New Source for Leads

Where do you go to find buyer leads.  Sellers are announcing themselves all over the place but buyers seem to fly under the radar.  But I've been discovering the secret hiding places of some of these potential buyers...

Construction Companies...quite often these companies have people who want to build a home and are looking for the right piece of ground to build on.  The right construction company may be a source of many lot purchase leads.

Sub Contractors...everybody knows somebody who wants to buy or sell real property and if you have a good relationship with the sub contractors they can lead you to many prospects.  This is especially true when the prospect wants to build a home and the sub contractor will get the opportunity to do their trade in the project.

Construction Lenders...obviously these people know who's applying to build a home.  Most of the time these people already have a lot, a house plan and a builder for their home.  But there are a few instances when people will actually start the process with the lender.

Remodelers...what about the person who gets a remodel bid and it is just more than their budget will allow?  Quite frequently the answer to this dilemma is to buy a different house and sell the one they are in.  2 leads instead of one.  And the contractor already has the bids for the work to be done if the property was to be purchased as an investment (and later resold with a listing agreement).

The Actual Project...if you're working on a project that needs work, maybe the best source of buyers are the contractors and sub-contractors who would be working on the project.  These people will make the money for the work they would have done anyway and they make the additional profit by enhancing the property value.  Then they need to sell the property (which means listing agreement) and attracting new potential buyers and investors.

I've discovered that the local Home Builder's Association is a great source of leads for an investing realtor.  They know their work, they get paid for it, may be the buyer/investor, and a listing source in the future!  It's time to develop a working relationship with the local contractors.  You will provide them additional work and they will be/produce buyers and sellers.  What a win-win opportunity.

Seasoned LLCs - A Great Place For Investment Equity!

For people with an unstoppable vision and desire anything is possible. And it is just a matter of time before the way will present itself. One of my friends just started a business brokering seasoned LLCs. Why is there even a market for seasoned LLCs? Because an established business can acquire financing that new business cannot. What does that mean?
A new business has no track record and the lending industy isn't very excited to take a chance on a business that is just trying to figure things out. But the same business, in 2-3 years down the raod is no longer "new." That means they have worked through the initial start-up problems and have survived so now they are worth taking a chance on (less risk). These companies can usually get SBA loans and Business Lines of Credit around $40-50K and very reasonable rates. (Keep in mind this is intended to be business debt, not commercial spending money.)
A saavy investor can purchase any number of seasoned LLCs and each LLC can get it's own line of credit up to $50,000. If they invest it with a company like ours they can take 2 LLCs ($100,000) and invest for 2 points, 12 % and 5% of the net profits. That means they can get $2,000 (for points), $12,000 (for interest for the year), and $5,000 (of the net profits) or something is the range of $17,000 return on the investment. If it costs 7% to borrow the money (or $7,000) and you make $17,000 then you have made an extra $10,000 for the year! Not bad considering that none of the invested money was actually your in the first place. And just about any one can qualify for this type of investing if they have better than average credit (680 FICO score or better).
I've been excited about this idea for a couple months now, ever since I learned about the power of seasoned LLCs. But it wasn't until this week that I discovered a consistent source of seasoned LLCs that could be purchased at will. This can be a powerful resource for investment capital for my real estate projects (based on our Foundation to Success criteria).
Consider...if each client had just one seasoned LLC with $50,000 in available credit...how many projects could be purchased? What if we combined this concept with the Equity Builder Program? Each tenant works to improve their credit to be able to purchase their own home. Once their credit is good enough to buy a home they would also be in a position to become an investing client using a seasoned LLC! If they added an additional $10,000/year in investment income, that gets pretty close to paying a reasonable mortgage payment...so once their credit is good enough they can start investing and the investments would pay for the house they just bought! And it would provide a new source for $100K investment capital on a regular basis!

Fortune Favors the Brave...It's Time to Act!

I heard Mike Watson say something that I remember as, "try to find reasons to make the deal work, not reasons why it won't work." There are so many tools in real estate that can be used to put and keep deals together. The more I work in investment real estate the more I realize that it's easy to get out of contracts and out of deals but that isn't what makes an investor wealthy. Our job is to get into contracts and into deals that make sense and then to do what it takes to make the outcome as profitable as possible (while still maintaining a win-win transaction).

Brian Tracy had a similar thought...
"Boldness is a necessary part of courage but it must be a boldness based on an intelligent assessment of the potential risks and rewards. The wonderful nature of boldness is that, properly directed, it builds the habit of courage in the person who practices it.
"Perhaps the most obvious important part of courage is the courage to step out in the face of uncertainty. Every great venture in the history of man has begun with faith and a giant leap into the unknown.
"General Douglas MacArthur said, 'There is no security in life, only opportunity.' The creed of Frederick the Great, one of history's most successful leaders was, 'Audacity, audacity-always audacity."
He continues with 2 ways to build boldness...
"First, just do it! Step out in faith! If you think some action you can take to improve your life, give it a try. You may be surprised.
"Second, when in doubt, act with audacity. Audacity may get you into trouble but even more audacity will get you out. Go for it!"

The greatest obstacle to a real estate investor is to do something. There are no guarantees in investing. But when you take an active role in creating and enhancing equity your chances for success are greatly improved. When you work with someone who has a plan for adding value, who strives for win-win transactions and opportunities, who has vision and who is willing to act with boldness (and audacity) you have a winning combination. So if the numbers work, so should you. It's time to move forward and make it happen!

Opportunities Abound

Right now we are facing a very difficult real estate market. In general terms we are facing a market correction. Very simply put, that means that prices for real estate are going down (correcting). This has caused many people to become scared of real estate in general.
As far as I can tell the reason property prices are going down is that the value being assigned to any given property is not being supported by the property itself. When people invest in real estate it seems that they buy a property with the hope that someone else will come along and think it is worth more. No work is done, few improvements made...so why would someone else think that a propety is automatically worth more?
One of the great things about our style of investing is that we actual do something to the property. This isn't just about adding carpet and paint to a bad house ("lipstick on a pig"); that just gives you a bad house with new carpet and paint. As you look at property there is a hidden value called its "highest and best use" that most people never see. The reason is that most people are not willing to take the time to learn and train themselves to see the opportunity (and it takes a lot of work and effort). Sometimes the hidden value involves carpet and paint but many times it does not.
I hope that as I work with my clients I will be able to help them understand and realize the hidden value that a property possesses and the abundant opportunity that is available in our marketplace.