Real Estate Geek

I wanted to show you a free, simple method for finding investment property in your area. This method will guarantee that you are not competing with any other investors in your market. These properties are not listed on the MLS, not for sale by owner (FSBO), no ads on the internet or in the paper, nothing like that. So because they are not listed and have no exposure in the market, you can bet that they will be all yours, no competition. How can this be, you might ask? Because I am going to show you how to create these opportunities.

The tip I am talking about is called “Farming Markets”.

You may have heard of this, but let me break it down for you. The gist of farming markets is to canvas a neighborhood or area that you are interested in, look for signs of sellers, and try to make deals. But I want to take you beyond that today. I want to show you more than just looking for signs and other propaganda in a neighborhood that screams homes for sale. I want to show you how to create something out of nothing.

The idea is simple, once you have scoped out an area that you are interested in, and made sure that the homes are priced closed to what fits your particular style of investing, do a direct mailing. If possible, hand write the mailings, or hire someone to hand write them, and hand write the envelopes as well. People are always more likely to open a hand written envelope, and read a hand written letter, than they are to open a typed envelope and letter.

In the letter, simply let them know that you have seen there home, are interested in it, and/or have cash and can close very quickly. Ask them to give you a call for details. You may even tell them you specialize in helping crisis situations like divorce or job relocation and that you can bring a speedy conclusion to a tough situation. This will ensure that you get motivated sellers, and lets them know that you are wanting to help. And in truth if you are able to buy the property from them, you will be helping them to solve their problem.

Once you receive the phone calls, screen the sellers, and find out what their motivation is. If they really don’t need to move and are just wanting to make some money, let them go. But if they do have a problem, and are motivated to sell, setup a meeting to walk through the house, and find out if it needs any repairs, etc.

So there you have it, simple, yet highly effective and cheap to implement. And you will be guaranteed to be the only one competing for the property. Cool, huh?

As we continue our discussion on Negotiating Real Estate, I wanted to share some more insights on how you can effectively turn a real estate deal to your advantage. When I look at the way real estate deals are carried out, I see a problem. And that problem is professionals working to get the highest price possible on the house, instead of working for you. Remember, agents and brokers are in the business for themselves, not for you. So with that in mind, let’s move on to my next point:

If Possible, Leave the Agents Out

If you can, search out for sale by owner, government owned or bank owned properties. Agents, brokers, and other professionals understand that these properties typically go for less than market value. And with the case of FSBO (for sale by owner) properties you have the opportunity to talk with the owner directly. So to reiterate, realtors are in the game to make money, and since they get paid a percentage of the final sales price, it is in their best interest to get the highest price possible. Avoid them if you can.

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Have you found it intimidating or difficult when it comes to negotiating real estate? Many have, and I would like to give you some solid tips and ways of handling the negotiation, so that you can get a great deal on your next real estate project.

Before I begin, I just want you to understand one thing. When you are negotiating any deal, you must detach your emotions from the negotiating process. You see, if you get rapped up in emotions while negotiating, you’ll either end up paying way to much for a piece of property, or you will end up selling at too much of a discount. Regardless of which side of the fence you are on (buyer or seller), you need to be aware of the negotiating process, and some tips and tricks that can increase your bottom line.

Knowledge is Power

This isn’t a TV commercial, however it is a power precept to understand when negotiating real estate, or anything else for that matter. You see, to effectively negotiate real estate, understanding things like what motivates the seller to sell, what the property’s market value is, what renovations are required, etc. are all valuable pieces of information that can dramatically change the end price and terms of the negotiation. So here are a few things you can do to gain the advantage when negotiating real estate:

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Today I would like to teach you a method of establishing banking relationships. Now before I begin, I need you to understand the importance of these relationships, and how local relationships are far superior to long distance relationships. Look, for any business to work and to be a substantial, growing business, you need to have solid, trusted relationships to complete various tasks for you.

Why? Because after you complete the most important part of the real estate investing process (finding property below market value), the next step is financing that deal. If you cannot get the financing, the deal crashes and you lose your time, and potentially any earnest/option money invested in the project.

So let’s look at some of the key points in establishing a solid banking relationship:

1. Keep to Local Bank Relationships

This is the most important point I can make. If you want to have a close relationship with someone, they need to be within driving distance. I mean close enough to have a lunch appointment with them. It may seem obvious, but someone outside of your region or state may not know all the ins and outs of your location, let alone trust and like you enough to finance any difficult deals.

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Last time, we talked about a mobile home investment project that I have done. In the article, I explained in detail how I found, bid, and financed the project. In this post, I would like to complete the story, and tell you exactly what repairs and rehabbing I did, my timeline for living in the property, my marketing strategy, and how I make money on the deal even today!

The Importance of the Right Deal

Alright, so before I go on with the rest of the story, I want you to know just how important it is to know the key to real estate investing. You see, you can do all the real estate internet marketing and other types of advertising you want, but if your price is too high the property is just not going to sell. So you need to make sure you buy in at the right price. This is what I mean when I say that you need to have the “right deal”.

Now then, on to the rest of the story.

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Now that you have a good grasp on mobile home investing basics, I felt it a good time to show you an example of some of the results I’ve had. I am going to go through a mobile home investment project that I have done recently, and reveal everything to you - how I found the deal, how I financed it, the improvements I made, how I marketed it, and the money I have made on it.

Before I go on, I wanted you to know that you, too, can do this. This process is not very difficult in concept, but it does take diligence to follow through. If you want to be successful in real estate, you are going to have to reprogram your brain for real estate success.

How I located this Mobile Home Investment

One of my favorite online foreclosure websites yielded this deal. This foreclosure site allows you to search for listings in your area, as well as being able to submit your bid electronically (you do need your realtor to complete the bid submission, however).

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The residential rental market is really doing well right now. I have heard it said that the new American dream is to own your own home. While I disagree with this theory, I do see quite a few Americans that have such low goals in life, that I can understand the logic behind this mentality. With an estimated 1.4 million home owners going into foreclosure in 2008, it seems that Americans have grabbed on to this dream, despite having the means to cover their payments.

It’s sad for me to see so many homeowners lose their homes. But there are two very basic, fundamental problems that have fueled this financial collapse - the lack of education, and greed. Combined, these two forces have created a whirlwind of brain dead decisions. Let me show you the trend:

The Downfall of the Residential Owner’s Market

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