STEAL THAT PROPERTY Saul Larner, Ph.D., LL.M., AARE

My Goal Today is for you to: Learn to be thorough, complete and successful in your negotiations. Learn the secrets of real estate, borrowing and leverage which most people don’t know Learn to carry an aura of professionalism in all of your successful dealings. Learn the secrets and how the secrets work.

While achieving success: You will enjoy every minute of your independence, and the busy activity and actions from buyers and sellers seeking you out. You won’t have to defend your low offer and you will tie the seller down.

The Five Principles 1. Every seller or property owner knows the value, but may take less. 2. There are two kinds of creditors 3. Never concern yourself with what the other person makes. 4. When you sign your name on a piece of paper, someone else pays it back. 5. Land Contract—The most valuable instrument in your tool box.

The Six Secrets 1. Seller is no longer emotionally involved, but he may be emotional. (Condo projects offer great opportunity). 2. No prospective buyer can visualize anything less than 100 percent complete. (It shows also that the seller is dealing out of weakness).

Rule 3 3. Get permission from the owner to meet with the lender. (Now the pressure of the seller is off. More importantly, the buyer can speak differently with the lender when the seller is not present).

Rule 4 A lender can offer you ALL OF THE INGREDIENTS to structure a workable deal without jeopardizing the bank’s position. A. A six month moratorium on payments. B. Higher interest rate on loan in exchange for other variables.

Secret 4 continued C. “Cosmetic Job” D. Home Improvement Loan E. Second mortgage to enhance leverage in buying the property. F. Unsecured credit line. G. Extend balloon payment. H. Lower or re-write principal amount.

Secret 5 Bankers have the same personality in making loans as they do in working out default difficulties. If they want to make the loan or work out foreclosure difficulties, they will.

Secret 6 Before structuring and committing yourself to a purchase, plan carefully what you will do with the property after you own it. To what extent will you make improvements and at what points will you refinance and sell it? Analyze ALL profit potentials.

Important Strategies A. Shared Appreciation Mortgages (SAM) B. Land Contract C. Buy down the points D. Keep the contract simple (Letter of Intent). E. Leave things for the attorney to correct.

Power Phrase The best presentation is less than 10% effective as asking the right questions.

When meeting with the client My role is to meet the financial goals of each family member with few regrets later.

I started with my own family A father is not to lean on, but to make leaning unnecessary.

With the major league players GREED MUST BE ACCOMPANIED BY HONESTY

Tools of the Trade 1. Lifting Clause 2. Option to Purchase 3. Seller to Carry AITD 4. No acceleration clause 5. Assume other obligations of Seller 6. Subject to Seller selling paper. 7. Blanket mtg. with second mtg. crank and one year release clause.

More Tools of the Trade 8. Other than cash as down payment. 9. Paper out offer 10.Paper out offer with carry-back note to be sold for cash. 11. Subordination Clause 12. Second Mortgage Crank. 13. Refurbishing fee and vacancy reserve.

More tools of the trade 14. Seller will arrange financing so there is no escape clause. 15. Down payment with created paper.

When developing your script. 1. This is the most important step in the purchase, but should not be confused with negotiations. Although the seller may begin to mention numbers, you should not make any commitments or indicate a willingness to buy or reveal any part of your forthcoming offer.

Three Ways to Pay Taxes NOW LATER NEVER

When developing your script #2 However, if things fall into place to your liking, go ahead and make an offer on the spot.

When developing your Script #3 At all moments,you should try to build trust with the seller. Yes, it is you who is analyzing the seller through all stages, but he is analyzing you as well. HE BECOMES MORE AND MORE FLEXIBLE AS HE SEES HE CAN TRUST YOU. ONLY THEN WILL HE CONSIDER CREATIVE FINANCING.

What to do if the seller balks. 1. Assure him of your serious intent and remind him that any buyer who is about to invest such a large sum of money really needs to know as much about the property as possible.

What to do if the seller balks #2 If he is a “don’t wanter”, carefully interpret his fears and try to relieve them. Remember your role as a problem solver and show genuine interest in being of help within the limits of your own resources and powers, so everyone can benefit. Ask the seller if the answers to the questions might dissuade you.

The questions for the Seller The questions fall into four catgegories: 1. Actual Questions (The Sale) 2. Seller’s plans following the sale. 3. Current Financing 4. Future Financing You can think of many variations to the questions.