"One Sub2 Ringy Dingy, Two Sub2 Ringy Dingy"

"Is this the party to whom I am speaking...?"

Unfiltered calls are the pits!

Last month I abandoned all heretofore protocols of mine and posted an unfiltered craigslist ad.

Why? I had a friend who had a friend who needed out of her small house yesterday. Frankly, I don't like doing low-end deals, especially, if I can't get the deed, and it's going to be lease/option deal --- and especially when the house isn't that nice.

That's nearly 3 strikes. The third strike would be trying to cover an adjustable loan, on an underwater house. Forget that.

However, my friend's friend needed help so I thought, "Well, if I owned an upside down rental, and needed a way to protect my credit, and I didn't know any way, and I found a guy like me to help me, he would be my hero." So I succumbed. I'm so desperate to be a hero.

I didn't have a buyer's list ready for either a lease/option house, or one this cheap. So I had to scramble to get things together. So, I experimented with the generic craigslist "lease option" ad, based on some proven ad copy I developed from earlier times. However, I left most of the qualifying information out of the ad to get the largest response, in my attempt to remind myself why highly tailored ads are critical to maintain --- and used to avoid having to wade through a bunch of trash calls.

My experimental ad copy worked, but I left out another important ingredient. Meantime, I got exactly what I advertised for...a pile of unfiltered buyers with no money for down payments. Whoops!

The real point of this, is that certain shotgun ads work. However, when it does, we'll be on the phone forever with "Looky Lou's!" who aren't serious (or ready) to actually buy our houses if we don't first say what we must have... Otherwise, we just get the just curious, and the tire kickers, that waste our time.

So what was the missing ingredient here, besides not qualifying with the ad copy?

Why, it was not using voice mail to capture and qualify leads. If we're not using a 3rd party lead capture, then what? It means that we're gonna have to do the screening in person.

In years past I was the "Marvin Milquetoast" of phone interviewers. I all, too often, operated from my heels. I rarely felt in control, or confident about how to cut to the chase. That was then. Not no mo.

Now, I've got one question that I ask every buyer before we get down to business...to see IF we can get down to business, so that I'm not wasting my time personally helping the curious weigh their options at my expense. And what is that "one question?"

You can find it in my creative real estate investing course I call, "Screw The Bank!"

It's my "no credit - no down payment - no hassle" real estate investing system that allows me to find the most anxious buyers and sellers in this market who will let me pocket $30k in 90 days."

Really "Low-Budget" Postcards

I am a strong advocate for ugly, non-threatening postcard ad copy. With years of experience, and a boat-load of wasted money sending "pretty" postcards ---- I recommend a bigger boat-load of profits made by only sending non-coated (not shiny), plain 60#, 4x6, "Insane Asylum Green" postcards with bullets of information...

Meanwhile, check this out. This guy's approach is even more low budget! And I actually thought that was impossible until now! Take a look.

In a future post I'll give you some proven ideas for simple ad copy that really works at sifting out the "don't wanters" and converting them.

How do you find "good" deals without any competition?

I've been curious and questioned other investors that consistently found juicy deals, how they found a particular deal. The answers have usually been that they learned about the property word-of-mouth from someone who knew the owners, or through some acquaintance. Basically referrals.

That seems obvious for seasoned investors who've staked a claim in particular farm. However what about when we don't have a presence in the farm yet? How can we find good deals before we've established a good referral business?

I've discovered that direct marketing is THE answer (dream tool) for not only finding juicy prospects, but getting the prospects to call ME directly, and...best of all... getting the prospects to call me without (or before) calling any of my potential competitors.

OK, so direct marketing works. But one asks, how we choose a good farm area. And what criteria do we use to chisel the list of prospects down to the MOST profitable mailing list.

The answer is easy. First make up your mind about what type of financing you are capable of. Are you a cash buyer? Are you a Lease/Optionor type buyer with a some cash? Are you a wholesaler with solid financial backing or personal funds? Or maybe a rehabber with a line of credit? These all make difference on what types of houses, and equity situations you target.

Then make a decision on the price range of houses you want to invest in, the size home, again the equity values, the age of the properties, and finally the length of ownership. Did you know that most owners get in trouble on their home loans within the first 24 months of ownership? These are usually good sub2 type prospects. These are what I target.

Yep. And these types of prospects usually have very little equity. And this makes a big difference for those of us who specialize in taking over loans on houses that I call "equity lite". These are properties bought with 10% down a couple years previous, but don't reflect enough equity now to pay a real estate agent to sell.

Of these prospects that get in trouble --- these are the same prospects that tried to keep up with the Jones after buying their new home. They moved in and immediately loaded their credit cards up with furniture and toy purchases. Dad of course had to match the "Bubba" truck that the neighbor owned, in order to pull the new trailer filled with "desert toys". And then mom soon after refused to drive the kids to school in that old 1995 Aerostar. So she came home in the new Honda SUV to show off to the other mothers.

Well, after all these purchases of cars, furniture and toys, they're now over extended. Whoops! Figuring out how to downsize the bills, they discover the only thing they can sell is the house! Everything else is upside down.

Meanwhile, I'm scouring for upside down moms and dads in new houses. So Mom and Dad Seller get a card from me, informing them about how they can sell their house in 24 hours (or less!). Mom calls to ask how this is possible. I invite myself over to evaluate their situation and explain what (if anything) I can do for them.

So, in comes me! The hero,

• to take over their loan
• protect their credit
• and resell the house for an obscene profit to a credit challenged buyer whom has roughly 10% down.
  
• This all happens in four weeks flat.

The house was worth about $300,000. I took over a $260,000 loan. I resold the house for $330,000. I asked for $30,000 down. So, $30,000 profit up front in down payment money, and another $40,000 in potential equity profit equals $70,000!

Not bad just for protecting someone's credit, and bailing them out of a loan they could no longer afford.

That's why DM'ing becomes profitable --- sifting out all the prospects except those that are likely to be headed to foreclosure because of pride. And notice, nobody else was competing with me for this juicy deal. I am the only one talking to these sellers. And I didn't have to create a name for myself in the community to get the referral. I just went directly into the pool of "don't-wanters" as Bob Allen used to say.

Next post, I'll explain the cheapest place to get a mailing list.