Now it’s time that we are put the different pieces of the puzzle together. In this section we will go over the simple steps of making money in real estate without leaving your house. Once you understand this you can get your first deal going within 15-20 minutes. You can do these deals from anywhere you choose as long as you apply the model.
First let’s do a quick recap of the kinds of deals you are going to be doing, since you want to be able to work with any buyer, seller, investor, etc you must have an arsenal of tools and solutions at your disposable. Now we need to know the categories that each potential deal will fall under.
Remember we are ONLY buying houses one of two ways…
FAR Below Market Value Or Payments over Time
The actions are simply either:
1. You will take Control (ownership) or you will not take control (ownership)
Remember when make an offer and control the house you are not going to take ownership. The ownership only happens if you get any type of deed notarized and recorded or some other form of ownership.
Don’t take control of any houses if you are not going to make money! A bottom line that you should not go under $200-$300 and $10-$15k on the back end when you get the equity cashed out. These numbers are the BARE minimum. Once you get the hang of this you will soon be raising the bar to make more money.
When you communicate with the seller, the first thing you want to determine is which category your deal falls under. Is it a cash deal or a terms deal? Then you will decide if you will take control or not. You are the RAINMAKER. You must learn how to analyze deals in seconds and take action to move them the same day.
I will teach you how to do these deals without leaving your house, but for the sake of understanding the processes, you should leave your house to see the process come together. It’s good to understand the processes thoroughly before you begin. There is some work in putting this system together, but after the pieces of the puzzle in place, it becomes very easy.
No matter what type of deal, whether it is a cash deal or a terms deal there are some things you will do regardless. This “checklist” of items is crucial and you want it to get done immediately.
Here is what you need to get done on any deal…
Step 1. Get the Agreement signed
You have to gain control of the house. You want the seller to have signed an agreement that says that you have either bought the house or you have control of it. I choose to use a “letter of intent ” (LOI) or a Lease Agreement Memo, a Purchase and Sale Agreement! .
By getting the agreement signed, this will make you a principal in the transaction. Only a Realtor can represent somebody else in a real estate transaction,. Since you are not representing anybody you are simply helping people by buying and selling houses. This action does not require a license. Having your “agreement” to control the house signed makes you a principal and therefore no license is needed.
Step 2. Marketing and put a Sign in the Yard
Yes, you still need to have signs! 40% of buyers still are driving the areas where they desire to live. You can sell lots of houses with just a few well placed signs. No matter what type of deal you are doing you want a sign either in the yard along with a few choice surrounding areas like intersections, subdivision entrances, other vacant yards, corner lots, etc. . Don’t forget this action. Get the signs up. This will generate calls, once you can effectively deal with these calls it is money in the bank. Your local support person can do this for you . Get him to pick the signs up that you ordered online from Kinko’s !
Remember that you can work backwards and find the buyer first and then find them the house. Don’t try and skip this step. Even if the deal you are working on falls apart you can get enough calls off of the sign for it to be worth your while.
Get your houses online, either with your own website and also on www.vflyer.com
Step 3. Obtain Access To The House
You will need to get access to the house. This can be a key or a garage door opener code, etc. However, we first want to send people to our website listing to view all details of the house. Don’t give people access to the house if you (or your team member) have not qualified them!! As soon as they are qualified, only then should you send them to the house
If the house is vacant your job is made easier because you don’t have to call the seller to schedule showings. Remember that you don’t want to inconvenience your seller very much by showing the property fifty times before you move it. If you are showing your houses too much it is because you are not qualifying the people enough.
Qualifying is essential because it ensures you are sending the right people to the right home at the right time. If you are showing the homes more than 3-5 times you are not qualifying enough or the numbers on the home are off.
Step 4.) Arrange the “Closing”
I prefer to have my virtual closing coordinator deal with this process, but a ‘closing’ can also be done at a title company or attorney’s office. A closing is when the buyer and the seller put their commitments in writing and you either assign your rights to the property or take ownership.
Remember that you are going to do this essentially as an out of town owner, the main step that is being added is you are buying the home as well as selling it.
How to do this from your house:
Get your offer signed by both you and the seller. You can do this by faxing, emailing, or sending the document by www.SignNow.com to the seller.
When you send an offer you want to tell the seller you will call back in a few minutes to make sure they got it and so you can walk them through it.
If they can’t talk to you right then you want to get a specific time that day or the next day where you can go through it, you can also offer to do a three-way call with their spouse or another decision maker that will be helping them decide.
Go on now and fax or email that over and get it signed.
Arrange a local support person and get a sign in the yard! This local support person can be anyone, a Realtor, property manager, another investor, even a person you hire from Craigslist. Ideally this should be somebody that you want to develop a relationship with. They are going to be making money working with you so you can “trust” that they won’t take advantage of you because it will cost them money. Let’s call this person a “rep”, short for representative. They won’t actually be representing you but we need to have a name to call this person. Your rep will put the signs out and handle the other three steps as well.
Getting access to the house will be handled by your rep as well, they can do this at the same time as putting the signs up. You can schedule a time where your rep can meet your seller or you can just have the seller leave the key in the mailbox, under a mat, behind a patio door, etc. You need to get the key/s to the home and a lockbox on the property. Your rep will be dealing with this.
Whether the home is vacant or not you need to be able to get people into the property quickly and easily. This is easier if the home is vacant because then you don’t have to schedule showings but you can still do it if there are people living there as well. Either way you want a lockbox on the home, a garage code, a keyless entry code, something that will give you access to the home, access that you can give somebody else who needs to see the home.
The first thing you need to do is realize which type of deal you are doing. There are basically two ways your closings will happen; either you will be assigning your rights or you will be taking ownership and own the home.
Let’s cover each in more detail.
Assigning Your Rights:
When you are simply assigning your rights to the home you are either going to assign them to an end user which is somebody who is going to live in the home themselves or an investor who is going to pay you an assignment fee for the home. In each case there are three basic steps you need to take. Here is a short recap:
If you are assigning a deal to an end buyer, the “for rent” technique is a perfect example, here are the three steps.
1.) First the seller signs the Letter Of Intent. This gives you the right to find a buyer for the home. This agreement is a one-page watered down commitment they are making to you. Once you have the LOI or the Lease Agreement Memo signed you immediately market the property to your list and get a sign in the yard or area.
2.) Once you find a buyer you have the seller sign the Purchase Agreement with you and the Lease Agreement and Option to Purchase based on the terms agreed upon – this will be between the buyer and the seller. In the “further conditions” section of the Purchase Agreement you will outline your rights to the home and the fact that they are being assigned.
3.) Your buyer signs an assignment form to take control of your rights that you have from the Purchase Agreement. Then your buyer signs the lease agreement and controls the Option to Purchase. At this time your buyer gives you the certified check as an assignment fee.
Now let’s look at if you are assigning a deal to an investor…
1.) Get the seller to sign a Purchase Agreement. This will give you the right to find a buyer for the home. Once you have the Purchase Agreement signed you will immediately market the property to your list and get a sign in the yard or area for buyers that you can move into other homes.
2.) Once you find your investor you have the seller sign the Purchase Agreement with any new terms if they haven’t already done so. In the “further conditions” section of the Purchase Agreement you will outline your rights to the home and the fact that they are being assigned to your investor.
3.) Your investor signs an assignment form to take control of your rights that you have from the Purchase Agreement. Then your investor gives you the certified check as an assignment fee. So in these deals you are in and out. You are simply matching up a buyer and a seller. The signing of the initial Purchase Agreement (PA) or the Letter of Intent (LOI or the LAM for Lease Agreement Memo) can be done over the phone.
How To Get Your Offers Signed Fast
Remember, you will only be talking to motivated sellers. So it’s a matter of simply walking your seller through a scenario where you find them a buyer and see if that will work for them. Tell them that you will need some initial paperwork signed before you begin. You will always want to iterate the benefits of your program and any drawbacks as well, then you can ask for a time schedule once you know what type of solution your seller needs.
Once you know what solution you can use that will work for them, along with the timeframe, you have to reinforce that the only thing stopping the process at that point is the paperwork being completed. Make it very clear to them that you can do NOTHING until they sign an agreement.
Send a fax or email to your seller to get this paperwork signed immediately. Whenever you send anything to anybody you want to set an “follow up” even if it is for the next 10 minutes, this follow up will be used to walk them through the paperwork and make sure they understand what they are signing.
You want to say it just like that: “Let’s talk in 10 minutes so I can go through the paperwork so that you know exactly what you are signing?”
If they say something like “I need my lawyer to take a look at it” or “I have to run it by my wife/husband first” your response should always be the same:
“No problem how about we talk tomorrow at 7, me, you, and your husband Tom can all get on the line after you have talked about it and we can go from there, how is that?”
Here you are pointing out that you don’t care who looks at the paperwork, in fact you will talk them through it as well. You can say the same thing for lawyers as well. You want to set a firm time to talk next. If you do not, you will LOSE lots of business. Now you have an idea of how to get these agreements signed without leaving your house. You can do action entirely on the phone.
You can get the initial LOI or PSA faxed and returned signed pretty quickly.
We have already talked about how your rep will be dealing with the access and the signs, I will get into why they are doing this shortly, but that still leaves the closing.
So what exactly has to be done?
You can deal with your seller signing the PA or the LOI yourself.
But your buyer and seller still need to sign the paperwork between each other and you need to get paid. Your rep will be doing this as well. This will not take them much time, all they have to do is meet with the buyer and seller once. They can meet together or individually, it really doesn’t matter.
I use a Virtual Closing Coordinator to make sure the paperwork gets signed! She/he will want to make sure you get the certified check because they don’t get paid unless you do! Please refer to our section on how to choose a VCC. Your rep may also take care of this simply by getting the paperwork signed and the check to you. I
Now before I get into how to find and deal with a rep let’s get into the other type of deals you will be doing…
If You Take Ownership.
These deals are slightly different. This is when you are going to take ownership of the home with a land contract, multiple mortgages, or subject to. In this case your closing will be a little more involved.
Here are the three steps with this type of a deal…
1.) First the seller signs the Purchase Agreement. This gives you the right to buy or assign the home but not until you find a buyer. Once you have the Purchase Agreement signed you immediately market the property to your list and get a signs up. In the “further conditions” you will outline exactly how you will take ownership if and when your deal closes.
2.) Once you find your lease option buyer you are ready to close. You will take ownership of the home via your agreed method of Subject to, land contract or a Multiple Mortgage. At this time, you will also have your buyer sign the lease agreement and the Option to Purchase. Doing it this way ensures you never risk a penny or even take the home until you already have a lease option tenant in place.
3.) When you have your buyer sign the Lease Agreement and give them control of the Option to Purchase you are going to get your certified check and take ownership of the home.
So those are the steps if you take ownership of the home. The only reason you will do this is to profit from the monthly income and/or the equity on the back-end when the home refinances. Otherwise you will just assign your rights to an investor or an end user the way I explained above.
How to Sell Your Houses Before You Buy Them
Here is the key. You must wait until you have a buyer with money and at that time you will take ownership. Doing it this way, you will never have to make a mortgage payment or pay closing costs – you then have actually just sold a house without buying it! Doing it this way, also ensures that you get paid to take ownership of homes, you can do your own closings and walk away from closing with cash.
By using this method, none of your credit is ever at risk. You have not put one cent into these deals, and you don’t have to worry about losing anything because you have nothing invested.
This is very powerful stuff! By simply doing deals this way you sidestep almost every pitfall that most investors run into. My way is the SMART way to invest!!
Now that you know these steps, how do you do this without leaving your house and how you can do this anywhere in the country? To understand that we need to take a look at exactly what you can do from your home and what you will have your virtual team do.
Either you do will be doing the action or your rep / team member does. I prefer to outsource everything. The key to this then lies in your ability to comprehend what you will and will not be doing yourself.
Steps You Need To Know To Conduct Your Investing from You Home!
We have already showed you the steps that you take to close deals whether you are taking ownership or just assigning your rights. In each case you are dealing with a seller and having them sign an initial offer that gives you control of the home. This can be done over the phone and through fax and email. So you don’t have to leave your house for this part.
The part that takes legwork is the sign in the yard, the lockbox, and the signing of the agreements when you find your buyer.
This is where your rep and your “virtual closing coordinator” gets involved. Below are the issues that your rep will be handling. We have already covered the signs and access issues but we will quickly go over that again.
Signs and Access To The House
This is a step that has to be done immediately after you get a signed agreement from your seller. You want a sign in the yard and/or at the front of the neighborhood. You may also want to use “directional’s.” You want to use the neon yellow signs as I have said a thousand times but you can also have your rep use normal signs with handwriting on them when you are starting the relationship.
Two good resources for signs are:
1. In a hurry for a local pickup – www.kinkos.com
2. Pre order and send out yourself to rep http://www.witnessdesigns.com
Now you also need to get access to the home so that you can show it. If the seller already has access you can use their lockbox or have your rep get the keys and put a lockbox on the home. You want your number to be on all the signs and obviously you want to know the password for the lockbox as well. *** Realtors, do not use a Realtors’ lockboxes that require a Realtor’s key to open, you want a regular lockbox that anybody with the password can open.
If you are doing deals long distance you need to set up an extension on your voicemail system to describe the house. You should also allow the person to break out to a person who handles calls. You will always get more business by having the option to divert to a live person. Your telephone system can divert breakout calls to your rep handling the house.
The Closing and Signing Of Documents
You want to get paid. Doing closing virtually can be the cause for some concern, so you want to work with professionals. This can be the biggest stumbling block for some people. You need to find a quality rep to handle your closings. I will give you a few different suggestions.
Since the way we close deals are not the typical long drawn out ones that you probably have attended, you get right to the cash and your rep won’t do anything until you know there is a solid confirmed closing.
Your reps involvement will depend on the method you are using, ie. if you are taking ownership or not. Let’s go over first the order of the procedure if you are not taking ownership. In these deals you are simply assigning your rights. You will either be assigning your deals to an end user or an investor. You know how to get the paperwork signed with the seller from your house, and you know how the rep will be handling the signs and the access.
You now know how to talk to and qualify buyers so you have the correct ones. Once your buyer and seller have been matched together and are is ready to move forward, you need to get the houses closed immediately.
Your rep will now do what you would be doing if you were there; they will meet the seller and get the Lease Agreement and Option signed or Purchase Agreement signed and also meet your buyer or investor and get the Lease Agreement and Option or the Assignment Form signed – they will also get your check.
Eventually your investors can wire the money directly into your account and you can get the money this way
How about deals that you take ownership of?
With these deals the main difference is that when you find your buyer you will have your rep record the documents of your ownership. However you bought these houses, you need to get the documents of ownership signed, notarized and recorded immediately.
Use a General Warranty Deed, which you have in the forms section, to transfer the title to your name with a Subject to the existing finance transaction.
With a Land Contract or a Contract for Deed, (*there are different names for it) but I would basically refer to these as a fancy lease option with ownership. The process here will be a slightly different. The contracts will be different for many areas so the best thing to do is have a lawyer in your area put one together for you when you have a down payment – this way nothing comes out of pocket. (or use LegalShield.com ) Use the lawyer at a title company to do this, you want to ask for an “editable” one that you can use over and over again in that area. You can also have the title company set up a multiple mortgage; they will create the second mortgage for your seller that you will pay on.
You don’t have to close at the title company, but sometimes it can be easier because the title company will notarize and record the documents for closing. Again, you don’t have to be present for this to happen, your rep can handle all of this. Think of all the Realtors that represent out of town owners, you are in the same position as far as your rep is concerned.
Your rep doesn’t have to be a Realtor by the way. I still prefer to use a Virtual Closing Coordinator to handle the process from contract to close. My rep is solely for the physical legwork.
Now that you understand the basics
1. Control and taking the ownership – DO ASAP
2. Once you get your buyer, get your ownership documents in place ASAP – if you don’t have them ready you can let your Title Company, lawyer, agent, know ahead of time so they are ready at the drop of a hat. 3. Your rep / VCC gets these documents signed and notarized if necessary, this closing can be at a bank or a title company whichever these folks want, and then you get your check and ownership. 4. You can send notarized documents to your rep as well and they can use them to close.
It all becomes much clearer when you do it. Remember action creates its own momentum. I have created this system to allow you to take action and start to make money immediately.
By the way, the “rep” can be anyone from any walk of life. Put an advert on Craigslist under misc part-time jobs or real estate jobs.
How To Find Your Rep And Why They Are Going To Love You!
Now you need to look at finding your rep. You rep can be a Realtor, property manager, investor, broker, appraiser, soccer mom, anybody that you are able to build a relationship with.
Let’s focus on one group: Realtors.
You can go into any market in the country and find more Realtors than you will ever need to grow your business. The key here is how to work with them by building a relationship that you can both profit from. The key to success is to create relationships of trust. Always pick the ones that are the most active “movers and shakers.” Picking the right people will catapult your business, to new heights and at the same time make money for your reps.
Finding quality people to work with can be one of the most frustrating things you ever do. But if you do it the way I show you, it will make it a lot easier.
You can contact pretty much any Realtor and immediately start a relationship by telling them what you are doing and how you see the two of you working together. When you start any relationship you want to look at how you can benefit them. Don’t try to sell how they can help you. Turn it around to how you can help them and make it a win-win situation. You want to convey the benefits they are going to enjoy by working with you.
Tell your Realtor that you work with all types of buyers, sellers, investors, etc. and let them know that you can help build their business. Start by working with a Realtor in your area by sending them an initial email outlining their goals and desires and ask if you put them on your email list to keep in touch with them regularly. You also want to explain to them that you need a good Realtor that you can send sellers, qualified buyers, qualified investors, investors’ criteria, etc. to in order to close more deals . Create the scenario where you are finding buyers, sellers and investors and have so many that you are growing fast. You are finding it hard to help them all, but still want to profit from your marketing efforts and the excess coming in.. This means that any subsequent buyers and sellers you come across you want to work with them as well.
For example: When you find a buyer and then start calling the “for rent” ads, dealing with Realtors, running ads, and putting your marketing in place to find them a home you are going to have a huge excess. Even if you just come across two landlords that want your help, with all of your other marketing and your buyer does not want the home you will still be getting MORE buyers from the signs, and other marketing that you are running in the course of moving the house.
With each of the buyers the process just starts again and again until… You close a deal. But it doesn’t stop there, why should it? You should continue putting this chain reaction in place each and every time you get any type of lead.
Then with your buyers that approve for a mortgage, you can send them to your Realtor and their lender for approval. You can also send sellers who want to list their home or want full market value for their homes to your Realtor. You can also have your Realtor close deals with the investors you find in their area. Any Realtor will agree to give you a 25% cut of their profits for referring them the deal. For real estate agents this fee is a referral, but if you don’t have a license you can call this a “marketing fee”.
Do you see the potential here? Your marketing efforts will bring you a plethora of people wanting to work with you. You can hand off all the excess to others, in this case a Realtor, and watch their business explode from the influx you create for them.
What you will be getting in return is that will want to you move a few deals with signs and “closings” that you arrange where simple agreements are signed and your Realtor sends you the check.
For the deals your rep, in this case your Realtor, does you can give them a flat fee or one month’s rent as a profit. They will happily do this because even though the money you pay them for the deals alone will justify their efforts, you are sending them business from various other avenues as well. It really doesn’t cost you anything to do this and you can use these leads and resources as leverage to build a priceless relationship.
This relationship, and ones like it, will allow you to massively leverage your time and knowledge by delegating simple tasks so that your positions in real estate investing can be created and profited from in a remote location without physically being there. You have to be looking out for others and what is in their best interest in order to build and maintain long term lucrative relationships.
These people will be happy to do your legwork because they know that you are a Rainmaker and you are a vital part to their business. The key is relationships. People always ask me “Can I really do this from home?” The answer is “Yes, why not?”