Jade Jean Blog

Next I shared with them a one-page sheet—a Bargainfinder—that they could use in telephone prospecting to reduce the anxiety of cold calling. As you can see from the sample, the Bargainfinder is organized so that the easier, ice-breaking questions are asked up front in preparation for the tougher questions, which assess the seller’s real flexibility.

The purpose of the questions is to gather information needed to score
the property. The Bargainfinder has a place for a property score as well
as sections for brainstorming creative sources of down payments,
generating a positive cash flow and making a profit.

I took them through a demonstration of the Bargainfinder by pretending to call a seller on the phone and playing both roles. “Mr. Seller,” I began, “I’m calling about your ad in the newspaper. Will you tell me a little bit about it please?”

“What is it you want to know?” “Tell me the address, some information about the neighborhood and any general information about the property itself.”

(The seller responds. This information is not as important as the
financing information but tends to put the seller at ease. As the seller
responds, just fill in the blanks of the Bargainfinder.) “How did you determine the price?” (I want to get a feel for value. Is the property priced above or below market? Is there a written, professional appraisal? A Realtor’s opinion is not as valid.) “We’ve priced the home at sixty-five thousand dollars to sell fast.”“Oh? What should it sell for?”

Taken From:The ROAD TO WEALTH

“I know,” he said. “David and I have been putting out the fires behind the scenes. One of the cameras jammed partway through the second hour, but we got most of the footage.” He sat waiting for me to speak, his silence prodding me to reveal my deeper feelings.

“There’s so much material to cover,” I said finally. “I don’t know how I’m going to get through it.” I paused, waiting for him to reassure me. I was tired of being the guru. “Feeling the pressure, are you?” he asked. I knew what he was doing. But I responded anyway. “Yeah. It’s a lot harder than I thought it was going to be.”

Sensing the right moment, he rehearsed with me the principles of the
instructional model we had designed together for the two-day challenge.
“People are more important than the material you have to cover,” he said. “Go where they are. Let them fill up their own buckets. You just
provide the well. They won’t remember all of what you teach them. Just
whether or not you care. Resist the temptation to push them faster than
they can run. That will mean more to them in the long haul.”

“That’s easier said than done,” I sighed. For months this had been my greatest struggle—the battle between short-term results versus long- lasting progress. After all, my reputation was on the line. I needed short-term results. Five thousand dollars cash in ninety days. Dr. Lee had tried to show me that you can’t change people with megadoses of information. People change themselves after minidoses of acceptance from people who care. “Acceptance is harder to give than advice,” he’d told me, “but infinitely more valuable.”

Taken From:The ROAD TO WEALTH

1. Tall grass, weeds
2. Peeling paint.
3. Discarded trash
4. Abandoned vehicles on property
5. Broken or boarded-up windows
6. Posted notices from city or county officials, such as condemnation,
public health hazard, etc.
7. Fire damage
8. Water or wind damage
9. Any sign of property mismanagement due to tenant abuse, such as
several cars parked on lawn
10. Any sign that the property is vacant. Owners become more flexible
when their property is empty.

LOGJAMS: THREE FREQUENTLY ASKED QUESTIONS
THAT ARE IMPEDIMENTS TO ACTION
Sometimes people get blocked in their progress because a few simple
questions act as logjams cluttering up the flow of their lives. Until these
few questions are answered a person can become paralyzed with inaction”

—on hold,” idling in neutral, waiting for the light to turn green.
Maybe I can turn you loose by sharing with you the answers to the
three most common questions:
1. How do I overcome the fear?
The only formula I know of for eliminating fear is desire plus
knowledge plus action. When your desire to be free exceeds your
reluctance to face your fear, to learn and then to take action, freedom willnbe yours. And you will deserve it.

2. How do I get started?
Are you waiting for things to be “just right” before you start? So is
everybody else. Do you want to end up like everyone else? No. Okay, so
get started even if things aren’t “just right.” Where do you start? Start with education. Get the knowledge you need. How do you know what you need? Go to someone who is already successful at what you eventually want to be doing. Ask them. And then do what they say. Do it now!

3. What about the economy?
Are you worried where the economy is headed? Afraid to sink your
money into something and have the winds change and leave you holding
the bag? It’s good to be asking these questions. Unfortunately, most folks use these questions as excuses for not acting. For instance, I hear two very common “excuse” questions:

Isn’t the game over? Everyone is into real estate. Won’t the “new” tax law make real estate a lousy investment? The answer to both of the questions is to realize that regardless of what happens in the future, there will always be highly motivated sellers—always! Therefore, you can be confident that with persistence you will be able to find the ten or twenty wholesale properties to take you to financial freedom. And every time Congress passes a “new” tax law, the fear and uncertainly just create more highly motivated sellers. A fearless investor finds the best of all situations: more properties to choose from with less competition. Buying in such uncertain environments is riskier, but this risk
can be minimized if you buy only below-market properties that produce
positive cash flows. I hope the answers to these common questions have eliminated some of your logjams and thus released you to act.

Taken From:The ROAD TO WEALTH

“Many. Very many,” Nora answered. “How many do there need to be? For you?” “A very small percentage,” said Nora. “One percent.” “Just one,” countered Mary.

“You just need one property in the next ninety days. In your city of two million people there might be several thousand highly motivated sellers. But all you need is one. How many properties will it take to make you a million dollars over the next ten years? Twenty? Maybe thirty? Can you find that many in a lifetime? Absolutely. Some people claim that real estate will cease to be a good investment as soon as everyone learns how to deal in it. I respond that there will always be don’twanters.

“Now, let me share one more example with you before we break for lunch. The St. Louis Business Journal carried a story about Don Singer,
the president of a local real estate investment group. The title of the
article is “Prospectors Look for Money in Land.” Isn’t that what you’re
doing? You may dig through tons of gravel before you find a little tiny
piece of gold.

Taken From:The ROAD TO WEALTH

“While we’re on the subject of foreclosure, one expert has estimated
that about 90 percent of all foreclosed properties go back to the bank.
Does the bank want them? No! So banks can become don’t-wanters. By
dealing directly with banks, you can find excellent prices on foreclosed
properties.

“Quick example. One graduate in Dallas located a bank foreclosure worth about sixty-thousand dollars. The bank wanted to dump the property for thirty-five thousand dollars, just to recoup its costs for interest and attorneys’ fees. He used a line of credit he had established to get the thirty-five thousand dollars cash to buy the property. Anyone with a sizable equity in a piece of property and good credit can set up a line of credit like this. So he found it and he funded it. How is he going to pay back his line of credit? Philip?”

“He’s got to farm it—either sell it, keep it, refinance it or trade it.” “First, he refinanced it. He went to a local savings and loan association and applied for a new first mortgage against the property. He had good credit, the ability to borrow. The property appraised high enough for him to be able to obtain a new fifty-thousand-dollar first mortgage. Where does this fifty-thousand dollars cash go?” “To him,” Steve answered.

Taken From:The ROAD TO WEALTH

“How do I find a bargain?” I began. “What kind of a seller would be flexible or crazy enough to sell a property to someone who doesn’t even
have a job? I call them don’t-wanters or highly motivated sellers. What
might cause someone to become a don’t-wanter?”

They shot a barrage of answers at me. “Divorce. Death. Can’t handle the payments. Bankruptcy. Transfers. They need money for whatever reason. Just don’t want to be bothered with it. Management.”

“What about inheritance?” I added. “Just yesterday a local investor drove me around to see some of the properties he’d purchased since
taking the Nothing Down seminar. He picked up eight properties from
one seller who had inherited them and couldn’t wait to dump them at an
unbelievable price.

“On the next chart you’ll find a list of twenty reasons why people
become highly motivated sellers. “The chart clearly indicates that the major reason for ‘don’twanteritis’ is more a result of personal problems than a result of owning a bad property.

Taken From:The ROAD TO WEALTH

“Money always flows to great opportunities. If you don’t have money, your motto should be, ‘If I don’t have it, somebody does.’ Whatever you need, you can always find a partner to fill it. If you don’t have cash, somebody does. If you don’t have the credit or financial statement, somebody does. You provide the opportunity. Let someone else provide the financial strength. You be the idea person; let someone else be the money person. Nora, which is more important, the financial strength or the opportunity? The idea or the money to fund the idea? The cash or the deal?”

“I’d say the deal.” Steve broke in. “You’ve got to have both, don’t you?”
“Sure. But you’ll run out of money before you run out of knowledge to find good deals. If you know where to tap, you’ll always be able to find willing partners. A person with just money and no knowledge of where to tap will never do as well as you in the long run. How about that building full of eye doctors across the street from this hotel? They make
a good income, pay most of it in taxes, live well, invest in a lot of dubious tax shelters. They’re so busy earning a living they don’t have the time to find the. …” I waited for them to fill in the blank.

“Bargains.” They could see where I was going. “Right! At least you have the time. Let’s look at this issue closer, because it’s the essence of wealth. What are the financial resources that you have to have to fund it … to put a deal together?

“Credit.”
“Cash.”
“A strong financial statement.”
“Cash flow from a job or other source of income.”
“You’re lacking in most of these resources,” I said. “But what nonfinancial
resources do you have that are extremely important?”

“Time,” Philip said. “Got lots of that.”
“Knowledge,” Nora added.
“Willingness,” said Steve.
“You have all of these things and more. So let’s add up our nonfinancial
assets:
“Time.
“Knowledge.
“Enthusiasm or willingness.
“Courage.
“Faith.
“Creativity.
“Desire.
“Life.”

This was an important concept. It was the crux of everything I would
be teaching them. How could I drive it home in such a way that they
would never forget it?

Taken From:The ROAD TO WEALTH

“Now, back to our example. The buyer and his wife were able to borrow
sixty- five thousand dollars, using the duplex as collateral. But how much
did the seller want? Only fifty- five thousand dollars. What does that
mean?”

Steve grasped the situation. “He’s going to make a ten-thousanddollar
cash profit.” “How much money will this buyer have to invest to make this tenthousand- dollar profit?”

“Nothing.” “And besides the cash, he owns a duplex worth eighty-thousand dollars with an existing loan on it of only sixty- five thousand dollars.

That’s a fifteen-thousand-dollar equity. He could farm that equity by
fixing up the property and renting it out for income. Or he could sell or
trade it for a profit. If he decided to sell it, he could run the following ad:
Illness forces sale {I’m sick of this property!) Worth $80,000. Sacrifice for $65,000. You just assume my loan. Nothing down. Call Bob. 555-1234.

Taken From:The ROAD TO WEALTH

“Maybe he didn’t know its value.” “Was he happy with the sixty-eight-thousand-dollar value? Yes. Was he happy with our fifty- five thousand dollars cash offer? Yes. How do we know he was happy?”

“He accepted our offer,” she said. “Is this moral?” I asked. “He’s happy with your offer, but you know that it’s way under market. Now, Steve, you’re a minister. Doesn’t this bother you a little bit? Don’t you feel like you’re taking advantage of this seller? Is this fair?”

“Well, I think it’s fair. We paid him what he wanted.” “Let’s get to the bottom of this. More than a few people are concerned about this issue. Suppose you walk in a store to buy a suit. You find one you like for $300. You know that the merchant only paid $150 for it. Is that fair? Do I care what the wholesale price is as long as I’m satisfied with the retail price? Nora?” “No. Because he’s a retailer and that’s business. He’s in business to make a profit.”

“That’s right. That’s business. And what is business? Buying products at wholesale and selling them at retail for a profit. You may call yourselves real estate investors, but you are really in business. Yo u have to learn how to buy right in order to sell right. If not, you’ll go out of business.”

Taken From:The ROAD TO WEALTH

“Where did you learn to ask such good questions, Philip?” I asked, stepping out of my role again. “You’re doing great.” Philip smiled proudly.

SELLER: I’d need at least ten thousand dollars down.
PHILIP: And you’d carry the rest?
SELLER: Yeah, I suppose. It would be nice to get a check every month instead of a bunch of tenant headaches.

“You make it sound so simple,” Nora said. “We haven’t bought the property yet, Nora,” I replied. “Keep asking questions. What are you cur ious about? What do you need to know? Didn’t I just teach you five areas in which you need to have answers before you can determine value?”

MARY: How much would it take to fix it up?
SELLER: A couple thousand dollars.
STEVE: Where’s it located?
SELLER: Over by the university. Great location.
PHILIP: Let’s see, ten thousand cash will make you happy.
SELLER: I can handle that, ya.
STEVE: This is going to sound absolutely crazy, but would you be willing to go down to the bank and borrow some money against your free-andclear property?
SELLER: Why would I do that?
STEVE: I don’t know why. Ha. Ha. [speaking to me] Why would he want to do that?

I could tell they were beginning to bog down. They had started giving solutions without first having answers to the five most important questions.

Taken From:The ROAD TO WEALTH