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Real Estate Lesson 1
So you want to become a Real Estate Investor. That's wonderful...BUT it's hard work. I mean HARD! You do know what hard work is don't you? It's hard BUT FAIR! The truth is you will reap the equivalent of the exact amount of effort you put into this business. And what a business. Here's the simple formula. NOTHING from NOTHING LEAVES NOTHING. Another one is Little in and little OUT! Real Estate is Americas number one money maker. Many self made millionaires made their fortunes in Real Estate. Men like T.T. who owns a football team and D.T. who has a couple 10 or 20 casinos and hotels all over. They all know what I know....and you're about to find out. It never ceases to amaze me after 35 years in this business how I can leave home with a little gas in my car, and a 10 cent piece of paper and come home counting thousands. NOWHERE else in this economy can you control so much...with so little. I've made money on houses I didn't close on. Someone else did and I profited from the transaction. You'll learn how to do this later to your utter consternation. It's not a scam. Any Attorney or Bank will close the deal with a smile. After all, everbody gets paid including the Seller.
Prospecting Your Real Estate career begins with a quest for knowledge and a sincere desire to suceed. Prospecting is is the art (Work) of locating Buyers and Sellers in the marketplace. Good deals are everywhere in these times. Bank closings, Wall St. troubles, unemployment and other factors make todays markets a "Buyers Market" You the Buyer is in control. Mr. Jones can't sell his house, the bank doesn't need another foreclosure and our Uncle Sam is trying to prop up the situation. So you the Real Estate Investor must do the footwork, see the houses, make contacts whenever and wherever you can. Like the old west prospectors you must pan for the gold. It means $10,000 or more when you find the nugget. Prospecting is numbers game. The more people you see the better your chances to get paid. It's that simple. make a comittment to this Real Estate. Don't neglect your family but you must dedicate the proper time in order to suceed. You'll all be glad on your way shopping or on a vaction or fishing. You'll have plenty of time and money with which to do all that in Real Estate. It is not a 9 to 5. The paychecks either! Go for it! NO's lead to YES'S! Not everybody will take your offer. Not everyone will buy your idea. Sellers say no sometimes. I mean oftentimes. But when they do just know that a yes is right around the corner. SMILE and say, " Thanks so much for your time. Here's my business card should you reconsider at a later date." Move on to the next prospect with the full assurance of eventual success. Flyers are an excellent and inexpensive way to contact prospects. A flyer should reveal what you do, and how to contact you at any time. Highlight important aspects like, "I buy houses-ALL CASH" or NO MONEY DOWN etc. Try and always offer some incentive to call and most of all, make a lasting impression. Start thinking about printing some business cards. They present a professional image. You must put a little something into this business. I'll give you the knowledge....you must do the rest! You're in the right place-America. This is why everbody wants to come here. They know the opportunity is HERE not there! Newpaper ads are expensive. This form of prospecting is strictly for the rich who can afford to carry on that type of costly expense. See properties and make offers. The more contacts you make, the better your chances. Let them tell you NO! $10,000 will ease all that pain in the end. Goalsetting Setting goals is an important step in achieving success. A goal should be S.M.A.R.T. S-The goal should be specific. M-It should be measurable. A-It should be achievable. R-It sholud be realistic. T-The goal should have a start and finish date. In order to prioritize your efforts you must concentrate on the basics and your objectives clearly defined. A good set of goals might look like this. 1. Contact 50 owners each week. 2. See 20 homes per week. 3. Write 10 contracts or offers every week. Write down the goals. Keep them in view at all times. There's just one more thing....DO IT!!! Yes, there will be obstacles to overcome but you didn't stop looking for that job you have did you? It was important. Money is important! Just try not having any. What will you tell your baby boy when he wants that new bike? Or your wife that new dress? So set some goals. Set goals and expect results.
FSBO's-For Sale By Owner A FSBO is a "For Sale By Owner". This is a private party not associated with a Licensed Real Estate Broker. There are millions of sellers who have attempted to tender their property by cooperating with a so-called licensed professional with no results. Although professionals they do not guarantee a sale nor do they assure an asking price. Therefore, many owners have fallen on tough times in selling their homes. These have waited for months, even years to no avail. These are our primary "target market" or distressed properties. By law a State Licensed Real Estate Broker, also called Realtors, must acknowledge their participation in all advertising including yard signs. So, when you see the Broker designation you might want to steer clear of the property. Why? Because, Brokers and Attorneys alike, are DEAL KILLERS! They have a legal obligation to the sellers-NOT YOU the buyer. And so they will tell the owner things you may not wish to disclose like, " Your house is worth a lot more." Maybe, " He's just trying to flip the house for a quick profit." Be sure for certain YOU BE CAREFUL WHEN CONTACTING "BROKERED properties. It means there is another cook on the stew. You've heard, " Too many cooks spoil the stew haven't you?" Be CAREFUL! When inquiring concerning the property there are certain questions we need to ask in order to establish whether this is something I will pursue. Use the following questions when contacting owners. 1. Ask directions to home. 2. Ask about the contents-bedrooms, baths etc. and any other details. 3. Do they have a mortgage? Is the mortgage current? 4. Why are you selling the home? 5. How quickly do you need to move? 6. Are you willing to hold a portion of the purchase pricefor a short time? Above all DON'T INTERROGATE! Be conversational. Blend in a little chit-chat here and there. AND when they ask a question answer the question then ask another question. This is a sales technique. In this way you control the conversation. You'll learn more on sales in another lesson. In our next lesson we'll discuss evaluating property-The Appraisal. This is the most important step. How much is the home really worth? This is the same process the bank will use to determine our loan capability. When we know this factor we know how much profit is possibly in this deal. To see or not to see that is the question.
Contacting Owners When contacting owners it is important to attempt to determine the "Sellers Motivation". Why is he selling the house is the question to ask at some point. They will not of course always reveal the truth especially in the case of foreclosure. No one likes to admit, " I'm in trouble financially and need help." The best way to ask this is the "Columbo Close". Here's how. As you talk about something else like maybe a feature in the home abruptly interrupt and say, " By the way why are you selling this home?" This catches the contact off guard and they will usually answer truthfully.
Courthouse Research The County Courthouse is an invaluable resource in the conquest of Real Estate. Within its files are Public Records which detail events and occurences concerning Real Property. Marriages, divorce, births, deaths, sales and transfers are all recorded according to state law. Most facilities are well staffed with friendly professional people who will graciously steer you to your intended goal. Contained within the files known as "Public Records" are records of fact which have affected the owhership of the property. Marriages, deaths, divorces, sales, anything pretaing to the ownership or ownership rights will be recorded by law. These records are NEVER EXPUNGED! These are the same records which the Title Company, an Insurance Company, will research to ascertain true ownership of the property and establish what the interest are according to law. This history is called "The Chain of Title" and will be discussed in a later lesson in detail. In addition, the Property Appraisers Office is a vital resource. Within its files are the names and addresses of not only the various properties throughout the city but their Tax Value as well. These are the same files from which the Title Additionally, The Office of Code Enforcement also has statistics and reports on the structural integrity and condition of each parcel. All properties must be according to City Code. To continue our study of the County Courthouse we will look at two problems in particular and especially with the Tax Assessors records. Each year the City of Jacksonville will levy property taxes to all property owners in the county on November 1. These tax records are only updated with new owners names and addresses once per year. So, if a property is sold after November 1, the new owners name will not appear on these records until the following year. In these case if you encounter a seller whose name does not appear on the tax records DONOT TENDER CASH prior to those persons establishing they have purchased the property. They must present a notarized deed or other notarized document or court order establishing they entitlement to the property. DO NOT TENDER CASH UNDER ANY CIRCUMSTANCES to these parties! Checking the tax records is the first precaution you will take PRIOR to writing a contract. Do Not accept unnotarized documents! All Deeds MUST BE NOTARIZED and Witnessed for authenticity and to be accepted into county records or for court documentations in the event of suits or litigations. To search for deeds or other documents in the courthouse a personal visit to 330 E. Bay St., Mezzanine Floor, is preferred. However, online searches are now possible for most municipalities. In our county you may search by internet as follows: Go to... www.cojnet.com The City of Jax. Or Property Appraiser Duval County Then select property search. When the search page appears the best and most accurate search is by address although you may also search by owners nameBe certain you inject the correct address, including the Street, Avenue or Drive etc. AND whether east, west north or south if applicable. The system is very sensitive to not search for incorrect input. There will be two addresses. A mailing address of the owner and the site or property address. When these addresses are different send any inquiries to the mailing address. When the addresses are the same send any inquiry to the property address for forwarding. A vital element for our inquiries has to do with an article in the Times Union Journal every Saturday. This is a feature section-Home. Inside is a sub-section named-Real Estate Transactions. Start to clip and save this valuable column every week. Later you will learn how to use this free tool in a critical aspect of the buying process. Internet searching is a part of your ongoing prospecting and canvassing activities in real estate. Here’s the order. God, then family THEN REAL ESTATE! Remember this fact of life. If you don’t….someone else will and reap YOUR REWARDS! Successful people WORK… but not for a company. Work for YOU and your family. There is a saying amongst the rich and famous. “Nobody ever got rich by working for someone else!” Not Bill. G. and not even Ted T. Of course money isn’t everything…but it will pay some bills. Just try and get along without some money and see. The Office of Code Enforcement The Office of Code Enforcement is located at 1412 West Main Street, Jacksonville Florida, Tel. (501) 982-0688. This city agency concerns itself with the structural integrity of buildings within the county. They regulate along with the Zoning Department and The Fire Department the usage and guidelines for all buildings within the city. Agency inspectors make house calls, that is regular inspections of neighborhoods and cite for violations of building codes. These rocrsds are not available online and a personal visit to their office is required. When buying older properties alsways check with the department for code violations and a "Recap Report" to establish what violations might need be corrected. These files will also provide more accurate information as to the legal owner since the department will immediately notify the owners of code violations which could lead to condemnation and demolition of the premises. Condemnation procedures and demoltion contracts are discussed in another lesson. _____________________________________________________________________________________________________________________________
Have a friend or relative in need of a home? Maybe they too have had problems in attempting to purchase that first house. We can help! We will pay a referral fee up to $500 for new participants in The HomeMentor Program. We also will pay up to $500 for property owners provided we purchase the home for The HomeMentor Program _________________________________________________________________________________________________
Be sure to call our Lesson Planning Department when you have completed your credit report and/or these first two lessons. Call us at (904) 210-2990.
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