It doesn’t really matter which type of real estate investing you prefer investing in, probate, foreclosures, rehab, flip or hold, they all have one thing in common. People.

You’ll be dealing with people.

Do you like that? Well, not everyone does. Like the Seinfeld episode where Jerry says, “People, they’re the worst,” you’ll be dealing with people. Sometimes, just like you and me, they can be a pain in the wazoo!

Have you ever had a deal that you were counting on, only to see your hard work go up in smoke because the guy decided that he would “wait a while longer” and see what else the wind blew in? Exactly!

The one thing I NEVER hear from most real estate gurus is how much “effort and patience” you must exert into this magical business of getting rich quick. (Otherwise known as real estate investing.) Of course, it’s not prudent marketing to say, “I made this $35,000 check after busting my butt for 6 months.)

This is not like going to dental school for six years and opening up shop where the money just starts rolling in consistently once your practice begins. Everyday presents a new challenge. This business is sales. I’m sorry to say, “If you don’t like sales or aren’t very good at it, you should stay out of real estate investing.” Or, if you think “people are the worst.”

It’s a people business and those who succeed, know how to talk to people and how to not let their behavior, throw them for a loop, too far when they throw them. In other words, (more understandable), when someone doesn’t go with your flow, don’t let it cause you to react in an unfriendly way now. This real estate investing business is all about people and relationships with people.

Yes, you have to talk with people all the time. Some investors hoping to do all the work with their website online and hoping to have little contact with the actual people, are in for a surprise and much less success. The “press the flesh” quote, is what every good salesperson knows will “seal the deal.”

Now that we’re in a mindset that we can have “virtual relationships” through Facebook and Twitter, some misguided real estate investors may think they can avoid the messy real life contact of human beings, but that’s not going to be nearly as successful as the people that understand the “human factor.”

I believe that some of the “old ways” of marketing are still the most effective. Direct mail marketing to potential sellers and buyers will possibly be even more effective as the online world continues to get very “cluttered and over-played” in our world.

It’s like when you were in high school. Remember all the different fads? I won’t try to list them here because they’re different for every generation, but we all had them. I’m not saying the internet is a “fad,” what I am saying is that, something that we get too familiar with, loses it’s effect to move us anymore.

Receiving a letter, addressed in a personal way, will always grab your attention. Then, it’s up to the letter to hold it and convey the message after it’s opened. Good direct mail does that and will usually get my attention before my computer even gets turned on.

None of us wants to waste time with people that “aren’t ready, not serious, just curious or just plain fickled” when it comes to spending time in this business of real estate investing. Yes, websites are necessary and provide leads, but there are people that will be looking for a buyer and may be hesitating or not quite ready yet… that’s where direct mail marketing will beat the others every time. If it’s done right, direct mail marketing for real estate investors will always have them coming to you.

I don’t like chasing deals with “uncertain” outcomes anymore than anyone else, but if you use good direct mail marketing to these potential sellers and buyers, your opportunities go way up! And best of all… they come to you! I like that!

The REIM Complete Package is a good direct mail marketing package. Check it out for yourself HERE!

By Jason Hanson

Whenever I can, I prefer to do a subject-to deal. I only do a lease option deal as a last resort. I usually end up doing lease options with savvy landlords who don’t want to give up ownership of the property (they want to keep all of the tax deductions).

Here are a few of the reasons why I like subject-to’s better. First, I own the property. The deed is in my company name. Second, I get all of the tax deductions and benefits of owning the property. Third, I don’t have to deal with any third parties or sellers because I own the house.

Here’s why I want to do lease options last: Because you only control the property, you do not own it. This means you have to trust the owner and you will never do a lease option deal with someone who is in financial trouble. Of course, you don’t simply trust the seller. You have your ironclad paperwork. You go to the courthouse and record a memorandum of option to cloud the title on the property (so they can’t sell it behind your back). You ALWAYS make the mortgage payment directly to the company (because if you send the owner a check, and they don’t pay the mortgage then you’re screwed).

In some cases the monthly rent you’re paying will be larger than the mortgage payment. Here’s an actual deal of mine: I owe the owner $1,000 a month and his mortgage is $890. So, every month I pay the mortgage company $890 and then I send the owner a check for the difference of $110.

You will also want to run a credit check on the seller. Make sure he’s not in debt up to his ears. And use an authorization to release form to check the monthly payments and mortgage balance. All of these items are so important because remember you’re promising your tenant/buyer that they will have the option to own the home down the line. If your seller goes bankrupt, or puts liens against the property then you won’t be able to sell to the tenant/buyer and you’ll lose your backend payday of $30,000+.

Luckily, I have never had a problem with a lease option deal. All of the sellers I have worked with have been honest and very thankful for the help I gave them. In a way, this is just like screening a tenant……you screen the sellers up front that way you know your deals will close and you won’t have any problems down the line.

For Finding Motivated Sellers, Get The NEW REIM Complete Package HERE

I’m not sure that I’ve ever thought about wholesaling this way before. It seems to work during a football game… the pretty girls dancing around in their little cheer leading attire, but WHOLESALING property? I’ve never heard it presented in such a “red-light district” sort of a way! Well, if you believe Preston Ely… he says, “Wholesaling Just Got Sexier.”

Maybe he knows something you and I don’t. Is this the new “pick up line” of 2009? “How about you and me getting together for a little “wholesaling?”

NA… that doesn’t work. Parasailing would be sexier to me.

Whatever he has up his sleeve, must be more than a “sexy face and wholesaling property.” This is probably going to surprise a lot of people, including me.

I’ve got an exclusive look for you from the “den of sexy wholesaling” and the “Hugh Hefner” of wholesaling right HERE. This site should be rated XXX, do to the “wholesaling nature” of the content.

Make sure there are no children around the computer or elderly with a weak heart condition before taking a look.

I just read an article on a forum where a guy states his dismal results from mailing postcards out. Although people still use postcards to reach out to prospects, there is another way to be more effective. It doesn’t matter whether you use postcards or letters.

It works on the same principle as social media. Personalize. It’s the difference between the weather guy or girl who says, “Hey everybody, the weather looks pretty good in (city or area),” and the weather guy or girl that says, “Today, it looks like we’ll get a little rain on our way to the game.” See the difference? When I talk to “everybody,” I don’t seem to really care about you, do I? But when I make it with “you” inclusive, now you care about what I have to say.

I have a great little eBook that explains the benefits of these little “tricks and tips” of writing and mailing great direct mail campaigns and it’s FREE. Get it Now at: FREE eBook

Every successful real estate investor knows they need to find motivated sellers, but they also know they need a steady flow of good leads to find those motivated sellers. So to find the really motivated sellers, you need a solid lead generation system that will continually FLOOD your business with motivated sellers! Getting the best leads is what really makes you truck loads of cash!

It doesn’t matter how well you structure deals if you can’t find “motivated sellers,” right? Isn’t that what people call, “Putting the cart before the horse?” Why waste your time and money trying to buy properties from a “less than motivated seller?” You might as well go fishing… it’s more fun!

How would you feel about having:

YOUR OWN PERSONAL “PRE-WRITTEN” LETTER TEMPLATES ALL READY TO SCOOP CASH FROM MOTIVATED SELLER DEALS!

YOUR OWN FREE REPORTS TO GIVE AWAY ON YOUR WEBSITES THAT WILL HELP YOU CAPTURE BUYERS AND SELLERS INFORMATION… SCOOPING IN EVEN MORE CASH THAN BEFORE!

BUYER AND SELLER AUTORESPONDERS HELP YOU STAY IN TOUCH WITH THOSE CASH RICH DEALS THAT EVENTUALLY WILL BURST LIKE AN UNDERGROUND OIL WELL!

And THE PRIVATE MONEY SALES TOOL TO GIVE PEOPLE THAT WILL BECOME YOUR PERSONAL BANK, WAITING TO GIVE YOU TRUCKLOADS OF CASH TO FUND YOUR DEALS!

This great direct mail marketing package is now ready for immediate delivery to you, PLUS, all the letter templates upload with a mouse click into RealProspect management software! You could have a complete marketing campaign ready to go out within a few minutes. Go HERE to see more about the NEW REIM Complete Package.

Every real estate investor knows that having a website is important. Having more than one website is much better. One for sellers, buyers, private money lenders and each niche of the business presents you as much more knowledgeable and professional.

The technology today makes it so much easier for real estate investors to build a website without having much html (programming code) knowledge at all.  In fact, more real estate investors are building their own websites than ever before.

I’m a real estate investor and marketer and I visit a lot of real estate investor websites to see how real estate investors use their own website as a lead generation gathering tool.  Of all the problems I see, one of the main problems would have to be, not bringing the viewer to a “definite conclusion.” This will always kill their conversions.

Not Having A “Call To Action” Is A Conversion Killer!

Too many things happening on a web page and poor design are also a conversion killer. Don’t make it confusing for the viewer. When someone arrives on your website, according to the research that’s been done, you’ve only got about three seconds to “capture” their attention and make them continue on. If they read the content there and decide that they’d like to get in touch with you, do you have a “clear call to action” for that visitor to take.

Make Your “Call To Action” VERY Clear…

Put up a big colored button on there that says “Click To Get Your FREE Report” or “Click Here To Sell Your House.”

People usually won’t read everything on the page. They scan. Attention spans are short, and you need to capture their attention within that first three seconds. Along with a big colored button, spell it out what you want them to do, with a strong call to action. This will increase your conversions greatly.

Only Make One Offer Per Page…

Be clear and don’t give them several choices. If someone has to make a choice, even if it’s something as simple as telling them to contact you by phone, email or sign up form, they’ll be less likely to take action. Why? Because they’ll have to make a choice between calling you, emailing you or filling out the form. People don’t want to have to choose when they’re tired and looking for something easy.

Use the standard form on your page that only asks them for their name and email address. Make sure you tell them that their info will be safe and that you’ll NEVER share or distribute their information with anyone. That way, they’ll take the action of contacting you and you can follow up with them.

The Details Matter…

There are so many “details” involved in a great real estate investor website that it’s easy to leave out any one of them. I do know some html code, (not a programmer by a long shot), but I still prefer avoiding the hassle and time it takes to really do it right.

There is one company that has been a little under the radar with such a top notch product, but I believe it will blow the others out of the water when it comes to “features and price.” You can see what I’m talking about here.

There are too many other things for a real estate investor to be thinking about, without having to put all his/her websites, landing pages, forms etc. together. Let the pro’s do that and you can focus on making money! Happy investing!

Great Website Offer HERE

OK, I admit, I live in the “foreclosure capital” of the world!

Not only Florida, but here in the Cape Coral, Fort Myers, Florida area. The “ground zero” of the splattered bubble.

While the median resale home price in this area has been sawed in half in the past year, according to industry data, real estate professionals say they’re seeing a sales boom that may hoist the market from the “quagmire of real estate sludge.” Well of course, you rocket scientists… If I offer to sell you my classic automobile for almost nothing, you’d buy it too!

The irony here is: it’s not all local investors snatching up the rare treasure of real estate bargains. There are many German investors buying and re-habbing in this area.

On Thursday, the National Association of Realtors reported that the median price of previously owned single-family homes in the Cape Coral-Fort Myers area in Southwest Florida dropped like a lead balloon, to 52.8 percent in one year, from $178,100 in second-quarter 2008 to $84,000 in second-quarter 2009.

Are they done dropping? I don’t think so. I believe they’ll still be coming down and how low they’ll go… Only God knows. Don’t believe any Realtor who says they won’t drop much more! Yeah… and the government won’t raise your taxes either…

And the banks??? Are they helping people get into homes? Not that much. Plus, the investors are “out bidding” these already low bidders to grab the prize. It’s a real “Wild West” here in Southwest Florida. If you want some of the action, you’ll have to fight your way past the euro.

And you thought hurricanes were the only danger of living here!

FREE Real Estate Investing Tools HERE

FREE Video Reveals The #1 Secret To Making An Extra $5,000-$20,000 Every Month

What Exactly Is Probate Real Estate Investing?

When a person dies, their estate – all their worldly belongings – often goes into a probate court where a judge appoints an “Executor” to oversee the administration of the estate. It is the Executor’s job to make sure that the belongings are divided fairly, according to the decedent’s wishes. Depending on the state, the judge may also give the Executor different levels of power.
Why Are The Owners Of Probate Property Any More Motivated Than Others?

Many times, when an heir (relative or family member) inherits property, they inherit a burden. There are estate taxes to pay, repairs that have to be made, in some cases a mortgage or second mortgage that has to be kept up to date. These are all expenses to them. Ready cash may be more important to them.

Also, there are often multiple ‘heirs’, some may live far away, and you have a situation where selling the house is the best option, sometimes the only option to make sure that everyone gets their fair share of the estate.
Is It Legal To Sell Property That Is Being Probated?

In most cases, the Executor has the power to make a decision to sell – as long as he has the agreement of all the heirs to the estate. In some cases, he/she may also need the permission of the court, but even if that happens, the agreement of all the heirs will usually be all the judge needs to approve a sale of real estate. Some states require that the property be listed through a licensed realtor.

If you’re looking for a great market of motivated home sellers who are most often willing to sell at a deep discount — a market where you’ll have little to no competition, then probate real estate investing is your answer!

Many investors agree, probate real estate buys are the most profitable area of real estate investing.
How Do I Find Properties In Probate?

Wills in probate are a matter of public record. A little research at your local courthouse will get you a list of all wills present for probate. Research to find properties whose owners are eager to sell, and sell quickly.
How Do I Contact People About Buying Their Inherited Property?

Unlike foreclosure sales, where the owners are being forced to sell when they don’t want to, many heirs are eager to sell their property quickly so that they can use the cash realized. You can send out letters or postcards, make a phone call, and even pay a personal visit. Just keep in mind that you are offering a solution that they may not have considered – ready cash. In many cases, they’ll be happy to accept an offer for as little as 75% of the market value of the house just to get it sold quickly, and will do anything they need to do to help the sale go through.
HERE’S AN ACTUAL CASE STUDY: One real estate investor, claimed a student he mentored, would make over $400,000 on a single probate real estate deal this year.

“She mailed out a few probate letters and found the owner of a free and clear house he inherited. He complained about having to maintain the property and he really wanted to sell it now but the market was slow. The house was worth about $250,000 and needed only minor clean up. It has a good floor plan and sits on a small lake in a desirable residential community.

Since the house was free and clear, she offered to buy the house for $200,000 with terms to pay him $1000 a month until paid. Because the house needed a little work and she needed time to find a buyer, payments would begin 90 days after closing. You read that right, she asked for the payments to begin 3 months after closing and he agreed. Do you see what happens when you ask? You can negotiate anything!”

Her plan is to rent this property at $1300 a month for the next 10 years and then sell it with 40 year owner financing for about $350,000. In that time, rents and values will rise and by that time she will only owe the original seller $80,000 and have a house worth $350,000. She’ll have created $270,000 in equity. And when she sells it for $350,000 with the owner financing it, she’ll collect over $2,500 a month but only pay out $1,000 a month. That’s right; she will clear about $18,000 a year for about 7 years. Once the underlying mortgage is paid off, she will still collect $2,500 a month in revenue with no outgoing payment. That’s $30,000 income a year for the remaining 29 years.

But let’s say her buyer sells the property in 80 months, which is the same time the underlying mortgage is paid off. It would look something like this:

• Rent spread first 10 years $ 15,250*

• Interest spread next 80 months $120,000

• Remaining equity due $322,563* *

Total $457,813

After taxes & insurance, assumes a 3% annual rent increase

Based on a 7.75% interest rate paid by the buyer

A couple other benefits include the fact that her profit will be taxed at the long term capital gains rate. Her other income will be offset by the expenses and depreciation during the period she holds the property as a rental, and she now has an excellent income stream to supplement her retirement. That’s what I call maximizing her intellectual capital!

If you’re interested in Probate Real Estate Investing, I recommend you check out Ron’s material. HERE It will give you what you need to jump into the Probate biz.

Depending on the complexities and circumstances, probate can last between six months to three years. If the decedent has an outstanding mortgage on their real estate holdings, the estate is responsible for making payments. Insurance, taxes and utilities must be paid through the estate, as well as property maintenance. The bills keep rolling in as far as that goes and now the executor of the estate is responsible.

Probate real estate investing provides an option to beneficiaries who are struggling to make ends meet, facing the constant upkeep of a property. This is particularly true for estates which are managed by a probate executor who resides out of town. Property maintenance and mortgage payments can cause tremendous financial burden for estate administrators.

Investing in probate real estate can yield a nice return on investment. Usually, real estate can be purchased well-below current market value when beneficiaries are in need of cash. Purchasing probate real estate doesn’t require special training. However, real estate investors who engage in purchasing probate properties should have strong communication skills and a strong sense of compassion. Probate investors work with people who have lost someone they loved. Therefore, it’s important to approach estate administrators in a kind and gentle manner. It’s a little different than foreclosures. They actually want to talk to you.

When an estate is placed into probate it becomes a matter of public record. The first step of probate real estate investing is to visit the local courthouse or get a list from a reliable company that provides current info. If you’re short on funds, you can locate potential real estate deals by researching probate records yourself. In most cases, the decedent will have executed a Last Will and Testament which outlines how they would like their property and personal belongings distributed.

This can be downloaded as a FREE eBook “Probate With Marketing Gold”
which includes the resource list: Click HERE

Private Lending for Real Estate Investors: Learn the 5 Danger Words NOT to Use in Advertising…

We’re going to learn the five words NEVER to use with your Private Lending marketing pieces. There have been cases out there where a state SEC has interpreted these words to be fraudulent statements.

Let’s go through the five words and why they could potentially be misinterpreted.

Guarantee/Guaranteed

The first of the five words that we should not be using is guarantee or guaranteed. You are not guaranteeing these investments with a personal guarantee. So don’t use the word guaranteed. The only person that can guarantee anything is the US Federal Government.

I would stay away from the word in pretty much all contexts, unless you’re talking about something completely different, meaning, “I guarantee to call you back in 24 hours. I guarantee to send the report to you in 24 hours. I guarantee to provide you with a great dinner at the seminar.” That’s all fine. That has nothing to do with what we’re talking about.

Low Risk

The word “low risk” is also something to stay away from. Low risk could be construed as being like a CD or money market. It could be interpreted to be a fraudulent statement.

Obviously, everybody believes that these types of private loans are fairly safe. I understand and they are for the most part relatively low risk. However, low risk may be interpreted by the other person as meaning, “I thought they were a low risk like a money market” or “I thought they were low risk like a CD”. I didn’t know they were high yield securities. I would stay away from this word.

Secured

Do not use the word “secured”. You have to be very careful here. You can use the word secured in some instances. You can say, “Private mortgages secured by real estate.” That is a factual statement. It is secured by the real estate.

So you can use it in that context, but be careful how you use it. Don’t say, “well secured” or something of that nature. Again, this one of those words I’d just be very careful with. Think them through a little bit and think of somebody potentially misinterpreting what you’re meaning.

Safe

Don’t use “safe”. Again, I’ve used the word safe in some cases. I’ve used it in my postcards and flyers. Today, I would not recommend you use the word safe. Find some alternatives. Again, safe can be interpreted as being like a money market safe, like a CD safe, a savings bond safe. All of these types of things could be mis-interpreted.

Risk Free

Do not use “risk free”. I would not use the words “risk free” because there IS risk in this type of investing. No matter what you say investing in real estate mortgages has some risk. Don’t tell people these are risk free and stay clear of misleading people.

To get a FREE “Private Money Sales Tool,” Get the NEW REIM Complete Package Today! http://real-estate-investors-marketing.com/REIM-Complete.html
It’s part of the best direct mail marketing package a real estate investor can have!

Hard Money Is Back In The Picture Again…

The lenders in this country have changed the rules on real estate investors. Underwriting guidelines  are increasing the minimum down payments from 10% to 20%, sometimes higher.  With low interest rates, an unprecedented buying opportunity for investment homes has arrived. In spite of this buyer bonanza, acquiring real estate has become expensive.  This leaves many real estate investors asking themselves the question, “How do I maximize the cash I have?” This has “re-energized” creative real estate investment financing.

Hard money, private money, short-term capital, re-hab loan or whatever you call it, hard money seems to be the most common. Using hard money seems to be coming back for a couple reasons; flexibility in deal structuring, and the speed and ease of acquiring it.

Usually it’s been used to purchase and renovate a home in order to hold for cash flow. This process usually involves two loans. The first is the hard money loan. It’s used to purchase and renovate the home, then it’s usually refinanced out within a short period of time (within 180 days). After refinancing, the hard money lender is usually paid off and the investor is left with no real investment in the home. The purchase price, re-hab costs, neighborhood, market will dtermine that final price.

The Process of Getting Hard Money Financing

1) Investor identifies a property in need of re-hab with substantial equity since most hard money lenders lend about 65-70% of the After Repaired Value of the home.
2) Investor purchases the home with hard money, which includes purchase price and all, or most all, repair costs.
3) Improvements are completed on the home through draws to a contractor.
4) On completion of the improvements, a refinancing of the hard money loan is initiated.
5) A new appraisal is ordered and an new value (After Repaired Value or ARV) is used to value the property.
6) The permanent lender underwrites the loan and pays off the initial financing, giving the investor new terms on a 30 year loan. (Usually giving the investor a positive cash flow on the property.)

Some Factors to Consider Though

This kind of loan usually involves a higher origination fee of 3% to 5%, and a high interest only payment of 1 to 1.5% a month. You’ll also pay closing costs again when the loan is moved to the permanent lender. This can cost around 10% of the equity to structure the deal in order to minimize your out of pocket investment. Many investors still choose this method of “using other peoples’ money,” due to the ability to purchase more properties and increase the “cash on cash” return.

Here’s an example:

After Repair Value(ARV):   $145,000

Purchase price:    $84,700

Cost of improvement or rehab:   $16,000

Hard money origination cost:   5% or $5,075

Transaction closing cost:  $1,600

Total due at close:    $107,375

In this case the short term lender loaned 70% of the ARV or  $101,500

Cash due from buyer $5,875

The buyer was then able to refinance with a permanent lender at 75% of the ARV using a typical no-seasoning Fannie Mae lender. The difference of 5% covers the investors refinance cost on the investment home.

The investor ends up with a permanent loan at $107,300 with a 6% interest rate, with a 30 year fixed payment for principle and interest of $643. In this example the home was rented for $1,195, leaving $552 in gross cash flow. After  taxes, insurance, management fees, vacancy and maintenance, this particular home will still cash flow positive for $110 a month. This leaves the investor with $1,320 net cash flow annually on a $5875 investment, creating a “cash on cash” return of 22%.

Even though the process is more involved than the standard 20% + closing costs,  the result is the buyer now owns the property at 75% of the ARV and saved over $25,000 of cash which can be used to purchase more homes.

The key to this strategy is making sure you qualify for the permanent financing first! As an investor you need to maintain a 700+ credit score and have 6 months of reserves for the 30 year loan payment.

Hard money financing can be found on the internet, your local real estate investing association,  and even locally. Just make sure you’re pre-qualified for permanent financing…