How to Find, Negotiate & Buy Real Estate on Terms Super Simple Strategies for Really Advanced, i.e. “Smart”, Investors

The Business of Real Estate Investing We Buy Houses And .. Apartments, Condos, Buildings, etc. ALL CASH ON TERMS

Techniques Simplified All Cash Cash at Closing Fast Biggest Discount On Terms Payments over Time Slower Highest Price

1 Type of Cash Deal 4 Main Sources of Funding Traditional Financing Hard Money Private Money

3 Types of Terms Deals Buying “Subject to” Buying on “Lease-Option” Buying with “Owner Financing”

Choosing Your Offer Strategy Faster Close Subject to All Cash Lowest Equity Highest Equity Lease-Option Owner Financing Slower Close

Offer Graph Highest Offer Price Cash Fast Now Cash Over Time Lowest Offer Price

Cash vs. Terms Comparison All Cash, Fast Close Terms Offer, Payments ARV :: $200,000 Fix :: $15,000 Rent :: $1,350 Offer :: 60% - 65% AIS Exit :: Flip/Hold ARV :: $200,000 Fix :: $15,000 Rent :: $1,350 Offer :: 85% - 105% AIS Exit :: Hold/Sell Terms

Terms Deals May Confuse Your Logic Zero % Interest, Principle Only Payments Interest Is Paid On Loans You Are Not Borrowing Money You Are Structuring “Terms” Solving a Seller Need

Understanding The Seller Terms Analysis No Cash, All Terms Some Cash, Some Terms Importance Order Price Cash Flow Cash Today Seller Needs/Wants No Cash Today Price Is Important & Cash Flow Is Desired Importance Order Cash Today Price Cash Flow Seller Needs Cash Today for Something Is Willing To Take Payments

Example Terms #1 ARV :: $200,000 Fix :: $5,000 Rents :: $1,350/m Seller Needs $0k You Need $5,000 You Want $10k

Example Terms #1 (cont.) ARV :: $200,000 Cash Needed :: $15,000 from PL OFFER :: $205,000 $1000/mo for 10 years Balance in 10 yrs. :: $85,000 to Seller PLUS Private Note :: $15,000 to Private Lender $187.50/m $262.50/m in Cash Flow Total Pay-off (est.) :: $100,000

Example Terms #1 (cont.) Total Profits Cash Today :: $10,000 Resell for :: $220,000 Pay-off of :: $100,000 Cash Today :: $10,000 Cash Flow :: $22,500 (over 10 yrs) Cash Profit :: $120,000 (cash in future) TOTAL PROFITS :: $152,500

Example Terms #2 ARV :: $200,000 Fix :: $15,000 Rents :: $1,350/m Seller Needs $20k You Need $15,000 You Want $10k

Example Terms #2 (cont.) ARV :: $200,000 Cash Needed :: $50,000 from PL OFFER :: $185,000, $20k at Close, $1000/mo for 10 years Balance in 10 yrs. :: $45,000 to Seller PLUS Private Note :: $45,000 to Private Lender $375/m to PL $75/m in Cash Flow Total Pay-off (est.) :: $90,000

Example Terms #1 (cont.) Total Profits Cash Today :: $10,000 Resell for :: $220,000 Pay-off of :: $90,000 Cash Today :: $10,000 Cash Flow :: $9,000 (over 10 yrs) Cash Profit :: $130,000 (cash in future) TOTAL PROFITS :: $149,000

Getting Offers Accepted Discovering the Need Pre-Meeting Discovery Addresses: Cash Today to Seller Cash Flow to Seller Cash Today to You Cash Flow to You Future Profits to Both

Who Accepts These Offers? Sellers That Want Their Price Sellers With High Equity Sellers That Want To Do NO Repairs Sellers That Want To Create Goodwill Sellers That Don’t Want To Pay Brokers

How Do I Find These Sellers? Direct Mail Marketing Targeted Lists Buyers Market Goldmine Huge Response Potential

10 Seller Leads in 3 Days… Email 7/1/2009 “Rob- My direct mail has hit and I have been inundated with roughly 80 responses- a great thing. I also have had roughly 10 people looking to sell. I am going to call them in the morning and find out if I can get them onboard. Thanks for your help.” J. Berkenkamp, Real Estate Investor

Meeting/Talking With Sellers Prepare Know Your Numbers Have Multiple Options Available Don’t Get Caught Off Guard Some Will, Some Won’t Exhibit Confidence Offer Education

Prepare for the Meeting Resources Zillow.com Eppraisal.com Melissadata.com Ziply.com MLS Access

The Initial Conversation & Scripts When do they want to sell? What do they think the house would appraise for? How much do they owe or is it free and clear? Do they have a place to move already? Has it been listed on the market? What are they asking? What condition is the property in?

19 Leads in 4 Days… Email 7/13/2009 “Things are progressing. I got a very good response to the mailing I did to owners that have high equity in their properties. I sent out 687 post cards and have received 19 positive responses.” Mike Smith, Real Estate Investor

Advanced Buying Technique Substitution of Collateral You can pay “full price” Need to be able to move the note Called Substitution of Collateral Without it you need an equity spread

Overcoming Common Objections I want money now I need cash I want interest on my “loan” I’ll think about it Need to talk to _____________ I’m not ready yet What if you don’t pay I won’t live that long I’ll list or rent it myself

Proven Selling Techniques Sell Wholesale Sell On Terms Premium Price Based on Condition Premium Cash Flow Based on Market Rent/Financing Evaluate the Length of the Deal Protection Against Market Declines

Exit Strategy Planning Buy On Terms :: Sell On Terms Create Deals With Wrap Financing Pay 0% Interest, Collect 8% Interest, CF Spread Build Fast Equity with Principle Only Payments 3 year, 5 year, 7 year, 10 year terms to balloon Does NOT rely on appreciation Perfect in a Buyers Market

Closing Terms Deals Investor Friendly Title Companies Small First in Front of Owner Financing Low Closing Costs Easy to Coordinate