Ready for a change! - Posted by Terry

Posted by Mel FL on June 25, 2000 at 20:56:14:

If you’ve ever read anything about REI then I’m sure that the first rule is to deal with motivated sellers. However it also seems to be the most overlooked rule too. You said it may be difficult to get an owner to finance, this is true. They only do that when they are “motivated”. Also I find L/O alot earier sell than owner financing. Some times doing a L/O is actually MORE beneficial to the seller than a straight sale. (If they are trying to make payments on two houses, for instants)

There are motivated sellers out there. They are probably only 3-5% of all the sellers but I think you should deal with them exclusivly. If they have a problem and you have a solution, thats a deal. All my sellers have thanked me for helping them, and they know I’m making a profit.

So look for those motivated sellers, they are out there. When you find one you’ll know.

Good luck, and let me know how it goes. Mel

Ready for a change! - Posted by Terry

Posted by Terry on June 23, 2000 at 17:08:03:

For years, I’ve toyed with becoming an REI. I get absorbed in the Carlton Sheet’s infomercials (embarrased to say), but still I’ve done nothing. About a year ago, I bought the program, read about 3-4 chapters, but still did nothing. Well lately work has become unbearable, and I’m once again thinking about REI as an income source and hobby.

So why am I so hesitant? There are a few reasons. (1) I’m not a big risk taker. (2) I’m wondering if I have the right kind of personality for the job. I am reasonably intelligent, very hard-working, but don’t see myself as being a particularly a good salesperson. (3) Additionally, I have a principle resident that is 1st & 2nd mortgaged, and I’ve been worried about qualifying for MORE credit if needed. I do have good credit and a jointly owned SF (co-inherited) as assets. (By the way, I renovated the SF dwelling improving its value considerably with a few $s AND LOVED IT!)

Now for my questions. How many of you are successful REIs who started out with all these fears and trepidations? Also, is it necessary to have a certain type of personality (i.e. extroverted, salesperson personality, etc.) to be successful?

Re: Ready for a change! - Posted by Mel FL

Posted by Mel FL on June 24, 2000 at 18:30:16:

Well first I’d like to say Im not the successful REI you asked for. Im still a newbie myself and have only done a few deals. But I have recently quit my job to go full time.

Was I scared, more than you could imagine. I started out with no credit(still needs work)and very little money. If your worried about those things try to learn a little about flipping and L/Os Thats all I’ve done so far and I haven’t used my own money or credit yet. Also you eliminate almost all risk with flipping, and L/O is a lot safer than purchasing!

Nothing against Sheets, but I think you would do well to invest in some different coarses. I just never met any successful REI that used his stuff only. If you want to know which is best look around this sight, thats one subject thats been beat to death.

I don’t think you have to be a born salesman to do this. In fact I honestly have not answered an objection yet. I probably should have but it took all I had to make the offer in the first place. The ones I got siad yes the one I didn’t said no. I am working on my negotiating though.

I firmly believe that there is only one difference between successful REI and Wannabes…ACTION. If you can get past the first offer they get easier each time after that. Hey, I didn’t even sweat when I made my last offer.

I dont know you, and I dont necessarily disagree with looking at 100 houses before I made an offer, but I know I would have givin up at about 25 or so. By the time you look at 100 you could have made 5-10 offers, and offers are the only way to get deals. I have probably only inspected 100 houses so far and I did six so…

Bottom line, in my opinion, is this. If you have the knowlege and take the action you can do it. I would bet that NOBODY EVER failed if they had the knowlege, took the action and stuck with it. They may have give up before they made it, but not failed.

My humble opinions, hope they help.


Re: Ready for a change! - Posted by Dave T

Posted by Dave T on June 24, 2000 at 15:36:42:

No you don’t need to be extroverted or a natural salesman to be successful. You DO need to be motivated and informed. You need to know what you are doing and then have the determination to get the job done.

Why did you only read 3 or 4 chapters in the Sheets course? Was this unfamiliar material you had trouble comprehending? If so, then take the real estate licensing course to fill the gaps in your understanding.

If you quit reading the Sheets course because you thought you were’nt the right personality for this business, then you just let fear of the unknown and untried get in your way. This fear will disappear as you become more familiar and comfortable with the mechanics of constructing an offer and closing the deal.

If you are just overwhelmed with the variety of creative real estate opportunities out there, then pick a niche to specialize in and develop a set of personal goals to complete your first deal. Concentrate your learning curve on the activities you need to do and the knowledge you need to have to do the deal.

While you are in learning mode, go visit 100 houses. Look at all the FSBOs in the paper and call all the owners. Go look at all the properties and ask the questions you need to ask to make an informed business decision. After each visit, make notes on the property, its price, its full market value, your estimate of repair cost, and the seller’s motivation for selling. Don’t make any offers until you have visited 100 properties.

When all this is done, you should be comfortable with neighborhood values, your ability to estimate repair costs, your ability to determine the true market value of a property, and your ability to meet a seller face-to-face. You will have the confidence to construct and make an offer that meets your objective in purchasing the property. With this confidence and knowledge you won’t be afraid to negotiate the best price that satisfies both you and the seller.

Lastly, before you make an offer, know what you will do with the property.

Have a plan, follow the plan, and revise the plan when something breaks. Establish a set of personal goals that lead to your first deal. Maybe you look at 2 houses the first week, and 4 the next week, and a certain number each week until you have seen 100 houses. While you are looking at that first 100 houses, get your contracts developed and assemble a team of experts. Perhaps you want a lawyer and a title company on your team for the first deal. Later you may want to add appraisers, rehab contractors, lenders, and realtors to your team as you need them.

The bottom line is that success in this business comes from confidence. Confidence comes from knowledge of your subject area and your ease and comfort with the activity you are doing. Knowledge of your subject area is gained every day you do this stuff. Ease and comfort with the activity are increased each time you meet a seller and make an offer.

Three words Terry! - Posted by Glitch

Posted by Glitch on June 23, 2000 at 20:48:07:

Hello Terry.

No big story here I say: “JUST DO IT”


Re: Ready for a change! - Posted by Terry

Posted by Terry on June 25, 2000 at 16:08:38:

Thanks to both you and Mel for the advice. As of last night, I had almost finished the CS readings and have now checked out 5 properties (open houses–mostly FSBOs). I surprised myself when I found how comfortable it was to talk with folks about their properites and my plans as an investor. I walked away from the collective site visits with names of people that can help with repairs, creative financing, etc. One thing I found was that convincing sellers to finance may be difficult. (Too soon to draw any conclusions, but that is my newcomer’s impression.)

One owner was interested in raising the purchase price and working with me to pay closing. I didn’t discuss possibly assuming the loan, but I may follow-up on this property. Incidentally, this was a nice property needing no work–pristine. It’s a FSBO in a great neighborhood, modestly priced ($90K)and the seller is willing to throw in appliances. None of the area properties are currently rented, so obtaining rental history or rates may be difficult. Any advice on how to accurately estimate rental & occupancy rates without much area history? (Hope this question makes sense.)

P.S. Does anyone believe in fate or divine intervention? So many recent life events seem to be leading me to take the plunge into the world of REI. Just now, I logged on to this site to check-out the lastest posts, and found one re: a need for a local investor’s group near Tappahannock, VA. A respondent said he is currently trying to organize such a group in the Richmond area (exactly where I live.) I had been searching for a group, and had even decided to check-out groups in Va. Beach or Northern, Va. Now I may not have to do so. Amazing!

Again, Dave & Mel, thanks for the advice and words of encouragement.