Do you want the Ultimate Real Estate Marketing Tip?
Then BE the BANK. What? I can’t be the Bank, I got into REI to make money fast! The number one way you can make money as an REI is to do exactly what the Big Boys do. You need CASH, right? (unless you know the techniques described in my book) So how do you get your hands on a steady flow of cash and eliminate being a landlord?
You could hire a good PROPERTY MANAGEMENT COMPANY to outsource all of the work of managing your rental properties for you, and turn over 10-15% of your cash flow to them. Or, you could open up your own property management company and use it as a wealth retaining tool. (recommended).
Or you could set yourself apart from all of the competition and serve an underserved section of the community. Use this to get tons of FREE PUBLICITY on local news and radio stations, which in turn will pour thousands of applicants back into your system, give you name recognition, and establish you as the EXPERT in your neighborhood.
But first: How can you be the Bank?
We’re not talking about registering with the SEC, or FICA or any regulating body that has all sorts of requirements and conditions about working as a bank. All we mean is you AS THE OWNER, hold the NOTE.
Good, old fashioned OWNER FINANCING, the exact same kind of deal you were looking for as an REI, is exactly what you offer to your clients.
How it works is like this: You negotiate to purchase a home for 55 – 60% and write a contract. Take that and get a HARD MONEY LOAN for 70% of the ARV. (After Repaired Value). You use the overages to repair the home and FORCE APPRECIATION to a better than current market value.
Now, while your crews are working, put a big sign in the front yard stating, LOW DOWN, EZ TERMS, NO BANK QUALIFY, and your phone number, or YOU CAN OWN THIS HOME FOR X A MONTH, CALL XXX-XXXX!
Set up a voicemail with all of the details, and tell invite them to apply or leave their contact info.
Ask for $3000 down (or less, depending on market conditions) and OWNER FINANCE for $200 - $300 over a traditional mortgage cost.
The numbers would look like this:
You bought a home for $55,000.
You got a HARD MONEY LOAN for $70,000 (on a $100,000 ARV)
You acted as your own GENRAL CONTRACTOR and used the $15K difference to repair the home up to a market value of $100,000.
You find a good applicant (out of 100 applications at $25 per app fee) (($2500)) who pays $3000 down, and a monthly payment.
How do you determine your monthly payment? Go to the bank and get an 80% re-fi on the home. Your mortgage payment will be around $650-$750 depending on the interest rate. So your new tenants will pay $850-$950 per month.
As a homeowner, as opposed to a renter, they will be required to pay taxes and insurance on the home, and that can be worked into the payment schedule as well. As the BANK, you would also be well advised to keep a blanket insurance policy on all of your properties.
Let’s look at those numbers again: An REI would make money on the Hard Money Loan by acting as their own contractor ($15K), They would make money on the application fee’s ($2500) plus the down payment, ($3000) and money on the re-fi ($10K). Don’t forget the $200 month positive cash flow, and the good will (FREE PUBLICITY) that comes with providing a valuable service to the community.
A good REI would make $30,500 on a deal like this.
And with the 99 other applicants who didn’t get into this home, you have 99 more customers to go out and find the exact same deal on, multiplying all of your profit by 99. Could you be the bank for $3,000,000?
How do you cash in on the FREE PUBLICITY that acting as your own BANK generates?
As an REI, you need contacts in the community, specifically in the contractors and sub contractors categories. Want to promote your REI business on television for FREE? Get a van with graphics on it, and be sure it has your contact number.
Next, write up a PRESS RELEASE with a good HOOK. Think sensationalism, just like a journalist. A Hook is what makes a viewer want to watch. You’ve heard it before. What’s in your home that may be killing you . . . stay tuned!
Your Hook will be something like, HOW A LOCAL BUSINESSMAN IS PUTTING BANKS OUT OF BUSINESS. Any producer or newspaper editor is going to jump all over that because it sells papers and draws viewers. Just come up with one great Hook, and you’ll never have to pay to advertise again.
When the TELEVISION NEWS CREW sets up to interview you, stand in front of your van graphic. Ask that they hold the shot a little wide, not too obvious, and then you’re going out to thousands and thousands of viewers with your phone number and it didn’t cost you a dime.
If a NEWSPAPER CREW takes your photo, give them an action shot with your sign, TELL YOUR BANK GOOD BYE, or PUT YOUR BANK OUT OF BUSINESS, and a phone number. Get a shot of you pushing it in the ground, hammer in hand.
Think outside of the box.
You could hire a good PROPERTY MANAGEMENT COMPANY to outsource all of the work of managing your rental properties for you, and turn over 10-15% of your cash flow to them. Or, you could open up your own property management company and use it as a wealth retaining tool. (recommended).
Or you could set yourself apart from all of the competition and serve an underserved section of the community. Use this to get tons of FREE PUBLICITY on local news and radio stations, which in turn will pour thousands of applicants back into your system, give you name recognition, and establish you as the EXPERT in your neighborhood.
But first: How can you be the Bank?
We’re not talking about registering with the SEC, or FICA or any regulating body that has all sorts of requirements and conditions about working as a bank. All we mean is you AS THE OWNER, hold the NOTE.
Good, old fashioned OWNER FINANCING, the exact same kind of deal you were looking for as an REI, is exactly what you offer to your clients.
How it works is like this: You negotiate to purchase a home for 55 – 60% and write a contract. Take that and get a HARD MONEY LOAN for 70% of the ARV. (After Repaired Value). You use the overages to repair the home and FORCE APPRECIATION to a better than current market value.
Now, while your crews are working, put a big sign in the front yard stating, LOW DOWN, EZ TERMS, NO BANK QUALIFY, and your phone number, or YOU CAN OWN THIS HOME FOR X A MONTH, CALL XXX-XXXX!
Set up a voicemail with all of the details, and tell invite them to apply or leave their contact info.
Ask for $3000 down (or less, depending on market conditions) and OWNER FINANCE for $200 - $300 over a traditional mortgage cost.
The numbers would look like this:
You bought a home for $55,000.
You got a HARD MONEY LOAN for $70,000 (on a $100,000 ARV)
You acted as your own GENRAL CONTRACTOR and used the $15K difference to repair the home up to a market value of $100,000.
You find a good applicant (out of 100 applications at $25 per app fee) (($2500)) who pays $3000 down, and a monthly payment.
How do you determine your monthly payment? Go to the bank and get an 80% re-fi on the home. Your mortgage payment will be around $650-$750 depending on the interest rate. So your new tenants will pay $850-$950 per month.
As a homeowner, as opposed to a renter, they will be required to pay taxes and insurance on the home, and that can be worked into the payment schedule as well. As the BANK, you would also be well advised to keep a blanket insurance policy on all of your properties.
Let’s look at those numbers again: An REI would make money on the Hard Money Loan by acting as their own contractor ($15K), They would make money on the application fee’s ($2500) plus the down payment, ($3000) and money on the re-fi ($10K). Don’t forget the $200 month positive cash flow, and the good will (FREE PUBLICITY) that comes with providing a valuable service to the community.
A good REI would make $30,500 on a deal like this.
And with the 99 other applicants who didn’t get into this home, you have 99 more customers to go out and find the exact same deal on, multiplying all of your profit by 99. Could you be the bank for $3,000,000?
How do you cash in on the FREE PUBLICITY that acting as your own BANK generates?
As an REI, you need contacts in the community, specifically in the contractors and sub contractors categories. Want to promote your REI business on television for FREE? Get a van with graphics on it, and be sure it has your contact number.
Next, write up a PRESS RELEASE with a good HOOK. Think sensationalism, just like a journalist. A Hook is what makes a viewer want to watch. You’ve heard it before. What’s in your home that may be killing you . . . stay tuned!
Your Hook will be something like, HOW A LOCAL BUSINESSMAN IS PUTTING BANKS OUT OF BUSINESS. Any producer or newspaper editor is going to jump all over that because it sells papers and draws viewers. Just come up with one great Hook, and you’ll never have to pay to advertise again.
When the TELEVISION NEWS CREW sets up to interview you, stand in front of your van graphic. Ask that they hold the shot a little wide, not too obvious, and then you’re going out to thousands and thousands of viewers with your phone number and it didn’t cost you a dime.
If a NEWSPAPER CREW takes your photo, give them an action shot with your sign, TELL YOUR BANK GOOD BYE, or PUT YOUR BANK OUT OF BUSINESS, and a phone number. Get a shot of you pushing it in the ground, hammer in hand.
Think outside of the box.
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