How to Make a Written Offer

Took 13 investors out door-knocking and we made 4 written offers!

Last Saturday, I took thirteen real estate investors from the Chattanooga Real Estate Investors Association out door-knocking. Before heading out, we discussed how to make a written offer to a seller.

The group had a number of concerns: 1) How do I find a property’s fair market value? 2) How do I discover market rents in the area? 3) How do I make a written offer right there on the spot?

Took 13 investors out door-knocking and we made 4 written offers!
Took 13 investors out door-knocking and we made 4 written offers!

The first thing to remember is that an offer is different from a purchase contract. A purchase contract is often a formal document written in legalese that no one – especially the buyer and seller – understands. On the other hand, an offer can be written in plain English on a Post-it note that makes sense to everyone! (NOTE: On North Georgia REIA’s Facebook page, you’ll see three of the written offers I made in Chattanooga.)

Randy Shelley is an investor who lives in that area. We spent the day knocking doors in his subdivision. Though he already knew the fair market values and approximate rents for his neighborhood, I asked him to not share this information with us.

Instead, we talked to ten homeowners. From them, we learned that most properties in the subdivision sold for between $175,000 and $185,000, and houses rented for around $1,200 per month. When we compared these numbers to Randy’s, we discovered our numbers were…

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April 9th North Georgia REIA

WHAT IS APRIL’S MEETING ABOUT?

You’ve seen the foreclosure ads that run in the newspaper. If you’re like most folks, you wonder what in the heck all that legal jargon means. You may also speculate about the steps you need to follow in order to go from reading a legal notice to being the high bidder on the courthouse steps at the foreclosure auction.

At April’s meeting, we’ll pull all the mystery away. We’ll answer the question: How do you buy foreclosures and pre-foreclosures?

Here are a few of the questions we’ll answer:

When and where do you first learn which properties will be sold at the monthly foreclosure auction?

How does a foreclosure auction work?

What should you do before you bid on a foreclosure property?

How do you buy a property at the foreclosure auction?

Where do you get the money to buy a foreclosure?

If you are the high bidder, what do you do next?

If someone is facing foreclosure, what do you say when you knock on his door?

Is there money to be made buying foreclosures and pre-foreclosures?

Why is it better to buy a property pre-foreclosure instead of at the foreclosure auction?

Is there BIG money to be made buying foreclosures? We’ll show you…

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Prepping For The Foreclosure Auction

While door-knocking, met a guy with a pet squirrel!

This week, Kim and I have been knocking on the doors of homeowners who face losing their homes at April’s monthly foreclosure auction.

Many folks are shocked to learn that we actually knock on an owner’s door. I’m often asked, “Aren’t you worried about getting shot?” After 20 years and thousands of foreclosure doors, no, I’m not worried about getting shot. Fact is, experience has taught us that most people facing foreclosure couldn’t be nicer and really appreciate the what’s-gonna-happen-next information we’re able to offer.

How many houses do we plan to bid on at Tuesday’s auction? None. So why are we out working foreclosures? Because the cheese has moved, and the best deals are now found buying properties pre-foreclosure, not at the auction.

With real estate investing, the cheese is always moving! For example, from 2003 to 2006, the best deals were found buying properties pre-foreclosure. Successfully bidding on the steps was difficult because of the…

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Said No One, Ever!

Knocking on doors

“I love to knock on sellers’ doors,” said no one, ever! (Thanks for the great line, Dorsie Boddiford.)

Over the years, I’ve shown hundreds of real estate investors how to knock on sellers’ doors. Many times I’ve said the alpha and omega of real estate investing is getting face-to-face with lots of sellers and making tons of written offers. Experience has taught me that the fastest, cheapest and most effective way to get face-to-face with sellers is to simply knock on their doors.

One key reason door-knocking is so effective is because you virtually have no competition from other real estate investors. For example, yesterday, I was out with Donn Myers. By days end, we’d been to thirty or forty houses that had a For Sale sign in the yard. How many other real estate investors’ cards did we find at those houses? Just one.

Don’t get the wrong idea; door-knocking is not all…

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Learn Real Estate Investing

Freedom of the Seas - with a rainbow over it!

What’s the best way to learn how to successfully invest in real estate? Easy answer: Get around experienced, been-there-and-done-that investors. They are your best source of real-world information.

Sure, lots of “gurus” are coming through town these days offering their free, no-work-required, just-push-the-easy-button system. A couple of questions: Do you believe success takes little or no work? Do you really think that success has an easy button?

If you want to run a marathon, it would be wise to regularly hang out with marathoners – plus you gotta run a lot. If you want to learn to fly, hang out with pilots – plus you gotta fly a lot. And if you want to be a successful real estate investor, hang out with investors – plus you gotta get face-to-face with a lot of sellers and make a lot of written offers.

Kim and I just got back from a weeklong Caribbean cruise with 100 real estate investors. Every year, we, along with Dyches Boddiford, Dorsie Boddiford and Pete Fortunato, host the Captains of the Deal cruise. Was there a lot of real estate investing experience on the ship? Between the five hosts, we have over 129 years of investing experience. More importantly, the 100 investors aboard owned a total of 3,509 properties, 304 notes and 93 options!

Imagine, if you’re seeking financial freedom and believe real estate is the best investment vehicle to use to achieve your goal, how much solid information would you have gotten having breakfast, lunch and dinner for eight days with…

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Motivated Sellers Say Yes!

A common mistake made by real estate investors is failing to recognize the difference between a seller and a motivated seller. A seller wants to sell; a motivated seller needs to sell! Another mistake often made is failing to realize that in time, most sellers become motivated sellers.

Here’s an example: A few weeks ago, I took Wendell Strickland, and Rodney and Debbie Palmer out door-knocking. We met with four sellers and made five written offers. It was a very productive day!

When we were done, one of the investors asked, “Of the five offers we made today, how many will be accepted?” Easy answer: “None!” Stunned, the investor asked, “Why don’t you think any of the sellers will accept your offers?” I explained, “None of the sellers were motivated. All of the sellers wanted to sell, but none needed to sell.”

It was quiet in the car as Wendell, Rodney and Debbie contemplated my reply. Finally, one asked, “How could you tell they didn’t need to sell?” I answered, “A motivated seller is willing to chew off his arm to make the house go away. Were any of the sellers we met with today willing to do that?” As a group they answered…

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About March’s North Georgia REIA Meeting

WHAT IS MARCH’S MEETING ABOUT?

With inventory as low as it is, we firmly believe Mobile Homes are one of the most underused and untapped resources in real estate today.

You may have heard of a Lonnie Deal. It’s when you buy a mobile home in a trailer park for $2000 cash, then sell it with terms for $7000. The buyer’s down payment will help you recoup a chunk of your purchase price. Best of all, you’ll get monthly payments of $300 for three years. That’s a yearly yield of 240% – making this a HOT STEAMING DEAL!

What makes Lonnie Deals even better is, after a year or two, you often get the home back because something happens to the BUYER, and he needs to move elsewhere. You then repeat the deal again. That’s an annuity, Baby! And because it paid for itself in the first year, your yearly yield literally becomes infinite!

But we are not stopping at Lonnie Deals. We’re also going to discuss how the lack of mortgage availability for Mobile Homes has created a niche for Cash Buyers. You can pick up Land Home Deals (a mobile home on land) for $8,000 to $20,000. These puppies cash flow for as much – or more – than a single-family home!

Also at March’s meeting:

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Would You Break Into A Vacant House?

Would you go into a vacant home this way?

You’re out working foreclosures and see an obviously vacant house. There is a sign in the window saying the home has been abandon and winterized. You look through the window and confirm that it is vacant. Do you open the door with your “investor key” (a credit card) and go inside to look around?

Over the years, real estate investors have hotly debated this topic. Some investors would never go in the home, while others think nothing of slipping the lock so they can inspect the interior before bidding on the property.

I know investors who regularly go into vacant homes. The popular thought is that there’s nothing wrong with that. The investor is not there to steal or vandalize anything, he’s there to estimate the rehab cost so he can accurately determine his maximum purchase price. What can possibly be wrong with this?

There are a lot of funny stories told by seasoned investors about things they found in abandoned properties; things you can’t believe a homeowner would leave behind – like artificial limbs, stuffed (taxidermy) animals, porno magazines, etc. After hearing these stories, many new investors come away thinking that it’s OK to break into vacant homes. But I’m here to tell you…

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Mom’s Best Life Lessons

IMG_0510

This week, Dorothy, my mom, turns eighty! My best life lessons have come from her, and the reason why she was such a great teacher and powerful influence on me, Sam and Jolie (my brother and sister) was that she showed us how to succeed rather than just tell us. Anyone can talk the talk, but walking the walk requires a very determined person!

Dorothy taught us that everyone can succeed – you just have to be willing to work at it, sacrifice for it, and never, ever quit! Too often folks point at things in their past as reasons for their failure. Failure has one father: Quitting!

Dorothy had every reason to fail. She was born dirt poor in Raleigh, Mississippi during the Great Depression. She spent summers at her grandmother’s in White Oak, Mississippi, where there was no indoor plumbing or outdoor well; water was carried in buckets from a nearby creek. There was no electricity…there wasn’t even an outhouse! Her father was a raging, hateful alcoholic who lost his leg in a drunk-driving accident.

Talk about reasons to fail! But she didn’t let these things stop her. She went through college at Mississippi Southern on a music scholarship, and worked three part-time jobs to pay for food.

The second biggest lesson mom taught us is that you can be…

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What is Door-knocking Like?

In 2014, i took 30 + people out door-knocking in Florida!

You’re driving through a subdivision and see a home for sale that you like. You’re curious about the price, the number of bedrooms and bathrooms, and why the seller is selling. What do you do? Do you stay in your car? Do you call the number on the sign and talk to voicemail? Or – gulp – do you knock on the seller’s door?

If you choose to knock on the seller’s door, what do YOU think will happen? Bet the vision in your head goes something like this: The owner throws open the door and screams, “Get out of my yard!” Then, “Sic ‘em Brutus! Honey, get my gun – there’s a varmint on our porch that needs shootin’!”

The truth is, folks are nothing like what you imagine – they couldn’t be nicer! You don’t believe me? After all, what do I know about door-knocking? I’ve only made a living at it for forty-three years!

To help you see what door-knocking is like, let me tell you about yesterday. I took Wendell Strickland and Rodney and Debbie Palmer out with me, and here’s what happened…

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