not allowing a property owner to negotiate a balloon payment, there is a good chance that a seller 55 years or older will die before receiving all their equity. Many seniors have invested in real property with the intent of selling it using seller financing (an installment sale) in order to supplement their income in retirement, but also with the hope that they would not be stuck with a 30-year investment. The Dodd-Frank Act does the same thing insurance companies do that sell 30 year annuities to seniors. Our government has criticized this deplorable practice because seniors will die before they receive all their investment.
The restriction of no balloon doesn’t affect just seniors, it has financial consequences for anyone using seller financing. Under the Act community banks are allowed to originate fully amortizing loans with a five-year balloon. The rationale is that they hold these loans in their own portfolios and the government recognizes their need to hedge against inflation and rising interest rates. Yet, the Act does not recognize that private property owners who have 100% skin in the game need the same protection. If there has to be a restriction it should at the very least be the same allowance given to community banks of a balloon in 5 years.I have heard the suggestion that a seller financing the sale of his or her own property would completely avoid the issue of licensing by retaining the services of a licensed loan originator. If a mortgage loan originator (MLO) fails to properly follow the ability-to-repay guidelines the buyer still has three years in which to rescind the sale which leaves the seller at risk and will most likely bankrupt them.  As I am sure you can see, the unintended consequences of these proposed rule changes, if accepted “as-is” without exempting individuals will negatively impact millions of American families.

This could be financially devastating to the seller. Let’s not forget that today’s buyer will be tomorrow’s seller. These sellers are a diverse group. They come from all walks of life: low income, high income, non-English speaking, seniors, widows, minorities, but this requirement places the same standards on individuals as banks and mortgage lenders, only with more risk – the banker is in the business of mortgage loan origination and factors that risk into his business plan, whereas the individual seller does not have capital reserves and doesn’t do this as a business. Also, unlike a bank, they do not carry errors and omission insurance.

My mother is 80 years old and owns two properties; a condominium and a co-op.  Neither of these will qualify for bank financing in the current market.  At some point she may need to sell and convert these properties into an income stream to provide for her long-term care unless she can find a cash buyer.  A cash buyer will likely force her to accept a substantially lower price because she’ll have no other option available to her and she’ll be at risk that for up to 3 years, that a case of buyer’s remorse could reverse her sale.  Is that in her best interest?  Additionally, as her and many other seniors in a similar situation exhaust their reduced assets, the government will be forced to pick up the tab for her care, further exacerbating the federal debt or reducing the quality of life for America’s elderly.On behalf of my family and families across America I am asking that you clearly distinguish between banks who are lenders who actually lend money and property owners who are principals in negotiating an installment sale in order to collect their equity in the sale of a home.  In a seller financed transaction both parties are consumers neither of whom need be disadvantaged by these proposed rules.

Please feel free to contact me directly at

Your decisions will impact millions of American families. Thank you for your consideration.

Selling Houses Fast – Avoiding Common Selling Mistakes

According to sellers have little room for error when putting their home on the market, or they risk having their property linger. When it comes to selling houses fast there are some common mistakes that should be avoided and the right agent can help.

1. Overpricing the home. Home values have dropped significantly since peaking in 2006, but many sellers still want to list a home based on what they paid for it. Eventually they realize their error and have to reduce their price, sometimes several times. In the past month, 23 percent of homes listed for sale on Zillow have reduced their price.  Ironically, if more agents and sellers understood financing options they’d be able to maintain pricing in exchange for terms.  

2. Relying too heavily on comparable sales. Effective market evaluation looks both backward and forward. Sizing up the competition currently on the market, not just the homes that have already sold for a dose of market reality. Evaluating other homes with a listing price similar to the seller’s to see how well it stacks up against the competition – and how it can be differentiated.  The total market inventory contains REOs (Real Estate Owned by banks that were taken back in foreclosure) as well as short sales.  In some markets these represent 80% of the sales.

3. Failing to consider the home’s web appeal. A home that can’t sell itself on the web may have trouble selling itself in the real world, and photos and even videos are key elements of online presentation. Include lots of high-resolution photos of the interior, including areas that home buyers care about most, such as kitchens, living spaces and bathrooms.  Don’t forget exterior spaces that add value suck as gardens, views, or outdoor recreation areas.

4. Hovering during showings.
Sellers shouldn’t be home for showings, but as a seller’s agent, neither should you. Lurking sellers or seller agents may make buyers nervous. Other real estate agents often want privacy with their buyers so they can gather true feedback about the house.

What advice do you have for selling quickly in this market?

Source: “Six Common Mistakes That Home Sellers Make,” (April 11, 2011)

Profits Without Ownership: Sandwich Lease Options


You may be asking yourself, “What’s a sandwich lease option?” It’s an incredible financial instrument for creating profits without ownership. Let me  explain.

It gets its name for the way everything is structured between the seller, you (the investor), and the tenant-buyer. You step in and negotiate a long-term option agreement with the seller, which gives you the right (but not the obligation) to close on the property within 1-5 years. Often, you also negotiate in the ability to assign the contract, and to let someone else other than you live in the property.

You then go find a potential tenant-buyer, perhaps someone who is a good person that has had a few financial knocks. Individuals who don’t qualify for traditional financing are prime clients for this sort of transaction. Often they will make ideal homeowners, but simply need a few years of documented on-time payments to help repair a spotty credit record. You then place them in the property with your own option agreement. If you structure it correctly, you can earn a spread on both the sales price and monthly payment amounts that you make to the original seller.

This is, of course, a highly simplified explanation of sandwich options. But my intent it to show you how it is very possible for you to start earning money through sandwich options.

By targeting areas with “pretty” houses in good neighborhoods, you will vastly increase the potential number of buyers you can attract. Since you don’t actually own the home, finding properties that are already in good condition is paramount. To make the most of your investment dollar, you will want to spend most of your money on marketing rather than repairs and clean-up. Additionally, properties in nicer neighborhoods minimize your risk exposure, as you won’t have to worry as much about vandalism or depreciating home values.

Sandwich options are an ideal strategy for the new investor because they carry limited risk and great upside potential. Further, they are an ideal match to the current market conditions. Motivated sellers and potential buyers with damaged credit are much easier to find. This technique of options has the potential to earn you a nice sum of money, but it does require work. Steve Zehala will be sharing with you a few other techniques that leverage sandwich lease options on October 23-24 at the REI Rainmaker Retreat. As with any investing technique, you need to find the right strategy that works best for you, learn it inside and out, and most importantly, TAKE ACTION!