Vacant House Riches Quick Start Guide

Transcription

1 Vacant House Riches Quick Start Guide The Fastest way to make $1,000 to $10,000 with Real Estate Investing By Christopher Seder Copyright 2012 by: Big Sky Property Solutions LLC

2 Disclaimer Copyright 2012Big sky Property Solutions LLC and VacantHouseRiches.net All rights reserved No part of this book may be reproduced, transmitted by any means, electronic, mechanical, photocopy, and recording or otherwise without written permission from the author. You cannot give this book away for free You cannot give it away as a bonus You do not have the rights to resell this book Any unauthorized reproduction of these materials in whole or part will result in legal action against you or your company. If you would like to participate in our affiliate program, go to Legal Disclaimer: All the information presented herein is based upon the author s research and experience. The author is not responsible for errors or omissions. Laws and legal practices vary from state to state, and from municipality to municipality. Furthermore, laws can, and often do change over time. The author does not vouch for the legality of his opinions, nor is there any intent to supply legal advice. The author strongly encourages the reader to consult with an attorney prior to entering any real estate transaction and contract and before taking any action on the material written or presented by the author. P.S. Warning: If you want to be broke forever keep doing what you are doing, but if you want to be financially free, get out and make it happen.

3 Introduction My name is Christopher Seder, and my business partner, Rick Seder, and I have put together what we believe is the best quick start guide for real estate investing on the market today. I have been exactly where you are and so has my business partner and father, Rick. He has been flipping houses and creating wealth with real estate for over 30 years now. After I finished college I knew I wanted to get started in real estate investing. I graduated in the heart of the recession, where jobs were scarce. But even though I grew up around real estate investing my whole life, I really did not know a thing about it. Starting out brand new in a business can be exciting, but it takes time to learn everything. Without a proven method to follow, it might take you 6 months to 5 years before you ever find your first real estate deal. Lucky for you, this workbook is designed as a step-by-step guide that will give you a clear direction on how to make your $1,000 to $10,000 as fast as humanly possible. I wish I would have had this simple road map when I first got started. You can now learn from my mistakes, and my father s, and learn how to make money in real estate in less than 30 days, when it took me 6 months. If you want to really be successful in real estate investing and get the most out of this quick start guide, you need to develop the mindset that you won t quit and you will not let any obstacle stand in your way. Believe me, it s going to be challenging. The world is going to test you to see if you are really committed to financial freedom. You need to get yourself excited and force yourself to stick to the plan even if you don t feel like working that day. Having a truly positive attitude and knowing that you will succeed is one key to success in real estate.

4 Some of you reading this may have no money, no credit, and are flat broke. You can do this business with almost zero dollars. There will be some investment required for marketing, and educating yourself. The reason I bring up money is because there are several strategies that you can use to flip a house without ever using any of your own money, and there are also strategies where you will use a lot of your own money. Our goal in the Quick Start Guide is to give you the easiest path to success possible.

5 Basic Ways We Make Money In Real Estate Below are a few of the real estate investing strategies that we use in our business. There are several other ways to make money with real estate investing. For the purposes of this Quick Start Guide, we are only going to be covering a few of the strategies. 1. Wholesaling What is wholesaling? Wholesaling is one of the simplest and fastest ways to make money in real estate investing. This quick start guide will mainly focus on wholesaling. Wholesaling is simply flipping a house quickly to another real estate investor or land lord. When we wholesale a house we either assign a real estate contract or do a double closing. Wholesaling is a real estate investing strategy that uses very little money. The only money you need is to market and find real estate deals and a few bucks for an Earnest Money Deposit. You can put as little as $10 down on your deposit. We will cover wholesaling from start to finish later in this book. 2. Rehabbing Rehabbing is buying a property, fixing the property up and then re-selling the property to a homeowner. Our average profit rehabbing a house is around $30,000. Rehabbing can make you a lot of money but is not a strategy that should be used by new investors. Here is what a typical rehab transaction looks like. We buy a house, using private money, a line of credit or our own cash. Then we take 1 to 2 months to fix up the property. We hire contractors and handy men to do most of our work. Once we are done, we put the property on the market. It usually takes around 30 days to find a qualified buyer. Once we have a buyer, it takes another 30 to 45 days to close on the property and get a check in our hand. So you are looking at around 4 to 5 months to get a typical rehab project done. Our last rehab project that we completed had 5 offers right off the bat with

6 qualified buyers. Our first buyer signed the contract and then 2 weeks later the deal fell through. Our next buyer signed the contract, and then 2 1/2 weeks later lost his job, so we had to find another buyer who finally closed on the property. You see how this can become very time consuming, and if you need money right now, rehabbing is not for you. Don t let that discourage you from rehab projects. A project we did last month took us 34 days from the day we bought it to the day we sold it. We cashed a check for over $30,000 in 34 days. Once you have money and know what you are doing, rehabbing can be one of the most rewarding strategies out there. I have heard of people making upwards of $200,000 on a rehab project. 3. Options Options are contracts that give you the right to purchase a property sometime in the future. A lot of investors today are doing lease options. They rent the property from someone trying to sell and have an option to buy the property at a set price sometime in the future. Options allow you to control a property. For more information on options, Google the search term real estate options. 4. Rentals (cash flow) A lot of people think of real estate investing and they think cash flow. Cash flow is one key to financial freedom. We are currently buying as many cash flowing rentals as we can. Once you have substantial cash in the bank, rentals are a great way to invest your money and earn a safe return.

7 The Fastest Way to Get Paid Our focus in this quick start guide is going to be wholesaling. Wholesaling is my personal favorite strategy because it s easy to do, you get paid in less than 30 days, and you can spend less than 2 hours wholesaling a property and make $5,000. Advantages of Wholesaling Quick cash Never take ownership Very Little Risk Do multiple deals a month Here is what a typical wholesaling transaction looks like. You start marketing like crazy and find a person who really wants to sell their house. You negotiate with them to buy their property. We are putting houses under contract anywhere from 40% to 65% of the after repair value (value of the home totally fixed up). Putting under contract means that you have the seller sign an agreement that they are going to sell you their house. For example, you negotiate with the seller and sign a contract to buy the house from them for $50,000. You determine the house is worth $100,000 after it has been fixed up (after repair value). Once you sign a contract with the seller you then go out and look for someone who really wants to buy a cheap, fixer-upper house and can pay cash. You look for landlords and rehabbers. Once you find your cash buyer, you simply sign an Assignment of Contract with the buyer. For example, you assign the contract for $5,000. Your buyer is buying the property for $55,000 paying you $5,000 and paying your Seller $50,000.

8 You then collect your check and move on to the next deal. Remember we are just ASSIGNING THE CONTRACT. For now, we are not closing on the property, just assigning the contract. You do not need any money except for $10 to $500 for an Earnest Money Deposit. Re-wholesaling Houses, the Art of Leveraging Other People s Deals Another strategy that I see a lot of people using to make instant cash is rewholesaling or wholesaling other wholesalers houses. What you do is find other wholesalers in your area who already have houses. You approach these wholesalers and work out a deal with them that if you bring them a buyer, they will pay you 30 % to 50% of their wholesale fee. Some wholesalers will love this because it s one less step they have to do, but there will be some that will not allow you to do this. Once you have built up your buyers list you can simply check other wholesalers inventory daily, send out a couple s to your buyers and make a quick $1,000 to $5,000. Now you will want to sign a contract with the wholesaler saying that you get x amount per deal. Most wholesalers will be stand up guys, and their word is their bond, but when money is involved - it can change people.

9 Step 1: Setting Up Your Foundation One of the first tasks you should focus on is to start learning about your local real estate market. You need to figure out what houses are selling for, what houses are worth, what are good rental areas, what are good first time home buyer areas, and what areas to stay away from. One of the best ways to find this information is by talking with realtors or active real estate investors. Active realtors should really know what is going on in your local market. You should find a local realtor that is investor friendly (some don t like us investors). Take one of these realtors to lunch and just ask them questions about the real estate market. Have them print you out the average sales prices for different areas in your town. Have your realtor list the average type of house that is selling, size, bed rooms, bathrooms, number sold; average days on market, and price. This will give you a good idea of what is selling in your market place. Also have your local realtor print out all of the CASH sales for different areas you are looking to invest in. If you see several cash sales in a certain area you might be able to determine that, that is where investors are buying. I recommend that everyone get a software called FreedomSoft. I use FreedomSoft in my business every day. You can use FreedomSoft to quickly and accurately evaluate deals. I know that I would not be where I am today without FreedomSoft. Check it out, the software is $37 plus $97 a month, but totally worth it. If you are really serious about investing in real estate, this tool will pay for itself 1000 times over. Here is a link to a DEMO of the software I made for you.

10 Running Comps Running comps means Running Comparable Sales. In order for us to determine what to offer sellers and what houses are worth, we need to know what similar houses are selling for. Once you have a realtor run the average prices for different neighborhoods, you can determine what houses are going for. We will get into evaluating deals more in-depth in step 4. Talking to local wholesalers A great way to determine what houses are selling for, what types of houses buyers are buying and what areas to start investing in is to talk to other wholesalers. Most wholesalers are doing lots of marketing and finding lots of deals so they know what houses are going for. Contact every wholesaler you can find, and start asking them questions. See if you can take them out to lunch. Also get on their buyers lists. Contact REIA members in your area Most cities have Real Estate Investors Associations. These are clubs where local real estate investors meet to network, get education, and even wholesale deals. I recommend that everyone go out and join your local REIA. To find a real estate investors association in your area go to From my experience, most REIA members are willing to help new investors. Start networking with these people. Your local REIA is also a great place to start building your buyers list.

11 Step 2: Start Marketing Marketing is what I consider the foundation of a good real estate investing business or any business. If you are not marketing and bringing in leads, then you are not doing deals and not making any money. The goal is to find motivated sellers. People who NEED to sell their house. These are the people willing to sell you their property for 40%-50% of the ARV. There are several ways to market for motivated sellers. 1. Driving for Dollars This is where you simply drive around your town and look for houses that might be vacant or in distress. This is my favorite way to find motivated sellers, and I have found some of the best deals while driving around. Once you find a property, write down the address, and then Google your county s tax assessor s office and look to see who owns the property. Then mail them a letter or go to 411.com and see if you can find their phone number. For more information on finding vacant houses refer to the Vacant House Riches Guide. 2. Direct Mail Sending mailers out to targeted people, such as foreclosures, probates, landlords, absentee owners, and people with vacant houses is a great way to find people looking to sell. I send out on average around 100 to 500 mailers per week. Sometimes more, sometimes less, but I always try and send some out every week so that I have fresh leads always coming in. You can get mailing lists at listsource.com, on FreedomSoft, or by compiling the list yourself.

12 You can go to the court house and find most of the information there. Personally, I think it s easier and saves a lot of time to just buy a list of 400 names and addresses to send to for around 60 bucks than to spend 4 hours writing down names at the courthouse. 3. Bandit Signs Bandit signs are an amazing way to find deals. If you do not know what bandit signs are, they are pieces of cardboard or corrugated plastic that say we buy houses and a Phone number. I place these signs at busy intersections all across my town. 3. Classified Ads One of my favorite ways to market is Classified Ads. I have a classified ad running in a local newspaper that costs me around $55 a month, and I get 10 or more calls a week from it. A deal that I just closed on around Christmas came from a guy calling me on my Classified Ad in the paper. All I have is, Cash Offer for Your House in 7 minutes, my Phone Number and Web Site. You can also have I Buy Houses; Cash for your house, I ll Buy your House Today or something along those lines. Another great place to put ads is on all the free online classified sites like Craigslist.org, backpage.com and Kijijji (ebay s free Classifieds).

13 A lot of motivated sellers post their property on Craigslist.org. I post all of my rentals and property I have for sale on Craigslist.org. Whenever I post an ad for my house I get hundreds of calls. I also try to post an ad on Craigslist looking for motivated sellers every day or so. All you need to do is say you buy houses and leave your number or web site. 4. Online Marketing The internet is a great place for motivated sellers and motivated buyers to search to find their answers. With this course you should have received an internet marketing course designed to help you dominate your local area. We use both free advertising and paid advertising to market our real estate business online. Start learning everything you can about marketing online. Create a web site for your business. 5. Networking Most big time real estate investors I know are great networkers. They talk to people and spread the world about their business. They want everyone they come in contact with to know that they buy houses. Every chance you get you need to be talking to people and handing out business cards. GET BUSINESS CARDS made up. 6. Places to Find Real Estate Deals In this section, I want to talk about places where you can look for deals. The best leads are leads that automatically come to you, but sometimes we need to be proactive and look for deals. Newspaper Online Classifieds Foreclosure sites (hudhomestore.com, homepath.com, etc) Local realtors For Sale by Owner Sites Bird Dogs (people who go find deals for you)

14 There are several other ways to find good deals and several ways to market your business. Start learning everything you can about marketing. Action Steps: 1. Get business cards made up 2. Over the next week attempt to do each of the marketing tasks listed above. Step 3: Start Building Your Buyers List Every big wholesaler will tell you the money is in the list. The more cash buyers looking for cheap houses you have on your real estate list, the easier it will be to wholesale houses quickly. It s going to take some time to build a buyers list, but there are ways to speed up the process, and I have seen people add hundreds of buyers to their list in just a few hours. The first thing you are going to need is a database to store your buyers list. I have two places where my buyers list is located. One is FreedomSoft. They have a way to capture buyers leads and for you to send your buyers s. The other place I have my buyers list is Aweber.com. Aweber is a place where you can create opt-in boxes and where you can easily send s out to your buyers. If you want to start promoting information products in the future you will need something like Aweber.com to start building your list. Aweber starts out at $20 a month. Here are a few places where we advertise and find buyers 1. Online Classified Ads Investors are always checking sites like Craigslist for cheap houses. Start posting your wholesale property on Craigslist and other online classified sites.

15 Also start posting ads like: Wanted, Investors, Rehabbers, and Landlords. It s Your Lucky Day. Body: You Can Finally Go Find Amazing Real Estate Deals In Seconds ATTENTION: If you are a Real Estate Investor looking for Rentals, Flippers, and Great Deals, this may be the most valuable information you will ever read. Are you Looking to buy wholesale properties or invest your hard-earned money on a safe option with great interest rates? Big Sky Property Solutions LLC has the experience, know-how, and infra-structure to offer you great opportunities in your real estate investment endeavors, whether you need a new rehab project to work on or an alternative to investing your money. Please visit our web site and contact us today Collecting Business Cards 3. Foreclosure Auctions (#1 place to find cash buyers) When buying at a foreclosure auction, you need to have cash in hand in order to purchase. You know that buyers at a foreclosure auction are serious cash buyers. 4. Cold Calling (call for rent signs) A lot of land lords are always looking for more rental property. Call up For Rent signs and ask if they are looking to buy more rentals. 5. Bandit Signs (market for buyers Ex, cheap house for sale Handy Man Special for Sale ) 6. Local REIA 7. Online Marketing

16 8. Facebook Advertising For more information on how to find cash buyers refer to the main vacant house riches manual. Step 4: Evaluating Deals The process of evaluating deals is not rocket science. But, it might take a little while to get comfortable with and really know what you are doing. We have a simple 3-step process we use to determine what to offer a seller and to determine if we have a good deal. If you have done a good job marketing, your phone should be ringing off the hook, with sellers calling to sell their house. 1. Go Over the Lead Sheet with the Seller With the Vacant House Riches Course, you have access to a seller s lead sheet. Once you have sellers contacting you to sell their house, all you do is simply ask them the questions on the lead sheet. It is very important that you ask all of the questions. We really need to know if a seller is super motivated or just a little motivated. A super motivated seller will pretty much give you their property, while an unmotivated seller wants full market value. It will take time to figure out if a seller is really motivated. Sellers are motivated for several reasons.

17 They need money Foreclosure Bills Sickness They don t have money to fix up their property Property is in Distress A vacant ugly house 2. Find the Market Value This process is pretty easy. We find comps. We look at houses that have sold within the past few months and that are similar to the property. Then we come up with our market value. This is not an exact science and is really just an estimate. 3. Formula To Use To Calculate Offer The next step is to determine what you re going to offer. Generally speaking, we want to make offers anywhere from 40 to 60% of the ARV. If the house seems like it needs lots of work, you want to be lower than that. Use the little formula that I provided. It usually comes out pretty close to 50%. After Repair Value

18 -Minus Repairs -Closing Cost -Wholesale fee = Maximum Offer Example: ARV = $100,000 x 70% = $70,000 Minus Repairs $15,000 (estimate) = $55,000 Minus wholesale fee: $5,000 = $50,000 Minus Closing Cost: $2,000 = $48,000 So $48,000 would be my offer on a property that is valued around $100,000. Sometimes I calculate closing cost in, and sometimes I don t worry about it. All of these expenses are examples and estimates; they could be higher or lower. The $5,000 wholesale fee is what you want to earn on the property. Note: The reason you multiply the property by 70% is that 30% is the rehabbers or your profit. You always want to give rehabbers a nice profit. When you are planning on wholesaling or flipping the property to another investor, it is important to keep the property under 65% of the ARV. This is because a lot of rehabbers use hard money lenders. Hard money lenders will not loan more than 65% of the ARV. Step 5: Making Offers, Letter Of Intent, And Signing A Contract Once you have a number in mind, it s time to make an offer to the seller. There are a couple different ways you can make your offer. 1. Call up the seller and give them a verbal offer. Simply say, I have run the numbers and based on the current market value, and the amount of repairs needed I can offer xxx amount.

19 If they say yes, you say great, and either them a contract to purchase or drive over to the property, and sign all of the paper work there. 2. You can also sellers a letter of intent. A letter of intent is a one or two paragraph letter stating that based on the current market value and the amount of repairs, xxxx is what you offer. It s pretty simple. The reason we send letters of intent is because sometimes sellers do not react very well with low ball offers and it s best to just send them an The next thing you can do is send your seller a signed contract. This shows that you are committed and ready to make a deal. As a side note, you will want to contact a local realtor and get a blank copy of the State Approved Buy Sell Contract. This is the contract realtors use and it s what we use in our business. It s not a must, but sometimes people like that contract better. Step 6: Assigning The Contract And Marketing For Buyers Assigning a contract is very easy. Once you have a good deal under contract, you simply send a few s to your buyers list or call up a few local investors you have networked with. Once they look at the property, have them sign an assignment of contract and give you a $500 to a $2,000 non-refundable deposit. We always ASK for a non-refundable deposit because we want to know the buyer is 100% serious, and that they are going to close.

20 Here are some ways to find your buyers 1. REIA Meetings 2. Foreclosure Auctions 3. Classified Ads 4. List Source/Public Records 5. MLS Wholesaling a House with No Buyers List

21 What if you do not have a list right now, but you have a wholesale deal? Here are a few things that you can do to find wholesale buyer leads and sell your house. 1. Put out Bandit Signs (not in the front yard) Put signs all around the area handy man special, fixer upper for sale, or cheap house 2. Put an Ad Up on Craigslist and Back Page You can make simple, little professional looking flyers that can be put up on Craigslist on a site called V-Flyer. Check it out. 3. Run an Ad in your local Paper 4. Put your Ad on other Sites (Zillow.com, Truila.com, Cyberhomes.com, Homes.com) 5. Put your House on Your Blog and Web Site 6. Take your Deal to Your Local Real Estate Club President Every city (or most) has a local real estate investing association and the president of that club has a buyers list of hundreds or thousands. Find the REIA nearest you, and call the president. Tell them you have a killer deal and was wondering if they knew of any members looking for what you have. Now you have buyers contacting you like crazy. Remember, we are just putting a motivated seller together with a motivated buyer.

22 Step 7: Closing On The Property Once you have your buyer all lined up, and the assignment of contract signed, you take both of the contracts to the title company or closing attorney and tell them to start all of the title work and paper work. You job is pretty much done. All you need to do is make sure everything goes well and wait for your check. Step 8: Repeat The Process A wholesaler s job is never over. During the process of closing you should still be out looking for your next real estate wholesale deal. I am always searching for the next real estate deal. As you can see our real estate process is not very complicated. Anyone can follow the simple steps above and have success with real estate investing. If you have any questions contact support@netincomerealestate.com

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