How I Replaced A Six Figure Income Within One Month Of Beginning To Invest
My 6 month mentor program:
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Read Transcript for “How I Replaced A Six Figure Income Within One Month Of Beginning To Invest”
Warren: My name is Warren Rosenthal. I’m from Indianapolis, Indiana. I found out about the program off of an overworked investor sign. I tried to do this on my own for several years and kind of failed at it most of the time. I knew I had the skills to be able to make it work but I think the thing that I really felt the most was I needed somebody to help me, like a mentor, somebody that could get me started in the right direction. I knew at that point that I probably could take it and make it work right for me.
Warren: I’ve been in the program for a little over 7 months and I’m at the point where I can do between 3 to 5 deals a month and I’ve been able to completely replace my income doing that. After I started working with Joe, I did my first deal in a week and a half. It was a gentleman who had good cash flow because he had a good income from his work but just couldn’t qualify for a mortgage. He was really looking for a house for his family. So by my showing this gentleman this new house, he was able to get into a house with very little money down and he and his family got into a home. Now he’s actually working with a financial advisor and a mortgage broker to be able to cash out and close that deal.
Warren: Well, per deal I make about anywhere from about $2,000 to $2,500. I have a list right now of over 600 people so it makes it pretty simple. I just have to tell everybody about that property – I blast it out to them and then I start showing the property. When I first started off, I would go to the want ads in the paper and find people that were selling their house for sale by owner or people that were renting properties and I would ask them a couple of simple questions like, ‘Would you consider selling your house with the rent to own method instead of just renting it?’ Or with somebody who was selling their house for sale by owner, I would call them and ask them, if the property has been on the market for quite some time, if they would consider selling their house rent to own versus just selling it outright. And most of the time, with a lot of the people, between two to three out of five would say yes, and then they would consider it more. So then it was the process of either working with them over the phone or actually going out and meeting with them. And as I got better and better at it, I did a lot more of just working with them over the phone.
Warren: The main thing that I need to do is show them the value of working with me, and how I can actually add value to them and help them to move a property quicker by my being involved in it and not just trying to market the property by themselves. First of all, I show them that it works out really well for them because it costs them nothing. By working with me I’m not adding any additional costs but I am adding extra value by marketing their property alongside of them. That doesn’t disadvantage them in any way – it just doubles the marketing effort that they’re doing. What happens next is that they’re pretty motivated by that time and so it kind of weeds out the ones that aren’t motivated and just don’t really want to do anything in that category. So after I start to talk to them about that, then I show them the value of working with somebody that has marketing skills (to be able to build a list of over 633 people) and how I can blast that out, plus the other proprietary websites that we use to be able to market that property out. Because with most of these people – they’re just amateurs at it – they’re just for sale by owner or for rent and they don’t really know how to get that property out to the masses. At that point, I show them the value of working with me. There is no extra charge that costs them, and they like that of course, because with a lot of these people, if they’re selling their house for sale by owner, it’s probably because they just don’t have enough equity or have enough room in the property to be able to sell it with a realtor. It would cost them money to be able to close but with me, it actually wouldn’t cost them anything and I would probably be able to get them a better value because I can usually get them more money for their property than they can if they would sell it with a realtor. But I’ve used the Push Button Method to where I actually have somebody that works for me for a very low hourly wage, and all she does is find people on the different websites like Craig’s List and some of the different websites. Then we have a form letter that she emails to them and they can go through my system and email me back and say they want to consider more information. My system then will give them more information and completely lay it out for them before I ever even have to speak to them.
Warren: With the for rent method, we’re selling the house on terms and people are coming to us because they have an issue – mostly it’s a credit issue – of why they are not just buying a house outright. So basically we know there are two ways of buying a house: if you buy it cash you can usually buy it significantly discounted but if you don’t have cash, and you need to go by terms and then you have to abide by those terms. And the thing is, the seller is in control at that point and they dictate the terms. And so the buyers are ready to take those terms because they don’t want to rent a home, or they don’t want to rent an apartment – they actually want to own something. It might take them a year or two years to be able to qualify for a mortgage, and in the meantime, they’re sitting in a home or an apartment that they’re just renting, but by doing it this way, they actually get to go into the house and start to work on the house – they can paint it, they can add a fence to the home, etc. They can do all of these things so in that two year period of time while they’re trying to qualify they’re already setting this home up for themselves. So they’re 2 years ahead of the game, and then when they cash out and buy the house, it’s theirs outright – they get all the fruits of their labor.
Warren: Every so often I do get emails back from these individuals and they say things like, ‘Thank you! I couldn’t have done it without you! You sure are a great blessing!’ These are the actual words that they use. This has to be one of the best jobs I’ve ever done in my life because of the gratitude that I get from both sides, from the sellers and from the buyers, to be able to put the buyer and the seller together and to help these people, and to really be able to help people and make money doing that is what my life’s work is all about.
Warren: One of my favorite deals was a deal (and you’ll hear about this when you take the program and you start to hear Joe talk about these things) with one of those houses that you could qualify as a fixer upper special. I think it was a little beyond that; it was a pretty messed up dilapidated house. And the reason why this one was so fun and it gives me so much joy to be able to have done this is because the gentleman that was trying to sell the house was almost at his wit’s end. He was probably going to let the house go and he just didn’t know what to do and he didn’t have the money to fix it up. So I asked him and said, ‘Let’s go ahead and put a sign in, a lockbox. We’ll send people through it, and we’ll market it as a fixer upper special.’ At first, there were several people who had gone through it and the first person who really wanted to buy the house or to rent to own it were all set to do it and then their finances fell through, which what was great about this process – I had other people in pocket. You’ll learn how to keep a pipeline going of other people besides the one or two people that came to that house that showed a lot of interest. That way, you’ll know it’s never a done deal until you actually collect the checks and sign the contracts. So that same day, when they pulled out of the deal, I knew I had other people in it and I was just about to call this other individual, but within an hour, they called me, and they said, ‘Is this house still available? I really want it.’ They were the ones that ended up going into it. And they were in a situation where they had been out of work for a little while so they had some additional bills that hurt their credit. They weren’t sure about how long it was going to take them before they would qualify for a loan. But they just didn’t want to live where they were living anymore; in apartments and rented houses, because they weren’t up to the quality of what they wanted. They wanted more control of their living arrangements so that they could do work – so what was so great about his house is it fit their needs so well, and they were able to go in and do all the work. As I said, it was in pretty bad shape and they needed to do the work and they took that house and made it their own. The great part about this whole thing is that, here’s a house that the seller thought he’d never even be able to sell, ever, because it was in such bad shape. Within six months, and at this point when we speak now, this woman is working with a broker that I’ve teamed up with, part of my team, and they’re going to be able to close this loan probably at the end of this month. So she’s actually getting the financing and buying this house outright within 6 months.
Warren: On that deal, I made $1,500. And the way I get paid on that was with the down payment. That was what they could afford; $1,500. I was happy to take that. It’s a little less than what I would have liked but I was happy to take that because the seller really needed to sell that house and to get somebody in there. So I stopped the paying on his side (he had a payment that he had to pay every month and now I had somebody paying that payment for him) plus he didn’t have to dish out between $5,000 and $8,000 to get his house fixed up. They were taking over the complete fix up and repairs of that property. So I made $1,500 doing that, and I was glad to do it – I have a happy seller who’s been telling all his friends about me, and I have a happy buyer who’s telling all her friends about me. Therefore, that’s going to build momentum for my business in the long run.
Warren: The thing that’s always amazing about this property – the people who think that you can’t do this remotely – this was about an hour and a half away from where I live – I’ve never seen the house, not once; only from digital pictures. I never even put the sign out of the lockbox – I had the seller do that. I asked him to go to a hardware store and buy a sign and I told him what to write on it and then he bought a lockbox and he put a key in it. So I’ve never even been to that house. I physically didn’t even have to do anything as far as putting signs up. I probably only had about 3 hours’ worth of my time total into that house, which means I made like $500 an hour.
Warren: The most I ever made at this point is $4,000 off of down payment, and I’ve had two deals that made $4,000, one just now recently and one about two months ago. The one two months ago was a gentleman who wanted to move out of his home – he didn’t want to live in the area where he lived. All of his family lived in a separate part of town and he wanted to live closer to his family. I was able to find a buyer for that house. That was a great and unusual story, and a great success story, too, because the first tenant buyer that I found for that house ended up not being able to do it because when we searched out her credit report and her background a little bit more, the seller decided that she wasn’t quite right for that. What we do in these transactions is we put the seller in control of the transactions – we work with them and we help them but they do have the say. So I had to go ahead and put somebody else into the home which was pretty amazing because then I got an email within hours from somebody desperately needing a home because she was in a deal and she was with another investor and what happened was that he was going to go ahead and buy a house but his financing fell apart and she was supposed to get that house within two weeks. She was already in the process of moving out of her house and into this house so she was pretty frantic about getting a new house. What happened was that it worked out perfect. I was able to put her into this home and her credit worked out perfectly and the process worked out completely perfect and so within two weeks, she was in this home and I made $4,000 off of that. I would say I probably put two hours into that. All I had to do was put a couple signs out and then I just put it up on my website. And I just have to tell you that the websites that I use right now, where I get leads from – I pay absolutely nothing for that. I do all of that free on all the free websites out there.
Warren: I made the $4,000 on the down payment. When they come up with the down payment on a rent to own situation, we basically dictate what the down payment’s going to be. Now it’s usually based upon the area, the monthly rent that that house is renting for, and then the value of that home. So when somebody comes to me and they say, ‘I would like to have a house and how much is the down payment?’ my first question is, ‘Well, how much have you prepared for a down payment for a house like this?’ And then they will say, ‘Oh, I don’t know, maybe I have $3,000.’ I say, ‘Well, if you had $4,000 I could definitely make this happen.’ So she said, ‘Okay, I do have $4,000. I could do that.’ So when she comes and puts a down payment down then that goes toward the purchase price of the house, and that down payment is what my company uses to get paid for our services. The great thing about it is that if he told me that he needed $150,000 for the house, what I would do is put the house up for $154,900 and then I would expect that I could get somewhere between $3,000 and $5,000 down payment so that when I do collect that down payment, it comes off of the purchase price of the house and then I actually get him a little more value out of the house and he loses nothing.
Warren: Like I said earlier, the great value of working with me is it costs them nothing. On the purchase price side and on the marketing side – I never charge them for what I do. The seller gets a qualified tenant buyer. I work all the contracts. I set up all the contracts and dictate all that for them so they don’t have to do anything on that part. They have somebody that’s working with the broker right now so that they can cash out within two years and he can actually sell his house. He completely got the value and a little bit more of what he wanted for his selling price and all it took him was to just say yes to my question of what he would be willing to sell the house rent to own. All it took was a yes and a couple of phone calls and the deal was done.
Warren: The way I do this without a realtors license – you see, in Joe’s course he teaches you how to use a certain contract, and he supplies all of these contracts for you, and one of the contracts that we use is called the lease option memo and it makes me a principle in the transaction. That way, I can do this without being a licensed realtor. It actually gives me a stake in the property. It makes me a principle in the deal. And then all I have to do is when I go ahead and sit down to close with the tenant buyer and I have an addendum to that lease option memo which transfers that principle that I had to the tenant buyer. It’s a very simple, one or two paragraph contract. It transfers it over and at that point, and I am no longer in the deal – I have transferred my principle rights to the tenant buyer and the rest of the contracts are between the tenant buyer and the seller.
Warren: I’ve got to tell you, it’s pretty simple and it’s pretty inexpensive. And at first, Joe will tell you that you have to do some of the grunt work up front. That’s what I did. I did what he said. I followed the directions and I went out and bought the ugly signs that you’ll hear about, those yellow corrugated signs and some of the racks, and I went around and I put them on telephone poles. I put them on corners. I did everything I knew to put those signs out. That started to generate a list for me right at the very beginning with barely any money out of my pocket. And then eventually what I’ve done is gotten to the point to where I’ve been able to build a system (which Joe offers) is the push button system which just works on its own. So I have these houses already and when I find houses, I put them up on the websites and generate leads from there. And those are free leads. I get probably between 15 and 25 people a day contacting me about the homes that I have. I used to call them all personally right away because when I first started the business, I had more time to do that, but now I’ve gotten so busy with the amount of transactions that I’m doing that I don’t have time to call everybody back. So the great thing about the push button system is that it keeps emailing them and auto responding to them about different things and the different levels of the program that we have available. I get to check the messages – I have somebody right now that I’ve hired to write up all my messages and they print them all out for me so I can just scan them. It takes me a lot less time to just scan over a message than to listen to the actual message. So I read the messages now and then I can pick which ones I want to respond to right away. If I have some properties I know I need to move quicker for some reason, or if I can tell by the message that they’re a better quality lead, I will probably contact them back myself by phone. Otherwise, I let the push button system continue to give them messages and essentially I let them call me. When they’re ready and they’re motivated, then they call me, and at that point, then I know that I have somebody that wants to go ahead and do this.
Warren: Before investing in real estate, I had several businesses that I owned and I did some sales work for some companies. I sold some programs and things like that. But the biggest chunk of my business career is has been that I owned a service business and I had several crews that worked for me. To replace my income full time as an investor, it didn’t take me very long at all. It only took about a month in this program. I was pretty motivated to do this because at that point, I was pretty frustrated in what I was doing even though it made me a six figure income – I just wasn’t happy doing the type of work that I was doing. And so I was pretty motivated to make this change and I changed it pretty quick. I did it in a month’s time. It’s been consistent and it’s actually growing. As you do this, you’ll get better and better at it. I’m at the point now to where I’ve been doing it for around 7 months, and I’m starting to come into my own and it’s going smoother and smoother for me; I’m getting better and better and smoother at it. My time on the phone and with sellers and buyers is much quicker because I’m able to word my sentences so that they’re much more powerful and pithy. I can get my point across in a lot shorter of a time. That enables me to spend less time doing this work. I make even more money doing this job because I’m getting better and better at it and I do more and more transactions than I did, say, three months ago.
Warren: In my old business, sometimes I would work eight to ten hours a day. And there were hours where I didn’t really like to work. Sometimes I had to work a lot of evening hours because I was working with people and I had to call them. What’s great about this business is that I can just go ahead and put it to the side for two to three hours a pop if I want to or even half a day, and then I can tell my wife, ‘Hey, lets go ahead and take the kids and lets go hiking.’ (We have a park close by to our house). ‘Let’s go hiking in the woods.’ Then I can just shut it all down, go hiking in the woods, then come back and pick it up any time. So that’s the greatness of what I do now, that I’m in complete control of my time. And I guess if I wanted to be in complete control of my hours, I can do that too, to where I can only work so many hours a day. Right now, what I’m doing is I’m trying to build it to the point where I can put it on autopilot. My time frame now is that in about a few more months (I gave myself a year to learn how to do this right) I’m going to put it on autopilot. I’m just about there right now. What it means is that you get the Push Button Method system in place. I have a gal who answers my messages for me. She even emails them back. We have some basic questions that we get now that we’ve seen over and over so we’ve answered them back with essentially a form that answers those questions for them. But what I’m trying to do is get them to go to the website because the website will inform them with the audio and the written script of everything they really need to know which answers about 99% of their questions. When they come back to that, all they have to do then is at that point, call up the specifics of the property that they want to talk about which is really only what we need to talk about – the property, not the process. I still have to talk to those people and I have to make those phone calls a lot of times. And sometimes I even need to go out and put a few signs out. I do that less and less now because I generate so many leads without the signs. I do that less and less, and a lot of times we need to go out to a home and take pictures and those types of things. I’m just going to have someone do that for me. I can hire someone very inexpensively to be able to do that for me.
Warren: I’m working about, on average, 35 hours a week, and when I said I expect to put it on autopilot, I expect to put this end of the business on autopilot and let this part of the business build itself. But then I’m not going to stop there, because the greatness of this business is there are levels, and this is just the foundation. Joe will teach you that the most important part about having a business is having cash flow, because you can’t really build a business without cash flow. And for instance, when you need a new computer and those types of things, you don’t have to worry about that – you have that money and you have that capital in order to be able to do that, in order to build the infrastructure of your business.
Warren: The next step is that I’m going to go ahead and build wealth. You see, the cash flow and wealth are two different things and I understand that. At that point when I start to build wealth, I’m going to start to pick up properties subject-to, which Joe will teach you how to do, and I’m going to keep those properties in order to build long term wealth and to have a residual income coming in which gives me multiple streams of income.
Warren: With subject-to, it’s explained pretty clearly in the course. And the great thing about it is you don’t have to use any of your own money to do this. You’re just helping people who are distressed right now because they can’t keep up with the mortgage payments on the property or they need to move because they have a job transfer, or whatever reason why they need to be out of their home. What you’re going to be able to do for them is to be able to take over their payments for their property. They’re not actually buying the property – you’re taking over the payments of the property and getting the deed subject to the mortgage. What I do at that point in the rent to own process is I just find a tenant buyer. At that point, they’re going to give me a down payment of $3,000 to $6,000 dollars which goes right into my pocket, and then when I get the home subject-to, like I said earlier, we talked about terms? – Well, I’m going to be able to get full market value for that property. So if I took over the property and it was a $130,000 house and they only owed $115,000, I’m taking that property over at $115,000, so I’ve already built that equity into the home immediately and I might even be able to get more than $130,000 because they’re buying it on terms. So then, when they buy that home and cash out, at the end of the contract, one year or two years or whatever the contract might be, I also make that money on the back end. And that’s why its long term wealth. Now, if they don’t buy the property and I continue to keep the property, the property continues to go up in value, which is good because it continues to appreciate and I continue to make more money that way on the back end and also, I can charge a higher rent.
Warren: It’s pretty nice to be able to drive the carpet highway to work every single day. People say, ‘Well, what’s that?’ The ‘Carpet Highway’ – I get out of bed, and it’s about twenty steps to the office, and there I am – in my office. My messages are already written out for me. My Push Button Method comes through the email so I have all these email leads that are sitting right there from people wanting to see my houses and sellers wanting to do the rent to own method with me. So I wake up in the morning and I have all these things already set and I just go ahead and start that process. I can go into that office any time I want. On some mornings, I like to sit out, especially in the better weather days, in the backyard and read the newspaper, drink coffee and hang out with my children and my wife. We home school the children, so we don’t have to get up and go drive in the hustle and bustle traffic or any of those things. As a matter of fact, I really don’t have to deal with traffic very much at all because when I set my appointments, I set them in the middle of the day so that I’m not on the rush hour parts of the day in the morning and the evening. So my day is a lot more calm than normal like when you have to get up every day and fight traffic and go to work and deal with those types of situations.
Warren: As I said, my wife and I owned businesses in the past, so we had already been in the entrepreneurial mindset. My wife was really pretty supportive because, and I’ve got to tell you – we’ve done some programs and they just didn’t work for us and we failed, but we never quit, and that’s the important thing. In this program, Joe will tell you – just don’t quit. If you do the work and you put the work into this process, this process does work – you just can’t quit. So I didn’t have to convince my wife too much because she was pretty much of the mindset of supporting me and my decisions in business ventures. My family and friends kind of knew that we’ve decided to go and do our own business so they already knew that we were kind off the beaten path; that we home school our children and do those types of things. So, people used to think of us as odd. And it’s really funny – I think our neighbors probably wonder what the heck I’m doing half the time because I can be out in my yard just hanging out during the day, playing with my kids, and I bet you they wonder, ‘How does this guy earn a living?’ I work any hours that I want and any time I want, and I love that freedom and to be able to have that that freedom is worth a lot – a lot more than a double six figure income would be – I’d rather make a little less money and have the time with my family and my friends now with the freedom I have.
Warren: This has been a dream of mine ever since I’ve started a business. I’ve always wanted to deal with investing in real estate and owning property. I just didn’t know how to do it. And I tried and I dabbled in a few things. I failed and I succeeded. Most of the times where I succeeded, I succeeded because I just kind of stumbled into it, not because I really knew what I was doing. Right now I feel like I really have a handle on that. So the process that I learned in Joe’s class is going to teach me how to build long term wealth to the point that I can retire, and I don’t even have to do any of this work. I can either have people in place and have the business in place, making the cash flow, or I can have the amount of properties that I need that will continue to pay off and bring me a residual income where I can be anywhere in the country or anywhere in the world and I’m still making the same amount of income and never having to be concerned about a business at that point.
Role Play Between Warren and Joe:
Warren: Ring, ring.
Warren: Hi, Joe. This is Warren Rosenthal. I see you have your house here for rent. Joe, I was wondering, would you consider selling your house rent to buy instead of just renting it?
Warren: I have a list of buyers that would be interested in buying your house with this rent to own method – I have over 633 people that are highly motivated right now and could rent your house. Now these people might not be able to buy your house outright right now, but in a year or two, they would be able to qualify for a mortgage and buy your house.
Joe: How much do you charge for that?
Warren: That’s a great question, Joe. It doesn’t cost you anything to work with me. My services are absolutely free. I get paid by the buyer. The reason why that works so well is because I get paid from the buyer and the down payment that they put down for your house.
Joe: So how does the lease option work?
Warren: A lease option is a pretty simple process and it works really well. I do three to five of these every month and it’s very simple and very smooth. The simpleness of being able to do a lease option is because it just takes a couple of contracts. I find a buyer (somebody that’s interested in your home) and then they have to be able to be able to qualify within a year or two, and I do that already – before I even start this process – I have them prequalified and ready to go, so I know that they can qualify for a mortgage. And they just have to be able to have a good income coming in to be able to make the payments on the property, and have money for a down payment.
Joe: So how much can you sell my property for?
Warren: I can sell your property for the full market value of the property right now because we’re selling it on terms, which means that we dictate what the price is. Do you have any idea of what your house is valued at right now?
Joe: It’s probably around $150,000.
Warren: How do you come up with that price? Do you know that because of the other homes in the area that are selling for around that price?
Joe: Yes, and I saw a sign next door, and there’s a house just like it and it sold two months ago for that.
Warren: That’s fantastic. Do you have any idea of what you think your house would rent for monthly?
Joe: About $1,200 a month. That’s what I’m asking.
Warren: And if you don’t mind me asking, what is your full payment, with your tax and insurance, and your mortgage payment? What does that cost you per month?
Warren: $975. And you’re looking to rent it for around did you say, $1,200? So you want to make a little bit of cash flow so we have a little bit of room there. If we go ahead and put that up for the price of $1,200, then we can probably bring three to five people to that house within the first week.
Joe: That sounds pretty good. Do you have the paperwork for that kind of thing or do I have to come up with that?
Warren: The great thing about it is that it doesn’t cost you a dime and I also have the contracts set in place. These contracts have all been certified by attorneys and they’re all legal for the state that we work in. It’s a pretty simple process for you. All you have to do is sign the lease option memo. Then what I’m going to do is come out and put a sign in your yard (and I’ll explain more of this as the process goes) and I’ll put a lockbox on the house so that I can have access to the house. Now is this house vacant or do you live in it?
Joe: It’s vacant.
Warren: A vacant house is good because then I can get more people through the house. I don’t have to set up an appointment with you so that works out really well. The more people I can have looking at your house, the more likely we’re going to find a buyer and we’re going to find one quick.
Joe: But you’ve got 600 people right now that are interested in buying a house?
Warren: Yes sir. And what I’m going to do immediately is when I get the lease option memo (and I have a link that you can just go ahead and sign it electronically online and set the purchase price of the property) then at that point, I can blast that property out to every single one of them within hours.
Joe: Let me see if understand this. You’re going to take the price that I’m asking for; you’re going to charge the buyer for the lease option fee or the down payment. They’re going to owe exactly what I want. I’m going to get the first month’s rent and you’re going to get me my deposit.
Warren: What I’m going to do is I’m going to bring you the first month’s rent and because it’s a rent to own situation, there is no deposit. There’s only a down payment. That’s a nonrefundable down payment – whatever we receive for the down payment is what my company keeps for its services. That way it doesn’t cost you anything for the process. And that’s how we make money. The great thing for you is that when the put down that down payment, they put down a pretty decent chunk of change; say $3,000 to $5,000 – that puts a lot of skin in the game for them. And that’s why this is a different process than just a rental process. This is a rent to own and so there’s a complete paradigm shift with the people that I work with that are going to come into this home because they want to own this house – they’re going to treat it like they own it and then they’re going to take care of it like they own it. A great example that I always use is when you rent a car. Nobody ever washes a rented car but when they lease a car, even if they’re not going to buy that car, and let’s say they lease it for two years, they’re going to take care of it like their own. So these are the type of people that I’m bringing to your home. They have a mindset to where they’re going to go ahead and own this home and take care of it. They’re going to ask you questions like, ‘Can I paint it? Can I do these things?’ And all of these parts that are adding value to your home and showing you that these people are more serious about taking care of your property. They’re going to be emotionally tied into the home. They’re going to be physically tied into the home. And they’re going to be financially tied into the home. That’s much more important because in a rental process, they’re really not in, any of those ways, tied into their home which is why, most of the time, they don’t care of the property.
Joe: How likely is it that they’ll actually exercise their option?
Warren: That’s a really great question. To be honest with you, the national average right now is about 30%. Now I’d like to see my percentage to be more in the 50% range. The reason why I believe I can make that percentage higher is because when I work with these people from the very beginning, I have them working with my broker and not only is he a broker but he also fixes credit. So he’s going to start with them at the very beginning and show them exactly what they need through this process to be able to fix their credit and be able to outright buy the house or get bank financed so they can cash you out.
Joe: So it’s not really likely that they’ll buy it?
Warren: As I said, it’s about a 30% national average. Now if you think about this as an investor and if they don’t buy in two years, is that a good thing or a bad thing for you? Well it’s really a good thing because if they don’t buy it in two years, they have the mindset of taking care of that property which means most likely, you’ll have people who have added fences and put in new carpet and did things to the house. So they’ve added value to the home and now they’re going to walk away from the home. There’s a possibility that they will. Let’s just say they do. At that point, two years have passed and your house has appreciated. They’ve paid down your mortgage so that your house costs you less. Its appreciating at the same time, and it costs you nothing because they’re paying your payment. And now what we can do is turn around and put somebody else in there because I’m very confident in my talents to be able to put somebody into that home within a few weeks to a month. We’ll also be able to charge a higher rate rent because two years have passed and your house will be worth more, so instead of that original $150,000, maybe it’s worth $159,000 now and we can get more money for the property. So if you think about it, if that happened, 10 times over, you’re actually better for that. Now that’s not my goal – my goal is to be able to help you, to be able to have your house cashed out in two years and the buyer to be able to really own a house. Because that’s what they wanted – that’s what they came into this process doing – they didn’t just want to rent, they really wanted to own this home. I take it personally and I work very diligently, side by side with these people so that they can actually be successful and carry through with what they wanted to do.
Joe: It’s a two year lease option?
Warren: Usually it’s one to two years. We can do a one year renewable. The reason why I say two years is because in my experience right now, I’ve found that most of the people that are coming into this process need about two years to clean up their credit. Now that’s not always so but I like to be able to give them enough room to be able to make this happen. I’ll know usually right off the bat, with my broker, when he does their credit report – he comes back and he says things like, ‘I can do this in six months,’ or, ‘They’re doable in twelve months,’ or, ‘They’re doable in eighteen months.’ So if we knew they were doable in six months, then I would do the contract for a year and just give them a little bit of leeway. If he came back and told me it was 18 months, I would do it in two years. But that’s always in your control. I’ll always come back to you and show you this person on paper. I will show you exactly where they stand and you and I will discuss whether this person is right for your home or not. I will give you my opinion on it, and what I understand about it according to how I work. But, I will always give you the last say so that you’re always in complete control of the situation.
Joe: Well, I’d like to have a two year or longer lease. The longer the lease is, the better, so that I don’t have to worry about it if they’re not going to exercise the option.
Warren: The longer the lease, the better, you’re right, for yourself, because that’s the least amount of time that you have to be concerned about it. If we could get a longer lease, that would be fantastic although you could make more money if you did a two year lease because then, if they don’t buy the house, and lets just use an example like – this persons a great tenant, you’ve never had any problem, they pay the payment on time for every single month – they’ve never been late, and two years pass by, and they actually have been working on their credit but they’re still not there – they’re still not ready. See, the great thing about it is you’re in control, it’s your property – you’re in control at that point. You could extend that lease for another year or two years, and at that point, you could ask for a little bit more money on the rent, and you could ask for al little bit more money on the selling price. It puts you in control throughout this whole situation.
Joe: So if I don’t like the tenant, I don’t have to take them.
Warren: Absolutely. You’re in complete control. When I show you that lease option memo (it’s just a one page memo), it’s going to show you exactly what the process is and how much control you have. I call it the ‘Stab Me in the Back Contract’ because you could actually turn around and take that tenant buyer from me if you wanted to and I really wouldn’t have any recourse. Now I know that’s not going to happen because you’re an honest guy. My point is that you don’t have to stop doing what you’re doing to market your house. I found you because you were marketing your home. You can continue to do that process alongside of me and I will not compete with you. But I can tell you that I have a pretty decent process going on right now, that I’m very talented at what I do and I’m probably going to find somebody quicker than you can for the home. Plus it doesn’t put you – I know you probably have a full time job and then you have to answer all these phone calls when you come home, show the property to people, run over there, and then they don’t show up, and then you have to deal with all of these headaches – so you put all of these headaches on me and I’ll take care of it because that’s what I do full time which I have a system in place that works very smoothly for.
Joe: Well, it sounds pretty interesting. What do you have to do to put it together?
Warren: It’s real simple. I’m going to go ahead and send you a link to sign that lease option memo. I have that online so you can electronically sign it. Once you sign that, all I have to do is go out and put some signs out in the area or put a sign in your yard. I’m going to ask you to give me an extra key so that I have access to the property and I’ll put a lockbox on the house.
Joe: Email it over. I’ll take a look at it.
Warren: Well, actually I don’t even have to email it. All I have to do is send you the link and then you can just go ahead and go on that site and then read it over yourself. Then, with the way the website’s designed, I have a complete explanation of it. You probably already saw that. Do you remember going to the website when I first sent you that email?
Joe: I don’t remember.
Warren: You don’t remember? What I can do is I can go ahead and send you that link because I think it would be very valuable for you to be able to listen to that. There’s a quick audio message on there and then there’s the script out below it. I’d like you to go ahead and listen to that and scroll down and read it at the same time because it’s going to explain the whole process to you again even though we went over it over the phone. I want you to hear it in that light because I do have it laid out, and if I missed anything in this conversation, I know it’s not missed there. It’ll answer 99% of your questions so that you’re fully informed and most importantly, I want to make sure that you’re comfortable with this process so that when we go ahead and move forward, you’ll be ready – because I’m very aggressive in my marketing, and at that point, as soon as you say okay, I’m going to be out there marketing that property and I can tell you – sometimes I have people within a few days, and it might shock you, so I don’t want you to be shocked – I want you to be ready and fully convinced that this is the way you want to move.
Warren: The really neat thing about this is that basically it either makes sense to them or it doesn’t. You’re going to have the real tough ones where it just doesn’t make any sense to them right now. But time and circumstance changes a lot of things and I’ve had quite a few people that might have said no to me originally, then they’re saying yes to me two or three months later. So they’ve paid a few payments and they realize that that’s a little bit painful for them and then they want to consider what I have to say. For instance, in a for sale by owner, if they just put it up on the market, then they haven’t even had the chance to even see if what they’re doing is going to work. It might take them about a month or three months, if and when they don’t get any showings or they only have one showing every two weeks, to realize that, ‘This isn’t going to work. I need to do something else.’
Warren: The important part about this process, because of the Push Button Method which works so well, is that once they sign up on the list, that auto responder is going to keep asking them, ‘I’m interested in your home. Are you ready to go? I’m interested in your home are you ready to go?’ And at some point they’re going to respond back to that. That’s the good thing about that – I never lose them. And I don’t have to keep track of that and continue to call them back. I let that process work automatically.
Warren: If they don’t send me the memo within the next day, I usually give them a call the next day and ask them where they stand and if they’ve been able to make a decision. And I can tell you this – what I’ve found is as I get better at it, more people do it right there and then with me on the phone. I’ve found that the more you do it and the better you get, the more confident you are in your abilities, then the more confident they are that you can do this for them, because that’s really what it is – they just want to know – can you do what you say you’re going to do and can you make this happen? Because they’re really dealing with some pain right now, and that’s why it’s important to ask them questions and find that pain and pull that pain out to the top during that conversation, so that they can see that they have a payment that they’re repaying every month on something that’s not paying off for them at all. And once they can see and realize that (I feel that that’s the most valuable thing that you can do for that person) then you can start to help them. I like to be able to help people – that’s what I do – I help people; both sides – buyer and sellers.
Warren: The first and foremost thing is to start listen to the course and start taking the steps, step by step, starting at the foundation and what Joe will suggest you do first. First, you have to build a cash flow – you have to do the grunt work first. Don’t be afraid to pick up the phone and call people. It’s cheap – the phone is the cheapest thing you can have. You already have one in your house and you’re already paying for it. The newspaper is cheap. You can go to the want ads and start calling off of those. You don’t have to go out and spend a lot of money with this at first. That’s the most important thing – don’t put that pressure on yourself by spending a lot of money at first. Then, the next thing is getting some of those signs. They’re cheap. You can get signs for a $1.50 or $2.00 a piece and start putting those signs up and start generating those leads. Those are the most important things that you can do right now. Then, just build your confidence and get smooth with the process. Joe gives you some scripts that in the program. Follow those scripts and read those and become really smooth with those. You can even practice with your dog, or your kids or your wife or the tree in the back yard. Get good at it and get smooth with it, because that confidence level is what you’re going to need when you do this process.
Warren: What I’d like to say is that, right now, during this process, I’m building a cash flow and I can see the end game. That’s the important thing – I can see where I’m going with this and I’m getting better and better at it. And I can tell you, as I said earlier – this is the best job I’ve ever had. I’m the most happy I’ve ever been – my wife even comments on how on my other jobs I was a little more grouchy and I would get off work and I wouldn’t wanting to do things with the family because I just didn’t like what I was doing. At this point I’m so happy. I got a text the other day when I checked on a house that I placed a tenant buyer in, and I just wanted to check if everything went smooth over the weekend with the move. And she wrote me back and said, ‘Thank you so much! I couldn’t have done this without you! You’ve been a great blessing!’ And that’s it – that’s my pay right there. Plus at the time I made $1,500 on the deal. But I could have taken it for free just because of that one comment, because of how it made me feel in my job. So I love my job. I love what I do and I can do this forever because of how much I love to do it.