Real Estate Investing Tips - Use A Second Mortgage For Lower Downpayment On Investment Property

Second mortgages are a great way to start investing in real estate because they will have lower down payment requirements for:

A commercial second mortgage, which is usually obtained from a mortgage company instead of a bank can be used for investing in real estate or financing part of a primary residence.

A second mortgage, because it will be in a junior position to the first mortgage and so will have a slightly higher interest rate as well as a lower term; ten or fifteen years rather than a twenty five or thirty year term.

Mortgage companies will lend on a loan-to-value ratio to reduce their risk. They’ll lend you about 80% of the value of the sum total of the first and second mortgages so if you default they can sell off a property quickly even below fair market value and get the full 100% of their money back.

You may be able to simply assume an existing second mortgage as part of your new financing for the property. If the seller is holding a second mortgage you may be able to assume it by just asking the mortgage company. You would need to qualify for the particular mortgage of coarse. If you don’t qualify for the existing second mortgage that is already on the property the mortgage company may very well offer you a new second mortgage of your own.

Here’ a creative idea you can use with a willing and motivated seller:

Even if you can’t get the second mortgage you may still buy the property “subject to” the second mortgage. In this way the seller stays on the second mortgage agreement as guarantor but you are making the payments. Sounds like a risk for the sellers but there is actually little to no risk because if you were to default on payments they would simply get the property back and would be responsible for no more payments than when they first owned the home.

keywords: Real Estate Investing Tips: Second Mortgage

Purchasing a property “subject to” isn’t the same as using the clause to attempt to circumvent the non-assumability of a first mortgage.

Use this second mortgage strategy as a great way to start investing in real estate.

Is there Greener Grass to Real Estate Investing?

This may come as a surprise to you but trust me when I tell you the grass is not always greener on the other side.

What kind of oddball do you think I am here making this type of statement as a real estate investing lesson?

Well, for me this lesson was one of those rather costly, hard learned lessons that I’m sharing with you. This is one of the most basic fundamentals when it comes to investing in real estate that far too many people overlook when on the lookout for their first property or gaining more properties. They believe they’d be better off investing in an area other than their own backyard.

They see all the stories of where someone picked up a property cheap and they think, “I wish I could, I would have if I were in an area like that, blah, blah, blah.” Or they think of the area that has seen double-digit appreciation rates and think “if I was only in an area like that.” The fact is whether you’re in a red-hot market or a slowing market, there’s a way for you to make money investing in real estate. It starts by just realizing that you’ve got opportunity in your own backyard to make this a successful business.

Here’s why:

When you’re thinking of investing in real estate, you’re looking for sellers that have some underlying situation that’s causing them to want to sell. Usually, these sellers have a problem of some sort that’s causing some undue pressure. We call these ‘Motivated Sellers’ and if you’re not attracting motivated seller then you’re wasting your time.

And there’s not an area in the country without motivated sellers!

The problem with thinking the grass is greener in another market keeps you from looking in your own backyard for the next profitable deal.

Even though, this sounds basic, it’s easy to fall into this line of thinking. At one point, I was convinced that I could work another market that was nearly 4 hours from where I lived. I’ve got to confess that this was a costly lesson.

While you can make money in another market, I was stepping over dollars in my own backyard to pick up dimes in a completely different market. See I tried building my business wide instead of building it deep in my own market. Lesson Learned.

See, I want you to focus on your own market, instead of making the mistake of spreading yourself too thin. Once I realized this lesson, I refocused my business and started building it like a business instead of a mom and pop shop. See, so many people are opportunist and just look for wherever they could make a potential buck. Just realize you know more about what’s going on in your own backyard than anywhere else. Also, it’s imperative that you work to build key relationships with people in your business. This was a major problem when attempting to do deals in too many markets - you’ve got to find new contractors, new realtors, new closing agents, and new investors to flip to. It’s like basically starting from scratch in every aspect.

So, the key lesson is to stick to your own backyard and master the system before you even think of looking outside your area.

About the Author

Derek Pierce is a full time real estate investor and business owner, who, now reveals how he went from corporate slave to Real Estate Success in with his Free E- Coaching Program. To sign up for the Free Program, go to http://www.thereisecrets.com

Real Estate Investing Spy Secrets

I bet your wasting a lot of time and money on your real estate advertising that could be better utilized. What if I told you of a way to know exactly how to spy to see what you’re competitors are doing so you can outshine them every day of the week? What if I told you there was a way that you could position yourself totally different from all the other ‘We Buy Houses’ crap that you see out there?

See, here’s the deal: when I think of these guys, the first thing that pops in my mind is the investor handyman with a beat up crappy truck with all types of garbage in the back. No offense if this is you, it just happens to not be what I want for my life or my business.

These guys are in love with their work and most don’t have the slightest clue how to work a deal creatively. So what makes you different from all the other goons out there? I’ll tell you in just a moment, but first I have an exercise for you.

If you already have a property that you have control of or that you’re trying to sell, then call up every “We Buy Houses” ad that you see. Now, I want you to play dumb (I know that’s not to hard for some but amuse yourself- OK?) when you talk to the “We Buy Houses” guys. Act like a homeowner would that is trying to sell their house. Don’t let them in on your little experiment, just do it and play the role of the motivated seller- OK?

Also, call any of the people that are offering a Free Report on “How to sell your house”.

Now, I want you to document everything they did during the appointment. Document if they were late, if they didn’t show up, or if they didn’t even call. For those that are offering a Free Report, document everything they send you, the time period it takes for them to send you and any follow up they have with you. Keep up with all this in a binder, under each company’s information that you called.

I can here you screaming through the internet right now - “Wow, Derek, that sure sounds like a lot of busy work. Why in the heck do you want me to do all that nonsense?”

You’ll thank me when you’ve completed this little task because it’s one of the most down and dirty tricks that I’ll ever teach you. As a matter of fact, I don’t know anyone that has this clear type instruction for you to attack and spy on your market’s competitors.

So, what’s the freakin use?

Ok, Sherlock. First you’ve got to realize that many of the “real deal” investors in this business are not going to share with you openly what they know. They want to protect their market and many will flat out lie to you or will fabricate the truth just to keep you out of their market. Well, this little technique will show you exactly what their marketing approach is and how they conduct business with their entire marketing campaign at your fingertips.

Imagine knowing how to tap into their mindset knowing exactly what approach they take to real estate deal making.

What would you give to know exactly what your soon to be competition is doing?

Well, now you can because I’ve given you the exact steps to go about spying on other real estate investors. That’s powerful to be able to know exactly what your competitors are doing in terms of their marketing approach. As a matter of fact, you can sit back and watch what they do for several months to see who remains in business and who doesn’t.

Now, I’ve done this little task and the results are simply amazing.

Here’s what you’ll find: That most investors that are pouring in their hard earned money for advertising do one thing: Nothing.

They’ll fail to call you back, they’ll fail to keep the appointment, or they’ll be late.

Here’s what else you’ll notice:

They always take phone calls during meeting with the sellers; they fail to build any type of rapport, simply going in for the kill by immediately talking about the numbers. They appear more desperate than a high school boy on prom night.

As you sit back watching this dog and pony show, ask yourself if you’d be willing to sell your home to this idiot or would you be skeptical. You will quickly realize there is not as much competition as you initially thought. The only competition you have is yourself.

Let me ask you this, if your competition was doing this, then how hard do you believe it would be to smoke them, leaving them eating your dust?

The fact is that it’s the same way in all businesses. You only have a handful that seems to use their brain. You’ve probably been to numerous businesses or restaurants in the past few months or even weeks where you noticed the service wasn’t up to par. The same is true with investors as most piddle, waste time, and appear to be un-caring about the seller’s situation. Therefore, they don’t do deals, which in turn makes it easy for you to outshine the others.

Take time out to spy on your competitors and you’ll see exactly how you can bring more to the market than any one else.

About the Author

Derek Pierce, full time Real Estate Investor, shows
you the exact strategies to his success in his Free Book: “How I
Went From Corporate Guinea Pig To Real Estate Success”. Get
your copy and Real Estate Investing Tips by going to http://www.thereisecrets.com

Beginning Real Estate Investing - “Subject To…” Investing

This is another in a continuing series of articles on beginning real estate investing. Today, we?ll tackle the basics of ?subject to?? investing. There are a lot of questions those who are just beginning real estate investing often have about ?subject to?? investing, and this article should answer many of your fundamental questions.

First of all, it?s important for those who are beginning real estate investing to know what ?Subject To?? investing is. ?Subject to?? means that you buy a property ?subject to?? the existing financing staying in place in the seller?s name.

Say that you get a call from a motivated seller. He tells you he must sell his house immediately. He also says he owes around $100,000 on his mortgage, his payments are around $900 per month, including principal, interest, and taxes. Even though you are only just beginning real estate investing, you know the estimated market value of his home is about $130,000.

You head on over to his home. It doesn?t matter in the least that you are just beginning real estate investing. After all, he needs to sell now. You tell him that you will take over his mortgage payments, and keep on making them until you get the house sold. You don?t know how long it will take, but the mortgage will stay in his name until you get it sold.

He asks if you can give him some cash to help him move. Even someone who is beginning real estate investing can negotiate an item like this. After going back and forth a couple of times, the two of you agree on $3,000, which you will pay to him the day he moves out.

Now, what have you got? A house with an estimated value of $130,000 that you will wind up paying about $103,000 for, and a payment of $900 per month. Since you are just beginning real estate investing, there is something you must do right away? market for a tenant buyer.

So, you place an ad in your local paper, and put up a few signs in Mr. Seller?s neighborhood: ?Lease to Own ? Bruised Credit OK.? Your phone starts ringing and you find a young couple with good jobs and good income who went through a brief period of financial trouble a year or two ago. You explain to them that even though you are just beginning real estate investing, you think you can help them.

You offer to lease them the home with a 12 month option to buy it. Their monthly lease payment to you will be $1,200, and their purchase price will be $135,000. They will also give you a non-refundable option fee of $5,000. It doesn?t matter that you are only beginning real estate investing- you can certainly see what you have just accomplished.

You?ve got monthly positive cash flow of $300 - the difference between the $900 you are paying and the $1,200 the young couple is paying you. You have also put $2,000 cash into your pocket right now ? the difference between the $3,000 cash you gave the seller and the $5,000 cash the young couple gave you. When the young couple exercises their option to buy, you will also pocket $32,000 - the difference between your purchase price of $103,000 and the price they pay you, $135,000. Not too bad for someone beginning real estate investing!

We?ve barely scratched the surface of ?subject to?? investing, but I think you?ve got the idea. I?ve got more great ideas for you at Beginning Real Estate Investing.

Now, go make more offers!

Real Estate Investing Tips - 5 Things You Need to Know

Real Estate Investing is simple, but not necessarily easy! You see, people can complicate anything! It’s like telling someone how to drive a car. It’s not complicated at all. Just open the door. Sit down. Turn the car on and put it into drive. But, people always make things harder than they need to be; They start asking thinks like ‘which door should I open - the left or the right?’ or ‘Do I unlock it with a key or click the button’ and on and on we go. Twenty minutes later, we’ve still not even been able to get into the car.

I liked that analogy because it applies to real estate. There are really 5 things you need to know - or steps - when it comes to real estate.

Here are the 5 Real Estate Investing Tips you need to know!

Tip #1: Find a Motivated Seller
Stop wasting your time trying to make deals out of deals that aren’t there. Sellers are motivated to sell a piece of real estate by only 3 things:

1. Change in personal situation. Sellers become very motivated to sell their properties when things in their personal lives change and they can no longer afford the home or there is an emotional reason for selling. Personal reasons for selling a home are: job loss, divorce, relocation, illness, etc.
2. Economic conditions.
3. Property conditions

Tip #2: Evaluate the Deal
Once you’ve found a motivated seller, it’s time to decide if the deal is going to work. Real estate investing comes down to the numbers. There are 5 factors to consider in order to decide whether or not to invest in a property.

1. Location. If real estate is located in an area that is full of abandoned properties and rundown houses, the score will be lower than if the house was located in a prime location, close to all of the area amenities.
2. Condition. The better the condition of the property, the higher the score will be. For instance, a brand new home is going to have a substantially higher score than a property that’s rundown and needs major repairs.
3. Price. The lower the price, the better! The goal is to purchase real estate for as little as possible. 30% or more below market value will score much higher than when the seller is asking for market value or better.

4. Financing. Real estate comes down to the numbers. If the seller is willing to give you financing with flexible terms and low interest rates and you don’t have to come out with any of your own money, it’s better than when the seller needs all cash up front.
5. Seller’s Motivation. On a scale of 1 to 10, how motivated is the seller to sell his/her property? The more urgent their situation is, the higher the motivation score.

Tip #3: Write an Offer
After you’ve done your homework and looked at the numbers, it’s time to put the pen to the paper. But before you write your offer, make sure you have 2 exit strategies in place. This way, you’re not stuck holding onto a piece of real estate that you can’t rent or sell. Many people are losing their shirts in real estate because they jumped in on pre-construction and hoped to “get rich quick”. Consider submitting 3 contracts on the same property with different prices and terms and let the seller decide what works best for his/her situation. For instance, you may have a wholesale offer at 50% of market value, a seller financed alternative that you might use for a rental, and a lease option which you might do a sandwich lease-option.

Tip #4: Line Up Your Financing
Once the seller has agreed to one of your offers, it’s time to get the deal closed. If you’re wholesaling the property, find your investor-buyer. If you’re going to close on it yourself, line up the financing via a conventional lender, hard money lender or line of credit. Also start looking for a tenant or tenant-buyer if you’re goal is to build a long term real estate portfolio. The key is to get your financing lined up in accordance to your exit strategy and begin moving immediately.

Tip #5: Follow Through with Your Plan
Many real estate investors purchase a piece of property with one plan, buy-fix-sell. They write the offer based on a certain sale price and with a specific plan to renovate. Then, once they close on the home, they over-improve and try to sell it for more than it’s worth or use a hard money lender and then decide they want to rent it.

If you follow these steps and remember the tips, then you will make money in real estate. If you deviate from the plan, then your chances of running into problems increase. You wind up with the wrong type of financing, you can’t find tenants, the holding costs eat the profits, etc.

Remember, real estate investing is like driving a car. It’s simple. Get in, turn the key, put it in drive, and go!

Real Estate Investing Spy Secrets

I bet your wasting a lot of time and money on your real estate advertising that could be better utilized. What if I told you of a way to know exactly how to spy to see what you’re competitors are doing so you can outshine them every day of the week? What if I told you there was a way that you could position yourself totally different from all the other ‘We Buy Houses’ crap that you see out there?

See, here’s the deal: when I think of these guys, the first thing that pops in my mind is the investor handyman with a beat up crappy truck with all types of garbage in the back. No offense if this is you, it just happens to not be what I want for my life or my business.

These guys are in love with their work and most don’t have the slightest clue how to work a deal creatively. So what makes you different from all the other goons out there? I’ll tell you in just a moment, but first I have an exercise for you.

If you already have a property that you have control of or that you’re trying to sell, then call up every “We Buy Houses” ad that you see. Now, I want you to play dumb (I know that’s not to hard for some but amuse yourself- OK?) when you talk to the “We Buy Houses” guys. Act like a homeowner would that is trying to sell their house. Don’t let them in on your little experiment, just do it and play the role of the motivated seller- OK?

Also, call any of the people that are offering a Free Report on “How to sell your house”.

Now, I want you to document everything they did during the appointment. Document if they were late, if they didn’t show up, or if they didn’t even call. For those that are offering a Free Report, document everything they send you, the time period it takes for them to send you and any follow up they have with you. Keep up with all this in a binder, under each company’s information that you called.

I can here you screaming through the internet right now - “Wow, Derek, that sure sounds like a lot of busy work. Why in the heck do you want me to do all that nonsense?”

You’ll thank me when you’ve completed this little task because it’s one of the most down and dirty tricks that I’ll ever teach you. As a matter of fact, I don’t know anyone that has this clear type instruction for you to attack and spy on your market’s competitors.

So, what’s the freakin use?

Ok, Sherlock. First you’ve got to realize that many of the “real deal” investors in this business are not going to share with you openly what they know. They want to protect their market and many will flat out lie to you or will fabricate the truth just to keep you out of their market. Well, this little technique will show you exactly what their marketing approach is and how they conduct business with their entire marketing campaign at your fingertips.

Imagine knowing how to tap into their mindset knowing exactly what approach they take to real estate deal making.

What would you give to know exactly what your soon to be competition is doing?

Well, now you can because I’ve given you the exact steps to go about spying on other real estate investors. That’s powerful to be able to know exactly what your competitors are doing in terms of their marketing approach. As a matter of fact, you can sit back and watch what they do for several months to see who remains in business and who doesn’t.

Now, I’ve done this little task and the results are simply amazing.

Here’s what you’ll find: That most investors that are pouring in their hard earned money for advertising do one thing: Nothing.

They’ll fail to call you back, they’ll fail to keep the appointment, or they’ll be late.

Here’s what else you’ll notice:

They always take phone calls during meeting with the sellers; they fail to build any type of rapport, simply going in for the kill by immediately talking about the numbers. They appear more desperate than a high school boy on prom night.

As you sit back watching this dog and pony show, ask yourself if you’d be willing to sell your home to this idiot or would you be skeptical. You will quickly realize there is not as much competition as you initially thought. The only competition you have is yourself.

Let me ask you this, if your competition was doing this, then how hard do you believe it would be to smoke them, leaving them eating your dust?

The fact is that it’s the same way in all businesses. You only have a handful that seems to use their brain. You’ve probably been to numerous businesses or restaurants in the past few months or even weeks where you noticed the service wasn’t up to par. The same is true with investors as most piddle, waste time, and appear to be un-caring about the seller’s situation. Therefore, they don’t do deals, which in turn makes it easy for you to outshine the others.

Take time out to spy on your competitors and you’ll see exactly how you can bring more to the market than any one else.

About the Author

Derek Pierce, full time Real Estate Investor, shows
you the exact strategies to his success in his Free Book: “How I
Went From Corporate Guinea Pig To Real Estate Success”. Get
your copy and Real Estate Investing Tips by going to http://www.thereisecrets.com

Realtors Can Help You With Your Real Estate Investing

You can’t build a successful, long term real estate investing business without the help of realtors (real estate agents).

The challenge is that many realtors have little real estate investing knowledge. What’s worse, even though every real estate agent will work for your money, few are willing go that extra mile to really help you grow your real estate investing business. But there are three simple secrets to getting a great real estate agent really working for you:

1) Use a top ?Sales? agent with a proven track record to sell your investment property. Don’t take on a “listing” agent.
A real estate agent can help you with real estate investing by advertising, marketing, finding buyers for your real estate, and doing virtually all of the paperwork. To make this process work for you, be upfront with your realtor about your real estate investing goals. And only use a proven realtor with real estate investing experience.

2) Position a Realtor as a Buyer?s Representative
Have another real estate agent act as your ?Buyer’s Agent? to find property on your behalf. Be sure you outline the sorts of properties you are looking for, then your real estate agent will contact you when they find this type of property. This saves you time and allows you to focus on the business of real estate investing rather than on property-hunting.

3) ?Pocket? Listings.
A real estate agent can explode your real estate investing business profits by turning you onto investment opportunities before they go public. Before properties are listed on the Multiple Listing Service (MLS), your realtor can alert you a juicy real estate deal from a motivated seller when it becomes available! This is perhaps the most profitable reason why you should build great relationship with real estate agents. All the best!

Yours for Massive Profits & a Rewarding Life!

Cheers,
Mary Wozny http://www.millionaireriches.com
“Helping 100,000 Women & Families Achieve Financial Freedom!”
To order ?How To Build Your Family?s Million Dollar Real Estate Empire??, and add $40,000 to your bank account or become a millionaire this year, click here now.

Real Estate Investing Tips - 5 Things You Need to Know

Real Estate Investing is simple, but not necessarily easy! You see, people can complicate anything! It’s like telling someone how to drive a car. It’s not complicated at all. Just open the door. Sit down. Turn the car on and put it into drive. But, people always make things harder than they need to be; They start asking thinks like ‘which door should I open - the left or the right?’ or ‘Do I unlock it with a key or click the button’ and on and on we go. Twenty minutes later, we’ve still not even been able to get into the car.

I liked that analogy because it applies to real estate. There are really 5 things you need to know - or steps - when it comes to real estate.

Here are the 5 Real Estate Investing Tips you need to know!

Tip #1: Find a Motivated Seller
Stop wasting your time trying to make deals out of deals that aren’t there. Sellers are motivated to sell a piece of real estate by only 3 things:

1. Change in personal situation. Sellers become very motivated to sell their properties when things in their personal lives change and they can no longer afford the home or there is an emotional reason for selling. Personal reasons for selling a home are: job loss, divorce, relocation, illness, etc.
2. Economic conditions.
3. Property conditions

Tip #2: Evaluate the Deal
Once you’ve found a motivated seller, it’s time to decide if the deal is going to work. Real estate investing comes down to the numbers. There are 5 factors to consider in order to decide whether or not to invest in a property.

1. Location. If real estate is located in an area that is full of abandoned properties and rundown houses, the score will be lower than if the house was located in a prime location, close to all of the area amenities.
2. Condition. The better the condition of the property, the higher the score will be. For instance, a brand new home is going to have a substantially higher score than a property that’s rundown and needs major repairs.
3. Price. The lower the price, the better! The goal is to purchase real estate for as little as possible. 30% or more below market value will score much higher than when the seller is asking for market value or better.

4. Financing. Real estate comes down to the numbers. If the seller is willing to give you financing with flexible terms and low interest rates and you don’t have to come out with any of your own money, it’s better than when the seller needs all cash up front.
5. Seller’s Motivation. On a scale of 1 to 10, how motivated is the seller to sell his/her property? The more urgent their situation is, the higher the motivation score.

Tip #3: Write an Offer
After you’ve done your homework and looked at the numbers, it’s time to put the pen to the paper. But before you write your offer, make sure you have 2 exit strategies in place. This way, you’re not stuck holding onto a piece of real estate that you can’t rent or sell. Many people are losing their shirts in real estate because they jumped in on pre-construction and hoped to “get rich quick”. Consider submitting 3 contracts on the same property with different prices and terms and let the seller decide what works best for his/her situation. For instance, you may have a wholesale offer at 50% of market value, a seller financed alternative that you might use for a rental, and a lease option which you might do a sandwich lease-option.

Tip #4: Line Up Your Financing
Once the seller has agreed to one of your offers, it’s time to get the deal closed. If you’re wholesaling the property, find your investor-buyer. If you’re going to close on it yourself, line up the financing via a conventional lender, hard money lender or line of credit. Also start looking for a tenant or tenant-buyer if you’re goal is to build a long term real estate portfolio. The key is to get your financing lined up in accordance to your exit strategy and begin moving immediately.

Tip #5: Follow Through with Your Plan
Many real estate investors purchase a piece of property with one plan, buy-fix-sell. They write the offer based on a certain sale price and with a specific plan to renovate. Then, once they close on the home, they over-improve and try to sell it for more than it’s worth or use a hard money lender and then decide they want to rent it.

If you follow these steps and remember the tips, then you will make money in real estate. If you deviate from the plan, then your chances of running into problems increase. You wind up with the wrong type of financing, you can’t find tenants, the holding costs eat the profits, etc.

Remember, real estate investing is like driving a car. It’s simple. Get in, turn the key, put it in drive, and go!

Beginning Real Estate Investing - “Subject To…” Investing

This is another in a continuing series of articles on beginning real estate investing. Today, we?ll tackle the basics of ?subject to?? investing. There are a lot of questions those who are just beginning real estate investing often have about ?subject to?? investing, and this article should answer many of your fundamental questions.

First of all, it?s important for those who are beginning real estate investing to know what ?Subject To?? investing is. ?Subject to?? means that you buy a property ?subject to?? the existing financing staying in place in the seller?s name.

Say that you get a call from a motivated seller. He tells you he must sell his house immediately. He also says he owes around $100,000 on his mortgage, his payments are around $900 per month, including principal, interest, and taxes. Even though you are only just beginning real estate investing, you know the estimated market value of his home is about $130,000.

You head on over to his home. It doesn?t matter in the least that you are just beginning real estate investing. After all, he needs to sell now. You tell him that you will take over his mortgage payments, and keep on making them until you get the house sold. You don?t know how long it will take, but the mortgage will stay in his name until you get it sold.

He asks if you can give him some cash to help him move. Even someone who is beginning real estate investing can negotiate an item like this. After going back and forth a couple of times, the two of you agree on $3,000, which you will pay to him the day he moves out.

Now, what have you got? A house with an estimated value of $130,000 that you will wind up paying about $103,000 for, and a payment of $900 per month. Since you are just beginning real estate investing, there is something you must do right away? market for a tenant buyer.

So, you place an ad in your local paper, and put up a few signs in Mr. Seller?s neighborhood: ?Lease to Own ? Bruised Credit OK.? Your phone starts ringing and you find a young couple with good jobs and good income who went through a brief period of financial trouble a year or two ago. You explain to them that even though you are just beginning real estate investing, you think you can help them.

You offer to lease them the home with a 12 month option to buy it. Their monthly lease payment to you will be $1,200, and their purchase price will be $135,000. They will also give you a non-refundable option fee of $5,000. It doesn?t matter that you are only beginning real estate investing- you can certainly see what you have just accomplished.

You?ve got monthly positive cash flow of $300 - the difference between the $900 you are paying and the $1,200 the young couple is paying you. You have also put $2,000 cash into your pocket right now ? the difference between the $3,000 cash you gave the seller and the $5,000 cash the young couple gave you. When the young couple exercises their option to buy, you will also pocket $32,000 - the difference between your purchase price of $103,000 and the price they pay you, $135,000. Not too bad for someone beginning real estate investing!

We?ve barely scratched the surface of ?subject to?? investing, but I think you?ve got the idea. I?ve got more great ideas for you at Beginning Real Estate Investing.

Now, go make more offers!

Selecting an Answering Service for Your Real Estate Investing Business

Here’s how I have my real estate investing business call system set up and what I look for in an answering service.

First, I have all different types of my marketing out to find motivated sellers. I use things like classified ads that have my toll free 24 hour recorded information line telephone number on it. I use different extensions for each type of marketing. So, my classified ad in the weekly free newspaper has a different extension than my post it notes that I have delivered door to door in my farm neighborhoods.

When a motivated seller sees my advertisement and wants additional information they can NOT call me directly. They must go through my 24 hour recorded information line to listen to a pre-recorded message that is about 5 minutes long and explains to them in my best presentation voice, the benefits of them working with me and having me buy their house.

Once they have listened to the message, I give usually give them two options: go to my website and submit a form or call me directly.

If they decide to go to my website, they fill out a web based property information form which is directly loaded into my Real Estate Investor Database contact and business management account for me to deal with when I am ready to talk to motivated sellers.

If they decide to call my office directly, they actually do not call me. They call my 24 hour answering service. Here are some things I look for in an answering service.

First, I must be able to forward my phone number to them. I have my system set up so that the 24 hour recorded information line actually forwards the call to the answering service instead of having the seller hang up and call into a separate number. I prefer this and it requires that the answering service give you a local number (not a toll free number) because, as I understand it, you can not forward one toll free number to another toll free number.

Second, they must be willing to input the leads into my Real Estate Investor Database for me directly. Imagine getting over 100 leads in a few days and having to manually add each one to your contact management system. It is a real pain, so the service must be willing to add the new leads directly into my contact management system (which is web based).

Third, they must be reasonably priced. What is reasonably priced? I think less than 50 cents per call is reasonable. If they are going to charge a monthly fee it should be a monthly minimum against calls and not a monthly fee in addition to a per call fee.

Fourth, they must have reasonably good response time. You do not want your motivated sellers on hold for 10 minutes waiting to get through. You want them to wait no more than 2 minutes and most times they should be able to get through immediately.

Those are the qualifications I look for in a live answering service for my buying system.

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