June 2009

Hey hope you are enjoying a great June. I am currently in the great sunshine state of FL. I have been hear for about a week and will be hear for another week as well. Normally my wife and I go on a cruise because this is our anniversary week. I love cruises. They are the best! I think it is the closest thing that you can get to being treated like royalty! This year we decided it against it because of our 7 month old baby. He is great but probably would not do to well on a cruise.

Ok down to business. If you are wondering what is going on my with my wholesaling business while I have been away for most of the month, I will clear that up for you. I have been working on several deals that have been in the pipe line for the last couple of months. I have also just sent out a mailer of about 6,000 and that should be hitting any time now.

The point is that while I am out of town my marketing to motivated sellers continues to go out and my virtual assistant continues to answer the calls. He sends me an email at the end of the day with the amount of calls he made and how many leads he was able to gather. I then decide who I want to talk to and pursue further.

One thing that you have to understand about wholesaling houses is that there is a pipeline involved. What is a pipeline you ask? In any type of sales related business you will have a pipeline. Basically a pipeline is a figurative term for deals in waiting or deals that you are working on. You can be the best negotiator in the world but not every seller is going to accept your first offer. It may be as well that you will not even be able to make an offer on a property right away for whatever reason. If this is the case, you need to follow up with them until you can make an offer or you get deal.

The key to building up to multiple deals in a month is managing your pipeline. The more deals you have in a pipeline the better chances you will have a big month. I am working on trying to figure how many leads or deals somebody would have to have to manage a 100K month. Once I figure that out I will let you know. I had a 50K month but I am not sure what it would take for a 100K month.

I wanted to give you a quick idea of deals that I working on right now and where they are in the pipeline.

Wakefield Property- This deal I have been working on for several months. I have it under contract and actually had a buyer at one time that chickened out (If you are a buyer and you do decide to chicken out on a deal please don’t just not return somebody’s phone calls and be a man and just be gosh darn honest). Ok sorry about that I don’t have much respect for people who don’t return phone calls.

Ok, like I said I have been working on it for several months and I have the property under contract for 30K and have a buyer considering it for 37K. Should know by the end of the week weather they will buy it our not. On this deal hear I have already give the seller the idea that I will be asking for a 5K reduction from the results of my inspection. This technique can actually turn a non deal into a deal or make you an extra 5-10K on a deal.

41st St Property- This property been working on for a month or so and the seller is entertaining my offer and is supposed to be getting back with me in the next day or so (One thing I have learned that when you are following up with people you don’t want to hound them, it could blow the deal for you. There is a special line between good follow up and just being a pain in the butt! ) I have a buyer that is interested in the property if I can get it for 60K he would gladly buy it for 65K. Notice that I do not have it under contract but I have notified one of my VIP buyers about it to get an idea off where I need to be to make it work.

Telstar property-This house has been a pain for the last couple of months. I think my mistake was that I jumped at the seller’s first asking price. The house is worth 150K and she told me 55K. This is an out of town or absentee owner and for whatever reason does not want to do “business” over the phone so I am waiting to see when she will be able to come down. I already have somebody interested at 75K so that will be a nice deal if it goes through.

Argonne Property- This property the seller is asking a fairly reasonable price for it. I do not have it under contract but he is asking 60K and I know it is worth at least 140K or so fixed up. The problem is that it is currently with a property management property. I guess I should just put it under contract and try to get a buyer or two into the property. The property management company complicates things but it can still be done.

Charlton Property- This is a property that should be closing this month.

Hosier Property- This is a property that have been working on for several months but should be closing this month.

Parker Ave Property- This property is interesting because I offered so little on the property like 17-18K but it is in a questionable area. The seller is interested in it and is willing to negotiate so I am waiting to hear back from her. I will probably put a follow up phone call to her today.

I currently have a lot more leads that I am working on that are in the pipeline but these are the main ones. Hopefully this helps you get an idea on what it type of volume you need to make some money wholesaling houses.

The key is before you can start working this many deals you need to have a steady source of leads coming to you every single month. I anticipate from the 6,000 postcards that I just sent out that I will at least get 250-300 leads to work on.

So go get some marketing out there and start getting some leads coming in!

If you have any questions or comments please let me know!

If you have been in the real estate investing arena for anytime I am sure you have heard of the term “probate investing.” Simply explained probate investing is working with people who have inherited a property and need to sell it to settle the estate. The great thing about probate is that you are dealing with sellers who NEED to sell. This is not something they are thinking about or mulling over….this is something they NEED to sell.

This is exactly the type of seller that we are looking for. I have found that if people have other options but selling it can be extremely difficult to make a deal. Let’s face it, in the wholesaling business we need to get the property discounted quite drastically to make it work. However, probate real estate gives us a great opportunity to do just that without making a seller feel like they are taking a ridiculous discount.

Probate properties can also be known as heir properties. In fact, the more heirs the better when it comes to negotiating these type of deals.  This may seem crazy to you know but by the end of this post I hope you will see what I am talking about. There is one that I am working on that currently has 13 heirs! The bad thing about this many heirs is that you have to get 13 different people on board wtih the idea of selling the property. The good thing is that a discount does not seem so bad when you have that many heirs.

For example, I will give you the details on the deal that I am working on.

They wanted 60K for the property

I offered 30K for the property

Normally this would look like a 30K discount right?

There is one thing that you need to emphasize when you are dealing with a probate scenario and that is what each Heir is going to NET. It’s all abou the money right? When you are dealing with the Executor of the will this is what you need to say

“Mr Seller, If you were to get 60K for the property that would mean you would end up with roughly $4,600 in your pocket right?? If I could offer you $2,300 in your pocket and a fast closing do you think we can get this wrapped up??

That is exactly the way I broke it down to my seller and she accepted it. Right now we are waiting for the case to work its way through the legal system and should hopefully close up on it next month.

The important thing again here is that you see what we just did. We just took a 30K discount and turned it into a couple thousand dollar discount! Because there are so many heirs involved it takes a little from each one and doesnt “hurt” as bad. Use this tool in your negotiating arsenal and you will make money!

You can use this principal on higher priced properties as well and it works beautifully!

If you want to find out more about probate investing click here===================>Probate Investing

Let me know your thoughts and comments on this.

Later!

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Hope you are having a great week! I am actually out of my home town and up north in the New England area. Even though I am up here my wholesaling business continues. My virtual assistant is still taking calls from motivated sellers, my direct mail campaigns are still going out, and I am still attempting to flip some of my wholesale deals to my buyers!

On another note, My father-in-law is a pretty big time farmer in this neck of the woods. It is really cool to see his business and how he has made it into a really successful farming business. One of the ways he did that was by establishing a great name for himself in the area. If you ask anybody up here if they know who Gary is from Gary’s farmstand they will always smile and say “Oh, yeah Gary, he is a great guy!” The main purpose of my post today is not talk about my father in law but take the principle from it. Make sure you treat people right in your business and you will build a great name for yourself and start getting wholesaling business from word of mouth. Hey, and guess what?? That type of business cost ZERO marketing dollars!

Ok, now to the main idea of the post. Have you ever wondered what type of contract to use in your wholesaling business? I mean there are so many right? All of the different real estate investing courses on wholesaling houses have various forms that range from 1 page to 5 pages. So which one do you use?

One side of you thinks that the more a contract has on it the more professional you will appear. You think that if you show up with a one page contract the seller is going to laugh at you and say “HA, what real estate investing course did you get that one from?” You expect me to enter into a contract to sell you MY house on a one page contract that looks like you typed it up in the last 5 minutes?!??!

If this is what you think is going through a motivated sellers head, you are wrong. I have dealt with all types of motivated sellers in my wholesaling business. One of my most recent wholesaling deals was involved with a very sophisticated seller. (We will talk about the different types of sellers that you will encounter in your wholesaling business so stay tuned!) In fact this guy is a financial planner. They needed to sell their house because it was in probate (Did I tell you that probate investing is a great way to make money wholesaling houses?).

I have to admit to you that I did feel a little nervous with my one page contract. But get this….He actually preferred the one page contract over the official state contract. He said that it was a lot easier to understand and everything was broken down in a nice easy format. He even brought it to his real estate attorney and he said the same thing!

Since I have been wholesaling houses, this is pretty much the story all across the border with motivated sellers. From the sophisticated seller to the seller to the unsophisticated seller they want a contract that is easy to understand and does not have a whole bunch of legal jargon that you need a team of 10 lawyers to interpret!

If you have read this far, you are thinking,”Ok Alex, give me the dang contract!” LOL. Well unfortunately for legal purposes I cannot give you the contract that I use but I can show you where I got mine. It is the same one in the Real Estate Voodoo and Virtual Wholesaling course.

You can get contracts for wholesaling houses on line for free but why not use one that has proven to be successful? Whatever contract you choose to use I wish you the best success in your wholesaling business.

Please comment and let me know what you are currently using in your business or if you have any questions about contracts or wholesaling houses in general.

Till next Time!