If you want to truly build wealth and create freedom for you and your family, then you need to learn and understand how to analyze a deal. I'll be sharing just a few of the steps to get you started on the road to your first property.
Today I want to talk to you about getting out of your house, off your computer, and out into the world. Deals aren’t only to be found in meetings or over the phone; you need to actually take the time to talk with sellers on their own turf. This is where you’ll find sellers who could use your help and opportunities to help your family and grow your wealth.
Door knocking is almost a lost art among investors today; however, it’s still a powerful and effective tool to finding sellers who may not know they want to sell. One of the best in the business is Bill Cook, a former Kirby vacuum salesman. He takes groups on property tours and actually knocks on houses in a neighborhood in a demonstration; many times the homeowner will let the entire group of over forty people in!
Knocking on doors can be dangerous, especially for women; if you feel unsafe on your own, then bring someone with you as a buddy, especially in rougher neighborhoods. I prefer to find unloved homes that clearly need repairs and help. If the occupant isn’t the seller but a tenant, you can usually find out from them (they might need reassurances that you won’t kick them out after buying the property, however).
If you see older people working in their front yard, make sure to stop and talk with them. Ask them about the neighborhood, compliment their home, and build that rapport. Older people who have been in the neighborhood for years will know who is looking to sell, and you just might get a deal out of it.
Need practice negotiating? Go to a yard or garage sale. Find something cheap and negotiate with the seller and get it cheaper. This is training you can’t get in a guru’s class or an expensive seminar; it might cost you a dollar if you buy the item, and you always have the option to walk away. This is a fantastic, no-pressure environment to get you into the negotiating mindset.
Visit LarryHarbolt.com for my investing courses and resources to take you further in your investing career.
After my recent podcast on the inner workings of the Subject-To deal, people have been asking me relentlessly about how to do “Lease-Option” exit strategies in their deals. Today we’re going to cover how you can do your own Lease-Option deals, or as it’s more commonly known, the “rent-to-own”.
If a property has been on the market for many months, it has a mortgage, and the seller doesn’t live in it, then there’s a good chance that the sellers are making two mortgage payments. If they’ve renovated the property, you’ll often find that sellers are reluctant to put in tenants for cashflow if they can put it on the market and sell it for top dollar. But if it sits on the market for months, they’re continuing to lose money every month it doesn’t sell. This is where the Lease-Option comes into play to help ease their financial pain and help you gain control of the property.
The Lease-Option allows the tenant to lease the property now and gives them an option to purchase the property at a later time under a certain set of circumstances. This gives you, the investor, control of the property and the option to put it under your corporation or a land trust down the road when you exercise your option.
For a FREE copy of my Lease-Option cheat sheet, go to http://www.larryharbolt.com/leaseoption.
Many investors have unfounded fears about Subject-To deals; specifically, they usually have no idea what a Subject-To deal even involves! My goal today is to break down the confusion around this deal structure with old-fashioned knowledge. If you have the education, then you can use this strategy as a tool to acquiring more deals.
A “Subject-To” deal is defined as the acquisition of a property that already has a pre-existing mortgage. However, the person buying the property does not become personally liable for repaying that debt. This is the opposite of “assuming” a mortgage, where the buyer would take over the mortgage payments of the property they are purchasing and therefore becoming personally liable.
Remember: If you take a property Subject-To, YOU ARE NOT RESPONSIBLE FOR THE PREVIOUS FINANCING!
You need to make sure you have all the proper paperwork for the deal, including a Purchase Agreement and any documents if you’ll be putting the property in a Land Trust. You can learn about land trusts and how to structure your properties to best protect them at my Land Trust Bootcamp coming up in November.
For more information on my Land Trust Bootcamp from November 11-13 in Tampa, Florida, click here: http://www.larryharbolt.com/landtrustbootcamp.
For your own copy of my cheat sheet that walks you through Subject-To deals, visit larryharbolt.com/subject2.