Private Money vs. Conventional Financing for Flips

As a borrower, you want conventional financing - for the low interest rates. Or FHA, for the low down payments. For houses you plan on keeping for rentals or living in, yes, that is true. However, for flipping houses, you are in a different game. Understanding how financing works will help you understand why conventional financing is not the preferred way to finance houses for flipping.

When you get a loan from a lender for a house, that bank sells the loan to the secondary market who then sells it again. If you pay off that loan in less than 2 years the originator of the loan may be on the hook to pay back any refunds or discounts they had received for selling that loan - thereby reducing their profit to nothing. Banks are in business to make money and if you consistently pay off your loans, the originators will stop lending to you.

If you have a line of credit, that is a different story. You can use and pay off that debt as much and as often as you like. It is designed to allow you to do that.

If you have a private money source, it is in the best interest of the lender for you to pay off and buy another property. Every time you borrow money and pay them back, you are proving you are effective in your business. They get paid and you get paid. Then, they are ready to lend once more to earn again. As long as you keep paying them back, they will be willing to lend you money.

Don't let a Single lead Get Away

As a Realtor, we are charged with getting leads for our business. Even if we are in a big company like Keller Williams or C21 or any other large company, getting your own leads is key to beating out the competition. I wanted to share this FREE report that should change the way you do marketing. The SIMS program helps you effectively generate leads. The report will open your eyes regarding how to capture leads that you generate.

Again, it's a free report, so if you do nothing more, at least read the report.

I spent the last 2 months learning about internet marketing and how to effectively generate leads. I have done a lot of direct marketing and get average results. 10 years ago when the internet started gain popularity, I knew that the internet would be the way to generate more leads. Well, today, if you've not already started to effectively use the internet, it is worth your time to figure out how.

One thing I learned is that my company website is not great. I spent a lot of money to have someone build it and it has generated maybe 10 leads in a year. Just one of my squeeze pages that I got from the SIMS program generates about 5 good leads a day for me! That's a huge difference! With just one tip from the SIMS program, I earned $900 in a couple weeks - and I didn't even have to work the lead to make a sale, I handed it off to another agent and split the commission! No driving around, no paperwork. Just a check in the mail. And the great thing is that the leads keep coming in and it takes minutes to do. Now, if I did everything that Greg taught me, it would take longer. But if I need more leads, I know I just have to implement more of his techniques.

The great thing about internet marketing is that you see results quickly. I can market in one place (for FREE) and get leads within minutes, or at least by the end of the day. Yellow pages, radio, tv, newspapers can't offer you that - the production time alone takes days or months.

So, you can see I'm passionate about this program. It's been a great tool for me and my business. I'm hoping it will help some of you increase your business as well. I believe the better we all do our business, it helps everyone in our industry.

Please, click here for the free report "Website Suck Squeeze Pages Rule" and see how you can help your business grow. Even if you don't sign up for SIMS, this report is a great FREE-BE! Click Here

Sold in One Day!

Well, the Property Launch was a total success. Sold the house that weekend! Didn't have a huge flood of people, but the buyers - people that mattered - did show up.

I had staged the house minimally - a few floor plants so the rooms weren't completely empty, bought the plug-ins for nice smells, baked cookies and had jelly beans for the kids. I also put out a flyer about the $8,000 tax credit and everyone took one of those. Don't forget to tell people that you just have to NOT have owned a home for the LAST 3 YEARS to qualify.

We got a full price offer on this beautiful little remodel. As the owner, I offered $2,000 BTSA, 50" plasma TV, home warranty and $2,000 towards closing costs. For a little $120K house, they were good incentives. The price compensated for the incentives. For a change, we weren't the best price, but we certainly were the best product.

Try to get your sellers to offer incentives, while keeping within $5,000 of the "right" price for the house. With the right marketing you'll get it sold fast - even if it's not a foreclosure!

Open House Marketing

We are preparing for our first open house in Deer Park, Texas. This house was completely remodeled by Rent Ready, a contractor we found in Lifestyles Unlimited, Inc.
We have a couple fronts we are working on to get ready for this. 1. The kitchen is not complete yet and the beautiful vent hood we ordered that we were expecting Wednesday will not be arriving until Thursday. 2. We are spreading the word about the open house using techniques from the SIMS training I took with Greg Clement.

The first issue we have is that in the kitchen, the space for the vent hood is smaller than usual, so we had to get a special vent hood. Not the same old under the cabinet will work...no cabinet. To add some sizzle to the house, we splurged and ordered from Euro-Kitchen a lovely high end vent hood. According to the website, it should take 4 business days to get here, so we were expecting in on Wednesday. Now that it is in route, it will arrive Thursday - in the northwest of Houston - far from the house. Now I need to work out with Rent Ready to get it installed 8 AM on Friday or Thursday evening. Why? Because we have an agent open house on Friday at noon! I have no idea today how long it will take to install a vent hood, I'm hoping 1 hour or less.

The second front we are working on is marketing. I love marketing!
- Email
- Postcards
- Press Releases
- Talking House
- Videos
We have sent out an email to the top producers in the Houston area to give them a heads up on the open house. I also have prepared a press release that I am sending out to TV, Radio and Newspapers. Why do they care? Because we are giving up to $500 to a local school right down the street from the house. For every family that shows up, we will donate $1! I'm not sure which media venues will announce this, but even just a couple will help. I also spoke to the principal of the school and she is spreading the word to her staff, who will hopefully spread the word to everyone they know.

I am creating videos to show the house, putting the house on the MLS today, putting together a before and after portfolio for the agent open house, creating a flyer about the $8,000 tax credit to have at the open house, finding a few items to dress up the counters and bathrooms, and making a flyer for the house which shows comps for the area.

I am not using a Realeflow website for this promotion, which may be a mistake since Greg is having a fun contest for high traffic. But I need to see the traffic that my marketing is generating and at this point, I can't do that with Realeflow websites. I believe they will have that available in the future, but I'm living this today.

Realeflow and SIMS

Working on implementing all the SIMS system is a time consuming challenge. In between doing everything else that a real estate investment company needs, now I need to implement more tasks.

After 6 modules and nearly 40 hours of trainings, (which I still need to catch up on) I am working on the task of how to most easily and quickly implement all the great tools Greg Clements of SIMS has provided.

Upside is that once these internet tools are implemented, it will increase our lead generation, improve our internet presence every day, and require less and less time and the power of compounding marketing takes place.

For example, 2 months ago our website was in the bottom 20% as far as website rankings. It is now in the top 40%! While we may not be exactly where we want to be today, we are steering in the right direction to get to the top.
One of the great tools that we are being able to use now with Realeflow is auto responding to emails and drip campaigns. Auto responders are when someone signs up at your website and your website sends them an email as soon as they hit "submit." Drip emails are the emails that automatically follow up after the first email. You can determine the frequency of the emails that get sent, the content of the emails and the quantity. With Realeflow, they have already created a number of auto responders for you to use. You just need to personalize it for your business information.

If you are a serious investor, you need to check out RealeFlow.