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How To Become A Real Estate Investing Deal Engineer And Make Money Off Of Every Lead
Joe: Hey, it’s Joe. This video is titled, “How to Become a Real Estate Investing Deal Engineer and Make Money Off of Every Lead.” One of the goals of the Automarketer and for my business is to always have leads coming in. Leads are the lifeblood of any business. Nothing happens in business until a sale is made. So if you don’t have good marketing, if you don’t have good systems in place to have that good marketing, you’re not going to have a regular pipeline, or you’re not going to have a consistent, reliable source of income. And your business will eventually crash because of it.
Joe: So, you’re goal is to have leads coming in all the time. So, as those leads come in you want to have a way to develop those leads. So the Automarketer can bring you leads. You can get leads through other sources, too. Snail mail, through ringless voice mail, through absentee owners, through, there’s lots of different sources of good leads which I’ve talked about in my other systems. But, once you get those leads in you’ve got to develop those leads.
Joe: That means that you have to talk to them, or you have to have somebody who’s going to talk to them. And when you talk to them, you have to find out what their needs are in order to solve the problem. And the more tools you have to solve those problems, the more likely it is that you’re going to make money on those deals. Everybody that you’re talking to, everybody that’s a lead, is somebody who potentially has a problem that you can solve. If you understand the zero down structure hierarchy that I’ve created, you can understand what type of offer to make on any type of deal that comes in and still make an offer that can make you a profit.
Joe: I’m going to go through the zero down structure with you real quickly here. I’m not going to have enough time, this usually takes me a few hours to go over this with my mentor students, and I’ve talked about it on other videos, so you can do a search and you can find some of these. But I’m going to give you the basic guidelines so you can understand that different types of people, different types of sellers need different types of structures to solve their problem.
Joe: Those structures are Subject To, that’s at that top of the seller hierarchy. And if I’m going to be the buyer in the transaction and I’m talking to a seller, Subject To is one of the best ways to buy it because you get the deed to the property. All they do is deed you the property, you start making payments on the loan that they’ve got. You don’t give them money for their equity, you don’t give them any down payment. You’re just taking over the property and making payments on it. You have to make sure you have enough income on that property to be able to pay that mortgage and have a profit. So, that’s the top of the hierarchy and that’s the one that you want, that’s the one that puts you in the most control of any of these structures because you have the deed.
Joe: The second on is the multi-mortgage. That’s if someone has a bunch of equity in the property but they still have a mortgage. Let’s say they owe $60K on a property but they want $100K for it. They can, you can take over this first mortgage subject to the existing loan. And then you can do a second mortgage that is between the seller and you for $40K and you can make payments to them. So you’re going to get, they’re going to deed you the property, they’re going to put a mortgage on the property and you’re going to start making payments on the first mortgage. And they’re going to put a second mortgage on. So you just have, still, again, you have to make sure you have enough income on that property to be able to make the payments. And that’s how you decide whether or not that structure is going to make sense for you. And that’ll give your seller their equity and it’ll also get you into a property.
Joe: The third type is contract for deed, or, land contract. And that doesn’t transfer the deed like the first two. So you have less control over the property, but you still have control over it. There’s the document between you and the seller. And if you record that document it puts you in more control. So, is you’re buying the property you’re going to make sure you record that document. If you’re selling that property you’re going to try not to record that document because if they default, if the buyer defaults, then you can get rid of them a little bit easier than if it’s on the title.
Joe: But it’s a pretty strong way to buy properties. And it’s very much like buying a car with a car loan. If you go out and get a car loan with a bank they will keep the title to that car and there’ll be a document between you and the bank that says, you know, Joe’s going to pay this much money over this amount of time at this interest rate with these payments and then when that’s paid off, then the bank is going to transfer the title to the care, you know, to me. And that’s what a land contract is except it’s with real estate. And it’s a legitimate way to do it and you can record those deeds if you choose.
Joe: The next way to do it is with a lease with an option to buy. That’s the For Rent Method that we use all the time. This is where you lease a property with the option to buy. I never buy a property with a lease option. But I sell most of my properties with a lease option. The reason is, is because the buyer is in the weakest position possible. They still have a legal contract. It’s still a legal agreement. And as long as your seller stays true to their word, then it won’t be a problem. But it’s not as hard to get rid of somebody if they screw, you know, if they screw with you, it’s not as hard to get rid of somebody if they stop making their payments if you’re the seller.
Joe: And if the seller’s not honorable, there’s a possibility that they could screw that buyer as well. So you don’t buy with a lease option, you sell on a lease option. Because you know that you’re going to do the right thing. You’re going to do the ethical thing and you’re going to follow through with your promises. But in order to do the right thing you have to be in control. That’s why you took the property subject to. You got the deed. Nobody can take that from you unless it’s going to be the bank if you don’t make your payments. But, you know, your buyer’s not going to be able to take that property, your seller’s not going to be able to take that property and you have control over it.
Joe: So that’s why you buy at the top of the hierarchy and you sell at the bottom of the hierarchy. So, that’ll make it a lot safer for you to do that. So that’s the hierarchy of zero down structures. And that allows you, when you understand those different structures, to be able to make offers on every single property out there. Because there’s no property in the world that you can’t make an offer on.
Joe: One of the advertisements that we do, we used to put signs out a lot, and they still work in some areas, by the way. And the sign would say “Guaranteed Offer on Your Home.” And we would always make offers. Whenever we call anybody, any of our leads, we’re always making offers on their property. Now it may not be an offer that they can accept or will accept, but it’s an offer that we can make and we know how to structure these deals so that no matter what deal we come across, we can make some kind of offer that’ll be profitable to us and it’ll solve their problem.
Joe: SAnd if you can do that, you can put a deal together every time you talk to a seller, if they’re willing to work with you.
Joe: All right. Hope that helps. Good luck with it.