CFD 010 – Your Questions, My Answers #1

The momentum is building for Cash Flow Diary podcasts. I’ve received a number of canny questions from listeners and will answer a select few during this podcast.

Tune in, as I reveal the title of a very resourceful book that can help you estimate repair costs on single family homes, discuss wholesaling owner financed properties, the importance of educational components while learning real estate/business investing and much more.

Show Notes

Summary

On this episode of Cash Flow Diary J. answers your questions. If you have a burning question you’d like answered on the podcast then send it to [email protected]

Show Rundown

3:40            Inspirational quote from Og Mandino

5:33            Q1: How do you estimate repair costs on a single-family home?

13:12             Q 2: What real estate education or resources gave you the foundation for your knowledge and the ability to take action in the beginning of you career?

14:30             Eustress versus Distress

16:30             J answers last week’s Cash Flow question

18:07             J introduces this week’s Cash Flow question

19:14 Q3: How do I wholesale an owner-financed property?

22:40             Q4: Is wholesaling possible without doing yellow letters in the US?

If you can’t meet in person with the seller how do you close the deal?

Is there a way not to spend a lot on marketing and get in touch with sellers?

31:38            Quote from Peter Drucker

Questions & Answers

Q 1:

How do you estimate repair costs on a single-family home?

A: You can’t have experience or knowledge without going through the process. Ask yourself how you can gain the experience or knowledge with the least amount of exposure or risk.

  • Check out the Home Cost Repair and Remodel Guide (Marshall Swift)
  • Get familiar with the Davis Bacon regulation (for larger projects)
  • You can always leverage “use what you have to get what you need so you can have what you want.”
  • What you have – property
  • What do you need – someone to execute repairs or knowledge
  • What you want – completed house
  • Four components of a deal: 1) knowledge 2) time 3) money 4) credit
  • If you have one of the four components above you can usually leverage for another
  • If the above negotiation doesn’t work then hire a contractor to do the work and follow them. Use them as many times as you need until you understand and gain the experience you need

Q 2:

What real estate education or resources gave you the foundation for your knowledge and the ability to take action in the beginning of you career?

A: You need specialized knowledge and environmental community.

  • Find your way into communities that will give you access to multiple components at the same time so you can take advantage of eustress.
  • Eustress is the exact opposite of distress and what happens when you experience peer pressure
  • There is no such thing as an ending the learning process
  • The Cash Flow Diary Virtual Book Club has further resources

Q 3:

How do I wholesale an owner-financed property?

A: Negotiate with the seller non-recourse financing that does not require the sellers approval of the actual buyer.

  • You simply need to let the seller know how you do your business and that this is how you will close
  • Even if you pay in cash, that is still a ‘financing method’ as you are paying an opportunity cost rather than an interest rate
  • The transaction is the same. You just have an additional thing to negotiate.

Q 4:

  1. i) Is wholesaling possible without doing yellow letters in the US?
  • The best marketing method is the one you are going to do consistently.
  • If you don’t tell anyone that you are looking to buy property you never will.
  • You must have some method in getting in front of people who have the property that you are looking to purchase
  • If you have nothing under contract then you have nothing to sell
  1. ii) If you can’t meet in person with the seller how do you close the deal?
  • You can close a deal through any registered mail service and spend money on notaries. You don’t have to be there in person.

iii) Is there a way not to spend a lot on marketing and get in touch with sellers?

  • Give other people a reason to market for you and speak about your transaction
  • Make it clear to people that you are never too busy for referrals
  • Understand your unique selling proposition (USP)
  • You need to be able to answer: why should someone sell their property to you instead of a relator? What are you bringing to the table and what problems are you solving?
  • People know people who have problems like themselves
  • Its easy to brand yourself as a person who solves a particular type of problem
  • The goal is to become known as the problem solver so people get in touch with you

Cash Flow Question (listen for answer on next week’s show)

Q: During your due diligence period what is the name of the process you follow when you are insuring the rent roll is accurate? 

  • When you are purchasing a property you’ll ask for a rent roll
  • Not quite a profit and loss statement

Thank you for listening! If you enjoyed this podcast, please subscribe to the show in iTunes 

Links to Resources Mentioned

The Greatest Salesman in the World

Marshall Swift

Davis Bacon

The Slight Edge

Renatus

Virtual Book Club

Click to Tweet

Got real estate questions? @cashflowdiary has your answers in the Cash Flow Diary Podcast Q&A! http://cashflowdiarypodcast.com/ #realestate

What are the best real estate education or resources? Find out in the @cashflowdiary Podcast Q&A cashflowdiarypodcast.com/ #realestate