Group Q & A
Welcome everyone to your Street Smart Group Q and A where I’ve got a lot of new information for you. I think you are going to be excited about this one.
We just completed our Millionaire Dealmaker event in Atlanta. It was fantastic. We had a great turn out. We had a great group of folks there; learned a ton about way to develop and design deals for today’s market. That was critical because I spent good, in-depth time on the important thing in today’s market; that’s being able to buy REO properties. Real Estate Owned by the banks. I shared my entire system of how we are doing it, brought in my entire team, and showed exactly how we are structuring the transactions right now, and the operation that we’ve put together on that, got some great insight into the pricing, the formats for the offers, and so on.
I encourage you to take advantage of the market we are in right now. I encourage you to get a system together for being able to fund cash deals like REO deals, and to continue to look at the other side of your business, what I call the “traditional” side of your business because we are also doing deals on free and clear property. One of our platinums, Amanda, just shared with us at the Platinum event, which was something we did right after MDM; we followed up after Monday, we did Tuesday and Wednesday was our Platinum Master Minds. All the apprentices came together. We had a fantastic event there as well, learned a lot from one another about advancing our businesses. One of the things that Amanda shared was a deal she had just gotten property worth at least $125,000…because the one next door had just sold for $124,000…and she was able to buy it for $75,000 at $300 per month until paid.
Now, I want you all to put that in your calculator and smoke that for a while. If you just see how much Amanda was able to make on that one transaction merely by structuring it in the right way. She also shared with us that the seller has multiple other properties as well that she wants to liquidate. Amanda has a real opportunity right there.
If you are not part of our Platinum Program, you are missing out. There is a lot of additional guidance, support, and training that you can get under that program.
Today I’m going to share with you something that we did at the event. My new radio show has started here in Atlanta at WGUN, 110 on the AM dial, and plays over the internet with internet streaming on a daily basis. I’m on every day from 12:15 to 12:30 at www.wgunradio.com. There you can learn some of the things that I’m doing to teach people how to do real estate in the local market.
We’ve been able to generate some leads from folks over the radio who are interested in our programs. Our work for equity, rent to own, owner finance, and all the other programs that I’ve taught you over the years are working so incredibly well in today’s market. I encourage all of you to truly take advantage of it.
Another thing we talked about at MDM that is so powerful is this $8000 tax credit. If you haven’t seized the opportunity right there, you absolutely should. I’ve created a button on your web site. It’s called Free Grant Money. Click here. If you go to your selling web site, it’s on your navigation bar on the left-hand side, click on free grant money, and it explains exactly how the program works and, in fact, has a direct link to the Federal Frequently Asked Questions on the grant money program. It’s powerful.
I taught a lot during this event about using the Agreement for Deed and how powerful that is with this particular program right now.
Today I’m going to share with you something else that we did at MDM. We actually recorded the radio show live while we were there and allowed everyone to line up and ask their questions. They had some very powerful and insightful questions. You are in for a treat over the next 60 minutes. I’ve got a lot of information to provide to you. I want you to just sit up, talk notice, and listen to all the great information that was imparted to the folks who saw me face-to-face at the Millionaire Dealmaker event.
Folks, mark your calendar now. Be sure and get yourself registered for that for the next time. In fact, everyone that attended that event is also going to get a special invitation to join us on some additional training after the event where we are going to do some additional analysis of leads and deals that were brought to the event. Not this coming Wednesday, but the following Wednesday, I believe, is when we are going to be doing that. Be watching your e-mail for the link information so you can come in and listen to that event.
Join me now as we go in to the training that we did at the Millionaire Dealmaker.
Husband, father, author, lecturer, inventor, investor, builder, designer, _____ 5: 57, real estate expert are all descriptions of this exciting trainer. Real estate investors in all 50 states across Canada, and 15 foreign countries, including as far away as Australia and New Zealand, have long regarded the training systems and legal forms created by Lou Brown as the best in the industry. Quoted as an expert by many publications and authors, Lou draws from a wide and varied background as a real estate investor, having been buying properties since 1976. He’s widely known as the creative financing genius with his deal structuring concepts. Being a teacher at heart, he enjoys sharing his discoveries with others.
Farmers and Merchants Bank, your community bank for over 100 years, with two convenient locations in both Covington and Connors, and the big gun, WGUN are proud to bring you Street Smart with Lou Brown.
Welcome everyone. We are here in Atlanta, Georgia at one of our events at the Millionaire Dealmaker. How’s everybody today?
Fantastic. That’s a good thing. I hope all of you out there in radio land are fantastic as well. We are going to have an exciting hour as we journey into the experience of real estate. I hope all of you are excited about buying real estate these days. It may be for your own account, in other words buying your own home. You may be a first time homebuyer or you are buying houses as investments. That’s what we are here to talk about today.
I’ve got investors from all over the country, from about 20 different states, here in Atlanta for a summit as we are talking about real estate, and learning about how to design deals, and craft deals. All these investors are lines up at the microphone right now to ask me questions. You guys are going to be able to participate and listen.
First tell us your name and town.
James Johnson, Forest Park, Georgia.
Yes, sir, James. What can I do for you?
A lady friend of mine, very good friend, owns 17 properties. Three of the properties are paid for completely clear; three of the properties. What she did was co-signed with a pastor for a $500,000. The pastor skipped town. The bank came after her. She told her lawyer that she’s not going to make any more payments on the remaining houses that she’s got rented out, and they are going to start going in foreclosure the first week in June. Is there anything that I can do?
That’s a great question, James. Do you know who the lender is?
I think it’s Bank of America.
It will be best to go back to Bank of America and try to work something out. She does have assets, does have free and clear properties. Obviously there’s equity there. There is something for them to go after, which is not good news for her because they can take all those assets and liquidate them.
In today’s market, right here, are all the houses here in Atlanta, Georgia?
Do you know where they are in the Atlanta area?
OK. The good news for her and bad for the bank is what REOs are selling for right now. It’s likely that she owes significantly more than what those properties would sell for right now. In other words if the bank takes those back they are going to have to resell the property at great discount. It is in their best interest to do some kind of work out for her. What I would suggest is that you maybe as her financial advisor work with her, call the bank and say look, here’s the situation. You have this $500,000 loan, we’d like to do some kind of work our on this. What can we do?
Another question is was that loan attached to a church?
Okay, is the building vacant?
It needs renovation real bad.
Needs renovation real bad. There are all kinds of churches out there. In fact, what I would do is have her, or you, or someone call all of these hotels, all over the place, because many times on Sunday mornings churches that are forming are actually meeting in hotels. They are looking for space. They are growing, growing, growing and they are looking for space. There may be some way to work out a deal on the building itself.
Get Bank of America to take a moratorium on payments; hold off on the payments while it’s being fixed up. Many times in a community, in a church group, there are people there with skills. They can come together, fix the building for little cost to the church, and then go ahead and resume payments on that $500,000.
Save her credit, get them a church. Everybody wins. Is that a good plan?
It’s a good plan.
She had most of the houses at least 25 years.
So, she’s paid down and paid down, and almost paid off those houses. That would be a tragedy to lose all of that equity. Let’s see if we can work something out on that church. I’ll be glad to help you with that, James.
This is Bennie Benensu from Greensboro, North Carolina.
First question is what qualities we should develop to become successful in this business.
What qualities should you develop in order to be a success in this business?
The strongest quality is discipline. You must be disciplined in order to pay attention to what needs to be done. Treat your investing like a job. Assign it a certain number of hours per day, even if you have another job, take time, one, two, three, four hours a day; whatever time you can give to your future. That’s really what you are doing. You are not taking time from your present. You are giving time to your future.
Set up a calendar. This will be a weekly calendar. We are going to assign time in that calendar. Then we are going to assign responsibilities in that calendar; what’s going to happen on Tuesdays, what’s going to happen on Wednesday. This is a recurring calendar; what you do on Monday, Wednesday, Friday, and so on.
There will be time to go out and visit with sellers. There will be time to go and evaluate properties, to look up properties, to set up offers for the sellers, and to generate your leads in the first place. All of these are important steps in your over all process of buying property and time should be assigned to it.
Once you discipline yourself and treat it like a job, then you’ll have some success, otherwise you’ll be all over the board and it will be difficult to have any kind of result.
Is that a good thing?
Give Bennie a hand.
Can you explain the options?
Options, okay. One of the greatest things that is available in real estate is a thing called an option. What happens with an option, let’s say that you have little, or even very little money to get in to this business, but you found an opportunity, a home that you can purchase, a property you can purchase. You can go to the seller, under contract, in fact it’s Volume IX of our system, The Street Smart System, and you can go to Volume IX and get what’s called an Option form. That mean you can take control of the property at whatever amount the seller agrees to, whatever amount of Option Fee the seller agrees to. Many times it ‘s a very small percentage of the over all cost of the property.
For example, let’s say that the home is $100,000 home and someone gave you an option to buy that home at $50,000. Now, you have a piece of paper that says that you, Bennie, have the right to buy that home for $50,000. You’ve done your evaluation; you know it’s worth $100,000. Now, you’ve got that hunk of money, you’ve got that opportunity to go find a buyer.
How did you get your option in the first place? You gave the seller some kind of consideration, anywhere from $10, to $100, to $1000. Let’s say that they gave you the option to purchase that property. There are some additional things that can be negotiated in that. For example, how long is the option? Is it a month? Is it three months, six months, or a year?
An example of this is whenever someone is going to do a commercial development. They often go option the property, option the property, and then they go to the county and see if that property can be rezoned to use as that commercial use. If it can be rezoned, then they will go through with the purchase of the property. That’s another way to look at an option because we’ve got opportunity that’s interesting.
Let’s say that the commercial property was currently a residence. Let’s say that residence is only worth $100,000, but you know, and you’ve got a connection, with Walgreen. You know that might be a location that Walgreen is looking for. You go ahead and option to purchase this $100,000 property for, say, $200,000; a much higher amount than it is worth today, but that seller is going to give you an option for a year at $200,000 which gives you the opportunity to go sell it to Walgreen for, maybe, half-a-million dollars.
Bennie, you could make an extra $300,000 just by that wonderful thing called an option, and it can be as little as $10 that you have on the table.
How many of you like that plan? That’s a great thing.
Boone Parker from Mooresville, North Carolina. My question is in regard to the $8,000 tax credit. My father, uncle, and aunt inherited my grandmother’s estate about a year-and-a-half ago. My father and mother live in one of the houses that is over $100,000 and rent it, but haven’t owned a house. How could they buy the house, or my mother buy house, and get the tax credit.
There was an inheritance. Who inherited the property?
My father and his sister and brother.
All of their names went on to the deed?
Well, that’s a problem because now they have owned a home in their name within the past three years. That’s one of the distinctions of the $8000 grant from the government; the buyer of the property cannot have owned a home in their name in the last three years.
By the way, all of you who are listening in, this is a marvelous opportunity for all of you to be able to buy homes today. You, now, can apply for a tax grant, or tax credit is what they call it, for $8000, up to $8000 depending on the value of the home. If it’s a $60,000 house all you could get is $6000. If it’s above $80,000 you can still get an $8000 tax grant from the government. The good news is that you can apply for it today and get that money back very quickly, within about eight weeks that can come back. If you are looking to buy a home, here’s a marvelous opportunity for you to get in to home ownership.
I hope all of you are listening and we are happy to help you at Street Smart. We can help you get your own home as well. We have programs, work for equity, owner finance, rent to own, where ever you are in your life, we can help you get in to you home, and we can help you apply for that $8000 tax credit and earn the home right now.
… Commercial Break …
We here in Atlanta, Georgia at the Millionaire Deal Maker. How’s everybody today? Fantastic.
We are having a great session on Q and A with all the folks that are present. We were just talking with Boone from Mooresville, North Carolina. Boone was talking about being involved in the $8000 tax credit and how can he get involved. One of the things we were just talking about is he, himself, has not owned a home in his name in the last three years.
What a great opportunity this is for everyone listening in to go ahead and get a home, get it purchased, and get yourself into the ability to own a home as quickly as you possibly can. There is an opportunity happening now that will not be repeated in your lifetime. Let me say that again. There is an opportunity right now for you to own a home that will not be repeated in your lifetime. There is free money, grant money, available from the government. It comes in the form of a tax credit. What happens is even if you owe taxes you can apply for this tax credit and receive the entire $8000 back. That really makes a great opportunity.
One thing that we are making available to our clients is that we are giving them the opportunity to go ahead and get the home, and they can apply for the tax credit after they move in to the home. We are going ahead and giving them credit for the tax credit in advance. It that a good thing?
Yes, no one else is doing that. We are making that available to our clients here in the metro area. All of you who are investors throughout the country can be offering this as well to your clients. Go ahead; let them choose a home, the home of their dreams, one from your inventory. They can apply for that home. If you approve them based on their income, they can move in to that home and then you give them something called an Agreement for Deed. They agreed to pay the payment per month, which includes principle, interest, taxes, and insurance. Right off the bat, up front, you are going to go ahead and give them credit for the $8000 from the government, along with the additional down payment that they have.
Ladies and gentlemen, if you are listening in, if you have three, four, five, six thousand dollars, money set aside, guess what. You’ve got that plus another $8000 to put down on your property. Be sure to call our office at 770-939-9000. That’s 770-939-9000.
Check out our web site, www.aaabuysellrent.com and see what properties we might have available for you today.
Let’s all give Boone a big hand.
Hi, Lou, it’s Janice LeBroad from Connecticut.
I’ve been recently working a lot wit the MOS chasing some REO properties. Through the searches, I’m coming across some free and clear properties that, apparently, aren’t selling. What key phrases can I give to my realtor to convince, for lack of a better word, the listing realtor to set up a meeting with all of us so I can do my presentation?
Janice, that’s a great question. What I would recommend is that you make an offer, some kind of offer, and in the offer you include that you, “the buyer, must be present for the presentation of the offer.”
First, let’s review the law. Listing agents must present all offers period; must present all offers. If the home is a $100,000 home and the offer is $50,000, the listing agent can’t say no, they won’t accept that. They have to present even that $50,000 offer. What happens is that in that offer you also put “and purchaser must be present to present offer.”
There are many, many moving parts. There are many opportunities. As you’ve been learning here over the last few days at the Millionaire Dealmaker, there are many opportunities in a deal. One of them is price, but the other is terms. What you want to do with these free and clear properties that have been sitting there for so long is you want to offer some great terms to these owners, and give them an opportunity to get rid of their property.
One thing I would do is offer a deal that is a possibility for you. Get that on the table. You’ve got to be present when it’s presented, anyway, and now you can explain exactly who you are and what you do.
Cutting out the realtor is not what we do. We don’t want to cut out the listing agent. We don’t want to cut out anybody else that is involved.
I would not recommend that you get your own realtor as well. Here’s why. The listing agent is going to have a higher motivation to work with you because they are going to get a higher percentage of the commission. Most deals are split between the listing agent and the selling agent. If you came through your agent going to that listing agent, they are already seeing deal split. They are already seeing commission split. I would recommend that you just go direct to that listing agent. Make the offer through them. If they give you any resistance then you go to your selling agent, your friend who is a realtor, and you get them to make the offer. They know the rules so they’re not going to be able to say no to that agent.
It that a good idea?
Yes, thank you.
Awesome. Give her a hand.
Hi, Lou, Virginia Amacurr from Biloxi, Mississippi. I have a question regarding the working for equity program. If you have a client who wants to obtain one of your properties through that program and just say, they want to replace the cabinets in the house. How do you determine their qualifications? Do you want someone to be able to go in there that really doesn’t have any experience to do that?
No, Virginia, and for everyone’s benefit, let me just explain our work for equity program. What we do is offer people the opportunity to get credit towards the down payment on the property; credit towards the repair of the property. What that allows them to do is earn a down payment based on the work they are doing.
Let’s say that we are working with someone with, say, they’ve only got $1000 down. They choose one of our homes that needs some work. Generally, we first offer our properties on our work for equity program. We give folks up to ten days to review these properties that come in before we start fixing them up. If you want to join our buyers list as a work for equity participant, then we send out an e-mail and say we just go another property in. You are welcome to go look at it. If you like what you see, we are willing to work with you on doing whatever work you can do, and we’ll do the rest.
Your question, you are asking about their qualifications. That is exactly what we are going to find out. What is your background? What is your experience? What other properties have you fixed up? Who else do you have in your family? Do you have contractors? Do you have friends? What do they do? What are their skills? If they have no skills at all, we are going to look closer.
I’ll give you an example, Virginia. We have a property that a nurse took from us. She was very mild-mannered, quiet. She said I like this house. I like this location. I can do this work.
We said what makes you think so.
She said, I’ve gone to Home Depot classes. She said I feel like I know what I’m doing. Will you give us a chance? Will you give me a chance to do this?
I said, yes. It was a great decision. Virginia, what she did, she went in to this kitchen that needed a lot of TLC, if you know what I mean. It did need new cabinets. It did need new counter top. What she ended up doing was so incredible. She put in a brand new tile floor, ceramic tile floor in the kitchen. She put plantation shutters on the window in the kitchen. She put a beautiful tile backsplash above the counter top, brand new counter top, brand new sink, new faucets. She put an island in the kitchen that she found at a garage sale, one of those moveable islands. On the pantry it just had one of those vented doors. She took that off. She put a beautiful French door on there.
One afternoon she brought over all the pictures and she showed us exactly what she had done to the property. Of course, at that point, she earned her credit toward the purchase of the home.
We make it clear to people; if you do lousy work you do not get credit. The credit only occurs if you do good work. Is that a good thing?
Give Virginia a hand. Great question.
Hello, I’m Janet from Geneva, Florida. I have an interest in a free and clear house that’s in probate. I heard about it last year. I looked in to it and they were not going to sell. I’ve recently found out that they are interested in selling. The son is the only heir. I’ve been trying to contact him. He has not been returning my calls. I’m not sure if I should talk about this, I want to make a zero percent owner-financing offer which would be to the son. Do I talk to him, or do I talk to the PR who is not an heir?
A great question. PR, let’s get that out of the way, it’s a probate situation. PR stands for Personal Representative. In Florida, that’s what they have and it’s someone that walks the deal, or walks the probate through the court system. They, basically, accumulate all the debts, and they make the presentations and representations to the court. They do the filings at the court. Everything is to the letter. The Personal Representative is the one in control, not the son, at this point. Even though the son will get the deed to the property, at this point, I would be working with the PR.
I would be working with the PR on a much broader scale. I would be talking to the PR based on other properties and other deals that they are representing as well; other estates that they are representing as well. I would say we are happy to pay a finder’s fee to you, the PR, in helping to walk through this process with us. We are very happy to support you in any way in getting this done. If this deal is not going to work, please keep us in mind for anything else that you are working on. We buy houses, and let me be clear, in any condition and any location, with any kind of problems that come with them. Please do keep us in mind for any of those properties.
Will that work for you, Janet?
Yes, it will. Thank you very much.
Folks, stay tuned. We are about to take a break and be back right after this two minutes and we are going to answer some more questions for all the folks that are here in Atlanta with us today on the GUN, WGUN, 110 on your AM dial.
We’re here in Atlanta, Georgia at the Millionaire Dealmaker event. I’m so excited. We’ve been together now; this is our third day. We are learning a lot about buying, selling, and holding property. We are learning about designing deals, creating and crafting deals. These are very exciting opportunities for all of you who are interested in making real estate a business where you can be in the business of buying and holding, as well as buying and selling properties.
We have an education program for you. Those of you have joined us today who are looking to buy your first home; we can definitely help you as well. We have a program for that. In fact, I’m teaching folks all over the country how we do our program here in the Atlanta Metro area. We have successful licensees of our program in all 50 states that are doing the same program. Whether you are here in the Atlanta area, or whether you are some place else in the country, we definitely have something that can benefit you in today’s market.
Sean from ibuychatanooga.com and I’m shameless. I wanted to thank you because you have always been accessible to me. I’ve even woke you up in the mornings and weekends at hotels out of state with emergency questions. You’ve always been there. I really appreciate you always take good care of your clients.
Thank you, Sean. I really do appreciate you’re saying that.
I have a question on asset protection. I’ve got a Nevada corporation that is five years old and clean. I use it as a general partner for a family limited partnership in Nevada. I don’t use them. I was considering selling them because, after five years, they are worth quite a bit more money than I initially paid for it to set it up. I will be attending the maximum asset protection seminar but it’s not until September. My question is; is that something I should hold on to and use as part of asset protection, or is that something that is not a integral part of asset protection in your program?
That’s a good question. You know the benefit of Nevada LLCs and corporations that used to be there are not there anymore. Many of those have been carved away and through legislation and what have you, the benefits of Nevada just aren’t there anymore. You are right that a corporation that’s been in existence for a period of time does have value. It’s what’s called a shell, essentially, and that shell that’s been up and running, even without having done business, does have longevity. You might consider selling that to the people that sell those things. Another is that you could offer it to anyone who is looking to have something that’s been going for a long time.
A third opportunity, though, for you Sean, might be to go ahead and take advantage of it. That entity could qualify for some loans based on its longevity. It may be able to establish its own line of credit. It may be able to establish its own bank line and so on, trade lines of credit, because of its longevity. I would highly and strongly consider using it for that purpose. In fact, activating the corporation or the LLC and going ahead, in fact, I would suggest that you apply for something simple like a Staples card, or an Office Max, or something like that. Then, use it. Pay it off. Use it. Pay it off, and start establishing these lines of credit. Once you can show a history on three different lines of credit under the name of that LLC, the LLC can actually get what’s called a Padex score.
A Padex score is essentially a credit rating for the company. Just like you have your own credit report based on your credit rating that everyone can get, your company can earn one as well. This score, you’ve heard of Beacon Scores, and that kind of thing for individuals going up to 800 points, well, there is a scoring criteria for companies as well. If you establish a good line of credit for that company and it gets a good score, then now you can use that to qualify for loans and get yourself a good line of credit at a bank; maybe $50,000, $100,000, even more for your company. That will really help to expand your company.
It that a good thing?
That’s a great thing, thanks Lou.
This is Lance Wall from Loganville, Georgia. I had a seller who built a four bedroom, two-bath home on a large lake lot about 20 years ago. Note: the seller does not own the land but leases the land, and the lease is a year-to-year lease. Landowner will not sell or change the leasing agreement, in fact, has indicated that he may sell the land to a developer. Is this a deal at any price? Seller is very motivated.
Let’s say the seller of the home is very motivated. The seller of the land has no motivation at all. The owner of the land is in a very, very strong position. The homeowner should have never built the property on a year-to-year lease.
There is a thing that’s common, not very common, in California called a land lease. You also see them in Hawaii a lot. This is typically a very long-term lease, usually no less than 30 years, and many times, 99-year land leases. Railroads, for example, railroads often have very long-term leases on land that they have. In this situation, it’s a very precarious situation because of it being year-to-year. It’s literally renewable yearly, correct?
What a bad thing. This person who built this home, did they do it with bank financing?
I’m not sure. I imagine that’s what they got to build the home.
If they got bank financing, I would highly doubt it, actually, because there was no land. Typically, when a bank finances the land is brought to the table. The land is pledged to the lender. Alternatively, the lender sees a long-term lease, usually beyond the functional obsolescence of that home, and then they say we’ll lend a 30-year loan on a 50-year land lease, or we’ll lend a 30-year loan on a 30-year land lease. But, we won’t do it for any less than that.
I would suggest that it’s likely he either built this free and clear with his own money, and unfortunately, he’s in a bad situation right now. I would suggest that it may be to your benefit to call and contact that landowner and see if there is any way that you can work something out with the landowner.
Remember that sometimes it’s personality clashes, and perhaps the guy who is about to lose his home has had a little bit of a personality clash with the person who controls that person’s home. It might be good just to have a fresh voice on it and see if you can work anything out with your skills, knowledge, background, and experience. If we can, great. That would be a combination because you could negotiate the home and you could negotiate the land at the same time.
Is that a good plan?
Good plan, thanks.
This is Bennie again. I’m from Greensboro, North Carolina. Will you give some tips on how to handle the tenants and how to select, or handle the property management company?
Absolutely. One of the things that we offer in our company which is unique and different than other landlords offer, is we offer our clients, we don’t even call them tenants, we call them clients, the opportunity to someday own that home. They can start with us as a rental. They can start with us on a rent to own plan. They can start with us on an owner-finance program. They can start with us on a plan to grow up through those ladders.
What we do is we say, we lay it all out, and we say okay, here’s the home. What do you want to do? What are your goals? Many times people’s goals are a rental, but when we show them that some day they might be able to own that home, they get very excited. They get a chance.
Our program is unique. If they have some money to put down on the home, then we will give them credit of that original down payment towards the purchase of the home. Also, every month that they pay their rent on time, they’ll earn a credit of part of that rent towards the purchase of the home. In other words, taking care of business and doing what they are supposed to do, what all tenants are supposed to do, they are actually earning a credit towards the purchase of the home.
Another thing that our company will do is we will finance them once they’ve built up enough down payment. Right now there is an incredible opportunity because of the $8000 tax credit that they can go ahead and get in to the home with whatever money they’ve got plus the $8000. They may be able to qualify for the owner finance program. If they can’t, they can’t.
As far as qualifying, what we do is look at people’s background and experience. Where do they work? How long have they been there? How much do they earn? Their spouse; where do they work? How long have they been there? How much do they earn? We are looking at household income. We also look at other income. If they have money from the government, if they have other, such as VA benefits, if they have retirement benefits, any other income that comes in to the home, if they want us to consider it, we are happy to consider it.
What we generally do is add all of that up and take about a third of that. We’re looking at a historical perspective on the people as well. Not only their jobs, but we are also looking at where they have lived. How long were they there? Who was their landlord? What kind of relationship did they have? Did they take care of the property when they were there? I want to ask that landlord that.
In our system, the Street Smart System, we do have a complete evaluation check sheet. What it allows you to do, it’s called our Application Evaluation Worksheet, and it asks all those questions where you can actually make the telephone calls, follow up, get answers, and then give a score. There is a scoring criteria based on the answers that you find. When we are done with all the scoring, you draw a line, you add everything up, and then it tells you how high their score was. Based on that we’ve got a criterion that says if the people were 90 to 100, they are fine. They are wonderful. If they fall below that we need to look closer at some of the information they got and then we are going to have to make a decision based on that. We have scoring criteria all the way below 60 as well.
I encourage you to look at that, Bennie. I think you’ve got our property measurement system, and I encourage you to look at all the aspects of it because it tells you exactly how to evaluate a client from start to finish, and how to work with them if there are any challenges as well. If they can’t pay, any issues like that. If they run in to a bump in the road, if they can’t afford the rent, anything, we take care of that. We explain to you exactly how to work with those people and how they might be able to solve their problem as well.
Thanks so much, Bennie. Give him a hand.
We are going to break right now.
We are on our last segment of our Street Smart Investor Show today and got People from all over the country learning about buying, selling, and holding property at our Millionaire Dealmaker Event where we teach folks all over the country how we buy, sell, and hold property, and how others can do it as well.
If you are joining us today as an investor wanting to buy and hold property, and sell it, we can help you with that as well. If you are joining us today and you want to own a home of your own, we can help you with that as well. You can either buy it yourself or we can work with you through our system, here, locally, in the Atlanta area, and we can sell you a home or rent you a home, or whatever you want in between. Let us know what we can do to help you. You could become a member of our VIP program.
Let me explain the VIP program. We’ve got so many properties coming in lately that we found folks finding out about the properties after they were already gone. We said you know what. We are going to offer people who want to step up to the plate, say, Lou, we love your program, we want to be involved in your program, we think it’s a great thing that you give credit towards a purchase of a home and you are actually creating affordable housing right here in the local market. We appreciate that. We want to be a part of it. We want you to tell us about your homes that come available before everybody else sees them, before they go on the internet, before the world sees them because they are going to fast, Lou, we keep getting cut out.
I understand. We heard you. We created a program for that. What you can do is call our office, 770-939-9000. You can talk with one of our friendly staff and they can go ahead and set you up under our VIP program for as little as $500. You can put $500 down as a deposit. This is a fully refundable deposit. If we don’t find you a home, you will get your money back. This gives you an opportunity to first get any leads, any properties that are coming available; we will be adding three more properties this week to our list. Those are first going to be exposed to our VIP members. If those VIP members take those properties you will never see them ladies and gentlemen. They will never make it to the internet. I encourage you to become a member of our VIP program by calling our office or visiting our web site at www.aaabuysellrent.com. That’s www.aaabuysellrent.com and check out some of the properties that we’ve got available today.
We rented, and lease optioned, and sold seven properties in the last week. You’ve got to move quickly. They are going fast. If you like the program that I’ve been sharing with you today, then by all means, get yourself involved.
This is Bennie again. I’m from Greensboro, North Carolina. My question is how to select a property management company and what to watch.
That’s a great question, Bennie. What you are really looking for is experience. You are looking for someone who knows what they are doing, or a group that knows what they are doing. I look for depth. I want to see that they’ve got staff, that they’ve got a significant staff, and that they’ve got the ability to move property. I’m going to look for testimonials. I want to find references, at least three other investors that they have worked with recently, not people they’ve been working with ten years, I want to talk to somebody that they signed up over the last month and what they did for them. We are going to make those telephone calls personally to those folks and interview them.
How has it been to work with these people? Have you enjoyed the experience? Are they knowledgeable? Are they moving your properties quickly? How quickly are they moving your properties? How much are they charging? Have you found any surprises in the relationship that you didn’t know about before? Those are the kind of questions that come up. If they are doing a great job for those folks, then it’s likely they’ll do a great job for you.
The other thing I would be careful of is signing any kind of long-term contract. I would make sure that you have a chance to test them out. If you like what you hear, if you like what you see, then, of course, you aren’t going to go any place else because they have earned your business. I always like to create relationships with any company that wants to earn my business.
For example, even the phone system that I shared with you this week while we were together has no contract. In other words you can use it for a month. If you don’t think it’s the most wonderful thing since sliced bread you can cut it off. You are not required to pay on the program. I like to business that way. I don’t like to trap people into things long-term.
By the way, I hope you are listening cell phone companies because that’s how I feel about you guys. I don’t think you are so great in the world because you trap us into these long-term contracts we don’t like. I look for companies that don’t do things that way, and do business that way. I encourage all of you, when you are doing business, not to trap people either.
Landlords, that’s a little bit different situation. We have to have at least a year’s contract when you move in with us we have to have a year’s contract. There is a reason for that. It’s expensive. When we are preparing that property for you to move in, many times there is paint, there is carpet, and there are all kinds of repairs. There are great expenses before you move in as a client. We have to require you to be there at least a year to give us a chance to recoup some of those expenses. I hope that makes sense to everyone.
Thank you so much, Bennie. Give him a hand.
Sean from I buy Chattanooga again. I have a marketing question which I want to thank you on your web sites. I’ve had them for years. I just got the third one. I didn’t have the money one, but the Private Lending site is awesome. I get leads every week, every day, almost, just for having a web site. Friends ask me where do you get your web site. I said go to Lou Brown. They spend thousands, two, three thousand dollars for ones they are not happy with anyway. It’s kind of dumb, but…
Thank you, Sean. I appreciate that. Thank you for being a client of ours for so many years. We really appreciate that.
My marketing question was about social networking sites. You mentioned earlier in the seminar this weekend about utilizing it. Can you elaborate a little bit about how to best utilize a social networking site like Face Book to let people know what services you offer, what deals you have, and that you’re looking for private money, looking for sellers, too.
Absolutely, that’s a great question. We are going to have a very special session tomorrow morning with an expert coming in just to teach our inner circle that’s here at the event about that very thing. We are going to spend a couple of hours on that conversation about social networking. The short answer is that this is the new way and all of you need to get involved. If you don’t have a Face Book page, and also, My Space, Twitter, and all that stuff, depending on how much time you have, you should get that.
Face Book has quickly become the gold standard in the social networking arena. What happens is that you are able to connect to other people that are not only in your family community, but in the business community as well.
There is another web site called Linked In, and that is more of a business community social networking site. What happens is that you connect with other businesses that are interested in what you are interested in. Then, you are able to connect the folks that you have resources for, and they have resources for you.
My Space is a little bit different type of category. It’s less business oriented and more personal oriented. Either way, once you can connect that way, what I’ve found so much fun, and if you haven’t become a friend of mine on my Face Book, go to my Face Book page, Lou Brown, and become a friend. What we’ve found is that we can communicate quickly on social network. We can say something and its right there. When you get a chance to look at it you can review it. I like that.
I like the fact that I can post general thoughts without having to have a very detailed explanation of it. I like the fact that if something is happening in your life you can post it. I can know about it and don’t even have to respond to it; just know what’s happening in your life. It’s a lot of fun. It does take time, so for you investors that are getting involved, I would say I caution you to the amount of time that it can take. I also caution you that it can be a distraction away from the business that you should be focused on.
There are lots of folks on your Face book that might know someone that might need to sell a home, or buy a home, or rent a home. That’s another connection that you can make from a referral basis.
Give him a hand. Thank you, Sean.
Russ Urchant from Delaware, Ohio. Lou, if you have someone that has a home with you as Agreement for Deed, they have a certain percentage that you’ve negotiated with them, they go out, and they clean up their credit, I know that you like holding properties for long-term. If they get to a point where they could go to a bank and finance and therefore you’d have nothing left coming in from that house, do you ever renegotiate the interest that they pay you?
It really depends on the situation; the house, our finances at the time, you kind of look at each situation on a case-to-case basis. If my client can go to the bank and get a lower interest loan, I’m going to encourage them to because that means, at that point, that they really have cleaned up their credit to a wonderful degree. Fine, go ahead and take advantage of the market. They will pay us off, we’ll go on down the road, and we’ll buy three more houses. It’s okay with us if we do that.
What I’m looking for as an investor, is I’m really looking for long-term relationships with my clients. What happens is if we can move them in as a rental, and eventually offer them a rent to own, and eventually offer them owner financing, they can have in-house relationship with us, long-term. I like that. I think it’s a wonderful opportunity to create a family atmosphere.
What happens with that, ladies and gentlemen who are listening in who are investors, what happens with that is they bring you their family and their friends, and other people that are looking for homes over time. It becomes a great relationship because if we also offer referral fee. We offer to pay people when they bring us a client that we otherwise would not have known about. Isn’t that a good thing?
Even if you are not part of our program you can bring us referrals. Is that a good thing? You should always spread the word out there in the community and let others know what you do. Spread your cards. Spread your word. Let others know your web site. Find out all about you. You should have buying, selling, and web site so that the world can find out about the properties you have available and the programs for buying properties as well as your program for selling properties.
We’ve got it all built in to the Street Smart System. I encourage you to find out more about the Street Smart System by going to www.streetsmartinvestor.com. Thank you.