Susan's Journal of a REI Newbie

Yeah!!! I am so excited. One of the men I met at the auction on Sunday, whom I had called yesterday and had to leave a message for, called me back. We were able to talk for a few minutes and I was able to get more specific information from him including the fact that he is a cash buyer and looks for properties all the time! So, while I only have one out of 4 "buyers" firmed up on my list, I think he's a strong, solid addition.

Well, only 19 more to go, right? No one said this would be easy right? It is great to see things happen though, even if they are just small steps in the right direction.

By the way, for anyone who hasn't used the qualification worksheets before when talking with a potential buyer, they really help you keep on track and make sure you get down all of the important information.

Well, it is a great end to the week. I spoke this morning with an investor who specializes in short sales and has a 79%+ closing ratio on them. He is willing to pay me $1000 for each lead that closes. And, after I show him consistency in the deals he is going to teach me more and let me take on a more active role and get a bigger cut of the profits

Because I have other investors who were willing to do assignments and or bird dog, I wasn't really looking at this one as being as lucrative as I now know it can be in my area. Thankfully I have the advisory line with the Success Academy! I felt a bit overwhelmed at everything coming together this week and not exactly knowing where to go next to find the properties and called them this morning.

So, I am off and running finding short sale candidates and on my way to a million dollars!

Welcome!! i think keeping a journal regularly is a great way to stay accountable and help others too. i am in northeastern Indiana myself. sounds like you are off to a great start. i wish you well.

I know that you are going to be doing deals quickly Sboeve! Keep up the good work - I have no doubts that you are on the right track! You can do this!!!

Thank you Linda and Shawn, both for stopping in, and for your words of encouragement.

Linda, I just read a bit from your journal.... you are one dedicated, determined woman! That is awesome! I wish you the best of luck!

Shawn, Thanks again for your help today!

Susan

Well, yesterday I sent out 60 pre-foreclosure letters. Wow! that was a bit of work. PropTrend did not have up to date info for my areas so I had to go through the Legal News. I made them all look like greeting cards with appropriate brightly colored envelopes and all. I also hand wrote the addresses and used a silver metalic return address label that I made up with my monogram and address. Here's hoping!

I also put out a few bandit signs - only a few because it looked like it was going to rain.

Today I made an appointment with a local real estate agent that has no problem making low offers and working with me. We'll talk tomorrow and go from there. He should be able to handle at least one of my areas.

I also received a call from one of the bandit signs I put out there yesterday. That was quick huh? Unfortunately, I don 't think there is anything I can do to help her. The house was part of her Chpt 7 bankruptcy but she was hoping to find a way to stay in it. I thought maybe I could find an investor to negotiate a low deal with the bank and then they would have an instant tenant, but I guess the foreclosure process has to be complete and she has to be out of the house before the bank will sell it. Pretty disappointing as I really wanted to help her. She got screwed over pretty badly by her ex-fiance.

Well, I found more pre-foreclosures, so I'm working on more letters.... looking forward to matching up sellers and buyers soon!

Well, I think I submitted enough info to my short-sale investor to where I will earn my first $1000. Unfortunately, I won't receive that money until the deal goes through with the short sale. I found the seller by sending out my preforeclosure letters.

Also, have 3 lease option buyers now that I am trying to find properties for. One of them I may have located something for her, but I'm not sure about it being a very good deal. The seller is an investor who had intended to just flip the property. He actually wants more for the property for doing a lease option and wants $30,000 up front???????!!!!!! Strange as it may seem, my buyer is willing to try to come up with that. I'm going to be posting to the forum here in a minute to try to make this deal workable, hopefully someone out there thinks it is.

I need to try to get more buyers today too. I really like the lease option deals better than the assignments, but I have to find properties/sellers that will match up with that... not just buyers.

I have an appointment to look at a home tomorrow morning with the listing agent. I think it could have a lot of potential for an assignment or bird dog with one of my investors.

I have an appointment with a family friend/realtor on Thursday morning who actually seems to know a bit about investing and did not balk at the mention of assignments, so here's hoping Something has to come together soon! I hate thinking about the money I invested in the Success Academy.

Also, I booked my flight to Utah today for the September conference with Dean.

Ahhhh..... so many things going on, it does get a little overwhelming. But, I know this is going to work!

Update on short sale deal. It looks like the seller is going to try a loan mod one more time, then the short sale investor will follow up with him in about another week and see. Could still go through, or not.

Update on Lease Option / Land Contract deal. Seller was thinking they were going to get a conventional offer which would give him all of his money to be able to move on to the next property, so he will take that if he does. Otherwise, will call me back on Friday to work out the Land Contract deal.

Update on home I looked at yesterday. I think I could get a low enough price to make it work, converting it back into a single family residence and then flipping it. But, it needs a lot of work... I mean a lot. So, I contacted one of my investors and he said he'll take a look at the numbers and comps and potentially partner with me on it. Or at the very least I'll get 1.5% of the sale price as a finders fee. We'll have to wait and see on that one too.

I met with a realtor this morning who will provide me with listings in a few cities. She also referred me to another realtor who will work with me on another few cities. I don't know. It seems like my best option right now is to find homes not on the MLS.... She wants proof of funds or a pre-approval. I know we can get proof of funds, but I have to look into that more.

I feel like I am working all the time but nothing is quite falling into place perfectly like I thought it would. I imagined having my first $15,000+ deal done by now.

Well, I am going to the REI Club meeting near me tonight, so we'll see what happens next.

I haven't been as good about getting on here and updating my journal. But I have definitely still been working! I have an ad in a newspaper running locally now. I have sent out a postcard mailing to 525+ residents in my sub. I have been going out with a Great real estate agent team. They are open and on board! It took a little while to find, but wow what a difference when you do find someone who is ambitious and out to make money themselves!

I ordered the set for life program and have started watching the Edge DVD's as well as created a core website and a squeeze page. I still want to find a way to customize them more, but I haven't had a chance to watch all of the classroom video's on how to do that. I did take a look at the cash buyers in 2 of my counties and was stunned to find that there were over 13000!!!! That is crazy! NO shortage of buyers.

My challenge still remains in finding motivated sellers. I am not receiving the responses like I think I should. I've decided that while I will still continue trying to market to them, I will have to try to put in some low offers on homes that are listed on the MLS and try to work something that way too.

I thought I had my first deal in the bag, I have an investor and a land contract end buyer all ready to go. But the seller (another investor it turns out) is holding on to a ridiculously high selling price. So, I walked. I'll be back out today looking for another house for my LC buyer as well as houses to partner with an investor/flipper.

Back to the Edge DVD's. I really want to do what Rina is doing long term. I like how she has her cash flow properties but then also flips and also will wholesale when it works out too. I don't like the idea of putting all my eggs in one basket at this point. I also want to get good at lease options because I see that as a way to help so many people in my area. I just have to get my foot in the door. I know that when I find the right sellers it will all fall into place. I will not give up on this!

Daily I try to learn something new and pursue what I do know. My husband can't believe the time and energy I am putting into this with nothing to show yet. But, I truly believe and I keep telling him, that this will start falling into place. There is no way it can't. I will succeed. I will become a millionaire and have the security and freedom that I want so badly for my family.

I love reading how other people are succeeding and also seeing their challenges and how they overcome. It makes me feel that I am not alone in my dedication and beliefs and therefore cannot be crazy

Well, enough rambling for one day. I'm going to try to start writing daily. I'm out to find a deal!

WEll, 2 days in a row. I'm off to a good start in trying to write daily.

I have been running around like a chicken with my head cut off! I am trying to learn the SFL program, go out and look at houses, watch the Edge 10 dvd's, research values of homes and determine what I want to offer on them. Work with a buyer in finding a house that we can put an offer on for her. (the first one did not get accepted, the second one decided not to sell on short sale under advice of her attorney) I have now spent weeks with this poor woman trying to get something to fall into place. (I use the word "fall" loosely! I will force it into place if I have to!!!) I can not spend weeks on the verge of my first deal!!!

Anyway, I just got finished reading Tammy (Zion Properties) journal and I totally felt like I could relate on so many levels. I am going to have to remember to keep up with her journal.

I talked to the Success Academy today and was told to just start making the offers... to use Private or Hard Money if I had to for the REO's but to just start making the offers. Unfortunately, most of the properties around me are in short sale or REO state.

I had wanted to start sending letters to people listed on Zillow for more than 60 days and submit them with an "offer" letter to see how that would work, but the day is going quickly and I can't get much more time in tonight because we are going to get tires for my husbands toy (a jeep). He complains that I spend too much time doing this REI stuff so every once in a while I have to take a night off. I guess that just means that I will be putting off the housework tomorrow and will be spending the day up here in my office.

It's actually hard for me to step away from all of this because I really do love it and I want so badly to succeed at this. And, I know that given the effort I am putting in I will, but it needs to be continual until I get to the point where I can have systems in place to do some of the work for me.

I did receive confirmation today from my REA that there is nothing illegal, immoral, unethical, or otherwise wrong about what we all are trying to do here. Not that I didn't already know that, but when you get told by multiple agents (before her) that that is the case, it just makes you feel weird. She had explained everything to her broker who just matter of factly told her that what I was doing was pretty common and that he had no problem with it! Excellent to hear that!!!

Well, done for the day. Tomorrow I have my son's football game but the rest of the day will be this.

Ok, so I forgot to write yesterday. It was a crazy day! I had my first response to my newspaper ad and they are willing to let me take over the payments on their house! I can't believe it! I know for sure that a lease option on this home would give me at least #250 cash flow per month. It is a good day! I finally feel like everything I am doing is paying off.

Now, if I can just figure out how to put it all together by tomorrow night when I go over and show him his options! I will be calling the Success Academy first thing tomorrow.

I also have to put an offer in on a house for my land contract buyer. I am getting tired of deals falling through for her.... let's hope this one works.

If I do a subject to, does that count as a deal I wonder? and then doing a lease option to an end buyer, would that be a second one? Or is anything involving the same property the same deal? (I need to get my 5 in)

I prepared about 75 preforeclosure postcards between yesterday and today, so they will be going out in tomorrow's mail. I already had them printed up by VistaPrint without a web address on them, so I had to print out labels with my squeeze page on them and stick them on each one. I am hoping that that will generate more leads than I have been getting.

On a personal note, my son, Aidan, one his football game yesterday 30 - 12 I think. He loves it and surprisingly enough I am starting to enjoy football, well watching him anyway. He plays, kicker, tailback, safety and one other position.... Heh, I'm doing pretty good considering a week ago was the first football game I'd ever watched!

Well, going back downstairs to watch more of disc 3, Edge 10. I love these DVD's because I am very nervous about the subject to deal I have working, but I learn so much and feel so much more confident after watching the DVD's. Thank you Dean and everyone else who is on there!!!

things are looking good!! if you find out how those deals count with the Success Academy, please post it. thanks. great news about your son. how old is he? the games are always a lot more enjoyable when your kid is playing. my kids played soccer and i miss it so much now that they are grown. have you read Randy428's journal? he is a master at subject to's.

Hey, just wanted to shoot you a line to say keep up the good work. I'm in the success academy and I'm trying to balance a long distance relationship, long hours at work, and getting this going! I've posted some ads on facebook and craigslist and gotten a few buyers already. Still need to build my power team, get business cards, etc.

Hope to hear more about your successes...

Jason

for pointing me in the direction of Randy's journal. I am going to go read it. And, if I find out about the deals, I will post it

Unfortunately, it looks like the property I am going to look at is not going to work out for a subject to. I did more research and the property is only worth about $150,000 and he owes $224,000. That didn't scare me at first because I think the lease payment could be high enough to cover the mtg pymt, but when I called the success academy that pointed out that with 4 other houses on the same street listed for around $150,000 it was highly unlikely that someone would sign up for the $224,000 price even at the end of 5 years.

Also, I started looking at what kind of an interest rate he would have to have to have his payments so low on a mortgage of that size and it is just not adding up, unless he has an ARM that is going to adjust soon.... Ugh, looking worse and worse.

Well, I'm going to go over and look at the house and just be honest with him. Maybe he wouldn't mind paying me $1000 to find someone to rent it from him. I know I could do that.

On a brighter note, well somewhat anyway, I am going to be showing a house today to a lease option buyer. Unfortunately there is not enough room in this deal for me to sandwich myself into it, but again, I'm hoping to get an assignment fee for giving the deal to them. And, I guess I shouldn't really count my chickens, because I have yet to successfully get the property locked up (it is through an agent) but my agent does think that what I am proposing is a good offer.

And tomorrow I will be putting in an offer on another house for my L/C buyer. Keep praying on that one!!!

BTW, Linda, my middle son is 9 so this is his first year in tackle football. I have 2 other boys as well, 16 and 7.

for the words of encouragement. And, good luck to you too! The Success Academy is definitely a big help. They will help you put things together in the right order.

Well, I just got back from the realtor's office. 2 offers submitted. One a cash offer which I will assign to an investor I am working with and who will in turn sell on land contract to one of my buyers. This is the 3rd offer on their behalf, and we're going to hope this one works out!!!

The other offer was for a lease option on behalf of a tenant buyer I received through my craigslist ghost ad. There is no room in the deal for me to sandwich myself in, so I told them my fee to assign the lease option contract to them would be $1000.

I did not offer to take over the home from the seller I met with last night. He has an arm right now which will begin adjusting in 2012 which explains the low payments. I did offer to find him a lease option buyer for the home for a referral fee or property management fee of $1200. Again, with him being so upside down in the house it did not make sense for me to get in the middle. He will be letting me know if he wants me to do that for him. I also gave him a cash offer verbally which I know was too low, but what are you going to do. And, I told him that if he wanted to start missing payments I could put him in contact with someone for a short sale offer, but that those were really his only options right now.

It was not as hard to talk to all the people as I was anticipating

When I met with my REA's today, I brought up having them send me the expired listings and me paying them $500/deal for anything that goes through off of it. They were excited! I can't believe I was so worried about bringing it up with them. My first three attempts at REA's were so negative and against anything remotely creative, I was assuming they would balk at it too. Nope! Just goes to show you the difference when you find the right team!

Well, I think I'm going to work on pulling out buyer from the SFL system and sending them a mailing to see if they are interested in me sending them properties. You can never have too big a buyers list right?

i have been studying co-op L/O's (wholesaling L/O's), which you can read about in my journal. that is what you are doing and i think you can make more money at it. the 2 people i know that are doing it charge 3-3.5% up front from the tenant buyer and that is their assignment fee. the seller doesn't pay them anything, but they don't really get much money from you for an option fee. you're helping them out and i can tell you that no property management company is going to give them any kind of a fee to get a T/B in their property. it's great if you can get a little money from the seller, but a good selling point is that it costs the seller nothing for you do help them. you are doing a great job!

Wow! Another day is over. I received 3 or 4 calls today from motivated sellers. I couldn't believe it. On top of that I was making offers and searching for other properties as backups when those fall through. It seems they always do. I also talked to one of my investors today and asked if he'd be willing to loan me money to do flips and or buy/refi/rent. He agreed if the deal looked right! Yeah! All you have to do is ask I guess! So, now I have a private $ lender.

Tomorrow I will be back out looking at more properties.

One of the calls I got today was for someone wanting to sell a property they have in Detroit. He's owned it for 23 years and his mother was living there, but she died a year ago. He was going to sell it to a neighbor across the street but something fell through with that and so he'd just like to get rid of it. He hasn't paid the taxes this year, but other than that there is nothing owing on it. I'd love to get it for the tax amount $700-$800 but I don't know if he'd go that low. The problem lies in what to do with it since it is in Detroit. Stuff is not moving there right now. It needs some work, nothing terrible from the sound of it, but still. I could probably find someone to rent it for $600/month, but the likelihood of them stopping to pay at some point would be very high. I could maybe do a L/C. I don't know. I'm having a hard time passing up a property, but I'm not sure if it will make sense in the long run.

I think tomorrow I will try to find and talk to a property management company who is familiar with the area and see what they say. And, I might try to talk to one of my investors who has purchase properties in Detroit before. I definitely need to go into this one with eyes open.

Linda, thanks again for your input. I know I am probably not charging enough for my lease options, but I'm working with a realtor on these, so I don't have a lot of room in them to do anything. Hopefully I will start getting some sellers who have not hooked up with Realtors yet.

I will call the one seller back tomorrow and talk to him about getting the fee from the buyer instead of him. That might make things work out better.

So many things to do, so little time!!!!

but I guess that is the beauty of our work. I'm going to sign on a deal this morning and look at another house

My first should be complete within a matter of days now!!! Yeah!!!

And, it was the least likely in my opinion to be accepted out of the 15 I submitted! I can't believe it. Unfortunately, I just brought the value in my neighborhood down tremendously!!! It is a short sale, so the bank has to accept as well, but I'm keeping my fingers crossed. Details are that the home was worth $300,000 + when we purchased in 2004, then of course the market tanked and the current value is about $185,000. I submitted the offer for $125,000 and they took it! I don't think there is anything that needs to be done to the house at all! Rent is $1500/month so that would cashflow very well and my neighbor who is having to sell his house wants to purchase the one I just locked up. He will literally just move across the street.

I sent in 15 offers this week. I'm trying to put in more, but my agents can't seem to keep up. I like them a lot, but I'm wondering if I need to start using other ones as well. I mean they are a team of 2.... shouldn't they be able to submit 25 - 30 a week? I could do that in a day!!! Hmm that just gave me an idea. Maybe I'll use one of the offers they wrote up and emailed to me, modify it and send it back to them for each that I want to submit. That will cut their work down. Then all they'll have to do is send me the rest of the adenddums to sign.

I have also had 4 sellers call me this week to buy their properties. Things are really picking up. Now if I can just get my agents to get the CMA's back to me for those, I can call them. 1 is actually a 3 unit rental in Royal Oak, MI which is a very hot area. Investors want to buy there, homeowner's want to live or rent there. I still have to analyze that one though.

I have been a bit overwhelmed lately, that is why I haven't been writing regularly. Still trying to find a home for my land contract buyer. I feel really bad for her. I had a for sure deal. Then my investor drove by, realized he didn't like the neighbors and wouldn't buy the house. Even though he would only have had $25,000 into it after she gave him her down payment of $25,000 and her first years l/c payments of $10,000 (this was to be done at close). He would have sold it to her for $90,000 so when all is said and done he would have received 165% back on his invested money. It's crazy! I wish I had the money to buy it for her.... that is a deal that could not have gone bad!

Well, it lead me to the conclusion that I need to find more buyer interested in being landlords. I primarily have buyers who want to flip. So, I'm going to work on that today. I just sent out another 50 postcards to pre-foreclosures. Now I have to develop a marketing campaign for buyers. I'm hoping it is pretty easy with SFL.

I received an email on Tuesday from a Buyer I had contacted via letter. He was on the SFL buyer's list for one of my counties. I'm very excited about that. I haven't talked to him yet, but the interest is there on his part, so how can it go wrong?

I also had my first seller accept a "creative financing" offer. Thank you Randy!!! Talking to him and Julie last week was sooooo awesome. They are real people with real stories of inspiration. Now, the problem is that I don't really think that anyone will buy on his terms. (the sellers) He is unrealistic about the price of his house and what he wants for a monthly payment, but I feel like I have at least found a way to approach it that people will listen too. Forget about the "lease option" wording in my area. I say I or they will take over his payments until they can purchase. It is the same dang thing, but "lease Option" is taboo in these parts.

I can not tell you how great it was to talk to all of the other DG / Success Academy members that went to Utah for the conference. Everyone is trying things, every one a little different, you learn so much and are encouraged so much. Anyone who has the chance should definitely go.

Also, I took a $1000 finders fee today for a condo for the Land Contract buyer I have mentioned oh so many times before in here. She went in full price for a condo with a cash offer. We are waiting to hear back from the bank. It was countered within a couple of hours, but they wanted a quicker closing date which she could not do. I am praying and keeping my fingers and toes crossed!!!

I also submitted 12 offers to my REA to type up the paperwork and send for me. Some of the houses were REALLY bad. I'm hoping I get at least one accepted! I did go in with really low offers, but I can back them all up by the ARV and the repairs entailed. Some of the houses have actually been on the market for up to 5 years!!! can you imagine?? One house had no ceiling in the family room... what are people thinking??

I had 5 things to start on immediately when I got home from Utah and the conference and out of the 5 I have worked on 4. They aren't done, but I have taken steps on them. Actually, I could kind of count the 5th as well as started because part of it overlaps with another. I have until tomorrow... so I guess it will be a late night.

Five things to do this week:
* Find 10 Rental Property Buyers
* Find more Private Money
* Write Up a Business Plan
* Develop a Stronger Knowledge of Adjacent Areas (new one each week)
* 25 Offers Per Week

I have been sick this week, so it has been hard to keep going till all hours, but I am starting to feel a little better today. Time to push it into high gear!

Also, I have been getting calls regularly from my letters/postcards now. It has really helped I think to keep sending them to the same people over and over. They become a familiar reminder that they need to take action to get out of their situation.

Well, writing all of this has been a reminder to me of my goals for the week, so I am going to get out there and start searching Craigs List for Rental Property Buyers.

And to all a good night......

way to go! you are doing a great job. glad you are feeling better. i never heard anything about a conference in Utah, but glad you got to go. sounds like it was great. congrats on the finders fee.

I love that you are my ( and so many other people's ) cheerleader! And, you always have great advice too!

The conference in Utah was part of the Success Academy package I purchased. I do not have a coach coming out but I got to go out there for 2 days of non-stop training and got to meet Randy and Dean among other DG Family members and Success Academy students.

Hello Susan!

I have enjoyed reading and learning from your journal. You are very encouraging! I do have a question. When you make or send in your offers to your real estate agents, do you send an earnest money check with each offer? I am also a newbie with real estate investing and the Success Academy and my coach told me to go out and make lots of offers with the real estate agents on my power team, but they expect to receive an earnest money check of at least $500 per offer. Since I am not able to do that right now, I am a bit stuck... but still wiggling free! (SMILE) I am searching for the for sale by owner signs, but most of them in this area have turned into realtor signs because they were not able to sell the property themselves. I am very curious about how you are able to make so many multiple offers and not mention earnest money. Is there a secret way to do this without earnest money, which I have not found out about yet? I look forward to hearing from you and God bless you for sharing your strategies with us!

Thank You,

JoyMD