10 Hottest TIPS to. TURBOCHARGE YOUR RE INVESTING By: Susan Lassiter-Lyons

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1 10 Hottest TIPS to TURBOCHARGE YOUR RE INVESTING By: Susan Lassiter-Lyons

2 When I first thought about investing in real estate, I kept looking for a step- by-step plan to follow. One that would ensure that I got off on the right foot and was in a position to turbocharge my efforts. There was none! Over the years I have developed my own to do list to share with newbie (and senior) investors alike who happen to ask for a little guidance. Here are the stepping stones on your path to Real Estate Investing Riches! 1. Clean Up Your Credit Good credit is not necessary to invest in real estate. There are hard money lenders out there who will lend on the collateral instead of your credit score. So don t let this be a barrier to you entering the REI arena. With that said, if you want to maximize your profit potential and get stellar rates on your loans that equate to smaller monthly mortgage payments, it is essential that you make an effort to know your credit score and work toward improving it. Most full doc A paper mortgage loans out there will go as low as a credit score of 620. If you need a higher loan to value (LTV) of say 90-95% and you want to limit your down payment OR if you want to go with a stated doc loan, you ll need a score of at least s is a great place to be when investing in real estate. I use two services to stay on top of my scores and to dispute and/or eliminate derogatory credit from my report. For my scores, I use CreditReporting.com. I order the 3-bureau credit report because quite often there are differences between the agencies. Click here to learn more about the 3-Bureau Credit Report. With the 3-Bureau Credit Report you get your report online within seconds and it includes: Your credit report from TransUnion, Equifax and Experian. A guide to reading and understanding your report Information on your credit rights Information to dispute any possible inaccuracies Your FICO score(s) With the report comes an automated dispute system. This part wasn t very effective for me and most of the companies didn t respond within the 30 day timeframe. To go a step further and take care of the dispute and removal of derogatory items, I use Lexington Law. Lexington is a real law firm and they have been improving credit scores for clients all over the US for more than a decade. They re cheap ($35/mo) and they have a money back guarantee. It s what we call a no-brainer. Click here to learn more about Lexington Law. 2. Get Preapproved Next you ll want to hook up with a good mortgage broker. Preferably, one who specializes in investment or non-owner occupied loans. Don t let your broker submit your package to a bunch 1

3 of lenders who will pull credit a million times - every little credit check can lower your score 15 points or more! Once you make the initial application, your broker will issue you a preapproval letter. This will usually indicate the maximum price you can offer for a property and the maximum interest rate you are approved for. This is the letter you ll need when submitting offers in order to be taken seriously. Most sellers accept offers only from preapproved buyers because it means that the deal is less likely to fall apart. 3. Know What You Want and Where You Want It Have you ever heard that old adage, if you fail to plan, you plan to fail? It s totally true. You have to know the following: The type of properties you are investing in Your special geographic area aka farm area The max price you will pay The max percentage of fair market value you will go to This is all info you ll need to know without having to look at a cheat sheet. Why? Well, you decide if you want to be investor A or investor B: Seller/Broker: What are you looking for? Investor A: Um, I don t know. Probably 3 bedrooms, 2 baths. Something that doesn t need much work. Seller/Broker: What are you looking for? Investor B: I ve got four zip codes in my farm area and I m looking for minimum 3 beds 2 baths with 2 car garage single family homes with a purchase price no more than 85% of fair market or after repair value. I really hope you picked investor B. Do some research to determine areas no more than 30 minutes away by car that are appreciating rapidly or are being redeveloped. Then get a farm package from a title company for those zip codes. I like to order addresses where the tax bill is sent to an address different from the property address. Those properties are usually rentals already and maybe they need work and/or the landlord is over it. These lists will cost you about $30 or so. Then you can do a mailing or even call them up to set up an appointment. 4. Network If you have a local REI club you must join! You will make a ton of great contacts - from appraisers to wholesalers. They usually have monthly meetings with guest speakers and trainings. It s really invaluable. If you don t have a local club, you can form a mastermind with other people in the business or visit This is a really active board with lots of great 2

4 people who will give you straight up answers. Remember, you ve got to circulate to percolate! 5. Locate a Good Real Estate Agent This section is by a friend/fellow investor/member of my mastermind, Mike Penny. When I meet with realtors here is what I tell them. First and foremost I tell them a little about myself. Then I tell them what I am looking for. I tell them that I want their trash. I tell them that I will pay them for their trash. I want any sellers that they come across that don t have enough equity to pay their commission. I say I am an investor who looks for distressed properties. I am interested in any properties they have that are going into foreclosure or are just on a time crunch. I can t always pay their full listing commission but I will definitely get them some cash up front and possibly the full commission on the back end of the transaction. I also am interested in any thing they have that is really stale and they think they might lose the listing or the word, RENT, has been mentioned to send them my way. If I can get something done then I will get them some cash. I am always interested in any thing they find that is at 70-80% of market value - I will buy those from you all day every day. So basically, with the exception of those 70-80% of value, I just want your trash; if you think you are going to lose any of your listings let me know. Then they will usually have a bunch of questions about what you do with the properties. Tell them and see what they say. If they don t understand what you are talking about STOP and shake their hand, wish them the best and be on your merry way. If they don t understand you, you are wasting your time! And as far as getting cheap properties on the MLS, you can do two things. But first you have to establish your relationship with a good realtor. Make tons of offers on all the properties that have, bank owned, HUD, foreclosure, fixer, or distress. in their descriptions on the MLS at 70% of the as-is value. 1 in 100 or less will get accepted but if you make 25 offers a week then that s one deal a week or twelve a year that you can flip or keep. Cheap properties at 70% LTV or less do come on the market via realtors but they are gone in hours. First they have to be put on the market by a broker then there are hundreds of realtors who search the MLS daily in order to find these properties. Find a good realtor who specializes in fix and 3

5 flip properties. Make sure you check their credentials - ask if they do rehabs themself. And make sure they actively invest in real estate as well. If so get them a pre-approval letter from a lender and give them the ability to lock up property for you, leaving yourself some sort of out via an inspection clause or something like that. Have them send a promissory note for your earnest money deposit and be prepared to honor it if your offer is accepted. These properties go fast and you must have the ability to act fast. Do not try to flip deals if you can not close on these deals yourself. Just make sure you act professional and treat them how you would like to be treated. You will establish a strong relationship by closing on deals and living up to your end of the bargain. The relationship is not an easy or quick one to establish but it is well worth every bit of time. Mike is cool! 6. Advertise There are a ton of REI gurus out there that are all making the same pitch with regard to advertising: Classified ads, bandit signs, cold calling, mailings and door knocking. I won t say that these methods don t work - but I will say that these methods are not for me! What works for me is a blend of offline advertising (newspaper/radio/tv) ads and online advertising (pay per click campaigns and search engine optimization). The problem that most investors run into is that they are not inherently marketers. Who knows why one ad will pull better than another? Who knows what keyword non-traditional buyers search on most in Florida? When you re focused on your investing who has the time or the money to make costly mistakes in advertising? That s why it s SO important to hook up with a service like Invest-O-Matic. We have done all of the research, written and tested all the copy, designed all the web sites and set up proven, national campaigns online and off to drive a steady stream of motivated sellers and non-traditional buyers to your web site. The bottom line is this: if you haven t yet signed up with Invest-o-Matic, do it now. You get everything that is listed on the next page. 4

6 Leads-O-Matic Motivated Seller Leads Only choose your zipcode(s) $99.95 set up $9.95/mo per zipcode General Features: Exclusive Ownership of Each Zipcode Notification of New Leads Secure Back-Office Access 24-7 Easily List All Your Properties Support: Toll Free Once a zip code is gone, it is gone so lock up your zip code(s) now to guarantee a fresh, steady stream of exclusive motivated seller leads. GET STARTED Web-O-Matic Website only Ultimate A nine-page professionally designed and hosted website to promote YOUR business. $ set up $29.95/mo web hosting Pro On a budget? A one-page professionally designed and hosted website. $79.95 set up for 1-page $9.95/mo web hosting General Features: Your Own Domain (yourname.com) Choice of Template Site Buyer and Seller Database Easily List All Properties* Allow Third Party Advertising* Detailed Web Site Statistics *Only on Web-O-Matic Ultimate Features: 6 POP3/IMAP4 accounts forwarding Catch All Spam Asassin Unlimited Aliases Autoresponders* *Only on Web-O-Matic Ultimate Marketing Features: Search Engine Optimization Search Engine Submission Pre-made Buyer/Seller Reports Support: Toll Free GET STARTED Invest-O-Matic Premium Leads + Ulitmate Website $ set up $39.95/mo** General Features: Your Own Domain (yourname.com) Choice of Template Site Buyer and Seller Database FREE Leads-O-Matic zip code Buyer and Seller Database Easily List All Properties Allow Third Party Advertising Detailed Web Site Statistics Notification of New Leads Secure Back-Office 24-7 Unlimited Access to Buyer Leads Features: 6 POP3/IMAP4 accnts forwarding Catch All Spam Asassin Unlimited Aliases Autoresponders Marketing Features: Search Engine Optimization Search Engine Submission Pre-Made Radio Ads coming soon! Pre-Made T.V. Ads coming soon! Pre-made Buyer/Seller Reports Support: Toll Free Once a zip code is gone, it is gone so lock up your zip code(s) now to guarantee a fresh, steady stream of exclusive motivated seller leads. **This rate includes one Leads-O-Matic zip code. GET STARTED 5

7 7. Establish Credibility Quick! Now that we are hard and fast in the Internet age all you really need to be credible in your new real estate investment endeavors is a business card, a phone and a web site. In the old days it was really difficult to figure someone out just by their business card but these days all you have to do is visit their website. If you do not have a web site you are way behind the times. This is the best way to establish credibility with sellers, advertise your properties and capture contact info from motivated sellers AND buyers. Here s how Invest-O-Matic can push you to the top of the heap in no time flat. You sign up for Invest- O-Matic Premium at Here s how it works: You select a website from the array of professionally designed and copy written sites available. Then you upload your properties and sit back and wait for the motivated seller AND tenant/buyer leads to roll in. Your site is automatically plugged into our online and offline advertising engine. When a lead visits your site and enters their contact info and needs into the pre-designed and coded form, the info is captured in your back office AND an is sent to you immediately notifying you that there is a HOT lead waiting to be contacted. What could be simpler? Hey, if you already have a website but are wondering why the leads aren t coming in you can just sign up for Leads-O-Matic and it works the exact same way just skip the website part. And PLEASE don t be fooled into thinking that you have to pay hundreds or even thousands of dollars for leads. It s just NOT TRUE! We generate high-quality leads without breaking the bank. 8. Negotiate! Times have changed. The economy s changed but people haven t changed and neither have their needs. If you look past the interest rates and the prices and look into the basic reason why real estate is still such a good investment, you will see that any disadvantage creates an advantage. The advantage is this: the same set of facts that might make a property seem out of reach actually creates a set of facts that makes it a better investment. Better in terms of leverage, tax shelters and control of appreciation. For example, if you re looking at a four-plex for $450,000, you will deal with its purchase more cautiously than a single family home for $150,000. You want to maximize your cash so you offer a lower price with less down at a lower interest rate. The less down aspect lets you leverage higher and consequently the leverage cost of your tax benefits, equity appreciation and income is enhanced. Understand is the key word here. Understand the seller s problems and needs. Understand your goals. Understand the process of lining you two up. Following are some proven tips for successful negotiations. Keep the distance short. Don t ever buy anything that is more than 30 minutes away by car 6

8 or one hour by bike. Find out the reasons behind their decisions Here s a great story Wade Cook tells. This was taught to me best when selling a house. I had used bank loans to extensively repair the house. Everything was remodeled inside and out. New carpet, drapes, paint, roof, landscaping, cabinets, fireplace, etc. I was so proud when it was completed and I wasn t surprised when it sold the next day. After negotiating the deal, I asked the lady what made her buy it. My chest was 6 inches bigger while waiting for her answer but deflated when she said, I ve always wanted a double stainless steel kitchen sink. That was probably the only thing in the house I hadn t repaired or replaced. If you want to buy or sell ASK OPEN ENDED QUESTIONS to ascertain their reasons. Tell them the benefits Don t ever mention to a seller that you re trying to buy his property with nothing down; tell him about the other benefits. For example, the tax benefits or the monthly payment income benefits. Do in person It s really hard to negotiate with the seller when a realtor is involved. If there is a property that you really want and there is not a realtor involved, then ALWAYS make sure you meet with the seller face to face to discuss the deal. The conversation will be much better because you can look each other in the eye, sit and discuss things and most importantly get things down on paper. And the most important rules in negotiating are always take time until the seller is comfortable, ask questions to avoid surprises, have a plan B, be creative, be persistent, listen carefully and take the initiative! 9. Find a Title Company that Understands What You Do This is a big one. If you re a seasoned investor you may have already gotten grief from a title company over the kind of transactions you re doing. Network to find a creative title company that has experience in creative real estate financing. Most importantly it should do escrow transactions, or, closings without title insurance. This includes contract for deed, installment land contract, lease/options and other owner financed transactions. Most big title companies deal primarily with brokers, banks and homeowners, and lack the experience and training in dealing with creative transactions. So get this one nailed down fast for smooth sailing later! 10. Believe and Invest in Yourself Here s where I give the Tony Robbins plug. You may be familiar with him and no matter what you think of him, we all need a little self help and motivation. I have his Personal Power II CD set and many of his books and tapes (all from ebay) and they are worth their weight in gold. Make an effort to read at least one motivational book per month or, better yet, do a 30 day course. 7

9 You will NOT be sorry. And there you have it! Have fun, make some money and for goodness sakes if you haven t signed up for Web-O-Matic, Leads-O-Matic or Invest-O-Matic Premium yet - what are you waiting for? Copyright Invest-O-Matic, Inc. Invest-O-Matic, the Invest-O-Matic Logo and Services are trademarks or registered trademarks of Invest-O-Matic, LLC. in the U.S. 8