We target properties that have been transferred as one of our marketing strategies. You might be thinking…so, what does that actually mean?

It means that a property’s ownership has changed but not through a traditional sale. On the deed, it will usually show a sale price of “$1, $5, $10, $100″ or something like that. Maybe someone inherited the property through an estate. Maybe there was a divorce and one of the spouses deeded the property over.

We have had some good success with the list so far. A surprisingly large number of the calls that we get are from people that own the property free & clear. And you don’t see that much these days.

There are many different types of mailings that you can do as an investor such as foreclosure, burnt out landlord, probate, out of state, etc. We used to mail foreclosure letters and bought plenty of properties from them, but there was so much competition. Each homeowner usually had a stack of investor mailings on their table when we met with them.

The transfer letter has gotten the phone ringing with free & clear property owners without a whole lot of competition. Give it a try. Just remember that repetition is the key. Mailing once is usually not enough for lasting results.

Popularity: 6% [?]

Buying property subject-to the existing mortgage is a key concept and practice as far as creative real estate investing goes. Most agents, brokers, and other people associated with traditional real estate practices are not privy to this method of buying property. They would probably even tell you that taking over payments on someone’s loan is illegal and will refer you to the due-on-sale clause.

The due-on-sale clause “allows” a lender to call a loan immediately due and payable in full if the title to a property changes hands. They are not required to, they just have the option. Lenders are in the business of making money through interest payments from borrowers. As long as a lender is getting paid their monthly payments, they typically would have no reason to ever call a loan due. I’m not saying that it wouldn’t happen, but I am saying that it is unlikely.

There are some precautions that can be taken to lessen the chance of a loan being called due. One such strategy is to buy the property into a land trust. If a property is passed into trust for estate planning purposes, the due-on-sale clause is bypassed. After purchasing each property in trust, we send the lender a letter from the homeowner notifying them that there is new management. We give them the property’s new mailing address to insure that we get everything related to the property. Even if the lender did a title search at any point in time, it would show that the property was passed into trust.

Even if you buy a property subject-to in your own name or company’s name, just make each monthly payment on time and you are probably good to go. I suggest buying your properties in trust though.

Popularity: 7% [?]

For those of you who have never heard of this tool before, Google Earth is a program that uses satellite imagery software to create an aerial map of the entire world. It is truly amazing!

It can be used to scout out and research properties anywhere in the world from the comfort of your own home.

We recently had a lead come in that looked interesting. I knew that the asking price was significantly higher that other homes in the area and it made me curious. I typed the property address into Google Earth and zoomed right in on the property. As I zoomed in closer, I realized that there was a dock in the backyard and that this house was on the water! I called the owner and asked, “What are you doing right now”? I was sitting on the back porch of this home negotiating with the owner within 30 minutes of the lead coming in.

As it turns out, the guy inherited the house and just wanted to get rid of it. He didn’t even owe a thing on this beautiful home that fell into his lap. I ended up buying this home for significantly less than what he was asking and got some owner-financing thrown in for good measure. We were able to turn this lead into an amazing deal that yielded us a couple hundred thousand dollars the day we closed on it!

Download Google Earth for free.

You can practice by Google Earthing your personal residence to see how the program works. You can even use this software now to look out into the universe and zoom in on stars and constellations or to take your own virtual tour of the Grand Canyon! Have fun with it, and I hope it helps your business like it did ours.

Popularity: 9% [?]

If you were a farmer, each spring would be a time of planting. Throughout summer you would tend to your crop. And if all went well, you would reap your harvest in the fall.

In order to reap a harvest of good deals and profit in real estate, you have to do the same thing. Plant seeds, tend to your crop, and harvest when the time is right.

Here’s 3 steps to get its done:

1. Tell everyone you know that you are a real estate investor and start talking to sellers. Now your planting some seeds.

2. Follow-up with your leads. Just think of it as if you are tending to your crop. Often times, we make offers and they do not get initially accepted. But the fortune is in the follow-up. We have bought a bunch of houses from sellers’ that we followed up with. Also, by telling everyone you know that you are an investor, you will get some great referrals for contractors, agents, mortgage brokers, attorneys, etc.

3. Now it’s time to harvest. If you got the word out and followed up with your leads, you’ve found a deal and are ready to assemble your team. Use those resources to “harvest the crop.”

Popularity: 6% [?]

In order to find a good deal, you have to spend money to do some kind of marketing, don’t you? Whether it’s bandit signs, “we buy houses” ads, or direct mail, you have to pull out the wallet.

Not true. I have found that in almost any market, there are investors that specialize in wholesaling. You might be asking yourself, “What exactly is wholesaling.” Well, it’s when a property is contracted and immediately sold to another investor.

There are a lot of investors that don’t want anything to do with rentals or rehabs and prefer just to wholesale property. If you are looking for a deal and don’t want to spend money up front, find a local wholesaler. The local REIA (Real Estate Investor’s Association) is great place to start looking.

Popularity: 13% [?]

I recently wrote a post on my entrepreneurship blog, YoungGunBusiness, about how niche social networking sites are the next big thing. Well, we ran with the idea and just opened access to the public to InsideInvestorSpace.

InsideInvestorSpace is a social networking site dedicated to connecting investors so they can meet, greet, learn, invest, and ultimatly…Make More Money!

The site will serve as a place to build your entire investing team. The classified section will serve as a place to find a local agent, attorney, appraiser, contractor, accountant, or even a great wholesale deal. The forum allows you to ask any question pertaining to real estate investing and community members can respond. You can start a group in order to network with people in your area or a group that focuses on the foreclosure process.

It doesn’t even cost anything to join. It’s Free! Go check out the site and become a member. It will take you about 2 minutes.

Popularity: 9% [?]

I remember when we were at our first big real estate seminar. We were salivating like pavlonian dogs waiting for Louis Brown to get started. We had heard him speak at a one day seminar before and were ready to learn more from the master himself.

As I suffered from a case of information overload over the 5 day period, one thing stuck in my head. Lou said, “Follow-ups are the key to the business.” He mentioned that around 60% of his deals came from following up with sellers days, weeks, and months after initial meetings with them.

In my first year of investing, we made over $20K on a deal in Mount Pleasant, SC because we followed up with a seller for several weeks after we made her an offer. Even if you give a seller your information after you have met with them, your job is not done. People lose things all the time. I always just ask a seller, “Do you mind if I put you in the follow-up log?”

Popularity: 6% [?]

About a year ago, we were contacted by a man who had a house he wanted to sell quickly. The seller had inherited the house and owned it free and clear. He had listed the property for a few months at $850,000 the prior year with no luck. He had gotten himself in a position where he wanted out fast and was willing to take a discount.

After Dusty worked his magic negotiating with the owner, we had the property under contract. Our purchase price was $550,000. But that’s not all! You’ve got to remember that price is only one component to any deal. The agreed upon terms were that the seller would get $200,000 at closing and a note for $350,000. He was to receive payments of $25,000 every six months until the loan was paid in full (and YES, that’s a zero percent loan).

Fours months went by; the previous seller found himself in a bind and accepted an early payment of $15,000 as payment in full for the first $25,000 payment we owed him. Not bad. We got a $10,000 discount.

It wasn’t two months later that he was calling again. The total balance that we owed the seller now was $325,000, and he wanted more money. Too bad his next payment wasn’t for about seven months. We were fine with the already agreed upon payment schedule. He, on the contrary, was not.

After about two weeks of going back and forth, we struck a deal. And what a deal it was! We agreed to give him $10,000 that day, an additional $10,000 two weeks later, and a final payment of $130,000 due in ninety days.

So what do all those #’s mean? The seller’s original note was for $350,000. After discounting his note a couple times, the total we paid him was $165,000. That’s an $185,000 Dollar Discount! And that was all after we bought the house.

Anytime you can get a seller to take back financing for a portion of their equity, do it! It’s less money that you have to come to closing with, and you can structure the payment terms

Popularity: 8% [?]

The best way to comp property currently is through MLS. If you are not a realtor though, you may not be able to access it. Enter Zillow. This service provides sold data for homes all over the country.

I have access to MLS for our primary investment areas. When we get a lead outside of those areas, I jump on Zillow to get a rough estimate. I wouldn’t suggest using it as your sole method to valuing property, but it’s a start.

Zillow has many more resources, but I haven’t used any other ones yet.

Popularity: 9% [?]

Hire a birddog!

After starting our real estate business, it wasn’t even a year later that we started to use birddogs to leverage our time.

Our primary strategy to acquire homes at that time was to go door to door to homes that were facing foreclosure. That information is public, so we were excited about that, and we figured that if anybody was motivated to sell, they should be. Although we got some good deals from door knocking, it was a lot of work. Driving around all day on week nights and weekends was no fun anymore. There had to be another way.

Enter the birddog. There are people out there that are happy to donote their precious time to be your eyes, ears, and legs. We found some hungry aspiring real estate investors and trained them to go out in the field for us. It was a great deal for them not only for the learning involved but the profits we split from deals they brought in.

Anyone who has a real drive to become a successful real estate investor knows the value of a mentor. Find you a birddog and put him to work. Your time can be spent elsewhere.

Popularity: 7% [?]