With Richard Roop, Dan Doran and Richard Blocker

November 2008

Oct & Nov Support Site:

Password: popcorn

How to

Prosper and Profit during Economic Chaos

Part 2 of 2

Solving the Biggest Challenges Facing

Real Estate Investors Today

Part 1:

How to prosper and profit during economic crisis:

Raising cash, creating cash flow, reducing debt and thriving during turbulent times

Visit the Oct & Nov Support Site:

Password: popcorn

Part 2:

How to prosper and profit during economic crisis:

Solving the Biggest Challenges Facing Real Estate Investors Today

Challenges faced by real estate investors today to be covered during this training system…

Marketing & Finding Deals

  • Trying to deal with sellers with no equity
  • Lower response to marketing
  • Less motivated sellers

Buying Right

  • Unworkable or unreliable investing models
  • Lack of confidence in structuring deals

Funding Deals & Raising Cash

  • Lack of cash
  • Replacing income from a job, business or career
  • Overcoming negative cash flow

Selling or Occupying Quickly

  • Inability to get new bank financing for buyers
  • Lack of qualified buyers calling to buy
  • Rising number of unsold homes
  • Dealing with declining home values
  • Managing vacant homes

1) Intro & Opening

Resources:

Richard Blocker

  • Dough for a Day
  • Investor Loans
  • Hard Money Loans
  • Tenant Buyer Financing
  • Credit Repair

October 2007 Marketing Mastery Training System (MMTS)

  • How to Profit after the 2007 Lender Market Meltdown:Insider Secrets to Mastering the Mortgage Market and How to Survive & Thrive During a Credit Crunch!
  • with Richard Roop, Dan Doranand Special Guest Richard Blocker

Search FHA Lending Limits

2) Challenges faced by real estate investors today to be covered during this training system…

Marketing & Finding Deals

  • Trying to deal with sellers with no equity
  • Most sellers who must sell have little or no equity
  • Declining home values have wiped out homeowners equity
  • Some sellers bought recently with little or no money down
  • Key points:
  • Deals today need equity
  • A highly motivated seller does not mean there is a deal
  • Geographic marketing campaigns will attract more non-deals
  • Ads
  • Signs
  • Flyers
  • Answers:
  • Become a ‘high equity specialist’
  • Use direct mail marketing to target homeowners with equity
  • Target older homeowners
  • Target older neighborhoods
  • Target landlords and non-owner occupied homes
  • Prescreen quickly on the phone for equity
  • Quickly eliminate non-deals
  • Network with real estate agents and mortgage brokers
  • Lower response to marketing
  • Caused by fear and uncertainty in the markets
  • Sellers and buyers have been taking a wait and see approach
  • Answers:
  • Maximizing Your Marketing Dollars
  • Adjusting Your Buying Systems For Today's Market Conditions
  • MMTC September 2008
  • How to generate more leads and stretch your marketing budget
  • How to improve the quality of your leads
  • How to build a better marketing plan
  • How to target better properties and farm areas
  • How to find more sellers with motivation and equity
  • How to maximize the value of each lead
  • How launch the best free and low cost marketing campaigns
  • The best prospecting lists today and where to get them
  • Where to search online for prospective deals and valuable resources

Marketing & Finding Deals

  • Less motivated sellers
  • Not willing to accept your price or terms
  • Unwilling to take a price hit
  • Unwilling to wait for their money
  • Willing to wait or explore other options
  • May be hoping prices will comeback
  • Don’t need to sell
  • They don’t believe you (as an investor) can pay a fair price today
  • Keys points:
  • Sellers who don’t need to sell are waiting to sell
  • Sellers with absolutely no motivation will NOT call you
  • Many sellers will hide their real motivation
  • Answers:
  • Your job as a pro is to uncover their real motivation
  • If there’s equity, go meet with the seller
  • Forget about uncovering motivation ahead of time
  • Build trust and rapport
  • Spend as much time as needed
  • Follow up as needed
  • Continue to follow up “until they buy or die”
  • You will not buy houses from truly unmotivated sellers
  • These are non-deals
  • Sift and sort through your leads for real deals (equity)
  • You will not buy houses from sellers with no equity
  • These are non-deals
  • Set the appointment then
  • Do your research
  • Cancel appointment if needed
  • Add some of the more targeted and motivated lists to your marketing plan
  • Smaller ‘motivated lists’ allow for more aggressive follow up
  • Door to door marketing
  • Telemarketing
  • Personal letters and postcards
  • News clippings
  • Educate your prospective sellers
  • In your marketing
  • In your presentation
  • In your follow up
  • Communicate…
  • You can pay up to full appraised value
  • You can buy because of your long term plans
  • You can pay more because of your selling programs
  • You protect yourself by not relying on banks

  • Resources:
  • Real Riches in Real Estate Niches
  • 3-part “how to” article at
  • Sales Mastery for Real Estate Entrepreneurs
  • Real estate investing negotiation and presentation system
  • Door to Door Marketing
  • Real estate training system
  • Marketing Mastery for Real Estate Entrepreneurs boot camp
  • January 20-23, 2009 in Orlando, Florida
  • What’s Working Best Now successful investor panels
  • Includes The Ultimate Strategy real estate investing system
  • Includes latest marketing tool and strategy updates

Next…

Buying Right

  • Using unworkable or unreliable investing models
  • Previous investing models not working as they once did
  • Challenges with buying Subject to
  • Lack of equity
  • Negative cash flow
  • Little or no upfront cash
  • Challenges with buying Wholesaling
  • Lack of wholesale buyers
  • Timid hard money lenders
  • Seasoning issues
  • Relies on getting a buyer bank qualified
  • Challenges with buying Retailing
  • Relies on getting a buyer bank qualified
  • Glut of homes for sale competing for qualified buyers
  • Threat of bank REOs slashing their prices
  • If you play the retail game, do it on an option
  • So you aren’t on the hook if the market tumbles
  • No competitive advantage when not offering terms
  • Must buy cheaper to seller cheaper
  • Challenges with buying Pre-foreclosures
  • New laws on targeting distressed homeowners
  • Months to get a “no” on short sales
  • Little or no equity requires you create equity
  • Relies on getting a buyer qualified with a bank
  • Answers:
  • Project a 10% decline in home values and buy accordingly
  • Buy bank REOs super cheap all cash to hold or sell on a wrap
  • Use The Ultimate Strategy to buy with terms and sell with terms
  • Avoid negative cash flow
  • Insist on positive cash flow
  • Raise tax free cash on the day you buy
  • Only to the level you need
  • Be frugal when mortgaging your future profits
  • Plan to hold longer term
  • Or forever with 1031 as planned exit
  • Get more offers accepted by offering up to full price
  • Move 0% owner carry back notes to pay off your other properties
  • Pay off owner carry back notes early at deep discounts
  • Create “forced appreciation” by rapidly paying off your houses
  • Avoid seasoning issues and new foreclosure laws

  • Resources:
  • Multiple Streams of Real Estate Cash Profits:
    How to Become a Successful and Flexible Transaction Engineer
  • April 2008 MMTC
  • Turning the Worldwide Credit Freeze into Large Piles of Tax-Free Cash
  • Article --
  • Lack of confidence in structuring deals
  • Concerns about future home values
  • Previous exit plans not reliable
  • Fear of making offers or buying houses
  • Key Points:
  • Stops the action needed to buy great deals
  • Answers:
  • Use a conservative resell price or future value
  • Project all your costs to buy, hold and sell
  • Establish a target net profit
  • Lock in your profit by not exceeding a “maximum allowable offer”
  • Buy with contingencies if your exit is uncertain
  • Don’t rely on exit plans the involve bank financing
  • Resources:
  • Free & Clear Offer Generator software
  • Included in The Ultimate Strategy
  • Review Module 4
  • Profit Guaranteed Deal Structuring:
    How to Construct Multiple Offers with Confidence
  • July 2008 MMTC
  • Includes Maximum Allowable Offer Generator software
  • How to Determine Current and Future Home Values:
    Finding Good Comps, Predicting Prices and Buying Right Every Time
  • June 2008 MMTC
  • Includes vast array of online resources

Next…

Funding Deals & Raising Cash

  • Lack of cash
  • Fewer wholesale flip opportunities
  • Fewer retail flip opportunities
  • Back-end cash outs are few and far between
  • Buyers have smaller down payments or purchase deposits
  • Waiting and hoping for short sale approvals
  • Answers:
  • Target houses with equity
  • Pull out up to 60% of your cash profits when you buy
  • Avoid using your cash to fund deals
  • Line up more private investors
  • Buy houses with at least a breakeven cash flow
  • Avoid short term financing or exit plans
  • Pull equity out of properties you’re holding long term
  • Meet your monthly cash needs by buying a house or two each month
  • Dump you dog properties now
  • Resources:
  • The Ultimate Strategy
  • Module 6
  • Marketing Mastery for Real Estate Entrepreneurs boot camp
  • What’s Working Best for raising private money, establishing lines of credit and funding your deals
  • Million Dollar Coaching
  • Weekly bonus coaching calls to address any issues

Funding Deals & Raising Cash

  • Replacing income from a job, business or career
  • Unemployment may rise to 8-10% next year
  • Companies are downsizing and laying off employees
  • Business are less anxious to invest now for growth
  • Reliable income is beyond the control of most employees today
  • Answers:
  • Take control of your income as a real estate entrepreneur
  • Start building a portfolio of houses with positive cash flows
  • Ask sellers to finance their equity with no payments for 7 years or longer
  • Buy a house and pull cash out each month
  • Overcoming negative cash flow
  • Causes:
  • High cost of taxes or insurance
  • Vacancies
  • Taking on payments that are too high for the property
  • Adjustable rate loans taken ‘subject to’ start adjusting
  • Option Arm investor loans adjusting
  • Answers:
  • Recapture or collect your buy and hold costs when buying
  • Begin avoiding houses that can’t hold their own
  • Stop relying on a new bank loan to payoff a bad loan
  • Target houses in a more affordable price range
  • Refinance your hold properties with 6-8% private money
  • Raise cash by buying houses to pay off high interest loans

Next…

Selling or Occupying Quickly

  • Inability to get new bank financing for buyers
  • Collapse of the subprime lending market
  • Tighter lending criteria
  • Seasoning issues
  • Skittish title companies
  • Less frequent cash outs
  • Less flipping opportunities
  • Answers:
  • Buy with long term seller financing
  • Sell with seller financing
  • Don’t plan on bank financing above FHA lending limits
  • Target houses in a more affordable price range
  • Be in a position to rent or hold longer term
  • Occupying with tenant buyers and get them to build their down
  • Buy contingent on finding an acceptable occupant or buyer
  • Lack of qualified buyers calling to buy
  • Not enough money down to protect you
  • No money, credit or stable employment
  • Good credit but can’t borrow
  • Good income but can’t qualify
  • Can’t afford higher priced homes
  • Answers:
  • Buy so you can hold as a rental
  • Buy using resell price you are confident in
  • Consider trades and sweat equity program
  • Allow tenant-buyers to build up a down payment
  • Apply the best practices for selling
  • Signs
  • Classified ads
  • Buyer’s list
  • Advertise free rent instead of discounting price
  • “2 months free rent”
  • Rent to own or lease option
  • Waive 12th and 24th month when all payments made on time
  • Offer great price or great terms, or both
  • Familiarize yourself with lending options available
  • Network with mortgage brokers and real estate agents

Selling or Occupying Quickly

  • Rising number of homes unsold
  • More competition to sell or occupy
  • Downward pressure on prices
  • Comps effected by bank repo either sold and active
  • Dealing with declining home values
  • Becoming upside down on a property
  • Watching profit spread disappear
  • Risks of rehabbing and then flipping within 3 to 6 months
  • Uncertain resell price or value in the future
  • Answers:
  • Research and get familiar with your local housing market
  • Consider relocating to better area to live, buy and hold
  • Plan for lower prices and buy right
  • Plan to hold long term
  • Sell now on a wraparound
  • Raise cash buying now and use to pay down debt on other properties
  • Cash out free and clear purchases to replace interest bearing debt with 0% financing
  • Managing vacant homes
  • Tenants giving notice
  • Evictions
  • Lack of qualified buyers
  • Answers:
  • Start your marketing to sell ASAP
  • Shorten the eviction process
  • Have your payments start when occupied

Best Resources for a bright 2009 and beyond:

  • The Ultimate Strategy™ real estate investing system
  • Vital for today’s market conditions!
  • Maximizing Your Marketing Dollars:Adjusting Your Buying Systems For Today's Market Conditions
  • September 2008 Marketing Mastery Training System
  • Vital for today’s market conditions!
  • Marketing Mastery for Real Estate Entrepreneurs boot camp
  • Includes The Ultimate Strategy™ real estate investing system
  • Million Dollar Coaching
  • Includes The Ultimate Strategy™ membership benefits

November 2008© RichardRoop.com, Inc.1