Lou Brown (00:00):
Now that you have the property, what are you going to do with it? Stay tuned.
Lou Brown (00:16):
Welcome. This is installment number 10 of our 10 ways to make your first real estate deal. And definitely we've been going through a checklist of things to do, what to do, how to do it, when to do it. And now this is number 10. And now that you've acquired the asset, what are you going to do? How are you going to put the people in there? Well, in another part of the series, we did talk about our strategy of finding the buyer or the renter before you buy. That means that you're kind of essentially custom-buy a house for them. And now that you have done exactly that, what we typically do is once we put a property under contract, then we're going to sell that property to them. So, at some point in the game, initially we're getting a down payment from them. We're getting monthly income from them. And at some point on the exit strategy scale, then they will purchase that property and you'll get the rest of your profit out of that property with a greatly reduced cost of funds, greatly reduced the cost of doing the job and the deal. Now, first I wanted to cover the Wins of the Week that we've had, and we've definitely had some Wins of the Week. So we're going to be getting into our asset management in just a moment.
Lou Brown (01:53):
All right. Well, I thought I'd start with a Win of the Week that I think will really entice you. If you're into real estate, you know that there are many different ways that you can purchase properties, and many different ways that you can make money in real estate. Well, one of the ways that I discovered is what I call a trade, right? So what if you go sit down with a seller and maybe you've paid attention before, and you know that we have a process that we do with a seller. So we make a presentation. We tell them who we are, what we do, how we operate, how we can help, how we're different from others and so on. And then we finally get to our cost-to-sell worksheet. And this cost-to-sell worksheet is how we get down to the bottom line number of purchasing a property while I did one of those recently, and I proposed it to the seller that we got to the bottom line number.
Lou Brown (02:56):
And they said,"Okay, whatever." And I said, "Well, let me ask you a question. What are you looking for?" And they said, "Well, we're looking for a 3-bedroom, 2-bath. We're looking in a certain area of town. We want to be near our grandson and our son. And we wanted to be near a hospital," and so on. So they gave me all their criteria that they were looking for. I said, "Let me ask you a question. If I were to find that house for you and I were to buy that house and you were to move in, say from here to there, and then we take over this property, would that work for you?" Oh my gosh, they got so excited. They said, "Yes! That would work. Fantastic!" And you've got to think about where they were coming from. I mean, think about this.
Lou Brown (03:43):
You have to sell your property in order to have the money in order to buy another property. So what you do, you might have to sell and now pack up everything, put it in storage, go rent an apartment, and go hunt for the other property. And then eventually buy that property, take everything out of storage, move into that other house where I proposed, "Look, let's just do a swap. Would that work for you?" Man! So exactly what you're looking at right now in front of you. That is my swap property that we just closed on last Friday. And it is exciting that we now have an opportunity. We've already put a brand new roof on the house. We're inside the house, doing some repairs, doing some fix up before they even see it. So, if they don't want the property, I'm not worried at all.
Lou Brown (04:34):
I've got other buyers. And so we'll go ahead and sell this property to somebody else if they don't love this property. But I think they're going to love it. It's everything that they said that they wanted. So we'll keep you tuned on that. Stay tuned for other options and opportunities as we move forward on the transaction. And another win of the week, oh, well, there you go. There's interior shots. Forgot I had that in there. And so now you can see it's a nice, big property, very comfortable, nice backyard, flat. Got a good workable kitchen. There, gotta do some work on those floors. And so that's what I am proposing to swap with them. Now, the other Win of the Week, I thought I'd share with you is Eric and Lily Cooper. They are Street Smart. They started with me over a year ago.
Lou Brown (05:31):
They've now done 18 properties using my program. I'm so proud of them and they are definitely offering people the Path To Home Ownership, the opportunity as Certified Affordable Housing Providers to make a difference out there in the world. So sure enough, this mobile home is a great example. They bought it. It's a 3-bedroom, 2-bath, 1,200-square foot. Seller was moving quickly. They asked $26,000. They negotiated and were able to do it the Street Smart way, which is with the seller being the bank. We love the seller being the bank. Of course, there's always an opportunity for cash deals, but even better is when the seller will carry back financing. You don't have to raise that money. So sure enough, $3,500 down and that included the appliances. And they're going to pay that off over $400 a month for 60 months at zero interest.
Lou Brown (06:34):
Now think about that. Now that's on the buy side of the deal. Repair's only a thousand dollars. They sold it using our Path To Home Ownership Program. Family with kids, like the school district. They got it at the gold level in our program, that means the agreement-for-deed owner-financing level of the program. They sold it for 45,000. You can see a mark-up already, right? $5,000 down, 725 a month, and that's for 240 months at 9 and 3-quarters percent interest. Signed a contract 45 minutes after they picked up the keys on the purchase of the home. So that's exactly what we like to do. We like to already have a customer in line for the property so that when we buy it, we sell it the same day. And separately, the Street Smart profit center that we teach you about asset management is that we separately, he separately sold them the appliances for $150 a month for 48 months.
Lou Brown (07:42):
So that's another $7,200 profit center in that particular deal. The appliances were only 6 months old. So they had some real quality and value there. So the income cash flow for the first 5 years, because they are paying off that underlying financing, it's like taking money out of one pocket, putting it in the other pocket because there's absolutely no interest on that financing. But as far as cash flow goes, that brings it down to $425 a month. Now, separately, the people are paying the lot rent as well, but you can see this is just clean cashflow off that property. It's a great example of what you can do when you learn how to do business, the Street Smart way. There are great options and opportunities where we solve sellers' problems. This seller needed to move quickly. They didn't need the money right now. They did like the idea of cash flow over the next 5 years.
Lou Brown (08:42):
And that's exactly what they're going to be getting is that extra $400 a month coming in, when their bills are due. So it's always an option and an opportunity to ask people if they would consider doing financing. Want to remind you that coming up is our Millionaire Jumpstart, that's going to be December 3rd, 4th, and 5th in Atlanta, Georgia. So I definitely want to get you there. Definitely, I want to help you to build an amazing business in real estate, go to MillionaireJumpstart.com. All right. So back to what I was teaching you about the 10th step in managing your assets.
Lou Brown (09:39):
Yeah, baby. All right. So here we are. Property management has been one of the greatest things to learn, and I want to alert people that property management is a skill that is learned. You would think that it makes perfect sense that somebody would come along and they would just hand you money and you would move them into the property. And they would keep paying you every month because they want a roof over their head while there's a very, a long way from people doing what you would expect them to do to actually causing them to do the right thing at the right time. So what I've learned is you want to incentivize people to do the right thing. One of the ways we incentivize people is through our House Monster program, where at some point they have the opportunity to buy the house that they're in or a different house.
Lou Brown (10:40):
And what happens is when they move in, we're working with their credit. We're having that reported to the credit bureau. We're helping them to build up their score, and eventually they could buy either that house or a different house in the future. So that is our unique selling proposition, the Path To Home Ownership. And we definitely have that as part of the overall incentive to have people do what they're supposed to do. To have people do what they agreed to do. Now, if you're going to do property management the right way, first of all, we're going to attract the customers. Secondly, we're going to have them join our membership, which is our Path To Home Ownership membership. Third, we're going to actually screen them carefully. So that means we're going to look at their credit report. We are going to determine what's on there and what it would take for us to be able to help them improve their credit score.
Lou Brown (11:42):
Now, the next thing is, we're going to go about finding a property for them. They look at it, they like it. Boom. They're going to be moving into that property usually very quickly. All right, now in that process, we also get an application from them. We get a full-blown application on every person that's 18 years of age or older. Definitely want to check them out and to know that, listen, screening the folks carefully is a key factor in you having success in this business. Because if they have a history, if they have a background, you need to know about it. That doesn't mean we won't work with them. Many times we do work with people. However, if they have a very significantly damaged background, they're going to have to pay more. They're going to, if we're going to take a risk, that risk is going to be mitigated by them, simply paying more.
Lou Brown (12:39):
And it's all about finding out first, who you're working with, what is their background and what do we need to do to work together on solving that problem? Like I said, we don't quickly turn people down. We're more inclined to work with people. Now, the first thing we're going to look at is their income. We definitely want to know where they work, how long they've been on that job, and what is the combined household income because we're going to take that household income, the net income, we're going to divide by 3 and we're going to come up with a number and that's the most they can afford for that property. So pre-screening your people and determining what is affordable for those folks is very, very important. And I say that because you want to set people up for success, not failure. You want this to work out for them.
Lou Brown (13:35):
You want to bring everything to the table necessary for them to be a success. Now I'm not saying that every client is a success because their life, they're on their own life's journey. And things definitely happen in life that are unpredictable for us to know about them. And for them to even know that might happen, could be health. It could be loss of jobs. It could be family issues. There's just so many things that can come up in someone's life. So what do you need to do to be successful in this business? You need to be very, very careful about whom you move into your properties and that you have properly taken the time to screen them and know exactly their backgrounds and be careful because people will set up interceptors when you're calling. You're actually calling their friend or their relative, that's given them a glowing testimonial.
Lou Brown (14:30):
Well, that might not be true. So be very careful about what we do and how we do it, so that we can get a good, solid customer into the property. Now there's a lot more about property management that you need to know. And in fact, we have a whole system on that, Property Management, Volume 8. This is the keys to our kingdom in terms of what we do and how we do it to manage our properties and the people that move into them. One of the things that you have to learn is there's a timeline on that. We have a rental process checklist and I'll get one of those for you. We'll have it down in the, click line down below because you really need to know that there is a process to properly move people into homes and to make sure that you don't leave anything out in that process.
Lou Brown (15:31):
You know, every time a pilot gets in a plane, they go through a checklist. Even if they just landed that plane an hour before, you need to have a checklist to make sure that you don't make any mistakes in moving in the wrong people at the wrong time. Do your property, and definitely make sure that your T's are crossed and your I's are dotted. Now, one of the things I'm known for is our paperwork. So we have some amazing paperwork. We have our Standard Rental Agreement loaded with profit centers and protection. It's critical that you get the right paperwork. Now over the years, I have learned definitely that one comma, one paragraph, one sentence can make all the difference. So we've learned. Every year, we review our rental agreement and we say, "What have we learned? What have we learned that we need to improve on with the rental agreement?"
Lou Brown (16:27):
So I have a killer, great rental agreement that has been developed over decades of being in this business. You know, I've been dealing with residents in properties for over 40 years. So there's many things that I've learned. We've done over a thousand Section 8 contracts, for example. So there's many things I've learned there as well, but definitely there are opportunities for you to enhance and improve your skill set on property management. Strongly encourage you to check out, go to StreetSmartInvestor.com and you can check out Property Management under Tools. StreetSmartInvestor.com/Tools and then check out Property Management. And you'll be able to see the amazing things that we've learned about property management. And we've got a complete system for you to be able to not only enhance your real estate investing business, but you can actually go into the business of property management as well. It can be highly profitable. A lot of people do that. So there's a lot of opportunity for you when you learn the skills of proper property management. I'm looking forward to seeing you again soon. Yeah, baby.
Lou Brown (17:57):
All right. So we are one month away from the Millionaire Jumpstart. I want to make sure that you do get registered for that. You are going to get a very special manual that comes with that event. And it's going to have some of my very best documents in there, my very best training. And remember that in Millionaire Jumpstart, you're going to learn about my magical presentation, the entire presentation process. Particularly we're going to focus on this cost-to-sell worksheet. You're going to have homework during the event. You're going to learn that thing. And you're actually going to do a cost-to-sell worksheet right there in class. It's vital. It's critical. It's life-changing. I have had so many people make so much money off of that presentation. And off of that one worksheet, I want to let you know, this is something you absolutely need to get to.
Lou Brown (18:52):
It's a 3-day event. The main focus is buying properties. We also talk about holding properties and you're going to learn about trusts, land trusts and personal property trust. We're actually going to do a transfer of a property into trust during class. So it's chock-full of great information for the whole 3 days, loaded. Got to get there, MillionaireJumpstart.com. I do recommend that you become a VIP. Now the VIP is all explained there. And one of the great things that VIP's get is they get a very special, let me just grab you one, but this is not just any cooler. This cooler is full of vital savings, really great stuff. In fact, you're going to get one of the most important things is a recording of a prior Millionaire Jumpstart because what happens is there's so much information that's given during the event. People say, "I've got to hear this again."
Lou Brown (19:54):
So I've got that for you. That's included in your VIP. Not only that, I'm going to be taking you to dinner one night during the event. And I've got a bunch of other things in there, but the most valuable thing in that beautiful cooler is you get special time with good ole Lou. There's a special consultation certificate there. So think about the next deal that you may be working on and you'd love to have somebody's expertise on whether that's a good deal or not, or how to structure it, or how to raise the money for it or anything related to real estate buying, holding, or selling. Listen, I can help you with that, also with trusts, land trusts and personal property trusts. So let's take that time. That's going to be yours. That's going to be a special bonus consultation certificate that's included in that package and a bunch of other things that you're going to see at MillionaireJumpstart.com.
Lou Brown (20:51):
So definitely get yourself registered for the VIP. And we also have a general admission offering as well. So pay attention and get yourself registered. It is vital, vital information. I promise, even though you may have been to other events before, not Lou Brown events, but other people's events. This is going to be different. And I can give you that guarantee. In fact, I'll give you a money-back guarantee. Fact, I'll give you a double money-back guarantee. If you don't think this is the best investment you've ever made, I want to give you your money back. How cool is that? And I just want you to know that I've been doing this for quite a while. We've had raving fans come out of these events. We've had tremendous success come out of these events. So I know what's in store for you. Now, that's going to be December 3, 4, 5.
Lou Brown (21:41):
It's going to be in Atlanta, Georgia. It's going to be in a hotel near the airport. So, definitely, you can fly in, catch a shuttle, get over to the hotel and we're going to be sequestered for 3 days. So if you want to come and enjoy Atlanta, do it by adding on days, on either end of the session that we're going to have together. You can call the office +1-800-578-8580 if you'd like to know more. And I'm definitely looking forward to seeing you there. You've got plenty of time to plan for it. Got plenty of time to cause that to happen in your world. And definitely of course, you know that we do that about 4 times a year. So if you can't make this one coming up, we've got another one, but you know what, what a great time to get this done right before the end of the year, get yourself geared into the new year. Perfect planning. So I absolutely look forward to seeing you there. And I will see you next week because we are going to be doing the 10 top questions on property management. And it is going to be a blockbuster! Come prepared with questions as well, because not only am I going to do the countdown on the 10 top questions, but also I'm going to entertain your questions as well. So I will see you on Facebook, YouTube live next Tuesday. Yeah, baby.
No comments:
Post a Comment