All Shook Up In Memphis
4 Day 1:1
I’m a real estate investor working my own business and a coach for Bob Leonetti and Jayme Kahla through the SMI Funding and the Real Estate Profit Coach. I travel the country helping Bob and Jayme with their educational seminars. I also work with our students on-site and assist them in building their real estate business.
I recently completed a four day 1:1 with one of our students, Kay Kirkpatrick. Kay lives in the Memphis area in Tennessee. Kay wants to provide a living for herself and give herself some flexibility for life issues, such as caring for an elderly parent. She also wanted a portable business that could be picked up and moved to another major metropolitan area, if that’s where life takes her.
Kay has participated in many real estate training events and bought one property. She had the “got-to-get-a-dealitis” and bought the property as a flip with short term financing in place. The property turned out to be in a rental or lease-option neighborhood. More on this challenge later.
So how do we get started? The first nut to tackle was documenting goals and refining her business plan. Bob Leonetti and Jayme Kahla have a great Profit Mapping 90 Day Action Plan that I used to get us started.
Profit Mapping is an important exercise that I have all my students either complete or review, depending on where they are in their investment business. Kay had completed this task in advance, so we reviewed her financial goals for the next six months. To meet her financial goals, we determined that Kay needed a total of 24 deals. This may seem like an overwhelming number, so let’s break that down:
· 240 offers total
· 24 deals total
· 4 wholesale deals a month
· 40 offers per month
· 10 offers per week
· 50 sellers per week
Now Kay has a weekly activity plan to keep her motivated and moving forward. What will she focus on? We began reviewing and finalizing Kay’s business plan. First, defined buying criteria:
· Want 3/2 SFR. Buying to hold.
· Want ARV $80 – 120k
· Light repairs up to $15k
· Need to purchase at 65% of ARV less repairs
· Target buying areas:
* Southeast Memphis
With the what and the where defined, it was time to focus on the who. Kay determined the following would be her target segments:
* Wholesaling w/ double close
* Assignment of contract
· Work offering Owner Financing for exit strategy on properties Kay controlled
· Work with defaulted notes
· Work with pre-foreclosures
* Sub2 reinstatement
* Short Sales
* Loan Mods – referral to loan officer
With the what, where and who, we turned to the how. Just how would Kay accomplish and reach her target segment? Through marketing and lead generation. Kay has marketing materials from several seminars attended that have generated good results for her previously. She would target pre-foreclosures from The Memphis Daily News and MLS Expireds from real estate agents on her team.
We went on a property tour to one of Kay’s target neighborhoods. During the trip, we recorded each For Sale/For Rent/We Buy Houses signs we came across. Several times we stopped and called on the signs to determine either price or rent requested to help refine our neighborhood profile. The end result was this is a great target neighborhood!
We went back to Kay’s home office to begin our marketing efforts on her target segments. Through Realtor.com we found REO real estate agents and contacted them with our REO buying criteria. You can search for my article on finding real estate agents through Realtor.com at the realestateprofitcoach.com.
Through REI clubs and local Meetups we found hard money lenders. We sent an email blast to them with our buying criteria, and did the same for REI and Meetup members. Online social networks are great to quickly get your message out to a large number of people with similar interests.
4 Day 1:1 - Day Two
Part of any good plan is a “dream team”. Kay needs a group of professionals to help her reach her goals. We set an appointment to meet with an REO listing agent Kay knew. This same agent is also willing to provide Kay with MLS expired listings. Two birds, one stone. I love leverage!
To prepare for our meeting with the REO agent, we decided to review a few of the properties Gerald provided that were in our target market. Gerald provided sold and rental comps which enabled us to quickly eliminate properties that did not fit Kay’s buying criteria. This left us with a few solid prospects to walk through with Gerald.
I introduced Kay to some other lead generation tools – Foreclosure.com and BidSelect.com. Foreclosure.com is a paid subscription online service that provides REO’s, pre-foreclosures, for sale by owners leads throughout the country. BidSelect is a free online service that provides government and other foreclosed property leads. Either is a good tool when targeting either REO’s or pre-foreclosures. Through these two tools we identified additional properties that Gerald could show us in Kay’s target buying area.
Time to focus some time on one of Kay’s obstacles - selling her current flip property. Her marketing to date consisted of listing with a local real estate agent, MLS and the agents sign in the yard. No flyers, no other online ads. Using Craigslist to advertise these homes is free, other than your time, and is effective if used correctly. Kay already had an account, so I had Kay create a series of generic ads on Craigslist since we had no photos to use yet. One ad highlighted the property. Another ad highlighted owner financing. And so on.
With the property ads posted, we left to meet Gerald, Kay’s real estate agent. We reviewed four properties and quickly eliminated two. This left Gerald with a good idea of the type of property Kay was looking for. He asked if we would be interested in a new build community where the builder was rapidly going out of business. YES! Yes, we would. I like a team member that will think outside the box. The homes were incomplete. Most needed a finish out – floor coverings, lighting, appliances. A few needed a driveway. We asked Gerald to get us information on the properties and the owner. Kay will ask her handyman to stop by and prepare a repair budget. With comps and contacts in hand, it will be time to play let’s make a deal!
We stopped by Kay’s flip property on the way back from working with Gerald. Staging a home is important in today’s market. You have to do something to make your home look different. I had Kay make a supply list the night before as part of her homework. She had a few supplies and we tried them out.
Staging materials do not have to cost a lot. I love Big Lots, Wal-Mart, and other low cost providers. You don’t need to fill a home with furniture, just a few key pieces to tell a story. I like a welcome mat and planter box with colorful flowers on the front porch. In winter, I’ll use silk plants, plus they are low maintenance! I put dishtowels and a few accessories in the kitchen. I’ll put towels, soap, candles, shower curtains in the bathrooms. I’ll put a camping bed frame covered with a bedspread and an inexpensive side table in the master bedroom. Vanilla or citrus scents will make the home smell welcoming. If there is a fireplace with a mantle, I’ll put a large framed piece on the mantle to highlight the space. Kay made notes on some additional items she needed for staging, including flyers highlighting a buyers assistance package, appliance package, and other items a new homeowner may be interested in. These flyers will be strategically placed around the home.
We returned to Kay’s home office and reviewed the contents of her 1:1 binder that she received in the program. Besides having hundreds of references for a real estate investor, it also includes useful tools such as a seller credibility kit, private money presentation, and forms an investor may use on a regular basis. Forms in my binder include property information sheets, a letter of authorization, an option agreement and a basic purchase contract for my state.
We ended our day by participating in the weekly coaching call with Scott Carson. Each week, we cover specific items in profit mapping and also cover current topics we believe our students should be concerned with. We’re at the half way point! I left Kay with additional homework assignments and called it a night!
4 Day 1:1 - Day Three
We continued work on Kay’s flip. She had a few hits on the property, unfortunately they all wanted to rent the home, not purchase it. We created a marketing flyer highlighting the property and purchased a few additional marketing supplies.
Time to continue building Kay’s “dream team”. We set an appointment to meet with an investor group that responded to one of my email blasts. Turns out Kay knew them and had actually attended one or more of their workshops. She never approached them about working together, however.
The investor group is very well run and offers two distinct products for investors. The first is their low end product of properties outside of Kay’s buying criteria. The second is their premium turn-key product where they offer anything from the property to financing, general contractors and property management. We identified five business opportunities for Kay and built the majority of her team with one meeting. Time well spent!
We stopped back at Kay’s flip property. Priority one - put a flyer box with the newly created flyers out front. Priority two – complete interior staging with additional staging materials and our printed flyers. The flyers not only highlight the home features, they also include references to a buyer assistant package offered and an appliance package, to name a few. It’s important to point these items out to potential buyers.
While at the property, we took new photos of the property fully staged. The photos were turned into a virtual slideshow using Homepix.tv, an online service mainly for real estate agents. The product is available to all those who sell homes. Homepix.tv not only creates a virtual slideshow for your prospective buyers to watch, it also tracks how many views the show has received.
I loaned Kay my Flip video recorder and let her take a video tour of her property, room by room. I took the multiple videos Kay filmed of her flip using my Flip and, with the Flip’s software, created a video tour. The video tour was uploaded to YouTube.com, again through the Flip’s software. Very quick and easy. Well, easy anyway. A video can take several minutes to upload.
The slideshow and video tour are simple and effective marketing tools a real estate investor can do for their business. Both were added to Kay’s previously created Craigslist ads in just a few minutes.
The investor group gave Kay a lender contact that may help her in refinancing her flip property. Replacing the short term financing with permanent financing could open up additional exit strategies and is well worth investigating. Kay sent the lender an email referencing the investor group that referred her.
Time to focus some time on another one of Kay’s obstacles – the fact she has a day job and has limited time. Ultimately, Kay wants real estate to be her primary focus and that is a goal we are working towards. In the meantime, bills must be paid. How do we keep Kay moving forward without completely burning her out? With an assistant! I had Kay call a couple of the local universities and ask if they had an intern program. An intern would work for free while earning college credit. Some of the universities had a formal program, others did not. Those that did not were willing to market job postings for their students. Kay ended up with several good options to consider.
I gave Kay an assistant wanted ad used by another student and had her create a list of the tasks that she wanted to delegate from an assignment earlier in the week. Kay put thought into the skills and specific tasks, then she created her assistant ad. We posted the ad in Craigslist and also forwarded it to the universities.
Kay will have a need for private money to give her additional money making opportunities. Kay made a list of 30 people she knows to send her newsletter to. Several of our students have created successful private money newsletters and we reviewed these to give her some ideas. Whatever Kay’s chooses, she needs to be make it her own. It’s important for any communications from you sound like they come from you, especially if you are working with friends, family and associates.
When Kay receives a response for private money, she will need to know what to say. We reviewed Scott Carson’s “Private Money Presentation” on RealEstateProfitCoach.com. It’s a great presentation that can be downloaded and gives talking points for you to address with potential private money lenders. The presentation should definitely be added to Kay’s 1:1 binder as another useful tool.
We ended the day reviewing marketing materials. VistaPrint.com is a great online sight for inexpensive marketing materials – business cards, rack cards, magnets, etc. I walked Kay through its most effective use. Three days down, one to go! Tomorrow we need to pull all of the pieces together and formulate a plan for Kay!
4 Day 1:1 - Day Four
Kay greeted me with nervous excitement. She had numerous hits on her property and admin assistant ads! One showing for the property was scheduled for the afternoon, so we focused on getting ready for it.
We started by contacting local loan officers that Kay knew or were recommended to her by her growing network. Never underestimate the power of networking! After a few calls, Kay found a lender well versed in FHA and Tennessee first time homebuyer incentives. He provided an application for Kay to use to have buyers complete and have their credit report run. The loan officer was willing to run the credit reports in exchange for potential clients.
I provided Kay with a few other buyer forms and she prepared packets for her prospects. Now we have home buyers calling Kay wanting to buy homes and she’s building her buyer’s list! We ultimately had 3 people make an appointment to view Kay’s flip. Two of those completed an application and left a deposit. Ain’t it great when a plan comes together?
After the excitement of the showings, we returned to Kay’s home office. More hits on the Craigslist ads for both the property and the admin assistant. Kay joked that she needed an admin assistant to handle the admin assistant responses!
We spent our remaining time making sure Kay has a well rounded business. We ultimately had a plan of action that identified activities on a daily, weekly, monthly, quarterly and annual basis that Kay can focus on to keep her business moving forward.
As Kay progresses and builds confidence, I want her to add layers to her business to build depth. She needs to work the private money side to give her business more flexibility with exit strategies. I left her with scripts and contacts for notes and hard money. Bottom line, Kay has all the tools she needs to get started. And we are going to be with her every step of the way!
Shaking Things Up In Memphis
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