When we do deals in real estate, we’re talking money and profit. Money is one of the main reasons why we got into real estate, and it’s one of the most important factors in a real estate deal.

So it’s not ironic that one of the main hurdles that a real estate investor has to overcome is in finalizing the property’s value with the seller. Agreeing on the price of a property to be sold is a challenging situation. As the real estate investor, you have to think of a way to have your price considered for the property. You’ll be the one investing money in it, after all.

But it’s not always an easy flow when considering the price for the property, especially if your price is not what the seller had in mind. There are times when the seller’s price is lower than yours and would only give you a small profit at foreclosure.

It all boils down to how you can get the sellers to go with your prices. And there’s a way to have the sellers agree on your price without having to get on the seller’s bad side. You wouldn’t want the sellers to turn away from you when you force on them a price that may seem unreasonable to them.

All you really have to do is to make your price the reasonable market value for the property. Explain the breakdown of your total price to the seller. Let the seller contemplate on the real value of the property as you perceive it to be.

Step # 1: Ask for the seller’s price on the property.

Don’t directly state your price. Consider all odds first. The seller has his reasons for setting up a price. It’s good for your business relationship to hear the seller’s side of the deal. The last thing you want is to blow off the deal so you don’t want to force things on the seller and make him feel frustrated with you.

Step # 2: Agree with the seller’s price… for now.

You read it right. Agree with the seller’s price… for now. It’s a nice feeling when an idea is appreciated. The seller went for the price he thought was reasonable, and it is to be commended, even if it is has a big difference with your own price evaluation.

Step # 3: Bring in your price to the picture.

After taking the seller’s price into consideration, it’s time to bring in your price! Oftentimes there will be a great difference between your price and the seller’s price. You will have to give the breakdown of your own price then.

Enumerate to the seller the expenses, the discounts, and the minuses. You can include an investor discount of 10-20%, stress out the fix-up and repair costs if the property is really in despair, include the commissions, and other factors that have made up your market price.

Step # 4: Make them feel that what the seller is doing makes sense.

Throughout this whole process, the one thing that you have to remember is to make the seller feel like all that he’s been doing has made sense and is reasonable. Getting him or her to agree on your price will be at times frustrating. But you can still foster a good relationship with the seller when you don’t make him or her feel like he or she was mistaken on the market value of the property.

The property is fixed up, and the price is being decided. But one thing is absolute in getting the deal done and that is to maintain a healthy business relationship with the seller.

Any real estate investor would know that, in the niches of real estate business, the hidden foreclosure market is one that contains the biggest deals. But while it may have the biggest deals, the foreclosure market is very competitive, which is why in general investors stay away from them.

But there is still a way to get deals in the foreclosure market without having to fight it out. All you have to do is look for that chance where you can convert a lead into a deal, that opportunity which actually has always been there.

The first thing you have to remember is this: Every lead is sacred.

Regarding foreclosures, you will find that people will do either of three things:

1. Pay back and escape foreclosure
2. Find a buyer
3. Claim bankruptcy

Most would choose the third option and claim bankruptcy. And what most of the real estate investors would do is to stop following up on these properties. Foreclosure has stopped, after all, and nothing can be gained from it anymore.

One thing that you have to realize, however, is that most people who claim bankruptcy don’t always stay bankrupt. A lot of reasons can be found for a person to be removed from bankruptcy, the primary of which is that they cannot comply with the terms of the bankruptcy. And when they’re pulled out of bankruptcy, foreclosure would start all over again.

This would be the chance for real estate investors to get in the hidden foreclosure market and get on top of the competition — the foreclosure gap. The foreclosure gap can be referred to as the time when the foreclosure has stopped because bankruptcy was claimed to the time when foreclosure starts again because of the removal from bankruptcy.

Every lead is sacred.

If the general population of real estate investors has dropped leads that led to bankruptcy, you can be among the few of those who’ll try a different tactic.

Follow up on the lead even if the person has filed for bankruptcy. You can send cards or notes that you will still support them in case they’ll need a hand in the future. In the end, when the bankruptcy claim has been lifted and the foreclosure starts again, you will be among the very first to be called in to get the deal done.

The key here is to continuously build a relationship with your leads. While giving yourself a lot of openings and a lot of chances, you’re also giving them a way to call you when they’ll be undergoing for a foreclosure again.

The situation has also become a little ironic in this case. From a market wherein there is a lot of heavy competition, you have actually turned the tables around and found yourself in a niche that has no competition at all! This is because almost nobody follows up on these “bankruptcy” cases.

Every lead is sacred. The hidden foreclosure market is proof of that.

After months of working as a realtor of abandoned properties, you’ll realize that driving down streets and looking around just won’t cut it. You will find that you will only be wasting your time, money, and energy looking for abandoned properties when you can do so much more with less!

So maybe you made an ad, put up some fliers, and set up some posters. But think it over again. What else could you do with the same amount of money? What if there was another way wherein you could have used your budget better and wisely? Would you have still gone for newspaper ads and posters?

Maybe you won’t, because there is one way where you can hit not one, not two, but three birds with one stone! Not only will you be able to advertise your business, you’ll also be able to find customers and abandoned properties. Plus, you won’t have to put in much effort looking for abandoned properties on your own!

How’s that? How do you do that?

Let’s say you’ve set aside $200 for your advertising costs. You could have an ad and some posters made with these. But the disadvantage of this strategy is that you may not be able to reach your target market. Not everyone is interested in reading about real estate, especially not about abandoned properties. What’s more is that your target market is not the only market you have to reach to garner customers! A passer-by can just point you to an abandoned property he or she knows of, and he’s not even part of your market.

Another disadvantage of this strategy after you’ve spent your $200, there’ll be nothing more you can do to get more clients. What happens when that ad or poster is gone? You’ll have to make new ones, and that’ll be another hole in your pocket.

Now try this.

First, make some forms wherein you can generate information about an abandoned property. Make sure you get the name of the person who refers you to that property, the location of the property, and other information.

Then get your friends, neighbors, and relatives. Ask them for a little favor. All they have to do is give the forms to their acquaintances and see if they know of any abandoned property around the city.

Here’s the catch for them: For every lead about an abandoned property, the person gets $10.

Not only will that give some motivation for people to look for abandoned homes for you, you’ll have many of them help you look for abandoned properties at the same time! This will certainly help you with your time, your gas, and effort. It also optimizes what you can do with $200.

Do the math: With $200, you’ll be able to get 20 leads. Surely, these leads will give you many sales and big profits, and when the profits are in, your $200 will be just a small thing. You don’t have to scratch your head thinking over a catchy title for an ad or flyer. All you have to do is generate information by giving forms to people and offering incentives.

Another benefit of this strategy is that it still focuses on the one idea that’ll generate you more clients: You got abandoned properties coming at your way! While giving off forms and incentives, you’ve also spread the word that you’re investing in abandoned properties, properties that many owners no longer want to own!

In the end, everyone wins. You got to advertise, your leads get some cash for the information, the owner of the abandoned property is rid of the burden of having a property that will only cost him mortgage payments, the property gets sold… and you get a big profit!

Picture this: a two-floor building looking decayed with faded brown paint, windows barred by planks of wood, lawn with grass at least 5 inches tall, bushes in a corner that has grown and never been trimmed, with no one staying in it.

What would come to mind as you drive down a street and see a building like this?

People would think, “Oh, it’s a rundown building with no one in it. Just ignore it,” or “That’s not our problem, leave it alone,” and other such thoughts. But as a real estate investor, you should be thinking, “Hmmm… How much will I get from this?” and it blossoms to another thought, “This’ll be a big profit for sure!”

Now why is that? What could you, investing in real estate, possibly do with an abandoned property that no one would want? Even the owner’s not interested in it anymore. How could something like this reap you a big profit?!

Normally, what someone would do to an abandoned property would be to fix the property up and let the realtor sell it. But the problem comes when there’s no money for the repairs. What happens is that the property is left as it is, and of course no one would want to buy a property that’s obviously not properly taken cared of and abandoned.

People may think that abandoned properties no longer have any value and is not worth the time and effort. But that is absolutely not true! Abandoned properties are one of the sources of big profits in the real estate industry!

Point # 1: There are many abandoned properties around the country.

A lot of properties are now vacant and being abandoned. These properties include condos and apartment buildings. What’s more is that they’re spreading everywhere. The city is slow to get rid of vacant buildings and abandoned properties. Some owners just don’t know what to do with them anymore and just leave them alone while paying for the property’s mortgage.

Point # 2: There is pressure on the owner to sell the property off.

As stated, some owners don’t know what to do with their abandoned properties. And the longer they hang on to the properties without doing anything about them, the more the pressure comes to them. There’s pressure from the neighbors; the owner has to fix the property because the abandoned property is just bringing the neighborhood down as it is with its unclean and broken setting. There’s also pressure from the government because a certain level of safety and cleanliness has to be maintained in every neighborhood. And abandoned properties generally do not add up to these standards.

Point # 3: Abandoned properties do not generate any income.

They don’t. What is worse for the owner is that he or she still has to pay the mortgage expenses of that property. Relieving him or her of the burden of having to pay the mortgage of a property that no longer gives him income is one of the good things you as a realtor can do!

Point # 4: There is very little competition!

No one can say if this fact stays as a fact in the future. But presently, it is. There is very little competition in the niche of abandoned property selling. Very little people care about abandoned properties, after all. Even the owners think that the properties are just a burden.

Point # 5: You’ll be making more money, not to mention have more free time on your hands, when working as a realtor rather than sticking to your present job!

Tired of waking up and getting out of bed everyday early in the morning just to cram and go to work? Are you currently fighting with traffic just to get to work on time? Are you required to work at least eight hours a day? Do you have a superior office that doesn’t even appreciate all the effort you’ve put in the job? And just how much is your salary right now?

Answer the questions and compare your answers to a realtor’s. A realtor would answer: They’re all irrelevant. Why? Because a realtor works according to his own schedule. No work hours, no superior officer, not much pressure with traffic… and a very satisfying salary.

All you have to do when investing in abandoned properties is to drive down streets, look for an abandoned property, find out who the owner is, make the deal, do the repairs, analyze the price, and then sell it! All these can be done at your own pace and at your own time.

So what could be a better deal than investing in abandoned properties? Not only are helping the city clean up abandoned properties and helping others to find new homes, you’re also putting money in your own pocket! And it’s not just a small sum.

Like all kinds of business invitations, it is important for you to make your invitation to private lenders interesting and fruitful. You’re the one making the first move, and first impression counts. Private lenders don’t just loan you money without testing you, after all.

Who Are You Gonna Call?

You’re looking for private lenders, people that will loan you money. So you’ll be targeting people with money. Your invitation, therefore should appeal to your target. Flyers or a website can be a good way to advertise for a private lender. But if you want to save the energy of putting up posters and flyers and the time to put up a website, you can rely on much more simple means of advertising like newspaper ads and postcards.

When and Where?

In making that newspaper ad, the first thing you have to do is make sure you’ve put down the important details. The place, the date, the agenda should be there, of course. Make sure it can be read easily by anyone, especially those with sensitive eyesight.

You might want to skip listing the time to get those interested to call you up. That way, you’ll get an idea of how many will be coming to your luncheon. You also have the chance to chat with the callers and start with marketing yourself to them with that call.

The Title Comes First!

Like every ad, a catchy title is needed. Make it interesting, too. Don’t just flat out state, “Private Lenders Needed” at the top of your ad. You can say something like “Tired of Low CD Rates?” or “It’s All About the CD rates…” Try to put yourself in the shoes of a private lender and see if the title you chose will catch your attention.

Who’s Buying Lunch?

Indicate who’ll be buying lunch! In most cases, it’ll be you. It’s your show, your presentation, and you’re the one asking for them to loan you money. You can control your budget by confirming those who’ll be coming to your luncheon. Call possible private lenders that are coming, ask them if there are any other private lenders that they might bring along, etc.

Share a Short Success Story!

A story about one of your private lenders that made a big deal that ended successfully would be inspiring and encouraging for the people you’re inviting. You can use this either for your ad or postcard. It would certainly get the attention of willing private lenders.

Bring In the Benefits!

If a person is going to invest money in something that could be risky, he or she would want to know what he or she’s going to get in return. He or she will also want to know if it’ll be a good deal for him or her.

You will mostly share the benefits of private lending to your audience during the luncheon. But putting in at least one great benefit on your ad or postcard will encourage them to give you a shot. Don’t put in everything in the ad. Leave some for your presentation during the luncheon.

Your invitation is what will bring you an army of private lenders ready to loan you money when you need it for your real estate deals. Before you can see them, before you can present your business to them, you have to get them to come to your presentation. This is why you can’t be careless with your invitation or your ads. From the very beginning, show them that you’re serious and that you can be trusted in doing business with them.

There are many resources from which you could ask for money or funding. The most commonly used resource is the bank. Others use hard money lenders, while some prefer to do creative financing or prefer their line of credit.

But there is one resource that can prove to be more advantageous and more beneficial to you. In fact, it can be considered to be the best, the simplest, the cheapest, and the safest way to get funding!

Private lending is a growing trend in the financial realm that is slowly being embraced by many. It’s a very simple process and you won’t have to go through all the hassles and headaches that a bank or a hard money lender does.

Why is private lending better?

First off, you have to recognize the disadvantages of using the bank or hard money lenders as your funding resources. With banks, for example, you most probably will lose the best deals that you want. There are also all those down payments, points, loan fees, and all the paperwork. It takes up a lot of time; it could take months for the bank to make a decision about your deal and by then you might have already lost the opportunity to acquire a property!

There is also no definite relationship with you and the bank. The bank would see you as just one of the many thousands of people wanting to get a loan from them, and with this perception could just flatly refuse to help you. Banks also makes some changes in their rules regarding loans.

You also have to meet important requirements for the bank to consider lending you some money. If you have a poor credit, it’s a “no.” If you have too many properties and too many deals, it’s another “no.” If your income doesn’t suit the bank, then it’s a “no.” If you leave or quit your job, you’ll get another “no.”

While banks are very strict and very time-consuming, hard money lenders will squeeze you dry and empty your pockets. In doing deals with them, you have to give a down payment of 15% and you have to pay the money back in twelve months. You’re also going to be covering the expenses for renovations and repairs. By the end of the deal, at closure, you’ll end up with less money while the hard money lenders have more.

With private money lending, you’ll be able to set up and close your real estate deal at a simpler and faster pace. No hassles, no forms, no sweat! With private lending, you are in control of your finances, have no monthly payments, and you have the ability to generate massive funding. What’s also great is that it fits every type of deal there is in real estate!

It’s quite simple and easy. It doesn’t require a lot of work and you just need to make a phone call once you’ve gathered private lenders that can help with your funding. There are no more fees and no more loads of paperwork. All you really need to do is gather up private lenders to a luncheon meeting or dinner appointment (whichever would suit you), explain to them your program, answer their questions, and make a professional relationship with them. Once everything is established, an army of private lenders and funding will be an easy reach for you.

The most important reason why it’s better to use private lending in your real estate deals is that you are in total control of the money. Working with banks and hard money lenders won’t give you that satisfaction because they have too many rules and requirements. With banks and hard money lenders, it’ll be like you’re begging for money. With private lending, and with the relationship and trust that you’ve established with the lenders, it’ll be just like taking out some of your savings since you know that they’ll just be there to help with the funding if you just call them.

Ultimately, it all boils down to being in control of the money and the situation. With private lending, you are.

As a real estate investor, it’s important for you to have definite funding and reserves. Real estate requires a lot of time and money, after all. One of the most used resources of funding for real estate deals is private lenders.

Private lenders have slowly become a very important factor in real estate deals. Not only are they easy to work with, you can just reach them any time and you get your funding with no hassle and paperwork. Private lenders work directly with you and you don’t run in circles just to get a loan from them.

Finding private lenders isn’t that hard to do. It’ll all depend on how you approach them, and the right way to approach them is to be open about your deals and how you go about with your programs.

First stop is posting ads and advertising to generate leads and audiences to your luncheon meeting (it can be other forms of relaxing conferences and not a luncheon). It is recommended that you target people who have the necessary means to give you a funding. Go over the yellow pages or the Internet. You can also call a list broker for names of private lenders. It is also better that the people you target have CD’s, or Certificate of Deposits.

Once you’ve established your target or leads, send out an invitation for them to join your luncheon. You can also send some information about what your luncheon is going to be about and when and where it’s going to be held. It is advisable that you don’t put the exact time for the luncheon. You can just put in the date and the location. This is because you would want your audience to come of their own free will and not pressure them to come at this exact hour. Keep a relaxing atmosphere as much as possible.

Make sure you get an approval for your ads, of course. You should also avoid all that “I guarantee you” and “low risk” talk. Businesses, and real estate deals, are mostly made up of risks and no guarantees. You should be as truthful as possible to your private lenders if you want to have a smooth relationship with them.

Settings like luncheons are much more preferred when finding private individuals. This is because a lot of synergy can take place in a luncheon. It is better than a one-on-one conversation with a potential private lender. The audience will be able to take notes and comment on your presentation, and share ideas and knowledge with each other. You’ll be able to liven up the mood better and show them your confidence and capability to control deals. The conversion rate would be higher and you’ll have a lot more private lending resources in a short time.

Dress properly and come prepared. When presenting your private lending program, you would want to be specific with your audience. Show them how you do your real estate deals; tell them which types of houses to buy, which ones not to buy, how to renovate, and so on. Stick closely to your agenda and organize what you’re going to show them and what you’re going to say.

Finding private lenders will be easier than getting funding from banks or hard money lenders. Banks have a lot of requirements and are strict with their policies. Hard money lenders can get a lot of money out of you when asking a loan from them, which is the opposite of what you would want. With private lenders, on the other hand, all you have to do is find them and build a strong trusting relationship with them. Then they’ll just be a phone call away!