The guys at TWBS (ThinkBigWorkSmall.com) are at it again with another great video. Did you hear about the latest housing news? Its positive again. And, as much as I’d like to say, I know why – I really don’t know precisely why people are buying. Could be the ultra-low rates, could be that buyers now believe that price have hit rock bottom, heck – maybe its just penned up demand finally breaking loose. Whatever the case positive housing news continues in May 2012.
As an aside, one day, (I’m dreaming here) – I want to be like the guys at TWBS. Love their style, love their delivery, love the production. Do you love video production? Are you a master with Final Cut Pro and After Effects? If so, get in touch with me. Maybe we can make some cool vidoes together. Email me asap if you are interested
For March & April of 2012 news homes sales rose 3.3% and in many markets, prices are rising – something I’ve been reposting for several months now.
Check out this video from Frank and Brian
Well, here’s another update on this fast moving house before and after; Rolling Thunder. My little version of Flip This House. In this 2.5 minute episode, I talk about what I think I do better than any other rehabber in the country – “sizzle with the steak.” Ever been to Ruth’s Chris steak house? You know when they bring that $40.00 steak to your table and its still sizzling? Ever wonder why they do that?
I’ll tell you why – BECAUSE IT COSTS $40 FRIGGIN’ DOLLARS! The sizzle is like that added bonus that makes you feel like your getting something really special.
Well, that’s how I do my rehabs. Lots of sizzle. And THAT is why my houses sell for more dollars and in less time than most other houses in the neighborhood.
Check out this video below where I show you what I’m doing with the basement.
Here’s the dealio; real estate success = real estate leads. Plan and simple. Without leads, you don’t have business, and without business, you’re S-O-L my friends. So how do you market yourself, your service, and your business to ensure you get leads out the wazoo?
You’ve heard of the shotgun approach where you buy a list of zip codes and blast out mailing to everyone on the list. You target everyone at once with a mass communication that doesn’t speak to anyone specific, and then you cross your fingers and toes and talk to the Man upstairs in hopes of getting a silly amount of leads. Problem is, even with God on your side this is a crap shoot. Sure, you can get leads this way over time, but you’ll spend mad mad money in the process.
At the end of the day, this will probably give you more indigestion and sleepless nights that you need. So, how’s about taking a targeted approach?
Psychology 101: We respond most to people who listen to us and understand us. So, what does that tell you? Hello, McFly?! Tailor your list and cater your message to specific groups like soon-to-be divorcees, or dead people, or people behind on house payment, or people over leveraged. These lists aren’t hard to get, and they’re well worth a few dolla bills, y’all. Let me say it again – tailor your message; that’s the key. You’re recipients need to know that you understand what they’re going through, and they need to feel confident that you are the man (or woman) who can help alleviate their homeowner stress.
TIP: No self-respecting real estate investor send just one letter to his target motivated seller. Do that – and you’re wasting money. Be smart, Mr. Propeller Cap, send multiple letters to each recipient. This takes time money and discipline – but I’m here to tell you, multiple mailings work like a pimp on payday!
Once you get into the groove like Madonna (she’s become quite the MILF, huh?), you’ll get a feel for a typical response rate, you can track your success and you can test new mail messages versus old mail messages. This is critical! Split test everything. ITS EASY! Just create two different mail campaigns. Expect about 3%-5% response rate, and track how many direct mail pieces (for example) you sent out, how many bites you got as a result, how long it took for you to get responses, say of the week you get most responses, and how many deals you actually closed. Use those numbers as a standard starting point going forward as you tweak and hone your message.
So what have we learned here people? Unless you’re a socially inept delinquent who has no friends, you know that people want to feel heard, listened to and understood. Your approach to real estate investment marketing should be no different.
TIP: Want 100 Sure Fire Ways to Find Insanely Motivated Sellers….just put your info in the box below and and I’ll send you my list for free!
Test and hone your message, put yourself in the sellers’ shoes, don’t get all long and flowery – and talk directly to your targeted audience. I’d go all-in like Steve Danneman and bet that you’ll get a far better response and more qualified leads.
We’ll write more on this later, ‘gators.
Bank of America is changing its short sale process, effective April 14th, so if you’ve submitted a short sale, heads up! You’ll have to complete a list of tasks to ensure your file isn’t stamped with a big, fat DENIED. Here’s what you’ve gotta do:
- Submit short sale offer
- Upload the offer documents
- Upload the supporting documents in Equator
You can access these documents at the Bank of America Short Sale Resource Center, but beware, the changes are so major that Equator will be down for up to 12 hours overnight starting April 13th. Speaking of Equator (and no I’m not talking about the line of latitude that burns hotter than a butt with hemorrhoids), all internal communications and transactions will take place here, however the duration of these transactions will be reduced to five days (from 14 days). Buyers will now only receive two counteroffers, and they will receive responses within three days. Talk about cracking the whip!
For more info, check out BOA’s webinar on April 19 at 4pm EST.
I have to laugh sometimes about this business. For the last eight years, its been a roller coaster of feast or famine. The deals are either so plentiful dropping like bikini tops at spring break, or their so few they seem like a skinny chick at a Jenny Craig meeting. Its a wave, people. And right now, we’re in the dessert waiting for a drop of water.
But guess what? There are people out there EVERY day buying deals. Did ya hear me? The deals are out there. Watch my two minute video below where to find out who’s getting all the deals!
Saying debt can be a good thing is like saying you have “good” cancer, or at least it seems.
You’re probably painfully aware of what bad debt is, but it’s not often you hear about “good” debt, probably because people avoid the word like the names of STDs, afraid if they say it, they’ll get it. As a devotee’ of my dear friend and Mentor; Steve Cook, I became a debt vigilante a few years ago. Believe it or not, I decided not to use any of my own money for deals. The results: well they speak for themselves don’t they? Investing with no debt can be done. You just have to ask yourself (especially if you’re a newbie real estate investor) how much of the deal are you willing to give up for NOT having to put up any of your own ching.
Personally, my wife and I have erased a ton of debt in just a couple years. Nothing (well with the exception of one or two things) feels more amazing.
Ever heard of leveraged debt, debt used to your advantage to make money? Some consider positive cash flow earned from leveraged debt, “good debt”. The Gurus love to talk about “good debt.” These are the same people cursed with Star Jones syndrome who say they are comfortable being grotesquely “big boned” (then they drop 367 lbs.), and these are the same people who tell you to go out and buy rentals using more-and-more debt that you damn well know you couldn’t possibly pay off if you got even one vacancy. You gotta ask yourself – would you rather be ridin’ high debt free or rollin’ in the dough with debt up to your silver dollar areolas? I believe it was the great prophet P-Diddy who said, “mo’ money, mo’ problems”…do you agree?
Wanna be like the Donald? Buy yourself a couple mansions, a bunch of buildings, a trophy wife or two….oh wait, you don’t have the money for that? Well here’s how you get the money! Marketing, marketing, marketing! Its all about “the brand” people. From Coke, to Apple, to Trump, to yes, even Dr Dre (love those headphones) – you gotta have a brand. Did you know that creepy “Skeletor” of a thing, Bethenny Frankel sold her little brand for $50MIL. It wasn’t just a Cosmo mix, it was a Skinny Girl Cosmo Mix. Holy crap – if that ain’t marketing, I don’t know what is.
Here’s your 5 CRITICAL steps for marketing success:
Unless you wore a helmet on the bus to school, the first rule is – know your market – should be obvious, right? Study your marketplace and what other investors, homeowners, buyers, and sellers are doing. Invest in your own backyard. Its probably what you know best, right? Not every vacant house is a winner. Don’t waste your time on “stupid,” houses. Too small, too main-drag, too ugly, too fringe does not work in this market.
Create an effective marketing campaign that brands you as a stand-out to drive leads and a marketing plan to secure long-term success. Remember, the typical response rate is 25 to 1, so don’t piss and moan when you get less than a handful of prospects.
I realize some of you may not have a lot of money to spend on marketing so here’s what: Spend what you can but spend it consistently. Pick a marketing niche’ and ride that ‘muv till the wheels fall off. If it’s working. Don’t change it. If you’re not getting the response you’d like – start testing new messages. Tweak. Don’t overhaul. And most of all, BE DIFFERENT!
Here’s a critical error most real estate committed by newbies: making business cards, establishing an LLC, and designing logos is NOT results. Its just action. There’s a big difference between action and results. Action doesn’t fatten your bank account, results do!
Finally, you may be all wide-eyed and keyed up for the potential deal like Justin when he saw Janet’s boob at Super Bowl, but keep the seller’s vision in mind, and look at the home from their perspective. Always remember however, that you set the home price, not the seller.
Make offers, people. No offers = no deals.
Mel Brooks once said, “As Long as the World is Spinning, We’re Gonna Be Dizzy & We’re Gonna Make Mistakes.” True dat Mel, but why not avoid these mistakes altogether.
Damn – I’ll sleep better tonight knowing that this is done! The motion to fine 5 major banks was filed today in Federal Court. Its safe to let your kids out again! You’ll recall that fine was a staggering $25 billion!
Can we all get on with our lives now knowing that all those buyers who were swindled into buying a house are now gonna get an average of about $350-1500.00 bucks BUT NOT the house. That’s gone. But, here’s an election year little gift for ya!
And, I’m gonna take an informal poll. Please email with the names of anyone you knew who got swindled by one of the banks mentioned below. I’ve bought hundreds of houses – so tell me, how do two people walk into a Realtors office, pick out a house, fall in love – then get swindled into signing 50 pages of fine ink, like some slight of hand by David Copperfield the banker! No one reads the fine ink….but your supposed to.
The Bitch-slapped banks include: Bank of America Corp., JPMorgan Chase & Co., CitiCorp, Well Fargo & bringing up (or taking it up the rear) is Ally Financial.
Here’s where it gets juicy: The banks will provide principal relief and borrower assistance totaling $17 billion. In addition, roughly $5 billion of the settlement will be paid in fines, while $3 billion will be used to help refinancing for homeowners who owe more than their homes are worth. The deal also includes new mortgage-servicing standards.
Instead of studying opera, I should have chosen law. Obama and and all his lawyers are splitting $5 billion large. I should have paid more attention Dr. Gordon’s music class.
Finally, does anyone think the Fed Gov is done? Really? Ever heard of big tobacco? Yeah, they got slapped and even though they’re looking like Courtney Love after a rough night, you can bet those lawyers out trollin’ will be coming back for sloppy seconds.
Bloomberg: “Foreclosure Settlement With Banks Filed in Federal Court”
WSJ: “Foreclosure Pact Alleges a Pattern of Malfeasance”
Courant: “Giant Mortgage Settlement Filed in Court”
New York Times: “What Homeowners Need Now”
I loved this report on CNBC last week. Now, if you think I’m going to go with the conventional wisdom of the Oracle of Omaha, or the Real Estate Goddess, you’re dead wrong. If you read the MSN article below featuring Vena, you come away thinking that all humans are cut out to be landlords. If you listen closely to Warren Buffet, he says (paraphrasing), “I’d buy up a couple hundred thousand houses if it were practical to do so”
Its true, rates are low and houses seem cheap but, landlording is friggin’ tough! Especially in towns like Baltimore where landlords are hated. And managing rentals just might be one of the worst jobs in all the job-universe. Tenants & Toilets is not for everyone. Period!
So, tread lightly my friends. Internalize this right now: You can not make a living owning 20 rentals with leverage. If you have to pay the bank, the property manager and save dollars for the inevitable vacancy or leaky roof, there ain’t a whole lot left over for you. If however you could own all 20 of the same properties with no bank financing, now – you are truly makin’ bacon. Go ahead, let it sink in. It ain’t glamorous, but I’ll be damned if it’s not the truth.
Ask yourself this…faced with a 3-month vacancy, would you sleep better at night if you owed the bank this month’s mortgage on the rental, or if you owed yourself this month’s mortgage on the rental? This country is littered with the carcasses of dead investors who thought they would strike it rich as landlords making $300/mo cashflow.
So Vena Jones-Cox, I respectfully disagree.
Read MSNBC’s article with Vena: “Investors Buying Homes by the Dozen.”
Watch the interview with Warren Buffett “Warren Buffett Wants Houses”