My oh my what fun we had last night!!!
I love attending and hosting network event. Real estate talks are a plenty and the topic is so fascinating. Believe it or not, most people around me don't want to talk real estate and investment. I know, shocking right!
Well last night I was surrounded be willing chatters. More then that, we arrange for a Q&A during the event. Everyone who attended were given the chance to write down real estate investing questions and we answered and discussed each one. What an amazing learning opportunity that was. Also each questions entered them for a door prize. Congrats to Sarah who was our winner last night.
That's right, we wrote our questions on "$1000 dollar bills".
Here are some of the questions we discussed last night.
Q: Is Kijiji really a good tool for real estate investor? How would you use it?
A: Yes! Kijiji is a great tool, if you are a real estate investor you should use it. The most important aspect of a real estate investor's business in the connection we make with others. Real estate is a team sport. You will need renters, sellers, and buyers. Kijiji is a great way of finding them. Place an add, "Handyman Special" to look for flip buyers. "Stop Renting" to locate tenant-buyers.
Q: Should I renew my existing Kijiji add or create a new one?
A: Create a new one. Let there be a few adds for a few different offers. In fact you should have an ongoing presence on Kijiji. I try to place adds weekly. Let them scroll through and find a few from you. It will make you look like an active investor, not a tire kicker.
Q: Which are the best group of people to sell your properties to? Investors or non-investors?
A: Well if you have a multi-unit you will need to approach investors. These will not appeal to first time home-buyers. But if you are working on wholesale or rehabs, basically for a single family house. You can easily sell these to either an investor or a non-investor. However, educated investors knows that having a property under contract is still not a completed deal. Due diligence will indicate if it will be a go or not for example. However, when a homeowner puts pen to paper for a purchase contract; that is a done deal in their mind and will most likely close on the property.
Q: What exit strategy do you use?
A: Your first level of exit is the exit clause in your purchase contract. These are a must. Never EVER sign a purchase contract without exit clauses. EVER!!
Wholesale is the universal exit strategy. No matter with property or which strategy you are concentrating on, always be ready to wholesale. When in doubt, wholesale it out!
For a rent-to-own, if the tenant-buyer can not close at the end of the term, there are a few exit option. Extend the term if they are still a good candidate. If they leave the deal, then you can find a new tenant-buyer, sell, wholesale, or rent.
For a flip (rehab) you could always turn it into a rent-to-own, wholesale, or offer a VTB (Vendor Take Back) in hopes to attract more buyers.
Q: What is your favourite tool that you have used for real estate investing?
A: With this questions we took turns describing out favourite tools so here are a few ones that was discussed. DocuSign. I have talked about that app in a previous post. In fact you can view it here. DocuSign give you the ability to sign PDF files directly on your phone or tablet and email the signed copy. So when I am on the road, if I have a realtor send me a purchase contract I can sign and send it back from my phone and not delaying giving the chance for other investors to put in offers in before me.
Team Viewer. This program give you the ability to access the desktop on your computer at home from anywhere. This gives you easy access to all your files and programs no matter where you may be. "Let me call you back when I get back to my office" will no longer be a viable excuse. OneDrive is a similar program available. Of course there are so hacking concerns, be aware.
You can do business from anywhere. You can fill your day with which ever activity you which and maintain your business as needs arise from wherever.
Q: What should I know about purchasing a house for a bank for a wholesale deal?
A: Don't. The wholesale strategy is purchasing a property with equity. By law, in Canada, a foreclosed property must be listed and sold by a realtor at or as close to fair market value as possible. So basically that means there will be no equity in this deal. Not only that, foreclosure have a reputation to be a great deal (even if they are not). Therefore many buyers look for foreclosed property and then they offer top dollars to secure the properties causing for these properties to sell for sometime more then fair market price. So to recap, you could find a good deal in a foreclosure, but the fact that it is a foreclosure does not guarantee for it to be a deal.
Q: How do you get a money partner to pull the trigger on a deal?
A: This question triggered a great group discussion and a few key points where brought up. It is harder to deal with new investors. If this is going to be their first "deal" that they will be involved with, they will be more nervous and they will be easily get cold feet. The best strategy to use here, in my opinion, is to keep the process of investing with you simple. Keep them out of the minutia as much as possible. Also do not drag on the process. Here is an example: "To invest with me, it is a simple three step process. One - qualify you with a mortgage broker. Two - information review (in a nicely compiled rapport, all at one time not bombarding them with tiny details every few days.) Three - Sign contract. Get a signed commitment of some sort before removing condition on the deal. Ideally get the money prior to that (in trust with the real estate lawyer). But having them put pen to paper, even if it's just on a letter of intent requires a level of commitment. If they hesitate at that stage, they will not likely close.
Our door prize was also the ideal answer for this issue. Pitch Anything is about how to present and close on deals. I have posted on the topic of that book in the past. You can view it here.
There will be more network events and there will be more Q&A. If you would like to submit questions even if you can not attend, email your questions to me here and get in the learning. Every questions submitted will be entered in a draw for a digital gift.