Here's a great article I found from Steve Cook about Evaluating Poperty, hope it helps.
Evaluating Properties for Investment
Points of Information to Know
Here are some things you want to find out about a property over the telephone before you go visit it personally. If you can be low key and friendly, people are more likely to warm up to you, and you will get good information. This is especially important when you talk to the seller who has no agent. It's good to start out "I'm calling about the house you have for sale. Can you tell me about it?" Then let them talk and take notes. You don't necessarily need every single point here, but get enough information that we can decided whether to go after the property or not:
1. Size of lot (in general, for comparison)
2. Size of house (square feet)
3. Number of bedrooms/bathrooms
4. Miscellaneous features (garage, fenced yard, recent improvements, public transportation, fireplace, grocery store nearby, etc.)
5. Price the seller is looking for
These first 5 are general points, and can be found on the MLS, but it's still good to discuss them for the sake of building a connection to the seller. The next 6 points are designed to establish the seller's motivation:
6. Why that price? (Find out how the seller decided on a price: was itscientific, based on knowledge of the market, or did Aunt Emma get theprice in a dream, or did the guy down the street sell his for that much, andthe seller thinks his house is better than the guy's down the street.
7. Why is the house for sale?
8. How long has the house been on the market?
9. How soon does the seller need to close?
10. Does the house have a mortgage? How much? What are monthly payments? What is the interest rate?
Note: People often feel their mortgage is private information; if you are talking to a FSBO, instead of just asking outright how much the mortgage balance is, ask if the mortgage is assumable. If the answer is "yes," say "great, that makes things easier. So that I know how much financing I need to get myself, could you tell me how much I can assume?" If they tell you the loan is not assumable, tell them, "that's OK, my bank will work with me, but I need to know the mortgage balance so I can tell them how much they will need to pay." The idea is to make things more businesslike and less personal. Of course, if the seller is an investor, this is already business, so just ask the question.
11. Is the seller looking for cash at the closing?
12. Will the seller help with financing?
Point 11 helps the client find out if the seller will help finance. Problem is, manysellers don't know what seller financing is, and it's easy to ask in such a way as toconfuse or frighten the seller. Never ask a FSBO seller a question like "so tell me,would you be willing to carry a note and take back financing on this deal?" This will give the seller a vision of the client as a slick operator in a double-breasted
pin-striped suit with a fat cigar driving an Eldorado. It will make the seller nervous, and nervous people don't negotiate well.
Solution: Before talking about seller financing, ask: "Do you know very much about creative financing?"
The seller usually doesn't, but is likely embarrassed to own up to it, and will say "yes." Simply continue: "Tell me what you've heard."
You now have an opportunity to explain: "In accepting creative financing, you greatly increase the number of people interested in buying your house. You make more money in selling your house, and you reduce your income tax liability from the sale. I always work with a title company (lawyer, escrow company) that has been in the business for 15 years, so it's done legally. It's a win-win situation and works very well." Note: do your research to make sure the company or attorney cited really does creative financing.
"Creative financing might include a conventional mortgage, a private lender's mortgage, and a note that the seller holds secured by the home. Most real estate agents don't do creative financing because they don't understand it, most banks don't work with it because they can't make any money at it.
"In essence, I give you some cash for your house, but also make monthly payments to you for a couple of years, then give you all the rest. You collect interest on the amount I'm making payments on, so you make more money, and you get income spread out over a couple of years, so you have less tax.
"Best of all you end up with more money because you get the full amount of the note plus the interest. And it helps me so we can get the deal done quickly"
This is simple information, but very helpful. You certainly are not limited to these 11 points, but if you know most of this
information, we can have a good discussion on the following:
• Is this a good deal, worth pursuing?
• How should you structure an offer?
• If your offer is accepted, how do you obtain either
ownership or control of the property?
• Once you have it, what do you do with it?
How do the pros do it?
Steve Cook did 47 deals in his first year as an investor, starting off broke and unemployed with mediocre credit. It's good to learn from your own mistakes, better from the mistakes of others, but it's best to learn from the success of others. Here's how he did it.
-Steve Cook
__________________
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
Here's a great article I found from Steve Cook about Evaluating Poperty, hope it helps.
Evaluating Properties for Investment
Points of Information to Know
Here are some things you want to find out about a property over the telephone before you go visit it personally. If you can be low key and friendly, people are more likely to warm up to you, and you will get good information. This is especially important when you talk to the seller who has no agent. It's good to start out "I'm calling about the house you have for sale. Can you tell me about it?" Then let them talk and take notes. You don't necessarily need every single point here, but get enough information that we can decided whether to go after the property or not:
1. Size of lot (in general, for comparison)
2. Size of house (square feet)
3. Number of bedrooms/bathrooms
4. Miscellaneous features (garage, fenced yard, recent improvements, public transportation, fireplace, grocery store nearby, etc.)
5. Price the seller is looking for
These first 5 are general points, and can be found on the MLS, but it's still good to discuss them for the sake of building a connection to the seller. The next 6 points are designed to establish the seller's motivation:
6. Why that price? (Find out how the seller decided on a price: was itscientific, based on knowledge of the market, or did Aunt Emma get theprice in a dream, or did the guy down the street sell his for that much, andthe seller thinks his house is better than the guy's down the street.
7. Why is the house for sale?
8. How long has the house been on the market?
9. How soon does the seller need to close?
10. Does the house have a mortgage? How much? What are monthly payments? What is the interest rate?
Note: People often feel their mortgage is private information; if you are talking to a FSBO, instead of just asking outright how much the mortgage balance is, ask if the mortgage is assumable. If the answer is "yes," say "great, that makes things easier. So that I know how much financing I need to get myself, could you tell me how much I can assume?" If they tell you the loan is not assumable, tell them, "that's OK, my bank will work with me, but I need to know the mortgage balance so I can tell them how much they will need to pay." The idea is to make things more businesslike and less personal. Of course, if the seller is an investor, this is already business, so just ask the question.
11. Is the seller looking for cash at the closing?
12. Will the seller help with financing?
Point 11 helps the client find out if the seller will help finance. Problem is, manysellers don't know what seller financing is, and it's easy to ask in such a way as toconfuse or frighten the seller. Never ask a FSBO seller a question like "so tell me,would you be willing to carry a note and take back financing on this deal?" This will give the seller a vision of the client as a slick operator in a double-breasted
pin-striped suit with a fat cigar driving an Eldorado. It will make the seller nervous, and nervous people don't negotiate well.
Solution: Before talking about seller financing, ask: "Do you know very much about creative financing?"
The seller usually doesn't, but is likely embarrassed to own up to it, and will say "yes." Simply continue: "Tell me what you've heard."
You now have an opportunity to explain: "In accepting creative financing, you greatly increase the number of people interested in buying your house. You make more money in selling your house, and you reduce your income tax liability from the sale. I always work with a title company (lawyer, escrow company) that has been in the business for 15 years, so it's done legally. It's a win-win situation and works very well." Note: do your research to make sure the company or attorney cited really does creative financing.
"Creative financing might include a conventional mortgage, a private lender's mortgage, and a note that the seller holds secured by the home. Most real estate agents don't do creative financing because they don't understand it, most banks don't work with it because they can't make any money at it.
"In essence, I give you some cash for your house, but also make monthly payments to you for a couple of years, then give you all the rest. You collect interest on the amount I'm making payments on, so you make more money, and you get income spread out over a couple of years, so you have less tax.
"Best of all you end up with more money because you get the full amount of the note plus the interest. And it helps me so we can get the deal done quickly"
This is simple information, but very helpful. You certainly are not limited to these 11 points, but if you know most of this
information, we can have a good discussion on the following:
• Is this a good deal, worth pursuing?
• How should you structure an offer?
• If your offer is accepted, how do you obtain either
ownership or control of the property?
• Once you have it, what do you do with it?
How do the pros do it?
Steve Cook did 47 deals in his first year as an investor, starting off broke and unemployed with mediocre credit. It's good to learn from your own mistakes, better from the mistakes of others, but it's best to learn from the success of others. Here's how he did it.
-Steve Cook
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125