Get More Offers Accepted

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The key to making money is making offers, right? While that’s certainly part of it, getting offers accepted is what causes the cash to flow! And flow it will if you follow a few simple steps.

1. Whenever possible deal directly with a property owner. Dealing with principals will make for better and more effective negotiations and provide a basis for creating a synergistic solution. This will result in the other party having greater buy-in and increasing the probability they will see the transaction through to the end.

2. Be sure to learn their motivation…”Why are they selling?” your offer(s) must solve this issue. To often investors fail to understand what the other party’s problem is and attempt to solve something the other party may not even consider an issue. People like to do business with someone they trust. In order to do this you need to build rapport and focus on their problem.

3. Whether you’re working with a real estate agent or direct with a home seller you need to be the one making the offer(s) and be present. This provides you an opportunity to explain, clarify or modify your offer

4. Never present a single offer. If you’re a one-trick pony; you know what I mean 70% minus repairs (the MAO formula) or 65% minus repairs (the wholesale MAO formula) you’ll have a tough time closing deals where the debt on the property exceeds your offer. This is not a one-size fits all business. Learn how to become a transaction engineer.

5. Make multiple offers, one all cash, one some cash now and some cash later, and no cash now and more later. Give your seller a choice and let them know you want them to accept the offer that best meets their needs.

6. Be prepared to help the seller understand your offers. You can remind them that you are running a business and that if you cannot make a profit you cannot stay n business (though that’s not their problem).

7. Let them know that you can close quickly (or on a schedule that meets their needs) and you are willing to buy their house “as-is” and they won’t have to do any repairs.

8. Your lowest offer will be your all cash offer because with banks not lending, cash is expensive to come by and therefore a greater discount is required.

9. Upon presenting your offer(s) sit quietly for a moment or two and allow them to process the information. If they ask questions, provide answers. If they don’t ask questions, you can ask them which offer do they find most appealing? It will give you an insight into which type of offer might work.

10. Ask them what they plan to do if you don’t buy their house? If you don’t close on the spot, you can always remind them that they might want to consider you Plan B because everyone’s situation will change with time and circumstance.

Do you want to learn how to come up with strategies like this on your own? If you’re like most investors today, you’re facing no money, no credit, and no idea where to start. That’s where the right instruction can come in! Join us on April 2-3, 2011 at the REI Rainmaker Retreat in Orlando, Florida for two days filled with quality instruction on how to profit in today’s real estate market. From freeing up your time, to finding properties that your competition is missing, to running your business on free tools that you can use from anywhere…we’ve got all the bases covered. Tickets for both days are on sale right now for just $197 is you use the code “CREIG” at checkout.

CLICK HERE to learn more about the REI Rainmaker Retreat

Get more cash flow…NOW!

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One of the greatest opportunities we may ever see is staring us in the face. Mortgage rates have now been at historic lows for a while, the stock market has proven an unreliable wealth building vehicle for the average person. This has set the stage for building private lending relationships that can finance your real estate deals. But wait…this is an article about cash flow.

Fortunately I don’t have to start over because many of these private lending candidates are also candidates for equity participation deals. Imagine, if you will, you find a great deal you can purchase for cash at a 50% – 60% loan to value. You give your investor/equity partner 60% of the deal in exchange for them coming up with the cash to buy the property.

They come into the deal with immediate equity and you have no debt! If there is no debt there are no mortgage payments. You simply collect rent and pay the taxes, insurance and maintenance (unless you have your tenant take care of it). The remaining cash flow is split between you and the equity partner. Since you have used your skills and secured the deal you’ve already made a valuable contribution to the deal so you might also be able to get compensated for managing the property. You might take 8-10% off the top for management and then after paying the remaining expenses you split the remaining cash with your equity partner based on whatever percentages you agreed to (in writing).

You and your equity partner will divide the benefits from the property on whatever basis you establish. 50/50, 60/40, 70/30. You’ll split the cash flow, the appreciation, the depreciation and the tax benefits. It’s all up to you and whatever you negotiate. If you get really good at this you can even give up your 10% management fee and outsource property management and focus your time on finding more deals and more equity partners. The beauty of this strategy is that when you have a vacancy you don’t have an outgoing mortgage payment.

This is just one of the many strategies I like to use to lower risk and increase returns. While I realize I’m giving up some of the upside, I’m trading it for a perfect risk reduction strategy. Besides, using this strategy I effectively own half a house free and clear because the equity partner and I might be 50/50 in the deal. Let’s say I was a newbie without much experience, I might be willing to give 80% of the deal the equity partner because I’m trying to get started and don’t have cash of my own. Even if you give up 80% of your first five deals you’d effectively own the equivalent of one complete free and clear house! That’s powerful. As you develop your skills you’ll be able to command higher percentages because you’ll be a credible partner!

Do you want to learn how to do a deal like this? If you’re like most investors today, you’re facing no money, no credit, and no idea where to start. That’s where the right instruction can come in! Join us on April 2-3, 2011 at the REI Rainmaker Retreat in Orlando, Florida for two days filled with quality instruction on how to profit in today’s real estate market. From freeing up your time, to finding properties that your competition is missing, to running your business on free tools that you can use from anywhere…we’ve got all the bases covered. Tickets for both days are on sale right now for just $197 is you use the code “CREIG” at checkout.

CLICK HERE to learn more about the REI Rainmaker Retreat

Dress For Success and Generate More Leads

While you can’t always tell a book by its cover, a well wrapped package tends to be more inviting to explore than something that looks like it fell off the back of a garbage truck. I’m always surprised when I attend investor meetings. We’re an entrepreneurial bunch of independent business people that run the gamut in terms of style, appearance, and grooming.

What I find most interesting are the people who go to meetings to network, seek loans, find financial partners, or negotiate deals looking like an unmade bed. Ripped or soiled jeans, beat-up gym shorts, shirts that look as though they double as pajama tops and 3 days of beard stubble don’t inspire confidence. Some show up looking like a million bucks and others look like they don’t have two nickels to rub together. It is said that that average person sizes someone else based on visual cues (appearance) in about 15 seconds.

What’s the biggest challenge facing the new investor? If you’re new there’s probably a list as long as your arm and choosing just one can prove difficult. Is it establishing credibility? Finding leads? Letting people know what you do or want to do? What does an investor look like? A policeman has a uniform, a hat and a gun; a doctor has a white coat. Lots of people can be recognized by the uniform they wear; but what about the investor?

When I first began attending REIA meetings, (that’s Real Estate Investor Association for the uninitiated), I was always impressed by the folks with shirts that had their business logo embroidered on them. They looked more professional, seemed more confident, more knowledgeable, more… well you know…prepared. Why was that? I think it was because they looked the part. They looked like they actually had a real business because if they were willing to invest in branding their business on their apparel, they must also be doing other things well too.

I recently developed a new product called The Ultimate Lead Generation Program for Real Estate Investors. It provides over 100 ways to locate motivated sellers; many of them free or very inexpensive to implement. One strategy listed under the “A” section is Apparel and it can provide multiple benefits. Anything that looks good and says “We Buy Houses” can get conversations started by people asking, “How do you do what you do?” Do you want to buy their house? A professional appearance coupled with a simple marketing message can go a long way.

I’ve been using shirts and hats with my business logo for years. A buddy of mine has his rehab crews wear tee shirts with his log, message, and phone number on them. The workers like the free tee shirts and he likes the free advertising. Even if you don’t go for the logo look, think about the image you project; when you’re a well wrapped package it will definitely make a difference in your business.

To your success

Augie Byllott

One of the best providers for items with logos (and they can help you design the logo too) is Queensboro Shirt Company ; you can check them out right here: Queensboro

Building Wealth – Episode 4 – How to Love This Business

Some time ago I wrote a piece on the Pareto Principle more commonly known as the 80/20 Rule.  80% of our problems come from 20% of our customers.  So, do we really need that 20%?  Being a small business owner is not without its challenges.  The good news is that we get to choose who we’ll work with.  We get to pick and choose based on our criteria.  If someone is going to be difficult to work with, simply think…next.

Establish your criteria for who you’ll deal with, just like you establish criteria for buying parameters. Let these criteria be your guide and you’ll find less hassles, more profits.  Besides, when you deal with the right kind of people you’ll even walk away from the closing table with a testimonial.    It doesn’t get any better than that!

Conversations, Confidence, and CASH

In these days of Tweets and texts, introducing ourselves on Facebook and LinkedIn, it seems the fine art of conversation has gotten lost. While technology can be a viable part of an investment business, never forget for a minute that we are in a people-centered business. Websites are great for building credibility and an image. Data-mining can help generate more and better quality leads. Drip email campaign help with top-of-mind awareness, but in the end, there has to be a CONVERSATION between buyers and sellers. This is where the ‘fear monster’ rears its’ ugly head.

How many of you remember being told, “Never talk to strangers” when you were a kid? That’s the problem with bad programming…and it can stick around with you until you exorcise it. The good news is that it can be done. Talking with sellers is pretty easy once you know how. It takes practice, commitment, and persistence with your skill development.

Knowing what to say is only part of the equation. Conversation has two components. One is talking. Can you guess the other?

It all boils down to this; to build a great transaction we have to have great conversations. Those conversations are the foundation upon which great deals are built. I’m talking about conversations between deal principals, not middlemen. Unless they are incredibly talented and know your mind, situation, and preferences, how can anyone represent you as well as you can represent yourself? You have the knowledge, flexibility, and creativity to solve the other party’s problem. You can choose to walk away or stay at the table.

Transaction Engineering is about having conversations that clarify ‘needs’ versus ‘wants’. It’s about knowing how to use multiple techniques to buy and sell property because this is not a one-size-fits-all business. Options, leases, private money, seller financing, and existing financing are all mechanisms for buying or controlling property…they are all possibilities to make a deal happen. They can be used independently or blended to make a great deal. The combinations are only limited by your creativity. The common denominator is you have to have an interactive conversation. One that ebbs and flows in order to create synergy, a meeting of the minds, where both parties contribute and both parties WIN.

Please join me on Saturday, March 20, 2010 for The Language of Investors – Conversations, Confidence and Cash at Central Florida Realty Investors, at 55 Skyline Drive, Lake Mary, Florida. This is a full-day workshop where we’ll work on the conversations, the mental perparation, and how to handle objections fearlessly. PLUS a workbook, scripts, role-playing and lunch is included!

For more information, contact CFRI at 407-328-7773 or visit http://tinyurl.com/pactprosperitycash.

Conversations

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Where Are The Answers?

What will I accomplish this year?   How much money will I make?  How many deals will I do?  Will this year be better than last year?  These are all valid questions to ask our selves and worthy of consideration.  I’m always asking questions; questions of sellers, buyers, lenders, contractors, tenants, students, and myself.

There was a time I actually feared asking questions because I had a big fat ego.  I was afraid that people would get the idea I didn’t know everything and therefore be less credible.   Thankfully, I learned a more correct way of thinking.  Asking questions creates a learning opportunity and most people are generally willing to respond if you are polite and respectful of their time.  As time wore on I discovered that it wasn’t just a matter of asking questions that elicited the knowledge or information I was seeking, it was asking the right questions.  Better questions generate better information.  Here are a few examples:

Early on, I used to ask sellers, “What’s the least you’ll take for your property” because that’s what the gurus taught.  While it’s not a bad question, I think there are better ones.  One is, “What’s the least you’d be willing to take for your equity?”  Its a better question because it improves the dialogue and positions you for a “subject to” transaction.  For those unfamiliar, a “Subject To” transaction is one in which you use the existing financing to acquire the property by taking over the payments rather than going out and getting a new loan.

When I work with private lenders today, I ask questions about their financial goals and objectives rather than, “do you have any money to lend?”  This allows me to establish long-term relationships rather than one shot deals.  It also helps me negotiate better terms that mitigate risk for both parties.  I find it works much better for both of us.

Learning to ask better questions will get you the information you need and will also get you on the right path.  I’ll leave you with two of my favorites that may help you  as you prepare for the year ahead.  They are simple yet challenging.  First, “What do you really want?” followed by “How will you know when I’ve got it?”  These two questions always drive me to examine where I am, where I want to go and how I will get there.  They haven’t failed me yet.  I hope they serve you as well.

So where are the answers?   They’re in the questions themselves!

To your success….

Augie