Often times I’ve been asked by many new and experienced investor students, “How do you get those big juicy deals?” I stand there wondering, doesn’t everyone get deals like these?
I think everyone should be getting big juicy deals every day. It’s all about the mindset and what you focus on. “I don’t Mind…It don’t Matter.” This, of course, is what my Drill Instructor always said to us in the police academy as we were doing PT, that’s Physical Training for you civilians.
I learned early in my real estate house flipping business, that the deal of the century comes along at least once a week. You just need to be prepared to take action on it when it’s in front of you.
I have seen numerous errors that new and experienced investors make trying to find deals:
- They do no marketing and just expect deals to drop in their laps.
- They procrastinate with making a decision and someone else scoops up the deal.
- They lack the discipline to follow-up with prospects and use scripts to close deals.
- They have no plan or vision of what they are about and how to do it.
Sellers don’t care about how much you know until they know how much you care. This is selling 101.
When I’m looking for houses to flip, my plan is to locate properties that meet my preset criteria for my marketing campaign. There’s a process for this that is automated.
Now there are many ways to market out there for properties; pick one that works for you.
As for what works for me in my California market I choose the following:
- Free & Clear or High Equity
- Absentee/Out of State Owners
- 250 to 300 letters mailed every week on a Monday or Tuesday.
So what do I mail? Well, it’s simple. The Yellow Letter that I swiped and deployed from Ron LeGrand, what else did you think?
I believe it’s “Ok to Copy Cat, as long as you Copy the Right Cat.”
The moment I have the letters mailed out, the calls begin coming into my PatLive line. By the way, everyone should have a PatLive service representative taking all of your incoming Seller calls. It just makes sense.
Once Patlive takes the call, they’ll email you the seller information from a script they use from Ron LeGrand’s system. It’s our job to follow-up with the seller and determine if they’re a prospect or a suspect.
A Prospect is someone who will accept terms, That’s it folks. We’re not going out to make all cash offers or go out and guarantee bank loans for 30 years. If we can get some good sweetheart terms, that’s the deal.
Some examples of Terms are: taking-over debt subject-to, owner financing, and lease option.
Once the seller has agreed to any of these type of terms, we set an appointment to see the property in person for a quick walk through.
Now, here’s where you do your homework and become a pro. If a seller has agreed to terms with me, it’s just about a done deal. You see, all my due diligence is done at this stage of the game where we leave no stone unturned. We’ll know our current as-is value, or ARV (After Repair Value), a list of value or comps, rental comps.
So how do I get the Big Juicy Deals that bring me $100,000, $200,000, $500,000, $840,000 dollars on each deal, NET PROFIT? The answer is in one word … VALUE. You must create a tremendous amount of value in direct proportion to how much money you want to make. In my next article, I’ll discuss how I create value in proportion to how much money I’ll end up netting on the sale.