Happy New Year and welcome to 2013!
There’s so much good news to celebrate and look forward to I almost don’t know where to begin.
2012 was a very financially rewarding year for I Love Real Estate members, and this year looks to be even better.
If you’re new to I Love Real Estate, that’s perfect because beginning today, you’re going to learn how to set yourself free from the chains of a job that you do because you have to, by creating steady cash flow and growing value in a real estate portfolio.
Are you ready to make a new begin in life in the New Year? Are you looking for income replacement or just more freedom in your life? Then 2013 is your year to get into the real estate market and make a positive difference in your life! Even if you’re not in the market yet, you can be! And the best part is that you don’t need to have a lot of money in your pocket to get started and I will show you every step of the way.
So today let’s see how you can get in the market right now without even worrying about what a bank might say about your qualifications.
You’re probably thinking, “How on earth do I do that?”
Vendor or seller financing is where the seller of the property agrees to finance the sale of the property to the buyer. This is a very powerful strategy because it gives you an entry point into the market without qualifying for a bank loan.
Think about that—You can get started in real estate even if you don’t have any money! There are no financing applications and no holding costs. There are, however, some key points that you need to know in order to make the most of a vendor-financing situation.
First of all, you want to use this strategy only with positive cash flow properties. Getting into a negative geared property, which many people do for tax advantages and other reasons, costs you money along the way, so that is not what you want in a vendor-financed property. You want the property to generate immediate positive cash flow; let’s look at how to do that.
The seller of a property is usually more flexible the longer the property has been on the market without a buyer. Look for properties that have been on the market at least six months or longer.
If the property isn’t furnished, there is no one living in it and therefore, the owner is getting no benefit from the property and will usually be willing to make a deal. Whether the property is empty or not, you want to find out all you can about the property, the sellers, and their situation.
You also want to find out about the agent; what’s he or she like? What’s the relationship with the vendor? Is the agent a personal friend or a family member, or is it simply a professional relationship? How long has the agent had the listing? You can find out all you need to know, but you have to go about it in the right way…
The most successful businesses are built on relationships, and real estate is no different. This begins with the agent. You want him or her on your side. To do this, use third level rapport techniques (which I teach my students) in my seminars to learn about their lives, their interests, and their hobbies. The deeper the rapport, the more information you will be able to gather.
Don’t ever try to bypass the agent because that can work against you. Always reassure the agent that their commission in the deal is safe. But if you feel like the agent isn’t conveying all the details of your offer, then try to get to the vendor directly. If you can’t get the vendor’s identity from the agent, use the internet to find out the details of the ownership and literally knock on their door.
Explain that you’re a buyer, working with their agent, but that you’re not sure the agent has conveyed all the details of your offer to them…and build immediate rapport with the vendor. Show interest in them and the property, ask them how they came into the property, how or when they bought it, why they’re selling. Are they downsizing or looking to get into another property? Ask them about their biggest concerns.
Also, remember when building rapport, to always go with your personality strengths. When you’re comfortable, the other side will be, too and you create a deeper level of intimacy with the agent or seller.
A solid rapport will uncover ways that a deal can be made. For example, offer to pay an interest rate that is higher than what is available with institutions and be flexible in terms of a settling date if necessary. Find out if the vendor has more than one property. Vendor financing is best used when the seller has many properties. This allows for greater flexibility on both parties and opens up many other strategies that I teach my students. But more on that in a moment…
When you’re pursuing your vendor-financed deal, be persistent with both agents and sellers. You will be on their minds as an interested buyer and also learn more about the property, the seller, the agent and any other opportunities that may be available.
In order for your portfolio to really work for you, you must buy more than one property. Use your first purchase to set up your next one, creating a momentum to buy cash flowing properties on into the future. I teach my students how to do this, how to use multiple strategies in a single deal, how to get a chunk of quick money from a vendor-financed deal, and other ways that you can build a cash-flowing portfolio quickly and economically in 2013.