Industry sign banking oklahoma contract easy
and it looks like it's live there we go we are now officially live and I'm going to blow this up and I'm going to do that alright so we are going to talk about on this live broadcast we're going to talk about deal structure we're specifically going to talk about how to get more contracts with the same amount of leads okay this has been a big topic in our board room boredom elite and billionaire boardroom masterminds there's guys doing a lot of deals doing wholesale deals fix and flip deals but they're completely missing out on a huge section of the market that really no one's participating in and we call it the down payment arbitrage right the down payment arbitrage and you can do it with luxury houses and you can do it with cheap houses you can do it with you know median home prices so we're gonna talk about this down payment arbitrage and what is the benefit of this down payment arbitrage is that literally buyers love the down payment arbitrage they love it they love it for buying rentals they love it for buying fix and flip properties so when it comes like I mean front we do anywhere from you know three to six deals a month just added in to our current deal flow of these down payment arbitrage deals so that's what we're gonna talk about today you're gonna absolutely love it and actually I'm gonna give you our contract in the addendum that goes with that it's a contract of addendum that goes with it actually I wonder if Chelsea can print that out the contract and in denim I don't know Chelsea can you print in a contract for us just print just print an a/b contract for us if you could okay and then the addendum the addendum okay she's gonna print it out she's in the other room right there alright so anyway so that's what we're gonna talk about I want to show you what it is show you how it works and and we're going to talk about the deal structure the language is in the addendum the lane is in the contract and how you can structure and then how you can pitch it to a seller this is incredibly important first off it's identifying leads and deals that come in and then obviously gonna pitch it to sellers all right so here's the deal number one cool cool okay so so before we get started before we get in deal structure before we able to double even triple your business with this this method of getting deals which literally this is how you eliminate competition this is how you crush competition because you're able to structure deals where other people can't right it's another tool in your tool belt so if you could do a do me a couple things right now first off let me know where you're coming in from so if you just type in the comment box where you're coming in from what market you're in I greatly appreciate just let me know where you guys are coming in from it looks like Tommy Lee join Chelsea joint Earl joined Joneses on KTM jeans on so yeah so let me know where you guys are from what markets you're in in the comments below we got Orlando Florida Jason we got Joey Dan Schultz wanted company office one day cool I love to have come in times Burger Brandon from Jersey Kansas City but trying to do this for a while looking across the nation all markets yeah I mean this can be done nationally hey what's up sergio toronto louisville kentucky tulsa oklahoma shout out in the house richmond virginia let a lot of people on their cool dallas texas we've got young town maryland young PG county maryland we got miami we got austin texas all these these markets you there's every one of these markets that we've named right here are super hot across the country we got mount vernon you can do this west washington 60 miles south of Seattle you can do it there Trinidad virtual wholesaling in Florida that's good we got Florida Miami Florida cool cool so every one of these markets you can you can do this deal now let me ask you a question here's another question how many deals have you done currently to date right it's right today is what we've got September 27 2018 how many deals have you done in 2018 so from January 2 currently right now September 27 how many deals have you done let me know type it in the box below I greatly appreciate it let me know yeah we got Kristen's got one deal on the on the works right now we're in the process of selling which is good Mario four deals we got Derrick one deal Derrick Schultz we're going to show you how to double your business Derrick 15 Alex we're gonna show you how to double your business outs imagine doing 30 deals versus versus 15 16 so far Brad congratulations John Harris 1 you've got that one under your belt Jason 1 start 60 days ago congratulations Jason just starting as cool zero on 3 oh hey keep pushing man have the faith first month got one in Glendale on to contract congratulations zero just got started congratulations Tim get up and going cuckoo has generate the answer from eco RVM rocks the house zero still toilet trying to get my first as okay keep pushing this will obviously help you when you get deals with little to no equity just starting Kevin congratulations Richard is on there's trying to get his first deal you will get your first deal you're not trying to get your first deal you will get your first deal it's inevitable it will happen as long as you keep pushing forward one contract need to assign still will get that sucker assigned man that's what that's when you go once you get your property under contract that's when you hustle that's when you it's it's no-holds-barred you want to do it everything you can to get his men in front of many eyeballs as possible to get buyers to look at your property to get that sucker sold so that's awesome that's awesome alright so we're gonna get started here we're going to talk about deal structure we're going to talk about the down payment arbitrage how to double your business literally with deals with little to no equity which in when if someone wants retail how you can structure it that way so so if you could go hit the like button for me right now the like button on there I just want to see if that works like button works go hit the like button if you could not that one it's the RA to be one or a to be contract no that's that's a post possession I need the regular a B contract an addendum its impo do ya rapid in them rapid in them and then they're just regular a B two-page contract okay so cool quo so if you could just hit the like button let me know it works hit the like button if you hear something really great while we're doing this presentation if you can hit the like button that'd be great if you could share this hits a share button that would be great share this obviously the more people we can get on it would obviously help the cause the hook to freedom cause and if this can help someone go out and structure more deals and you can get more deals with less leads that's the thing right there's two ways to double your business right you gotta increase your leads or increase your conversion so we're gonna talk right about now today we're gonna talk about how to increase the conversion and now this gives you the opportunity to do more deals with the same amount of leads that's incredibly important right because now you're not having to spend more money for the leads but you're converting more of those leads in the contract that is what it takes to T two ways to grow your business from one we got it lands on there to grow your business from one deal that if you've done one deal if you've done 15 deals some of these guys didn't fifteen sixteen deals if you want to be able to double your business either gonna get more leads or you got to convert more deals right so the leads though that means you're putting more money in the business you're spending more money on mail you're spending more money on RVM you're spending more money on google adwords you're spending more money on other methods in time and energy to go get deals or write you can get great at conversions see what what you know it's interesting them you have my my property consultants to go out we have our meeting every friday and we go through and we talk about all the deals and talk about conversion and that's where we do our training about conversion that's important but literally just about a couple months ago I went out you know just to see if I had it still went out ten appointments got eight contracts on ten appointments and it's literally it's that conversion thing if you can master conversion then this business is amazing right this business is amazing because you can go on an appointment me the seller and can get a contract and you know the process of how that works we have a nine step seller conversion sequence we call it but mastering that changes everything right it'll change your profitability in your business if you're managing a team of people like I do it changes that whole profitability model why because of conversion that's how it works now a key component of conversion is one getting great at the ninth of a celle conversion sequence the second portion of it is be able to structure any deal that comes across your desk right as long as there's motivation there yes yes perfect thank you all right so we've got this is the contract and this is the addendum this is where the magic happens right here within then with the temple guy talk about this here in a second all right so let's get into it the like button works the share button works greatly appreciate so let's get into it okay you have a lead that comes across the table right you have a leave that comes across the table right and we get leads all the time that come across the table in the caveat here alex is asking at a 1 out of 15 leads a good conversion rate yes but you can get better right and this alex will actually help you get better at that so all right so let me focus here focus on start talking about I go off on tangents the next thing you know I'm answering questions so we'll answer questions here in a sec but I want to deliver this information because I know it's gonna make an impact and once you understand how to structure it how to identify it structure and pitch it it'll make a big difference in your business all right so deal structure we're talking about a lead coming in your business we all get leads to come in their business and we evaluate that lead right we make up we look at that lead we make a decision do we want to actually do that deal or now what should we do to be able to get that happen right so when we when we when that lead comes across right a couple things we wanted to do all right we're gonna get up okay so now let's see that's right if you sued okay all right so we give a leave that comes across you're talking to a seller and there's motivation there right there's motivation there that's a key point so the number one thing is there's got to be motivation with that seller has to be motivated this will not work if the sellers not motivated so number one the seller is gonna be somewhat motivated so the second thing is let's see the selling you're gathering the information right you gathering the information and what's the what's the critical information would want to know right you know what's the reason for selling what we also want to know what's it worth what do they owe and what do they want to sell for right so number one let's say they go let's see it's worth $200,000 right it's worth $200,000 and you know to $200,000 house and you pull comps and you look at Redfin you look at Zillow you look at the MLS and you determine that the value of the property is $200,000 okay I'll do another Facebook live to really dive into actual value on how to determine value I think that's critical I think a ton of people missed the boat as the market gets more aggressive as the inventory decreases as the markets heat up across the country or they cool off during in the country this number is critical if you don't nail what you believe the property is worth then you're missing the whole boat right so number two right okay this pen sucks number two let's use green hey Green works okay number two is what they owe so we need to find out what they owe on the property so let's say in this example they a 175 right they own 175 thousand dollars so basically we got twenty five thousand dollars now what's our typical offer so there's equity in here is 25k right so we have equity of twenty five thousand that's not really a deal it's not a wholesale deal it doesn't really work now if we were gonna do our offer right our offer structure and we're gonna go okay we've got a deal it's worth two hundred thousand dollars they owe 170 and if I go two hundred thousand dollars times say 70% that's a hundred and forty thousand let's say you need fifteen thousand repairs you know so it's it and then you've got that's a hundred and twenty five thousand minus your fee of say ten thousand dollars put you one hundred and fifteen thousand dollar offer so what's your wholesale offer on this your wholesale offer things were 200k right so if you take 70% of 200k right and obviously I mean this is our typical wholesale model it's gonna change as the market heats up but I'm just gonna do this for an example two hundred thousand times 70 percent boom gives you a hundred and forty thousand dollar at seventy percent - and let's call it fifteen thousand in repairs right and ten thousand dollars in profit for you brings that down to what do we say a hundred and fifteen thousand dollar offer right so now this leak comes in we're doing our math and we're saying okay my offer is gonna be a hundred and fifteen thousand right one hundred fit I can sell it for a hundred and twenty five thousand which is our exit price 125k and I can make ten thousand dollars on the deal now if you offer the seller you're gonna look at these numbers right here you're gonna see that they owe 175 and what you're gonna do is you're gonna pass on that lead you're gonna say no because it doesn't fit into the wholesale box right it doesn't fit into that wholesale box and what happens is most people in the business when they're getting started once you get started in this business and you start working it you try to take every lead that comes in and you try to put it in the wholesale box right so you're taking every lead that comes in your business you're trying to drop in the wholesale box you're doing 70 percent less repairs less your fee here's my offer if this number doesn't work I'm gonna trash the lead now let's talk about real quick what's the cost of this lead well right now I mean we're seeing we're seeing direct mail is three hundred and forty-one dollars we're seeing right now actually our VM is $43 our VM is one of the lowest cost leads we're seeing we're seeing actually Coke calling over a hundred dollars for Coke calling we're seeing Adwords two hundred and eighty one dollars so this is country so it took me let's say it's direct mail if you take a blended on that one to six divided by one two three points of view so two hundred and two hundred forty bucks roughly for a two hundred forty dollars for an average cost per lead on a blended across there so it cost me two hundred but let's call it two hundred dollars to make it easy two hundred dollars to generate this lead and I'm trying to fit it in the wholesale box if it doesn't fit I'm gonna trash it right so now I got two hundred dollars a cost for lead how can I turn around and generate money off this particularly in the trick to this business on how you get great at it is the ability to monetize every single lead that comes in try to find a way to monetize every lead instead of trashing it so when you go from a new be brand new and you're putting everything lead in the wholesale box then being able to structure what we're talking about today then you're gonna crush it it's gonna change your business you're gonna do way more volume you're gonna make way more money on less lead you're gonna have way more profitability so you got $200,000 175 right $25,000 in equity now the first thing I look at right here is who is our buyer who is our buyer that's that's a that's the biggest question I ask when when someone brings me a leaving Chris Chris got a deal the other day in Scottsdale and we looked at the numbers I go who's our buyer right now h
got a wholesale deal right because it has enough equity in the property so it could be a fix and flip or it could be a buy a hold buyer or even could be a retail buyer so we've got three buyers we've got a winner races we understand our wholesale box right we understand our wholesale box we try to put every lead in the wholesale box so what happens is this we've got three buyers so we've got one we got a fix and flip we got - we got a buy and hold and three we got a retail okay that's it so when someone brings me a deal I go who is our buyer is it a fixin foot buyer now fixed and flip buyer they're buying decision is off equity the more equity they have right the better they off so on this particular deal $25,000 in equity what happens to the fix and flip buyer they go away so guess what they're gonna buy for equity $25,000 on equity on equity spread is not going to work to fix and flip it now we'll buy and hold buyer they're gonna buy on equity in cash flow right and a retail buyer is just gonna buy because in the neighborhood in terms right so potentially on this deal we can sell to a buy and hold or a retail buyer these are the two buyers we're going to focus in on to sell this particular deal okay so now what we're doing the lead comes in two hundred thousand dollars they oh one seventy-five and they're motivated alright so what we're going to do is we're going to structure the deal where we can keep the 175 in place okay and the best way I can explain it is this and it's called a wrap right so we're going to keep the 175 in place on a wrap and a wrap is a is a it's actually called and exactly I'm going to think of it the exact term for it so when you talk to your title company make sure you talk to your title company it's called an exact wrap now what is an exact wrap means exact wrap means that one the loan amount is the same two the interest rate is the same right and the three the payments are the same and this is pretty basic you can get really detailed into this and for the term of the loan can be different okay so we got on an exact wrap loan and let's say this loan right here is a VA loan and it's a hundred and seventy five thousand so it's a 175 okay and it's at 4 percent interest with eight hundred and ninety dollars slash a month payments right and it has 23 years left on the loan right so what is the exact wrap loan amount is gonna be 175 interest rate it's going to be the same at 4% payments gonna be the same at 890 and the terms can be different instead of 23 years we're gonna make the term 5 years okay so now what happens is now we're using this instrument which is an exact trap and the verbage is on our addendum right here seller agrees to convey property via an agreement for sale on an exact trap with the existing loan for the term of five years okay so we get at least five years the loan amount shall not exceed one seventy five and the payments including taxes insurance shall not exceed eight ninety so you're capping those right because the seller sometimes doesn't know exactly what those are but you want to get as close as positive say so if the loan amount comes to be you know two hundred and twenty thousand you're not locked in in the contract so that's why you put it not to exceed on there and then by agrees to pay seller X amount of cash at closing now we're going to talk about how to pitch it to the seller and then we're gonna talk about deal structure but first off I want to understand exact route and exact trap is like this I have this phone case right here I think I can get off breath okay I just broke it great these things anyways it's one of those Lux phone cases got my phone right here this right here is the loan this is the 175 175 four percent eight ninety for 23 years right this is in the exact track of that wrap loan I'm gonna basically wrap this existing loan right here let's see if it still works okay it works so I'm gonna wrap it with this with a shorter term of five years so all it does is it basically is called a wraparound mortgage and it's the exact wrap of the existing loan that's what it's called okay now I'm going to get rid of this right here and we're going to talk about deal structure and how to pitch it to the seller so deal structure right here we're basically looking to negotiate with the seller and the terms that we want to negotiate are one minimum cash to seller minimum cash the seller to at least a five-year length right at least a five-year length so these are the two points you want the longest long time possible five years and minimum cash to seller that's what you're looking for that that's the main negotiation points so let's say if we're a structures deal I'm going to talk to the seller this is how I pitch it and this is how I structure I go okay mister seller let's talk about your options with this deal now remember they're motivated let's say the seller has to move to they're in Arizona they have to move to Denver they have to get out of it they don't want to have two houses right they don't want to have two house payments they're gonna be moving in the next 30 days and they've got to figure out something to do with this house they don't have the money to fix it up or whatever so you go okay mr. seller our first option is you could list the property okay now if you list the property at $200,000 roughly by the time you pay real estate Commission's closing cost fees and you get reduced offers you're probably going to have to come out of pocket with $10,000 to get out of the property are you in a position mr. seller to write a check for $10,000 to get out of that property right are you in a position to do that so the other thing okay so the answer is either yes or no right they either don't or they do have the wherewithal to write a check for $10,000 right the second option now what we're doing is we're listing the options for the seller and and they're gonna land on our option right so list you can list a property - you could rent the house rent the property would you like to rent it usually when I tell people you want to rent the property they freak out I don't want to rent it I don't want to be in a rental ad they freak out right or three mister seller you could do a what's called a voluntary foreclosure then people really freak out they first off listing they don't want to come out of ten grand they don't want to be a landlord a long-distance landlord dealing with a rental property and they don't want to do a volunteer foreclosure and ruin their credit so they freak out about this freak out about this freak out about this right or you can just leave it vacant and make the payments they don't want to do that or for what we can do is we could give you $1,000 cash right and we can keep your 175 loan in place for the term of five years and we'll make payments to that loan so let me ask you a question come out of pocket with ten grand rent it won't be along to a long distance landlord volunteer your foreclosure and ruin your credit or we'll give you $1,000 keep your 175 in place for long and for five years and we'll pay that one seventy-five off honor before the next five years which do you think they're going to pick you're absolutely right they're gonna pick this right they don't they want that right so what happens is this how do we structure the deal now now we go okay $1,000 is the lease down and we've got houses like this for $0 we'll just take over the payments literally bought a house for $0 so now what we do is we structure the deal where we're number one we'll give them $1,000 cash right at co e which is close of escrow to we're gonna keep the 175 loan in place for five years and that's it that's that that's that's the bulk of the deal right there right so they're gonna have some questions or question is what happens after five years after five years we can sell the property and path alone we can refinance the property and pay off the loan we could pay cash and pay off the loan but out of five years you're done right what happens if there's a default situation we honored before the next five years where the payments aren't made well guess what you know there won't be a default situation because we're gonna step in and we are going to make those payments right so what happens is now we're gonna flip this and I'm going to show you how we can flip it and how the down payment arbitrage the down and payment arbitrage okay this is the down payment arbitrage so we're gonna make an arbitrage on this down payment right here so we've got 175 so we're buying it essentially for a hundred and seventy-six thousand dollars we're keeping the loan in place for five years on an exact trap of the existing loan that have payments shall not exceed eight hundred ninety dollars a month right so now this is the contract that we use right here right this is the contract it's a basic simple contract and stay on to the end I'm gonna show you how you can get this contract okay I'm gonna stay on to the end I'm gonna give you a keyword you can put it in the comments below and you can get a copy of this contract right so this is a simple contract it's literally gonna say it's a two-page contract it's gonna say see addendum andand addendum this is where all the magic happens this addendum basically says seller agrees to convey title on the agreement for sale it could be a land contract or contract for deed it depends on the state that you're in the loan amount shall not exceed 175 right the payments including tax insurance sell not exceed eight ninety by agrees to pay seller one thousand dollars cash to close of escrow all the terms and conditions be amazing saying this is the magic if you give this to your title company they'll be able to take that information close this transaction now let's talk about the arbitrage this is the front end this is how you get the contract with the sellers we talked about head wide minimal if it's little to no equity then you're gonna you're gonna eliminate your buy-and-hold investor in you're only gonna sell to a retail investor but if you put this on Craigslist with seller financing your phone will blow up this is one of our best one of our best deals are selling these type of deals right here so if there's little equity then your buyer becomes just a retail buyer if there's more equity like in this right here so there's ten to fifteen thousand dollars in equity and anywhere from three to ten percent of equity now you got your buying hold investors that are getting in there and there's significant equity obviously then you have your fix and flip investors so the bottom line is now this league comes in how can we flip it for cash now remember this is the cash needed to close the deal one thousand dollars plus closing cost right so now what we're going to do is we're going to put it out to market we got the property under contract we're in escrow right now now we're going to flip the contract we're gonna flip the agreement for sale and what and now remember what we do to flip it we're gonna do an assignment right we just closed one this week and I think we made $18,000 on the deal this week on an assignment deal that we closed this week Thursday earlier earlier this week so on assignment deal so we're gonna assign the property we're not gonna double escrow it we're gonna sign it and on this assignment we're gonna put it out to market and we're gonna stay right in our Craigslist ad I'm gonna get rid of this the three buyers we know we're three buyers are right so what we're gonna put we're gonna put right here seller financing financing only right only 15k down right seller financing only 15k okay down beautiful house now we can look for comps in the neighborhood the highest listed comps in the neighbor listed I didn't say soul this is listed so you might have a listed comp for 215 you might have a sold comp for 190 you can use the hi listed comp of the 215 and it's a houses going for two hundred and fifteen thousand dollars right you got you got you know so so you're basically selling the property for fifteen thousand down now so we're keeping the hundred and seventy five in place so basically you're looking at comps of 215 down payment 15,000 loan of 175 for the term of five years payments eight hundred and ninety dollars a month right so look at that so fifteen thousand dollars down someone can own this property who's going to be the buyer it could be a buy and hold buyer that wants to have more properties it could be a retail buyer that wants to live in the property now remember we're gonna assign our position for the difference in the down this is the arbitrage this is where we get the down payment arbitrage 15,000 and a thousand dollars is cash needed so cash to us on this deal how much do we make how much do we make good these comments on here - this thing is like freaking out okay so how much do we make on this you guys know you guys know you guys okay new comments on the bottom are they on top they say 14k 14k we got Tim young 14k Earl 14k right 14k 14k Jason set 14k Josh up 14k Tim 14k 16 K Earl since 16 K right you got 15 so 15 thousand the buyer is putting 15 so let's look at this so we got 15 this is the only cash in the deal fifteen thousand from the buyer one thousand goes to the seller right the arbitrage is 14 K the arbitrage is 14 K right - closing costs right Nikolas Kelly you're right - closing cost so there'd be maybe thousand dollars in closing cost in there plus the overage of the monthly payment it depends on the monthly payment but typically what happens is the buyer is gonna pick up the monthly payment on the next month that comes down and the new payment will be paid by the seller so if you do it correctly then guess what the sellers gonna make the payment and then the buyers gonna come over and make their payment so but Jack very good on that very smart alecks i mean alex Martinez good one on there Jack okay so the bottom line is this how this structure works right here this is considered the down payment arbitrage this property if you put in Craigslist seller financing only 15k down and put the put Phoenix right what's gonna happen is your phone's gonna blow up to fifteen fifteen thousand dollars down now what they're gonna do is they're gonna sign a similar contract they're gonna sign the similar contract here and when they sign that similar contract the only difference is is that you're gonna have seller abusive convey title agreement for sale the long term out maybe five years 890 right by a greasy pacer in on here it's gonna be $15,000 down so you get $15,000 down versus a thousand down it's the exact same contract the only difference is you have a higher down payment so these deals come in all day long you're gonna have retail buyers this is gonna buy it you're gonna have wholesale buyers that's gonna buy these type of deals all right so it's great so I want to give you this this is the magic this is the magic right it's a two page contract with a two page contract does you put on three pages but this right here is the magic so all you're gonna do is in the comments below in the comments below type the word contract cont RAC t contract type the word contract and when you type the word contract you're gonna get open that your messenger is gonna open through for your messenger bot there for your messenger and what's gonna happen is you're gonna able to download that contract so you type in contract CEO and TR AC T type in the word contract in the message below and what's gonna happen it's gonna open up and then you're gonna have access to be able to download this contract and information okay so just type in the word contract below and you'll be able to download that so when it comes to this down payment arbitrage let's talk about important key important things the loans that you can do this with and the loans that you can't do this with all right first off typing contract below and you'll be able to get that okay so let's talk about the loan right so you can do you can do VA loans you can do regular conventional loans right you can do conventional loans right these are loans you can do like regular like Fannie Freddie not I mean my fault you can do regular like big bank loans VA loans you cannot do right and this is the this is the majority of loa
s right here the loans you cannot do with this is yes right and this is let's talk about now this is yes and this is no so no yes loans no is FHA which sucks you cannot do FHA you cannot wrap FHA loans to write our reverse mortgages cannot wrap reverse mortgages so the to no ones are FHA everything else you can pretty much wrap you can do wraps on right now yeah just type in the word contract below and you should be able to get that anybody other download that so there's certain low as you can and there's certain loans you cannot so if it's an FHA you can't wrap it if it's a be a conventional loan you can if it's a reverse mortgage right your first mortgage you can trap those type of deals so those what you can do now these come all in different sizes okay there's so many different type of deals that you can do this with right here's the word contract so type in contract in the comments below to get the contract okay so recently did a deal it's a foreclosure deal that we did the seller I don't have the exact numbers actually I do this on my computer let me get the exact numbers let's go pull it up right here Desktop properties 2018 tallgrass addendum no I don't let me see if I got this settlement statement here so okay so this one this one right here this we basically bought the property it was roughly looks like it's one roughly 170 right with back payments we kept the existing loan at 170 in place and we sold it for over two hundred thousand dollars right there and basically someone came in with thirty thousand dollars cash on the deal and the property is worth about 230 K 230 K or so so it's in foreclosure i reinstated the mortgage was about five or six grand to reinstate that brought us up to the 170 mark right sold the property for over two hundred thousand dollars someone came in with thirty thousand actually I think it was more like thirty four thousand cash and then they own a great rental property with thirty thousand dollars in equity it was a newer house and we did so that property was in foreclosure that we did right there but these uh we have another one on the whiteboard we did we got so many other working right now another one for you if I can find it fine verse tada we just closed on it let me see the truth you know just type contract in the this one was a this was a 23 this was on 59th Avenue wrapped transaction $23,000 deal sold price to 30 25,000 368 deal contract price 205 so yeah so we left the existing loan on this one of 205 K right this one was worth this one is worth roughly 299 right and we sold it to 30 right so to 30 so we sold it for 230 thousand dollars and we made a $25,000 spread on that particular deal okay that one's literally just closed September 25th that's the new one we just got closes September 25th but these deals come in all the time now what happens is people go what if I come across the property I can't sell right what if I have a property that I've got and I can't sell we flip it into seller financing so you got a property let's say it's worth $300,000 and you get it under two under contract for 320 right 300 better you get it you put it put it under I mean you put it under contract for two hundred and twenty thousand dollars so it's worth three hundred you get it on a contract for 220 you think you got a good deal you put it out right at two hundred and forty thousand dollars and you want to make a $40,000 spread and there's no buyers on it your phone's crickets no one's buying the property no one no one's your phone's crickets so what you what do you do with your property that's unsellable you can't sell it when you add seller financing structure what we're talking about here it changes the whole dynamic people jump so we've had deals like this so we have two hundred twenty thousand right and that's basically what they oh you gave them what they own the property they ten or something like that so what happens is you've got 240 thousand dollars here that you're trying to sell you want to make a forty thousand dollars right and you think it's a good deal but because they're sixty thousand dollars in equity but nothing's moving so what you do is you can go back to the seller restructure and say hey mister seller why don't we keep your loan and two hundred and twenty thousand dollars in place for five years we'll give you a thousand dollars cash which is more than you're getting now right and now you have a structure we have two hundred and twenty thousand for the term of five years you gotta make sure it's a conventional loan or a VA loan right and let's say payments on that two hundred and twenty thousand dollar loan is $1,100 a month with tax insurance and now you still market it for forty thousand dollars down the only difference is with seller financing so then you put out seller financing forty thousand down two hundred and twenty thousand dollar carry for the term of five years now your phone's gonna blow up why cuz you've changed the financing structure once you change that financing structure you're gonna take a deal that is not sellable and turn it sellable so you've got to probably see you've got properties right now and you're working on and you can't get them sold for some reason you don't understand why it's not it's just not going and you know I've talked that we're in boardroom billionaire boardroom up in Park City just last week and so we asked the question how many people are seeing a kind of little bit of slowdown in the market and a lot of hands raised raised their hands in the whole group you know probably about eighty percent of them raised their hands and they raised their hands one because it's seasonality where we are August September going into the end of the year seasonality and number two is because we've been very robust and they're asking prices that are too high so you've got two different options you can reduce your price and lose out on your $40,000 spread or you can restructure seller financing with a seller and because it's seller financing your tier changing the acquisition to cash with seller financing it's a lot easier for someone to come up with $40,000 with a two hundred and twenty thousand our carry then come up with two hundred and forty thousand dollars cash and then pay hard money which they're typically playing anywhere from 12 to 15 percent right it changes the whole model it allows a deal that becomes not sellable to a deal that becomes incredibly sellable because of that seller financing model alright so if you guys want yeah this is from John do you use a different contract with a foreclosure no we just have language in this contract that you'll see right here this says the loan shall not exceed X amount and the payments including tax insurance shall not exceed Y amount right so so that we use that language in there and it protects us so what we do is you know if the if the loan amounts 150 and we know there's six months behind you know in the payments or $1000 month we're gonna go 156 to 170 on a loan amount so we're gonna say loan amount shall not exceed 170 as long as it's still a deal at the 170 you're good to go the bottom line is is that if it comes in for 180 or point for 190 John then you're gonna want to have the ability to renegotiate on the contracts especially if you're going to give the seller significant cash at closing so for an example we've had we've done deals where we give a seller ten thousand dollars or even five thousand dollars of closing so if we do a not-to-exceed at 170 and the loan comes in to be 173 174 it gives you two the ability to renegotiate on the contract and have the seller contribute to that dump I mean to those payments right so you say it's four thousand dollars seller we're gonna split it down the middle you do two and I'll do two and but if you don't have that language in there if it comes in to two hundred thousand versus 170 now it's gonna ruin your deal but you're still stuck on the deal because of the contract well I post the replay yes I mean what we'll have it in Facebook right here and I can send it out to you guys so let's type the word contract in the comments below contract in the comments below if you could do that greatly appreciate it plus a like button if you like this information the share button if you could share it I greatly appreciate it and this will get get out there so $14,000 yes that is the deal I've been using RVM yeah you can do an RV em I mean RV m is our our lowest cost per lead at forty three dollars right now forty three dollars cost per lead direct mails 341 we've got Google AdWords over 280,000 we've got cold calling over a hundred thousand we got direct mail forty-three dollars but thank you guys so much for hitting that hitting the like button to greatly appreciate it so yeah so if you have an hour RVM question definitely ask it let me tell you about our VM or a written list voicemail it's a great we have the our VM lead machine which is it's literally changed the industry Oliver billionaire board remembers board rooms are crushing off it it's literally been a complete game-changer and how people are getting deals for so cheap the secret to our VM the secret to our VM is you're gonna have a ton of callbacks the people that leave voicemails you want to scrub through those of people that are actually real sellers ok real sellers now our conversion on our VM is about one in thirty-nine one in thirty-nine leads actually converts into a contract right one in 39 which is not bad and they if we're paying I mean if you look at the numbers right if you got 39 times 43 that's $1600 cost per deal right $1600 with Adwords and direct mail we have over $5000 cost per deal and we're talking one in thirty-nine the cost per deal is way cheaper that's a great question so Pablo is asking what's the best way we can find these deals some of the best way you can find these deals is typically when you're when you're marketing for equity you look at the age of the property in your Arcanine for equity and the length of they own the house you can target houses that are newer houses you can target houses they're built in 2005 to 2010 there were person purchased recently in the last five years that's a great market right the houses are built 2005 to 2010 they're newer houses they were purchased in the last five years so they have a little bit of equity not a lot of equity and what happens is in those particular properties right if someone wants to sell they're gonna be in a situation where I'm gonna have to pay you know realtor Commission's just to try to get out of that property and they're clean you want to have pretty you don't want to trash property when you do this you want something that's fairly clean but the bottom line is no one no one is targeting those type of leads nobody those leads you're not going to get massive competition you're gonna have not have a seller say oh I've got ten of these mail letters everyone's going after equity you go after these and you start structuring these you're gonna be the only person talking to those people how do you get access to RVM you can go to our vm lead machine comm is there someone who can type in in the comments and say I can't do it okay let me see oops there is a demo you can watch the demo right there Jeff Joey's asking what's up Chris chris is in the house okay any other questions you guys get but definitely definitely definitely definitely have seller financing will the wrap trigger that due on sale clause um so what happens is you're doing a land contract contract for deed or you're doing an agreement for sale so the title is actually not transferring until the underlying loans paid off okay although it's still a recorded document so the seller can't encumber the property on any future loans or anything like that so in that particular case it won't it won't trigger a due on sale cause so this one so Chris the property on Cannon Street in Glendale send this over to send me a message on facebook with that or send it to flip to freedom - at gmail.com and I'll get it flip to freedom - at gmail.com we can help you with a buyer for that property what about dodd-frank act dodd-frank act right we're doing an assignment so a dodd-frank app primarily refers to sellers that are selling their property with seller financing right and because we're doing an assignment and I specifically said we do an assignment not a double escrow we're completely out of the transaction we're contracting with the seller we're getting assigned an assignment out and we're getting an assignment feet and it's going on to the buyer now if the seller has 25 properties they're doing obviously you don't want to do it but typically most of the sellers you're dealing with they're one-off properties how accurate is that they're phenomenal very accurate what's the max you would offer a seller remember the lowest downpayment in the longest term five years or over will make your property more sellable when it comes to your exit price Sergio so the the what's the maximum it depends on the price of the house but I don't like to do any more actually I don't care the price of house I don't like to do any more than $5,000 $5,000 typically becomes my max Pablo is saying we should come out with an Adz course we actually have an entire course on this and it's actually every finance structure is called sellers code and that particular deal talks about every different deal structure from fire damage deals to seller finance deals to pre foreclosure deals to negotiating deals to note deals it's called sellers code you can actually hit up Chelsea I flipped you freedom to a gmail if you want to learn more about it okay this is great question it's what happens after the five years is up how does the loan get out of the original owners name there's a couple different options one you sell the property right so the buyers gonna this doing the arbitrage where they can sell the property they can refinance the property they can pay it off cash or they could essentially renegotiate with the seller to try to get a longer term most of the time what the seller does is refinance the property out or they flip and sell the property so Bob's asking about an rbm calendar that we typically do drops what we do is is a bob what we do is we go through drops like we go through let's say we have 20,000 drops we go through those drops we change the voicemail we change the color ID we rehash the list and we read drop again right it's almost like you know it's almost like direct mail direct mail you want to hit the same list over and over and over again at least eight times similarly with a voice mail drop but what we do is we change the message we change the the actual caller ID number and then we'll read rhop to those lists and we do it eight times this is a good question so Earl's asking what's the difference between a subject - in a rap okay those are two different things right so he's asking what's the difference between a subject - in a rap now remember if you want to get this contract like you get to do this type of contract and the verbs below so he's asking subject to subject to is how the title transfers this is this is to do with title right this is the title of the property so a subject to the existing loan right so subject - you can do a warranty deed you can do a general you can do a general deed right you do a warranty deed general deed right but this is subject to the existing right subject - it means the how it's transfer and that could be a deed right now when it comes to a rap rap has to do with the loan right so a subject - where is the title would transfer on a warranty deed or general deed and the loan of the 175 would stay in place in our case the way we're going to transfer title is called an agreement for sale right an agreement for sale land contractor contract for deed so we do an agreement for sale and we're gonna wrap the existing 175 so instead of a warranty deed general deed is agreement for sale why do we do that that's the question the question is because once the title transfers and then the deed is done the only way if there's a default situation on the 175 and your buyer stops paying the 175 then what's going to happen is on this particular deal you're going to have to go through a judicial foreclosure o
you're gonna have to foreclose on the mortgage you're basically gonna have to go through a six-month process hire an attorney and go through the process of a foreclosure process when you do an agreement for sale land contract or contract for deed it's literally what happens is the contract will become null and void after a certain period of time and it's different for each statement for an example in Phoenix if a seller's in default they're gonna get a default notice if they don't pay within 45 days then that contract becomes null and void and it reverts back to the seller without having to go through a hopeful closure process so we flip land contracts contract for Deeds agreement for sales if we're gonna buy and hold it for ourselves like I built a 36 million dollar property portfolio 120 properties all subject to I purchased some subject - I took title to the property I kept the loan in the seller's name I fixed up the properties and I turn around and rented him and I had 120 round the properties I can tell you it was a nightmare I'd rather have 120 apartment complexes then have 120 rental properties what if your county doesn't do ab Jonathan what I do is talk to a title company and ask them you just need to talk to the right title company I haven't heard of any counties that won't do rap Riley how how crucial is rapport in your voicemail not too crucial it's just getting to the point exactly what you're looking to do that you're buying properties in your neighborhood and and if you like to have you their property considered please leave your name number and your property address after the phone so Titus lives in the Carolinas then there is a lot of floods and mold damage anything different about determining the renovation cost for the flooring log yeah it's it it's very different when you're when you're dealing with flooding properties you're dealing with mold you're talking about serious renovation and stuff like that what I would do if it was me Titus I would contact a contractor a reputable contractor and go to homeadvisor.com homeadvisor.com try to find a reputable contractor in your area and then ask them to look at a property and ask them their pricing what about remote mold remediation flooding renovation and what the typical cost is on a house on a per square foot basis if you can figure out a per square foot basis and it might be twenty-five dollars a square foot it might be forty five dollars a square foot then you can go into a house very simply right you can say the house is 1,500 square feet in the contractor told me that a rough average is about forty five bucks a square foot times forty five dollars well now you're talking sixty seven thousand dollars in renovation costs just to remediate the mold and and renovate that property so now you can do a quick and dirty if you can really nail down that price per square foot to renovate the entire house Nate's asking what is your RVM set up from the script unit we have a whole entire training course for in the RVM lead machine and we talk all all about that we talked about the script we talked about the pre-qualification script we have the the entire thing in our training course but if you go to our VM lead machine comm you can actually register for the webinar you can see the demo how it works it's pretty killer you know typing contract Haringey piping contracts it's not gonna work you type in the word contract not plural how long you wait between each new drop typically if you got let's say you've got a list of 20,000 and you're dropping 500 a day that's gonna take you about a month to go through and you go rehash the list and then read and go we just can we just continually are dropping over and over now if you have a small list of 500 and you go through it in a day you don't want to hit 500 every single day so obviously the bigger the list the better I'd probably wait 30 days between drops of those those lists the smaller lists pebble is I do you have to get the deal deed from the seller no you don't have to get the deed at all you're you're gonna do what's called the contract for deed it's called a an agreement for sale or land contract it's done by the title company your title company escrow company or attorney will be able to facilitate transaction as long as you have the right verbage and the contract you're good and then they will be able to structure that deal on an agreement for sale so it's agreement that the title will transfer when the underlying loans paid off great this is a great question from Terry mulberry have you ever had a buyer default on a payment there's a way you're notified if the buyer defaults in the payment are they responsible for the payments okay that's a great question so Terry yes so we've flipped a property we made $15,000 the buyer defaulted on the property what we do is we tell the seller listen if the buyer defaults on for any type of reason we will step in we will make the payments whole and we will line up another buyer for you now you want to do this to stay in the deal so I've had it where a buyer defaulted the property reverted back to the seller we made the payment or even to payments then what we did is we went out and remarketed the property seller financing and we made another 15 20 thousand dollars down and we gave the seller the thousand dollars that was owed to them and everybody was happy right everybody was happy the loan was paid we got to flip the property again and the seller got another thousand dollars and we got another 15 20 thousand dollars for structuring the deal I've done on I've got on one property three times in one year it's crazy what are all the strategies there's about 16 different strategies that come with sellers code you could ask Chelsea touch she can give you a list of the ones you know but between fire damage inherited properties probate properties seller financing down down payment arbitrage negotiating second liens on pre foreclosures lease options we have a whole entire lease options course in there that's killer that goes through and this you do lease options with FHA so if you got an FHA deal you do a lease option all other ones you do rap transactions like we're talking about yeah I just explained that subject to and rap if the property has damaged that the sellers insurance will pay for how do you factor in that to your offer okay there's two different things the seller can assign you the insurance claim right so the seller can assign you the insurance claim or the sellers gonna get paid the insurance claim and then you can reduce that from your offer price okay so you don't want to give him read-only given the highest price possible and he's gonna get the check for the insurance claim that's what he's gonna want to do but you're gonna want to negotiate that how do you remove the leads that you already you can just put them in your DNC file so it's doing that call that's on your on your left-hand side right there just put them into the do-not-call file and now they won't be called right so just the leads or the contracts you got coming in or the people you got under contract put them in the DNC file and then everybody else will get contacted do you have a loosely a lot of confused collars people seem not to understand it means ok so Riley if you have a lot of confused callers that come in what happens is is your quality you don't have your qualification voicemail set up so when we drop a voicemail to a seller they're gonna call back that caller ID number and that caller ID number is gonna direct them right to a qualification voicemail they're gonna listen to the qualification voicemail which is more extensive explains what you do inside the RVM bleed machine we have the scripts to record that qualification voicemail but if you recorded exactly like that they're gonna have to listen to the entire message and they're gonna leave a message they're gonna say I opted out right stop calling me or what they're gonna say is they're gonna say hey I've got a property I want to sell 1 2 3 4 Main Street so it sounds like Riley you don't have a qualification voicemail set up correctly got [Music] how do you decide how do you decide what how much of a down payment you can ask for down payment you can ask for it it's you've got to think of who your buyer is your buyer could be a retail buyer or it could be a buy-and-hold buyer so if it's a retail buyer buy-and-hold buyer right it I is try to keep it under $30,000 right try to keep it under $30,000 so if you're down payments between 5 and 10% you're right in the money if you get to more than that then it becomes hard to sell if you want a voice broadcast to capture leads afterwards well RVM still send the lead leads if the leads in DNC know you don't want to target anybody the lead anyone's in D&C so anytime you import a new list and let's say you're gonna import for a boy voice broadcast to your warm list you always want to select scrub against the DNC right if anybody is on the DNC and they complain you could be liable this is great from Fernando can you exact rap a property then keep it and Rehab it with a hard money loan well typically let's say you're 175 mortgage that's gonna be in first position so typically a hard money loans not gonna want to be in second position behind that first position loan so you can though which is great keep a loan in place of a seller and then if there's enough equity in it buy the property give them a thousand two thousand dollars buy the property right keep the loan in place then spend money to renovate it and then turn around and sell it that's a great way to get into a fixed and flip property without having to come in with a huge hard money loan okay this from Earl Jones would you recommend mastering one strategy before learning another if you already know the fundamentals of wholesaling is that the right time to dive in and learn raps are are they synonymous with each other yes I this is this is what I think with this Earl I want to make you aware of doing raps and seller financing right so once you're aware of it once the lead comes across your desk now what you want to do is dive in and learn exactly how to do that so you can't you don't have to lose that lead now if then that's six months you don't get any seller finance lead that comes across your desk there's no retail leads then don't worry about it so I always it's almost like I don't want to learn how to ride a bike until I have a bike right so I'm not gonna do all these videos and I'm gonna learn how to ride a bike but I don't have a bike yet right I want to learn how to ride a bike once they get the bike I can get on the bike and I can wobble it I can feel it I can you know come on and you'll learn more through growing through the process meeting the seller asking the questions pitching the deal cuz I explained all that then you will learning it and then saying all I'm gonna implement it when a league comes in so that's what I see I'm more of the lead comes in then I take action and figure it out how many postcards do you recommend a month I only have I I can only do 500 do what you can do right Dee Williams do what you can do if you can do 500 postcards and ones to do 500 but then hustle when you go out I mean our property consultants our sales guys versus they're submitting anywhere from 15 to 20 self-generated leaves a week that we're working to get appointments on the schedule to get those properties under contract so remember there are many other free ways to get deals you can get deals from from driving around and finding vacant properties for sale by owner properties abandoned properties boarded up properties those are great type of deals you can turn around you can find deals on Craigslist to get those properties under contract you can talk to other wholesalers that have properties under contract that you can then turn around in wholesale and flip with a JV partnership talk about that okay this one Brett how do we bring an agent in into this and how do we get the seller to agree to list the agent most of the cash buyers don't want to buy house at retail even when the seller financing so most efficient way to market is to list with an agent well it depends on the seller right if the if the seller is motivated so we have an agent that we send out our retail referrals to so if the lead comes in it doesn't fit the wholesale model it doesn't fit the seller finance model we can't structure it then we're gonna we're gonna pass it off to a realtor we're actually gonna set an appointment for the realtor the realtor is gonna go out get the property under contract and then we they typically pay us either a lead fee but because we have a realtor on the team my wife's our realtor tilda she'll still he'll send 25% of the 3% as a commission let's consider a self-generated lead a self-generated lead Tim is the lead that's not associated with marketing dollars that means there's no cost per lead it's free or I'll get the analogy cool cool cool all right I am going to sign up for today it's been a great day we're gonna do another Facebook live next week now I've been traveling so much in the past couple weeks man I've been going that September's been insane him in Park City been to San Diego twice for different events we have boardroom events billionaire boredom events been crazy so I want to get back in the schedule of doing this remember put contract in the comments below contract in the comments below to get your contract there and I want to thank you guys really appreciate it it's been phenomenal make sure you guys follow me on instagram at flip to freedom I share a lot of stories on there a lot of killer techniques I do a lot of Instagram IG TV stuff on there which actually which is posted here so follow me on instagram at flip to freedom at flip the number to freedom follow me there and i will i love to connect with you guys so yeah definitely fall I do a lot of Instagram stories and stuff you know and I post a lot of stuff there so thank you guys so much have a blessed phenomenal awesome day and I'll see you next week god bless you
