Alabama Real Estate Investment Coaching
Finding Deals in Foley
Day One Monday, July 21, 2008
9:00 I arrived at Dayton’s office and he introduced me to his staff and his wife. Dayton had booked a full day for us with meetings so we immediately got to work. I sat down with him and started to review his current marketing and we posted several Craigslist ads (Handyman Special, I Buy Notes, No Bank Qualifying, etc). After getting these posted, we headed out to meet with a mortgage broker, Judd Besse.
10:00 We arrived at Judd’s office and found out that he and his wife focused on residential and large commercial loans respectively. Judd liked the idea of what we were focusing on and he gave us several recommendations for realtors, Title Company, and he even came up with several potential deals for Dayton and I to review with Jayme Kahla on a large commercial project basis. Along with this, we discussed the purchasing and recasting of notes on an individual and pool basis. Judd stated that he would be interested in helping Dayton with anything along with reviewing or recommending specific contacts for him to use in the future. We thanked him and headed out to meet with our next appointment.
11:00 We arrived at Joyce Harrington’s office who had been a realtor for over five years. She didn’t seem that interested in assisting us as she stated that her primary focus was on beach condos and development. So we only spent about 20 minutes with her .We then headed back to the office.
1:00 After lunch, we headed over to the ERA Realty office to meet with realtor, Wayne Waters. Wayne had been a realtor for six plus years and was an investor himself. He spent a lot of time in Mobile working on some foreclosures and REO’s, but was definitely interested in assisting us some things to focus on. He had taken the time to pull some REO’s along with a list of short sales for Dayton to review. We discussed builder closeouts along with the local market. Wayne had negotiated several short sales along with selling several of his properties with owner financing so we immediately felt comfortable with him. We agreed to meet on Wednesday to initially submit some offers along with meeting Thursday am to review builder closeouts across the area.
3:00 On the way back to the office, we took some time to drive around the area to identify several ugly (weeds) homes that were in need of some TLC. Dayton stated that he didn’t know how to identify the homeowners and I stated that we should pull the county appraisers website to give us the home owner. We arrived back at the office and I spent 20-30 minutes working with Dayton and his assistant, Melissa, to show them how to identify the home owners of specific properties. Along with this, we pulled up a list of area hard money lenders off of REIclub.com and we also found a Real Estate Club that meets the first Tuesday of the month in Pensacola that was not listed there as well. Dayton was excited about this as the time was something that he could actually attend as opposed to the noon meeting of the Mobile, AL club.
5:00 We spent the last hour working through Dayton’s list of clients and contacts to create a private lending email. The email took some time to explain to Dayton that we were mining for money by indirectly asking for financing on specific deals that we had found from Wayne that morning (that we were yet to review). Dayton stated that he was definitely outside of his box on this and that he would entertain the idea. We were unable to send the email due to internet problems, but we saved the draft to tackle it first thing in the morning.
6:00 We wrapped up the day with Dayton completing the Daily Journal and I assigned him the task of calling local FSBO’s to discuss them selling their properties to him for what they owed or offering owner financing.
Day Two Tuesday, July 22, 2008
9:00 I arrived at the office and Dayton was finishing up with a client. After he wrapped up, we spent the morning calling on and reviewing hard money lenders (9 total) and structuring a couple deals to show Dayton how to calculate his carrying and closing costs as well. After doing this, I had Dayton send out his private money email to over 5000 contacts. After doing this, Dayton expressed his interest at looking at a couple of the properties that he had looked at the night before from Wayne’s list. Luckily Dayton had MLS access from another realtor, so I was able to call and get the lockbox codes for us to access the properties.
10:00 We reviewed four total properties, three of which were complete rehabs. Dayton wasn’t comfortable with the idea of rehabbing these, but I brought up the idea of wholesaling these to other investors and still making something. He liked that idea and so we discussed how he could build a buyers list from attending the local clubs and contacting individuals who had pulled building permits from the city. The one property he liked was one that was an REO in a decent area. We spent some time calling several of the agents who had For Sale sings and came up with a value of around $130K. We decided that we would have Wayne pull actual comps and base our offers off of that.
We then headed back to the office.
1:00 We arrived back at the office and I worked on creating a LOI (letter of intent) for Wayne to use when submitting bulk offers on the 12 REO’s that we had discovered and reviewed. We emailed them over to him and then Dayton called GulfShore title to set up a meeting with Linda Davis, Escrow Officer.
2:00 We arrived at Gulf Shore Title, and Linda was extremely warm and welcoming. She even recommended us researching a builder’s subdivision that had been foreclosed by Regions and Vision’s Banks where there were at least 20-24 finished homes. Along with this, Linda agreed to send Dr. Hart Estimate Hud-1’s for short sales, along with emailing him several local private lenders for him to contact. After spending some time just visiting, she gave us directions to the subdivision and we headed out to review it.
3:00 We were able to find Crimson Ridge Subdivision relatively easy and Dr. Hart was surprised at the amount of development in the area as he admitted that he didn’t get out often. There were 24 homes and 4 had been vandalized already. We were able to walk through these four, and all that they would need for repairs is paint, windows, appliances and some paint and sheetrock repair. Otherwise, the remaining homes were move in ready and needed landscaping as the yards were in disarray with weeds as tall as some of the homes. We then headed out to meet with Dayton’s banker at Regions, Suzanne Hinton.
4:00 We arrived at Regions and met with Suzanne. She was unable to find any information on the REO’s but gave us several names to call on to check with for more information. After talking with her for a few minutes, we headed back to Dr. Hart’s office and I tried to pull of the properties on the county appraiser or CountyClerks website with no avail. I then called the Regions Bank contacts that Suzanne gave us, and they could still not find anything, but they recommended that we contact the Birmingham office to find out more information. We spent about an hour on the phone and then decided to call it a day.
6:00 We wrapped up the day with Dayton completing the Daily Journal and with me assigning him the task of looking over the properties that Wayne had pulled for us.
Day Three Wednesday, July 23, 2008
8:00 I arrived at Dayton’s office and Dayton was excited to see several responses to his private lending email from clients who had forwarded it on to contacts that they knew who might be interested. After reviewing this, I got Melissa and I worked with them both on roll-playing and scripting initial phone calls to mortgage bankers for one offs and pools of notes. We worked from 9 to 11 calling 26 mortgage bankers from a list that I had previously pulled. We were able to speak with six contacts and we were able to get their emails to follow up with on drip marketing as well. They both did well on the phones, and Dayton expressed the idea of hiring someone to complete this. I suggested that he keep Melissa and himself on the calls until he had completed the sale, trade, or brokering of a couple notes.
11:00 Dayton had one of his mobile home tenants stop by and offered to sell her mobile home to him for $5K. She owed $8K, but was willing to pay $3K down to lower the balance. She did not want to stay in the property, and was willing to sign anything that Dayton would put in front of her to have someone else take care of the problem. Dayton figured the mobile home would be able to rent at around $400 a month, bringing in around $250 a month in cash flow! I expressed my interest in him adding more slots to his Mobile home park to bring in more cash flow that what it was currently doing. He stated that he would post a few ads in the paper to get some more marketing done.
1:00 We arrived back from lunch, and I had Dayton review the listings on Craigslist. We found a private lender who was lending out of IRA’s (Nicole Bell) off of ARV on rehabs at 7-8% on a 5 year arm and 30 year fixed rate mortgage products. I was extremely excited about this, and so was Dayton. He like this idea but had to repeatedly ask me about how it was going to affect his credit. I mentioned that since it was a private loan that it would not reflect on credit. Dayton’s biggest setback is his lack of financial or creative financing. He mentioned that he suffered with that and he seemed to have a mind block and that it was a fear of his that sometimes kept him from acting upon opportunities. We spent some time discussing the pros and cons of leveraging himself along with using hard and private money lenders to take deals down.
3:00 We spent some time discussing marketing for his dental practice and how his niche (Mercury Free filings and removal) would be something for him to hang his had on and advertise on a much larger basis. We also discussed him contacting health foods, chiropractors, and special educational or autistic clinics to help drive some business. After this, we spent some time reviewing Craigslist on ways for him to advertise for free.
5:00 Dayton had a client come in for an emergency procedure so I worked on creating a subject to amendment for him to use in the purchase of the mobile home that from the lady that had come by the office just before noon. Dayton came from his appointment excited that the client had received his email on private lending and had passed it on to five of her friends who were looking for investment opportunities. On that we decided to call it a day.
6:00 We wrapped up the day with Dayton completing the Daily Journal and we headed out to dinner at the Longhorn Steakhouse.
Day Four Thursday, July 24, 2008
9:00 I arrived and Dayton was wrapping up with a client. After he finished, we ran over to meet with Wayne. Wayne had pulled together the contracts on the two REO’s that we had and were going to review and he had Dayton start signing the documents. After this, we headed out to review the one on Foley Rd. The property was an REO that had sold two years ago for just under $200K and the bank had it listed at $145K. It would be a light rehab with paint, flooring, landscaping, and cleaning or at $10K at the most. We asked Wayne to pull the latest comps on the property and we would probably come in around an offer of $80 to $90K based on a sales price of around $150K.
10:30 After reviewing the property, we headed out to Dayton’s mobile home park. On the way, we stopped to inspect a nice REO that HomEq was selling at $225K along with looking at a mobile home that Dayton was considering purchasing if it was a Zone 1 mobile that could be moved to his park. After this we spent some time looking at a couple of his vacant mobiles to see what needed to be repaired, along with him having the option to add an additional 10-15 units on his park. After spending some time out in the field, we headed back to his office to pick up Melissa for lunch.
1:00 We arrived back from lunch and Dayton and I began to work on his marketing plan. We set up a Daily, Weekly, and Monthly action item and marketing plan for he and his staff to work on to build a pipeline of leads coming in. I also had Dayton focus on writing his remaining 2008 goals, along with his new 2009 and identifying specific action items to accomplish. I also had him work the numbers backwards so that his marketing would align up with his numbers as long as he worked the system on a regular basis. I also spent some time and discussed with Melissa, and Michelle, their roles and how Dayton would be utilizing them both to delegate items of marketing, calling, and collecting information on potential deals.
2:00 We ran over to meet with Jay Jennings and Nick Weichert with Wiechert Realtor. Jay was an agent and Nick was a broker who owned the company and we had a great visit with both guys. They were very interested in learning what Dayton was looking to focus on along with coming up with potential leads and deals that would fit into the formula that I had outlined for Dayton to stick to. Nick was also interested in the note side of things and it was interesting to find out that he had come across WeCloseNotes.com just the week before. He loved our concepts and was extremely excited to have him and Jay working with Dayton. The guys promised to get back to Dayton within the early part of next week with some properties. We then headed back to the office.
4:00 We wrapped up the 1:1 with Dayton completing the Daily Journal and Mentor Evaluation. Along with this, we discussed Dayton following up on other deals that we had come across throughout the week.