I haven't written alot in the last few months, but I have been very busy with my real estate endeavors. I have started to implement my marketing plan by re-writing the copy on my website and having it professionally redesigned to encourage people to submit the form to sell their house. Check out the results at http://www.3weeksorless.com/
Since May 1st I have been unemployed. My travel nursing assignment has finished. I am working per diem only a few days a month, but I do not have enough income to support my family right now. I could go back to working as a nurse and nurse practitioner full time, but I really do not want to. The past 2 weeks has been awesome. Rebecca has been working on finishing her e-book, and I have been working on real estate. Between the 2 of us, we have been working around 50 hours per week. We love the lifestyle. We are home, we can eat lunch together, we can take breaks from work to read a book to our daughter, Arianna. This is the lifestyle that we want right now.
My goal is to invest in real estate with a buy & hold strategy to produce enough income that I don't have to work. This is a longterm strategy, and it will not produce enough income NOW. So I have switched strategies temporarily. I have partnered up with an experienced real estate investor to learn how a quick turn real estate strategy to generate cash now. I think this strategy will work now in this current hot real estate market.
The quick turn strategy involves sending letters to out of state land owners and asking them if they want to sell their land. We then will get an option for $10 to buy the land at a specific price, then we will aggressively market the property and sell it for a greater price and keep the profit. There is little monetary risk for me, the investor, because I only have a $10 option. The only risk is my time.
Here are the steps I have completed so far:
1. Searched for out of state owners:
I went to the town hall in 2 different towns and asked for an alphabetically list of all property tax payers. I told them I was looking for land to buy. The list shows the name, the address of the owner what is owned (land and/or buildings) with an appraisal value, the location of the land on the tax map (map and lot number). I painstakingly searched through all of the tax records looking for owners with out of state addresses, and I wrote down all of their pertinent info (name, address, map/lot #, appraisal value, # of acres). I wrote down 250 names of out of state owners after about 3 days work.
2. Wrote a letter.
I wrote a short 1 page letter asking people if they would consider selling their property in the specific town. I told them I was an investor and I wanted to buy their land, and if I couldn't buy their land I probably knew an investor who could. I told them I could buy property in any condition, and that I could buy it easily and quickly. In a PS, I emphasized I was an investor who wanted to buy their property, not a real estate agent who just wanted to list it in the MLS. I asked people to call my business line.
(I have been told by marketing experts that people are 3 times more likely to call a plain old telephone number than they are to call an 800#, so I listed a buiness line for which I set up an answering machine).
3. Hand-addressed, signed, and sent all the letters.
My mentor has stressed that it is important to hand address the letters because people are much more likely to open a letter that looks personal. It took alot of time, but it is worth it with this kind of targeted marketing effort.
4. Answered calls that I received on the aswering machine.
My mentor told me that he usually has a 10% response rates to these letters. So far I have received 3 calls from the 70 letters I sent out 2 business days ago (on May 12). I called them all back an asked them the following questions:
What is your name:
Telephone number:
Location of land: Street address, tax map and lot #
Why are you selling:
How long have you owned:
When was it last surveyed:
What is the value of the timber:
What is it's appraised value:
Is there a mortgage on the property:
How much: What are payments:
Who is on the deed:
What would you take for the property:
May I ask, What do you plan to do with the money:
Would you consider holding paper:
Is your property listed with a realtor: When does listing expire:
Have their been any offers: How much?
OK, I have completed these steps on 3 peices of property, and they all sound promising. Here are my next steps:
5. Find comparables on each piece or property. There are two ways to do this:
1) MLS listings include data about property that has been sold in the past. I plan to connect with a broker to gain access to this list. I hope to encourage a broker to work with me because I will offer to send deals his way from people who I could not reach an agreement with, and I will use him to help me sell properties.
2) Go back to the town hall and ask for information about all land sales over the past 2 years. Find comparable peices of land and note their price.
6. Using the comparable data, I will come up with a price range I am willing to pay. This price will equal the estimate sales price minus the profit margin I would be willing to accept given my time and effort in the deal and minus the estimated cost of marketing the property.
7. Call the owner to negotiate. I have a lot to learn here, and I will let you know how it goes. I am planning to let my mentor lead the way in a 3 way phone call.
8. Obtain an option.
9. Market the property for sale.
10. Close on the property in 1 or 3 ways:
1) Transfer the option to a savy buyer with a "finders fee", possibly to a fellow investor.
2) Sign a purchase a sale agreement with a clause at the end saying "... and or assigns", and transfer this purchase and sale agreement to the new buyer for a finders fee.
3) Complete a simultaneous double closing with new buyer.
Well, as you can see, I still have alot of work ahead of me. Starting on Tuesday, I plan to start in on checking out the comps on the 3 peices of property I received calls on. I will keep you posted. If I make progress on any deal, I will give the details in my next post.
Wish me luck!
