Buying and selling bulk REO’s is among the hottest real estate niches in the country right now. But this business is only a few years old, so the fact is not many people know how this business works yet.

Lucky for you, I have been one of the few investors in the country who has actually closed bulk REO deals and play in this market everyday. I like doing $1 deals with Bulk REO’s just as much as I do when buying and selling single REO homes.

However, I like doing bulk REO deals more because the profit potentials are much bigger.

In addition, the bulk REO business is far less competitive than buying single REO homes from REO agents. Most investors don’t understand how to make money with Bulk REO’s, or they think buying bulk REO packages are too risky.

Click Here for a FREE Webcast on:
“Bulk REO Secrets: 6 Steps to a $50,000 Pay Day” 

“Isn’t Bulk REO Investing Too Risky?”

When you buy a pool of bulk REO assets from a bank, you are buying “sight unseen”. This is enough to scare away most traditional investors. Don’t worry, you’re about to discover how to take the risk out of buying Bulk REO’s.

Traditionally, most real estate investors are used to going out and physically inspecting properties themselves. I refer to these people as “touch & feel” investors. However, when you buy Bulk REO homes from banks, “touching and feeling” these homes are impossible to do when you’re contracting to buy 30-500 homes or more scattered across the country. Therefore, you have to depend on others to go out in each local market and inspect the properties for you.

I have been active doing Bulk REO deals for 15 months now. Traditionally, I am a “touch and feel” type of investor like many of my peers and it was hard for me to adapt to buying properties “sight unseen” and not inspecting a property before I contracted to buy. For that reason alone, I had no choice but to develop a system that would allow me to buy and sell Bulk REO deals without ever looking at a single property but still feel comfortable along the way.

“Why Are Banks Selling Off Bulk REOs?”

Due to the U.S. economic meltdown and foreclosure crisis, banks across the country are failing. This has created a unique opportunity to buy properties directly from banks like never before. Today, banks all across America have BILLIONS of dollars in defaulted loans. As I write this report, there are over 1,905,723 foreclosure filings right now. If foreclosure filings continue at this pace we would have exceeded the 3 million foreclosure filings the U.S had in 2008.

When a borrower is in default of their mortgage note, the bank will move to foreclose on their home. The mortgage note is now considered non- performing and becomes a liability on the banks balance sheets. Immediately the bank will hire an attorney to begin the foreclosure process.

In addition to attorney’s fees, if the homeowner in default fails to pay the hazardous insurance policy, the property taxes and neglects to maintain the property, the bank will have to step in and pay those expenses as well.

Some banks have thousands of these properties and the financial burden is enormous. At this point the bank wants nothing more but to get rid of this money pit!

The timeline to foreclose on a property will depend on if the property is located in a judiciary or non-judiciary State as we discussed in the Foreclosure Frenzy article. In a non-judiciary State, the process to foreclose is much faster and can be done in 2-3 months, while in a judiciary State the process normally takes about 6-12 months.

Once the court has issued a “Notice of Judgment” in a judiciary State or a “Notice of Trustee Sale” in a non-judiciary State, the bank will move to sell the property at the foreclosure auction. The foreclosure auction is normally handled by the local Sheriff’s office. At auction, an opening bid on the property is set by the foreclosing lender. This opening bid is usually equal to the outstanding loan balance, interest accrued, and any additional fees and attorney fees associated with the sale. If there are no bids higher than the opening bid, the property will be purchased by the attorney working on behalf of the bank.

If this occurs, and the opening bid is not met, the property is deemed a REO or “Real Estate Owned”. This typically occurs because many of the properties up for sale at foreclosure auctions are worth less than the total amount owed to the bank or lender.

Banks have become accustomed to using this process to sell off foreclosure homes to remove them from their books. These homes are considered “toxic-assets”. Today, due to the U.S. foreclosure frenzy, banks are plagued with these toxic-assets while the courts that handle these foreclosure proceedings are backed up making the foreclosure process take longer then ever before.

With Federal Regulators breathing down the throats of banks to do something about all the defaulted loans on their books, banks are now seeking other non-traditional ways to get rid of their toxic assets……such as selling their non-performing notes and pools of Bulk REO properties to investors.

This new approach of bundling up Bulk REO properties and selling them at steep discounts saves the banks the headache of continuing to pay for the property taxes, hazardous insurance, utilities, maintenance cost and more importantly, removes the toxic assets from the banks balance sheets enabling them to stay in compliance with Federal and State bank regulations.

“What Are Bulk REOs?”

Bulk REO’s are foreclosed properties that banks own. Some of the homes may be currently listed with an Agent while others may not. Banks are not in the property management business. They are in the lending business and want these toxic assets off their books. Therefore, this has created a tremendous opportunity for investors who know how to play in this market.

A bulk package is also referred to as a tape. These tapes contain tens or hundreds (sometimes thousands) of REO properties. A tape is nothing more than an excel spreadsheet list of properties.

“Can I Do $1 Deals With Bulk REOs?“

Yes, in fact you can get started trading Bulk REO deals without any money. Let’s learn exactly how this can be done.

There are several ways to make money buying and selling bulk REO’s. Your options are either:

• Brokering Bulk REO Deals
• Buying Bulk REO Properties from Banks

Brokering Bulk REO Deals…

Brokering Bulk REO deals is much easier to do than buying them from banks. A Bulk REO Broker or Trader (some people refer to them also as Syndicators) acts as a middleman between the seller of a Bulk REO tape and a buyer. It is important to note that a professional license is NOT required to broker Bulk REO deals.

The great part about brokering Bulk REO deals is that you don’t have to use “Cash or Credit” to get started. Nor do you need an office, staff or car for that matter and you can do it part-time from the comfort of your home. Brokering Bulk REO deals only requires that you have a telephone, fax machine and a computer.

1. Computer: Will be used to network with other Bulk REO Brokers, Bankers and Investors online.
2. Telephone: Will be used to communicate offline with the people you network with online.
3. Fax Machine: Used to send and receive all the documents and contracts when doing these deals.

“How Do I Get Started Brokering Bulk REOs?”

The first thing you have to do is understand the role of a Bulk REO Broker so you can find your niche to play. There are two types of Bulk REO Brokers. The first is a Seller’s Rep and the other is a Buyers Rep.

A Buyer’s Rep works exclusively with buyers who are looking to take down tapes. They match their buyers with sellers of Bulk REO tapes and charge a fee for their efforts for finding product for their buyer to purchase.

A Seller’s Rep works exclusively with sellers looking to sell Bulk REO tapes. The seller may be a bank, private equity fund, hedge fund or a private investor. The seller’s rep will get paid a fee for their efforts at finding a buyer to buy the tape from the seller.

Some Brokers work as both buyer and seller reps. The hat they wear will depend on what lead source they have. If they have a source of product for sale, they may become the seller’s rep. If they have a serious buyer of Bulk REO product they may wear the hat of the buyer’s rep.

I have acted as both the buyer and seller rep and made money. However, I prefer to wear the seller’s rep hat because my strength is creating marketing advertisements that sell Bulk REO product. Last month I closed on a small Bulk REO deal and made $25,000 working as a seller’s rep. It only took 4 hours of work to get this deal done.

Let me explain how this deal worked:

• Step 1 – Find The Product
  A Bulk REO private seller called me about a small 24 home nationwide tape he had just taken down from a bank. He was asking $300,000 for the tape.

• Step 2 – Find A Buyer
  I passed on taking down the tape myself but decided to call a buyer I knew who was interested in taking down a nationwide tape. My buyer was very interested.

• Step 3 – Arrange A Conference Call
  I arranged for my buyer and seller to talk about the particulars of the deal. The buyer provided verifiable Proof of Funds (POF) to my seller and the tape was sent to him via email.

• Step 4 – Due Diligence
  The buyer conducted his due diligence in 3 days and moved forward to take down the tape.

• Step 5 – Master Fee Agreement
  The seller and I signed the Master Fee Agreement to pay me the difference between the seller’s price of $300,000 to me and my sale price to my buyer for $325,000.

• Step 6 – Contract & Closing
  The buyer executed a contract and made arrangements to close the next day. Once the funds were sent to my seller’s Title Agent, I picked up a check for $25,000.

The worst part about brokering Bulk REO deals is finding REAL buyers and sellers. Most of my time is spent filtering through the fake buyers and sellers of Bulk REO’s. There are lots of fake buyers and sellers of Bulk REO who care nothing more than to waste your time.

As a Broker you have to learn how to distinguish between the real buyers and sellers of Bulk REO from the fake. There is an art to this and the better you are at it, the fewer headaches you will have, the less time you will waste and ultimately the more money you will make.

~ Kenny Rushing, House Hustler

About Kenny Rushing…

Kenny Rushing is a remarkable tale of a life turned around. A resident of Tampa, Kenny is best known for the moving story of his humble and troubled beginnings, and his phenomenal success as a real estate investor – in spite of the seemingly insurmountable odds he faced. He is a successful real estate investor, civic leader and devoted philanthropist. His company, Rehabbers Superstore, Inc., now grosses millions of dollars per year through real estate transactions and investments. Kenny Rushing is a living testament that: If KEN Can Do It – So KEN You!

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This guy is a total machine, and he’s built one of the most elegant, scalable, systematic short sale businesses I’ve ever seen.  He’s made millions systematically quick-turning about a house or two a week for the past 6 years in a row, and is truly in a class where few other investors can fit.

Anyways after we reconnected he mentioned an article he’d written that basically walks through the entire short sale process from an investor’s perspective, one step at a time. I’m not new to short sales, but I was intrigued nonetheless and asked him to point me to it.

Lo and behold, it kicks butt.  In fact is may be the best darn walk-through of this process I’ve ever seen. So I wanted to share it with you guys.

Enjoy…and as always, please leave any comments or questions you may have below…

The Complete Step By Step Process On How To Complete A Short Sale Transaction

By Josh Cantwell

With foreclosures on everyone’s mind these days, the interest in investing in foreclosures has skyrocketed. Everyone has a book, seminar, or website . . . where were all these “gurus” last year?

Most opportunity seekers looking to invest in foreclosures are not quite sure where to start. The truth is there are really only two ways to invest in foreclosures. First go buy a bank owned property. Bank owned properties have already been foreclosed upon and the lender now owns it. They typically sell these properties cheap because they need a lot of work. These properties are typically rehab projects. The second way is to try to buy the property before it is foreclosed upon. Most times houses in pre-foreclosure have zero equity. In these cases a short sale must be negotiated in order to create the equity to buy the property.

Several years ago when we first got in the business, you’d be hard pressed to find a Realtor or even an investor who knew anything about short sales. Why? With housing values appreciating and easy money being had, short sales were once considered too much work for the money. Today, they’re still a lot of work, especially if you don’t know what you’re doing — but we’ve proven that a highly profitable, full-fledged short sale business can be built, grow and prosper no matter what’s going on with the market.

Today, with banks defaulting and homeowners under water, real estate agents, investors and homeowners must have a full understanding of exactly how to negotiate and process a short sale. Homeowners in default should educate themselves on this process to avoid the financial pitfalls that go with having a foreclosure on their credit report. Real estate agents must be fully educated on the short sale process to regain lost commissions. A vast number of listings they receive are now “subject to lender approval” and require a short sale be negotiated. Investors looking for solid investment opportunities are now obtaining a growing number of leads that are over-leveraged and in foreclosure. “Equity” deals are tougher and tougher to find.

The concept of marketing for the real estate investor revolves around finding “motivated sellers”. Typically, you would think, individuals who are behind on their mortgage payments are motivated to sell to avoid foreclosure. Most houses in foreclosure these days have zero equity. To construct a profitable real estate transaction the real estate investor must pair up a motivated seller with a successful short sale negotiation.

Below is a guide of the exact steps to take in the short sale process. I have coached hundreds of investors and real estate agents throughout the US through this process using these exact steps. I have watched them close on properties they otherwise would have never been able to close so I know this stuff works.

Here we go…

1. You must identify your “sweet spot” and stick to it. A sweet spot is an area in your town where you want to buy and sell houses. Identifying your sweet spot is fairly easy. Find the areas where houses resell the quickest, then go market and buy properties there. Avoid areas where you know buyer interest is low. Try to stick to areas near your office or house where houses are selling the quickest.

2. Obtain the list of pre-foreclosures in your sweet spot.You can obtain these lists from a courthouse or a list provider. Make sure your list includes the following information: name, address, city, state, zip, lender, and the date the foreclosure was filed.

3. “Scrub” the list with a skip tracer for updated addresses and phone numbers. Skip tracers have access to databases where they can find updated information. To advertise to these homeowners in foreclosure you’ll want the most updated information including address and phone number. Some free services include: w3data.com, zabasearch.com, 411.com, and whitepages.com. Paid services include lexisnexis.com and accurint.com.

4. Market to the list of names and addresses in your sweet spot. Marketing can consist of direct mail, postcards, letters, cold calling, door knocking, voice broadcasts, and free recorded messages. You can also use referrals from centers of influence. Centers of influence are other professionals like attorneys, real estate agents, mortgage brokers and title companies. The idea of marketing for the real estate investor revolves around finding “motivated sellers.” Typically, you would think, individuals who are behind on their mortgage payments are motivated to sell to avoid foreclosure.

5. Let the leads roll in. Your marketing efforts should generate calls to your office from sellers in pre-foreclosure looking to sell.

6. On each “buy call” you must qualify the property and the situation. “Buy calls” are simply the phone calls you will receive from seller who you have marketed. If they call you it’s a “buy call.” The goal is to qualify the homeowner and the property to see if it’s worth your time to go look at the house and attempt to buy it. Also, run comps and score property with the Realeflow’s Deal Filter. Try to avoid condos, townhouses, new construction and new loans when prospecting for short sales. The best properties to pursue include FHA loans, solid resale neighborhoods, large 2nd mortgages, vacant houses, any deal where you already have an end buyer, and any loan that is six years or older.

7. Go see it. Set an appointment to view the property and meet the homeowner for the first time.

8. When viewing the property, make sure to note major repairs, and the property condition. Likewise, pay attention to the appearance of the neighborhood. Does the subject property conform to the area? Is it above or below community standards for that street?

9. Discussion with the homeowners should be guided by the “Positive Results Conversation.” This conversation in an educational talk given to the homeowner by the investor. The purpose is to explain the seller’s options, the short sale process, and how to set expectations regarding how the short sale process works.

10. Start the Short Sale Process. If a short sale makes sense for all parties involved, and the homeowner gives the go ahead, then start the short sale process.

11. Set up an appointment to meet the homeowner a second time in your office with a notary.

12. During the second appointment with the homeowner the option contract and other legal docs will be signed. The option contract is a special purchase and sales agreement used to control the subject property during the short sale negotiations. The option contract also allows the investor to resell the property for a profit. Moreover, additional information will be collected to complete the seller portion of the short sale package. The short sale package is a compilation of documents that lenders require to begin a short sale on a house in pre-foreclosure. This includes: 2 years tax returns, 2 month bank statements, last 2 pay stubs, hardship letter, FDMC financial form, and a listing agreement. Other docs include mortgage statements, property disclosures, and repair estimates. Legal docs must be notarized and consist of: option contract, notice of option, affidavit, disclosures and the bill of sale.

13. Record the Notice of Option Contract in the public recorder’s office.

14. Gather the short sale documents from the homeowner mentioned above.

15. Develop the short sale package to submit to the lender.

The short sale package consists of the following:

a. Authorization to release loan information
b. The short sale cover letter (which explains the offer)
c. The option contract for purchase and sales agreement
d. The HUD 1
e. The Listing agreement (if listed with a real estate agent)
f. Financial Statement (FDMC form)
g. Hardship Letter
h. Homeowner’s Last 2 paystubs
i. Homeowner’s last 2 bank statements
j. Homeowner’s last 2 year’s tax returns
k. Pre-approval letter for buyer’s financing

16. Get authorization. Fax the authorization to the customer service department to make sure you are authorized to talk to the lender about the account.

17. Order payoffs from the mortgage holders.

18. Fax the short sale package to the lender(s). Send this package to each mortgage holder and then just send the purchase and sales agreements and the HUD 1 to any lien holders.

19. Get assigned. Your short sale package will then be assigned to a loss mitigator (LM) at each lender.

20. Get a BPO. The file will be reviewed by the loss mitigator (LM) and they will order an interior BPO.  A BPO is short for Broker’s Price Opinion. The BPO is a third party report of the value of the property. This value could be determined by either a real estate agent or an appraiser.

21. Interior BPO completed. This is the most crucial part of the entire short sale process. For a short sale offer to be accepted the interior BPO needs to come in near the offer price. The real estate investor should meet the BPO agent to try to validate their offer price. The goal of the interior BPO is to have the agent or appraiser value the property as low as possible. This will allow for the most options for the homeowner and investor. The investor should bring the purchase and sales agreement, the comparables that are near the offer price, the construction repair estimate, the listing history, and the hardship letter written the homeowner who’s trying to sell the house. See “Art of the BPO.”

22. Get key intel. Learn the value of the interior BPO by contacting and asking the loss mitigator “Where did the BPO come in?” You can also call the agent or appraiser who performed the BPO and ask the same question.

24. Begin to clarify your exit strategy. Was the BPO low enough to buy outright or possibly do a resell quickly (quick-turn)? The property must then be re-marketed to find the end buyer if the exit strategy is to resell the property and structure a back-to-back purchase and resale of the property.

25. If an investor is going to buy the property outright they must be able to purchase the property near 65% of the as-is value. If the property cannot be purchased at 65% of the as-is value then the investor should plan on quick-turning the property (buy & resell) for a profit.

26. Pull title with a local title company. If title is not clean you must negotiate additional liens. Lien holder should accept around 10% of their balance. If the property goes to sheriff’s auction lien holder typically receive zero proceeds.

27. Re-market. If the preferred exit strategy is to resell the property and structure a back-to-back purchase and re-sale, then the property must be re-marketed at this stage.

28. The buyer, who is the option holder, has an “equitable interest” in the property through the recorded notice of option. The option holder, or buyer, has the right to list and sell the property for a profit.

29. List it. If the exit strategy is to resell the property, the house should be listed for resale with a real estate agent on the MLS.

30. Send counter offers to each lender. The following is a general outline of what each lender will accept via a short sale. 1st Mortgage (80-100% of the BPO), 2nd Mortgage (5-20% of balance owed), 3rd Mortgage (5-10% of balance owed), Liens (5-10% of balance owed). Counter offers are done via fax. Fax the counter offer to the loss mitigator at the bank. The counter offer should include the Option contract with an adjusted offer price and the HUD 1 along with a cover letter explaining the counter offer.

31. Fax purchase and sales agreement and the HUD 1 with adjusted offer price to lenders. Increase your offer price through negotiations. All counters must be made in writing with purchase and sales agreement as well as the HUD 1. For both the HUD 1 and purchase and sales agreement the price must match. Then fax the purchase and sale and the HUD 1 to the loss mitigator for approval. Counter offers are done via fax. Fax the counter offer to the loss mitigator at the bank. The counter offer should include the option contract with an adjusted offer price and the HUD1 along with a cover letter explaining the counter offer.

32. Negotiate the final purchase price. The final purchase price will depend on the negotiations and the BPO value.

33. Receive approval letters. Approval letters are issued by the loss mitigators when they accept your offer price. The approval letter will explain the closing date, the gross offer price, the net proceeds that the lender will accept, the real estate agent commissions, the acceptable closing costs and any other lender closing instructions. The approval letter will need to be faxed to the title company or closing attorney.

34. Commit to an exit Strategy: Buy – Fix – Sell; Buy – Fix – Rent; back-to-back quick-turn.

35. A back-to-back quick-turn must have an end buyer at a higher price than the short sale price. Tie down an end buyer with a purchase and sales agreement at a higher price than the short sale offer you have made through the option contract.

36. End buyer must schedule a closing date.

37. End buyer receives the “clear to close” from their funding lender.

38. Close both transactions back to back. 1st the investor purchases the property. Then they resell it in the same day. Each transaction must be funded and each closing have it’s own escrow.

39. The title company files the deeds and funds each closing.

40. Property transfers – Two deeds are recorded. The first deed is from the homeowner to the investor (A-B). The second is from the investor to the end buyer (B-C). The loans (previously in foreclosure) are paid off (short sold), mortgages released, the foreclosure is then ceased and real estate agent commissions are paid. The title company will also issue a profit check to the investor for the difference between what they bought the property for and what they sold it for.

So there you have it, that’s the basic outline for the short sale business. Are there twists and turns along the way . . . you bet. One of the things we like about short sales is that each deal is different, and that we are always learning something new. This outline is more than what we had when we started out, so hopefully it will be useful for those of you interested in short sales and looking for some additional direction.

Good Luck!

Josh Cantwell
Strategic Real Estate Coach

About the Author…

Josh Cantwell is a full time real estate investor from Cleveland, Ohio who’s been involved in thousands of foreclosure, pre-foreclosure and short sale transactions over the past 5 years. Josh has been training and teaching apprentice partners since 2004. Josh has vast knowledge and experience in helping coaching clients, mentor students and apprentice partners from across the US in finding, structuring, negotiating and closing short sale transactions for a profit.

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So check this out…

It seems Joe has developed his own special little niche: wholesaling lease options.

And as a result, Joe found himself in a position so many new investors dream of:  His part-time income from wholesaling lease options surpassed his full-time J.O.B. income very quickly.  His $75,000 / year job was actually starting to cost him money. So as you might imagine, he kissed his “real” full-time J.O.B. goodbye within a matter of months and hasn’t looked back since.  All thanks for his quiet little discovery of wholesaling lease options.

So when I reconnected with Joe, I was – as you might imagine – intrigued.  And I thought you might be too.  So here’s a guest post by Joe, describing briefly how it came about, and how it works for him.  Enjoy…

What is “Wholesaling Lease Options”??

By Joe McCall

Let me first tell you a little bit about my background.  A few years ago, I was buying a lot of homes with traditional bank financing.  When the banks started telling me that I couldn’t buy anymore homes, I started buying homes “subject-to” the existing mortgage.  Pretty soon, I owned about 12 homes within 12 months.  (And I was selling all these homes on Lease Options.)

Yes, I owned 12 homes.  I thought I was a successful real estate investor!  But…

I was equity rich and cash poor…can you relate??

I had lots of equity?  OK, actually I thought I had lots of equity… but then the market crashed!  Can anyone relate?

But when you are only making $100 – $200 per month cash flow on each house, that money quickly disappears in vacancies and repairs.  All of the sudden, I found myself with a serious cash flow problem.  I realized I needed to fix my cash flow problem, and fix it quick.  So I started wholesaling houses.

So next I found myself spending thousands and thousands of dollars on marketing – direct mail, Google adwords, websites, signs, etc.  And I was getting a lot of leads, and actually starting to make some good money!

But before too long I started getting very frustrated because I was spending so much money on marketing and throwing away so many leads from sellers who were not motivated! Maybe they didn’t have enough equity.  Or maybe they did have enough equity, but they weren’t willing to share any of it with me!  A lot of my leads weren’t behind on payments. As a textbook wholesaler there was nothing I could do to help them, and I was getting really frustrated!

So there I was. I loved buying properties and I was really good at selling them on lease options.  But that approach left me with a serious cash flow problem.  And while I loved the cash flow that traditional wholesaling was giving me, I was frustrated with the amount of time and money I was putting in marketing for wholesale deals with relatively little to show for it.

That’s when it hit me: “Why not wholesale lease options”?!

Let’s look at some facts…

1) There are TONS of sellers out there who can’t sell their home.  They either have very little equity or they aren’t willing to discount their home to 70% of ARV to compete with the banks.

2) There are TONS of buyers out there who can’t buy a house.

So I thought to myself, why not stop throwing away all those leads and do something with them?  Why can’t I put “Lease Options” and “Wholesaling” together and make the same money with them as I was making with regular wholesaling?!

The Quick and Dirty of Wholesaling Lease Options…

Here are the basic steps:

1) Find a motivated seller who wants to sell their house on a Lease Option…

2) Get the property under an “Option To Lease Option” contract…

3) Find a qualified tenant-buyer who has a good down payment and a good chance to get a mortgage in 6-12 months…

4) Sign the Lease Option paperwork with the Tenant-Buyer…

5) Assign the Lease Option docs back to the seller…

6) Keep the Option Consideration / Deposit and give the Seller the first month’s rent…

7) Put the Tenant-Buyer in a credit repair program with your mortgage broker…

8 ) Deposit your money & move on to the deal!

Real simple… really!  That’s why I love this business so much.  Almost anyone can easily do 1-2 of these deals a month.

Imagine what you could do with an extra $3,000 – $10,000 in “Hip Pocket National Bank” every month!  And if I can do it – anyone can!!!

- Joe McCall
St. Louis, MO

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Yes, hard money lending is less risky than owning real estate!

Think about it.  Done properly, your loan will be secured by real estate worth much more than your loan.

Personally, loans I make are no greater than 60% of the fixed up price of the property. And if there is much fix-up to be done, I escrow the repair funds and provide draws only as the work gets done.

As a hard money lender, you will only loan on property you would not mind purchasing for the loan amount the day you make the loan. That way you will not mind taking over the property if the borrower defaults. Therefore, you will not make loans on property or in areas you do not feel comfortable.

Another risk common in most loans is the credit worthiness of the borrower. As a hard money lender, this is a minor issue. You are primarily looking to the property itself to return your capital and a nice profit in the event of a default.

As a hard money lender you also avoid the risk of tying up your capital for long lengths of time. Since your loans are relatively short duration, you have your capital back for other projects, loans or for your personal use. This allows you to quickly respond to changing economic conditions and neighborhoods.

The higher rates charged on these loans provide an excellent buffer for inflation and rate changes in the market. Want further protection? Rates can even be variable or you can participate in the profits!

If you already understand real estate, hard money loans are really low risk and cannot be beat for the returns on your capital and time.

Due Diligence…

One of the most important things a hard money lender does to be successful is doing good “due diligence.”  That means checking out the collateralizing property and the borrower. Where the conventional lender concentrates on the ability of the borrower to pay back the loan, the hard money lender concentrates on the property and its ability to repay the loan.

The knowledge to do good due diligence and access the viability of the project is why every successful hard money lender has a background in real estate or has someone they can depend on who does.

More important than the property is the neighborhood. The types of people the neighborhood attract will determine the kind of people attracted to the property.

• How much competition is there?
• Are there indications of disposable income and/or credit among the neighbors?
• What is condition of other property?

These questions are important to answer before even considering the property itself.

Next the property is evaluated along with the investor’s background and ability to do what he or she says they can do. Trust but verify.

A good hard money lender wants their borrowers to make money.  That way the lender is sure to get paid and their borrower will come back for another deal…again and again!

Foreclosure and Dealing With Default…

Of the many loans over the years, I have had to do very few foreclosures. Upfront due diligence and proper paperwork go a long way to making a successful loan.  Although foreclosure should be considered the last ditch effort to collect on your loan, you still need to be aware of the requirements in the state you are making your loans.

With a properly structured loan, this concern can be minimized. For example, by keeping the loan-to-value ratio low, other lenders that loan at higher LTVs may cash you out in case of a default. Or the borrower can sell the property at a lower price and still pay you in full.  And if it does go into foreclosure, there is more equity to cover costs of foreclosure, holding and fix-up for subsequent sale. There are other ways to lower your risk as well.

You should be aware of the foreclosure process in the state where you will be lending.

Each state is different, but there are basically two procedures.  All states allow the use of the mortgage.  In these states (referred to as lien-theory states), a court action must be initiated and an approval of the court must be gotten before the actual foreclosure sale.  The process can run from a few months to well over a year.  And you don’t get paid while you wait.

The second type involves the use of the trust deed. In these states (referred to as title-theory states) a non-judicial foreclosure can be done. Usually, these are the quickest–some as quick as three to four weeks of advertising and then the sale.

Be aware that the term “mortgage” is used as a slang term for both kinds of instruments, so don’t automatically assume you know which your state allows.  You will need to be aware of the procedure so you can know how to minimize the time and cost.

However, you should be prepared to handle a default even before foreclosure by a willingness to address the default early. Often the borrower can be convinced to get the project done and continue payments if they are not far behind and have not gotten totally discouraged.

This may also be an opportunity to buy the property from them at your loan balance plus a little to encourage them to deed the property over to you.  This is business, so it does not pay to get mad and belittle them. Besides, if you did your due diligence and structured the loan properly, you should make much more profit on a default than if the loan was paid as agreed.

If profiting from being a hard money lender is something you might seriously consider, you should consider attending my soup-to-nuts online class about How to Become a Hard Money Lender.

Good Investing!

Dyches Boddiford

About Dyches Boddiford…

Dyches Boddiford has been investing in real estate since 1980 and is a national speaker. He speaks from experience in single family homes, owning apartments, mobile homes, buying discount mortgages, hard money loans, developing, including using land trusts and land contracts.  You can get information on his upcoming classes and sign up for his free newsletter www.Assets101.com.

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By: Brad Wozny, Author 6 Figure Syndication Secrets

Why Your Business Will Get Punished If You Don’t Remodel It Now

Did you know that the top 5% of the wealthiest people in the world earn nearly 90% of its income?

That’s because there’s a major problem that plagues every financial freedom-craving, money-making, opportunity seeker out there. It’s something that the economic elite have recognized and conditioned themselves to avoid because this problem follows the other 95% of people around like an unknowing shadow.

Often, the problem is so subtle that the signs are missed, and it causes entrepreneurs to put themselves through an unnecessary hell over and over and over again until one day, they finally get fed up, pack up their bags, and sit on the sidelines of temporary defeat.

What’s even worse is that this problem creates a nasty habit in the human psyche, and the cycle begins to repeat itself. Eventually, they become upset with their work environment, feel that they’re truly not earning enough, and get up the guts to jump back in the game. While they may see a win or two when they first start out, they’ll inevitably spiral downward into a financial abyss of defeat once again.

The problem I’m referring to here has a label called “opportunity.”

How the Top 5% Think Differently

There’s a key difference that separates the top 5% of the investors who earn much more than a full-time income from part-time effort … and those who work hard, spend lots of money on programs, books, and weekend trainings, but end up going nowhere quickly.

Those elite investors who have a rock solid investment business which is sustainable and grows are able to do so because they think strategically and not opportunistically.

The following two lists demonstrate what I mean.  Which one are you?

The Average Opportunistic Investor:

• Deal presents itself, jump right in
• Scattered, has no plan, “Just wants to make money”
• Switches investment strategies and tactics whenever market masses do
• Believes they must equip themselves with every strategy, tactic, software system, and tool available to be successful

The Top 5% Strategic Investor:

• Deal presents itself, pursue only if fits their strategy
• Has specific goals and institutes processes to “grow a business”
• Switches investment strategies and tactics only after their business goals are met and are then reassessed
• Acknowledges and understands that only several strategies, tactics, a few business basics, and key tools are necessary to have a considerable financial impact and build a massive business from home

Putting Property Investing and Home Businesses into Perspective

No matter how you cut it, the opportunity seeker is doomed to complete failure every time. The opportunistic investor is one who is guided by emotions. And friends, making decisions based upon emotions instead of level-headed thinking that looks at the facts and sticks to basic business and investment fundamentals … well, it’s extremely dangerous.

Bottom line? EMOTIONS = COST. And emotions have no place when it comes to investments. Period.

In fact, whenever I’ve worked with my coaching clients, or spoken in the workshops where I’ve taught throughout North America, I drill away at this point very hard.

Unfortunately, all too often, I see the people sitting in their chairs rolling their eyes or politely nodding their heads while they quietly urge me to “move on to the good stuff.”  And for them, the “good stuff” is just strategies and tactics.

I truly hope you’re not one of those people.

I hope that for your own financial sake, you take this particular lesson to heart and see it for what it is.  If you ignore this powerful, yet simple, lesson, it will indeed cost you your business down the line…and perhaps, even your credit, what you have in your bank, and even everything you own. I guarantee it.  So, stay away from this trap.

Here’s How to Change Your Mind…

From now on, think strategically about everything you do in real estate…

If you have been doing so thus far, kudos to you and keep it up. If you haven’t been, change that behavior and mindset this very instant, and look upon yourself as a strategic real estate investor and business owner rather than an opportunity-seeking money-maker.

A key lesson for you is to match up your goals with your needs and locate the one or two (never more than two) strategies that map back to those criteria.

For instance, if you have very little cash in the bank, and your financial goal is to have a six-figure bank account within 12 months, you need to focus your energies on assigning contracts and double-closing properties. You need to avoid deviating from this business strategy whenever the supposed “next great thing” comes along.

But that’s not enough. The second big challenge you need to overcome is how to distinguish your business in order to stand above the competition and survive today’s marketplace.

Surviving Today’s Ultra Competitive Marketplace

The landscape for building a real estate investment business has changed drastically over the past quarter century. The nature of the beast today is that any investor faces the following……

(This article is from Brad’s 77 Page Shock and Awe Report: Real Estate Investing Doctrine for Today’s Crisis which is currently off market)

About Brad Wozny:

Former forest firefighter and Search & Rescue qualified Infantry Reservist Brad Wozny considers the day he stepped off the 80hr/week corporate treadmill to be “One of the BEST days of my life…”   Within his first 93 days as a real estate investor, he pocketed more than 11 times his annual salary, and now enjoys working whenever, wherever, and however he wants.

Brad is also the highly acclaimed author of the “Shock and Awe Doctrine”, a free report outlining his blueprint for building a 6 figure income and a 7 figure net worth through real estate state investing.

Thoughts? Questions? Comment!

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When most people hear the word “bankruptcy,” the first reactions are intimidation and avoidance.  The fact that it’s a legal process involving the Federal government pretty much explains both reactions.

From our informal surveys of many investor groups across the country, most real estate investors react precisely the same way … largely due to a lack of education and experience.

However, there are so many opportunities for real estate investors in the bankruptcy niche, that my partner, Mark Klee, and I have made it our personal specialty to remove the fear commonly associated with bankruptcies.

And when you consider the current economic climate, it’s only common sense to realize that even though the economy is in a recession, the bankruptcy market is exploding … heck, it’s downright ”recession-proof!”

Let’s address the some most common myths and misconceptions…

Myth #1: “Bankruptcies are too legally complicated for the average real estate investor…”

Truth: That’s ridiculous.

Do you need to be familiar with bankruptcy terminology and the general process of how a bankruptcy proceeds?   Sure.  Do you need to understand the basic differences between a Chapter 7 and a Chapter 13?  Of course.  Do you need to know the responsibilities and perspective of the Trustee?  You bet.

But you can easily learn all of these details and more by simply finding the right materials/seminar and being open to grasping a small pool of information.

Myth #2: “You can’t buy a house in a bankruptcy…”

Truth: Hogwash!  Sure you can!  It does require an extra step compared to buying a house that’s not in a bankruptcy, but it’s more than worth your effort.

The fact of the matter is it’s really a pretty simple process to get educated enough about the bankruptcy process and terminology to be able to speak intelligently with sellers.  And the paperwork required to purchase a home in a Chapter 7 or a Chapter 13 is also very basic.

• The magic piece of paper you need from the Trustee in a Chapter 7 case is called a “Notice of Abandonment.”
• If it’s a Chapter 13, you need to file a “Motion for the Sale of Real Estate.”

Myth #3: “Only attorneys can deal with the Bankruptcy Court or a Bankruptcy Trustee…”

Truth: No way!

The Court system is designed for “the people.”  It’s also where many attorneys earn their living.  If you’re filing for bankruptcy, we certainly recommend that you do so through an attorney, but if you’re just trying to purchase a home involved in bankruptcy, you can do it on your own.

Further, the Trustee is an officer of the court whose responsibility is to protect both creditors and debtors.  As a potential purchaser of a property under the control of a Trustee, you can certainly contact that Trustee and walk through the process.

Myth #4: “If there’s any equity in a house, the Court won’t allow me to buy it…”

Truth: Indeed, one of the Court’s responsibilities is to evaluate the debtor’s estate and see how as many creditors as possible can be paid.

But there’s a big difference between a house having enough equity for the Court/Trustee to want to go to the trouble to sell it and a house having enough equity for a real estate investor to find a good deal.

For example:

(a) The Court will have to factor in a Homestead Exemption payment to the debtor (a real estate investor doesn’t have to do that).

(b)  The Court will also have to factor in “yellow pages” prices for any necessary repairs (most investors have less expensive resources).

(c)  The Court will be selling the house through a full-service realtor, who will be charging a 6% or 7% commission, whereas an investor may use a “flat-fee” listing service or want to keep the house as a rental.

(d)  The Court doesn’t have the opportunity to negotiate a “short-sale” with the lender(s) and we all know that investors can make TONS of money in the “short-sale” market.

Myth #5: “There are no pretty houses in bankruptcy…”

Truth: People with nice, expensive houses get in financial trouble just like folks with more modest or “ugly” houses.  In fact, some of the biggest deals Mark and I have done have been with VERY nice houses in VERY nice neighborhoods!  We’ve each had the opportunity to do “short-sale” purchases on homes in the $300,000 – $500,000 range.

Myth #6: “There are no investing opportunities for houses in bankruptcy, because mortgage balances are too high…”

Truth: This issue was dealt with briefly in Myth #4, but there’s more to know.  In fact, because of the circumstances leading most debtors to file bankruptcy, there may be MORE opportunities in bankruptcies than elsewhere.  Five reasons for the many opportunities are:

(a) Most investors are afraid to deal with a bankruptcy or don’t know how. So there is less competition.  Where there’s less competition, there’s more opportunity!

(b) Speaking of opportunity – right now in 2009 the American Bankruptcy Institute projects bankruptcy filings will increase by 30-50% over 2008.  That translates into an estimated 1.4 million new bankruptcy filings in 2009.  In 2008 bankruptcies increased 30% over 2007.  How many niche markets do you know with this kind of year to year growth … or should we say explosion?

(c) We’ve heard all sorts of figures, but (conservatively) 70 – 80% of all Chapter 13 payment plans fail, which leads to extremely motivated sellers!

(d) Many debtors were facing foreclosure when they filed bankruptcy so when they realize they may not make it through the bankruptcy, they often realize they have run out of options and they MUST sell their house to avoid foreclosure.

(e) Mortgage companies that loaned money to these debtors have really been drug through the legal system – foreclosure, bankruptcy, then back to foreclosure. So, the mortgage companies can also be extremely motivated to negotiate a “short-sale” so they don’t end up owning the house via foreclosure.

These are just some of the many myths surrounding bankruptcies and the many unknown opportunities for real estate investors.  A little education can go a long way if you can see the incredible profits available in this niche market!

About Caryn McKinney:

Caryn McKinney partnered with Mark Klee in 2002 to create PostBankruptcyReport.com.  At the request of their subscribers and others, they have now developed quality training materials.  Their simplified and detailed information includes everything you need to know as a real estate investor wanting to purchase homes in the bankruptcy niche market.

Thoughts? Question? Comment!

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One of the questions I have been getting over the last few months concerns being able to sell the Probate property once you have acquired it.

As many of you are experiencing, acquiring them has become much easier lately, but some of you are still hesitant to get started because you are fearful you will not be able to sell them.

Not “knowing” has you stymied.  Now you feel stuck.

Here’s a quick story to make my point…

We have a large 100+ year old oak tree in our back yard that my office window looks out to.

It’s November as I’m writing this.  And now that the vast majority of the 17 gazillion leaves that are normally on the tree have fallen into my backyard, I can watch the two major owners of that tree, two fox squirrels, as they scurry about each day gathering what’s left of food in the tree.

As they leap from branch to branch I have noticed one thing…

Often times they end up at the end of a branch that can be no more than ½ inch in diameter.  As soon as they hit the end, the branch begins to bend and squirrel begins to rapidly head to the ground….. often from 3o to 50 feet in the air.

Don’t miss Mr. Squirrel!….Oops sorry, that hurts doesn’t it? Ouch!

But a strange thing happens while the branch is quickly bending…

…the little squirrel jumps…..catches another scrawny branch and off he goes searching for more food.

So I got to thinkin’…

How did that young squirrel ever get the courage to make his first jump?

Did Momma squirrel stand on the ground promising to catch him on his first attempt if he missed?

Did the squirrel fire department show up with little squirrel nets just in case our young boy misjudged?

I doubt it. What probably happened is he had seen Mom and Dad do it, so he believed he could do it.

“If they can do it, I can do it”

So he jumped and learned his first lesson.

You need to believe before you can achieve!

Belief is the basis for all achievement.

So let’s see now, how does squirrel jumping relate to Probate real estate investing?

Back in 1948, a guy named Claude M. Bristol wrote a book titled, The Magic of Believing.  This book has been reprinted many, many times over the past sixty years and has enriched the lives of millions of people throughout the world.

If I can take the liberty of creating the ultimate Cliff notes version of Mr. Bristol’s hard work, here’s what the book says.

“You create your reality through the power of your beliefs.”

Or, said another way…

“You need to believe it before you achieve it.”

Bristol called this power of belief “a royal secret” that very few will ever comprehend or grasp.  But those who do will achieve beyond their wildest imaginations.

Now to be honest, for many of you, I’m not telling you anything you don’t already know.  Since 1948, hundreds of book has been written claiming the same “secret”.

But for some of you the idea of “jumping” before the results are certain is pretty scary. Not having every “i” dotted and every “t” crossed is thin ice.

How do I know that?

Because I used to be that same way myself. As they say, I had to have all my ducks in a row or I didn’t move.

Then one day, I read a little quote that had unbelievable impact on me. It said,

“People of high activity are blessed by the goddess of good luck”

Read that again…..

“People of high activity are blessed by the goddess of good luck!”

What, no guarantees?  No “safety net”?

Nope, just “get busy” and “get lucky”.

And you know what? It’s 100% true. The busier I am the luckier I get. Amazing!

The profound difference it’s made…

Now to be honest with you, if not for adopting this philosophy…

• I would never have created the “31 Days to Profits in Probate Real Estate” system.

• I would never have headed to the court house back in 1996, if I hadn’t believed there were others like myself who had inherited properties and would love to get rid of them quickly, if only some one would contact them.

• I would never have bought my first house without knowing who I could sell it to, if I hadn’t had the belief before hand that I could do it.

So here’s what I’d like for you to believe for today…

“If others are doing, I can do it.”

Period.  That’s it.  If others are doing it, you can too.

Believe in yourself and magical things will happen. I guarantee it!

Just don’t go crawling out on skinny branches of trees thinking you are soon to be come the famous flying squirrel… all bet’s are off once you and Mr. Earth have a face to face meeting.

And if you would like to have your very own blueprint of my Probate system, I can show anyone how to make money in Probate Real Estate, especially in today’s crushing real estate market.

But enough with the squirrels. I gots to find me a turkey! Haven’t seen them fall out of trees either!

Enjoy your week!

Be Happy, Take Chances, Live Life Fully!

Ron Mead
The Probate Guy

About Ron Mead…

Ron Mead is a “regular guy” real estate investor from Oregon, with a particular focus in the very lucrative probate real estate niche. Ron also teaches others how to make money in Probate Real Estate through his blueprint, “31 Days to Profits in Probate Real Estate” — which costs about the same as a couple of pizzas, leaves no stone unturned, and includes everything necessary to get you started immediately.

To discover more from Ron about “Probate Real Estate: The Untapped Market”, click here…

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Rather than talk about a “real estate” issue this week, per se… I want to address the topic of taking action and getting started – and being accountable.

I’m going to warn you that this might be a little hard, but I’m getting tired of all the “poor me” stuff going on out there. I agree… the economy is less than perfect… the housing market has its challenges… financial institutions are on the fritz…

But, you don’t have to sit there and take it lying down and it doesn’t have to signal the end of your world. So let’s talk about some of the issues we hear all the time and nip them in the bud…

1) “The Market’s In the Toilet. I Can’t Get Into Real Estate Right Now…”

Okay… I DO AGREE that there are some challenges in real estate and I know of more than a handful of SUCCESSFUL investors that are using foreclosure as an exit strategy. Heck, if you’re on a sinking ship holding a bag of lead weights, the smart choice is to toss the bag out and save the ship!

So… if you have properties and you’re in this boat, you’re not alone and you CAN repair your credit. But don’t let that stop you from moving forward.

This is THE TIME TO BUY property. This is THE TIME THAT MILLIONAIRES are made!

People are buying property and people are selling properties. You just have to know the numbers and go with them. The grass is always greener on the other side of the fence until you climb the fence! So… get off the fence and start making some money! (Just do your numbers more conservatively and look for the creative solutions for financing)

2) “The ‘Gurus’ Are Always ‘Selling’ Something”

I gotta be honest here… this one drives me mad!

Everyone is looking for the MAGIC pill, but success and financial security don’t come in a pill. It takes hard work, commitment and dedication.

I LOVE INFORMATION and I buy several things a week. Sometimes, I spend $47 for an ebook. Other times, I spend $4700 for seminar or event. Here’s the difference. I’m looking for ONE SINGLE tip that can make a difference.

For instance, I spent $1997.00 on a downloadable training program. I have only gotten through the first 1/2 of the first session and I’ve already implemented one of the strategies that has made me back the investment. Everything else is gravy and now I have permission to invest in another program!

When I started, I didn’t have 2 nickels to rub together, but I was creative and scrounged up the funds on borrowed money to attend a $4000 workshop. I learned a ton, but I got 2 things in particular that enabled me to make $40,000. But you see… I had to DO SOMETHING in order to make the money.

So… invest in your education and invest wisely… and realize that there’s always going to be something more ESPECIALLY with how fast things are changing with the industry and on the Internet.

3) “I Don’t Have the Time or Money. I Need Something That Will Do It All For Me…”

Folks… ANYONE that makes claims like this to you is lying. Don’t buy their stuff. There is NOTHING that you can do that make you wealthy if you don’t invest time or money.

There are systems and tools that automate a lot of things. There are virtual assistants that can give you back your time and you can essentially run a business on autopilot, but it’s going to cost you some money. So… be prepared to work.

There’s a great book by a guy names Larry Winget. The title is “It’s Called Work for A Reason” and he’s got another titled, “You’re Broke Because You Want to Be” (Or something like that).

This is the harshest pill of them all to swallow because it holds you accountable for your success or failure. There is no course that is going to give you every answer to every question when it comes to real estate. PERIOD. There is always a what if, but here’s what you do… You take action… When you take action, you’ll find out what you need the answers to and then you BUY the information when you need it.

For instance, let’s suppose you find a homeowner willing to sign over the deed, subject to. But, you don’t know what contract or form to use or what paperwork to file or whatnot. You THEN buy the information. This way, you don’t have a bookshelf full of unopened courses on the shelf.

What does this have to do with real estate you ask? It has to do with the fact that I want you to be successful, and to realize that ultimately it all comes down to taking action. I’m with you… I love information, but without action, you’re just a broke, smart person!

And wouldn’t you rather have buckets of cash?

So here’s what to do: Write Down 3 action items that YOU WILL DO this week!

These should be MONEY-GENERATING actions. I’m not talking research a market, set up my entity (though you should do this sooner than later), etc. I’m talking things that can directly put money in your pocket.

THIS is the only way to overcome these objections. You have to put the information you’ve already purchased to good use. If you have $50,000 in courses on your shelf and haven’t done a deal, I am hard pressed to believe that ALL of that information was faulty!

Here are some examples of action steps you can take and I’m even assuming little to no money out of pocket here:

• Talk to 50 sellers (Call Newspaper Ads) – this will help you learn to talk to people and ask the hard questions that take some time to master
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• Distribute 250 Fliers In Your Target Neighborhood – You can print these from your home computer and distribute themselves or have a teenager do it for you.
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• Write 3 Lowball Offers on REOs – Don’t worry about assignability, financing, etc. JUST DO IT!

Heather Seitz

About Heather Seitz…

Heather has an extensive background in sales and marketing and is the author of The Real Estate Rant newsletter and co-author of Guerrilla Marketing for Real Estate. While working in marketing with several startup companies, Heather began studying real estate and evaluating the investment opportunities. Very quickly, she realized the potential of investing in real estate and immediately started buying, fixing and fliping property, which was her main investment strategy for her first 5 years in the business. Since then, she’s also worked with lease options, straight rentals, seller held paper, etc.

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I have to say, I live in one of the toughest states in the country for investing. Our Maryland legislature is constantly passing new laws that have serious effects on the business of real estate investors.

And you know what? It doesn’t matter if you are a landlord or a flipper, new laws are being passed more and more frequently that will directly impact your business.

For example: I had a discussion with a student yesterday, who was discouraged by the recently passed Maryland foreclosure laws. Thanks to the dramatic statutes, his business model has suddenly become obsolete.

I could feel his pain!  He had a great thing going, and he felt like he was just put out of business by the stroke of a bureaucrats’ pen.

Look for the next open door…

Rather than allowing him to be discouraged, I challenged him to look at things differently.

“You know the ins and outs of this law. Do you see a void left by the changes in the law? Perhaps the law closed one door while opening another.”

As it turned out, he was well positioned to make a simple adjustment and go right through one of the doors that the new legislation had opened.

Before our talk, it seemed to him that all the doors were closed, and for a moment that was probably the case.  But with just a moment’s creativity, he was able to find the new opportunities embedded in his current challenge.

I share this with you, because I want you all to think this way:

There are always obstacles, and there are always opportunities…

I’ve been in the wonderful world of real estate over 10 years. If I had kept doing the same things I did when I started, I would have shut my doors after only two years in the business.

But, after many adjustments, here I am, still going strong, even in this new, buyers’ market.

When I look back, my strategies have changed numerous times over the years. A part of me feels like I’ve been unfocused. But the reality of the situation is that I’ve been adjusting.

If you’re going to survive, you too must learn how to adjust.  When the proverbial “cheese” moves, you must learn how to move with it rather than focusing on how wronged you feel that it’s not right where it used to be.

I’m always looking for the void that needs to be filled…

…and when I find it, I carve my niche right there.

Sometimes that void only lasts for a short period of time before the opportunity is gone, but that is how people make money.

It’s one of the best takeaways from Napoleon Hill’s book, Think And Grow Rich: Look for the seed of an equivalent or greater benefit in every difficulty.  Or, put simply, find the void and fill it.

Start by opening your eyes to begin looking for open doors of opportunity that open up in your market.  Then adjust your business to exploit the windows of opportunity from time to time.

Rather than being stopped by difficulty, take each challenge on, cash in on the trend, and start searching for the next void that you can fill. When you do, you’ll be celebrating many new successes.

Steve Cook

About Steve Cook…

Since 1998 Steve Cook has been actively flipping houses as a full time, Baltimore-area real estate investor and has taught thousands of his students how to follow successfully in his footsteps. Steve’s specialty is his “flipping homes 1-2 punch”, a proven system of real estate investing that powerfully combines wholesaling and rehabbing houses.

Also the founder of FlippingHomes.com and author of Wholesaling for Quick Cash and the Real Estate Investors Business Plan, Steve is dedicated to helping others succeed through understanding and applying proven, time-tested principals to flipping real estate.

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We also discussed the comm myth that, for your potential private money lenders, “it’s all about the ROI (return on investment).

Offering too high of returns can hurt your response.

At my first bootcamp on money partners, Joe Arlt shared his experience with some money partners that associated higher returns of 12-15% interest to more risk.

I’ve had the same experience. Some people don’t understand why you are offering such high returns and sometimes we shouldn’t.

You’ve been taught that you need to offer higher returns in order to attract money partners but that’s not true.

The premise behind this belief is that you have to “compete” with the banks by  offering higher – much higher – returns to convince people to invest with you and your company.

Not only do some prospects associate a higher risk because of the return but it raises red flags that it could be a scam.

AARP and state organizations are always offering seminars and programs to teach seniors to be aware of investment advisors offering “high returns with less risk”.

“Isn’t ‘high returns’ supposed to be your money partner sales pitch?”

Then your sales pitch may need an overhaul.

Try a different approach to appeal to their emotional triggers. Offer moderate returns instead of being over the top. And seek out more sophisticated investors.

Find out more at my Private Money Bootcamp. I’ll give you my exact system for using “emotional triggers” to attract money partners. When you use them, ROI becomes secondary.

My best to you,

Matt Scott
PrivateMoneyEvent.com

About Matt Scott:
Matt Scott is the nation’s top-expert on raising funds for real estate ventures. OPM (Other People’s Money) is a key to his success in real estate and he’s discovered that in order to become successful partnering with others, you must have more than one size wrench in your toolbox. By expanding OPM well beyond what anyone else imagined, Matt has created an event based on his success using OPM.

Matt gave up his employee status in May 1994 and is a full-time real estate entrepreneur with a Bachelor Degree in Accounting. His experience in the CPA firm made him realize entrepreneurs and investors are the wealthy not only in assets but in lifestyle and freedom.

Need private money for your real estate deals?  Find out more about Matt’s next Private Money Event…

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