Learn the Secrets of Probate Real Estate Investing | Greg Vanderford | Skillshare

Learn the Secrets of Probate Real Estate Investing

Greg Vanderford, Knowledge is Power!

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20 Lessons (2h 40m)
    • 1. Lesson 1 Intro to Probate REI Final Cut

      8:22
    • 2. Lesson 2 Getting Mailing List From Courthouse Final Cut

      5:54
    • 3. Lesson 3 Getting Leads from the courthouse Part 2 Final Cut

      6:50
    • 4. Lesson 4 Making and Sending Your Mailings Part 1 Final Cut

      4:42
    • 5. Lesson 5 Making and Sending Your Mailings Part 2 Final Cut

      4:21
    • 6. Lesson 6 Making and Sending Your Mailings Part 3 Final Cut

      8:52
    • 7. Lesson 7 Talking to Sellers Part 1 Final Cut

      14:13
    • 8. Lesson 8 Talking to Sellers Part 2 Final Cut

      7:27
    • 9. Lesson 9 Talking to Sellers Part 3 Final Cut

      5:41
    • 10. Lesson 10 Talking to Sellers Part 10 Final Cut

      5:58
    • 11. Lesson 11 Analyzing Probate Deals Part 1 Final Cut

      12:47
    • 12. Lesson 12 Analyzing Deals Part 2 Final Cut

      9:14
    • 13. Lesson 13 How to Finance Probate Deals Part 1 Final Cut

      10:46
    • 14. Lesson 14 How to Finance Probate Deals Part 2 Final Cut

      7:24
    • 15. Lesson 15 Marketing to Wholesale Buyers Part 1 Final Cut

      6:46
    • 16. Lesson 16 Marketing to Wholesale Buyers Part 2 Final Cut

      9:07
    • 17. Lesson 17 Rehabbing and Listing the Property Part 1 Final Cut

      8:44
    • 18. Lesson 18 Rehabbing and Listing the Property Part 2 Final Cut

      9:32
    • 19. Lesson 19 Course Summary Part 1 Final Cut

      6:28
    • 20. Lesson 20 Course Summary Part 2 Final Cut

      6:59

About This Class

In this course you will learn:

  • How locate motivated Probate Sellers
  • How to market to these motivated sellers
  • How to talk to these motivated sellers
  • How to close a deal and get the property under contract
  • How to quickly and easily analyze these deals
  • How to find financing for these properties regardless of credit
  • How get your money out of the deal with minimum risk and maximum profit

We lay out for the exact process that we use at Sell House or Home to to flip several houses every year including actual videos of me going into two different courthouses and looking up seller info in probate case files.

If you're tired of paying thousands of dollars for real estate investment courses from seminar gurus, this course is for you. We have invested that money for you over the years while receiving our real estate education.

Learn in a few hours what took us years to learn, at minimal cost and no risk. We wish you the best of luck in your real estate journey!

Transcripts

1. Lesson 1 Intro to Probate REI Final Cut: welcome to the class. I'm really excited to get started. And Teoh show you guys how profitable this niche in real estate iss. So just to go into an overview for those of you who don't know exactly what probate real estate investing is, Basically when someone inherits of property and wants to sell it, we need to find those people, right? This is one of the great things about probate. Real estate is that when people have properties, most of the time they want to turn those properties into cash, and especially if they're living in a different city, they're living out of town. They're going to be motivated to sell that property quickly and get cash out of it. So we want to find them. So we investors, we market to those people after we've located them, which is what this class is all about, and then we drive leads to us. Can we get those properties under contract? Now, you may be familiar with what it means to get a property under contract by doing other types of real estate investing. We're gonna go into this more detail in a later lecture. But just as an overview getting a property under contract basically means that you have made an offer on that property. They have signed a purchase and sale agreement. The seller has done that and agree to sell it to you, and you will have control the property for some period times, such as one month, so that you can do some due diligence. As we say in the industry, right? Do some research. Makes sure that everything that seller has told you is true. Find a pure financing if you If you need to do that, if it using hard money or something, and then you can get out of the contract if you need to and escaped from by, not property. If you if you need to do that so you get the property contract right. We execute an exit strategy after we have purchase that that property by wholesaling it to another investor for some quick cash or by rehabbing the property for a bigger profit. That's basically the process of probate real estate investing in a nutshell, and so that's that's the process. Of course, the devil's in the details. We need to learn how to do this in order to make large amounts of money. Why is this niche so great? And in my opinion, so much better than foreclosures and other types of motivated sellers? Well, one of the main reasons is there far greater levels of equity in these properties. Obviously, not every single property it's going to be totally paid off have no mortgage on it. But usually when people hear properties there in Harry Herring them from their parents who have lived in them for decades, and oftentimes these properties will be totally paid off. So, you know, having to deal with doing short sells, you know, having to deal with. OK, how much do they owe? Is this worth it for me or not? And it gets more complicated in this case. You get a property and you just buy it out right. You have all the equity in there, and it's exactly what we are always looking for in this business. So this is a niche has them most equity in his house in general. As I said, most people that inherit property, they're open to selling it because they want to get a quick sale. They want to cash in their pockets and a lot of these people who inherit properties, we don't know what their financial situation is like. So they may be thinking, Oh, my goodness, I just inherited this property and this is gonna save my But I mean really cash in this as soon as possible to pay off some debt or or whatever financial is. They may be happy. So a lot of you inherit property. They want to sell it. Most of these properties do not need a huge rehab. I can tell you the difference between a 10 or $20,000 rehab in a 30 or $40,000. Rehab is not just the money, it is the time. It is the complexity. It is the risk involved. Most of these probate niche properties that we get need much less of a rehab, and that saves us time. That's it is money, and we make a lot more money because of it, and it stages headaches. So for all of these reasons, these are better properties to get usually okay. And then, of course, there's less competition from other investors because they either don't know how to talk to these sellers or the concern about ethical issues with, you know, marketing to someone who just lost a loved one and trying to buy their property. I've had this conversation with a lot of people. I talked to a lot of people about this particular issue, and a lot of will say, You know, they don't want to deal with upset and emotional people and they feel like maybe it's it's wrong to do this and I even have some of those thoughts myself. But after doing this for four years, one thing you realize is that there are a lot of people out there that in hair property, and they are emotional and they are upset, obviously, and they don't want to have to deal with the process of trying to sell this property. But they do want to sell that. Do you want to get the cash out of it? So we are helping these people. I can tell you many stories about people who have been very grateful. It contacted them that we just paid cash for their property. We did as little as one week in some cases, and there they're happy. They've got cash in their pocket. They get this headache gone, they can move on. You know, a lot of times when these kind of things happen in their lives, people want to move on motivated sellers and any niche, whether it's probate, foreclosures, tax, tax, leans or otherwise, they want to move on with their lives. They're trying to get past this chapter in many cases, so we're helping them to do that. And of course, we're trying to get a huge discount on this property because of their motivations. So, you know, this is one of the reason why there's far less competition in this niche. A lot of you are comfortable doing it. So if you can get over that used to talking to these sellers, you know, despite always being cheerful in polite. And if you do get upset caller every once a while, which you will you know how to talk to them, know what to say to them, and we do cover that later in the course. Of course, there will be times when people are simply angry at you for sending them a letter and marketing to them. So they lost someone in their family. That's understandable, and we just kind of have to deal with that. But again, this is one of the reasons why most investors don't like dealing in this niche. And they're leaving huge amounts of money on the table. I tell you, as I said in the promo video, our most profitable deals come from the probate niche, and there's so much more profitable. There's so much easier in so many cases that we focus almost primarily on this this niche now and a couple other of the motivated seller niches because we just make so much more money and so so much little time compared to the others. That is just in our opinion, it's just by far the best next to be working. And so we're excited to show you how to do all these things, how to find the sellers, how to market them, how to get these properties. And we're gonna do some some analysis of these properties with you. We're gonna teach you the whole entire model, give you the letters we use. We're going to show you how to go to the courthouse and get this information. You know, I was just talking to ah, very experienced realtor just a couple days ago we were looking at a property that we were thinking about acquiring. We did put in an offer on it, and we started talking about some investing. He had done so foreclosure investing, and he had never even heard about marking the probate sellers. Didn't even know that you could go to the courthouse and get this information. And you'd like to this group of people. So this is a guy who has 20 or 30 experience. Years of experience in the industry is very knowledgeable guy. He's done real estate investing for years very successfully, and he didn't even know about this. So this is something that no one goes far to say. It's a secret, But I know very future people who know how to do this. So we're gonna teach you how to do this In this course, I'm gonna try to get you Ah, great value for your money. 2. Lesson 2 Getting Mailing List From Courthouse Final Cut: going to the courthouse to finally is is the first step in finding these probate sellers. A lot of people don't know how to do this. They find it intimidating, having to go look around in the courthouse and go to different places in there and ask all these questions and you know the first time you do it, it can be a little bit difficult. You go there you go the wrong place or you you asked the wrong spot and it does vary by county, which is why we have included two videos to different counties to see how we could go and do that. So the process is just a little bit different in each county. But basically it's really similar and it's it's really not that complicated once you have gone and done it yourself one or two times. So the basic processes that you visit the county clerk of the court house in most counties , right? You asked for the case numbers for probate cases between specific dates, so will usually do with this every week, and we'll ask for the case numbers for the probate cases for the last seven days and once you get used to doing this on a regular basis. The people at the courthouse will recognize you. Obviously, you're going in there every week and let us know what you need in a bill to pull up for you really fast. But when you first do it, that's what you asked for. And then, if possible, get them to give you a printout. So if you don't get a print out, if you just say, can I add the case numbers they're gonna give? You use actual cases that you have to look through them all the permit cases in all these different cases, and you have to kind of find case numbers for the probate cases that takes like an hour or more to do that. That's what most people actually go and do. But if you especially build report with the clerk there, you can ask for it. Print out and you'll see in the video that we've included in this lesson. The first she was like Well, we don't usually do that And I said, Well, go ask, uh, Gary. He does this for us, so if you if you're insistent, usually they will give it to you. It's pretty amazing. A lot of times when you go the courthouse and you asked for some documents or files, even the people that work there don't know where they are. They haven't had to get these for you before. And so you kind of have to educate them some time to say yes. We'd like the case numbers for the probate cases for the last week, and we'd like a printout, please. And they don't know how to do that. Just be confident in telling us that you, like this is public record. You are an American citizen. By law, you have a right to access this information. They can't ask, you know what do you use it for? None of their business. This is public information that you have access to the hopes that hopefully will make you feel a little more confident. You go do this. So that's step number one. Second thing you need to do is take those case numbers to the archives. So we asked them if you don't know where the archives are in that your courthouse in your county and then once you get to the archive office, request those case files. You're given that print out, you say. Can we please have all the case files for these probate cases? All right, they will go on finals for you. I might take a few minutes, and they'll give you either the actual cases and you'll see in the video in one courthouse . They give us the actual cases, and we have to look through those by hand and find the petitioner. That's we're looking for the petitioner in the probate cases and in the other courthouse. We can just get on the computer and they'll come and set you up on the computer, and then we'll show you how to punch in the case numbers. And then it will pull a scanned version of those case files to either get a scanned copy the actual files in the computer, or you're going to get the actual hard copy of those files and again, watch in the video, we show you, us going into the courthouse and actually doing this. Now, one thing I want to know about those those videos and you watch them is that they're not perfectly clear because we're not suppose to have a camera on in the courthouse. They say don't have a camera, especially in both courthouses. We go to a really strict about it. So it had to be a little bit sneaky and make sure that we could record what we were doing. And you could listen to what we said to them. You can see their responses and everything. So, um, it was kind of like a little, uh, a secret recording there. But we wanted to do that to make sure we got you guys and actual footage of us going in and doing that. So that's why those videos are a little bit little bit sneaky looking like around 60 minutes or something. So again, what you're looking for is the petitioner in the file, so you'll go through the files, and it depends on the particular file where it's gonna be, because each law firm, each lawyer that prepared those probate case case files will do the paper a little bit differently, so you might have to look through a little bit. But you just go and you locate the petitioner, and then once you find that, then that's the prison. So someone that might be, you know, 10 people in the estate. It might be 10 kids that are heirs, but only one person will have control about a state, only one person. We'll be able to sell you the property. That is the petitioner in the file. And so you get that person's name and their address, and that is who we're going to send the mail, too. So basically, you sit there and just write down the address and the name of every petition, each file. And you get all of the all those case files for that week of that month, however long that you're looking at them for. And then that is going to be your mailing list and you're going to get some people calling you from that list and you're trying to buy their house, and it's really all there is to it. I mean, you go in a little more detail in the next lesson about about this process. We don't go too long each of these these videos, but that's that's what you dio to get the information 3. Lesson 3 Getting Leads from the courthouse Part 2 Final Cut: welcome to Part two and going to the courthouse to find lease. There are a couple other things we need to consider and that we should know when we are going down to the courthouse to get those leaves for our mailing list. One of them is that sometimes there is no address in the file for the petitioner. That doesn't mean that we can't locate that petition and send mail to them. In fact, it will mean that if we are successful in locating that petitioner and sending mail to them , who will probably almost certainly be the Onley person to send them a letter. So that means zero competition for that particular lead. So there's no I just for a petitioner, you may still be able to find them by using a skip trace service, such as white pages dot com. You put that name in the white pages dot com, and they will try to locate that person address for you. Oftentimes, I also can just do a simple Google search, and it will pull up a phone number, address and things like that. We know which county that we're looking into. Sometimes when you do a Google search include the county, or you'll include some other information in the probate file, such as If it's a petitioner has other heirs or their siblings in there, you can include their names, and a lot of times Google will be able to pull. Pull it up and you'll be sure that is the right person, because you cross reference it with other information that's in that file. That's just another trick. And it does happen. I'd say maybe one in every 20 files or so you're gonna have a petitioner's name in that file with no physical address that you can send mail to for them. Every once in a while, there will be no address, but there will be a full number that's more rare. But sometimes you'll have that because, like I said before, it just depends on the law firm that prepared that probate case file document and how they or their paralegal chose to do that. Paperwork consented, so it just varies a little bit the fastest way to get these addresses, especially if you're in a big city or you're doing a big period of time where you might have hundreds of leads that you're trying to write down. Obviously, if we have to sit there and physically write down each of those addresses out by hand, it's going to take a really long time. It might take half, half the day or a whole entire tae. If you have tons of leads right down, right, so it's a big time, time consuming activity. So if you can take your smartphone and just take photos of the petitioner in the address, it goes really fast. You just flip through that case file, find a petitions address, click take a photo, clicked, take a photo the next one and it's go through, take photos of all of them. And then when you get home, then you have the have the time to just take all that, all that stuff out of your phone and put it into a list on Make your Mailer. Now most courthouses do not allow us to use our cameras to do that. Some will. Some will be more stringent about it. Some will be more lacks about it. And sometimes when you're looking to the files or you're on the computer looking through the scanned files, they're just nobody there, so you can just go ahead and take all the photos that you want. It's not really a big deal. I think they just don't want to be able to have, like people on their phones, such inside the courthouse, and they don't people like recording all kinds of stuff in there. But it's not that big of a deal. If you take out your phone and take photos of the addresses again, their public record, everything we're doing here is totally legal, and people do it all the time. So that's just a trick to save you, tones of time and that's really what we're trying to do. We're doing all these activities. It could be time consuming, and we want to do everything as efficiently as possible. So it's good thing to know. Now, another thing toe know about is that not all the petitioners will have real property, right, So we have 100 leads that we're running all the addresses down for maybe only 20 or 30 of them are gonna actually have a house that they might be able to sell to us. And so one way that you can save money instead of just writing down every single address and then sending a piece of mail to everyone it is reaching all of them on. Getting calls from those that are interested are those that are very motivated and spending an extra 30 40 $50 or mawr on stamps and such. You can pay for a monthly fee for service such as Rebel Gateway, which is what we use, and they cost about $45 a month. And then, if you add another county, too, under multiple counties, it's $15 each month for additional counties. There are other types of services that do this. We just happen to use this one because it works well for us, And CNN's gonna rebuild gateway dot com and sign up for that. But what it will do is it will give you a list of all the probate properties that actually have real property on them, so you might go in the middle Gate wins, Okay, there's 30 um, leads with real property in there, and then you go the courthouse and you have 100. You know, only 30 of those have property. Now, the reason you can't issues, we will get one for the list All together you still have to go to the courthouse because rebuild Gatewood will only give you case numbers and information about whether or not there is real property. They're so you still do it the courthouse to to go and pull up the actual petitioners addresses. So we will get what you pay for this service. It will save you one big step instead of having to go to the clerk and ask for all the case files and looked through them. If they don't give you a printout, then just go. You pay for reveal Gateway, You print out your your informational have already have the case files. And this case files will be just the ones with real property. And then you go to the archive and you will simply pull the cases and get those petitioners files is the fast way to do it. This is the way that we like to do it. So we're saving money and not sending all the stamps out. We're saving a step not having a go. The clerk will go straight to the archive and we just print all that all that stuff out. But It's good to know how to do both, and this is there is a cost to this. And so not everybody wants to pay 50 bucks a month or 40 bucks a month to get all these things, especially if they're only targeting one niche. So I'll leave that decision up to you, but something that could save time, they conceivably that's we're always trying to do in this business. So that's pretty much how you how you find leads at the courthouse. Those are the places you go to get those lists. That's the process that you can do and then once developed information. The next step is that you're going to be making an actually actual mailer using a mail merge to produce those mailings to go out to these leads. And that's why we're gonna look at next 4. Lesson 4 Making and Sending Your Mailings Part 1 Final Cut: this lesson, We're going to look at making your actual mailings. Okay, so if you done some real estate investing before you're targeting other distressed sellers and you've probably already done this if you're looking at this course and looking at this probate niche as your first attempt at targeting motivated sellers and this will be new to you, so basically you will use either Microsoft access database files or Microsoft Excel to input your names and addresses in mailing friendly format. I used Microsoft access just because I'm used to using this program and making databases. You can make your make a database that you make a table and you will just put the actual names into there. And then you will say that I'm gonna show you guys how to do that is a separate video to show you how you input that stuff and how you do the actual mail. Merge eso. Make sure you check that out after you. You finish with this lecture and I'll show you exactly how to do Ah, mail merge. And so either one of these is okay. You will put the last name the first name, and then the addresses into excel into Microsoft access. And then when you do your mail, merge Microsoft Word, you will simply click on start mail, merge Goto mailings for the start mail, merge and then you'll you'll put in your your data file in there. And then you will take your letters, which we have provided for you, and you will do emerge your input. Those merge fields where you want him. So having the address of the top and having the the leads. First name Dear You know John Smith or whatever you're John, that will be Emerge Field, and then it'll just merge all those letters for yield taking one second. And it's really, really fast. So you want to make sure you have your own company header and footer in there. The letters that we're gonna give you, you will have our company 100 footers. Obviously you want to change that information to have your own company header and footer and your own company contact info in there. And then once you have all of that, that mail merge done and you will just print out those letters, sign them stuff, um, and mail them now, one of the reasons direct mail is one of the best ways to reach people and do marketing in real estate is because it is very inexpensive compared to other types of marketing stamps now, or 49 cents each. Still hasn't seen that cheap for sending out, you know, Ah, 1000 a month you're gonna be paying five or $600 that month in marketing costs and direct mail. But if you send out 1000 letters a month, you're getting a lot of leads. You're gonna definitely be getting some properties under contract and making lots of money . So think about marketing and real estate. Is that you know, the more you do, the more leads you get. More deals you get, you spend if you spend hundreds of dollars a month or even thousands, if you're getting tons and tons of deals going, one deal that makes you 30 grand is going to cover, you know, several years of marketing for you. So at first, when you're first starting out, if you haven't got any property in the contract, that you might be a little bit hesitant to want to fork out $200 to send out a whole bunch of these direct mail campaigns, but it pays off because people are actually getting a piece of mail from you. It's not like they're getting some spam email or something. They will see its physical. They will open it. You're gonna hand write. The address is on the outside of these to make sure that the likelihood of them opening opening them will be much higher. Which is really what we're trying to trying to get mail in front of these sellers and make sure that they open that male and do a separate lecture on that particular topic of, you know, the numbers game of how many letters you send. What kind of response can you expect to get, what kind of quality leads you get? And what's the what's the best way to get them to open the mail? Handwriting? Which parts of it how to save time? We're gonna go over that in a separate one, but for this one, I just wanted to over the process of you making database in Excel or in Microsoft access. You do a mail merge and you make your mailings and go ahead and go check out the video where record my screen of me, actually putting in the database table in myself access. And so if you've never done that before, they'll show you really, really easily how to do that. And it really doesn't take very much time. It all went to get used to doing it. You've done it wanted, wanted to time. So with that, we will see you in the next lesson. 5. Lesson 5 Making and Sending Your Mailings Part 2 Final Cut: So we've made our mailings. We've gotten all the leads from the courthouse, were sending these mailings out to people. Now what can we expect toe happen from here? Something is good. To keep in mind is the kind of numbers that we can expect to get in terms of Leeds, depending on how much mail we send out. You know, a lot of people that knew this. They send out 100 letters and it surprised when they don't get 50 phone calls of motivated sellers saying, you'll by my property. It's a little bit more difficult than that, and it takes a little bit more time. Then again, if you're sending out massive amounts of of direct mail, you're gonna be getting a lot of calls. Are you getting a lot of leads now? It does, very depending on the list. You have the area. You're in lots of different things like that. How you how you written out your letters and your address is It's not an exact science. However, you can expect to generate between 1 to 5% of all the millions send out getting a lead from that's. That means if you sent out 1000 pieces of mail. You're going to be getting 10 to 50 people calling you from that mail. If you send out 100 pieces of mail, you're probably going to get five calls or less. Now, that may not seem like very much, but you remember you're you're hitting it targeted list. And those leads will be people that have property that there at least interested in selling you. Otherwise they would not be calling you right. So these are good leaves and you're targeting them. And it shouldn't be a lot of competition from other investors. Carney's people. So you're getting all those leads. And of all those all those leads, about 10% of those will actually turn in two deals. So you get 50 leads. We're sending out 1000 pieces of mail and you can convert 10% of those 50 leads. You getting five deal of the one mailing that would be on the high end, right? Maybe you only get one deal out of it. That would still be excellent, right? That would be a great result. What we're trying to achieve, and you just you got to send the mail out and you're gonna take these calls. And that's the kind of numbers you can it can be expected to be getting. So just remember, it only takes one good deal to pay for one or two years of a lot of marketing. Okay, so when we haven't got any deals under our belt yet, we're thinking man of spending this money on marketing, But you just have to do it, and it will pay off if you are just consistent and you keep sending them okay, and we're gonna go into more detail again, another lecture. We will be learning how to send out the full campaign and maximize not only the amount of leads that we get but maximize the quality of the leads that we're going to get. You don't just send out one mailer toe this list, you're going to send out four or five. That means every two or three weeks you're gonna send out another letter that we have provided for you. It'll be a letter number one and number two, you will be different. The number three will say different things on number four will say different things in it. And what happens is people receiving the same letter from you, you know, 34 times and they haven't called yet, But on the third or fourth time, they will call you much more often than after just receiving one letter from you. You actually kind of building report by sending them multiple letters because they just get used to seeing your name, senior company and the Okay, well, you guys have been persistent. I'm gonna give them a call and see what they have to say. So the whole key, though, is we want to generate a lot of leads. And when you get your phone ringing in the chances of you getting a deal and making money, easy money go way up. Remember, we're not doing this stuff because we think, you know, real estate investing. It's just fun to go the courthouse and make millions. And it's funny. You know, something stuff actually kind of is fun, but you get to be your own boss. You get to you have the chance of making an unlimited amount of money. And if you get really good at this, you can do 20 or 30 deals a year. Our company, we usually dio about 10 to 15 flips every year, and most of them now. Our probate deals with market heavily to probate deals in all the counties around our area because we just get the best deals with you. The best leads this way, and that's what it's all about, so that will see you guys in the next lesson. 6. Lesson 6 Making and Sending Your Mailings Part 3 Final Cut: in this lesson. I'm gonna show you guys how we do the mail Merge with the address is that we have got from the courthouse. I just made up some phony names, everything just to show you where we put them and how we set up our Excel document. That said before we could do this with Microsoft access or with Excel. And I'm going to show you how to do in excel because most people have this program and familiar with using it and everything like that. So it's real simple. You just in the very first column right here, you put the merge field that you want. I just do the first name. Last name. I just lied one and address line two. And so you just put the names, the information in you might have, you know, 100 names you've got from the courthouse orm. Or you just gotta input that stuff into excel. Once you have everything, the way you want it in all the right spots right here, you're just gonna save that however you want to and then close it out. So that's what I'm gonna do right now. Close it out. And already status only to save it. And then what we're gonna do now is going to look at our actual letter and do the mail, merge and get it ready to print so you can stuff the envelopes and send it. So this is one of the letters you guys will have access to in the course. This is the first probate letter that we will send out. As you can see, it has our company stuff in the header and in the foot or down here. And you just gonna put your your name right here that my name should be there. So put that there, and then I'll leave some space right here to sign it above our name. So this is the letter that you guys are gonna have and you guys were going to use. And the easiest way to do this is this. Go up to mailings from mail merge, and it's over in the left hand side. So you have to click, start a mail, merge and then select recipients. No, I just go to step by step mill marriage wizard, adding It's easiest way Fastest whale. Just take you through everything full screen again. and so over on the right hand side, we're gonna make it like this so you guys can see it more easily. Sighs this better for us here. There we go. So, over on the right hand side, um, we're going to select the list, and then I'm gonna find the list that we want to use from what I put in my computer here may emerge list, and it's gonna be on the sheet one, something like Okay. And then I say, OK, so now it has our actual list loaded up into it. So the next thing we do is we go right, our letter And then when we want to put wherever we wanna put emerge field, we just go up. Teoh, Um, insert emerged field right here and I want to put the first name here. Dear first name comma. So now for your emerges in your first name here defending the letter if you want to, you can put the address up here. And if you want to do that, you just click, insert, merge, merge field, and then put in first name, last name. I just want address to this letter is size so that it's not enough room for that and you know it's really not even necessary. You're gonna put the addresses on the envelope inside the letter. Just having the first name there. For all the letters I think is quite sufficient. This is what I usually do is put the first name in there. So it's pretty simple. After I'd been served that one Merge feel dear First name. I go to preview my letters and then it doesn't murders for you can see it's gonna look like that. So it just shows you what one of them is going toe toe look like. And then I was going to here and finish and merge. Finish, emerge. I say edit individual documents to see You can see how the verge went. You can just go printed documents immediately. Like to edit individual documents. We want to merge all of them. So it was OK. And now it has merging for us. So we see says dear John, this 1st 1 and then we go down and we see the 2nd 1 to your Tom, etcetera, etcetera. Here. Steve, you're William, You're Clark and we only had five names in our data file on ourselves. Spreadsheets, That's all did. So we could have 1000 names in there. And all we have to do is do mail merge. And it would put a different name on the east letter, and it only takes you a couple seconds Teoh do that. So reasonable process. But I thought I'd show you guys how to do it. Eso would be thorough in the course and show you the whole process from getting the name of the courthouse. Teoh actually doing a mail merge and printing out your letter. So now we would just go todo control p and to do a prince. And then if I wanted a print one copy of all these other click OK, so I'm not gonna not gonna do that. And then so simple is that once you are finished with the mail merge, you will stuff those envelopes and you will write out by hand. The address is on there. So the reason we write it out by hand and not just make labels and print out the labels is because the likelihood of people opening them goes way up When you write things out. My hand a little bit more personable. It doesn't make you seem like, you know, a cold corporate entity that's sending out mail to everybody. They see that you've written down their address, and even though it takes a lot more time, it is worth it because a lot more people will will open. They say that the rate will go up two or 3% points with in terms of how many people will open your mails. That's a lot. When you're sending out hundreds of letters, you need a lot more calls by doing that. And on the third letter that you sent out, you'll see it'll be before letters they're gonna send out in the probate campaign. You're going to send out one every three weeks. You could do two weeks to go really fast. It's kind of it's kind of could be too much for some people or you can do ah month. But I think three weeks is a sweet spot for how often you send out these these letters. So we'll send out the 1st 1 and then three weeks later, just now the 2nd 1 and in the 3rd 1 you're going to want to actually write that out by hand . You put it on a yellow legal pad piece of paper because it just more eye catching. It seems toe work and stuffs been tested through and through, and that seems to get the highest number of responses. So you will write that third way out by hand. Just copy what is in the letter that we have provided for you right onto a yellow piece of paper and send out when you get most of your calls. After that third letter because you will be building report a little bit By setting out these letters, people get familiar with your name and company and you get a lot of people calling when they've received a hand written note from you. They don't feel like you're just some giant corporation marking to them, and this is very effective. So you're gonna want Teoh complete the whole campaign, So don't give up if you get no calls from the first or second mailings. If you get just a few calls or no calls, you want to keep sending them out every three weeks and the third mailing, you're gonna get a lot of calls and you don't get any calls you on from that. Once they got the 4th 1 you need to complete these campaigns. The whole thing is designed for consistency, one of the first rules of marketing, right as you want to be consistent. That's what you see on TV commercials. They're saying the same jingle or the same line over and over again because it works. So when it comes to the mailings, you've got to send out the whole four letter campaign. And every time you get a new list, if you go down to the courthouse once every week and you get another 100 names on the probate list, then you're going to start a new campaign. And then every three weeks you're gonna meal meal with that campaign. So you know, we have a different campaign going out every single week, and then we have to track that every three weeks. We sent a second letter to the 1st 1,000,000 campaign than every three weeks to send a second of their letter to the other 1,000,000 campaign and so on so I could get a little bit complicated. If you're not organized, just make sure you want to go in the courthouse ideally, every week. And get this information If you wait every month and then just do one mailing starting every month. You can do that to adjust to a really big mailing. The good thing about going down every week, you're getting fresh names that are just showing up in those case files. And when they get a letter from you right after their house is inherited Um, you very little competition. Probably the very first person most likely that has contacted them. And so that gives you a leg up on the competition on again. There isn't much competition this niche, so But if you if you're the 1st 1 and send them something right after they've inherited property and they want to sell it, well, then you're gonna get that property in the contract and you're gonna make a lot of money. So that's what it's all about. And with that, go ahead and practice this and we'll see you in the next lecture. 7. Lesson 7 Talking to Sellers Part 1 Final Cut: So one of the first considerations we have to think about when talking to probate sellers is that every once a while you get one that will call you and they will be upset that you sent them a letter. It has lost a loved one, and they, you know, they think Why have someone marking to me, trying to buy my house? This is just part of the probate niche we have to deal with. A lot of people won't won't be this way. But every once a while you will have calls like this and ah, sounds pretty obvious. Just be polite, respectful when they're upset. But it does take some practice when you know if someone is angry or if they're yelling over the phone to say I'm sorry that we have set you buy, send you that letter. We do find a lot of people are very grateful that someone is there to help them, you know, sell their house and help them with the whole process, which is totally true. Pretty much every single house we ever bought from produce Seller is glad that were there to buy it from them, especially if they're an out of state seller. They don't wanna have to fly into town, try to figure out who's a good realtor and had to deal with all that. And they have a full time jobs, often times right there busy. And if we're just gonna give them cash for their house, they are very grateful. So but you will get these calls and the best thing to do. We just let them, you know, talk and say what they need to say and then say sorry, we bother you and it's always be polite, respectful, no matter what it is they say to you how to call Ah, a week or two ago release. And you know you're a vulture and you're preying on these people. I understand why they would have that perspective because they don't know what it is that we're doing is that they don't understand what our job is. It understand what this business entails. And so that's just their perspective on it. And so you know, you can't argue with them. I just tell them. Sorry, upset you. You know, we are here to help people, and we do do that whether or not they believe you. You know, it doesn't really matter, but just let them let them talk and then move on to the next lead. Remember, we're basically collecting knows that's what we say. They were collecting leads. We're going through all the people that call us and trying to find that one really motivated seller that wants toe cell so you might spend 50 or 100 hours on the phone, which seems like a lot of time. But then you get a deal that you make 40 grand off of where you get a deal that you can wholesale and make 10 grand off of in like, two days. And so that's were doing It's like we're fishing were just tryingto put the line out there and find those good properties in the right situation. And so that's the mentality we always want. Teoh. Yeah, another thing that we want to say to them. Remember, too, that there named the property address is public record. If they ask you how they get their info, I have a lot of callers will say. Well, how did you find out about this? Or how did you get my information? And I just tell them you know, we go down to the courthouse when we get public record of people in various situations that we that we market, too, to acquire properties. One of them is a probate list. You know, one of them was a tax lien list, and we just tell them, you know, oftentimes I have my my employees and I have an intern that goes down there full rest and goes and collects all that stuff. So I say you always send we send an intern down to the courthouse to get this information and send it out. And so, you know, a lot of times, people have no idea how did we know? But they just inherited a property, especially if it was like yesterday, right, Because we're going out there every week in this info and we send if you get a new a new listed case and we send out a letter that day, they're gonna be, you know, getting this letter like a day after the case was felt. There was like, Wow, how did this happen? Someone's already sending me mail wanted by my house. That's exactly what we want. Because if someone is motivated and they get a letter right then they're like, Yes, I want to get money in this house cooking as possible. They call you and they're motivated. You go see the house, make an offer and he's accepted. Oftentimes it's that easy, and it can be disturbed. Courage ing when you're sitting, you're spending all this time talking to build a phone, and you have upset people. A lot of you are interested in selling. You're collecting a lot of nose, and all of sudden one will combine that. Yes, you want to sell boom and you just got a property and it really does happen that fast. It can be that simple. And so that's what we're looking for. So just keep that in mind. We're talking a lot to be on the phone. You just waiting for that one person that has a proper motivation and in the process is very easy. Just bring your person sale, agreement it, sign it closing date and you're done, and you get that property and you go on with the rest of the process. You can tell them about your company and ask if you could ask them some information about the property, right? If someone does call and they're and they're motivated, they're not upset, right? Then you just tell them This is the name of our companies, is what we do. And, you know, may I ask you some information about your property? That's a good way to start it out. Of course, if they're just didn't selling it, they'll say, Yes, of course. And that's when you use the seller info sheet from this course. And you just asked them, You know whose names on the title do you owe money, you know, Is there a mortgage? How many mortgages are there? How much do you owe living in the property? Exactly Why are you selling? How much would you take for your property? All those questions? All those things you'll see in a cellar info sheet that you want to fill out when you're talking to the seller on the phone and get some of the basic information you'll be able to tell right away whether no, it's a potentially good deal or not, right? Some of these people, if they're not motivated, they're gonna be asking like some really high priced the property. They'll be asking list price for the property. And a lot of times people distinctive properties worth more than it is if they have inherited property from their parents and it needs 30 grand worth of work to be put into it . But, you know, they don't see that. They just see that this is a valuable property and they want to get what they want to get out of it. They don't know anything about real estate, right? So one of things that were off often doing is educating people about real estate. When we go to meet, the sellers were Well, you know, you don't want to tell him their houses worthless or anything, make him feel bad. But you do want to say, you know this this house could take about $30,000 to fix it. Now no one's gonna buy this house. Or if you do, listed on the market with a realtor, you're going to be waiting for months, if not forever, to sell it. Whereas I'm offering you cash in your pocket and as little as seven days if necessary. And so we're doing a lot of educating the value of their house and we're gonna talk about some of that stuff later in the course in more detail. So that's that's just the basics, right? You wanna you deal with some upset collars and just want to be respectful and polite about it Helps that they are and say sorry. You bothered them. Let them know when they ask you how much. Uh, how did you get the information? Now it's public record, and we get it from the courthouse. And if you know, if they argue with you about about, um Well, scratch that, we'll edit that out. Tell them about your company and asking You gonna ask information of the property, get that information and then that's the That's the first step in talking to a seller. And so the next lecture will go into more detail about some other aspects of that 8. Lesson 8 Talking to Sellers Part 2 Final Cut: Okay, so another thing we want to do when we're talking Teoh the sellers is if possibly want to pull up the property while speaking to them. If they give us the address when we're filling out the cellar info, she and we're at a computer, we can look it up, and we can, oftentimes on Zillow or Trulia or even just Google. You can pull it up and you can look at it. You can see a lot of information of So while you're speaking with them, you might be able to see that you know, it's sold one or two years ago for X amount of dollars. You can see how much it was tax assessed, for you can see exactly how it looks. And so while they're giving the information about you know how much they were willing to sell it for and stuff like that, you can actually be looking at that right when you're talking to them, which helps a lot, because sometimes you know you can actually just give them a ballpark figure over the phone just to gauge how motivated they are. They say they want $100,000 for the property and you see that it sold, you know, 10 years ago for 60,000. Well, you know, you're gonna need to get way away lower. And if you say well for this particular pop, it will probably be more in the range of, you know, 40 or 50,000. And if they just say, Well, that's ridiculous. No, you know, they're not very motivated, But often times you will be surprised at how people will take that kind of information. When you say, um, you know, throwing a low number like that and then people are like, OK, well, um, let's let's meet and talk about it or they say, Well, we can't go that low, but we'll be willing to take this much. You know they're motivated and most the time. You know, if you talk about numbers at all over the phone, you will not be able to get them all the way down to where you want them to. But if you if you just see that they're motivated, you set an appointment to meet with them. And then once you meet with him face to face, that's when you can talk about their house. How much work. It needs how hard it's gonna be to sell, how much they'll lose and commissions if they go with a Realtor and then get them down to the number that we need to get them down to. And we're having a totally separate lecture about those actual numbers. The analysis of the deals, which are a little bit different in probate, real estate and definitely different. Based on this situation, too, you may have learned from some other real estate courses or from my own experience, that we use, you know, 7% of the Air B or 65% of the Air B. And this is a formula. Well, it's a baseline formula, but every situation is difference, and we're going to go into that a little more detail later. A good rule of thumb is always carry the seller info sheet with you, because if you get a call from one of your mailers and you're out running errands or you're out around town, you want to be able Teoh. Get that information. The worst thing you can do is do all this energy, you know, do all this effort to get motivated sellers to call you. And then once they do, you don't have the tools to write down the information, give information, and you try to just memorize it, what they tell you and you and you forget about it. And, you know, you could lose a deal potentially. So always carry the seller in, Push it with you. I just put mine in my wallet. And then if someone calls, I pulled out for a little pencil I carry with me and I could take the information from and you wear Addison before it seems like they're motivated. If it looks like they're gonna get down somewhere near where we're talking about in the phone, then making a point, you see the property. It says here if they're asking less than 100,000 this totally depends on your area and what the real estate values are in your area. Unless the 100,000 might be impossible. You're living somewhere in a big city in L. A. California, You know, in my area, I do a lot of lower and type houses that were acquiring for between 30,000 and 60,000 and then were fixed them with someone for anywhere from 100,002 116 170,000 mostly what we deal with. And we usually my spreads between 30,000 to 60 or 70,000 us on the program video. That was one that we got from very, very cheap. And we are gonna be creating a ton of value like fixing that one up. So that one we're gonna make about 60 grand on it looks like and that was gonna be sold here in a couple of weeks. But basically the whole point of getting these leads and you want to go with engage whether or not these people are motivated and you'll even be able to get that property for anywhere close to what we're gonna get it for. One of the biggest mistake inexperienced investors make is they try toe tryto work leads that are just bad leads right in a person not motivated. You don't want to waste your time on badly. You'll get lots of badly. It's most your leads you'll get. People won't be motivated. They're looking to sell their house. They'll be calling you asked me how you got information. We're looking for those very few out of all the all the leads that we get that are motivated sellers and the rest of them. If you spend time you're going meeting with people thinking, well, maybe I can get them, maybe get them down, making talk them down. You're wasting your time because you're driving all the way out to their place. You might spend a few hours, or even if it's only one hour driving there and talking to them and you just wasting it that much time you could be spent on more marketing or in analyzing another deal or on following up with another lead. That's a hot lead, right? So this is one of the biggest pieces of advice. 1/2 of you is that you do not wanna waste time on badly lead calls. They're not motivated sick. Thank you for calling and move on, because even though we're said we're spending money and time getting these leads to contact us, all we want are those motivated sellers that we need the property in a contract for for a very, very low price below market. So at the 74 have you sent out 1000 letters and you get 50 calls You might only get. You know, 10 of those collars are really motivated, but all it takes is one deal. And every once in a while the stars will line, and you will be getting too early to deal's off of one Mailer. I had one time where we sent out only 100 letters to of a smaller county near where I live to a probate list. And we got two properties out of that 1 100 letter mailing. And they were both really good ones, too. You were able to convert those both in less than two months, and I think we made about $50,000 combining those two deals, and that was in two months. So sometimes you'll have stretches where it seems like you're never gonna get another deal . And that might last, you know, for one or two months or longer. And then all the sudden it's like, Boom, boom, boom. You get a bunch a motivated seller. So the whole point is just be consistent with your marketing. You keep doing it. You keep handling all these leads because you don't know when you're gonna get that motivated. So to call you that wants to sell So this is a business that you have to be comfortable waiting for those leads to commend. It's nothing is guaranteed. But what is guaranteed is that you are consistent. You keep sending out these mailings and you keep marketing to motivated sellers like this, these targeted lists in this niche or any other motivated seller niche, you will acquire properties. That's a certainty, unless you just give up and stop doing it. So you know, another way to look at that is, if you are working full time and doing this inside, we don't have to have any real urgency. You just keep your marketing going out, just an expansion to something you're doing and you send it out. You can take the calls, you know at your leisure and maybe your goals only to acquire, You know, two properties year. Flip those and make you know, double your salary or whatever. If you're doing this for a living, then you need to be doing a lot more marketing and be a little bit more active more aggressive about it. But you will acquire property, so take some faith and take some patients. But if you keep at it, you will be successful. And so what? That will go to the next, uh, lecture on talking to Sellers part three. 9. Lesson 9 Talking to Sellers Part 3 Final Cut: a very important thing to do when talking to sellers is to always emphasize the benefits of selling to you and not going through a realtor. Basically, this is, you know, one of the things that we learn called overcoming objections in sales. Right? And so they are really specific objections. People will have, like that price is too low. And then you deal with that, uh, with a specific overcoming the objection of specific line or something you prepared to say . But there's also general things that you need to always be saying always be focusing on the benefits so people see the value and selling to you over going the normal route of seeing with a realtor. So the first thing you always want to say is that you save the Realtors Commission of 6% right? So could that several $1000 that you automatically saved by selling to us. That's no small thing to a lot of people, right? You could get a fast closing just a few days if they need it. Whereas they list it with a realtor, they put it on the MLS. Maybe they're waiting for months. Maybe they're making for a year. Maybe it won't sell at all because it needs so many repairs. You know, not burying people want to buy a house that needs a whole bunch of repairs, and maybe it's a dump. But you gonna dump if we get it for cheap enough, we will be able to turn around and make some good money on really fast. So we say, you know, you get a fast closing, we can close in just a week to if you want to get some cash in your pocket. We always emphasize that were gonna pay in cash. Even if you're going the hard money lender, you're still gonna have casually closing. So one of our biggest sales pitches that, you know, we're paying in cash, fast closing, paying cash, same filters commission. And you know you don't You're probably sitting on the market. If these people are motivated, these are gonna be big things because they don't want to wait months to get their cash. They want to get a sale. They see you're gonna buy it. Well, then they're going to sell it to you. They want cash. So there's the things you always emphasize when you're talking about the contract, the purchase and sale agreement, everything in there. You want to use the word standard, I This is a standard thing here and you know, number two here. It says that, you know, whatever this is the terms of the agreement, you want to say this is a standard thing. That purchase sale agreement says it's normal, it's standard. And when you talk about the contract, you always want to use the word agreement, right when you say contract and make the sound serious, because soon, so binding and final that psychologically, to a lot of people, it sounds scary, right? Or you're locking them into this permanent thing. And so you say in this agreement we signed this agreement. This is what's gonna happen when you are talking about the house you're gonna buy. You want to use the word property because that helps them detach a little bit from the fact that they're selling maybe their parents house or the family home. When you start using words like buying your house, it can trigger some emotional responses s so we want to use the word property, we're gonna get this property. We're gonna make an agreement. Israel standard terms here in this agreement, it just makes everything sound less threatening. And these psychological factors using these words instead of the other words we could use is no small thing. It's a huge thing because oftentimes, actually, most of the time these people have, you know, some emotions going through them as they've inherited this property and they're selling it . And we don't want to trigger any emotions by, you know, making them think about the family home, this or that. They want to sell their house. We're helping them to do that. And we want them to feel good about selling it to us anytime. They say, Well, I'm not sure if you want to sell right now, or I think that price much too low. I need to talk to my to my realtor any objection that they have just go back and saying, Well, you know, your realtor is gonna tell you what you want to hear because they're gonna make a commission on the sale. You know, a commission of 6%. Whereas, you know I'm gonna buy this property from you. You can have money in your pocket next week if you want to and just go back to those benefits were always emphasising the benefits. And, you know, you don't have to be doing a hard sale, right? We're not out there pushing our deal into them and being too forceful and aggressive. You just casually conversationally talk about the benefits and make make him feel really comfortable. You know, make them like you, be friendly and just very calmly. Always go back to this. We can close the fast cash in your hand, you know, why wait to sell your house and pretty much any objection to have just bring it back to these things and it works. This is what we do, and it works. We get houses on a contract all the time, just by using these same things, and sometimes it will seem like, you know, they were motivated, and then you're not sure or they're trying to negotiate with. You are trying to pretend it's not motivated, but just be confident and and you'll be surprised sometimes at all, suddenly said, Let's just do it. I'll take your offer of 30,000 for the house and even sometimes I'm surprised I offer you 20,000 for a house, and then they accept it when I'm thinking, Wow, this guy didn't even seem all that motivated. He's like, when can we sign? And I say, Well, how about how we signed? We signed today and, um well, close in two weeks, and I just need a little bit of time toe check And make sure that the property is, you know is as you say it is and there's no problems with title and, um and we're going to go and some some properties come through like that, so to stick to the system and, um, it will pay off because it works. 10. Lesson 10 Talking to Sellers Part 10 Final Cut: Okay, so in this lesson, just looking at more things. Do you need to know when you're talking to the sellers that are really important things? I've condensed all the most important stuff you need to know in this business when talking to motivated sellers into these few short lectures. I mean, this is stuff that is totally necessary. And that works and that, you will be saying, will be using left out all kinds of stuff that they might teach you that, you know, might go into a really long advanced course about how to overcome every single individual possible objection of which there are hundreds, which these sellers might say for why they don't want to sell or why you know, your prices to lower or this situation, their family, whatever it is. Millions of things we want to look at some general things that you can use in almost every situation. So I'm emphasizing again here in this number one that if they object to your offer, revisit the benefits of selling to you. So we just covered that. But it's so important that you don't, you know, argue with these people. These sellers sometimes can be a little bit aggressive the phone and they're upset. And it still that's a ridiculous price. Or you say, Well, that's, you know, why would I want to sell to you? Listen with the realtor, why you been calling me? Of course that they've already called you. Then they're interested. But anything that anything that they say instead of, you know, arguing with them or overcome their objection with something that may be construed as an argument. You just go back, Teoh the benefits stable. We're saving your money, giving you cash. And you know, you're gonna You're gonna be glad you sold to us because you're gonna have this money in your pocket really soon instead of having to wait for months. And you just keep going back to the same things and it works. Now try to negotiate a bugger maximum offer. Nothing. Even emphasize is a huge cost of rehabbing the property. The great risk you're taking in doing that and that you're looking a lot of other properties and you can only buy so many. This is something that I use almost every time when people objecting to my offer and say it's too low because You know, almost every single house needs some rehabbing. Someone might say, Well, my house is in need any work at all? But that's that's almost never too. I mean, you have to put to resell property to put new carpets in there. You probably fix up the kitchen. You might need toe fix the siding. It might need at least some paint, some some windows, some fixtures, some trim. I mean, that stuff adds up really fast. So if they say there was no work, you can almost guarantee that it will be at least 10 to $15,000 to rehab a property. Usually it will be a lot more than that. So if the house is in great disrepair, which most of the properties that we are looking at will need a lot of work, you can emphasize the huge cost of that in your negotiations, and they look at this house is gonna cost me $40,000 to fix. That's a huge risk that I'm taking on buying this property from you. I need to be able to resell it. And you know, I'm always looking at other properties. I can only by so many can only handle so many products at once. So, you know, this is my offer. I need an answer on it because I'm looking at two other properties right now. You know, that's true because we're always looking at lots of other properties. That's what we do in our business. So none of nothing you're saying them is not totally true. And then, of course, you need to be willing to walk away. This is one of the most important things in negotiating, especially if you have been trying really hard and spending a lot of time trying to get a good deal and fun. And you've got one. That's a good lead. You guys air close on price. Maybe, you know you need to get it down another five or 6000 to make it be worth it. And you say, You know what I worked so hard were close enough. I could still make some money on this deal, and then you cave in. But you can't do that. You have to stick to your formula, especially if it's a big rehab. If it's a rehab that you think is going to 30 40,000 based on your estimation. You've got to believe yourself some room in there because that could easily, easily go over budget. So you need to be one to say. Okay. Well, thank you. You know, we were pretty close by. I just can't budge in this price. This is the highest offer that I could make and say goodbye. That person's motivated, and you have made an offer to them. They will call you back, and you will get it at that price. I can't tell you how many times this has happened where I've walked away and they had called me back and say, OK, let's do it. They want the money. They want to sell their house, Made them an offer. You know, they're just trying to negotiate with you and get the most that they can out of your offer . You need to be able to walk away. Even if they don't call you back. You say, What's a risk? You know, they didn't call me back when I lost that deal. Well, it wasn't a good enough deal anyway. You need to be able to walk away. We are the creative real estate. Investors were the ones that are negotiating to get a deal Where in this business to make money. And if you can't get the property for the price that you need, you move onto the next one. You cannot get attached. You can't get attached to the cellar or the property or the price. If it doesn't fit the formula that we're going to learn when we're financing deals and that you probably already have learned by 65% of air via 70% of Air V, it's not below that. Then you just say thanks for your time and if they're motivated to call you back and if not , we find another one. We're in this business to get through leaves and find the perfect houses, motivated sellers that we can get it probably for low enough. And you know, almost any property you can be acquired for the right price, even a proper that looks like it needs $50,000 you know, and work. And it's just totally just gone. I mean, you get the property for $10,000 and Air B is gonna be 80 or $90,000 on once it is fixed. Well, then, it's still gonna be worth that. You're still getting a lot of money on it. So the name of the game is to get through all these leads to the proper motivated sellers and get the house under contract for what we can get under contract for never get attached and be willing to walk away because that gives you leverage in the negotiations. Don't get desperate and don't take more then you know you should take. That's the number one rule in this business. 11. Lesson 11 Analyzing Probate Deals Part 1 Final Cut: so we've talked about what to say. The sellers we know has sent out the letters and get the get the leads. But one of the most important things right is knowing how to analyze the deals, to make sure we know how much we can offer for that property. So it's basically the same as other types of motivated sellers. Whether your marketing Teoh, a foreclosure list or a tax lien list or state sale list, or whatever space is the same formula, however, we want to go through some considerations that may make us a little bit flexible on our formula. So I'm gonna go through this is pretending that you have never heard of this before. Explain it very clearly to you. So when you hear someone talking about, we need to get the property for 70% of the R V minus repairs. What it means is a RV is a after repair value. This is how much you're estimating you can sell the house for after you have fixed it up. So it's totally new again, right? So whatever that let's say that's $100,000 that you think the house is gonna be worth after you fix it, you need to acquire that property for $70,000 minus how much is gonna cost you to fix it. So that's $20,000 Have you see, in this example 70,000 miles 20,000 is 50,000. So we know that we need to acquire that property for $50,000 or less. Okay, that's the most you should ever pay for a property. If you are going to rehab it now, 65% number is a number that a lot of investors use, and it can be harder to get it down to that when you're negotiating. But if you can, you do a few things. You give yourself more margin for air if your estimation of the repair cost is, you know, a little bit low or, you know things go over your budget a little bit during the rehab, which is very, very easy to have happen, especially not have a lot of experience. So I give yourself some some safety there, some margin of air. Also, if you're planning on whole selling the property and you don't want to do the rehab yourself, then if you get it for 65% air V. You can bump it up to 70% of the air B and you make the spread the difference between 65% and 70% which in this case before $5000 on the person who's gonna actually rehab another investor, they're going to be able to get the property from you for 70% of the interview minus repairs still fill our formula, and they're still gonna make 30% margin. And everybody wins because you wouldn't found the property and you had to do the marketing and you had to do this work. But then, if you could just sell it quickly to another investor, well, you just made a few grand off of that. And then you can move on to the next one, and it's do a bunch of them and you have less risk. You don't have to invest all of your money in rehabbing the property, waiting for to sell, waiting for the closing after it sells, right? But of course, the person who does the rehab is gonna make a lot more money. When you were the one who acquires the property and doesn't rehab yourself. You flip it around quickly within one or two months. Well, you just made however much 2030 40 grand in two months. And then, if you can get properties rolling in one every month or two, which is totally doable. Once you get your marketing ramped up and you get talking to sellers, you can make you know 40 grand every month or two. And that's why people are so interested in this business model. Once you get good at it, people can make a lot of money on a lot of real estate investors that make between 1 $200,000 a year. I know other ones that make for $500,000 a year, and I know some who only likes to do one or two projects a year. But they enjoy, you know, being their own boss and having control of their own schedule. And they make 50 grand a year, and they just do one or two houses. So it's really all to you. The whole goal at the whole reason over in this business is we want freedom, write from our desk job, freedom from a boss. We want the potential to make unlimited amounts of money and basically get Thio Thio, keep what you catch, right. If you get these properties, you make the money. You get to keep it. You're not work for a salary and have a cap on your salary So that's the way that it works . So when it comes to, you know, making an offer, it's up to you to decide. You know, do we want to do I want to stick to 65% air V or 70 70% of every going to be enough? If you're just gonna rehab yourself, well, then you can get it for, you know, a little bit higher in the sense that you're not trying to wholesale it. But then again, you you leave yourself less of a margin for error if you don't get it for more like 65%. If it's a newer house and you know that the your rehab estimate is accurate and you know the rehabs gonna be smooth and get done quickly, well, then you may decide, You know, in this case, I know the seller won't budge. I would even go even a little higher than 77 Air B because you know, the rehab is gonna be such an easy one, right? So you stick to the formula, but every case is different. And if you if you know that you're going to make money off this property quickly, well, then it's up to your judgment. So just you gotta get used to thinking about that. But this is the Formula 65 or 70% of the after appel repair value minus the repairs. That's your maximum offer. Now, that doesn't mean that's what you should offer them. If 50,000 your maximum offer, you still need some room to negotiate so that you can, you know, give them something in the negotiations and raise your offer a little bit if you if you need to. So in this case, you might want to offer them 40,000. And then if they say no or the hammer Ha, It's okay. How about this? I'm gonna be generous with you here, and I will pay for the closing costs for you will raise my offer to 45,000. If you will sign the contract today right then you're giving of something. You're just raised it. $5000 you say you'll pay for the closing costs. Now, you know that you're still below your maximum for 50,000 you can get it for 45,000 plus closing costs. Well, then you're gonna make you know even more money than 70% of Air B. And so that would be great. But if you need to go all up to 50 you just know get 50,000 is the most I can offer on this house, and he just can't get them down there. If you're stuck it 60 or 57 or 58 you've gotta walk away because you can't get in the habit of getting properties for paying too much. This is one of the the biggest mistakes that a lot of novice investors make. And a lot of seasoned investors. You know, they're very, very picky because they understand the pitfalls of getting it probably for too much going over on your on your rehab budget instead of the deal that you thought you're gonna make 30 grand on and flip in two months. Now it's taking you seven months, and you're only gonna make you know five or $10,000 because you messed up the rehab estimation how long it was gonna take and how much it's gonna cost. And this is this is where the risk is that in his business, right? And this is why you need to get these properties for low enough to minimize that risk. So the two absolutely critical skills that we must have in this business besides negotiating and getting the deal under contract for what we need to get under contract for is using the cops right, using the comparable properties in the area to get a very accurate after repair value. I mean, this is all worthless. If we think the house is worth $100,000 after it's done, it's only gonna be worth 85. And now all of a sudden, we moving no money over, make very little money, and our risk goes away upright. So you need to be able to get accurate cops and make sure you get, you know, five or six cops and close to the number of bedrooms and bath as possible, as close to the square footage as possible and as close together in proximity as possible. If you can get three or four compass that are all really similar that are all telling you those houses are going to be worth at least 100,000. We're done. Well, then, you know your air B is accurate and you'll be confident about that. And then the 2nd 1 is making an accurate estimation of the repair cost. This was difficult because every house is different, right? It might cost $6000 to fix the roof on this house and might cost seven or $8000 in a bigger house. It might cost only 4000 another house. But this is why what we dio in this business is we give a little bit high estimations when we are estimating the repair costs. OK, so we just use a rule of thumb. We just assume that, you know, it costs fixing the kitchen, putting cabins. Everything is gonna cost, you know, three or 4000 the roots gonna cost six or 7000 and then usually it will cost less than that . And you're giving yourself some margin for error. And we have provided for you in the course access to the repair cost estimate sheet that has a whole bunch of high estimates for all these things. You can even memorize that, right? A 20 or 30 things in a house that were almost always gonna be needing fixed. How much it cost to put in new windows, new floors, carpet paint, the roof right. There's a general estimates. But as you learned in this business, you get good at figuring out you know how you can You can bump one up or lower one once you look at the property. But you can just memorize all those averages you want to and come up with a pretty accurate repair. Costs with system is based on being conservative, so we want for property for as low as possible. We want to make our estimation of the repair cost a little bit higher than you actually think they will be to give yourself some room for error and if anything, a RV after repair value with house, we want to make that a little bit lower, because if you are conservative like this and the deal works, you know you're gonna make money in some cases, even more then you thought you were gonna make so if you did you know, 7% of Arab you guys probably 50,000 but your repair estimate was pretty high. Maybe you and everything goes really well with the rehab. You won't make it $5000. And when you thought And once the house is rehabbed, everything is brand new. You have added a lot of value of the house. You may actually have bumped up the value for the RV by 5000 or $10,000. So you there are situations where you think you're going to make, you know, 30 grand and you make 50 or you make 40 because you saved five or $6000 on the repairs. You increase the die of the property by five or $10,000 at the markets Really good. And it's a neighborhood people want to live in. All of a sudden, you'll be surprised you list the house for 100,000 and is bidding is a bidding war on it, and you sell it for 1 10 right? So then all of a sudden you rehab only cost 15,000 and you got 10,000 more than you thought you were gonna get of it. You made extra $15,000. And this is when his business is really exciting. Because when things line up and the market is booming or even, just, you know, just steadily, properties of the houses are appreciating while you're fixing the house, you you get a deal on some on some granite for the kitchen. You put some wood floors and they're all of a sudden your house gets done and you have added tons of value and you make an extra 10 or $20,000 on the rehab. That's what happens often times. But you gotta be. You gotta be in the game to make it happen. You're gonna go up there and take the risk toe, get this kind of rewards. And I guarantee you that if you do five or 10 rehabs, you're gonna make between 50 and 100,000 on one of those properties, and eventually you're gonna get some situations where you just make huge amounts of money because the stars line up, you get, you get a property for pennies and the market is lined up and you get a buyer that wants it . And that's how you make a lot of money. So you know, like I said, you could make half a $1,000,000 in a year if you get enough properties and you're flipping these things around really fast, and that's or trying to do. But that's a system for how you analyze it deals and how you come up with the figure for making an offer on that property. Watch this as many times as you need Teoh and really absorb that. So you get to the point where you look at a property. You pull the cops, you can look at the repair sheet, and you can estimate the repairs very accurately. And then you know that when you go to me with that sell, you are confident that the offer you're making is a good one. And if you can't get down to it, you walk away. It's that simple. You just get is many leagues you can. You look at as many problems as you can, and it's a certainty that when you do this, you will acquire properties in the probate niche and you will make money. The only reason that you will fail at doing this is if you give up and you stop doing it. You don't want to see the millions out anymore. You dont spend the 50 $50 on stamps. You don't have to talk to any. You know, upset callers will. Then you will probably fail. But if you just continue to implement this system, you will succeed. It's a certainty. So hope that helps motivate you guys, and you just got to go for it, and that's all there is to it. 12. Lesson 12 Analyzing Deals Part 2 Final Cut: In the last lecture, we went over the basic system for analyzing a property and figured out what we need to get under contract for what our offer needs to be. Now, this one. I'm just gonna go over some more consideration that can help you make those decisions and help give you some flexibility in terms of making the decisions are different kinds of properties. So in general, the newer the property that easier to rehab products going to be right, it's going to go faster. It's going to be, you know, the floor is gonna be nice and flat. All the angles will be easy for construction workers to deal with it. It's not gonna be some really complicated situation where, you know everything needs to be levelled where you need to deal with the specious where you need to deal of lead paint, where you need to deal with knob and tube wiring. And so you know that that the risk is much lower. Newer properties that need less of a rehab. So I just before, in that case, you may want to fudge a little bit and get the property for, you know, 75% of the rehab minus repairs. You know, you're gonna make 20 grand, 25 grand still, and the risk is low. On the other hand, if the house is built in 1905 and it's got knob and tube wiring in it, which is the old old style of wiring, which means you're gonna have to rewire the whole houses, ripped that stuff out of there. It had this pestis. If it has these weird layouts that you're gonna have to, you know, be cutting out walls and you have to be, you know, putting in this new stuff everywhere. Relay out. The house has led painting it right. Let's that you look at a house like that and you're thinking OK, well, my estimation on this property normally would be about 30 grand, and I think I can offer, you know, x amount of dollars for it. You need to stop right there and understand that this type of a rehab is going to take you much longer because there are things you cannot for see complications. You need to get everything up to code. The permits have to all be according to the law. And in these old houses. You know, you might have to level out all the floors. Gotta deal with lead paint. You deal with mildew. This this kind of a project is the nightmare that you hear about. So that doesn't mean that you don't want to acquire these properties. Sometimes these properties can be the most lucrative because the mawr rehab you have to do on a property, the more potential value you are creating. If you did, old 1900 house that everyone sees is just a total eyesore and it's worthless, and you can put 50 grand into it. And all of a sudden you've made you increase the value about property by 60 or $70,000 in the market. Everything is brand new where you're gonna make a huge amount of money on the flip. But you just need to know that is the risks are greater. The cost is higher of the length of time that you're doing. The rehab, um, will probably be longer. And so you just need to get the property for less money. That's all there is to it. So if you're gonna offer four began to this probably normally you don't want to reduce that by 10,000 or 15,000. And you can use that in your negotiating with the seller and say, This is a really old house. It needs a huge amount of rehabilitation, and it's a very risky one for us to take on. You know, no one's gonna buy this if you listed. I mean, no one is gonna buy your house, but I will buy it for this much. And if the sellers motivating is money, they will sell it to you. But you need them to understand the reason that your offer is low. If they think it's low and of course you know it is lowered. We're getting in these towns for cheaper as we possibly can. Um, we just need to emphasize the huge risk you're taking and the amount of investment that you need to put into it. $50,000. A lot of money. $40,000. A lot of money to put into a house. You know, they don't know that you probably financing that or that using hard money and you've got private money that you know it's not even your own money you're using Teoh, flip this house which, of course, we're gonna talk about in another lecture how we can do that. It's one of the things that helps you negotiate. So you just gotta gotta remember that every property is worth an offer. If the price is right. I mean, any any caller that calls you, no matter what property they have, whether it's just land, whether it's a house for a flip, I wonder what it is. You can make an offer on the property. Now. Most of your offers will not get accepted, right? And some people might even be angry with you for offering them, you know, $15,000 on a property they want to sell for 50 or whatever. But the MAWR offers you make, the more of them will get accepted. And this is one thing that myself and a lot of other experience to investors always say to new investors is that they wish they would have made more offers when they first started. Because you don't know what people will accept or not. You might think there's no way they're going to accept this offer right here. It's a little bowl offer, and then they do. They just want the cash. You know you don't know what their financial situation is like. They may be under some serious distress financially, and they need the money for child support. Neither money for taxes and you, the money for the credit cards and other money for some health issue they have. And you surgery you don't know. And so the more offers you make, the more we get accepted. Think about it this way. If you make 100 offers that are low ball offers over the course of a couple of years, only one of those 100 gets accepted that you normally would have made you think it's not worth it, and you make $40,000 off of that house. Just think about how much money you just made it, thereby making all these offers and doesn't cost you anything to make them. So you'll read when you read books about the stuff you know, common saying is that you know, if you're a little bit embarrassed by your offer, it's not low enough. So it's a good thing to keep in mind. You can make an offer on every single house you may get laughed at and they get turned down and they seem ridiculous. But sometimes that offer will get accepted so justly. With everything else in marketing and sales, it's a numbers game. Okay, so keep that in your mind. You know, you're not gonna make money off of most these leads. You're really just looking for those really motivated sellers. But that doesn't mean you can't throw out a number, and maybe they will take it. Another tip that has helped us in the past is if you're not really good or confident about doing your pair estimates Or maybe this particular property is really tricky and you don't want to mess it up. You can use a general contractors bid to help with the repair cost estimate. Right. So let's say you call general Contractor up and you call 45 of them. You say I would like you to a bid on this project. You need to fix all these things in this house. How much would you charge us to do that? Now, the amount of money that general contractors will charge for their services varies widely, so you might get really expensive contractor who may be very, very good and he says he will take us 30,000 fixes and another one that says 20,000 and another one says 17,000. Well, that's a huge range, right? And sometimes a contractor's bids. We won't be very accurate or they'll be too high. But it gives you really good sense of your thinking. Okay, I think it's gonna cost $20,000. We have this property, and then you get three bids from general contractors and they're all right around $20,000. You could be very confident that your your estimate was accurate if they're all. If all of the general contact you get bids from and you get several bids say it's gonna cost 30,000 Well, then you can be pretty confident that you messed up somewhere and it's too low. But the point is you got to get lots of different estimates because one of them might be way higher, way low and, you know they're trying to make money to, and so a lot of general context will you know they'll be bidding top dollar, and they don't even care if they're really busy whether or not you take their bid. So again, just like with when your cops for the house to get the Air V. If you're getting bids from contractors you want to get, at least in my opinion, four or five different bids. And sometimes I'll get three or four businessmen gotchas were already high. Maybe I was off on this, and then I get a bid for from the fourth or 5th 1 and it's 20% lower, and that's the one I go with. So it's just another thing to keep in mind to help you when you're first starting out with making the repair estimate. Have a general contract. Come walk through the house with you and tell you how much they think that they can rehab it for. And it's also another really good way to learn how to do the repair estimates. Because, you know, I can give you the sheet that gives repairs to Macaws and that will give you really good basis. You can memorize how much you can expect to spend on these different things in the house, but then once you go and actually look through actual rehab projects with the professional , and you see the way that they look at everything in the way that they consider things that it will just make you learn that much faster and get that much better at estimating the repair costs. And I just want to emphasize one more time. Those are two absolutely critical skills in this business. What is an accurate A RB and what is an accurate repair estimate? Everything hinges on those numbers being correct. Now, that being said, if you get the property for cheap enough, well, then you've got lots of room for error and you can be off right When I first start, I would estimate that stuff. I'd be off by a few 1000 sometimes, But I get the properties for so cheap that it doesn't matter. You know, I made a list. I made three or $4000 less than I thought or $5000. So I thought I still made 20 grand that property in one month, right? So the basic business model still the same get it probably for low enough, and you're and you're fine, but get good at those two skills and you will make a lot of money in this business. 13. Lesson 13 How to Finance Probate Deals Part 1 Final Cut: There are various ways to finance probate deals, and this is where the creativity and created real estate investing really comes into play, seeing how we can acquire these properties and how we can make money off it. And there's lots of different ways now to most people who first hear about his business model. They always confused about the different financing, because what we're trained to know about in this society, right is the big banks give us mortgages to buy properties, whether it's to live in or an investment property rent out because we go it alone from Big Bank. We put 20% down. It was an investment property or whatever, and then we have a mortgage and we try to cash full it that way. But using hard money or private money or a gap lender or our own money, there's lots of combinations of different kind of find anything that we can do. So we're gonna talk about that over these next two lectures, and the 1st 1 is hard money. This is how a lot of people get started if you don't have a lot of money or you don't really have any money hard money is basically just like private money, only a little bit more expensive, right? It'll be investor themselves that has a company, a finance company. They want Teoh allocate their capital to get a higher return on it. Then they can, in stock market or bonds or from a CD, or for most of the traditional methods out there of investing hard money. Lender can loan out their money at from 8% to 16 20% interest, or MAWR and also get points on their money. So we recently use hard money to finance one of our deals and we paid two points on it. That was $2000 to originate a loan and then 12% after that. Our payment while we were doing the Flip Waas about $450. And then once we flip the house and sell it, we pay back all that money and so basically you're renting that money for the duration of your rehab. So to explain another way, you acquire that property with this hard money loan. Usually the terms are from six months to a year. You will buy the property with that money, you will pay the points of a couple $1000 usually to the hard money lender. And then you will pay interest while you're flipping the house. So this is a way to use other people's money, right? Teoh to acquire a property. And the only money you need for this part of the deal is to pay for the interest on it, which is just a holding cost you pay for for as long as you are. Flipping the house is one of the reasons why, especially using hard money. You want to put the house as quickly as possible, because in this business and flipping houses, time is literally money. You need to be always finding ways to get that deal done quickly to flip that house quickly and sell it quickly. So in this case, you might want Teoh, you know, price it very aggressively and get a quick sale, as opposed to waiting for two or three months to make an extra few $1000 when you need to get that money out and you need to get into another property as quickly as possible. This is a game of speed. Basically, volume and speed is usually what we're looking to get, especially if you're using hard money. Now. A lot of people don't like hard money because it is relatively expensive. It's more expensive usually than private money, which is just borrowing from an individual, which could be a family friend or family member or a colleague, or whoever is out there that wants to invest their money. They're really happy, usually to give you, you know, $50,000 which is secured by real estate and then get a 12% return or 10% return on their money, knowing that if you default on that loan, they will get a property that's worth more than the money that they loaned. This is also how you secure the hard money loan. The hard money lender will get it lien on the property, so if you default or anything goes wrong during the flip, then they just take that property and then they go ahead and resell themselves or finish the flip themselves. Now, hardly lenders don't really want the property. They're in the business of being passive and just loading out their money and getting that big 12 14 16% return on it. But they just know that anything happens to that deal. They're gonna have that real estate, and it's gonna be worth more than the loan, Which is why real estate is such an awesome business model, because you can secure loans with it, whether you're the one flipping the house is using other people's money or whether you're the one loaning the money on it. Both sides make money the harmony and makes money. You make money. Everybody wins. Now some people will say, Well, hard money is expensive, But the thing about it is, if you can't get private when you don't know anyone who has, you know, hundreds of thousands of dollars lying around $50,000 lying around, it's very, very handy because it doesn't matter if your credit score is terrible, you don't have to deal with all the paperwork from a big bank, which won't loan on distress properties anyway. This is one the reasons why we use hard money. If a property is a stress and needs a lot of rehabilitation, a normal lender, such as a big bank will not loan in mortgage on that property. So hard money is a great solution because it's easy to secure. As long as you have a good deal, it will give it to you and everybody wins. Now. That being said, what most investors do overtime is they build up a portfolio of private lenders. They may be their doctors or whoever. You know, anyone that I just mentioned. People in the family or friends. I don't have money. They want to invest because usually it'll be cheaper. They're usually won't be points on it, right. For example, if you say okay, about $20,000 you got a friend that flips houses say, I'll give this to you. Can you give me 10% back on it over this year? Then at 10 you know, $10,000.20,000 dollars is going to make you one or $2000 at the end of the year. Totally passive. You didn't need to do anything. You just making money off your money, which is which is great. Now a Gap lender is a lender that will typically give you the funds for both the acquisition of the property and the rehab itself. The other stuff we're talking about, Usually we use hard money or use private money. You'll use that money to acquire the property, and then you need to have some of your own money to do the rehabilitation. So if you've got $30,000 you can acquire a $50,000 property with hard money and then use a $30,000 toe, rehab it and pay the holding costs and then flip it right. But a lot of people getting started in this business don't have the money to do the rehab so you can start using and Gap Lender, which means they'll pay for the whole thing. So if it was $50,000 to acquire the property than $30,000 to to rehab it, they give you the whole $80,000. But then you split the profits with them, so they're doing nothing but letting you the money. You're doing all the words. You give half of the profit to the Gap letter, but it's a way to use someone else's money to do the deal. So this is how a lot of people get started. Just try to build up their capital so they don't need to use a gap lender later on. Now you have lots of money that you might want to become a gap lender because it's very lucrative. Okay, so that's just another way of doing the deal. Now. It just depends on your situation. Whether not you need to use hard money or gap lender or private money. Or if I mean, if you're independently wealthy already, and you just want invest in real estate for fun and to increase your wealth, you could just use all of your own money and do this yourself. But most people don't want to do that because you want to use leverage in real estate to use other people's money to acquire MAWR properties, and you could by yourself. And it's less risky. So some combination of your own money and other people's money is usually the best way. In this one example, I have here $50,000 hard money plus $20,000 of your money, $30,000 in profits minus the interest payments and other holding costs. Other holding costs during a flip might be the electric bill on the property, the water bill. Those things there are usually running while you are fixing it. There are all of the costs that are associated with the rehab itself. That add up that maybe you foresee, such as extra things you didn't realize you needed to fix on the house or things that need to bring the house up to code and such. But holding costs are all the costs that you have for your money and other things while you're rehabbing that property. And again we want to get these probably turned around as quickly as possible, so that are holding costs are as low as possible. The longer that you spend rehabbing that property, the more money it's going to cost you, especially if you're using hard money. But I will say hard money can be an excellent way to get started when you don't have the funds. But you can get deals with your marketing, and then you can use that money to put them around. All it takes is one of two flips, and then you have your own amount of capital. You might be able to acquire those properties by yourself or you meet a few private money lenders. What usually happens is when people see you doing this and they learn about what you're doing they say, Wow, so I can loan you money. It's secured by real estate and you'll pay me 12% return. People want to do that, so finding private money is not that hard. Once you have some flips under your belt, people see that you know what you're doing, and it's not very risky now. A lot of people don't know a lot about finance and business. They look at this business model and they're just clueless. They think you know, it's hard money. Is it like a loan shark? Or it seems like you're doing some weird stuff there because they don't understand creative real estate investing. Okay, And in this probate niches, usually simpler than foreclosures, could you not doing a lot of short sales and fancy stuff like that? You're usually just buying a property that is paid off and, as you know, lots of equity in it. So it makes the financing part of things a lot simpler, and that's what we're always trying to do, simplify everything. So that's the basics. Financing deals. It's not really that complicated, and you can find hard money lenders in any city. You can just look them up and go talk to them. Basically, if your deal it's a good one and you have gotten a property under contract for 70% or less of the R V, you're gonna have no problems finding it. Hard money lender. The issue then would be how much interest they're gonna pay for that money. It's a great business model, and it works really, really well. 14. Lesson 14 How to Finance Probate Deals Part 2 Final Cut: in this lecture. I just want to reiterate some of the really important points that we just went over and explain again some of these benefits of financing deals in this way, using other people's money and using hard money. And also look at it. Just a couple more examples of how you might do a flip. This is a new a way of thinking for you. You can see that there's not just one ways lost different ways at any way that you can bring the capital together. To make this stuff happen will work as long as at the end you make money and you're accomplishing your goals. And of course, the more deals we dio, the more we learn, the easier it becomes and the more experience we get. So once you've got you know, three or four flips under your belt, you're gonna be seeing a lot of things. You didn't understand the floor. You're seeing a lot of things work and a lot of different ways and new ideas to how you can finance these deals and bring it all together. Sometimes you'll be doing some deals, and you've already got some private money. You've already used them hard money and you get another proper and you go Wow. Well, I've already used you know, the hard money that had access to you can always find other hard money. Lender. Maybe you've already used all the private money you had access to. And so you're thinking, how am I going to finance this deal? And so you see into lots of different ways of doing it. So this example here, just kind of some of the other one. You could use $50,000 of hard money to acquire the property, and then you could use $20,000 of private money, do the rehab, etc. Make $30,000. That's your is your profit minus all your interest payments and holding cups. That's really similar to the one from the last one. I reiterate that one because it's a model that we usually use if we can, either a combination of hard money and private money or private money and our own money is just one that works really well, and it's usually pretty easy to set up. Another example would be if you have some of your own capital and you don't wanna have to pay the interest and the higher holding cost. You will make more money on the deal. If you use your own ways, you could use $30,000 in your own capital, plus $20,000 private money. So you're using any hard money in this case, and you only pay the interest on the private money, so this would be a cheaper way to do a deal. And so you make $30,000 profit, Let's say, minus interest payments, which might be a few $1000 less than using hard money. So you do a deal this way. You might make an extra five or $10,000 on the deal. Of course, if you use all of your own money, you won't be paying any interest at all. But the problem with using your own money and not using other people's money OPM, it's called an industry, is that you usually can't choir as many properties as you could with other people's money, even though it costs money to rent that money. And, uh, there's greater risk when you use your own money is all tied up in these rehabs. If anything goes wrong without property will you sunk a bunch of money into, and I gotta try to figure a way to get it out, whereas if you're using other people's money and you've got, let's say, five flips going, you're putting your own money into those properties because of the holding costs and paying that interest. But that's all that you got into it. So if something goes wrong with those flips, you lose all those properties and will be put into them. But it won't be as much as you lose is if you put all your own money into them. And but the biggest thing is that you want to be using other people's money to acquire Mawr property and real estate. It's a special business model because there's not many other business models that will allow you to borrow money that's secured with something that's so solid as real estate. So you can get a lot of private money and a lot of capital in real estate that you cannot get another business models right. If you started a small business and you've got a really good business plan, you go into a bank and you don't have a lot of security for that loan. You do have security for the loan. They don't like your business plan or they think it's risky, which small business enterprises usually are. It's hard to get capital, whereas in real estate it's very easy to get capital. All you say is put a lien on this house. You will have your loan secured. This is what we're doing. Flip this house and people will long you that money. So this is one of the primary principles in business. But especially in real estate, you want to use other people's money as leverage to acquire as much property as possibles. This is one of the oldest wealth building models, and especially well in real estate. It works especially well in flipping houses and especially well in probate deals. Because there's so much equity in these deals. Traditional banks again, they don't loan in distressed properties. So if you're still confused about this business model this understand that your credit score is totally food bar, and you even have declared bankruptcy recently and you have no credit whatsoever. You could still get a hard money, loans or private loan because all people care about is that the money that loaned you is secured by the property and that property is worth a lot more than the amount that they won't it to you, right? This is one of the good things about this business model to you're quiet his properties for so cheap. That's gonna be equity in them no matter what, if you get them for 70% of the R V when it's the repairs and it's very, very safe for investors. But banks don't want to deal with this. Banks don't want to have toe get a proper that needs to be rehabilitated and put their money into facing up and reselling it. Banks are in the business of one of their money and making money off their money. They don't want to have a bunch of properties. In fact, when banks have to foreclose, they're not happy about that because they have all these costs associated with offloading a property ever spent. Four close, Which is why, for clothes was such a good way to make money for investors because banks just want to get rid of him not trying to make money off foreclosures. They're trying to get as much money back from foreclosures as possible. So that's the reason why they don't loan on distressed properties. And this gives this whole opportunity for hard money lenders another financiers to get into this business, which is good and harder. Private money is available regardless of credit score. Keep emphasizing that because it's so awesome, in my opinion, how you don't have to worry about your credit score in this business, you don't worry about a lot of the traditional things you have to worry about, like having a fixed income having a salary, having great credit score. You get these problems in a contract and you're gonna make money off them. You're gonna have access to capital, and you could be very creative with it. And it's just a fun thing to know how to do and to be able to do even if you're not in this business full time. As an investor of the said before, if you've got a job, I just want to do this on the site. It's very fun, and you could just do one property every year and making extra 20 or $30,000 it's not that difficult. If you know what you're doing. You learned about it and you don't have any huge demands on the the amount of time that you need to do this in it. You want to take your time. It's been the Holy Year flipping a house, and I really enjoy it and just make extra money. It could be a really fun thing to do as well, so there is no limit to the different ways you can finance a deal. There is no limit to the different ways you could be creative in real estate and especially in flipping houses. So I hope you agree that it's a really fun business model. It's one that allows for a lot of freedom and creativity, and that's what it's all about. 15. Lesson 15 Marketing to Wholesale Buyers Part 1 Final Cut: when it comes time to market your property. Wholesale buyers, which are other investors that want to do the actual rehab on the property. You have a lot of ways in which to do that. One of the best ways that we have found is to post the property at your local real estate investing association, Group A re a group so you can just go to the regroup and say, Hey, I just got a property and contract It's a really good one. Anyone is interested in this property, come talk to me afterwards. Or usually there will be a Yahoo group or a Google group that they use the Internet. You can just post propped up there with the details about it. Show them the air B. Show them the potential. The deal put a bunch of photographs or better yet, a video of you walking into the deal, explaining how you came up with the repair estimate and all that stuff. And then people will be all over it because everyone is always looking for deals. If they can acquire one from you at 70% of the A R B minus repairs, you're gonna build a whole, so that property very quickly now. The reason a lot of wholesalers have problem in this problems in this business is because they try to make a much money as you possibly can, and they will make a RV seem higher than it really is. They will make the repair estimates seem lower than they really are, which is why, in some segments of this business, wholesalers have a reputation as being maybe untrustworthy, or at least not leaving enough money in the deal for the other investors. But this is great for us, a great opportunity because if you can show by selling your deal Teoh to a rehab er one or two times successfully, they will tell people, you know, this guy just hooked me up, and he's really, really good and honest about. It's also deals. You're never gonna have any problems selling these so, especially if you can get it for 65% or less of the A R. V and make a nice five or $10,000 spread, and it's immediately sell it. Another investor. You have no risk in that property. You don't have to worry about all the financing for the rehab. And this is why a lot of people say hold still is the best way to get started If you don't have any money instead of getting a gap lender and instead of trying to finance a rehab, just wholesale it and try to build up capital that way until you have enough to start rehabbing because rehab is really where the big money is. So when you just wages post area group another good way to send to your buyers list, which you will build by going to your regroup and just networking in general, on the Internet with people that you meet networking friends, business people and Aziz, many real estate investors and you could meet out there in the world. You want to build up a list, and it could be 2030 people. It could be up to hundreds of people that you can send your property to immediately once you have it under contract. The reason you wanna have a big buyers list is because even though some of these people might always be acquiring properties a lot of times, they will only be able to do one of two at a time And so even if you have 20 people in your buyer's list, you know that there really active of rehab is and investors they might have their capital and time all tied up in property. Already, you just don't know. So the timing here is what is what matters. So the more people you have on your buyer's list, the higher the likelihood is that someone's going ready to take on a property and they will want yours. Of course, you can always posted on Craigslist. A lot of people are always looking on there every single day for deals, and we have. We have used Craigslist successfully to get several deals. Solis Wholesale deals. You can take it out of the paper, which is, you know, it's a traditional way we use at the paper for our marketing as well as our marketing for properties as well as our marketing to sell the properties. And even though it's an old way, it's rather expensive, it's still working. You'll reach a whole other segment that you of the population that you won't be able to reach with more targeted marketing, and a lot of times you get really, really qualified leads and buyers just from the newspapers. So we still do that as well. And then bigger pockets dot com has a marketplace. This is a relatively new real estate investing websites. It's a national. It's one that we use. And, um, it's very good place to post your deals because there's growing community of investors on there. They're always looking for deals, and if you do these five things alone, you should have no problem wholesaling your property. The thing that takes the most time is building your bison because that tastes you going out there and networking and meeting people and getting out in the world. But if you just go to one or two RIA group meetings and you go there and say, I got a property and contract, you're gonna have lots of people are gonna come look at that property and you're probably gonna be able to hold sell it. No problem. If you got a good deal, this the thing. If you could get a negotiating, you get a good deal. You're gonna make money on the map because people will be all over that now. If you don't get a good deal, you can't trick people or pull one over people. Much more experience than you will be able to say. Your estimate here is way too low where Air V is way too high or there's this issue or there's this problem. So you've got to be skilful doing this, but you get a good deal, you're gonna money up that property. And, you know, even if you only make $2000 whole selling it, that's 2000 bucks. It didn't take you all that much work. Once you got into contract, you just make it real quick, but you can wholesale dealing that can make 10 15 $20,000 as well. Did you get an excellent deal? And you're in a market that's on the upswing, because during that time that you're doing this deal, things you're appreciating, things were selling, and that's really what you what you want to do. You want to hit a really good market and flips many houses possible that time. This is how you hear the stories about people getting wealthy overnight because if you do start in this business during a boom, you can flip a bunch of properties really fast, cause everything is selling and they're appreciating, and you're making huge spreads and tons of people that have done this during the most recent boom between 2000 and 6 2007 and then in the eighties there was a huge boom, and I need It was a real estate built, And so if you hit that time, when you that's when people get rich fast. Now, if you're not in a boom, you still make a lot of money. This niche, it's just not gonna be super easy, like you hear about all the goobers talking about, you know, make millions in real estate overnight. That actually does happen, but stars really have to align for to be that easy. But there's a lot of experience, investors say, longer in the business. The Mawr. You will have the opportunity to see some of those amazing deals and hit it hit a season or two where the market is really just ripping and you make a lot of money a short period of time that allows you to weather The storms were in the markets, not as good 16. Lesson 16 Marketing to Wholesale Buyers Part 2 Final Cut: a very, very important thing for everyone to understand when marking the wholesale buyers is you do not want to over price that property and 74 you want to leave in a meat on the bone, as we say for the rehab. This is really important because even if you make more money on one deal, you will get a reputation. If that rehab er doesn't make enough money in that deal, or they think that you overpriced or they just didn't get a good enough price in general for being a rehab over prices, things that tries to jack up the rehab, uh, the repair numbers that tries to jack up the air, be numbers. And this is one of the main reasons, if not the main, reason why a lot of wholesalers don't make it in this business. On the other hand, if you understand that if you're conservative with the numbers and you want to make less money, her deal, but you get a reputation for having good value in your deals, people will be all over your properties because everybody is looking to be able to get we have properties without having to do the marketing. That's why you're adding so much value. You're going in there doing the marketing, doing the legwork for the properties and negotiating with the sellers, and you're the one that's creating the value. So this is why you can get him for 65% of the air beer less. You will have that spread to make $5000.6 $7000 on this property and flip it really quick to a rehab investor, and they will come back for more. You will be able to easily offload your properties when you do this. And this is one of the main reasons why a lot of wholesalers have bad reputation. Or, if you have them, give us all a bad name by trying to over price everything and then it sometimes just easier for other investors to find the properties themselves. Then get a property where they're going to make a lot less money than they thought. And no one wants to have to deal with. You know, other investors that basically aren't trustworthy, so this is a critical thing. You have to understand once you have a good reputation and once even one or two buyers knows that you have good properties for sale. They will come and snap those things up like instantly. Okay, So important thing toe Always, always keep in mind. It's just a good, good way to behave in this business in general. Another important thing to understand is the difference between a signing versus doing a double closing. When your whole selling a property way do an assignment right when we write on the contract , that person sale agreement our name as the buyer and then you write and or signed. And that allows us to simply sell that house to another investor market up before closing with a next a piece of paper, which is an assignment, contracts Really simple. You just feel on assignment contract, and then when you do the closing, you get paid on the closing day. That property. Just do one closing. However, if you're gonna make a really big spread proper, let's say you're making $16,000 on it. A lot of times, other investors did not want to see you making so much money, and we'll say, Whoa, I didn't know you were making $16,000 on this. Why am I paying you so much for and they want to get a better deal. They think maybe she only making 4 $5000 or less, even right. And a lot of people don't think that way. But a lot of them do. So wait. Used to avoid that altogether is just closed the property yourself from the cellar and then do a second closing that same day with the other investor and resell that property. This avoids the problem of them knowing how much you got under contract for and allows you to make a biggest possible profit on that wholesale deal without you running into, you know, at the very last minute be pretty terrible to think you have this deal done and then all of a sudden you are closing and the the end buyer looks that goes, won't want to buy it from you for that much. I didn't realize you're making so much money, and that kind of thing does happen, believe me. So, um, it's a good thing to keep in mind whether that you wanted to you an assignment versus the double closing is going to be up to you and those considerations that we usually make what we're gonna do either one of those again. If you build a reputation for providing great value, those rehab buyers will tell other people back. Yes, I've got this awesome wholesale guy. You don't worry about them trying to keep you a secret so they can file your properties. Because almost no rehab buyer's gonna be ableto by multiple properties from you all right in a row, because they're going to be busy with that project, right? This is what you need to have a buyer's list with a lot of people on it. Because even if you have a really solid buyer, doubt that once every property that you that you get in a contract once they're available to do it, they're not being able to buy all of them from you because almost inevitably, they will get busy with a project, and then you'll need to buy it. You need to sell it to another buyer. But this is everything in this business is your reputation. So if people know you people trust you, people like you and you go out there in your network and you go the RIA meetings and you and you meet people at those meetings and they know that you're wholesaler. You're gonna have no problem whatsoever flipping those properties. Just don't try to make too much money off each one. Unless, of course, the value is there. You want to be giving 70% of the A R V prices to rehab investor. If you're not doing that, you're fudging the numbers people will know because people have been in this business a long time and they can do the numbers accurately. It's not rocket science, right? So you can't pull the wool or anybody's eyes and you even if you try to fudge it a little bit and make it look a little room in there. People in this business are really intelligent, and it doesn't work very long. You might be able to do it once or twice, but you basically screw yourself over. So Billy reputation for providing get value and making less than your wholesale deals with doing more of them is the way to go. And it's pretty much the only way to be successful. And you could be very successful if you do that, so it's gonna also look a again, the difference between you making maybe only a couple $1000 if you just do a lower and wholesale for a couple hours of work vs. If you have a rehab, that's going to be a big pain in the butt and making you know only 15,000 for hundreds of hours of work, right? So this is when it comes to making a decision. When you get a property, do you want to wholesale it and get out and get into another property with no risk? Or do you want to rehab that property? Your self? What we do in our company is we try to cherry pick the very best rehabs that we know. We'll get a big spread that we know we can turn around quickly. That we know will not be a huge, huge, challenging job where we have to redo the wiring and the plumbing and the roof and all this other stuff. And maybe the house is really old. And so that doesn't mean that those aren't good. Rehab products does make a lot of money off of, but you want to be doing everything as I've been telling you as officially as possible as quickly as possible. So we'll take the rehabs that are basically the easiest with biggest spread, and we'll usually try to hold so all the rest of them. And there's nothing wrong with that. Your whole selling value. You're giving someone a property that has lots of value in it that you had to find and get , and you could do that whole sell yourself or excuse me, that rehab yourself. But basically one way to look at it is okay, well, if I could just make a couple 1000 bucks and you know it, just call someone and get an assignment contract done. Then I'm done with this property. I mean, $2000 today, and I could go find another one versus doing it yourself. And maybe that rehab takes five months and it costs you 30 grand. And there's some risk involved there at the end of the day because of the difficult nature of that rehab. Maybe you make a lot less than you thought. You had hundreds and hundreds of hours and do it and you only made $15,000 or something. So you won't always be thinking about when you get a proper in the contract. Should you wholesale it, or should you rehab? So the way we think about it is how difficult it will be, how risky will be, how much money. We probably make it the end, you know, and sometimes better. Just take a couple grand and get that contract sold versus making you know 10 times as much . And having a lot of Rick's not decision is just up to you again. There's never This is the best way to do is the only way to do it. You hear anybody tell you that in this business, well, you should be suspicious, right? Because everyone has different goals were on a different situation. We all different skills, we all different ways of thinking about things. But if we understand all the different consideration ways to think about it, we can make really good decisions. And we could go into this business with a style that fits our personality and our skill set . So I think it's a really good way of looking at things. That's how we look at things, and it's worked very, very well for us over the years 17. Lesson 17 Rehabbing and Listing the Property Part 1 Final Cut: and this lecture we're looking at rehabbing the property and listing the property. So have you decided that you don't want a wholesale, that you want to make more money and you want to rehab the property? There are some considerations that you should be aware of that will help you along. When you first started in this business, one of them is the decision whether not to hire a general contractor versus managing the project yourself again, neither one of these is best in all situations. It really just depends on your level teas, what you're comfortable with and what will make you the most money. If you hire a general contractor, you will be saving a lot of time and stress and not having toe have a lot of knowledge. Are at least as much knowledge about real estate and fixing houses up as you would. If you're managing it yourself, you don't to manage the people. You just hire one person and you work with them and they handle pretty much everything. But a general contractor of the good will be more expensive. And general contractors not as good as you thought they were going to be it could be a real big pain in the butt. And so, you know, that's something to consider when you manage a proud of yourself. It's a lot more time assuming you got to go out there and get all the bids from all that subcontractors. And you gotta manage those people to make sure the work is getting done. Time you have to go down and make sure that your costs are being kept low and works all all moving along. But this could be a really good way to go if you're good at managing people and you are learning a lot are already know a lot about construction. And maybe you have some people that you know in the business, and you just hire people to do each piece of work one at a time and you manage it and you do everything and you might save a lot of money doing this. If you know what you're doing and you want, imagine yourself. You might save a few $1000 not having a general contractor. On the other hand, if you don't we know what you're doing. You're more into this business model, a za business person in an entrepreneur, and you don't have a lot of experiencing instruction. But you're good with your good with people. You might just hire really good general contractor and give them a scope of work, which is a detailed plan about what needs to be fixed. The timeline that you have it, what materials you want, use etcetera. You might have a few meetings with your contractor, and he will just make everything happening, doing lots of deals than in our opinion. It's definitely best to use general contractors. That's what we do. We have a few guys that we news that we've been using for the last several years, and they just crank everything out for us and awesome. So one of the things will read about when learning about this business is a lot of the problems people have imagine contractors and the nightmare situations they've had to deal with with the contracts of contractors and mechanic leans. They get saying that you haven't paid them for the work of stuff like that. So when it comes to contractors, you really need to find good ones that are trustworthy and know what they're doing is a lot of really great contractors out there, and there's a lot of bad ones. So this is one of the things that can make or break a rehab. And you need to do your due diligence on these contractors when you're getting bids and ask him a lot of questions and really interview them thoroughly before you just hire one. I mentioned in a previous lecture that a lot of times, you know, whatever bid comes in lowest, we will take that bid. But if I got a concert that I know is going to do a good job and he knows what I want and worked before, well, then we will go with them, even if they're a little bit more expensive, because it's a lot better to pay a little bit more and have a job done right and know that the House is going to sell, then to save a couple 1000 bucks and then have a nightmare on your hands with job is delayed by one or two months, you having problems, just making the contractors, you know, get the work done and various things like that. So the point is, do your due diligence with the contractors and interview them thoroughly. And the goal was to find a really good, gentle contractor or to trust that knows what you are expecting them to do, and that can just do it without any hands on from you. Okay, that's what you're trying to achieve now. Another consideration is listing the property with the Realtor versus becoming a real to yourself. A lot of people when they have been this business for a long time, they decided, You know, I don't want to pay 6% commission on every property analyst, which is several $1000 when I could just become a realtor, get access to the MLS, get under a broker and just let's always properties myself. Why am I just throwing away thousands of dollars now? Again, there's no best with its. A lot of people will say it's a total waste of money to hire Realtor. We can sell the property yourself, on the other hand, and this is what we do in our business. We hire realtors because we have a team of very, very good ones, pretty much just two guys that we use that are excellent at what they dio, and that's 6% that we make off of that is totally worth it because they get the house is sold, they are experts in their field. We don't have to worry about it. We don't have to think about this aspect of it. We focus on the activities that we are good at, which is acquiring properties, getting good deals and then doing the rehab and giving to the realtor. He sells it for us, where you can flip a lot more properties, even if your margins are a little bit lower. That's a lot better than being able to flip on Lee A. You know, one or two and getting a big margin on those plus you doom or properties. More people make money and you get MAWR experience and there's a lot of sort of alchemy that happens when you're doing this. You network with a lot more people and you will find a lot more opportunities in general. Basically, you want to be flipping as many properties that you can if you're in this business full time, and having a really good realtor that can do that for you, in our opinion, is a really good way to get now. That being said, if you like being a realtor, if you want to sell the product yourself, you want to say that 6%. That might be the best thing for you to do so. It's just a matter of preference. And becoming a realtor is not that difficult. So it's another reason why a lot of cool So I'm able to get access to the adolescent training cost about $1000 and you can complete it in just a few weeks. Take the test. You're a realtor, and now you still are a real estate investor. But you can list of property to yourself and save that. Say that commission buddy. So it's just a matter of what you prefer to do. But another good thing about becoming Realtor is that if for whatever reason, you're not doing very well in the house flipping business. But you've been getting some listings. You know, people want a list of property with you, and you realize, well, I could make pretty good money just being a realtor and a lot less risky than the rehabbing business. Then you may end up just being a realtor and making more money doing doing that. So that's another reason people get into it. It gives you less risk and gives you the option. Another way to make money, either on the side or as your primary income driver. Okay, leaving room for air in the repair estimate. I've already mentioned this, but I want to emphasize it again because it's so important. You want to make a high repair estimate rather than a lower repairs, and you want to make a high repair estimate Once again, it's a lead yourself some room for error when you come across unexpected things in the rehab, something costs when you expected something needs to be fixed. You didn't even know I needed to be fixed. And now you can feel safe going well. I look myself 10 or 15% room for error, and they're and this is exactly the reason why. So it lowers your risk. Whenever you're conservative with the Air B and conservative with the repair estimate, you will be in really good shape and I tell you this will happen. There will be times when you will go over budget. There will be times in his business where things take a lot longer than you expected. It's just the way it is. So the more you lower your risk by being conservative with all the numbers, the better off you will be at almost every single, experienced, good experience investor that I know is very, very picking the properties they take. And they're very, very conservative with all of the numbers, and they make a lot of money because of that. Now, if you're in a situation where you need the money and you take on a deal that you know is gonna be a challenging one, but you're still gonna make money off it. I'm not saying that you shouldn't take those deals on. It all depends on your situation, but in general, you want to lower your risk, leaving more room for air in the repair estimate and just want to emphasize one time as well. The importance of completing the rehab it's could be as possible. There is no other business in the world where he's saying Time is money is more important than in the rehab real estate business. The more time we spend rehabbing properties and more cost, we have. So we need to get them. When you find whatever ways we can get these properties to, drones could be as possible, your money out get into the next deal. So just keep that in mind when you're making all of these decisions and you should have a big leg up on the competition. 18. Lesson 18 Rehabbing and Listing the Property Part 2 Final Cut: this lecture. We're going to be looking at some other considerations when rehabbing, enlisting the property your self, whether not use a real sort of whether you do it yourself. We need to know some of this stuff when the first considerations that we need to be thinking about is pricing. Depending on your goals and situation, right, we don't always. I need to get maximum value out of our rehab were flipping lots of houses. We want to get quick sales so it might be worth it to price a house at two or 3% points lower, even 5% lower, which seems like a lot. But you can get a quick sale instead of having to wait 12 three months form or 67 months of a long time in flippant house. We need to get our money out of these rehab so we usually price them aggressively. So there's lots of action and we get a really fast sales. We can move on to the next one now. One of the great things about this business model and about rehabbing is that your house is usually do sell quickly anyway because everything is brand new and them right, You fix them up, and most houses out there on the normal market aren't going to be totally rehab like the ones that were doing. This is one of the reasons that rehabbing such a great niche in real estate because the houses will so especially if the real estate market is booming, they'll sell immediately and will be will be bidding wars on these properties. We listen one last month that got snatched up for about $10,000 more than we listened for because there were two or three buyers, but all wanted it had granite countertops and a pretty low end neighborhood. You wouldn't normally see that in. We had wood floors, granite countertops and people were all over it. So you just need to consider that, depending on your situation, whether or not you want a price attacks, so maximum get the most money out of it. A Z can, which a lot of times you will want to do that, especially if you're taking your time and not doing very many flips right. You want as much money out of that is possible because you put a lot of work into it. and you put a lot of investment into it. But if you're flipping lots of houses in doing this is a pro. We'd like to get quick sales and get our money out. So instead of making 40,000 on one, we might take 35 or 32 or something like that in order to get it out and into the next project. Turnover is really important. The choosing materials, depending on the neighborhood, just means that you know you're in a low end neighborhood. You don't really want to be spending an extra $5000.6 $7000 putting in, even though I just mentioned it. Granite countertops Really nice floors, high end stuff because those houses, when their rehab, everything's gonna be new in them, it could be linoleum. It could be basic things like that that I don't need to be super expensive because those house they're going to sell anyway. And you're actually not even creating that much value when you put extra money into a house with lower end of the market because it just won't increase the price. Very much is still gonna be tied down to the cops in that area, other properties and their values. On the other hand, if you're doing flips in a really high end area where you're selling properties for $500,000 or more than every single thing that you do to add value to those properties, there's no limit on how much value can be created basically. So if you put an extra $30,000 into one of those rehabs, you're probably gonna be adding an extra $60,000 in value. So it almost always makes sense to be putting mawr nicer things into high and properties. But when you're doing a lot of flips where you only making 2030 grand like a lot of the ones that we do and you're doing a lot of them, you don't need to be putting all the nice stuff in there now. Mission. When we did last month, that granite countertops in there, well, we got a really good deal in the granite, were able to put that in for even less than it would have been to put the lower quality material in there, same thing with the wood floor. So in that case, we knew it would help us sell the property very quickly, and we got a deal on it. But if we're gonna have to put in extra for $5000 in the house just to make it look nicer, it wouldn't be necessary. And you just be wasting your money. So you need to be thinking about those kinds of things when it comes time to finish up the house and sell it. You know, in some cases it's worth it to put more money into it, to add more value and Teoh increase the likelihood that it will sell in other cases. It's not worth it to do that. So it's good to be aware of some of those things. I was a lot of important variables to consider when you're thinking about the price, and a lot of this is beyond the scope of this particular course. But I just want to bring some of these things to your attention in case you're not totally aware of the fact that you know your property is gonna be going for a lot more money if you have a big, nice master bedroom as opposed having no bastard bedroom and having you know bedrooms are upstairs with no bathrooms. Or if it's on a corner lot, it's gonna be worth three or 4% points more if it has a 32 or four to. In terms of the bed bath ratio, you're gonna be selling the house much more easily than if it's a 21 or 11 or 31 or 41 right? Three twos are kind of the the sweet spot in this business. So our last we had the one I was just mentioning we when we got it was a 41 We turned it into a 32 because that's what people want. It will sell much, much more quickly. So when you look at houses to take on his projects, you sometimes not necessarily want to avoid taking on houses. If you get a good deal, as I said, you can, you can take any property for the right price. But just be aware of the fact that if it's not a four bedroom and to bath or three bedroom two bath, it's smaller than that, then it's not worth as much, and it might be harder to so OK, so you could do some of your own reading on that stuff toe. Figure that out. But it is also one of the reasons why we just had to go ahead and just use religion when it comes time to sell it. We get our guy on the phone, he does all that stuff for us and that thing is sold. And so we're willing to invest that 6% commission to get our house is sold. We don't don't worry about the city on the market. We know we're going to get the right price for them and we have a great leadership with a realtor and so we make money for him. He helps us out to give us all kinds of leads and other things like that. So it works really well to have a lot of really good team members in place. And I put using a website for re sold the property on here. Even though this is also kind of outside of the scope of this course, it's another thing that you could be aware of. You go onto a website and you list your proper in there or excuse me if you build your own website, learn how to build your own website. You can list your own properties on there, And if you get traffic your Web site, you can simply sell your properties by putting upon their We do that. We sell some of our properties this way on cell house home dot com, and I think we have one on there right now. That's for sale. And once you get ranked, especially in your city, if you can get your website ranked on the first page that people are looking to buy properties in there, you'll get a lot of action on your website. You can also get a lot of leads from your website, so it's like a whole another area of real estate investing marketing. But it's something to be aware of when it comes to resell your property to have it on a website and its people to get more traffic from there s o. Take a look at the repair estimates sheet that we have included in the course there. Repair estimates, sheets again, I would emphasize, is extremely important, a very valuable, valuable tool. I just memorize all the numbers on that. So, you know, you could just know exactly or approximately how much something costs fix. So when you do your walk through right after you talk to that cellar and you got an appointment to go see them at their house, it's a really good Lee got them down to pretty low ballpark number. You know they're motivated. When you walk through the house, you should be able to look at everything, see what what needs to be fixed and be adding the numbers up in your head and then and we'll see on the repair. Submit she whatever your number is, you want to add five or 10% to that, no matter what, just to give yourself room for error principle of investing. It's a principle of this business at an extra 5% at least I always add an extra 10% just to make sure there's a little extra costs. Don't put me over my budget. So memorize that. And then, like I said before, once you get a couple clips on your belt, you're gonna be able to see really easily how much everything is in a constant house to fix . And if you're not sure if it's not totally clear, well, ballpark it and then add another 10% of that and you'll be in the range again. It doesn't have to be perfect. You know, you might be reading stuff. This isn't your Paris. It's really, really important. And it's totally true. But you get the houses for cheap enough. The whole point of his business model is that you leave yourself a huge margin for error so that if things go over budget, okay, maybe you didn't make 30% of the A R V like we wanted to you. You only made 20 because it when everything went wrong, is it was a really tough rehab. Well, you still made 15 20 or $25,000. So it's not the end of the world. But that's why we need to be conservative with all the numbers and give yourself that margin of air 19. Lesson 19 Course Summary Part 1 Final Cut: So for these last two lectures were going to summarize some of the main points that we have learned in the course again. All this stuff is stuff that will take you a long time to learn if you're out there in this business doing it yourself. So hopefully you can save a lot of time by having taken this course and go out there and make a lot more money and save a lot when you're not making a lot of the big cost of mistakes that we had to make when we first started out in this business. So which niche is best? There's no best for any of this stuff, except for being best for what you want and what your situation is. We believe that the probate Mitch is best, however, for us, for the reasons that I mentioned in the course. Because you will find the most equity of these deals, you will have the least competition in these deals, and usually you will have less of a rehab do with these deals, which is a huge think. So basically it means that your risk is lowest. If you could just get used to talking sellers and get over the hump and your marketing going. This is probably the easiest niche to do, and it's definitely the best. In our opinion. However, there's money to be made and every single niche, whether it's foreclosures are Eos. TAX LEANS State sales divorces all those niches air good. But for us, pro Bates have made the most money by far. Which acquisition strategy is best, so there's no best here either, except for what is best for your situation. However, in terms of acquisition, strategy is basically two major strategies that are used by most investors, and the one we talked about in the scores is direct mail and marketing directly towards sellers. In today's market. This is absolutely the best, because now that there's so much Mawr competition going on, with the real estate market recovering and a lot of investors out there trying to acquire barrios, which are foreclosures, are you a stands for real estate owned? It's just a bank term that they used, but it just means foreclosed properties now. It used to be after the crash that you wanted to go out there. There would be so many foreclosures you could just go out there and make offers really low offers and all the foreclosures. You get tons of those Now that the real estate market is better again, there's so much competition is that you will often have bidding wars to bid up some of those properties. So the margins are really slim, which is why pretty much right now you have to market directly to sell. If you want to be able to get properties for 70% of the air B or less and less, you just get really lucky. Okay, so in this in this suitcase, this acquisition strategy is best, and direct mail is the most effective for us because it's relatively inexpensive. You will get a guarantee number of leads, even though that will be arranged from 1% of 5%. You will get leads and you will acquire properties for sure. If you just continue with the strategy exit strategy. Same thing, depending on what you want, your situation, your skill set and all those things whole selling the property for quick cash or rehabbing the property for a lot more money with greater risk and greater time. Most the people that we know including ourselves, that have made a lot of money in this business have done it by rehabbing properties, acquiring them themselves and rehabbing them themselves because we acquired them yourselves . You don't wholesale him. You have a larger margin and then rehabbing yourselves and get get it sound and fast. You have huge margins, and then, if you're doing that on a whole bunch of properties every year, you make the maximum amount of money. But it is more challenging to acquire properties and do the rehabs everything yourself. A lot of people choose to just buy them from wholesalers or acquired them in other ways, and then do the rehabs and they'll make a lower margin. But they're still happy to make 10 or $15,000 on a flip for $20,000 on a flip instead of making 30 or 40 because that's the way they know. And maybe they save time by doing it that way. So wholesaling and rehabbing are the two major ways when it comes to flips. Hey, what are long term goals from doing this? I'm sure you already have these, but we think about them ourselves in terms of the free three freedoms, right? We have We want financial freedom. Obviously, that's why we're all in this business. We want to make money and hopefully we also love real estate. We enjoy what we dio. We enjoy working with people. We just enjoy the all the different angles of real estate that there are intellectually. Um, we want freedom from a boss, right? I don't know. Anybody's in this business that doesn't look at that as being one of the great things about flipping houses. And this is why a lot of people want to be real estate investors and not a real service. Right, because if you're a realtor, you can make a lot of money as a realtor. But it's pretty much just a job. And you usually have a boss, which is your broker, right? But when you are flipping houses, you take on all the risk. But you get all the reward. Your real estate entrepreneur. This is definitely one of the main motivations for us and then freedom to control your schedule, which is huge, right? You want to take a break in the middle of the day You want take a long lunch you want to get day off. You want to run errands, you can do that now. We pretty much still work more than 40 hours a week. If you want to be several in this business, you probably working a lot more than that some period of time. But you get control when you take vacations when you take time off and all those things, so it's huge. You guys probably have other reasons to get in here. But if we can see clearly all the benefits of being in this business, even if you're not out there to make you know a $1,000,000 you can flip houses, take your time and just do a couple every year. And you can still make $6100 a year. Not a bad amount of money to be your own boss and control your schedule. And you know most most people only make 30 or 40,000 year, right. The average salary in America believe now is maybe 35 post great recession, so you could flip one house and make that which you know is not too strenuous to Dio. So hopefully that helps toe motivate you guys and go out there and get started 20. Lesson 20 Course Summary Part 2 Final Cut: I want to go over the process just one more time for you guys to just clarify at all and make sure that you understand everything very clearly. And of course, throughout the course, you have any questions about anything you can ask them in the course. And we will respond to those questions that you can have discussions in there. I can I can help you guys have any aspect of this probate niche or flipping in general that you have. So hopefully you will take advantage of that. So the first thing we do is go to the courthouse. We get the leaves and we mail them the mawr mail. You have going out more leads you'll get, and the more properties you will get. Remember, it could be time consuming to write all the addresses out. And then the third letter that we write my hand could be very time consuming. This is one of the first things that after you have some money you want to outsource, you can just hire somebody, pay them a small amount of money to do this for you. But all the time that will save you is very beneficial for marketing and everything else. You want to expand your business engine network and all the things like that. But you definitely want to do this yourself at first to get used to the process, going to the courthouse and everything like that. After we have leads, we talked to those sellers and we isolate the best leads. Remember, don't waste any time on bad leads. Don't tryto work. Every lead, most of them will be bad leads 90% of these leaves. 85 90%. They will not be good leads to. Don't get discouraged. Just remember, we're out there fishing for that one or two. Really hot lead that we can turn into 30 40 $50,000 on a nice flip. Okay, So don't waste your time on bad leads. Get through the nose to the best, please, And get those properties right now, we need to analyze a deal. Make sure that we have a good after repair value, good repair estimate, and that we can get that property for 70% of the RV or less. And be willing to walk away from the negotiations if you can't get it down there to be picky about these properties in a lot of marketing. A lot of negotiating. We're doing a lot of leg work, but again, it doesn't take very many of them to make a lot of money so good at analyzing the deals so you can give him the smell test, right? We see the sniff test, it will look at the house and go. Okay, This one has potential. I know I'm gonna be able to make 30 40 grand in this house. It's a good deal. Here's my offer. If you can't get them to take it, then you walk away financing deals. We can use hard money. We can use private money. We can use our own money. But for distress properties, we generally cannot use bank financing. That's not a weakness. That's a good thing, because it is easier to get hard money. And once people see that you are doing this for a living or that you have even successfully flipped one house, you'll be able to find private money. No problem. How many people do you know out there that are looking for a 12% return on cash that is have sitting in their bank account that can be secured by something as solid as real estate . Pretty much everybody is looking for that. And once people see that you can successfully flip a house, they go, Wow, you know, can I invest with you? So definitely the goal for us has always been to get as much private money as possible. And if you can finance everything eventually with private money, then you're gonna be good to go. But hard money is always there if you get a big spread on property, um, hard money is a great way to go, which is a little bit more expensive, but you don't have a good credit score. It's flexible. And there are hard money lenders everywhere. You can find them in every city. Look on the Internet, go interview a few of them, try to find a good one. We just use the same one for all pretty much all of our deals. Everyone's while we need to use another one if there's not enough capital one, the main hard money lender that we use. But you find a good one, just like with a good general contractor and a good realtor, you build your team And if everybody knows what you want and they're people that you worked with and the trustworthy and they're there good at what they do, this business can become quite easy and quite automated. At first it's it's hard. But you got a great realtor, a great general contractor, good hard money lender, private money. And you've got a good process for bringing in these leads and it's working for you. You can get these things going and basically let them just run themselves that rehab gets going to give it to your military. You don't have to do that much, but setting it all up is really what takes the most time. Okay, after we've got the deal done its finance and is rehab or before we have it right, weakening their wholesale it or we can re habit. We choose the wholesale properties that are not the totally ideal rehabs and make money quickly off of those. And we choose to rehab the properties that are the best. So the ones that have big spreads, newer properties, we know they will be quick. We rehab those ourselves. Our risk is lower and we make mawr money. Okay, so the hardest part of this business is not doing everything. This is not rocket science, right? The real estate business is not all that complicated. You learn the system, you just do it and you will make money. It's a guaranteed thing. But the hard thing is, and the reason most people fail is because they give up because it takes a lot of time. It does take a lot of energy. It takes a lot of work, right. If anyone tells you that flipping houses is easy, they are lying to you or their insane because it's not easy. But it is one of the best ways out there to build. Well, I got to get any other better way to build wealth than by investing in real estate in general. But flipping houses is just a pretty much sure way to do it. It may not happen quickly, but it is a system that works. You just remember that stay motivated. You will succeed if you don't quit. I've seen tons of people come and go. They start doing this. They see it's too hard to give up or they did some training. That's an expensive training that paid for from one of the girls for like, $10,000 or $15,000 for that training, and then they tried it for a few months or even a year. And he says it's too hard. It's way harder than they told me on they give up. But if you just keep at it, you keep your marketing going to keep talking to Sellers, you will get properties and you will make money. So just have faith in that. Keep that in your mind when you're going through each of these steps and just know that it's out there if you want it. So good luck to you. And I wish you all the success in the world. Thank you for taking my course.