Posted by Tim V. on November 06, 2000 at 11:11:36:
Merle,
Thank-you for your response. I am in Ontario, Canada. We use standard mortgages and liens, etc.
A good day to you!
Tim V.
Answering some email questions … - Posted by Merle
Posted by Merle on November 03, 2000 at 09:15:33:
Concerning the relationship with the investor (lender). We take title to the property giving the investor a Deed of Trust securing his/her/their note. The investor is not on the title to the property, but is protected by the recorded DOT. We are not really “in the middle” … we are the property owners.
Our Buyers handle all the maintenance. Contract contains a provision stating their responsibility for maintaining the property. We occasionally drive by for an exterior “inspection.” If we see a possible problem, we notify them by mail of a possible formal inspection. Never had a problem.
Investor is not involved in the casualty policy on the property except to be named as the Mortgage holder. Our Buyers do carry renter’s coverage, at their option. We are the owners, therefore no protection for our interest is necessary.
The question was, “are there any “extra special” clauses that must be included to accomplish a smooth transaction?” Not sure how to answer that question. Let me think about it … or perhaps, you might restate the question. You mentioned the “escrow agreement,” but not sure exactly what you are looking for.
When the Buyers exercise their option to purchase, we notify the investor as soon as we know it will definitely happen. We give them a choice of taking the money or reinvesting the money on the next property we buy for that amont of money. Some will add additional funds to the payoff balance to make the next loan. Very rarely do they take their money.
How difficult will it be for a brand new real estate investor to convince a potential investor to loan him/her $50-$75,000 for a purchase? The answer: VERY DIFFICULT!
That is, for most people. It was very easy for us from the beginning. BUt, as I said in an earlier post, we had years of experience in business previously and I know how to sell. Pat says it should be more accurately called “persuasive communication.”
Most people tend to develop pre-conceived ideas as to their limitations … their inabillity to do more than the average. This severaly limits their opportunities in life.
Appealing to folks who have money in a “safe” place because they are concerned for its safety will challenge negative thinkers way beyond their reach.
Yes, you can do it … but, only if you look past the typical thought processes of the average person.
A story I once heard about a man who went to England to visit a friend, a farmer. As they walked around the farmer’s home, the man noticed the farmer’s cow stretching their necks trying to see over a rock wall.
“Why are those cows stretching to see over the wall?” he asked the farmer.
“I guess it’s because they can’t see thru the wall,” came the answer.
Learn to see over the wall … you will see things most people never dream about.
Have a GREAT day … TODAY!
Merle
What is a Deed of Trust? (nt) - Posted by Tim V.
Posted by Tim V. on November 05, 2000 at 13:47:40:
nt
Thank you Merle… - Posted by Brad TX
Posted by Brad TX on November 03, 2000 at 15:25:11:
You answered couple of my questions in your post. Thanks!
Brad
Thank You. You’re MOST Generous! (nt) - Posted by Pic (MI)
Posted by Pic (MI) on November 03, 2000 at 13:48:20:
(nt)
Follow-up questions - Posted by Drew
Posted by Drew on November 03, 2000 at 12:22:16:
Merle,
Thanks for another very informative post. Would you mind following up on a couple of thoughts?
As far as knowing how to sell is concerned, do you have any recommendations for Sales materials (e.g. books, tape sets, etc.)?
In regards to "Appealing to folks who have money in a “safe” place because they are concerned for its safety will challenge negative thinkers way beyond their reach. " What are some of the arguments/ideas (e.g. secured, personal guarantee, business experience, etc.) you used to show your investors the advantages of lending to you?
Thanks for your help Merle!
-Drew
Re: What is a Deed of Trust? (nt) - Posted by Merle
Posted by Merle on November 06, 2000 at 07:17:05:
The Deed of Trust is used in some states to secure the loan from the borrower to the lender. Other states use a mortgage … probably the case in your state. My apologies for not being more clear.
Merle
Re: Follow-up questions - Posted by Merle
Posted by Merle on November 05, 2000 at 06:04:24:
Wish I could be more helpful concerning the sales material to study. I have not kept up with “who is writing what” for several years. I used to read just about every book I could find and listen to all the tapes I could get.
Someone once said, “you should become a student of, not a follower of.” In all my research on any subject, I try to look for the new ideas, confirm old ones, and stir my own creative thoughts. I’ve learned from the newest sales person as well as the seasoned pro.
Listen, listen, listen. Every prospect will, at some time during the conversation, tell you exactly what you must do to sell them. They will disclose their needs and desires.
My first sales experience was with pots and pans, door-to-door. Long time ago. I was told that you should learn to sell everyone you called on. That sounds good … highly impractical, however.
But imagine this. The folks you call on have been planning and saving for years for a (let’s say) new boat. They are close to reaching their goal. They are already thinking about next year’s vacation using the boat. They worked hard to save the money. They’ve sacrificed.
Now, here I come selling something other than a boat. To make the sale, I have to talk them out of buying the boat for a while … using that money to buy this product. That can be extremely difficult!
Two choices … convince them they don’t need the boat or, convince them they need this product more. Suppose I do either of those and they later decide they made a bad decision. Guess who they blame for the bad decision … certainly not themselves. They blame that sales person who talked them into doing it.
For my long term success … to build a good reputation and encourage referrals/repeat business … I must learn to analyze each prospect to know what they need, should have, can afford, etc. Then, I sell with full confidence of helping that customer … no concerns at all of any future problems.
My point … I would study any sales training information that leads you to making sure that if you make the sale, everyone receives the fair and correct benefit from that sale.
Once you begin learning to sell, you hold a distinct advantage over the prospects you attempt to sell. They do not have any opportunities for learning how “not to buy.” Be careful how you use that advantage.
In convincing someone to loan you money, you must be sure the offer you propose makes sense … in today’s econonmy … in your geographic location … for your prospect’s needs. Everything you write or say must be slanted in terms of benefits to your prospect.
Then, you must somehow offer some history of your “doing what you said you would do” to show them they can trust your word. This could be a testimony someone else who loaned you money … even your bank, loan company, etc. That’s why the banks check your credit. The private investor cannot run a credit report so you have to give them simiar info. Keep in mind that they don’t understand formal credit reports.
The common sense of a solid residential real estate loan convinces most people. They have heard all their lives that real estate is the most stable investment. While that is not always true, that is what they believe. You must make sure that what they believe, in doing business with you, remains absolutely true.
Whatever image you project … no, more correctly, whatever image they perceive of who you are and what you do will determine their decision in doing business with you. Do you come across as honest and above board? Would they welcome you into their home?
One of our investors recently asked if I would act as temporary executor of his affairs. Managed to get his cousin to do it instead.
Out of time for this morning. Have to get ready for church. Hope this makes sense and answers some of your question.
Have a GREAT day … TODAY!
Merle