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

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

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

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

5. 3 Types of Terms Deals Buying “Subject to” Buying on “Lease-Option”
Buying with “Owner Financing”

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

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

8. 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

9. 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

10. 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

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

12. 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

13. 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

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

15. 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

16. 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

17. 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

18. 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

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

20. 10 Seller Leads in 3 Days…
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

21. 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

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

23. 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?

24. 19 Leads in 4 Days…
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

25. 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

26. 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

27. 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

28. 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

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