5 Steps You Can Take Right Now to Begin Investing Today
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Hey, this is Josh Weidman. Thanks for joining me for today’s training. Today in our REI 360 training, we’re going to talk about something that I didn’t really expect to talk about today.
I had a call earlier this morning with one of my coaching clients, and I bring this up because something really jumped out at me. It’s something that I’ve thought for a long time about this, and it’s something that kind of jumped out at me during the call.
During the course of our conversation – this is a new client in his first year in the business. He wholesaled eighteen properties, and he did a flip. That’s pretty significant. Really going from zero information to full bore in a twelve-month period is pretty substantial. He did this while working a full-time job so he did it part-time, and it’s a pretty neat experience. And as we were talking, and as we were discussing some of his strengths and weaknesses, where we wanted to spend his marketing dollars and kind of going through an introduction for a coaching session, he mentioned something to me that really popped out, and that is this: He said, “You know, it seemed like whenever I tried it, it worked. Not to a great extent, but everything seemed to work.” And it was like a slap in the face. It was a slap in the face because it’s something that I’ve been saying to my clients, to people that I’ve talked to in the business, to people I’ve seen over the years who have continually told me, “I want to get started in real estate, I want to get started in real estate,” and I would talk to them a year later, and they still haven’t done anything.
So, the purpose of this training is kind of to get in your face. If you were in this situation where you’ve been at a standstill, not sure how to get started, immersing yourself in so much education that you’re overeducated, and you’ve just been a little petrified about jumping out and taking that first step, I’m reaching out right now, and I’m going to shake you. And I’m going to go through five simple steps. Five steps – that’s it – that you can take right now. As soon as this training is over, you can take every one of these steps and by doing so, you can immediately get started in investing in real estate. Alright?
So, here’s what we’re going to do:
Step one, we’re going to get started right now. We’re going to determine our exit strategy. There are three exit strategies here. If you have never done a deal before, or if you’ve only done one and you really want to immerse yourself, only pick one of these. If you’re going to be wholesaling, get rid of the other two. If you’re going to be rehabbing, get rid of the other two. If you’re looking for rentals, get rid of the other two. That’s it. Boom. Right here, during the course of our short training here, we’re already done step one. Finished. Let’s move on to step two.
We are going to define a farm area. I have done trainings on this. I’ve done trainings on how to identify farm areas, how to look for specifically exactly what you’re looking for, and really take it down to very, small, little niche areas that you are going to target all of your marketing, and advertising, and comfort level, too. However, the point of this training, we’re going to make this really simple.
First, based on your exit strategy, what types of properties are you looking for. What I mean is are you looking for properties in areas that are primarily owner occupied like if you’re going to be rehabbing a property? Or in areas that are predominantly tenant occupied, which are cash flow properties. If you’re wholesaling, you need to determine whether your buyers are going to be predominantly buyers who are going to be buying rental properties and, in that case, your wholesale theme will probably be somewhere between twenty-five hundred and ten thousand dollars. Or will they be people that are buying in flip areas? Your wholesale fee will be somewhere between ten thousand and fifty thousand dollars. With that being said, what you really have to really realize is that you’re going to hit a lot more singles and doubles with that twenty-five hundred or ten thousand dollar price point than you will with a flip market where you’re making the ten to fifty thousand. It’s going to cost you more to find the deals, so keep that in mind.
But we’re going to define that. Boom. In this case, we’re going to look for rental properties, alright? So, we’ll go with rentals.
Next, we’re going to determine the resale value. We’re going this so that we can narrow down our target. In your market, the resale value for rental properties might be fifty thousand dollars, it might be two-hundred thousand dollars – it really depends. Whatever it is, write it down. In my market, I’m looking for resale values anywhere from sixty-five to a hundred and five thousand dollars. Okay?
Now, we want a geographical location. What am I talking about ‘geographic location?’ Take these two bits of data, pull out a map, make a circle from your house – no more than ten, fifteen miles with your house at the center of the circle, and then do a demographic search. They’re available on Google or are also available if you just do a Google search for ‘demographic maps’ and your zip code or your area. You’ll be able to look at the financial information, property values, things like that. Trulia and Zillow are also two sites where you can pull up that information.
But you’ll be able to target small, little niche areas, small, little neighborhoods in that roughly hundred square mile vicinity with your house right there in the middle. These are your target markets. Boom. We just defined our target market. Done.
Alright, so now we have our exit strategy, we have our farm area. These are the two biggest steps that you’re making towards your investing. Once you’ve got these two done, next we’re going to put together a website.
If you’re a member of REI 360, you have a free website that you can go and design and customize. There’s a bunch of different templates, but what I want you to do is this: whether you have a nice video camera that you can sit down in front of, or you have a computer with a camera on it, or you just have a smartphone or somebody you know has a smartphone with a video recorder, I want you to make a video. What should the video be? You’re going to tell people what you do and why you do it. Find your own motivation.
For me? I do it because I like to make neighborhoods look better, I like to solve peoples’ problems, and I like to rehab houses. So, my sales pitch is, “My name is Josh Weidman, and I’m a real estate investor in Philadelphia, Pennsylvania. My company purchases rentals and distressed properties all over the city. If you have a property that you’re interested in selling, I’ll be the one that will be coming out and evaluating the property, I’ll give you an all cash offer, and we will close very quickly. If you’re interested in talking to me, give me a call.”
That can be your message. Something that simple. I’m not looking for anything crazy or detailed, and I’m not looking for it to be polished. I want it to be real, and I want it to be from you.
Once that video’s done, you’re going to post it on the front of your website. You’re going to be customizing this website, again, to tell your message. Tell your story. Don’t complicate it. Don’t make it crazy. Keep it really simple, and don’t spend so much time on the this step.
Alright. Boom. Step three.
Now, at this point, maybe you’ll spend a couple hours putting this all together. I’m not looking for a polished finished product. I don’t want you to be spending ten days on this information because, at this point, this is just setting the stones and setting things in motion, setting a foundation, for our marketing campaign.
So, at this point, we’ve defined our exit strategy, defined our farm area, and set up our website to build our credibility. Now, it’s time to do the marketing. Boom. This is where you want to spend most of your time as fast as you can. You want to get to this step as quickly as you can because once you get the phone ringing, that’s what’s going to fill your pockets.
So, depending on how much money you have – you have to be realistic – sit down, look at your finances, and write down how much money do you have right at this moment that you could spend on marketing for distressed sellers. Maybe you have twenty, maybe you have none. It doesn’t matter. There’s options for each step. I mean, when I started out I had a penny, you know? So, I understand that. But let’s start from the top.
Let’s say you’ve got fifteen hundred dollars set aside. In that case, I want you to choose one of the two. You’re either going to send out a mailer for non-owner occupied owners. These are people within your farm area that own property within your farm area, but they don’t live there. Where are you going to get this information? There’s one of two places: you can either do a Google search and find a list broker, buy the list, or if you are friendly with a local agent, call him up, tell him what you’re doing, asking him if they can pool the public information on the local MLS. That’s one option.
Second option is to buy a probate list and mail it. I have done trainings on how to send out a mailer or how to prepare the mailer, all that kind of stuff. A probate list is a list of people that own real estate that recently passed away and either their will or their estate is being probated. That means it’s going through the legal process of transferring the assets to the heirs. I find this is one of the best lists to pick up good deals. Where do you get the list? Google it. I’ve done trainings on different stuff that you can go and reference, but I don’t want you to spend a whole lot of time searching. This is short-term, this is what you can do right now to start investing today.
So, we’ve got a list. We’re going to send out a mailer. What should the mailer say? This is an introduction mailer. Whether it’s the probate list or whether it is the non-owner occupied mailer, it is an introduction mailer. What do I mean? What we’re going to say is:
My name is Josh Weidman. I’m a real estate investor. I purchase properties in this area, and I noticed that you have properties in my target market. I’d love to talk to you about selling one of your properties. If you’re interested, please give me a call. I pay all cash, and I close very quickly. I look forward to talking to you about how I can purchase this property.
Here’s my phone number. 215-555-1212.
and at the bottom I put my website so that they can go and check me out, I can throw some credibility there, they can get some information about what I do, how I work, all that kind of stuff, and then they can call me.
You’re going to use the same basic message for either one of these. But let’s say you don’t have fifteen hundred dollars to invest. Let’s say you hardly have five hundred, but let’s say you’ve got five hundred. Our choices are going to be a little bit different. In this case, we’re going to be looking at either doing bandit signs – those ‘we buy houses’ signs. If you choose to do bandit signs, you’re going to go to banditsign.com or do a Google search, and you’ll find other manufacturers and printers. You’re going to buy as many as you can with the finances that you have, and you’re going to take your map of your target area, and you’re going to look at the major intersections throughout the area. These are in your sections that enter and leave a neighborhood. These are intersections for major highways, whether there’s a stop light. Somebody’s going to stop their car, look up, and see your sign. You’re going to hit all four sides of each of these intersections, and do as much of this as you can.
That’s going to be one of your marketing outlets if you have a limited budget.
In that same breath, you can also send out a mailer to the non-owner occupied owners with the same message that we just talked about introducing yourself, telling them what you do, and prompting them to call.
The non-owner occupied list is a little bit less expensive, you may have to limit the number of people that you’re sending the mailing to depending on your budget, but it’s a good list to target.
Well, let’s say you have no money. What do you do then? Now, your options are a little bit limited, but here’s what I’m going to ask you to do: scrape together twenty-five dollars. If you can scrape together twenty-five dollars, next thing you want to do is go online, you’re going to go to vistaprint.com, you are going to fill out, design, and buy whatever the free business cards – I think you can do either two-hundred fifty or five hundred free business cards. You fill it out, you’ve got to pay for the shipping. It’s probably five or ten dollars, whatever it is. You are going to get that, and you’re going to buy them.
With whatever money you have left, you are going to go to Staples, or OfficeMax, or one of these other stores, go to Walmart, whatever – you’re going to buy one legal pad, and you’re going to get one good pen.
Then, you’re going to take that pen and that yellow legal pad, or white legal pad or whatever, and you’re going to take a stack of business cards, you’re going to put them in your pocket, and you’re going to drive to the first house within your farm market, and you’re going to walk up to the door, and you’re going to knock on it. And you’re going to do that to every single house throughout the entire market, your entire farm area. And here’s what you’re going to say: “Hi, my name is Josh Weidman. I’m a real estate investor, and I’m sorry to bother you today. The reason I stopped by is that I’m looking to purchase some properties in this neighborhood, and I’m looking for your help. I’m offering five-hundred dollars today to anybody that can help me find my next real estate investment. Do you know anybody that wants or needs to sell their home because if you do, I’d love to give you the five-hundred dollar referral fee,” and then listen. They will say, “yes,” “no,” “get off my property.”
Whatever they say, you just say, “Thank you so much. It’s really a pleasure talking to you, ma’am. Here’s my card – if anything changes, just remember, I’m giving away a five-hundred dollar referral to the first person that calls me about the next deal. So, don’t forget.” You walk out, you go to the next house, boom, boom, boom, and do the same thing. Hit every single house in your entire farm area, and if you don’t get one lead, go back to the first house, and you do it again. And if you still don’t get a lead, go back to the first house, and do it again. Believe me, you will get leads, you will get deals out of it, and you will probably be uncomfortable at times, and you probably will wonder at times if this is ever going to work. But let me tell you something: it certainly will. That’s option number one.
Option number two, if you have no money, is to do something else. The one thing I knew how to do when I had no dollars was to go knock on doors, and that’s what I did. I generated leads, and that’s how I got myself from having no money to limited money to playing money to invest in my marketing. I knocked on doors, but that might not be for you, but you’ve got to do something. I don’t know what that something is – you’ve got to start with that.
The third option is to just quit. You could just fold it up, real estate investing is too hard, or you probably can’t do it, doesn’t work, it’s not for you, whatever. But don’t pretend that you’re doing the best you can if you’re not doing anything. So, you need to make a choice. When you get to number four, you’re going to make a choice: you’re either going to send out a mailer, you’re going to do some bandit signs or send out a mailer, you’re going to go knock on doors, or do something else, or you’re going to quit. If you don’t choose one of these, you’re not investing. If you’re not doing business, you’re not in business. So, don’t fool yourself.
But look, let’s say we’re marketing, we’ve got a marketing plan down, we ordered it, boom. What do we do? Step five.
Step five is to learn your market. My final step is I’m going to pick up the phone, and I’m going to call my real estate friend: “Hey Nancy, how are you doing today?” “Great Josh,” you know, we’ll have a little conversation: “Nancy, listen. I’m really thinking about buying some rental properties or investing in some real estate, and I know that you are an awesome realtor. I was wondering if you could help me. I’m not going to waste your time by asking you to drive me around to all these different properties and all that kind of stuff until I really get a handle on what I’m looking for, but here’s what I’d like you to do. I have an area that I’ve been thinking about buying houses in. I call it my farm area. In this farm area, I’d like you to please send me an email with a link on it that will give me a list of all of the properties that have sold within the last six months, and all of the properties that have been listed in the last six months. If you can make the report that contains all of the information that you would have as an agent, I’d really appreciate it because I’m specifically looking for how long properties are on the market and things like that. I’m not trying to buy any of these. I’m just trying to understand what the market looks like.”
And, of course, Nancy’s going to say, “Hey, of course, Josh. I’d love to help you out. That’ll take me all of five minutes, but do me a favor, would you? When you’re ready to buy a house, do call me up.”
“Nancy, of course I will. Why do you think I called you? I knew you’d help me out, and when I’m ready, I’m going to call you.”
So, she’s going to send you over the information. That’s the first part of step five. The second part is to take a look at and review this information. You need to spend time, and you need to know this market. When these phones begin to ring because you’re doing this work, because the marketing is working, you need to know what these properties are worth, to at least have a handle on what properties are worth, what they’re selling for, and what are the contributing factors that change the valuation of each of the houses in your target.
Alright, so what you’re going to do is look for values based on the sales. Take a look and figure out, “Okay, so this house is probably worth this amount because in this condition it sold for a hundred thousand dollars, and a little bit better condition sold for a hundred and twenty. Okay so, probably the value is somewhere about one-twenty on those houses. On these over here, more like eighty-five.” You know, you need to learn the value based on the sales.
Better yet, take a look at what didn’t sell, and try to determine why. A lot of times it’s because the price is too high. A lot of times it’s because the property is in too bad a shape for what they’re asking. A lot of times, it’s because they had a bad agent, and the agent really didn’t know what they were doing, they listed the properties too high, they gave bad advice, and it sat there for a year. Well, guess what? These are leads for you. These are properties that have expired and never sold. The people wanted to sell at one point, but for one reason or another, they couldn’t. Hey, there’s a lead source for you. Go and get those deals.
In addition, one thing that I like looking at are the days on market. How long did it take for a property to sell. If the average days on market are a hundred and eighty days, that’s six months of a property being listed before it sells. That’s a lot of time. Likewise, if the days on market are five or six, at the high end of your price point, maybe that is not really the best area. Basically, you have a lot of competition. So, you want to learn your area, learn your market, so when the phone starts ringing, you’re ready to take those calls.
So, let’s go back here. Why are we doing this today as our training? So many people get stuck in neutral. They sit there in the learning phase of their real estate education, and they look around, and they’re saying, “Alright, so I need a little bit more information. This looks like how this deal could be done. How do I get started now?”
Well, these are the five, quick, easy steps that you can do right now to get started investing in real estate today, and as a review, first, pick your exit strategy. Second, define your farm area. Third, get your website built up for credibility. Fourth, put together a marketing plan and execute it. And number five, learn your market. That’s it. You do those things, and you’re going to be pointed in the right direction. Just like my new coaching client, you’ll be looking back in twelve months, and see a trail of deals, and you’ll be looking at your bank account, and man, those breadcrumbs look pretty good.
So, that’s it for today. I really appreciate you joining me in today’s training, and until next time, I wish you the best of luck in your real estate investing.