There is no other business like the real estate business. Everything that is acquired can be negotiated, and the most important negotiations are terms and price.
Terms are far more important than price, because you can obtain terms at low or no interest and then the rent from the house could pay it off.
Obtaining inexpensive seller financing is a strategy I’ve used for over 30 years. I’ve created tremendous buying opportunities that have generated significant equity over the years in several cities and states throughout the United States. These opportunities are available in real estate markets nationwide.
If you’re buying to flip, price is more important because you need to sell for more than the purchase price plus the cost of any rehab you might do. If you’re buying to hold for the long-term production of income, and to eventually become financially free, then terms are more important.
It’s easy to buy houses at retail value and obtain institutional financing, but why would you? You see, most small investors have limited choices of what they can acquire, and it might be because they have a limited skill set.
When you think about all the skills required to be a super-successful house buying maverick, it’s no wonder why more people can’t get through the barrier of entry to create a “buy-sell machine.” Most people know about rental houses and the overwhelming benefits they have over every other kind of investment. But most people don’t have the time, desire or drive to really get out there and make it big!
Success Requires a Certain Mind-Set
And there’s a reason for that: It takes a certain mind-set and a lot of effort to be successful. Such focus can be hard to come by in this day and age, when there is so much economic uncertainty, political turmoil and senseless violence happening all around us.
But we have an incredible ability to freely create business in America—the same entrepreneurial spirit that colonized this country. All you need to do is simply work your business, continue to learn and grow and focus on your strengths to be prosperous and take care of your family.
This is key to the successful operation of what I call a “buy-sell machine.” You have to want to succeed and prosper more than anything. Desire and perseverance are character traits you must have.
Your knowledge of local real estate markets is easily obtained and enhanced through various websites and experience. It’s also important for you to hone the ability to make fast decisions to buy, sell, hire, fire, rent and evict. An understanding of finance and how to create financial friends and a network of association is paramount to your success.
Knowledge of construction, rehabs, subcontractors and human relation skills gives you an edge in this game.
But, But, But…
All of these are great qualities to have, but if you don’t have a lead generation system that provides house-buying opportunities, you’re dead in the water. You can’t take action if you have nothing upon which to take action.
Think about this: Most of the hedge funds that were acquiring properties at courthouses all over the country are virtually gone. Oh, there are a few left that were late to the party, and now they are bidding each other up past retail values. You know why? Because 95 percent of the funds only had one of two ways to acquire houses: through mortgage foreclosure or via the Multiple Listing Service (MLS).
But now the mortgage foreclosure crisis is no longer a crisis, and we are back down to prerecession levels for opportunities at the courthouse and elsewhere in real estate. The MLS is overwhelmed by every well-intended investor and homebuyer out there.
When nearly everybody is fishing in the same pond, it’s not easy to catch a fish. Same thing holds true if you desire to buy houses. The more competition, the less opportunity and quite possibly the more risk because you’ll be paying more to win.
So what can you do?
What I have tried to do my entire life is to separate myself from the pack. I don’t want to do whatever everyone else is doing or I would be just like them. And I’ve never worked for anyone else in my adult life because I want to be rewarded in direct proportion to my knowledge and my ability to take action. I don’t even like the word “job”!
What You Need is a Lead Generation Syste
So what we’ve done in our real estate enterprise is create a lead generation system that provides leads and off-market opportunities with little to no competition.
In the last two weeks, I invested $25,000 into our lead generation system, and we’ve acquired seven houses with profit potential of over $200,000!
For me, it was easy, because I know how to talk to people. Come to think of it, it was easy for my personal assistant and daughter because I taught them what to say, too. Pretty good return on investment, eh? (No, I’m not Canadian, just a buy-sell machine who loves what he does.)
How about you? Are you good at buying houses? Do you have the money and ability to buy five to 20 houses a month? Do you acquire houses to flip, wholesale, retail or sell to investors and then manage properties, like we do?
If you can’t find the opportunities, I’m not surprised. You have to be more and more resourceful these days to get what you want. And for me, that is personal freedom that comes by having financial freedom.
If you are serious about buying houses, then you need to know how to find them. Here’s one of the opportunities I locked up this week.
I acquired a house built in 2014 on Lake Martin in Alabama. It was on the market last year for $425,000, and there are two houses on the street for sale for $450,000 and $499,000. The owners of this house are behind on payments and owe $193,000. They did have an all-cash offer for $325,000 last October and turned it down.
I’m taking over their $193,000 mortgage and giving them $20,000 at closing on top of the mortgage plus 50 percent of the net profit when I sell.
So let’s see:
It needs $5,000 in repairs.
I’m paying $213,000.
Even if I sell it for the $325,000 they had offered, there is a minimum of $90,000 in profit, which could give me a $45,000 profit on a $25,000 initial investment.
That, my friends is creative. It works. And I did a similar arrangement on another house just like this with a similar margin profit this week.
It’s All About Providing Solutions
It’s easy to make profitable transactions when you understand the issues of a particular house and the owner. Providing acceptable solutions to a distressed owner is not only fun, it’s profitable.
Our experience of acquiring houses in 12 states and more than 50 cities has given us a comfort level of how to approach sellers and create workable solutions.
You must be able to solve the seller’s needs before you can think about your own. If you can’t solve theirs, they will never sell you the house, so it always starts with them. This dialogue between buyer and seller begins on the phone, and as a buyer, you must find a way to get them to trust you—a little. This initial phone call and rapport building are critical for your success to create workable solutions that solve the seller’s needs and put money in your pocket.
The only way to have massive success in this business is by having a plethora of house-buying opportunities. I’m not talking about using a Realtor, but rather by going directly to the sellers to get really good discounts. A Realtor could never convey your thoughts as clearly as you could. When we get in front of home sellers, we lead the discussion with questions and basically control the direction of the conversation.
Over 15 years ago, I was buying houses in a city of 275,000 people. I was working with a Realtor, Kim, and our deal was that she would let me negotiate directly with the owners. As a result, I acquired 43 houses that year from her efforts and another 60-plus through my own. So, if you have a smart Realtor and you’re good at negotiating, then this could work for you. Just keep in mind, you only want to negotiate with decision-makers. The more people you can get in front of, the more practice you will get, and your skill set could improve quickly.
The key: You must have the opportunities in order to practice your negotiation skills. This is where the money is really at, in the single-family house business.
If you’re not getting the leads, then you’re not getting the houses, and you’re definitely not getting the money.
So my advice is to identify a lead-generation system that works. One of the newest that has come to market is a franchise called Fast Home Solutions, which is definitely worth checking out.
But whether it’s this system or another, you owe it to yourself—and your future profitability—to explore the possibilities and the opportunities they hold.
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