For the first 10 days, HUD only allows owner occupants, government programs or non profits to bid on their properties. These properties are generally in need of repairs, they have eliminated at least 90% of the buyers for their properties. Additionally they have eliminated buyers who are willing and capable of making fast decisions. Because they have opened a door for finding a great deal. These properties are generally listed on a Friday. If you view the property over the first weekend and discover that it is listed at a pretty good price, you need to make a quick decision. You must make an offer prior to Tuesday to have the greatest chance at getting a good deal. In almost every state, HUD will automatically take a bid that nets them 87% of the list price. If you put the offer in on the first available day (which is 5 days from the day it is listed) and you put the offer in that nets greater than 87% of list price, and if you are the only person who puts the offer in, you will be the winning bidder. Please consider that this strategy will not work every time because others bid more. Typically, I have to do this two to three times for each property that I buy or help somebody else buy using this strategy. One way to get outstanding deals is to buy a HUD home that you intend to live in. Because you are committing to moving into the property, do not use this strategy if you do not intend to actually live in the property. It is illegal, and you are very likely to get caught. Other investors hate when properties are bought owner occupied, and they will spy on the property over the next few months. If they discover that it was bought by an investor, they will be quick to report you. At least that is what happens in my market. You can often find fabulous deals to move into because HUD makes these homes available to owner occupants and non profits. This means that if you can move quickly, you can sometimes get huge discounts with a very low chance of being outbid. Another opportunity to get good deals on HUD homes is to track them over time for price reductions. If you can make a bid the day after a price reduction, you may be able to get the property at a price less than others had offered the day before, simply because you are doing so the day after a price reduction. A third opportunity to get good deals on HUD homes is to discover homes that fell through that are re-listed. If a property goes under contract, then falls through, it can be listed on any day of the week. Because it fell through, it will have a list date that is further down the list on HUD’s website; most other investors will not notice that it has been re-listed until it is too late. If you happen to notice the first day that the property is back on the list, you have a great chance at getting the property. Rarely will a property that was a great deal fall through. Because if it were a great deal, the investor would have found a way to get it closed. However, having a good list price does not mean that it was under contract for a good price. Many of the properties go for over list price because an investor might want to make sure that they get it for a great price. It takes consistency, patience, and practice. Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com

There are a number of advantages to purchasing a home “subject to” from a previous owner. The most obvious advantage is that you do not need to apply for your own financing. If the previous owner had a good interest rate, their rate will typically be lower than the rate that you would be able to obtain as a new owner. The biggest reason for this is that their rate is based on a primary residence and it will carryover to you. Besides a lower interest rate, you will typically avoid all the closing costs associated obtaining a new loan. If you are buying the house subject to, you may be able to obtain the house for no money down; sometimes the seller will pay you to take over the mortgage. In these scenarios, you are definitely better obtaining a loan subject to than you are obtaining your own financing. Are there reasons not to take a loan subject to? If their interest rate is higher than your APR would be on a new loan, and if you do not have a limit to the amount of loans that you can obtain, you may be better off getting a loan yourself. Here is where I think a subject to, does not make sense. I have heard a lot of people tell me that they are better off getting a house for a 15% discount because they took over the seller’s loan, and thus have eliminated all the risk of investing in real estate. They think that they are better off getting a house at a 15% discount subject to than they would be getting a house at a discount of 30% where they had to use their own credit. I have trouble figuring out how they reached this conclusion, but let’s explore an example. Let’s assume that the house is worth $100,000. They bought the house for $85,000 subject to, and I bought the house for $70,000 and had to get my own financing. Let’s assume that they took over an interest only mortgage at 5.5% and sold the property after one year for $100,000. For the sake of simplicity, the house was sold outright after a year with no tenant in the house. In their scenario, they had to pay a total of $3,850 interest. After spending $1,200 in taxes and $500 in insurance. (Please note that their insurance agent may have advised them to pay for two insurance policies. One insurance policy that covers the previous owner and another that covers their liability). For the sake of this example, let’s assume that they didn’t even have to pay for that. In their scenario, let’s assume that typical closing costs and the other holding costs totaled $5,000. Their net profit on this transaction is $4,950. That is assuming that they actually sold it for full price. Let’s take the same example, but I bought the house for $70,000 and had to obtain my own financing. I paid cash and then refinanced with a 12 month note. My interest rate was 7.5% with $500 in closing costs. In this scenario, I pay a total of $5,250 interest and $500 in closing costs. Thus I paid $1,900 more in financing fees than the person who bought the house. I have all the same closing costs, holding costs, taxes, and insurance upon the sale. In my example, I made a net profit of $17,550. Thus I made $12,600 more than the person who bought subject to. You might say that this scenario is not a fair comparison because we may have to hold the property for longer than a year. I hold my properties for an average of 8 months; on average I will do even better, but let’s say that in this example, it takes us four years to sell the property. After my year is up I have to refinance to a 30 year fixed mortgage and it costs me $3,000 to do so. In this scenario, I am ahead $12,600 after year one. At the end of year one, I have to buy the new mortgage, so I am now only up $9,600. For each additional year that I hold the house, I will pay an additional $1,400 in interest than the person who bought the house subject to. You may have done the math and figured that I had to pay an additional $1,700 per year, but remember my loan amount is only $70,000 whereas the subject to buyer has a loan amount of $85,000. We are under the assumption that the person who bought the house subject to did not, in fact, have to pay for the second insurance policy. After paying an additional $1,400 in interest per year for the remaining three years, I am still ahead of the subject to purchase by $5,400. It would take 7.85 years of us trying to sell the property before the model of subject to that I have presented would be better than my method of buying at a deeper discount and obtaining my own financing. If I am buying a property with the purpose of reselling, it should not take me an average of 7.85 years to sell. However, if I know that I will be keeping this as a rental, and if the sellers are okay with keeping the mortgage for well over 7.85 years (I say well over 7.85 because that is just the break even point. In order for it to work better, I would have to keep it for much longer than this to become a benefit), and if I’m not obtaining the second insurance policy, an argument could be made that I’m better off buying the second subject to. Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com

Another piece of advice that I’ve heard is not to partner with somebody and split the profits 50/50. Instead, they say that you should offer them 15% or 20% interest. I can’t tell you how many times I have heard real estate experts say “never partner with an investor 50/50 because 15 or 20% is better than 50%”. I assure you that it is faulty logic. You are not splitting 50% of the value of the loan with the investor; you are splitting 50% of the profits. These are two totally different things. A better piece of advice is to say, there are times when you should partner 50/50 and times when you should give an investor a set interest rate. Let’s explore an example. Assume that you buy a property for $60,000. You borrow $60,000 from a private investor, and an additional $10,000 from the private investor to fix up the property. It takes you 8 months to fix up the property and close the property. After 8 months, you sell the property for $85,000 and you net $82,000 after paying all associated fees. That represents a profit of $12,000 ($82,000 minus a purchase price of $60,000 and $10,000). If you were to borrow money from the private lender at 15% interest, you would owe the investor $7,000. That is 8 months at 15% of $70,000. That represents more than half your profit. You receive $5,000 and the investor receives $7,000. If you split the profit with the investor, you would have only given him or her only $6,000. Additionally, when you pay a set interest rate, you are taking on all the risk, and the investor gets paid whether or not you make a huge profit. For example, if you made only $6,000 profit, you would still owe the lender $7,000. Thus you would lose $1,000 for all your time invested. Whereas if you had split the profits with the private lender, you would have made $3,000. Hopefully you are not buying properties where you are making such small profits over such extended periods, but this scenario is certainly a possibility. There are a number of things that could cause such a scenario. On the flip side, if you were to net $88,000 for the property, that would represent a profit of $18,000. Of that $18,000 you would only have to pay the investor $7,000 and you would keep $11,000 – or more than half. In this scenario, you would have been better to offer the investor 15% interest. I’m not telling you to do one or the other, but I ask you to recognize that there are pros and cons to each. When somebody tells you to only offer an interest rate, and not to consider profit sharing, they are offering incomplete advice. In some cases, they are actually offering a mathematically poor advice. The next time somebody gives you this advice, please explain to them how their advice has the potential to be a mathematical problem. Is there really any way of knowing which method you should take? It is very difficult to accurately forecast when and for what you will sell the property, however, there is typically less risk when you partner. There is also no reason you should have to partner 50/50. Perhaps it is a win-win situation to offer then investor 25% of the profits or 15% of the profits. It all depends on their goals, motivations, and their relationship to you. I have found that on average, if I offered a 50/50 split to investors, I would end up paying them more than the interest rate that I give. I generally pay one percentage point higher than prime to private investors. This amount on my deals works out to an average of 20% of the profit per house. If I offered an 80/20 split, the investor would on average end up the same thing as if I offered a percentage rate. The reason that I do not do this is simply that I have not tried. I can see many reasons why I would want to do this. For one, I reduce much of my risk. Secondly, the agreement would probably call for me not to make payments to the lender as they are small partners in the transaction. Thirdly, this strategy might make the lender motivated to help me find a buyer for the transaction. Whereas, the investor would receive the exact same interest rate for all sales, if I make the investor a partner, they may be in a position to help. However, you may find that they become more of a nuisance under this arrangement because they are constantly calling to see how things are going. If they do become a nuisance, you probably want to abandon that strategy with that particular investor. Having your investor putting pressure on you will only provide unneeded stress. You may become more likely to make mistakes or to sell to unqualified buyers, or even to take too low an offer. While I have not used the latter of the two strategies, I’m not opposed to doing so. It would just have to be the right person and the right situation. Right now, all my investors are out of my local market and thus would be unable to help locate buyers regardless of their motivation. Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com

Let’s say that I wanted to sell 10 properties at 85% or 90% of appraised value. This method will still work, but the buyer will have to come up with 5% or 10% down (plus closing costs). This may be advisable if the buyer wants to buy all 10 properties, but doesn’t have enough money to put down 20% on all 10. This may be an advisable strategy if the buyer simply wants to leverage their money further without having standard 90% loans with PMI. This method, if done correctly, will save the new owner hundreds or thousands of dollars when compared with obtaining 100% financing on investment properties. The interest rate should be substantially lower, the closing costs should be less, and there will not be private mortgage insurance. If you are the seller, you might say that this does not benefit you. However, if you and the buyer have trust and are willing together, you should be on the same team; since you are saving the buyer hundreds or thousands of dollars, they should be more likely to buy from you in the future. They are more likely to cash flow on their rentals, and they are more likely to be successful in the business. You want others to be successful. If it is good for them, it is good for you. If they don’t make money, they will probably not buy another property from you. If you are looking to buy properties in this way, and if you are looking for sellers to work with you on this program, you may or may not have success. It all depends on the seller’s trust of your ability to do what you say and to get financing. A business plan with full detailed intentions will help you in this regard. Sellers will innately be weary of this method because you are asking them to carry financing with no money down – something that few sellers are willing or able to do, even if it is just a few months. Secondly, because they may feel like they are taking a risk, they may be unwilling to sell at a 20% discount. Thus, you might not be able to purchase at a discount that makes sense. I assure you that if you contact enough sellers, you will find dozens who are willing to do this. It’s all about their motivation to sell. Buying a property for no money down and favorable terms simply means that you have better terms than other methods of buying no money down. It does not mean that it is a good deal. It is difficult to cash flow immediately when you have 80% financing on a property – especially if you are buying single family housing. Perhaps you should look for sellers who are willing to sell at a 25 or 30% discount. After all, there is not a shortage of sellers and landlords willing to sell at a 25 or 30% discount. It is entirely dependent on your local market and experience. If you don’t know whether it is a deep enough discount, I would not buy yet. Keep getting experience. Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com

Are you an expert in the mechanics of fixing up a house? I can’t tell if being an expert in the mechanics of a house help or hinder your chances to be successful. I am not an expert. I would call myself unqualified to comment on any aspect of how to fix up houses; however, I think this may serve as a benefit. Because I am so unqualified, I don’t feel the urge to step in and help. I’ve never been tempted to save money by doing the work myself. I never tell the contractor how to do the job, and I never take time away from finding good deals because I’m busy rehabbing the house. On the flip side of this, if I were an expert in the mechanicals of fixing up the house, I could save a significant amount of money on each house by being my own general contractor. I could show my own team of employees how I want things done, and not be at as great a risk of being taken advantage of. I might have ideas for my own houses that my current contractors might overlook. I’ve seen both types of people be successful at this business. I am not convinced that one method is better than the other. I think that those who fix the properties themselves make more money per house than those who hire out all the work. They seem to be quicker at managing bids and other contractors. At the same time, however, they tend to miss a lot of the good deals that come by because they were busy at their houses doing the work. Their focus becomes more associated with the job as opposed to the big picture of buying, fixing, and selling. For me, I know that I am better off knowing nothing rather than being the general contractor. While I may overspend for the rehab according to other’s standards, I feel that I underpay for the house. I.E. I spend so much more time looking for good deals that I am able to buy them for cheaper than others. Additionally, I don’t have to spend much time with the rehab. Sometimes, I only see the property once or twice during the entire rehab process. From a financial perspective, I must consider what I make per hour in the business and weigh that against what I would save per hour by learning to rehab properties. I would save significantly less than I could earn despite having smaller margins on each deal. This question must also be addressed by asking you what aspect of the business you enjoy the most and are most gifted at. If your greatest abilities lie in being the general contractor, you may put yourself at a huge disadvantage by trying to turn that aspect of the business over to somebody else. First, nobody else will satisfy you because that is your area of expertise. Secondly, you will be taking yourself away from the things you enjoy the most to focus on the things that you think will earn you the most money. Doing this may cause you to lose your passion for the business you may find yourself giving up. Many will tell you to stay away from the rehab because that will take you away from finding good deals; and others will tell you to avoid overpaying for the rehab. My assessment is that you should focus your attentions to your strengths and try to find others to help you with the parts of the business where you are weaker. My strengths are finding good deals, and finding cheap financing. These two aspects are where I focus the majority of my energy, and others help me with the rest. Do you have contractors that you know and trust? Part of the reason I am free to focus on finding good deals and finding cheap financing is that I have a number of contractors that I trust. I trust the opinions of the contractors, their assessment of how to proceed, and I trust that their prices are fair. I have this trust because I have a history of dealing with them over time. They come recommended by others, and they have extensive experience. These contractors have done hundreds of rehab projects, and their experience works to my advantage. I pay the contractors very well, and I tend not to talk them down in their prices. As a result, the contractors are very independent, and free me up to focus on what I am good at. If you do not have good contractors that you know and trust; and if you do not want to do the rehab yourself, you must consider doing extensive interviewing before deciding that you will not be involved with the rehab process. Finding contractors that you trust is one of the most important aspects of the business and you probably cannot be as effective and efficient as you want until you feel mentally free to trust others with the details of the rehab. Don’t be afraid of paying what others consider to be too much money. You can afford to pay too much if you are able to buy properties at great discounts. If you don’t find them at great discounts, then you cannot afford to pay too much money for the rehab. Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com

Your primary purpose is to stay in front of the REO agents for future good deals. It relaxes them because they will begin to understand that you are persistent and professional in your pursuit. Additionally, it will serve as a constant reminder and keep you on top of their mind. If your email happens to be in their inbox, they don’t even have to look up your information. They can simply respond to your email, or they should be able to find your phone number on the signature of your email. Sometimes just having your number on the first page of their screen will be the difference between them calling you and forgetting to. The email campaign works great when you are consistent. If you are diligent about doing this every two weeks, you will be amazed at the long term results. You will typically only get responses from those agents with whom you have spoken. You may find it helpful to send to 40 or 50 agents, but it really only works if you take the time to call them. When I send the email to 100 agents with whom I have never spoken, I will get responses from about 8-10 agents the first day and another 5-6 agents within 7 days. After being consistent for a number of weeks with the email, you will have better conversations with the agents on the phone. I recommend that you try to talk with all 20 agents at least once a month. Call them about a specific property and then ask if they have any good deals. Do not spend too much time on the phone with them unless they are encouraging long conversations. Because they are so busy managing these properties, you may put yourself at a disadvantage by talking with them too long. You will be rewarded in the long run. Visit www.zzzinvestors.com for more tips and information about getting ahead in the real estate market. How do you get to the good deals first? To start, you need to personally know the top 20 REO agents in your area. If you do not know who they are, you can discover that quickly by searching all the listings or through the websites. Visit www.zzzinvestors.com to learn how to obtain this vital information. The best way to get to know them is to meet them face to face at least once. Either show up at their office, or invite them to lunch. At the very least, make sure that they know you from multiple phone conversations. Do not put them on the defensive. Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com

If the owner does not have the cash to sell and to pay off the mortgage, the owner may be able to sell on land contract and keep his or her own financing in place. This could be considered a safer method, but it requires more upfront research with the lenders. Before doing this, be sure to check with the new lender to see how they refinance land contracts. Some lenders cannot refinance the land contract off the higher value. They don’t place the same value on the transfer of ownership of a land contract as they do a sale with seller financing. You may need to write the land contract for $100,000 stating in the land contract that you will accept $80,000 as full payoff – depending on the lender, however, even this might not work. If the lender does allow this, the lender would refinance based off the number $100,000 instead of $80,000. Some lenders can refinance a land contract after three months, while others need to wait 6 or 12 months. By doing this, one can sell a property to another investor with no money down. It may simply take 3 or more months depending on the bank and the strength of the buyer. It also keeps your (the seller’s) original loan in tact. What is really happening with the land contract refinance? If you sell to the new buyer on a land contract for 3 or 6 months and the buyer cashes you out, essentially, your bank is lending the buyer money to buy the house for 3 to 6 months, enough time for the buyer to obtain their own financing based off the appraised value instead of the purchase price. Whereas through seller financing, you were lending the buyer the money until they could refinance. When would a seller want to utilize either of these methods? Selling a property in this fashion is only advisable if the seller and buyer have a history of trust together. I have a number of people with whom I have dealt with over a long period of time. The only people I would sell this way to are people with whom I have a lot of trust. I also need to know that the buyer has a long history of being able to obtain mortgages on rental properties. The reason I would not do this with somebody else is that if they fail to keep their end of the bargain, I have sold the property to them with no money down and for only 80% of its value. If the buyer has a number of rental properties but has not bought any properties lately, I would have them get approved with a mortgage broker or bank that you trust before entering into any part of the transaction, including paying for the initial appraisal. There are a lot of things that can go wrong and you need to have all your ducks in a row before starting the process. Another reason that I would only do this with buyers whom I have had a number of dealings with, is that I need to know for sure that this buyer is capable of obtaining financing for this property. If the buyer does not obtain financing, I have the same problem again; I’ve sold them a property with no money down, and I’m still holding the note. Another word of caution is that I need to be very confident that I know the value of the property. If the property does not appraise for the $100,000 like anticipated, I now have a huge problem. I have already sold the property, and now the new buyer cannot get enough cash to pay off the full $80,000. A good way to hedge this risk is to have an appraiser (hopefully the appraiser that the new bank will use) do the appraisal before I sell the property in the first place. This appraisal is not 100% foolproof because the appraiser might have a different value for the house for the bank as for us as individuals. In other words, the bank may have requirements about which comparables can be used that prevent the appraiser from establishing the value they anticipated. Typically, however, they will appraise for the exact same number – only in rare situations will there be an issue. Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com

Do you have realtors whom you know and trust for advice? While I am a realtor, I have seen a lot of bad advice given out by some realtors. At the same time, I have seen a lot of realtors give excellent advice. Only after working with a realtor over an extended time will you be able to decide if their advice is good or misguided. Hopefully, realtors will be willing to talk you out of a deal if it is not in your best interest. If you are working with a realtor who tries to talk you into deals that don’t make sense, they will probably hurt you more than help you over time. If you find a realtor who is willing to advise you against a purchase, then this person may provide a great long term service. A second thing to consider when working with realtors is to assess how you motivate the realtor through monetary means. Realtors are generally paid by either helping you buy a house, or helping you sell a house. They are generally paid a portion of the sales price. Because their incentives are structured this way, they are not motivated to find you a property at a huge discount, nor are they motivated to help you sell for a higher price. It is extremely important to note this fact before getting involved with realtors. Realtors are motivated to sell you more houses, and sell more of your houses. If you make nothing, the realtor will generally receive the same commission as if you made $50,000 for the same house. Why do I bring up this point? There are two reasons really. The first is that you should always be aware of what it is that actually motivates what they do. Because they receive generally the same amount regardless of your profit, many realtors will do whatever they can to get you to buy and will do whatever they can to get you to sell. In other words, they will be motivated to get you to work for less profit. Many of the realtors will not be conscious of their intentions, and they will disagree with my assessment; however, I ask you to think about it logically. Why would a realtor talk you out of taking an offer for $112,000 even if they felt you should get $115,000? They are paid almost the exact same commission. They generally will only make an extra $45 for telling you to hold out. Additionally, they will probably have more than $45 in additional advertising expenses. The longer they have the listing, the less they make and the more time they have to spend on your property. The second reason that I point this out is that real estate commissions are entirely negotiable. You do not have to pay a realtor a set split. You can entice your realtor by offering them more money for finding you a better deal. Additionally you can offer a realtor more for selling your property at a higher price. For example: Let’s say that a realtor wants to list your property for $100,000 at 6%. If that property sold for full price, you would net $94,000 minus the other costs. What if you told the realtor that he or she could have all the commission for anything that netted you more than $94,000? Do you think the realtor would take this arrangement? I don’t know. It depends. Some realtors might not be allowed by their broker to work for this arrangement even though it is entirely legal. Other agents will be so confused by your question that they don’t have an answer at all. Other agents will actually see this as an exiting strategy. It would be interesting to see what the same agent would want to list the property for if their incentives were changed. You AND the realtor might net more because you align their incentives with your incentives. Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com

The benefit to generating offers without actually presenting them is that you will get the needed practice that is essential to being successful in the business. If you had some offers that were thousands higher than what the property ultimately sold for, then you may have made an error in that assessment. It is important to figure out why you made that error. The most important reason that you want to do this lengthy exercise is that you will begin to have an outstanding feel for your market. If you begin to know exactly what others will pay for properties then you will understand what you need to do to make a profit. You will simply offer less than others would be willing to pay. But you do this on many properties. Thus when you begin to purchase properties, you can immediately sell them to others who might pay a little more, or you can go through and rehab the house. The second thing you should do in the information gathering stage is to begin to go to auctions. Go to the sheriff’s sale auctions and go to other real estate auctions. But do not bid or have the intention of bidding on any of the houses. You should not do this until after you have graduated your 120 day training program. Instead, go to the auctions and practice. Pretend you are buying the house and analyze it. Have an offer ready in your mind. See what the house ends up selling for. Pay special attention to the people who are bidding the most for the properties. After the auction, get to know those people and get their email address. Tell them that you will email them if you come across a good deal. There are large segments of the investing crowd who only buy homes at auctions. Because they limit themselves to only auctions, you will be able to find better deals to sell to them. These investors may be willing to pay you a finder’s fee if you truly come across a great deal. Also talk with the people at the auction who did not bid. Many of the people who did not bid would have bid if nobody else did. These investors may be quite experienced and may have insight into your market. But most of the people there were either being nosy or did not have a serious intention of buying. One note of caution. A weird phenomenon occurs when you try to sell an auction buyer a home that is not being auctioned off. Because they are not at an auction, they will not pay as much for the exact same house. During the auction, their juices get flowing and they want to win. However, when you bring them a deal on the side, their negotiation juices will start flowing and they will want to win the negotiation. This is where you need to be creative and help them satisfy their negotiation ego. Start higher than you normally would to leave room for them to negotiate you down. If they don’t feel like they won, they will not buy the property from you, even though it may be the same deal or better deal than they just bought at an auction. Their motto is to buy low and sell high. What they don’t realize is that they can still buy low and sell high even if they are not at an auction. This phenomenon has frustrated me over and over. It has frustrated other investors in other markets and I don’t think is specific to my area. The same phenomenon will occur from foreclosure or REO buyers. Some people will only buy a foreclosure. Even if you bring them a deal that is equal or better than another deal they just bought, many will pass because it is not a foreclosure. Their mindset is that they should have found it the first time, and they are not going to let you profit just because they missed the deal. In situations like these, it is important to have many buyers working against each other so that you create the same environment of competition for the property. Foreclosure buyers want to feel like they won as well. Except they want to feel that they won by beating other buyers to the punch and finding the deal sooner. Satisfy their ego by having them compete against each other. Some buyers could not care less how they find the deal as long as the numbers work for them. These buyers are generally the easiest to work with and will be most likely to buy a property from you if you find a great deal. Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com

To start, you need to personally know the top 20 REO agents in your area. The best way to get to know them is to meet them face to face at least once. Either show up at their office, or invite them to lunch. At the very least, make sure that they know you from multiple phone conversations. Do not put them on the defensive. Understand their perspective before you meet with them. Here are some important things to know. REO agents tend to get more commission from selling the property to a buyer that they represent than they do from listing it. Often they must pay a referral fee to list the property, but they are not required to pay a referral fee on the selling half of their commission, so they are very motivated to sell it to a buyer that they can represent. Thus if you are working through a buyer’s agent, the listing agent will be motivated to sell it to their own clients first. There are a couple of reasons for this. First of all, it is the same amount of work (perhaps even less work) to sell to their own client as opposed to another agent’s client and they receive more than twice the commission. Second of all, if they can sell the property to somebody who they know will close on the property and not waste their time, they will look better to the bank, they will not have to deal with closing issues, and they can receive their commission check quickly. The better they look to the bank, the more listings they will receive in the future. They are afraid of new buyers because new buyers tend to make their lives more difficult. They would rather sell the property to somebody they know. That is why you need to be somebody they know. You also mush reassure them before putting in the offer that you are easy to deal with, and that you are willing to make their job easier. If they know that you are a person who will make their life easier, they will send you good deals when they have them. If you don’t give them both sides of the commission, and if you are difficult to deal with, they will not send you good deals. It really is not any more complicated than this. As I have a real estate license, I could take a commission from purchasing REO properties; however, I do not do this. I understand that if I take a commission, I am removing any incentive by that agent to send me good deals. I understand that the other agent will be motivated by finding his own buyers. If I give him the commission, I make less on that particular deal, but I will profit in the long run. This is a difficult transition for most agents, but I have found it to benefit me over and over. If you have a real estate license, I strongly recommend taking this strategy. If you decide that you only want to work with one agent, make sure that agent is able to get along with a variety of people. If your agent has a bad relationship with the REO listing agents, you will probably miss out on deals simply because the other agent didn’t like your agent. Your agent may be able to get you plenty of good deals, but it really requires that person to have an excellent working relationship with others in the market. Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com