“Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.”

This is good advice as long as you don’t get so spread out that you are doing too many things but nothing with success. It’s important we understand the fine line between focusing on one niche without putting all your eggs in one basket, (so to speak).

To simplify the term real estate investing, there are really only three ways for investors to make money in real estate:

1. Real Estate Appreciation and Equity
2. Cash flow while you own it
3. Assignments: Payment when you flip a real estate contract without owning it.

So where do you start? Let’s try to answer this question on every aspiring real estate investors mind. Since real estate investing encompasses so many types of exit strategies or I like to call profit centers, it’s important to study and pick those you are most passionate about. In my Coaching U2 Profit Your Way training I thoroughly teach on over 24 profit centers, otherwise called exit strategies. The following is a summary of ten of the most popular real estate investment strategies with their advantages and disadvantages.

1. Rentals or Cash flow Investment Property: These types of investment properties are the ones which generate rental income. These are mainly apartment buildings and rental houses.
• Advantages: One of the easier ways to get started, and good long term return on investment while also earning monthly income.
• Disadvantages: Risk of not renting property leaving you with the mortgage payment and no income. Property management can be a challenge. You typically will wait awhile to sell your property so payoff is slow.
2. Lease Option. This is when you buy a property, then sell to someone else via a rent-to-own arrangement.
• Advantages: You get higher rent, and the buyer is usually responsible for maintenance. Cash flow can be good.
• Disadvantages: Most rent to own buyers don’t complete the purchase (this can be an advantage too, but it does mean more work for you). Bookkeeping must be done properly and can be complicated.
3. Fixer Upper Investment Property. These types of investment properties are the ones which are in ugly condition and need renovation. These properties can be acquired to flip after fixing-up quickly or held to rent out.
• Advantages: You can receive a quick return on your investment (months). You usually get below market value pricing on properties bringing you instant equity.
• Disadvantages: Higher risk. (Many unpredictable expenses come up in construction). You get taxed heavily on the gain when you sell in under a year.
4. Vacant Land. Many options including just holding while appreciating. You can also split it and sell it.
• Advantages: History has shown that land always appreciates in value (it’s the buildings on the land that go down. It is simpler than most real estate investments, with the possibility of great profits.
• Disadvantages: It can take a long time to increase in value. You have expenses, but no cash flow while you wait unless you sell the contract before closing.
5. Commercial Real Estate. These are any building containing 5 units or over and/or buildings sited for commercial use.
• Advantages: Long term triple-net leases mean little management and high returns. Lending is usually based on the value of the property vs. personal credit.
• Disadvantages: Commercial property valuation requires a more complex method, taking into account the income potential of the property. This is recommended for the more experienced investors as there is a lot more involved to set up and maintenance.
6. Buy property with Forced Appreciation. Buy in the path of growth and holding until values rise. For instance buying a lot in a residential development prior to roads being completed.
• Advantages: Can yield large profits, especially if you buy low to start.
• Disadvantages: Future price is not predictable – the market can turn, the developer can go out of business. You have expenses with no income while you’re waiting.
7. Preconstruction Investment Property: These types of investment properties are acquired directly from a developer before the construction or renovation is completed.
• Advantages: Low money out of pocket to tie up property while being built. If purchased in appreciating markets, you make money in equity at closing and can instantly re-sell at a profit.
• Disadvantages: You can’t always predict what a market is going to do. If market depreciates, you have lost money. Also higher tax rates in selling quickly.
8. Pre-Foreclosure Investment Property: These types of investment properties are the ones which you buy from sellers who are behind in their payments and may lose their property to the bank via foreclosure.
• Advantages: You have opportunities to buy properties at below value pricing – “Instant equity”.
• Disadvantages: Legal liabilities are higher. Finding these properties requires a lot research and footwork to find a deal that works. You can do all the work and still not have a deal with enough equity to profit after expenses to sell, (taxes, realtors, etc).
9. Assignments: This strategy has you get into a property at a discount, preferably with a known buyer in place before you commit to your purchase. After you are in contract to purchase a property, you would sell your contract for a fee to someone else. For example you get into purchase contract to buy a $120K property for $100K. You turn it to an investor for $110K and profit $10K cash without the cost and hassles of ever closing on the deal.
• Advantages: This is a great way to make quick cash with low or no upfront investment, low risk and fewer headaches from closing and ownership. This strategy creates a win win win outcome for everyone involved.
• Disadvantages: This will only work if the property you are buying has equity so that you may buy it a discount. In declining markets, this type of property is harder to find. Also when dealing with banks on REO’s or Short Sales you will find they will not allow you assign your contract. However, there are ways to get around this if you plan and handle the contract correctly up front.
  Do you want to know how I have managed to get around not being able to assign a contract? I have purchased properties in the name of an LLC set up exclusively to buy properties. I then sold the LLC to someone, making them the owner of the LLC, therefore making them responsible for closing on the purchase contract and end buyer of the property.
10. Flipping - Wikipedia defines Flipping as is a term used primarily in the United States to describe practice of buying an asset and quickly reselling (or “flipping”) it for profit ..

This description pretty much explains property flipping, with there being a slight difference from that description of flipping assets. In real estate you can get into an agreement to flip a contract you have gotten into before you even buy it. This can be done with ease when you know exactly what your buyers want and with no money out of your pocket utilizing transactional funding. Flipping can also mean closing and quickly reselling your property, sometimes even doing both transactions the same day – this being subcategorized a “double closing”.

• Advantages: My favorite strategy. You work the deal backwards. You create relationships with buyers who can close quickly with cash, (I mentioned earlier there is a system that does this for you at www.CashBuyers4Flips.com ). Then you find a property meeting the needs of your buyers. This strategy allows you to profit literally from no money down, with lower risk and very little of your own time.
• Disadvantages: The law requires you to disclose your intent to resell quickly to sellers. When dealing with banks, this can sometimes cause your offer to be rejected. You must buy properties in the name of an LLC in order to utilize transactional funding. Setting up and maintaining an LLC will cost you money. Though the intent of a buyer might be to close on the transaction, sometimes “life happens” and something causes the buyer to be unable to follow through. You may have to walk away from earnest money if you cannot find another buyer quickly

Now that you that you have learned strategies to consider, you will need to consider the type of properties you want to go after, developing a marketing strategy to find motivated sellers of those deals. Over the next months I will be sharing steps and strategies on how to profit investing in real estate 12 different ways.

Please leave a comment if you have anything you would like add to what I have written here with the heart to support fellow real estate investors. (Any solicitations for business will not be published) I appreciate the feedback!

Networking is such an important part of your business. You must let everyone know what you are doing. Everyone can be a “bird dog” for you – And you for them.  A great book to read if you are uncomfortable with the idea of attending events to network yourself and your business is ‘How To Win Friends and Influence People’ by Dale Carnegie. It’s a great book that helps you to understand why you need to network with others as well as knowing what to say when you meet with new contacts.

Throughout the 30 years of owning several businesses, I can honestly say this type of marketing has been the most effective … and the most fun!  Of course my belief in the benefits of networking is reflected as I founded a networking group called Women’s Success Group, (a nonprofit networking group since 1998) and now beginning and running an Investors Network in my own town.

For the sake of my audience I am going to focus all marketing strategies discussed over the next few weeks  exclusively to those involved in real estate investing, though the same principals often apply to most other businesses.

I would like to start with suggestions for some places to Network your real estate investing business.

1)      Search Real Estate Investor Clubs in Your Area.
(Mine is www.InvestorCommunityofCentralValley.com)

2)      Check meetings and trainings for local Real Estate Associations.

3)      Check meetings and trainings at local Title Companies.

4)      Check on handyman, builders and contractor associations in your area.

5)      Ask everyone you talk to for referrals for networking events that have worked for them.

6)      Of course chamber events and networking clubs that meet at breakfast and lunch are a general source to get to know the general public.

I know the biggest fear and reason many people don’t attend networking events is they don’t know how to approach or what to say to others when first meeting them. So here is an idea.

For every person you come in contact with at any type of networking meeting, your conversation might go something like this:

• “Hi there, my name’s __________.  What’s your name?”
• “Say their name – What is it that you do?
• “How long have you been doing this?”  (Don’t be surprised most investors are part timers)
• If they ask what you do for a living or about yourself, be prepared!

1)      Hand them your card.

2)      Summarize your business in 30 seconds or less.  This is where spending time writing down how you want to market you and your business is important. You want to be concise and clear in describing what you do and what types of referrals would be most helpful.  Try to incorporate something that differentiates you from the rest?

Here is an example of a 30 Second Commercial

“Hi my name is _________________. I consider myself the real estate investor with a heart. My passion is to work with home owners in jeopardy of losing their homes to foreclosure. If the home owner wants to keep living in their property I might point them direction on how to do that (www.theavoidforeclosurebook.com ) …if they just want out – maybe they lost their job and can’t afford to keep it any longer, then I offer to buy their property. My goal is to create a win-win-win. Win for the home owner/seller, win for me the buyer/ investor and win for the bank when I take the house off their hands.”

If you know anyone that can use my help I pay a $500 referral fee to you when if I end up buying their property.”

Here is my 30 second commercial to everyone:

“I enjoy buying and selling real estate having closed on over 300 properties in the past 5 years.   Some people call me the Flippin’ Queen because as you know, flipping is another term for contracting to buy and then selling real estate quickly for a profit …. Or as I say Flippin’ it.  I look to invest in residential real estate at a discount through pre-foreclosures, short sales, REO’s, bankruptcies, Probate, as these are the usual reasons a seller is motivated to sell a property at a discount. After I am in contract to buy, I will often “flip” or turn the contract or property to an end buyer at a discount too.  Are you interested in buying and/or selling discounted residential real estate?”

Here are some things to consider if your new contact is in an occupation other than an investor:

The important thing is that you are interested in what they do for a living. Don’t talk about yourself until asked. Ask them questions about their occupation and how you can be of support to them in their line of work. If this person is a potential power team member for you, ask if you could contact them in the future. (You would be able to follow your list of questions for power team members and take notes when you called them back)

However, if this person is an investor, you might want to ask some of these questions:

• “Do you buy, fix and sell or do you buy and hold?”

• “How many properties do you own and/or have you sold?”

• “What part of town do you invest in?”

• “Really, why that area?”

• “What do properties cost in that area?

• “Do you pay cash for them or what banks do you use that are investor friendly?”
• “What title company do you enjoy using the most?”

• “Do you know any of the other people here?”

• “Who are the big investors in this area?”

• “If you ever come across some good deals and you don’t want them let me know.”

• “By the way, do you have any property you want to sell?”

• “We sometimes have properties for sale as well, if you’re looking to increase your inventory.”

• “Well, Mr. /Ms. Investor based on what you told me and where you prefer to buy; if anything comes along I’ll make sure to call you first”.

Make sure to collect everyone’s card, email address, fax, cell, and correct spelling of first and last name.   Write a note or 2 on the back of their business card helping you remember the next steps you will want to take with this contact in the future.  Just a “nice meeting you” card in the mail or email is often a memorable gesture encouraging future communication re: each other’s business needs.

Networking should be a part of
everyone’s marketing plan.
ATTEND, JOIN, PARTICIPATE…
…whatever you want to call it…

The important thing is to GET IN FRONT OF PEOPLE!

Top 10 Marketing Strategies for Real Estate Investors
Part 1 -Aim-Ready-Fire- Talley The Score
Part 2 – Networking

Originally posted 2010-09-06 04:00:21. Republished by Blog Post Promoter

“Being able to touch so many people through my businesses and make money while doing it, is a huge blessing.”

One of the longest proven ways to get leads as a real estate investor is calling on FSBO’s out of the newspaper. If you are on a budget and just getting started then you can do this yourself, or if you can at all afford it I highly recommend you hire someone to do it for you.

Why are FSBO’s good leads?

Often times homeowners who place their house on the market without a realtor ( FSBO’s),  are  in a position  where they need to sell a home quickly.  When this happens,  you are able to help them by closing quickly with cash, while at the same time, you receive a great discount.  There are many reasons a homeowner might need  to sell quickly. Some are trying to avoid getting behind on payments, some are already behind on payments, others need to immediately move to new location for job, some received a property gifted through probate, may be experiencing illness or maybe the landlord doesn’t want to own a property for rent any more, etc.  Whatever the specific reason a person doesn’t  utilize a realtor and place their property for sale on the MLS, it is likely there is an opportunity for you to get a great  wholesale deal.

• Where do you get the leads?

The first step is to locate the properties not listed on MLS, however for sale by the owner direct.   How do you do this?

1.       Classified Ads Online: There are several online classifieds such as Craigslist.org or Kiji.com or backpage.com and many others.  It’s so easy to search the internet for this stuff….just type “your city” properties for sale by owner; see what comes up!

2.       Newspaper classifieds:  Checkout newspapers in the areas you would like to buy. (also often available online)

• What do you do once you have the locations for leads?

a.       Buy a copy of your local newspaper and open the real estate classified ads section.  Get a sharpie or a highlighter and begin to scan each and every FSBO (For Sale By Owner) add in the paper.

b.      Grab a copy of the FSBO magazines offered for FREE in grocery stores.  These could be great leads as someone is  paying a lot of money to put their house in a magazine. I view this as sign that the owner could be a motivated seller.

c.       Go the websites of newspapers and look at their classified section online. You can put these links in your favorites.

d.      Visit FSBO online websites. Here are a few sites I like:

• Owners.com
• ForSaleByOwner.com
• FSBO.com
• HomesByOwner.com
• Trulia.com

You will want to check the FSBO sections in these resources daily.  If there is a good real estate deal for sale, it will be sold quickly to the person who acts quickly – You!

• What do I look for?

All ads listed could be potential investments. To save time however , you want to be looking for  keywords or phrases that indicate the seller has a motivation to sell or is showing signs of flexibility.

Here are a few examples of keywords to watch out for:
“Must sell” “Just reduced” “For Sale Or Lease” “Seller Financing” “Fixer Upper” “Handyman Special”

• Create your Motivated Seller  “Hit” List

This is a list of those you will want to contact to find out more about the property and the seller’s situation. If using paper (like a newspaper in hand), you will want to mark the ads with your sharpie or highlighter as you are scanning the paper for those “motivated” words listed above.  Mark as many ads as you can!  It is better to have too many leads than too few.

If online- – -copy and paste the ads found on newspaper, classifieds  and FSBO sites to a word or excel doc, then print it out.

Remember having too many leads is a good thing as it keeps your options open.

Stay tuned for the next blog which will contain the actual script I have refined over the years when calling FSBOs. Using this system and this script, I have found great success in helping others with their situation while at the same time buying discounted real estate.

Spread the news!

Tamera Aragon
www.TameraAragon.com
Top 10 Marketing Strategies for Real Estate Investors
Part 1 -Aim-Ready-Fire- Talley The Score
Part 2 – Networking
Part 3 -Business Cards
Part 4 -Win-Win-Win with Realtors
Part 5 – Classified Ads

Originally posted 2010-11-17 10:15:21. Republished by Blog Post Promoter

Definition: The delinquency is added to the loan balance in order to bring your payments up to date. Adding past due loan amounts to your current loan balance increases your loan balance and will also increase your monthly payments. The amount of the payment increase will be smaller if the life of your loan is extended at the same time as well. This is a good option if the reason for your mortgage default was temporary and your future income will support the new payment.

Go here for more Foreclosure Coaching

Originally posted 2008-06-16 13:20:46. Republished by Blog Post Promoter

“To give real service you must add something which cannot be bought or measured with money, and that is sincerity and integrity.”

Now that you have your “Hit” list, you are ready to start calling your leads, (or hire someone else to do this – I use this company for my Virtual Assistants: http://tinyurl.com/2ulcobp). It is important that you use just the right words when talking to sellers, focusing not only on information gathering but also building a relationship and trust.

Make sure you read this script in detail before you make the first call as there is a lot of improvising that you sometimes have to do. It’s a good idea to practice on a live person, (a friend), just to get comfortable with saying it so it doesn’t sound like you are reading.  You want to sound natural.

FSBO 1^st CONTACT  SCRIPT

PROPERTY LEAD FOUND ____________________________________________________________

INTRODUCTION:
Hello my name is (Your name here) I was calling about your house for sale, is it still available?

Q. Are you the owner of the property? Are there any other names on title? How is your name spelled?

A. Owners Name: ________________________________________Date_________________________
Q. I have the address listed as (repeat address back to them or in case the address is not listed get it at this point) is that correct?

A. Property Address: ___________________________ City: __________ State: ____ Zip: ___________

Q. Is there a Cross Street, Subdivision, or  Landmark nearby? (Get the general location of the property if you don’t know where it is)

A. __________________________
Q. Ok and what number is the best to reach you?  if I have any more questions?

Daytime: __________________  Evening: ___________________

Cell Phone: _________________ Email: ___________________

Q. So could you tell me a bit about the house?
Notes: Keep in mind they will want to tell you all the good stuff. Just let them talk all they want about it. (Take Detailed Notes here on the unique things that make the home valuable.)

Q. After they have described their home to you use this phrase exactly.
“Gosh that sounds like a wonderful home why would you even consider selling it?” Write down the reason they are selling and take detailed notes on the conditions and why they are selling. (This is the most important part of the call as for you the investor knowing the reason and motivation for selling is the key to making an offer that will work for them. Let them ramble on as long an necessary you want as much information as possible in this portion take detailed notes and maybe even record the call if necessary)

…. If not interested, this is a good time to gracefully exit the call. Just thank them for their time and let them know you will contact them back if you find there is an interest.

…….If still interested, go on with questions not yet answered about the house

Q. So could you tell me a bit about the house?
Notes:

Q. Has it ever been listed with a realtor?
A:  Yes / No Explain:

Q: Ok, so what is your homes value?

A: _____________________
Q: How did you come to that value?

A: ____________________
Q: How many bedrooms does the house have?

A:__________________
Q: How Many Bathrooms:

A: ___________________
Q: What is the square footage?

A: ____________________
Q: On a scale of 1 to 10 1 being practically condemned and 10 being like new, what is the condition of your home?

A:  (Circle One) 1  2  3  4  5  6  7  8  9  10
Q: What is owed on the first mortage for the property?
Q: If there is second  mortgage, what is the balance of the 2^nd?

A: 1st Mortgage. ____________________ 2nd Mortgage. ___________________

Q: Are there any other liens on the property?
A:  Yes / No   Explain:
Q: What is combined monthly mortgage payment?

A: _________________
Q: Would you be willing to offer terms or owner financing on the property?

A: Yes / No  Explain:
Q: Would you be willing to lease with the option to purchase?
A: Yes / No  Explain:
Q: If I offered you all cash and closed quickly what is your rock bottom price?

A: ____________________

End Call: “Thank you so much for taking time to talk with me.  I would like to provide you with my contact information and then do some research so I can call you back with a valid offer.  When would be a good time to call you back tomorrow?

Appt Date_____________Time__________________Best Number_____________________________

• When you call the FSBO seller back at appointment time – be prepared with to present your offer by phone, as well as information to substantiate the amount.

FSBO 2^nd CONTACT SCRIPT:

I am so excited to talk to you about the house you have for sell. You see I am a real estate investor.   I buy and sell houses, handling all items for transaction and do not charge a fee like a realtor does.  I have researched your home and am interested in making an offer. Based on comps in your area, and the declining market today, I would like to offer $______________.  Then be quiet until they speak. The first one to speak here loses.  If they think that might be in the neighborhood of what they could accept,   then make an appt to see the house.  Don’t forget to bring to your appt with seller a completed contract (without final price) and all disclosures – everything you need signed.  It’s best to go assuming your offer will be accepted by the seller at this point.

Spread the news!

Tamera Aragon
www.TameraAragon.com
Top 10 Marketing Strategies for Real Estate Investors
Part 1 -Aim-Ready-Fire- Talley The Score
Part 2 – Networking
Part 3 -Business Cards
Part 4 -Win-Win-Win with Realtors
Part 5 – Classified Ads
Part 6A – FSBO’s

Originally posted 2010-11-22 04:00:42. Republished by Blog Post Promoter