Struggling to Get Started

Lesson Learned: What a Failed Deal Can Teach You

Scott Costello — Thu, 26 Jan 2012 14:49:31 +0000

Investing in Real Estate is almost never easy and many times you learn your most valuable lessons by deals that have fallen apart. The only real hope is that these lessons are not expensive ones, but many times they are. You can have all the mentors you want or have packed your brain with as much knowledge as possible and that still doesn’t mean you will escape the school have hard knocks.

My Lesson

Deal #2 is officially dead! After 2 weeks of calling the sellers trying to figure out why we haven’t heard from them after only getting the addendum signed (not the contract) we finally decided to call the attorney and got our answer. The sellers backed out because we lowered our price ($2000) from our original agreement (the one that they backed out on). They really needed 40k but we just couldn’t offer that to them.

The consequences for us are not huge…

Lost $75 for the title search that was performed
Lost a potential $5k wholesale fee
Had to inform our buyer the deal fell through (potentially lowering our credibility slightly)

The lessons learned though are valuable…

We learned we need to be a bit more forceful when it comes to getting the contracts signed. As the saying goes “Strike When The Iron Is Hot” applies here. What happened is that we gave the sellers to much time to think about the deal and our offer. They got cold feet.
We learned a little about human behavior. When sellers stop returning phone calls all of a sudden, it means they are getting nervous about the deal. Motivated people will be sure to stay in contact and not give you excuses for “taking so long to call back”.
Build up good rapport with the seller. The deal will go much smoother if the seller trusts you and feels comfortable talking about what they are thinking. I believed we did this, but I guess we didn’t or in some cases this just isn’t possible depending on the seller.

Even if Deal #2 is officially dead, we plan on following up with them next month to see how things are going. Our buyer is still interested if we can rekindle the fire.

What is your experience with sellers who suddenly stop communicating with you? How do keep the lines of communication open?

Marketing Monday: Planning Out My Year

Scott Costello — Tue, 17 Jan 2012 15:45:58 +0000

This year is going to be a hectic one for sure, so one of my early goals was to create a schedule for all my mailings this year. Last year I basically decided what to send out at the beginning of the week. I’d sit at home on Monday night and figure out how many mailers I wanted to send, see which of my current lists needed a 2nd or 3rd mailing and create those. If there weren’t enough, I’d pick a new town, pull that list and create that mailing. Some weeks it was harder then others to come up with enough mailings but I managed to make it work. This was however a disorganized system to say the least. I wasted a lot of time thinking about what I should be doing next instead of doing.

I can’t afford to do that again this year so I spent the last week looking at SI Lead Manager, the county tax records and the New Jersey Census data to come up with my 2012 Schedule. Here is the basics for how I determine my schedule…

Current Campaigns

I took a look at the calendar in SI Lead Manager and made note of all the 2nd, 3rd, 4th, etc… mailings that where already planned for 2012. I then transferred them to my 2012 Schedule Spread Sheet based on the week they were scheduled to go out.

NJ Tax Records

In my weekly phone call with my partner, we discussed which counties we were going to market too. I used the tax site to then pull out all the towns in each of those counties and wrote them down. I’m sure I could have used other sites to get this info, but NJActB.org I knew gave me that data so I went with it.

I then cross matched these towns with the my current campaigns and marked in green which towns I’ve already started mailing too. This was also a great exercise as it helped me see which counties we were concentrating on the most. We weren’t has targeted as I once thought.

Median Home Values

Because of our buying strategy we don’t want to target any homes worth more then $500,000. Knowing New Jersey, there are plenty of towns that average well above that number and we don’t want to market to them. This led me to look up the median home values for each town. There are a few sites you can do this with…

Trulia Home Prices
Government Census
MLS – Must have Agent Access (at least for gsmls)

I found the median home value for every town in our targeted counties and then eliminated all those towns that had a median value of 450k or higher. Now I could easily see which towns fit our criteria and I can put them in our schedule for this year.

Here is a glimpse of my schedule so you can see what I’m talking about…

I really think this schedule is going to help me out through the first few months of the baby era. I also think that the research and planning will definitely make a huge impact on our results as well. We used to guess as to which towns were good to target, now we will be able to look at the numbers and know.

For those that would like to schedule out your 2012, I created a word template for you all to download.

2012 Direct Mail Schedule Template

Beta 5 Tutorial #3: Editing Lead Information

Scott Costello — Thu, 12 Jan 2012 02:42:27 +0000

Tutorial #3: Editing Lead Information

It is easy to search for and edit a lead. You can search for a lead 11 different ways…

Name (first or last)
Property Address
Property City
Property State
Property Zip
Owner Address
Owner City
Owner State
Owner Zip
Phone Number
Email Address

To view a lead’s detailed information, simple click on their name on the grid and it will take you to their card. This video will walk you through the process as well as create some notes and even a schedule a task to make an offer.

Video Tutorial

Beta 5 Tutorial #2 – Importing Leads From Excel

Scott Costello — Thu, 12 Jan 2012 02:38:07 +0000

Tutorial #2: Importing Leads from Excel

This is the method I prefer to enter in all my leads. If I have a few dozen leads to enter into beta 5, I like to put them in an excel spread sheet and then import them.

Open up the Leads area
Click “Import” then “…From Excel”
Select Excel file to import
Match fields
Import

If you use a specific column headings in your excel file, Step #4 will auto-match your fields saving you a few clicks. Here is a template you can use to enter all your leads into…

Excel(2007 – 2010) Import Template

You can use any excel spreadsheet that you have no matter what the column headings are, you will just have to manually match up the fields.

Here is the Video Demonstration

Beta 5 Tutorial #1 – Entering A Single Lead

Scott Costello — Thu, 12 Jan 2012 02:26:02 +0000

Tutorial #1: Entering A Single Lead

One of the first things you’ll want to do after installing SI Lead Manager – Beta 5 is to put some leads into the system. One of the two ways to do this is by manually entering in each lead. Here are the steps you need to follow in order to do this…

Navigate to the Leads area by clicking the menu item.
Create a new List (you can skip this step if list already exists)
Create a new Lead

To see a demonstration of this you can watch the below video

Recharging the Batteries and Getting the Motivation Back…Check!

Scott Costello — Mon, 09 Jan 2012 15:23:38 +0000

I’m a big believer in taking some time off to recharge the batteries. I’m not talking 1 day here and there either. If you are anything like me, that really does nothing for me because my mind is still thinking about real estate on that day off. I like to take about 3 weeks off and the perfect time to do that is around the holiday season.

In the past years, I’ve continued to post on my blog during this time but I felt this year I’d take some time off from that as well. So I apologize for the lack of posts lately, but it needed to be done. Even last week I wasn’t really feeling the motivation return so I kept things light.

Taking that time off has really worked and I feel rejuvenated all over again and am ready to take 2012 by storm! It is going to be a tough and my most challenging year to date with my first child coming along at the end of March.

I am not sure what to expect with the new baby. The one thing I’m sure about is my life will change and until I can get into a routine it’s going to be tough to commit time to Investing. It is easy to make excuses and get lazy with my real estate investing business, heck who would blame me right? The opposite is true though, and I am going to come up with a plan of attack this week that will help keep me moving through the challenging time ahead.

For those new fathers (and mothers) out there, what sort of experiences did you have when your baby was first born? Did you completely shut down your investing or did you figure out a way to keep moving forward? I’d love to know

SI Lead Manager – Beta 5 has been released!

Scott Costello — Thu, 29 Dec 2011 21:23:22 +0000

Have you had a tough time managing your leads using Excel?
Did you find that other lead management software is just too Expensive?
Have you tried SI Lead Manager – Beta 4 and found it too confusing?

If you’ve answered Yes to any of the above questions, then you need to get SI Lead Manager – Beta 5After working hard for over 7 months, SI Lead Manager Beta 5 is finally ready for release. The interface has been completely redesigned in order to make it a more user friendly and intuitive software. I’ve been using ‘beta 5′ for about a month now and it has worked great!

I’ve added a number of new features as well as streamlined some existing ones. Here are some of the major items...

Interface Improvements

3 Pain view allows you to view leads grouped by Lists, Lead types, Currently Marketing to, Closed, Responded, Working, and more….
Mark leads “Top Priority” by placing a star next to them. You can then filter the leads to only view “Top Priority” items
Search all leads directly from the top of the screen by Name, Property Address, Owner Address, and more…
Easily add new Leads, Mailings and Tasks

Improved Lead Organization

In Beta 4 I always had trouble distinguishing the different statuses of leads once the person had contacted me. Beta 5 has a new organization method called BUCKETS. Once a lead responds you can place them in one of 7 buckets (Responded, Closed, Working, On Hold, Returned Mail (for undelivered pieces), Deal, Marketing)

Improved Mailing Campaign Tracking

Once you have scheduled all your campaigns, the Mailings feature will show you (All Mailings, Future Mailings, Mailings that are scheduled to be printed over the next 7 days, Mailings that have been printed and are waiting to be mailed over the next 7 days, Passed, Due Mailings,Recently Mailed)
You will also be able to filter the mailing campaigns by Lead Type or Lists
Click a mailing and you’ll see a detailed breakdown of the list. See who is Scheduled to get mail, which have been printed, which have been mailed and which have responded.
Setup Mailing Patterns so you can quickly reproduce a campaign.

Organize all your Contracts

Organize all your contracts by importing them into the system and giving them a label
Quickly call up a contract and print it when you need it
Use one of 50+ contracts donated by J.P. Moses (of REITips.com)

Google Calendar Integration (must have a google account)

Uploads all Events to your google calendar
Use google calendar to send you email notifications
View your SI Lead Manager calendar on your smart phone

Importing leads

Now you can import your leads directly from Excel 2007-2010 versions (Beta 4 only supporting Excel 2003).
Now only 3 steps compared to 5 in beta 4
Auto matching columns (dependent on excel column headings)
Improved method for manual match of columns
Duplicate Property Address detection on import (will not import)

Database Pointing & Multi-Database Support

You can share one database with multiple users if you are on a network.
Have multiple databases to add another degree of organizations

Tasks Interface

View all your Tasks (formerly ‘To-Do’) items in one location
Mark off and add new items more easily
See all your tasks on your Smart phone with the help of Google Calendar

Tasks on Calendar

In beta 4, only mailings showed up on the calendar. Now you can view all your Tasks as well.
You’ll be able to plan out your week much more easily by just checking out the calendar to see when you have to make those phone calls, comp a property or send out a mailing.

Improved Calendar interface

Each event is marked with a unique icon and a brief description so you don’t have to click through to see what it’s about.
Change scheduled dates for events directly from calendar
Print mailings by ‘right-clicking’ on the event
Expanded 3 month view to allow you to see how busy you are
Daily, 5-day, 7-day and monthly views

Data Transfer

Import all data over from Beta 4

And there is much much more!

Get it here: SI Lead Manager – Beta 5 and use beta as the password

-Scott Costello
StrugglingInvestor.com

Email Question: What Do You Think About Mentors?

Scott Costello — Fri, 23 Dec 2011 03:32:41 +0000

I’ve been asked quite a few times what I thought about getting a mentor or finding a coaching program. The main concern for those that are asking is it worth the money to join the flip vips or other coaching programs offered by various people. Most recently one of my blog readers Zac asked me this very question and after I took some time to reply to his email I thought it would be a great idea to post my answer here.

My Answer to the question…What I think about mentors and coaching programs

I definitely recommend finding a mentor, or a group of mentors where you can ask questions and get advice. I’m not big on paying for this however, at least not a lot of money. It’s also a good idea to find a mentor in your area if at all possible because at some point you are going to want them to help you analyze the repair costs of a potential deal by walking through the property with you. That was one of the biggest helps for me hands down.

My mentor actually found me through this blog, saw that I needed help and offered to help. I imagine he took the time and made the effort to contact me because he saw I was serious about making it in the business. I only got asked to the full fledged coaching program after I offered to help him out to develop his real estate webpages. He was greatful enough and when I offered to do it for free he offered to coach me. So I traded my help for his and it cost me nothing. The normal cost of his coaching program is thousands of dollars per year. I’m not saying you have to go out and look to build webpages for local investors in trade for help, but what I’m saying is that you need to prove that you are serious and willing to sacrifice to succeed.

The best way I know how to do this is to start marketing and get sellers calling you. There is no risk at that point, but you will gain experience talking with sellers. What will also happen is that you will be able to ask other experienced investors (that you’ve met at local REI meetings) their advice on dealing with the specific motivated sellers and their situations. You’ll be amazed at how willing people are to help you out if you bring up real life calls. Don’t bombard them with questions though, just ask a few open ended questions and see how much help they are willing to give. If they are the type of person that loves to help, they will give you even more then you expect. They also may say something like “Call me tomorrow and we can talk about it.” if they do, you better call them.

As long as you show up to meetings consistently you will recognize the people who know what they are talking about. These are the people you want to target and become friends with. Once they start recognizing you by name, you are in. Then it’s up to you to continue to work on the relationship by offering to help them out in some way they may need. Remember you have to give to get.

I hope my answer can help anyone with this same question. If you need more clarification or need another question answered about getting started, please feel free to contact me.

Marketing Monday: All Time Funniest Response

Scott Costello — Tue, 20 Dec 2011 14:18:51 +0000

One of the risks with sending out direct marketing letters is that you are going to piss people off. You shouldn’t take these people to seriously or feel bad that you pissed them off though. This is because I can guarantee that they were pissed off way before getting your letter. Sometimes they will call you up to tell to say that you are the scum of the earth and sometimes they will write you a letter like this one…

You wondering what it was written on like I did?

That’s right! it’s a paper grocery bag…Outstanding!! I’m still chuckling about this reply even a week after receiving it. I’m almost thinking that the person made it sound over the top hillbilly to have some fun with us. Either way it is a classic.

What are some of the funny responses you’ve gotten?

Deal #2 Update: How Patient Are You?

Scott Costello — Thu, 15 Dec 2011 14:34:50 +0000

How much patience should one have? I have plenty of patience and don’t mind waiting these people out, but is that always the best way? I’m glad our first deal went very smoothly or else I would think all deals are like this current one. Below is the time line of events and shows how sketchy these people can be. To me a lack of communication is the most infuriating thing.

September

The beginnings of Deal #2 happened September 15th when we got a call from the seller expressing interest in selling their house. By the end of September we had agreed on a sale price and we began the process of getting the contract ironed out. As you all know, we were dealing with their attorney at this point and things were taking FOREVER!

October

Spent the entire month waiting to get responses from the attorney for various questions and

Novembercontract addendum negotiations.

The End of October came and we had not gotten a signed contract and the sellers had stopped responding to our phone calls and emails. We attempted to contact them for over 2 weeks with no response. We even found out that they were calling other investors even after we agreed on a price. So we decided to pull our offer in hopes that it would wake them up. That worked like a charm when we heard from the seller no more then 24 hours after we pulled or offer.

December 3rd

Things were moving along smoothly again, we adjusted our price because of market conditions and everything was agreed upon, even the contract addendums that we got stuck on the first time. The addendums were signed off on by both parties.

December 6th

A few days after receiving the signed addendum, we realized that the sellers did not sign the actual contract. This was embarrassingly pointed out to us by our buyer (who we already got an acceptable offer from and was ready to go). We figured this out on December 6th and left a message for letting the seller know we needed to have the actual contract signed along with the addendum sheet that they had already signed.

December 8th

Called and left another message

December 12th

Called and left another message

December 15th

Today is December 15th and we still have yet to hear anything from the sellers. This is the second time they have “gone silent” on us. The first time we found out they were calling other investors looking for a better price. This time seems very similar and I wouldn’t doubt if they are shopping our offer around again or maybe even found another buyer.

I’m tired of these people