Hello Personal Leader

Happy to answer your questions, but I can't find my own post that you are asking about!   

Please show me where the post is that you are referring to – we have done a lot and I need to refresh myself on what deal this was about.

Cheerio

Mr Fair Go

Hi N

Local notice board is a great one, but not all noticeboards are created equal.  Test, test, test.  Our area has four or five of them, but only one, outside the local IGA supermarket,  is really effective.  And they get so many notices that the supermarket pulls them all down regularly and starts fresh.  I keep a bunch of fliers (with little tear-off tags) already printed out in the car.  When I see the fresh board (my previous advert has gone) I whack up a new one immediately.

Local newspaper (not city-wide: if there's a free local one that's best) is good.  I have a small I-buy-houses advert (costs $10.60) that runs every week.  It is simple and directs people to a website as well as my mobile number.  I often get calls from people who say they have seen the advert many times, and just now are responding.  It's worth the $500/year to have this, since only one deal covers the cost easily.  Sometimes I also put a selling advert in the paper (costs a lot more usually!) but in this area I have found that does not work as well as the noticeboard.  In a previous area such an add in the free local paper would pull about 30 calls.  This local rag is paid-for ($1.00) and only pulls about 3 calls.

Bandit signs are a GREAT way to get customers.  Put a hand-written sign in the window of a property you are selling, and in the front yard – and if your local council is not too sign-police orientated, you can also scatter smaller ones around on poles etc, with appropriate wording depending on your aim: directing people to the property you are selling, or trawling for sellers.  Tip: go to a signwriter and buy corflute offcuts.  Tomato stakes from the local hardware store are a cheap way to mount them if it's for a yard sign.

A business card can help a lot too, if it's done properly.  Your name should be tiny, and what you do should be large. An offer on the back to pay a finders-fee is also worthwhile.  Put them in local businesses, keep several tacked to the local noticeboard mentioned above, and hand them out.  I find that on the counter at accountants and solicitors offices have been useful places to put a little dispenser of them.    You don't have to  get expensive cards, but they need to have a motivating message, and do use both sides! Tip: vistaprint.com.au but don't get the free ones because they have Vistaprint advertising on the back.

A website is also be a great way to find customers – both for buying and selling.  Don't pay a lot to have an expensive site built.  A blog-style site is easily maintained yourself, but don't use the "free blog host" type sites… you need your own domain.  Get a good domain name.  Make sure people can get on your mailing list at your website.  Learn about SEO.  We get a lot of business from our websites, but it's not always in the local area.  However, when someone calls, even locally,  I ask if they have internet access, and get them to fill out an online application.  Works pretty well.   (Disclaimer: My other company sells domains, builds and hosts websites, installs blogs etc, but I am not asking for business here – we are not the cheap solution you are looking for)

We offer a finder's fee to existing and past clients if they put a new client onto us and they buy.  We send a 'thank you' note to the referrer even if the referred does not buy. We keep in regular contact with existing and past clients asking for referrals.  These people are your best 'champions'.   This referral program has been very successful for us over the years and up to the present.

We are also about to start (in the new year) radio adverts and sponsorship of a real estate information program on our local station.  We have high hopes for this, but we are unable to report on it's effectiveness  (Yet!)

I saved the best one for last: flapping the gums.  Have a sentence ready that explains what you do.  Dunno if I should put this on a public forum, but I don't suppose it will hurt… Mine is: "We buy houses and then sell them on vendor terms to people who don't currently qualify for bank loans."   Simple and clear.  Almost always gets a good reaction, and people remember us and tell their friends.  I will often mention in passing that we pay finder's fees if they know someone who wants to sell a house.

These are some of the ways we use to "reach clients".  "N", do them.  Do them ALL, don't rely on just one or two.

Cheers

Mr Fair Go

Hi PropertyJockey,

As you already appreciate: the ones who give you the least trouble in achieving your aims with wrapping.

Besides the very wise advice you have already received to check out their current living conditions and employment etc, consider a newish arrangement we have put in place to ensure as far as possible that the customer will truly be able to do what we need them to do.

We now look over an application, and if we think this one might be a "goer" we ask the applicant to fill out a standard home loan application form, and pay a "Credit Assessment Fee" .  This fee actually is paid to a Mortgage Broker who assesses their creditworthiness in the light of getting a bank loan down the track.  She prepares quite a detailed report for them (CC'd to us of course) with her advice on what they need to do to ensure the maximum chances of getting a loan from a traditional lender in due course.

This accomplishes several important things…

1. We are more aware upfront of how long it may be before they can cash us out
2. We avoid entering into an arrangement with someone who may never be in a position to cash us out
3. We save a lot of time on processing applications
4. They are aware of what to do in order to maximise their likelihood of getting a traditional loan, e.g. not to change jobs, not to increase borrowing, to fix any credit issues that have come to light, etc.

Did you note #3?  This helps address your concern with time.  The "donkey work" involved in processing an application is outsourced, and we make the final decision based partly on that report.  Time spent on wrapping can also be minimised if you have good processes in place.  Much of the bookwork can be outsourced once you have the procedures down pat.  Our part-time bookkeeper works from home, all that she needs from us is put online, she posts monthly statements, payment failure notices, reminds us when insurance is due, etc.  It has made our business a lot more stress-free.

Hope this helps

Mr Fair Go

G'day Television

Read the classic "Rich Dad Poor Dad" and other books by Robert Kiyosaki to get some theory and mindset.  If you'v e already done so (I I suppose you have) move straight on to #2…

Read John Burley's "Australia's Money Secrets of the Wealthy" to get an overview of a bunch of strategies and a lot of practical help.  This will really help with "which property investment strategy may be best for my 'personality'"

Read Dolf de Roos books, like "Real Estate Riches" and "101 Ways to Massively Increase the Value of Your Real Estate "

And of course, read Steve's books "0-130 properties, and the later one.

VERY IMPORTANT: don't wait until you "know it all" before you start.  Accept that lots of people make money with very little knowledge.  Also accept that learning comes from mistakes.  However, if you get the strategy right you will lessen your risk. It's not really how MUCH you know as what you do with the knowledge you have.

Happy investing

“Is any one doing optios at the moment. can any one tell me that they actually did the option and executed the deal . and have made money”

Yes.

Yes, yes, and yes.

Mudassar, there are dozens – probably SCORES if not hundred of people making money with this technique in Australia right now. It is nearly as old as the country itself.

Of course, you have to structure the deal properly. The money is in the deal, not the technique.

Hi Guys!

A few comments, relevant I hope, based on my 8 years of experience with dozens of Instalment Contracts and Lease options in Queensland:

Mal & Jean, it is correct that you have to pay the Stamp Duty upfront with an Instalment Contract purchase.  However, if you are an owner-occupier and this is your principal place of residence, you should get a rebate to 1% instead of the investors rate of 2%. Read the rules carefully at http://www.osr.qld.gov.au/

If the Stamp Duty is going to kill the deal for you, why not inform the vendor and ask if you can give them a lower deposit so you can afford the Duty?  Alternatively you could ask the vendor if he is prepared to sell it to you with a Lease Option, which does not require the upfront Stamp Duty.

However, the Instalment Contract is more secure for you that the Lease Option.  One reason is that with an Instalment Contract you can put on a once-only caveat that is clearly recognised at law, but with the L/O you may need to renew it every three months, which is expensive.

The comments by others above re the plethora of contracts, some good some not so, are valid.  You really should get it checked over by a solicitor knowledgeable in this area.  I can recommend ours, Aylward Game Solicitors (Mark Game, ph 07 3236 0001) in Brisbane.  I don't know if he charges an upfront fee for a new client, but at least he won't have to go and research instalment contracts at your expense!  He created the ICs we use – both for selling and buying – and we have never had an issue with them.

Re hidden expenses.  Check to see if the vendor or you are paying the rates.  Insurance too.  If you have insurance on a property under an IC that's paid by the vendor be sure you get yourselves noted on the policy as well as the vendor.  If it's a LO the insurer probably won't put you on, but at least ask to see the vendor's policy.  If you are at all doubtful of the arrangements of the vendor, insure the property yourself as well.  You can get pay-by-the-month that won't break the bank.

By the way, I probably shouldn't tell you this but as a vendor I prefer to get my Lease Option customers either refinanced or onto an Instalment Contract as soon as possible, because a much larger proportion of the Instalment Contract payment is ours to keep.  A typical LO payment might be 1/3 or more option fee (going toward the house, and therefore credited back to the client at the end) but a typical IC payment starts at less than 1/10 principle (again, going toward the house, and therefore credited back to the client at the end).  This means for you that you get ahead quicker with a typical LO than an IC.  But please .  If you are confident you can refinance with Westpac within 2 years, this is worth thinking about.

Hope this helps

Well, first read Steve's disclaimer, that this site is not providing "advice" that should be relied upon without checking with your professional. 

Having said that, save like mad, coz the "no money down" deals are too far apart to make a living with only them.

"Comparatively little money down" deals are fairly commonplace when you know where to look.  I generally try to secure a property with less than $10k down, more like $3k if I can.

Second piece of advice is to get educated as to how to safely use options.

Quantum Leap, what sort of option deals are you wanting to learn about?

I personally don't do the "option and DA then sell the deal" type, but I do the "Option and improve and onsell" or "Option a discounted property and flip."  It's a lower profit than those "DA" guys all talk about (assuming those are "real"), but I find my way of doing deals fairly quick and easy.

I am a long way from Melbourne and I don't have a lot of spare time, (I run 3 businesses as well as having an active private life) but if this is the kind of thing that you are interested in, get back to me for some directions.

Cheers

We recently lost a sale because, even  after several extensions, the buyer could not get finance.

Our solicitor sent me a bill for $330 for his time, being a lot of communication with the buyer's solicitor.  Ouch!

So if a buyer comes to me and wants to buy our house, I want to know they are likely to go ahead with the purchase.

Having said that, I myself have sometimes put in multiple offers.  I remember once a REA ringing me and asking if I wanted all of them presented, or one at a time.  I said All.  I will figure out how to pay for it later if they all say yes.  If they are good deals, I can find JV partners easily enough, or refi other properties to raise the deposits.

However, the most we ever bought at one time was three, back in the days when houses were around 100k, so it wasnt' too bad.