I have been a real estate investor for several years, but had a friend with a real estate investing association in Florida invite me to his associations annual convention. I figured it would be a great way to visit Florida and write off my vacation.
I went to see what the speakers had to say and to see what the vendors had to offer. I was not going to buy anything, my credit cards were staying in the wallet. So I sat throught the first day and took tons of notes and 1/2 way through the second day listened to two different speakers who had a program to find motivated sellers.
I am also a realtor and have been buying most of my deals primarily as REO properties for sale by the banks through local real estate agents. But the prices of the REO's were getting so high that while I watched both speakers talking about finding motivated sellers and not running down pre-foreclosures I thought to myself that maybe I should think about purchasing one of the programs.
The first program was from Kathy Kennebrook and I was very excited about what she had to say. The other speaker was Scott Rister and he not only had his how-to program, but he had a software program to manage the direct mail. Scott's was much cheaper and as I said, I really did not want to buy anything, but I broke down and purchased Scott's program.
I brought home his program, and started on the first book about finding motivated sellers. I picked one part out of his program about buying a list of absentee owners and sending letters to them. I used the letters from his software program, purchased a large list of names and sent out about 400 letters.
I didn't get too many calls that were motivated enough. I did get some calls but no deals. I wasn't really excited and I was still playing with the software, so I mailed the same basic list of people again about 2 months later, the exact same letter.
I received about 20 calls back, about 10 of them were motivated people. Out of that 10 there was one gem.
A lady called and said that she had a rental property that she had owned for about 30 years. The current tenant had been in the house for 20 or more years. The tenant was on a month to month basis and was paying about $250 a month which for where this house was located and the size she described to me to be about $300 under market.
I kept her on the phone and kept asking her the questions that Scott had suggested. She didn't really want to name a price, but finally cornered her with “I don't need an exact price, but what kind of ballpark price might you want? I need to know if we are both in even the same type of price range before I waste your time and my time looking at a house that I can't buy.” She then told me she needed $12,000 to $15,000.
Now I got really excited because I knew the area of her house and approximately what it looked like and that it should sell for about $25,000 even in really bad shape. And with people living in the house, it had to be in decent shape.
I made an appointment immediately to go see the house. She had the tenant show us and she called back into the office the next day to see what our offer might be. I was out and she talked with my partner. He offered her $10,000. She countered at $13,000. We bought it for $12,000.
We closed in a week, just after the tenants moved out. The house needed quite a bit of work that could not be completed with a tenant in the house.
The day we closed we put a for sale sign in the yard and took a few days off at the lake. When we got back we had a bunch of people who wanted to buy it at $23,000 with out us doing a thing.
So, for my investment in my flight to Florida, the annual convention, and the purchase of the program, all of which were tax deductible, spending some time mailing letters twice, we made about $10,000, and only owned the house about 3 weeks.
So I have learned two things from this experience. First that by copying how someone else finds deals, I can find deals much easier than trial and error. Second, that by attending a two or three day seminar, I can save $100's of dollars on the purchase price of the how-to program to copy.
Now it is in my annual goals to attend one training event a year to see how other people complete their real estate investing and to purchase at least one program and implement some part of it into my overall strategy.
Kansas City, MO