Another week has passed and I spent about 15 hours working on my offer-making machine.  Good news; I’ve got it done and it’s ready to kick-out offers (on expired MLS listings).  Bad news; the Option-Contract that I was planning to enclose as part of my offer is garbage.

Originally, I was thinking of just mailing a short letter with a complete standard MLS contract.  Then I had a change of heart and felt the Keep-It-Simple-Stupid principle would be best.  So, I’m opting to send a short letter with an option-contract, perhaps the simplified approach will be better.  I had found this very simple Option-Contract on a forum about two weeks ago and I made some tweaks to it to fit my preferences.  I setup the mail-merge with it and my cover letter, I was feeling like the best thing that ever happened to real estate.  The best that ever did it.  So my gut told me just to shoot over the option-contract to my lawyer just to cover my bases…and I’m glad I did.  I received an email response that was about 5 paragraphs long, the cliff-notes basically explaining that the document was trash.  So…I’ll be stalled on the 40 offers until I get my shiny new option contract back from my lawyer.

The beautiful thing is that I have about 500 expireds to choose from.  I could just pace the offers at 40 each week or maybe just push out more per week to make up for lost time.  This has been a weekly goal for about a month now.

Once I have my new option-contract, perhaps I’ll post in detail of how I created this automated system I now have.  Surely at least one person may learn from it or get an idea for something better.

P.S.
I’m going to step-up my fitness regimen a bit.  I was looking at a measurement that I made back in January of 2009, and back then I had a weight of 210 lbs and percent body fat of 19%.  I then measured myself again about a week ago and now have a weight of 200 lbs and a percent body fat of 17.2%.  Not much of a change.  However, I haven’t really been pushing that hard with workouts.  It’s kind of hard to do so when you’re not specifically training for something.  Very hard.  I can’t wait until I have time for triathlons and such.

- Peace Out

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I indeed decided to place an advertisement in the 2009/2010 Yellow Pages.  Although I believe print advertising is a dying medium, I’m following my gut on this one.  Deep-down, I really believe that the homeowner who is at risk of being foreclosed on may turn to the Yellow Pages to find who to call.  This would be especially true, if that homeowner is older and is more used to using a print directory vs. the internet.  The older homeowner will most likely have more equity in their house; see how this makes sense in my head?  You should.  And the main incentive is that my ad will be the only one in the Real Estate section about foreclosure prevention…boo-yhaw!

And I just thought about this, but it’s too late now.  I should’ve used an exclusive phone number and had it forwarded to my main phone number, just for advertisement tracking purposes.  It’s too late now, so I’ll just have to ask every caller how they heard about me. The 2″ Yellow Page ad cost me $60 monthly, so $720 for the year.  You should see a blog from me within the next year about how a Yellow Page lead generated “X” ROI.  Everyone told me not to place an ad in the Yellow Pages, all I heard were naysayers.  But when folks turn right, I go left.  You’ll see how this turns out…oh yeah…you’ll see…

- Justin

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In this series of videos, I give a brief overview of how Screen Scraping (data collection) with software such as Mozenda can greatly benefit Real Estate Investors. I’m excited about this software. I’m glad I found it as I’ve used others that aren’t even half as good. Watch the entire combined 17 minutes (part 1 and part 2) and I guarantee it won’t be a waste of time.

- Justin

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I visited the rehab house that I wrote about on Friday and checked out the interior. This house was completely gutted with no electrical/plumbing. I only checked out the inside due to the suggestions of other investors, but I had no-idea what to look for. I took some video on my flip mino, so when I get a chance I’ll post it here. The seller is extremely motivated, so I think I’ll counter his $5K counter at $3K, then see if I can find a rehabber to take it for $10K. Maybe I shouldn’t talk numbers on this blog because more people read this than I know of. Oh well. A $7K come-up would be fantastic, but I could settle for $5K.

I hit the jackpot in regards to adding to my buyers’ list. I figure that the all of Section 8 property owners are investors themselves, so I called up the Section 8 office, posed as a student, and asked for the property addresses for all of the Section 8 properties around town for demographic research (I was going to reverse-lookup and find the owner info by address). They shot me down and said the information is sensitive and they just don’t hand it out. So about two weeks later, I called as an interested property owner that wanted to offer his properties for Section 8. I asked for an application, handbook, and other Section 8 property owner info. Jackpot! As I type, I’m looking at this packet of information containing the property address, contact person, and telephone number! Pure Gold! I bet I could go down the list and cold-call (rather hire a VA to do it) each Section 8 property owner to see if they have interest in the rehab house. If they don’t, still add to the buyers’ list. If they do, I may have my $7K in hand soon.

In about two hours, I meet-up with a local wholesaler who is newer than me. We’re going to talk about strategies here in town, future joint ventures, etc. I’m a little upset because I forgot about this appointment until just now and really was set on going for a long-run outside. Looks like I’m stuck indoors at the gym tonight. Still gotta get it in. I ate a bunch of garbage last weekend, I need to get back on point.

Tomorrow morning, I meet with Shane at a property in St. Joseph. I plan to do the same with that property that I did with the property on Duncan Avenue (floor plan, video, pics, website) and perhaps make a flat-fee for marketing. However, this time I have blank white corrugated plastic bandit signs on the way (100 quantity). With stakes, they cost me $178 at SignWarehouse.com. I’m going to blast all of Champaign County this Friday night with these signs. My phone will be on fire! I can’t wait. This reminds me, I need to get PATlive service situated before this Friday, so they can field my calls instead of having them go to a voicemail box.

- Justin

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Old Goals from the week of June 29th:

1. Contact Title companies in town for information on the real estate transactions in town involving deeds without mortgages. I’ll find my cash-buyers this way. (Done. Although none have returned my emails, perhaps I’ll call)

2. Acquire a pre-foreclosure list from either the County Recorder or SalesTeamLive (Failed.)

3. Have my local VA create my handwritten envelopes to those in pre-foreclosure; send mailings to these people. (Failed. Dependency on Goal #2)

4. Find a programmer to optimize both of my WordPress blogs; schwaps.com/blog and justinmcclelland.com. I cannot figure out why they move so slow. Actually, I’ll try updating to WP2.8 and if that doesn’t make a difference then, I’ll try a programmer. (Done. Updating to WP2.8 made little difference, I’m in touch with programmers now)

5. Order the 100 bandit signs and stakes. I’m not making signs again myself unless I absolutely have to, huge time drain. (Done. SignWarehouse.com is a great place for signs and very cheap)

6. Create a list of local investors in Champaign-County, call other bandit signs, paper ads, etc. (Done.)

7. Order some flyers that look like real $100 bills. I’ve heard that these are extremely effective, I will give these a try. (Failed. Just plain slacked on not placing this order.)

New Goals for the week of July 6th:

1. Ramp up the remaining aspects of the advertising plan; flyers, post cards, business cards, news ads, etc.

2. Acquire a pre-foreclosure list from either the County Recorder or SalesTeamLive.

3. Follow-up with local Title Companies

4. Find additional Realtors to work with. I’m only working with two at the moment. I think one of them has been avoiding me since our first meeting, after she found out I was new to investing. The other seems to be out of town often. I need to not limit myself here.

5. Contact and perhaps arrange appointments to meet all of the other local investors. There is a good possibility that business can be done between us all.

6. Find out how I can legally build a birddog army. But not only birddogs who find property, but more-so birddogs who can help find property buyers. Find new lawyer to speak this over with.

7. Purchase some additional stationary for the Ad campaign and a reflective vest for safety when putting out bandit signs at 3AM (this also will give a greater appearance of legitimacy, then maybe the cops won’t stop me again). Make these purchases through my Net30 vendors, so that I can continue to build business credit.

- Justin

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The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000.

Per:

http://www.federalhousingtaxcredit.com/2009/faq.php#1

I’ll have to go back to the drawing board as far as marketing and my exit strategy. Maybe I can still make that deal work.

- Justin

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I have a deal that’s in negotiations at this time (at least I hope you all consider it a deal, this would make my very first).

I ran across a 3/1 900 sq. ft. rehab that’s located in a less-desirable area of Champaign. The seller originally was asking $8K and estimated that the property needed $15K of rehab (new drywall and plumbing work). The ARV of this property is around $40K.

I made a lowball offer of $2,500 yesterday. The seller called me today and verbally countered at $5K. I’m thinking of countering at $3,500 with 60 days allowed for closing.

Here is my wholesale exit strategy. I think I could flip this very quickly to a first time homebuyer who would use the $8K tax credit and the HUD 203K rehab loan to perform the necessary rehab plus additional improvements that they desire.

I would like to wholesale the property at $8K and make a quick $4,500. By offering the property at $8K, the house could be marketed as a “Free House” due to the fact that the $8K credit may now be used by buyers towards the down-payment.

I just ended a phone call with Shane as I type this and he strongly suggests that I atleast take a look at the inside of the property, regardless of the lowball bid, he says if it’s bulldoze worthy then it’s not even worth the time. He also, suggests that I flip the property to another investor and not a retail buyer due to the greater ease of transaction. Per his suggestion, I just scheduled to view the interior early next week. The seller seemed a little annoyed. But oh well, I’m not the one in the bind and needing to sell badly. We shall see how this turns out. $4,500 would sure look good in the marketing budget right about now…

- Justin

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Since Sunday morning my phone has been ringing non-stop with buyers interested in the property I was marketing. I didn’t have an equitable interest in the property (1104 S. Duncan), however I was assisting the owner with the marketing free of charge, which kept me legal. Not charging anything up-front actually helped in the long-run because; I was able to use an actual property to draw buyer leads with and help a fellow investor out at the same time. The house actually was put under-contract, not by any of my doing, the day after I posted the signs. However the buyers still kept calling. Once I found the house was under-contract I changed my voicemail message and let callers know that the property was sold. The message also directed them to a squeeze page (champaigndeals.com) which took their information so that they could be notified of future deals. I used a Skype phone number for my signs (I’ll never stray away from Vonage again, Skype is garbage) and I was able to keep record of each number that called in. So yesterday evening I set-up a automated call blast (using callfire.com) to call of the callers letting them know that the house was sold and informing them of the champaigndeals.com website. I now have about 30 more buyers on my buyers’ list than I started with.

Overall, despite the tedious manual labor involved in creating the signs, I’m very satisfied with the results. For next time; I’m going to ditch Skype and purchase Vonage numbers, I’m going to order premade signs with metal stakes, and I’m put more signs out and spread out to other parts of Champaign County, perhaps I’ll put out 200 signs next time instead of 38.

- Justin

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I’ve been doing a lot better in regards to accomplishing my weekly goals. I’ll provide a summary of last weeks’ goals:

1. Begin the SEO of my sites (done)

I’ve begun the keyword research of additional domains that I’ll buy for the http://www.schwaps.com website. After a lot of research on SEO, I know that having a domain name with your desired keywords in it helps SEO. Also, having your keywords in your Title HTML tag.

2. Start advertising all over the web to add to my buyers’ list (done)

I started using Postlets.com which updates CraigsList, Backpages, and a slew of other sites. Thus far, it seems like I get more spam than anything else from these postings. But for free, I’ll take the extra exposure.

3. Gather the information from the county regarding property buyers who used cash (done)

I did go the the County Recorder’s office and use the public terminals, however I found that I cannot search specifically for a property deed sans mortgage, which is how I believe I need to search to find cash buyers.

4. Get signed-up with PATlive answering service (failed)

I may hold off on this for just a few more weeks, as I don’t have an immediate need for my call center staff just yet. I may schedule this to go live about 2 days after my first round of mailings.

5. Select a group of freelancers to post Champaign, specific real-estate articles to the Schwaps.com blog (done)

I found a guy using Guru.com who is able to do this for $2/100 words! He sent me a sample article that was on point too. His competition wanted $50 per article. I’m glad I stumbled upon him.

6. Select an off-shore virtual assistant to perform some of the clerical duties I don’t have time for (done)

I have a VA from India on stand-by.

7. Order about 100 bandit signs for placement around Champaign-Urbana (failed)

I didn’t order the 100 bandit signs, however I did make 40 signs on my own and placed them around town. My phone has been blowing up for the past two days! Can’t knock the bandit signs at all.

8. Hire a freelance graphic designer to create some handbill and full-page flyers (done)

Although I didn’t hire one. I found a company with a fantastic portfolio and for a 3 designs they quoted me at $1K! That’s not bad, but it’s a hell of a lot more than I was planning for. I’ll go with them when I have more marketing capital, until then I’ll do the designs myself unfortunately.

Goals for the week of June 29th:

1. Contact Title companies in town for information on the real estate transactions in town involving deeds without mortgages. I’ll find my cash-buyers this way.

2. Acquire a pre-foreclosure list from either the County Recorder or SalesTeamLive

3. Have my local VA create my handwritten envelopes to those in pre-foreclosure; send mailings to these people.

4. Find a programmer to optimize both of my WordPress blogs; schwaps.com/blog and justinmcclelland.com. I cannot figure out why they move so slow. Actually, I’ll try updating to WP2.8 and if that doesn’t make a difference then, I’ll try a programmer.

5. Order the 100 bandit signs and stakes. I’m not making signs again myself unless I absolutely have to, huge time drain.

6. Create a list of local investors in Champaign-County, call other bandit signs, paper ads, etc.

7. Order some flyers that look like real $100 bills. I’ve heard that these are extremely effective, I will give these a try.

This list isn’t long enough, but that’s all I can think of for now. I’ll add to it later. I also have some information to post regarding how I set-up my bandit sign phone system/website. If I have time, I’ll add this later tonight.

- Justin

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I spent 12 hours between yesterday and today with my bandit sign mission. I made 40 of them from scratch. I think it was a good thing that I only made 40 because I had a hard time finding appropriate locations to place them in. I did my best to put them in locations that were near stop lights and I avoided highly manicured/maintained areas because I figured they would be removed faster in such places. Want counts is that I accomplished my mission of getting signs out this weekend. I made an impulse decision on Friday to do this, when I called around about obtaining signs and having them rush delivered, I found that the pricing was through the roof; handmade signs were my only option. On average a corrugated plastic 18″x24″ sign would run $1 each and the metal stake would also be about $1, then for say a quantity of 50 or 100 the shipping may be $30-$50. I was able to get the cardboard for free and all I had to buy was the stakes, nails, hammer, tape, and other miscellaneous items. The fee per homemade sign was about $1 each, so I was able to save just over half.

- Justin

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