Monday, November 29, 2021

Step 8: Why Most REI’s Run Their Business Backwards

  
Lou Brown is doing a ten-part series of Step by Step guides in buying your first BIG real estate deal. Today he will teach you how to find the buyer before you buy a property. Instead of having an inventory of properties, have an inventory of buyers. Have an inventory of clients that you are going to buy a property for. This is exactly what Lou means when he says real estate investors run their business backward and it’s costing them a fortune. Timestamps: 0:01 - Introduction - “Real Estate Investors Run Their Businesses Backward and It’s Costing Them a Fortune!” 0:35 - Lou’s Wins of the Week 0:45 - High-end property successfully sold without going to the bank. 3:11 - What does the Affordable Housing Provider mean? 4:59 - http://www.WealthBuilderWorkshop.onli... - One day for $1 with Lou - October 30th 5:57 - Step 8: Why Most REI’s Run Their Business Backwards - 10 Steps to Buy Your First BIG Real Estate Deal 6:25 - Find the Buyer Before You Buy 10:41 - Get aligned with your real estate agents and mortgage brokers 12:20 - “Doing Good, While Doing Well” 15:00 - http://www.WealthBuilderWorkshop.onli... - One day for $1 with Lou - October 30th - learn the benefits of TRUSTS 18:41 - Are you a bank? What is seller financing? 22:39 - Get away with the pain and suffering of the real estate business 24:30 - Work for Equity 26:17 - https://www.StreetSmartInvestor.com 27:30 - Fewer deals, Less Work, More Money 30:09 - Lou’s parting message: Are you serious about your business? If you want a business that will succeed join my workshop. Grab the opportunity to build wealth. http://www.wealthbuilderworkshop.onli... - One day for $1 with Lou - October 30th

If you are JUST getting started in real estate investing, you NEED to attend my ONE-DAY virtual training. I teach it LIVE over ZOOM, and it's only $1 (yes, one dollar) for SIX HOURS of solid how-to training! https://www.wealthbuilderworkshop.online If you're ready for a more in-depth experience, then you owe it to yourself to investigate my THREE- DAY Millionaire Jumpstart Event. I host it four times a year in various locations, and you can attend LIVE and in person. I'm your coach all three days. Find out more at https://millionairejumpstart.com/ You'll discover how to start investing in real estate (or do it easier and more profitably) at either Wealth Builder Workshop or Millionaire Jumpstart. Here is an overview of my proven and practical approach to investing in real estate.

* Money Making Secret #1: Getting Motivated Sellers to Call You! No more calling unmotivated sellers and getting rejected more times than a geek for the high school prom!

I’ll show you how for over 28 years, I’ve been able to get deals brought to me and motivated sellers hunting me down to give me their house.

* Money Making Secret #2: The Art of Structuring Deals! I’ve been doing this for 40 years and I love to share how I get sellers to give me the house, a check, and even a jet ski or two.

* Money Making Secret #3: Negotiating Secrets Revealed! I love to negotiate, just ask Matt, one of my hand-picked coaches. We recently went to an estate sale and he witnessed me structuring a deal to buy the house and contents right there on the spot.

* Money Making Secret #4: Trusts Simplified! A little confused on this entire Trust thing? Why to do it? How to do “Subject-To” safely? I’m going to show you my new fundamentals of Trusts training that will simplify the concept of Trusts, so a 9-year-old child can understand it.

* Money Making Secret #5: Develop a Plan for Success in Real Estate. The wealthiest man ever to walk the earth left clues for us on how he amassed his great wealth and kept it.

How to Help People While Helping Yourself – Become a Certified Affordable Housing Provider™

Create Your 10 Million Dollar Retirement Plan – specific formula revealed

Learn Hidden Profits Available in ANY Deal – worth thousand$

How to Take Over the Seller’s Loan with NO Money

How to Have the Seller PAY YOU to Buy Their Home – no kidding!

Buying Without Bank Loans – over forty years and never one bank loan!!

Easy Ways to LEGALLY Raise Big Money for Your Deals

Renovations – Quick Ways to Safely Make Huge Cash Now

Money-Making Management Secrets from a 40 year veteran who manages over 150 now

Accelerating Your Cash Flow – Add built-in “Profit Centers” – extra hundred$ per month

Case Studies: Secrets of How They Were Found, Negotiated and Sold

How to Protect Your Deal from Someone Else Stealing it

Legally Pay ZERO Taxes on Your Real Estate Portfolio – simple structure worth thousands

Having Tenants Leave Your Property in Better Condition than When You Gave It to Them

Why Land and Personal Property Trusts are the Best Privacy and Asset Protection

Benefits of Trusts You Cannot Get With ANY Other Entity

The Due-on-Sale Clause – What it is and How to Avoid it Legally

And MUCH More

Attend this power-packed “one-of-a-kind” best of the best training on making money in real estate investing!

Call 1-800-578-8580

Listen to our Podcast:

https://streetsmart.mypodcastworld.com/11465/step-8-why-most-reis-run-their-business-backwards


Why Most REI’s Run Their Business Backwards


Lou Brown (00:00):

Real estate investors run their businesses backwards and it's costing them a fortune. Stay tuned.



Lou Brown (00:18):

Yeah, baby. Well, hello. I hope you are having a fantastic week. We have so many great things happening and I love to bring Wins of the Week to you. We're going to get into why real estate investors run their businesses backwards and it's costing them a fortune in just a few minutes, but I wanted to give you the Wins of the Week because many times, that is such an inspiration. And I always love to hear your Wins of the Week as well. So, definitely, always send those in. We just had one and it really fits with everything that I teach. We had a property, it's a higher-end property and we put it on the market. Now, not only did we put it on the market on our own website, which is to attract potential buyers that have a nice pile of down payment money and the ability to pay the monthly payment.



Lou Brown (01:10):

But sometimes if I don't have that buyer, that particular buyer in the inventory already, then what we do is put it on the market and list it with a flat fee broker. Sure enough, we did that with this property and this buyer comes along with their agent in tow and the agent comes in, the agent's being paid a full commission on this deal and brought me a buyer, wonderful buyer on this property. And in fact, they got $60,000 down. So when we talk about the House Monster, we talk about finding the buyer before you buy. We talk about there's people out there with huge down payments, but the banks don't love them. Now, this gentleman easily should be able to qualify for a traditional loan at the bank, but he can't. And that's just so common with entrepreneurs. They've got good businesses. They've got piles of money in the bank.



Lou Brown (02:10):

They've got the ability to pay on a monthly basis, but the banks don't love them. Well, we do. And we give them a great opportunity to have a great property. And that's exactly what we had here. So this gentleman put it under contract with his agent. And so now he's going to have about a $2,300 a month payment, and we're going to have initially $60,000 down and they're going to have a great thing. So looking at Wins of the Week, that's an amazing one. And I want you to just be thinking about what does your business look like when you already have a buyer? You already have a buyer, they already have down payment money. They can already afford a monthly payment. And in this particular case, you say, "Well, Lou, that's what you're telling me to do. But in this case you already had a house. Why didn't you have a buyer for that?"



Lou Brown (03:03):

Well, because I just simply didn't have an inventory. Someone that could afford a $400,000 home. And by the way, when we hear the term "Affordable Housing Provider," you might be thinking in your mind, you're talking about junker properties in bad neighborhoods. No, we're not talking about that at all. We're talking about what the customer can afford. And sometimes we need a little help to find that customer with the most significant down payment. And in this particular case, we did have someone that was wanting to buy this property, was not able to perform, decided to move to Florida, handed us the house back and said, "Here, have fun with that." And we said, "Thank you very much. We will." And we did give them that when we received the property back, they moved on, we looked at the market and we found that the property was worth about a hundred thousand dollars more than they could have purchased the property for. 


Lou Brown (04:02):

But that was their decision to leave and move on. As a result of that, that's what caused us to put it on the market. And through the process of having that flat fee broker, we were able to discover and know every time the property was shown. It was shown a number of times and we had different competing interests. We had some people that did have good enough credit, did have good enough down payment and other properties. They just simply bought other properties. And then along comes a buyer that says, "I want to know more about this 'owner-financing possible' that's in the listing." And so as a result, that's how we were able to obtain our buyer. I hope you enjoy that story. And I hope it's an inspiration to you on what to do and how to do it with your business.



Lou Brown (04:58):

Now, we do have an event coming up. This is going to be a lot more in-depth training. It’s a one-day and this is coming up on our Wealth Builder Workshop. Now this Wealth Builder Workshop, I do it several times per year and the next one is coming up on Saturday, October 30th. And you definitely need to get yourself there. Now I make this thing brain-dead simple. I made it so that you cannot refuse. I made it an undeniable bargain of having me as your teacher over 40 years in the business buying, holding, and selling property. And I'm doing it for $1 so that you have an opportunity to really learn more about how to advance your business because when I say that real estate investors are doing this backwards, I really mean that. And I want to focus on that as our lesson for today, I've been giving you a 10-part series. So let's get into that.



Lou Brown (06:11):

So this part of the series, and we've been talking about how real estate investors actually do this business, how you're able to build a business, how you're able to build an amazing multi-million dollar business in this 10-part series. And this part of the series, I wanted to focus on that particular subject that I just shared with you. It gave you a great example, and that is find the buyer before you buy. When I say that real estate investors are doing this business backwards, that's exactly what I mean because imagine that instead of having an inventory of properties, you have an inventory of buyers. You have an inventory of clients that you are going about finding a property for, and that is so powerful and superior to what the typical process is. And in fact, I just put a property under contract and then next week, in fact, at the Wealth Builder Workshop, I will be talking about that property and the story behind what happened with that.



Lou Brown (07:21):

But it's a great story because I found a buyer from a real estate agent and this real estate agent said, "Lou, I can't do anything with these people. They won't list the property they live in. And I got to," she did get me an appointment. I did make a presentation to them. They did get interested in what we could do for them, simply buying the condo that they were in. Why? Because we already have a buyer for the condo. And so not a problem, so I said to them, "Hey, let me find out exactly what you're looking for. How many bedrooms? How many bathrooms? What location? What are the specifics that would really turn you on about a property?" Well, a few ideas just to share with you. They said, "Well, we want a level-home because we're getting older. We don't want all these steps like the condo has."


Lou Brown (08:12):

I said, "Fantastic!" And they said, "Well, really, we want a basement." And I said, "Okay, that's possible." And they said, "We really want an all-brick home. We don't want to have the maintenance in our later years. And we really want a flat backyard and we really want it to be really close to our son and our grandson." So I said, "Okay, what if I could deliver that to you? What if I could give you everything that you want? Would that work for you?" Well, they went ecstatic, bonkers on that. And by the way, that is the typical reaction of your sellers. If you can actually give them what they're looking for, they don't want to look for it. They don't want to have the pain and suffering of having to pack everything up, put it into storage and then go about finding another property.



Lou Brown (09:07):

Cause often that's what happens. The house sells fast. They have to move into an apartment. They put their stuff in storage and they go about the hunt on a property. And oh, by the way, they just signed a contract on the apartment. So they can't quickly find another property now. You're in an appreciating market, in some cases, depending on where you are in the country. So the prices are going up. So it just only makes sense if we can keep the ball rolling with these folks. So sure enough, that's exactly what we have been able to do with that couple. And just think about that. Your business, driven by the customer. It's a customer-driven company. And what we do is analyze those folks. Well, before we analyze them, we have to market for them and we do many, many things to market for our buyers.


Lou Brown (10:00):

And in that process, we're actually able to find the very buyers that I'm describing to you. Now we've had buyers with as much as a hundred thousand dollars. We recently had one with $150,000 down and sure enough, they got the home they were looking for. And so you're not talking about broke people. Although people do show up from time to time. And the good news is that we have a program for them as well. So our Path To Home Ownership program is what I'm going to be spelling out and laying out for you at the Wealth Builder Workshop. But for you, now, for this series for learning what to do and how to do it, the answer is that you're going to market. You're going to get aligned with real estate agents, mortgage brokers, people that have people in their world that would love to buy a home and/or can't get qualified for a home.



Lou Brown (10:55):

Now, just think about all the people they turned down. Well, those people don't disappear. They don't dry up. They still want a home. Now imagine that those real estate agents and mortgage brokers are referring those folks to you. Now, as a result of those referrals, you now have a great client. You now have someone that you can nurture, you can help, and you can find a property that works for them. And what we're going to do is buy that property, right, and buy that property cheap. And I went into some of those details last week as part of this series. So this is a focus point, but I want you to learn this process right here. Find the buyer before you buy and know that there are marketing materials that are proven, that have been used throughout the entire country and have driven amazing buyers to the table.



Lou Brown (11:57):

And as a result of that, they've been able to get what they were looking for. And my clients, my Street Smart clients, my Certified Affordable Housing Providers, they were able to get what they were looking for, as well. And that's a profit. Well, actually my clients really have a dual strategy because my book is called, "Doing Good While Doing Well." So my clients are entrepreneurs that want to build an amazing business and also be able to help others as well. And certainly ours is a noble mission. We do help people to end up with home ownership. We do take them where they're at right now. We do support and nurture and help them through the process of building up their credit, building up their down payment so they can get in a position to actually purchase that home. And we've had many do it.



Lou Brown (12:56):

And we were going to have many more even at the event. I'm going to also share with you some very recent case studies where we've had people have success with the program and be able to purchase the homes that they're in. And I'm going to show you the numbers as well. What that means in terms of how much money came to the bottom line and the possibilities that are available for you as well. So definitely important for you to learn what to do and how to do it so that you can build an amazing business as well.


Lou Brown (13:47):

All right. So, the conversation that I was giving you is to really get you geared towards something that we do. Occasionally, we don't do it all the time, but we have this one-day workshop and it's a rare opportunity to get Lou Brown at a very, very low cost. Only $1. And the idea is that you now have some amazing information that you can use immediately to impact your business. And that's the idea is that you're going to take this information. You're going to implement this information. You're going to see that everything I'm telling you is absolutely a hundred percent true. And then you're going to realize that you can duplicate this over and over and over again. And then once you see that you go, "Yeah, baby! I need to learn more from Lou Brown. I need to have his forms."



Lou Brown (14:44):

"I need to have his formulas. I need to have his marketing. I need to have his techniques. I need to have his scripts, what to say, and how to say it. Need to have it all. And I need to protect my assets as well." Now, in other parts of this series, I have talked about trusts - land trusts and personal property trusts. And I've talked about how to protect everything that you create. So on this one-day, I'm going to be going into that. I'm going to be teaching you and training you on the benefits of trusts. I'm going to give you the step-by-step process of what to do and how to do it, to get privacy protection, probate avoidance, and profits using trusts. Imagine that you can profit by using trust. And the answer is that we can take over existing financing on property when we use a trust, when we assist the seller in using a trust as well.



Lou Brown (15:45):

So the opportunity is big for you. And I definitely encourage you to take advantage of that. I want you to get to the one-day for only $1. And the opportunity is for not only you to advance the current business you already have, because believe me, we have people join us that have over 300 properties and we have others join us that have zero properties. So it's going to be very valuable for every one of you to be able to see what we do and how we do it. And it is unlike what you are doing in your business. So, for example, if you're a landlord, well, typically landlords make the difference between what the mortgage is, the debt service on the property, and what they rent it for. And they've got a little spread there and hopefully over time, they have appreciation, which is a real thing, and it does happen.



Lou Brown (16:39):

And also they have an income stream off that property. Well, that's great. But what if you had 25 more profit centers stacked on top of that? Well, we're going to be talking about at the workshop, some of those profit centers that you have that are built on top of the business that you already have. So again, whether you're just getting started or whether you have been in the business for forever, not a problem. We want to give you some amazing things, including trusts, land trusts, and personal property trusts. And we're going to do that. Now, the link is WealthBuilderWorkshop.online/Lou that gets you to the dollar page. And that's an opportunity for you to take advantage of this great process that we have put in place that I think is going to amaze you. It's something we've been doing in our business for over a decade.



Lou Brown (17:34):

Now, over a decade, we've been operating our business this way. Now I've been in the business for over 40 years. So I'm not telling you that in that entire time, I've done it this way because I haven't. I found a need in my business and I filled that need. And I provide that very thing that worked for us and provide it to you as well and works for us because we still do it to this day. And I want you to do it as well. So take advantage of that WealthBuilderWorkshop.online/Lou. Gets you to the $1 page. And that's a great opportunity for you. All right. So now, Scott, we're going to open this up for questions and I'm sure we have some interesting questions that have come in so far.



Scott Paton (18:39):

Yes, Lou. We've got some interesting questions and one was about the Kendrick house and they forgot exactly what you said, but they asked the question like, "Are you a bank?"



Lou Brown (18:52):

Well, yes. That's a great question. Are you a bank? And the answer is sorta, kinda. You're a seller and you're carrying back seller-financing. Now we do it in the form of what's called an 'agreement for deed.' Now, the way that works is very similar to a vehicle, and most people are familiar with this. If you've ever bought a vehicle that was financed, what happened was the dealership kept the title to the property and they passed that title onto the lender. Now it might've been Ford Motor credit. It might've been a third-party lender, whoever it was, the dealership passed the title onto them. Now, what did they do? They let you drive off the lot. They gave you the keys. They let you get in the car or the truck. They let you drive off the lot. They let you enjoy it.



Lou Brown (19:46):

They let you drive it anywhere, a place you wanted to go, put as many miles on it, as you want, and take whatever care of it that you did. And in the meantime, as long as you make those payments, then they have a wonderful investment for them. And at some point, when you pay that off or you sell it to someone else and pay that off, then what happens is that they stop getting payments. Well, if they get paid off, they send you the title to the vehicle. And our agreement-for-deed works exactly the same way, where you retain the deed to the property. However, they have a contract to get that deed. And in the meantime, they get the keys to the house. They get to move into the house. They get to enjoy the house. They get to use the backyard.



Lou Brown (20:38):

They get to use everything. Mow the grass, take care of the property. And as a result, they are building up their credit. They're building up their down payment. They're getting themselves in a position that they can eventually own that home. In the meantime, you're the bank. So you get principal, interest, taxes, and insurance on that. So you're insured in case the house burns down, you still get paid off and they still get the deed to the land. If the house is burned down, there's still land. They're still entitled to their deed to the land. And that deed is held in escrow until they pay you off. So that's a beautiful thing and a big benefit to them. And the second thing is insurance. Like I said, if it burns down, then you get paid on that and they still get the deed to the property.



Lou Brown (21:33):

So you've got your cake, you get to eat it, too. And one of the best things is if they stopped paying you, now you could get the property back without having to go through a mega-foreclosure proceeding. And there's variations on that depending on the state that you're in. And certainly we treat it like the buyer has got equity in the property. So if they don't go peacefully, if they don't hand the keys back to you easily, then you can still get your property back through the process of either eviction or foreclosure and then eviction. So it just depends on what is so in your state. But the process of getting the property back may be easier by using our agreement-for-deed process. So that was a long answer to the question of, are you the bank? And the answer is, yes, you are. 



Scott Paton (22:37):

Good answer, Lou. Bruce had a question and he said, "I'm a fix and flipper. So what you're telling me is, is that I should be a flipper with no fixer?"



Lou Brown (22:48):

Exactly right, Bruce. That is the way to go is to absolutely get rid of the pain and suffering of this business. Maybe you really enjoy fixing up property. You love buying it and going to Home Depot and Lowe's and the hardware store and finding all these supplies and bringing them in. Maybe you enjoy doing that work yourself. Maybe you enjoy hiring contractors. Maybe they always show up on time and they do everything they said they'd do. And they give you a bill exactly as you asked for. But no, that's, that's a different story. Let me tell you for most of us, we have a lot of pain and suffering in that process because you never know when they're showing up, you never know when they're going to complete. You never know what they're going to find that they're going to want more money for.



Lou Brown (23:45):

So I've found that a better way to do this is to find a buyer that's willing to do some or all of the repairs to the home. Now we don't make that a requirement. Our buyer can do some, all, or none of the repairs. We're quite happy regardless of what it is, but think about what's in it for them. They get to select their own colors. They get to select their own flooring. They get to select their own ceiling fans. They get to select their own faucets. They get to do their thing to the property, which most people want to do. They want the house to be their way, what they've chosen. So it's so cool that we can offer that because what we do is give them credit towards their down payment for doing some or all of the repairs. Now, I want to quickly say that it's very important that you have proper paperwork for that.



Lou Brown (24:42):

Now I've developed an entire system on that. It's called "Work for Equity" and it's our Work for Equity system that adds to our Property Management System. So our baseline property management, standard rental agreement, application receipt agreement, analyzing their application, screening them, that whole process remains in place. And we add to it with certain disclosures, certain paperwork, certain processes and procedures that we do when they agree to do some or all of the repairs in exchange for a credit towards their down payment or moving fee. So there's definitely opportunities for you to improve your business in a dramatic way. Just think about that. If they were coming in, typically a landlord would go in and do all the repairs to the home that have all that out-of-pocket expense. But with this system, you don't have to worry about that. You still got all the money in your pocket for those repairs, your buyers coming in, you're going to give them a credit towards their down payment and you don't have to go through the pain and suffering.



Lou Brown (25:55):

So I love teaching that process. That's a very important way to build a business. And we've been able to see tremendous success as a result of it, ourselves and our licensees all over the country. So I encourage you to get the property management system, get the Work for Equity system. Now we do have a website called StreetSmartInvestor.com and at Street Smart Investor, when you go to the Tools section, you can open that up and you can see all of the different systems that we've developed for our business. Now we've developed these businesses over decades of being in the business. We discovered exactly what forms were needed. We developed those forms. We found out what worked and what didn't and things that should have in the form that worked in the form. We've continued to improve the process all the way through.



Lou Brown (26:50):

We've made it into an entire system so that not only we can have success with our business, but so can our licensees across America. In fact, people across the world have been able to adopt and adapt this into their world and they've had amazing results. And then the other thing we offer is the brand. The brand to be able to offer into the marketplace. Something that is seen nationwide is a very good thing. And all we ask is that you protect the brand and you do what we teach you to do and how we teach you to do it. And you're going to have some amazing results. So in our world, we definitely want you to have less work. I call it less deals, less work, more money. That's kind of like my trademark phrase, right? Less deals, less work, more money. And certainly the work for equity process can do that. And, Bruce, back to your question of not flipping, being the non-flipper and in fact, flipping clients into homes and then having a cashflow potentially forever is the best strategy I have found.



Scott Paton (28:11):

Beautiful answer, Lou. You reminded me of a previous life where I was a sider. I was putting siding on these houses and we would intend to work till 5 o'clock and the contractor, he worked till noon because he had other houses he went to. The owners would come back at about quarter to 5. We were the only ones there. And then they'd be saying, "Well, like, did this get done? Did that" "Ma'am, I'm just putting the siding on. I have no idea." And then she would always say, "Well, I've called him 4 times and he's never replied." And just imagine being, you know, buying the house and then deciding you were going to fix it and then sell it. And then being stuck with some guy that said it was going to be done in a month. And like 3 months later, it doesn't look like any work's been done. So, it's better, you know, better not to have that headache if you're in the real estate investing business, in my opinion.



Lou Brown (29:11):

Yes, Sir. I agree 100%. I feel the pain of those people that were coming. They're asking you what the contractor did. I certainly have lived that. I've done hundreds of renovations and it's just so pleasant when the client comes in and agrees to do some or all of the repairs to the home. Oh my gosh, it takes such a burden off. And it really gives them an exciting opportunity because they get to choose where typically it's the investor that's choosing or the builder that's choosing what goes into that house. Not necessarily with our program. Our clients get to choose what they want, when they want it, how they want it, and how much credit they want for that. And as long as it fits inside of our budget, we're ready to roll, baby.



Scott Paton (30:03):

Nice. All right. Well, Lou, we've come to the end of our questions and the end of our time. But before we go, can you give everybody, like, one last reason to come to the Wealth Builder Workshop, October 30th?



Lou Brown (30:17):

Well, I guess I would say just, are you serious about your business? I can't say it another way. Really. We have developed a multi-million dollar business. Many of our clients have copied us right through the process and have built themselves multi-million dollar businesses in their local markets. If you're serious about your business, if you want a business that succeeds and goes past the buy and sell of a single property, I want you to very strongly consider and do set all other businesses aside. It's too important for your future. WealthBuilderWorkshop.online/Lou that will get you to the $1 page and just know that that's what we want for you is the opportunity for you to build and duplicate exactly what we've been able to do. Exactly what we've helped other people do nationwide. You have the opportunity to do that as well. So come see. And if you like, you can partake. And if you don't like it, what did you lose? A whole dollar. And I promise you, I'm going to make it worth many, many, many, many more times than that investment so that I hope to see you over and over again in the future. So with that, I will say, yeah, baby, I'm looking forward to seeing you again soon.


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