Real Estate Wealth Today Blog
Mike Lautensack
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6 Steps to Develop a Private Lending Program For Real Estate Investors
Wow, has the real estate market changed in 2009! Real
estate investors have been shut out of traditional mortgage money
unless you have a 9000 credit score and a 50 year work history without
missing one day of work (ok enough of the weak humor but you get the
idea). Even hard money loans are HARD to get as they have all gone out
business.
But just as the mortgage market is shunning the real estate investor - we are starting to see signs that the real estate marketing is starting to bottom and home prices have even gone up in some markets.
So how do you take advantage of this buying opportunity if you can not get mortgage money from traditional sources?
Private lending is the answer. You can start borrowing money from private lenders to fund your real estate investments. Raising private money allows you to take advantage of the low prices without ever using any of your own cash or personal credit.
There are several significant benefits and advantages of private money lending compared to mortgage money or hard money lending.
First, you can begin buying more houses for "all cash" offers and drive significant discounts from sellers who are highly motivate to get cash versus waiting and hoping another buyer will get a mortgage approval.
Second, very simple paperwork with a typical private lender transaction only requires 3 or 4 documents with less than 20 pages.
Third, you control the terms and conditions under which you will borrow money and the lender will lend. You tell the lenders what rates of interest you will pay, how long the term is and all the other conditions are set by you not a bank or hard money lender.
Finally, you can turn many non-deals with no equity into super profitable deals with substantial equity by paying off existing debt at a discount... using private money.
Six Steps to develop a private money program for real estate investors:
But just as the mortgage market is shunning the real estate investor - we are starting to see signs that the real estate marketing is starting to bottom and home prices have even gone up in some markets.
So how do you take advantage of this buying opportunity if you can not get mortgage money from traditional sources?
Private lending is the answer. You can start borrowing money from private lenders to fund your real estate investments. Raising private money allows you to take advantage of the low prices without ever using any of your own cash or personal credit.
There are several significant benefits and advantages of private money lending compared to mortgage money or hard money lending.
First, you can begin buying more houses for "all cash" offers and drive significant discounts from sellers who are highly motivate to get cash versus waiting and hoping another buyer will get a mortgage approval.
Second, very simple paperwork with a typical private lender transaction only requires 3 or 4 documents with less than 20 pages.
Third, you control the terms and conditions under which you will borrow money and the lender will lend. You tell the lenders what rates of interest you will pay, how long the term is and all the other conditions are set by you not a bank or hard money lender.
Finally, you can turn many non-deals with no equity into super profitable deals with substantial equity by paying off existing debt at a discount... using private money.
Six Steps to develop a private money program for real estate investors:
- Develop your private lending program and the terms and conditions under which you will borrow money and repay your lenders
- Build your info/credibility kit to establish yourself as real estate investing expert
- Create a marketing plan with 5 to 10 different marketing techniques to attract potential private lenders
- Create your group or one-on-one presentation
- Schedule group or one-on-one meetings and follow-up with potential lenders
- Present and close deals with your potential lenders
I invite you to learn more about Private Lending and get my new FREE 20-page ebook titled "Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!" by clicking here http://realestatewealthtoday.com/FREE-eBook.html
Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lending Presentation Kit
Discover How to Use Post-It Notes to Get Sellers Calling in Droves
As we talked about, post-it notes come in two sizes -
large and small. They are different style templates. One is landscape
and one is portrait, so you get a sample of both.
Importance of the Headline
The headline is "Attention Homeowner." It's got a big notice going the opposite way. Again, that's the FedEx and UPS concept. I don't have the word FedEx or UPS on here. We're not going to get in trouble with those organizations. If you look at this from afar I guarantee that's the first thing you're going to think that you've got a FedEx package.
The headline says, "Our Company is seeking to purchase several homes in your neighborhood..." That leads them on to read. "Are you looking to sell soon? Your home has been identified as a good candidate for our real estate buying needs.
Why the Seller Should Work With You
"When we become your buyer we can buy your house as-is for a fair price on the date of your choice. There are no commissions to pay. You'll get immediate debt relief. You'll get fast cash and a hassle free sale. You're putting your house on the market without fixing it up. We're professional home buyers. We're not listing with an agent. We can work with existing loans and we have private funds that require no bank financing. This allows us to offer you a quick and easy sale."
How to Get a Response
Then you are into the response mechanism. "If you would like to listen to a 24 hour recorded message, here's the number to call." Guys, the very first call we want is into pre-recorded voicemail, so you should have that. They can choose to go to my website and get a free special report, and that can talk about some of the special benefits. That's one of the post-it notes.
The other one is more of a bullet point style instead of paragraph style. It has "We buy houses fast, all cash, as is, if you need to sell quickly, behind on payments, facing foreclosure, divorce." It gives a series of bullet points and then, "You can get more details at..." and your phone number there and a website.
Printing
What you would do once you've picked a printer and have changed these around, you would upload these to your printer. Different printers have different ways, but there should be a way to upload these onto the printer site. Be sure you've proofed it and made sure it's right, fits, and all that.
Typically at some point they will ask you to initial a proof and then you would order your 20,000, 25,000, or 50,000 post-it notes. They'll come to you a few days later in a box with packets of 50 to 100 post-it notes per pack.
Once you've got them, you can start thinking about distribution. You don't have to distribute them all immediately. You can do them in segments. You can do 1,000 a week. Have one or two kids go out and distribute them at 1,000 per week.
Importance of the Headline
The headline is "Attention Homeowner." It's got a big notice going the opposite way. Again, that's the FedEx and UPS concept. I don't have the word FedEx or UPS on here. We're not going to get in trouble with those organizations. If you look at this from afar I guarantee that's the first thing you're going to think that you've got a FedEx package.
The headline says, "Our Company is seeking to purchase several homes in your neighborhood..." That leads them on to read. "Are you looking to sell soon? Your home has been identified as a good candidate for our real estate buying needs.
Why the Seller Should Work With You
"When we become your buyer we can buy your house as-is for a fair price on the date of your choice. There are no commissions to pay. You'll get immediate debt relief. You'll get fast cash and a hassle free sale. You're putting your house on the market without fixing it up. We're professional home buyers. We're not listing with an agent. We can work with existing loans and we have private funds that require no bank financing. This allows us to offer you a quick and easy sale."
How to Get a Response
Then you are into the response mechanism. "If you would like to listen to a 24 hour recorded message, here's the number to call." Guys, the very first call we want is into pre-recorded voicemail, so you should have that. They can choose to go to my website and get a free special report, and that can talk about some of the special benefits. That's one of the post-it notes.
The other one is more of a bullet point style instead of paragraph style. It has "We buy houses fast, all cash, as is, if you need to sell quickly, behind on payments, facing foreclosure, divorce." It gives a series of bullet points and then, "You can get more details at..." and your phone number there and a website.
Printing
What you would do once you've picked a printer and have changed these around, you would upload these to your printer. Different printers have different ways, but there should be a way to upload these onto the printer site. Be sure you've proofed it and made sure it's right, fits, and all that.
Typically at some point they will ask you to initial a proof and then you would order your 20,000, 25,000, or 50,000 post-it notes. They'll come to you a few days later in a box with packets of 50 to 100 post-it notes per pack.
Once you've got them, you can start thinking about distribution. You don't have to distribute them all immediately. You can do them in segments. You can do 1,000 a week. Have one or two kids go out and distribute them at 1,000 per week.
I invite you to learn more about Real Estate Investing and become a member of our FREE weekly tele-seminar class where we teach tips and strategy on how to grow your real estate investing business and how to raise Private Money by going to http://www.realestatewealthtoday.com/TuesdayTipsSignUp.html.
Mike Lautensack is a full-time real estate entrepreneur, coach and mentor in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE eBook go to Real Estate Investing Blog
Real Estate Investing and the Advantages of Private Money
With traditional mortgage and hard money lending getting tighter and tighter for most real estate investors - private lending is fast becoming the only option to finance your deals.
What is private lending? Private
money is a type of creative financing that is usually provided by
private individuals who have excess money that they are willing to lend
at higher rates than they could get at banks or CD's. Their investment
is usually secured by the property you are buying and NOT by the
borrower. Unlike traditional mortgage lending, the terms and
conditions will vary from one lender to another and they usually depend
on the agreement between a you and the private lender.
Borrowing money from private money lenders
is much easier compared to traditional banks and hard money lenders.
Because a borrower only needs the approval of a single person, he
doesn’t have to deal with 4 inches of paper work and a 3 to 4 month
approval process only to get reject after a long waiting period. In
addition, he doesn’t have to present lengthy documents and other
credentials because private lenders are not interested with such
things. Private lenders first want to know the real estate investment
makes economic sense first before they worry about other issues.
Because of such a scenario, real estate
investors with poor credit scores can still borrow money from private
lenders if they are prepared and the deal makes sense. However, they
must be able to show that their real estate investment makes sense and
will generate enough rent to cover their interest payments and the
property collateral is worth more than the loan amount. Therefore, if
an investor wants to borrow $125,000 from a private lender, he has to
make sure that the collateralize property’s market value will hit the
$175,000 with an appraisal once repaired and renovated.
One reason why many real estate investors
prefer private money over looking for a business partner who will
finance a project is that they can earn bigger profits. Most private
lenders ask for interest rates of 8% to 15% range while business
partners are likely to demand a larger portion of the profits when you
sell a property.
The key to getting private money is to be
prepared and have a well thought out business plan and credibility
kit. Without these two items in place it is hard to image a successful
business person giving you money if you do not impress the person with
your well thought out business plan. Take your time and be prepared to
answer all the questions about the property such as what are the value
of comps, what are rents in the area and what are the cost to fix up
the property. Also spend some time to develop your credibility kit to
show your experience and knowledge as a real estate investor.
I invite you to learn more about Private Lending and get FREE instant access to a 60 minute audio and 20-page eBook titled "Discover the Secrets of How to Fund Your Real Estate Deals with Private Lenders!" by going to http://realestatewealthtoday.com/FREE-eBook.html.
Mike Lautensack is a full-time real estate entrepreneur in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE Real Estate Wealth Newsletter go to Private Lender Money Kit .
Real Estate Investors - How to Sell Your Property Before You Buy the Property - Build a Buyer List!
With your real estate investment business what is at the top of your "frustration" list?
Could it be trying to determine if a certain property is a good deal not? Trying to determine if your offer prices is "low" enough for you to make a profit in this market place.
For most real estate investors, this dilemma causes a lot of confusion and frustration. This is may be because your definition of a "good deal" may be skewed.
What makes a property a good deal? The answer is: one that has a ready buyer at a profit.
As long as you have a buyer ready and willing to buy that property and there is room for your profit, then you have a good deal on your hands. You can actual predict what your profit will be with the knowledge of the buy and sale price.
For example, if you know you have a property under contract for $120k and you can have a ready buyer lined up to buy from you at $130k you have a $10k profit locked in.
But the obvious question is how do you get a ready buyer?
You do this by building and maintaining a "buyer list". Building a list of ready buyers is the key. If there is a buyer from your list of buyers, who is in the market for the property you are looking at - then voila you have a good deal!
The way to build your buyers list is through aggressive marketing and here are 5 simple ways to start your list:
Mike Lautensack is a full-time real estate entrepreneur, coach and mentor in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE eBook go to Real Estate Investing Blog .
Could it be trying to determine if a certain property is a good deal not? Trying to determine if your offer prices is "low" enough for you to make a profit in this market place.
For most real estate investors, this dilemma causes a lot of confusion and frustration. This is may be because your definition of a "good deal" may be skewed.
What makes a property a good deal? The answer is: one that has a ready buyer at a profit.
As long as you have a buyer ready and willing to buy that property and there is room for your profit, then you have a good deal on your hands. You can actual predict what your profit will be with the knowledge of the buy and sale price.
For example, if you know you have a property under contract for $120k and you can have a ready buyer lined up to buy from you at $130k you have a $10k profit locked in.
But the obvious question is how do you get a ready buyer?
You do this by building and maintaining a "buyer list". Building a list of ready buyers is the key. If there is a buyer from your list of buyers, who is in the market for the property you are looking at - then voila you have a good deal!
The way to build your buyers list is through aggressive marketing and here are 5 simple ways to start your list:
- Post an ad on Craig's List, Backpage.com and other local internet bulletin boards with ads like "I sell ugly houses" or"Fixer Homes Avaialble". Do this once per week and be sure to capture everyones email address for future follow up.
- Write down the phone number when you see "I Buy Houses" signs, ads, and websites. Call these investors and get their info, and let them know you're an investor and would like to bring them properties that are available. Add them to your list, and don't forget to get their e-mail address for when you automate!
- Hand out at least 24 business cards at REIA meetings and be sure to go to as many REIA meetings as possible. If you not sure about where meeting are go to Meetup.com and search your local area for real estate investors.
- Talk to everyone and tell them what you do and ask them to spread the words to their friends, family and coworkers.
- Advertise in small local newspapers that you have "Fixer" homes available for sale and provided a phone number and email address.
Mike Lautensack is a full-time real estate entrepreneur, coach and mentor in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE eBook go to Real Estate Investing Blog .
Real Estate Investing - Learn How to Make Money in Real Estate Without Cash
It is a widely held belief that if someone wants to
invest in real estate market, he must be loaded with cash. The idea is
not entirely true. If you don't have enough money you can still invest
in real estate. The notion seems unbelievable at first glance but it's
true. Real estate investing with no money to put down is a viable
option.
In order to invest in real state without down money, you must be creative in your approach and devise various methods for utilizing other people's money to finance your transactions. Some of those innovative methods are listed below:
Use Double escrow
If you have a finance background, you must have heard of the escrow account. There is such a term as double escrow. Double escrow means buying and selling property at almost the same time. The money received from sale is utilized to pay the purchase price of the property. The sale price is a bit higher then the purchase price which is your profit. In a double escrow, profit is realizable only after both part of the transaction are simultaneously completed. Before going into this kind of transaction you must first secure both ends of the deal or you might end up in a jam.
Use seller's financing
Usually a property owner already has one or other lending facility. What you have to do is convince him that you are going to take over his mortgage for a specified period of time until you can find a suitable buyer for the property. When the property is sold, the sale proceeds of the property can be used to pay off the mortgage. The difference amount is your profit.
Mortgage Take Over
There is a paragraph in virtually all loan agreements which is called "due-on-sale" clause. This clause stipulates that when the title of a property is transferred, the lender has the right to demand full settlement of his loan. According to this clause it is the lender's prerogative whether or not to demand full settlement of loan. If you take over a mortgaged property and make timely payments there is every chance that the lender will not exercise his right of "due-on sale". This way you can buy properties without having to go through a credit check. The properties can later be sold to prospective buyers.
You might be discouraged in the beginning when you go and try out any of the above mentioned options. But there are great opportunities of making money in the real estate market without down money. The key is to build a workable real estate investing strategy and not get discouraged by early failures.
In order to invest in real state without down money, you must be creative in your approach and devise various methods for utilizing other people's money to finance your transactions. Some of those innovative methods are listed below:
Use Double escrow
If you have a finance background, you must have heard of the escrow account. There is such a term as double escrow. Double escrow means buying and selling property at almost the same time. The money received from sale is utilized to pay the purchase price of the property. The sale price is a bit higher then the purchase price which is your profit. In a double escrow, profit is realizable only after both part of the transaction are simultaneously completed. Before going into this kind of transaction you must first secure both ends of the deal or you might end up in a jam.
Use seller's financing
Usually a property owner already has one or other lending facility. What you have to do is convince him that you are going to take over his mortgage for a specified period of time until you can find a suitable buyer for the property. When the property is sold, the sale proceeds of the property can be used to pay off the mortgage. The difference amount is your profit.
Mortgage Take Over
There is a paragraph in virtually all loan agreements which is called "due-on-sale" clause. This clause stipulates that when the title of a property is transferred, the lender has the right to demand full settlement of his loan. According to this clause it is the lender's prerogative whether or not to demand full settlement of loan. If you take over a mortgaged property and make timely payments there is every chance that the lender will not exercise his right of "due-on sale". This way you can buy properties without having to go through a credit check. The properties can later be sold to prospective buyers.
You might be discouraged in the beginning when you go and try out any of the above mentioned options. But there are great opportunities of making money in the real estate market without down money. The key is to build a workable real estate investing strategy and not get discouraged by early failures.
I invite you to learn more about Real Estate Investing and become a member of our FREE weekly tele-seminar class where we teach tips and strategy on how to grow your real estate investing business and how to raise Private Money by going to http://www.realestatewealthtoday.com/TuesdayTipsSignUp.html.
Mike Lautensack is a full-time real estate entrepreneur, coach and mentor in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE eBook go to
Real Estate Investing Blog.
Residential Property Management: Tips on How to Find Renters Using Newspaper Advertising
Importance of Headlines
Particularly with newspapers you don’t have a lot of space and it’s expensive, so you’re going to have maybe a headline, one or two bullet points, and then a phone number or website. You don’t have a lot of space so you’ve got to make sure that you do it the right way. Your headline has to be appealing.
Let’s use Louisville as an example. You don’t need to put Louisville in your headline. Everybody knows it’s a Louisville newspaper. You’ve wasted your space. We see that mistake a lot.
Putting irrelevant words in your headlines doesn’t mean too much. Make sure your headlines have relevant words. If it’s a particular neighborhood or section of town, if it’s a well-known area, make sure you put that in there, but not the town.
Be Concise
Be very concise. If you can drive them to your voice mail system or your website, that’s the best way to do it. They would go there and find out if they have some interest. They would see some photos or the video and would kind of screen themselves out and save you a lot of time.
Be Careful of Fair Housing
One thing you’ve got to be careful of is violation of Fair Housing when you advertise. Remember people are going to look at your ad and claim somehow that you’re being in violation of Fair Housing rules. This is a whole subject by itself. We can spend a whole night talking about this. You have to be careful about the words you use.
You can’t use words like church – even if it’s right next to the biggest church in town, or directly across from the biggest church in town. You can’t mention that church. That is a violation.
You can’t mention any sort of family – “It’s a family neighborhood.” If you say the words “family neighborhood” in theory you might be implying that single people aren’t welcome so you’ve got to be careful.
Or vice versa, if you use “apartment designed for singles,” it might be construed as excluding families. Be careful about the words you use. Think about them a little bit.
One of the things I’m going to do on the checklist you’re going to get from me is there are a lot of things in there in terms of words to use and then alternative words to use, particularly if you want to write an ad and you want to use the word fantastic three times.
It will give you fantastic and then give you two or three alternative words to use to try and mix up your words. My template ads are on that checklist. You’re going to get those as part of this program.
Be careful of Fair Housing. If you want HUD offers, in most areas a one day course doesn’t cost much, say $25, where you can take a Fair Housing course. You can learn all about the rules and regulations of Fair Housing. If you’re a serious property management I would do that. Go and spend a Saturday or whatever day they offer that course, take it and learn those rules and regulations and keep yourself out of hot water.
I invite you to learn more about Property Management and get a free 60 minute audio titled “Learn the 10 Success Secrets of Property Management Every Real Estate Investor Must Know to Maximum Profit and Avoiding Tenant Headaches” by going to http://www.realestatewealthtoday.com/PMS.html.
Mike Lautensack is the owner of Del Val Property Management LLC, a FULL service residential property management company located in Philadelphia, PA.
Particularly with newspapers you don’t have a lot of space and it’s expensive, so you’re going to have maybe a headline, one or two bullet points, and then a phone number or website. You don’t have a lot of space so you’ve got to make sure that you do it the right way. Your headline has to be appealing.
Let’s use Louisville as an example. You don’t need to put Louisville in your headline. Everybody knows it’s a Louisville newspaper. You’ve wasted your space. We see that mistake a lot.
Putting irrelevant words in your headlines doesn’t mean too much. Make sure your headlines have relevant words. If it’s a particular neighborhood or section of town, if it’s a well-known area, make sure you put that in there, but not the town.
Be Concise
Be very concise. If you can drive them to your voice mail system or your website, that’s the best way to do it. They would go there and find out if they have some interest. They would see some photos or the video and would kind of screen themselves out and save you a lot of time.
Be Careful of Fair Housing
One thing you’ve got to be careful of is violation of Fair Housing when you advertise. Remember people are going to look at your ad and claim somehow that you’re being in violation of Fair Housing rules. This is a whole subject by itself. We can spend a whole night talking about this. You have to be careful about the words you use.
You can’t use words like church – even if it’s right next to the biggest church in town, or directly across from the biggest church in town. You can’t mention that church. That is a violation.
You can’t mention any sort of family – “It’s a family neighborhood.” If you say the words “family neighborhood” in theory you might be implying that single people aren’t welcome so you’ve got to be careful.
Or vice versa, if you use “apartment designed for singles,” it might be construed as excluding families. Be careful about the words you use. Think about them a little bit.
One of the things I’m going to do on the checklist you’re going to get from me is there are a lot of things in there in terms of words to use and then alternative words to use, particularly if you want to write an ad and you want to use the word fantastic three times.
It will give you fantastic and then give you two or three alternative words to use to try and mix up your words. My template ads are on that checklist. You’re going to get those as part of this program.
Be careful of Fair Housing. If you want HUD offers, in most areas a one day course doesn’t cost much, say $25, where you can take a Fair Housing course. You can learn all about the rules and regulations of Fair Housing. If you’re a serious property management I would do that. Go and spend a Saturday or whatever day they offer that course, take it and learn those rules and regulations and keep yourself out of hot water.
I invite you to learn more about Property Management and get a free 60 minute audio titled “Learn the 10 Success Secrets of Property Management Every Real Estate Investor Must Know to Maximum Profit and Avoiding Tenant Headaches” by going to http://www.realestatewealthtoday.com/PMS.html.
Mike Lautensack is the owner of Del Val Property Management LLC, a FULL service residential property management company located in Philadelphia, PA.
Learn How to Collect Rent and Deal With the Eviction Process Without Attorneys
Collecting rent is one of those situations where I have
to use some rules of thumb, some feeling, some gut to try to figure out
whether it's time to go and do the eviction or do we try to work with
the tenant and see if they can get caught up. Maybe it's a temporary
problem. We can do a weekly or monthly payment plan and maybe we can
get them back on paying again.
In the same token, if I don't feel it's going to happen, we have to go to eviction quickly. There's no point in waiting and spending two or three months waiting around for something that's not going to happen. That takes some gut feel and experience.
Know the Rules for Eviction
We'll talk about the eviction process. There again, just like the rules and regulations, you've got to be smarter than your tenants. You've got to know the rules better than they do, because if you don't, I guarantee you they will take advantage of you. They will tell you things that are not accurate and if you buy into it you're going to end up being their whipping post.
Now every state might be slightly different and I recommend you go to Google and search for your sate and landlord regulations and study them front to back. Knowing the rules and then enforcing them is the single most important thing in terms of collecting rent.
Should you use an attorney for evictions? You guys can do it better than an attorney can. They will do almost nothing for you except the fact that they're attorneys and they'll charge you $250-300 an hour.
I can probably out perform any attorney in this area and I can do it for $50 an hour for my clients, probably one sixth of what they'll pay an attorney.
How to Retain Tenants
How to work with tenants and try to encourage them to stay tenants, making sure that you're resolving issues with them in a friendly and professional way so they say, "Hey, yeah, I want to stay another year, two years, three years whatever."
If you are late with doing maintenance, you drag your feet, you try to find excuses why not to do it every time they call you, you don't return their calls, they got a little drip here and there, you don't fix it, do you think they're going to stay that second year after that lease runs out? I don't think so.
Again, you want to keep at it. You want to work within trying to keep the tenants as long as possible. Also, we have little things in our lease that encourage tenants to sign a new one-year lease. They can go month-to-month but there are some penalties - I wouldn't call it that - but just some things in that lease that make it more onerous on them as opposed to coming back to me and saying, "I'd rather have a new one-year lease than go month-to-month."
We probably have 75 to 80% of our tenants come back to us for a new one-year lease as opposed to remaining month-to-month. It's hard for you as landlords and owners to manage if you don't know beyond 30 days whether your tenant's staying or going. It's much nicer to have a one-year lease and you know that for the next 12 months at least you're going to get rent, so we'll talk about that.
In the same token, if I don't feel it's going to happen, we have to go to eviction quickly. There's no point in waiting and spending two or three months waiting around for something that's not going to happen. That takes some gut feel and experience.
Know the Rules for Eviction
We'll talk about the eviction process. There again, just like the rules and regulations, you've got to be smarter than your tenants. You've got to know the rules better than they do, because if you don't, I guarantee you they will take advantage of you. They will tell you things that are not accurate and if you buy into it you're going to end up being their whipping post.
Now every state might be slightly different and I recommend you go to Google and search for your sate and landlord regulations and study them front to back. Knowing the rules and then enforcing them is the single most important thing in terms of collecting rent.
Should you use an attorney for evictions? You guys can do it better than an attorney can. They will do almost nothing for you except the fact that they're attorneys and they'll charge you $250-300 an hour.
I can probably out perform any attorney in this area and I can do it for $50 an hour for my clients, probably one sixth of what they'll pay an attorney.
How to Retain Tenants
How to work with tenants and try to encourage them to stay tenants, making sure that you're resolving issues with them in a friendly and professional way so they say, "Hey, yeah, I want to stay another year, two years, three years whatever."
If you are late with doing maintenance, you drag your feet, you try to find excuses why not to do it every time they call you, you don't return their calls, they got a little drip here and there, you don't fix it, do you think they're going to stay that second year after that lease runs out? I don't think so.
Again, you want to keep at it. You want to work within trying to keep the tenants as long as possible. Also, we have little things in our lease that encourage tenants to sign a new one-year lease. They can go month-to-month but there are some penalties - I wouldn't call it that - but just some things in that lease that make it more onerous on them as opposed to coming back to me and saying, "I'd rather have a new one-year lease than go month-to-month."
We probably have 75 to 80% of our tenants come back to us for a new one-year lease as opposed to remaining month-to-month. It's hard for you as landlords and owners to manage if you don't know beyond 30 days whether your tenant's staying or going. It's much nicer to have a one-year lease and you know that for the next 12 months at least you're going to get rent, so we'll talk about that.
I invite you to learn more about Property Management and get a free audio titled "Learn the 10 Success Secrets of Property Management Every Real Estate Investor Must Know to Manage Your Own Investments Properties for Maximum Profit and Avoiding Tenant Headaches" by going to http://www.realestatewealthtoday.com/PMS.html
Mike Lautensack is the owner of Del Val Property Management LLC, a FULL service residential property management company located in Philadelphia, PA.
The Advantages of Professional Property Management Vs “Mom and Pop Management”
One of the things we’re going to focus on is what is professional
management versus mom and pop management. Now many of you may have a
couple properties. Maybe you’ve read a book on property management, I
don’t know, but if you ultimately want to make a business and to grow
wealth and to be a serious real estate investor, you need to become a
professional property manager.
That is you’re better at it than most people. You’re better at it than nine out of 10 investors. You take it seriously because you’re investing a lot of your own money in these properties, a lot of your time and a lot of your energy, and you want to get the most you can out of it.
That’s where the money is, because if you don’t manage it properly, the value of that asset declines rapidly. I guarantee you, if you’ve bought a property, put a bad tenant in there and they destroyed your property, you’re looking at $5,000, $10,000, $15,000 of damage. Not that property management can totally eliminate that possibility, but certainly professional management versus mom and pop management makes a huge difference.
Advantages of Property Management
We’re going to go through that and understand that process. We’re going to go through the advantages of property management. Why is it worth you getting on this call for two hours for a series of four calls? What are the monetary advantages of doing it? Are there monetary advantages to it? Why not just read a $12 book?
Sure, you can do that, but everybody knows reading a book is a hard way to learn. It’s not interactive. You won’t have the ability to fire questions at me. Maybe you’re pretty good at property management and you have a couple areas you’re weak at. You won’t have the ability to fire questions at me.
Again, filling a rental. Let’s say we had a $900 a month rental. Filling it 30 days earlier than you would otherwise puts $900 in your pocket. So the monetary issues here are tremendous. Keeping a tenant a second year as opposed to losing them because you didn’t treat them right or you didn’t fix the property right or whatever, reselling a vacancy is tremendously expensive.
You could be looking at two months vacancy, $900 per month, and costs you have to pay to maybe carpet in between tenants, so maintaining a tenant is again a huge monetary issue. So there are clearly some monetary issues here that can be quite overwhelming in terms of cost savings.
We’re going to talk about the importance of education, these kinds of calls tonight, the importance of doing it on a continuous basis, meaning joining your real estate clubs, looking for other resources, maybe join my coaching program at some point down the road, but continue to educate yourself further and more completely as time goes by.
Again, a professional real estate investor continues the education process and never stops. A mom and pop learns a couple things and then stops. We’re going to talk about the difference between the two. How to do things like develop contacts and network, how to work with contractors.
I invite you to learn more about Property Management and get a free audio titled “Learn the 10 Success Secrets of Property Management Every Real Estate Investor Must Know to Manage Your Own Investments Properties for Maximum Profit and Avoiding Tenant Headaches” by going to http://www.realestatewealthtoday.com/PMS.html
Mike Lautensack is the owner of Del Val Property Management LLC, a FULL service residential property management company located in Philadelphia, PA.
That is you’re better at it than most people. You’re better at it than nine out of 10 investors. You take it seriously because you’re investing a lot of your own money in these properties, a lot of your time and a lot of your energy, and you want to get the most you can out of it.
That’s where the money is, because if you don’t manage it properly, the value of that asset declines rapidly. I guarantee you, if you’ve bought a property, put a bad tenant in there and they destroyed your property, you’re looking at $5,000, $10,000, $15,000 of damage. Not that property management can totally eliminate that possibility, but certainly professional management versus mom and pop management makes a huge difference.
Advantages of Property Management
We’re going to go through that and understand that process. We’re going to go through the advantages of property management. Why is it worth you getting on this call for two hours for a series of four calls? What are the monetary advantages of doing it? Are there monetary advantages to it? Why not just read a $12 book?
Sure, you can do that, but everybody knows reading a book is a hard way to learn. It’s not interactive. You won’t have the ability to fire questions at me. Maybe you’re pretty good at property management and you have a couple areas you’re weak at. You won’t have the ability to fire questions at me.
Again, filling a rental. Let’s say we had a $900 a month rental. Filling it 30 days earlier than you would otherwise puts $900 in your pocket. So the monetary issues here are tremendous. Keeping a tenant a second year as opposed to losing them because you didn’t treat them right or you didn’t fix the property right or whatever, reselling a vacancy is tremendously expensive.
You could be looking at two months vacancy, $900 per month, and costs you have to pay to maybe carpet in between tenants, so maintaining a tenant is again a huge monetary issue. So there are clearly some monetary issues here that can be quite overwhelming in terms of cost savings.
We’re going to talk about the importance of education, these kinds of calls tonight, the importance of doing it on a continuous basis, meaning joining your real estate clubs, looking for other resources, maybe join my coaching program at some point down the road, but continue to educate yourself further and more completely as time goes by.
Again, a professional real estate investor continues the education process and never stops. A mom and pop learns a couple things and then stops. We’re going to talk about the difference between the two. How to do things like develop contacts and network, how to work with contractors.
I invite you to learn more about Property Management and get a free audio titled “Learn the 10 Success Secrets of Property Management Every Real Estate Investor Must Know to Manage Your Own Investments Properties for Maximum Profit and Avoiding Tenant Headaches” by going to http://www.realestatewealthtoday.com/PMS.html
Mike Lautensack is the owner of Del Val Property Management LLC, a FULL service residential property management company located in Philadelphia, PA.
Real Estate Investors - Learn the Most Important Element You Must Have to Make a Successful Offer!
The first step in the instant offer system is simply to
build rapport. This is a fundamental building block to any offer. You
cannot develop a deal with a seller if you're not in rapport.
What is a Rapport?
What is rapport? It's hard to define. It's not necessarily being friends. It's not necessarily having a long relationship. It's not that. It's a sense that the two of you are on the same page. There's some comfort between the two of you.
There is starting to be a sense of trust that you're comfortable with each other. You have a sense that the other person and you are kind of moving in the same direction that both of you want to go.
If you don't have rapport you cannot move forward in this system. It is absolutely the most essential of the five steps. If you do not have rapport then really the process is over.
The Importance of Rapport
If you go talk to a seller and the first couple of minutes are very awkward, maybe very argumentative or you say something that the other person doesn't like - it gets their back up a little bit - the offer process is really over at that point. It really can't proceed until you come back and you develop that rapport.
It doesn't mean you can't come back and get it, but at that point you've got to take a minute and build rapport.
How to Develop a Rapport
One of the best ways to develop rapport when you walk into somebody's home is to start to ask questions and take a little tour of their home. Make comments about some of their belongings in the house.
Maybe they've got sports memorabilia and you can make a comment about it if you're in a sports town. You can talk about the great game a couple of years ago, the Superbowl, World Series or whatever. You're developing some rapport. The two of you are developing some commonalities. You're starting to understand each other.
If the person has pictures of their kids or something of that nature you can make comments about that. If there's something about a college, maybe you can make some comments about that - you or somebody you know has been there.
Basically you want to walk through the house with that individual, spend a few minutes and just chat about relatively minor things - nothing important. That is the rapport building process. You can compliment the house. If it's decorated nice or there's something you particularly like about the property, a compliment is obviously a process of building that rapport. It's important that you go through this step. It's important that in your mind you take some time.
I know everybody wants to jump to the table and start making the offer, but this process needs to take its time. Let it build and develop naturally. If this walk through takes half an hour, let it take half an hour. Don't try to force it. Again, the rapport will happen naturally if you allow it to.
What is a Rapport?
What is rapport? It's hard to define. It's not necessarily being friends. It's not necessarily having a long relationship. It's not that. It's a sense that the two of you are on the same page. There's some comfort between the two of you.
There is starting to be a sense of trust that you're comfortable with each other. You have a sense that the other person and you are kind of moving in the same direction that both of you want to go.
If you don't have rapport you cannot move forward in this system. It is absolutely the most essential of the five steps. If you do not have rapport then really the process is over.
The Importance of Rapport
If you go talk to a seller and the first couple of minutes are very awkward, maybe very argumentative or you say something that the other person doesn't like - it gets their back up a little bit - the offer process is really over at that point. It really can't proceed until you come back and you develop that rapport.
It doesn't mean you can't come back and get it, but at that point you've got to take a minute and build rapport.
How to Develop a Rapport
One of the best ways to develop rapport when you walk into somebody's home is to start to ask questions and take a little tour of their home. Make comments about some of their belongings in the house.
Maybe they've got sports memorabilia and you can make a comment about it if you're in a sports town. You can talk about the great game a couple of years ago, the Superbowl, World Series or whatever. You're developing some rapport. The two of you are developing some commonalities. You're starting to understand each other.
If the person has pictures of their kids or something of that nature you can make comments about that. If there's something about a college, maybe you can make some comments about that - you or somebody you know has been there.
Basically you want to walk through the house with that individual, spend a few minutes and just chat about relatively minor things - nothing important. That is the rapport building process. You can compliment the house. If it's decorated nice or there's something you particularly like about the property, a compliment is obviously a process of building that rapport. It's important that you go through this step. It's important that in your mind you take some time.
I know everybody wants to jump to the table and start making the offer, but this process needs to take its time. Let it build and develop naturally. If this walk through takes half an hour, let it take half an hour. Don't try to force it. Again, the rapport will happen naturally if you allow it to.
I invite you to learn more about Real Estate Investing and join our FREE weekly tele-seminar class where we teach tips and strategy on how to grow your real estate investing business and how to raise Private Money by going to http://www.realestatewealthtoday.com/TuesdayTipsSignUp.html
Mike Lautensack is a full-time real estate entrepreneur, coach and mentor in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE eBook go to
Real Estate Investing Blog.
Real Estate Investors – Learn the 5 Key Elements You Must Have to Make “No Money Down” Offers
I would like to talk about what I call the “WOWWW” formula. It
is a simple formula that you’ve got to understand and incorporate into
your business if you are serious about real estate investment.
There is simply no way that you can structure a truly no money down and creative offer if you don’t understand this formula. There are just five pieces to it. Four of which are “W’s” and one of which is an “O”. The five important elements to working with a seller before you can structure an offer you must know these five pieces of information.
“W” When
You must know when. That is basically when do they want to sell? You want to understand their sense of urgency, their motivational level. If they want to sell months from now, they’re not very urgent. You’re not going to get a very good deal, and it’s really not something you should be spending much time on.
I’m not saying you don’t capture that person’s name, email and phone number, and put it in a database somewhere and follow up with them on a regular basis through postcards and what not. But they’re not going to be a deal this week or next month. They’re simply not.
If they’re not properly motivated, and the when is motivation, if they are going to be doing a deal in the next 30 days because of a foreclosure, they’re moving out of state, or they’re out of state or about to miss a mortgage payment because they’ve been trying to sell it for a year and they can’t sell it and they’ve run out of money, then their ‘when’ has really shortened up.
“W” What
What is their situation? That’s kind of related but you need to understand what’s going on with them. Why do they need to sell? Is it a foreclosure or pre-foreclosure? Is it a divorce? Is it a sale where they can’t get it sold? Is it that they bought it to flip?
We’re seeing a lot of this. People have bought things to flip them, went in and rehabbed it – spent a lot of money – and they were hoping to sell it but the market turned on them and they got stuck. So you need to understand what their situation is. That’s an important element of this.
“W” What Is the House Worth
Worth is always difficult to nail down, but you should do your homework and figure this out. You should look at comps or appraisals or whatever other sources of information you want to try to figure out what the properties worth fixed up.
It may be worth $150,000, $200,000, $300,000 or who knows. You should have some sense of what the property’s worth to make an offer.
“O” Owe
You should know what the person’s owes on the mortgage or mortgages. This is a critical element and something a lot of people don’t understand. You cannot make an offer through the MLS system if you don’t know what the other person owes. It’s very hard to make a creative offer if you don’t know what they owe.
If the property is free and clear and there’s no mortgage, then that will dictate a completely different type of offer. If they’re completely under water and the house is worth $130,000 and the mortgage is $150,000 that will drive a completely different type of offer. If they owe $90,000 that will drive the ultimate offer.
You cannot make quality offers to sellers if you don’t understand what they owe. It’s absolutely critical. All five of these are critical.
“W” What They Want
Probably the least important is what they want. That will change over time. If they’re not motivated and don’t need a quick sale – one and two aren’t really in place – most likely they’re going to want a high price. They are not truly ready to do a deal. They are not where you need them to be to do a deal.
What they want first all changes over time. It’s also probably the least important of the five items. However, you do need to know what that is. If they want some outlandish number, you don’t want to spend a lot of your time and effort on it.
That is the WOWWW formula. Use it on every deal and make much better offers.
I invite you to learn more about Real Estate Investing and join our FREE weekly tele-seminar class where we teach tips and strategy on how to grow your real estate investing business and how to raise Private Money by going to http://www.realestatewealthtoday.com/TuesdayTipsSignUp.html
Mike Lautensack is a full-time real estate entrepreneur, coach and mentor in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE eBook go to
Real Estate Investing Blog.
There is simply no way that you can structure a truly no money down and creative offer if you don’t understand this formula. There are just five pieces to it. Four of which are “W’s” and one of which is an “O”. The five important elements to working with a seller before you can structure an offer you must know these five pieces of information.
“W” When
You must know when. That is basically when do they want to sell? You want to understand their sense of urgency, their motivational level. If they want to sell months from now, they’re not very urgent. You’re not going to get a very good deal, and it’s really not something you should be spending much time on.
I’m not saying you don’t capture that person’s name, email and phone number, and put it in a database somewhere and follow up with them on a regular basis through postcards and what not. But they’re not going to be a deal this week or next month. They’re simply not.
If they’re not properly motivated, and the when is motivation, if they are going to be doing a deal in the next 30 days because of a foreclosure, they’re moving out of state, or they’re out of state or about to miss a mortgage payment because they’ve been trying to sell it for a year and they can’t sell it and they’ve run out of money, then their ‘when’ has really shortened up.
“W” What
What is their situation? That’s kind of related but you need to understand what’s going on with them. Why do they need to sell? Is it a foreclosure or pre-foreclosure? Is it a divorce? Is it a sale where they can’t get it sold? Is it that they bought it to flip?
We’re seeing a lot of this. People have bought things to flip them, went in and rehabbed it – spent a lot of money – and they were hoping to sell it but the market turned on them and they got stuck. So you need to understand what their situation is. That’s an important element of this.
“W” What Is the House Worth
Worth is always difficult to nail down, but you should do your homework and figure this out. You should look at comps or appraisals or whatever other sources of information you want to try to figure out what the properties worth fixed up.
It may be worth $150,000, $200,000, $300,000 or who knows. You should have some sense of what the property’s worth to make an offer.
“O” Owe
You should know what the person’s owes on the mortgage or mortgages. This is a critical element and something a lot of people don’t understand. You cannot make an offer through the MLS system if you don’t know what the other person owes. It’s very hard to make a creative offer if you don’t know what they owe.
If the property is free and clear and there’s no mortgage, then that will dictate a completely different type of offer. If they’re completely under water and the house is worth $130,000 and the mortgage is $150,000 that will drive a completely different type of offer. If they owe $90,000 that will drive the ultimate offer.
You cannot make quality offers to sellers if you don’t understand what they owe. It’s absolutely critical. All five of these are critical.
“W” What They Want
Probably the least important is what they want. That will change over time. If they’re not motivated and don’t need a quick sale – one and two aren’t really in place – most likely they’re going to want a high price. They are not truly ready to do a deal. They are not where you need them to be to do a deal.
What they want first all changes over time. It’s also probably the least important of the five items. However, you do need to know what that is. If they want some outlandish number, you don’t want to spend a lot of your time and effort on it.
That is the WOWWW formula. Use it on every deal and make much better offers.
I invite you to learn more about Real Estate Investing and join our FREE weekly tele-seminar class where we teach tips and strategy on how to grow your real estate investing business and how to raise Private Money by going to http://www.realestatewealthtoday.com/TuesdayTipsSignUp.html
Mike Lautensack is a full-time real estate entrepreneur, coach and mentor in Philadelphia, PA and creator of the Private Lending Presentation Kit. This powerful done-for-you kit is loaded with tools and techniques to attract and develop a consistent stream of private investors into your real estate business. To learn more about this kit and receive your FREE eBook go to
Real Estate Investing Blog.