Reply and question to posting on Group I - Posted by Marla Arnold

Real Estate Investing
1

Posted by John Behle on June 07, 1999 at 20:21:40:

Each dollar buys $2 equity. That’s based on seller financing, assumptions, subject to’s, etc. Bank financing is different.

Most of the time, as I mentioned below, the “create a second and a third and sell the second” technique works with these. If I have a 50% discount on a note, I can easily sell it for the cash I need or more. I create the note, find the broker to fund it and the seller gets the cash. You could even pocket the difference in today’s market - or make the paper very soft.

2

Reply and question to posting on Group I - Posted by Marla Arnold

Posted by Marla Arnold on June 07, 1999 at 17:41:58:

John,

This is in reply to: How do you find motivated sellers? Posted by you on 6/3/99 @ 19:24:20

We are just beginners in the Tulsa market. How do you offer a seller ‘full price’ for their property when you haven’t inspected it? It could be the only property on that street that is worth well below the verified prices through the MLS. Even though your written offer is subject to inspection & appraisal, doesn’t the fact that you might come back with a final offer well below the original contract price, create credibility problems between you and your sellers?

Your original pitch was “we will give you full price for your property if you sell to us on flexible terms”.

It sounds like your encouraging the seller not to discount. Confused about the whole “full price” issue. Why even bring it up? Why not just emphasis how fast the property can be moved? Thanks for your reply.

Marla Arnold

3

Good question - “Positioning” marketing example - Posted by John Behle

Posted by John Behle on June 07, 1999 at 19:20:49:

I should have gone into the details of how and why I created that ad. My strategy is to always get the first call. I looked at the other ads in the paper and it looked like a bunch of sharks. In essence you felt like you would be mugged when you entered their office.

The concept of positioning in marketing is the “position you hold in the customer’s mind”. My ad gained the best position and the “meta message” (the underlying message - un-spoken) was “I’m not like all the sharks out there.” It did generate the first call always.

Down below, in this forum I went through a little bit of the ad call, offer strategies, etc. It’s under one of the posts titled “A Question for John Behle”.

“Subject to appraisal” came in handy if there was going to need to be any bank financing. Not all of my offers were subject to appraisal, but all were subject to my inspection and approval of the interior and exterior of the property.

Let me give you an example of one that was subject to appraisal. My clause is usually worded "This offer subject to a FNMA appraisal of $XX,XXX or more. Appraisal fee to be paid by seller and reimbursed by buyer at closing should appraisal be $XX,XXX or more.

I encouraged any agents to preview the properties so we didn’t waste our time. One time one of my newer agents was presenting an offer. I came with her for training. The seller “Balked” at the appraisal clause. I explained that there is no risk there. If the property appraised at the $70,000 that they were portraying the value as then no problem.

He said “that’s just it. I know the property isn’t worth $70,000 - it’s only worth about $50,000 - but you’re getting such wonderful terms.” We didn’t buy that one.

I’m willing to pay full price if I have exceptional terms. As I mentioned below, if they need cash, then I discount the property $1,000 for every $1,000 in cash I have to put into the property. There’s much more information below.

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Re: Good question - “Positioning” marketing example - Posted by David Alexander

Posted by David Alexander on June 07, 1999 at 20:11:03:

You mean for every dollar you get two dollars worth of equity?

And did you end up buying a lot of houses subject to existing loans this way?

David Alexander