Just released first version of the flight game. It test your knowledge of geography! and even has a top 100 scoreboard. Try it out, see if you can be #1.
I have realized that I am spreading myself too thin. I have too many projects going on at the same time and all of them suffer. I have too many mailing list “spamming” me and too many podcast to listen to. So I am going on an information diet. I know what I know and I will not get closer to my goals by listening to another podcast or reading another infomercial type email.
I am ordering my projects according to the priority and completion potential. I will spend time only on one of them until it is finished. I think a lot of technical people have the problem with polishing the product and never realizing that is does not have to be perfect. Once it is working, we need to focus on marketing and selling it. I know I sometimes suffer from this perfection paralysis.
So focus, focus and one more time focus. Do not let your eye off the ball.
And for those who want to listen to a very interesting podcast on internet business and marketing check out Sterling and Jay on “Internet Business Mastery“
My plan was to finish a simple flash game for attracting more visitors to own of my websites, but as sometimes happens – life intervened. I was able to sit down at the computer to code for ah hour at around 8pm last night. Caring for an infant is exhausting. All you moms out there I really know how hard you have to work!
On another note, we are filing our first eviction in 3 years or real estate investing. That is a great track record, but I rather not do it. Sometimes you just have no choice. To have even a slight chance of getting our money we have to go to court. I feel for the family that has to move out, but we can not afford to run a charity.
My newest creation – www.nestery.com is now in google index. It took 3 weeks to get all the pages there, but it is finally all in there.
How should I go about promoting this website? I will email all fellow investors I know to add the houses they have to it. That should add couple hundred houses. How would you go about promoting it for buyers?
- place adds on craigslist
- respond to adds on craigslist
- need more ideas…
Anybody has a good idea how to get trafic?
I have been looking into Openid. So far I can not decide to add or not to add the support for openid to nestery.com. It may be useful but on the other hand more options just confuses users more.
Has anybody added openid to their website and found it to be the time well spent?
You did great job marketing and now have an avalanche of leads coming your way. You need an efficient way to prescreen them. How would you know which deals to pursue and which ones you should avoid.
It all boils down to 3 key indicators, at least for me:
Like you already know the 3 key factors determining the price of any piece of real estate are: location, location, location. So first we look at the location of the home. Is this home in the good area of town? Is it even in the area we do business in? If the main source of your leads is from direct mail, leads should be in the right area of town. Signs, on the other hand, bring leads that are in other states. So check the location first. If it falls into your business area, take it, otherwise pass and go to the next one.
BTW, you have chosen the area you will do business in, haven’t you? Do not spread yourself too thin. We chose to do business primarily in the North east quarter of Atlanta. If I would do business in the whole metro area I can have a drive of more then 2 hours between the houses in the south and north suburbs. Imagine that you have to manage the renovation for 2 houses at the same time which are 2 hour drive apart.
Anyway, back to prescreening. The second thing we will look at is the situation. We want to work with motivated sellers. Not someone who is thinking about selling the house, but with someone who NEEDS to sell. And to determine that we need to know the situation. The situation can be: divorce, job loss, illness, job transfer, can not maintain house anymore, can not afford payments anymore, etc. We need to see a situation where they really need to sell. If the sellers say “I want to….”, pass this deal. You will spend weeks spinning your wheels and in the end come up with nothing.
The third and last thing we are looking for is the timeline. When the sellers need to move? Is it next week, next month, or some time in the future? This is important. If you hear the seller saying “I really need to sell this home in 2 weeks, because I have been transferred to another state and have to start working there from next month.” you have the situation and deadline. If you hear “I wan to sell in next couple months. I would really like to move to this state to be closer to my grand children.” pass this deal. There is no situation or deadline. The key phrase here was – “want to”.
So we have checked the location, the situation and the timeline. All are good we play, one of them missing we pass, or put it on follow up if the deadline is not there yet. If we play we go to the next step – negotiate and sign the contract.
The very first step in the process of flipping a house is to attract sellers. Without sellers calling you, you will not be able to buy a house, renovate it, sell it and make a profit. So, in my personal oppinion, you must do at least 3 things to attract sellers. Here they are in order of importance:
- Direct mail
Dirtect mail : the most cost effective and predictable source of leads. 80% of our leads at the moment of writing this come from direct mail. A lot of people I meet say that direct mail does not work. It does not if you do it wrong. For direct mail to work you must have 3 things right: the list, the message and repetition.
First of all you need a list of people to market to – a targeted segment of people. What would be a good target to mail to? People who really need to sell their home? People behind on their mortgage payments? Someone who has recently been divorced? I think all of them are perfect candidates to receive a letter from someone offering to buy their house.
Second you must write to your list about their problem. They are not interested in how big your company is or how long you have been in business. All they care is how they can get rid of their problem. So write to the people who are behind on payment about their situation and how they can benefit by calling you.
Third thing you have to mail them multiple times. Sending one postcard to 1000 people will not do the trick. You must, I repeat, you must mail them at least 4 times. Would you like to convince 1000 people 25% of they way or 250 people 100% of the way? The choice is yours.
Referrals : do not be afraid to open your mouth and tell other people what you do. The longer you are in business the more people will know what you do and refer othes to you. Do not be afraid to ask the sellers to refer others who need to sell their house to you. This does not cost you a dime, but brings great results with time.
Signs : the best way to get a quick inflow of leads. Follow county and city ordinances -you do not want to pay fines for illegal signs. Signs work great for a very short time. Put out 20 “we buy houses” signs and you will get 20 to 100 calls depending on the weather and where your signs are. The only catch is that the leads are unpredictable: your sign may be on the north side of town and the lead will come in for a house on the south side, more then 1 hour away, or better in a different city or even state.
If you do these 3 things and do them right your phone will ring day and night with motivated sellers calling you with houses they are ready to get rid off.
So what are you doing now to attract sellers? Is it working? Are you ready to try something that does?
Or how to get started investing in Real Estate in 9 simple steps:
- Attract Sellers
- Prescreen Leads
- Negotiate and Sign Contract
- Fund and Close the Deal
- Get Property Ready to Sell/Lease
- Attract Buyers/Tenants
- Prescreen Buyers/Tenants
- Close Quickly
- Cash Check and Repeat
These are the steps we go through every day in our business. This is all you have to do from beginning to the end with one property. After you are done with your first one you will be able to juggle multiple properties in different steps and still get them all to the check closing step, but the first one is the most challenging and the most fun.
In the next post we will start on Step 1. Enjoy the ride!
Long time has passed since I posted last time. In short we have bought 2 houses and lease optioned them out. Plus wholesaled 2 houses since the last post. We also went to an investor retreat in Dominican Republic to spend some time with like minded people and take a look at our business and share the knowledge and experiences. We came back with a lot of good information from this trip.
Since then we have revamped our marketing to sell and now we are working on improving our buying marketing. Just recently we have redesigned our website to sell your house fast in Atlanta. We are currently working on couple more websites some of which are real estate related and some are not.
I have made a commitment to myself to blog more often about what is happening in our business and share my knowledge on how to start investing in real estate.
I will see you in the trenches.
I got into a conversation with one of my friends why would someone buy a house from me Sub2. Let’s look at the deal like this: $5,327 down and take over payments of$1,307 per month, you will buy $14k worth of equity. Which in essence means, that you are taking over payments on a mortgage which stays in seller’s name, you paying $5k out of pocket for a house worth $163k with the loan balance of $144k.
So what other ways can you purchase this house? The conventional way would be to go to the bank and get a loan. But wait, there is more. With current situation in lending industry the best deal you will get will require you to put at least 10% down and your interest will be somewhere in 9-10% range. So you will need about $15k to put down and you monthly payment will be $1,140 just for principal and interest. Add taxes and insurance and you are looking at $1,400+ per month. So the conventional way you need more money to put down and your payment is higher.
Also you can go and borrow hard money. Hard money is called hard money, because there are hard rules. You will have to pay about 5 points which is 5% of the loan amount and you will be able to borrow about 70% LTV. LTV stand for loan to value. So if in this case the value is $163k, so LTV comes to about $115k. So you need to buy properties way bellow market value and it will cost you about $6k to get this loan. So in this case you need money up front and the payments are high and LTV is low.
So considering the 3 ways you can buy houses, the Sub2 way looks pretty darn good. You do not need to go to the bank and apply for a mortgage and you do not need to borrow hard money. Plus the monthly payment is usually lower and the mortgage is not showing up on your credit report. Once you get about 10 loans in your name you will see that it is very hard to get more.
So the moral of the story is that in current market, at least in Atlanta area, there are so many houses for sale that we do not buy any other way, but subject to existing loans.