LIMITED PREVIEW: Including Introductions of Each Chapter
Secrets to Short Sales Success
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Secrets to
S hor t S ales S uccess *the Jeff Kaller Method
Jeff Kaller v
Secrets to Short Sales Success
Copyright © 2009 by Jeff Kaller. All rights reserved. No part of this publication may be reproduced, stored in any type of retrieval system to be transmitted in any form by any means, whether electronic, mechanical, scanning or photo copying except as permitted under section 107 and 108 of the 1996 United States Copyright Act, without the prior written permission of Paramount Publishing LLC 303B Anastasia Blvd. Suite 151 St. Augustine FL 32080. Disclaimer of Warranty/Limit of Liability. There is legislation in several states that strictly limits the manner of operating a preforeclosure short sale business and individual transactions. There are many exclusions to legislation depending on when you contact the debtor during the foreclosure process, contracts and disclosures you use. Because individual states have different requirements YOU MUST consult your attorney who is licensed in the state or states in which you intend to operate and engage in preforeclosure transactions. We are happy to provide contacts we may have who understand the legislation that governs how you contact your business which is at best very vague and unclear. Particularly legislation governs how you contact an individual in foreclosure and rescission contracts, even amounts you can earn. Particular attention should be given to Colorado, Oregon, Maryland, North Carolina and California at the time this copy was printed. Many if not all of these states currently have statutes providing civil and criminal penalties for operating a business in a deceptive or unfair manner. Upfront fees would be considered to be deceptive or unfair because a service has not yet been performed. The techniques are illustrative in nature on how to provide homeowners from foreclosure OPTIONS to having a foreclosure on their record. Your personal attorney should be consulted on all aspects of how to conduct these transactions and your business. While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties or merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. Every concept, method, form and entitlement contained herein is the property of this work’s copyright holder. Disclaimer: Every stated “we” or “ourselves” was not necessarily the writers but could be the writers’ clients or students. “We” and “ourselves” are used to protect the privacy of those concerned. Contact us for products, services and technical support at www.JeffKallerSupport.com. Our office support within the United States is (800) 646-2574 Extension 120. vi
Contents
IntroductionWelcome To The Family Of Short Sales Insiders 1. Six Steps To Success .................................................................................1 2. Getting The Best Deals To Find You ...............................................................................17 3. Evaluation Of Deals ...............................................................................53 4. Throwing Your Seller A Lifeline ...............................................................................75 5. How Mastering Bank Communications Will Lead You to a 7 Figure Income .............................................................................109 6. How to Control the Value of the Property .............................................................................157 7. How to Create the Ultimate Short Sale Package ..................................................................................199 8. How to Make An Offer the Bank Can’t Refuse .............................................................................271 9. Hybrid Sales Strategies Guaranteed to Work in Today’s Market .............................................................................321 Conclusion - Pulling Out All of the Stops .............................................................................395 Glossary .............................................................................399 Index .............................................................................435 Jeff’s Wealth Resources .............................................................................441
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Dedication To all of you who are searching to improve the quality of your life...
May you recognize that the power from putting this knowledge into action is guaranteed to work when you base this on an intense desire to help others.
Your life will be enriched as you join my mission to help us save one million families more from foreclosure.
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Acknowledgement The Jeff Kaller Method of short sales would not have been possible without the collaborative effort of tens of thousands of clients who have asked me to distill my strategies, techniques and tactics into the pages of this book. There are very specific clients that have inspired me although it was they who sat in a training and got to learn these life altering strategies. My closest working relationship with the most successful students turned teachers are my five coaches that help change the lives of new clients that come to us: Steve and Jeannie Campbell with the simplicity of running an automated preforeclosure business. Chris Westphal and Jim Claydon, both realtors who once admittedly opposed my strategies but now teach others how to leverage the business through the use of other agents and brokers. Doug Norton who manages our coaching program yet still manages five other businesses all related to short sales. I acknowledge the five of you for your commitment to travel with me as we share our mission. Especially the intense hours at our Masterminds as you lead our coaching teams into a new lifestyle. And your unselfish support when you go the extra mile to take calls during your personal and business time to ensure our clients get their challenge solved. Your expertise and wisdom have created the most powerful coaching program ever! You’ll get to read more about how they started from extremely varied backgrounds from realtor, to hot dog vendor, to marketing director and so on. All my students who become successful and those working with me share two common threads. First, they approach homeowners facing foreclosure in the spirit of service to help first, make money second. Second, none of them have short sale experience, at least not the way I teach it. I feel compelled to acknowledge my special students who came to me with the faith they could transform their own lives despite enormous setbacks. Chris and Diana Burhans are two of my most inspirational clix
ents having found me after losing two children in unrelated accidents, the IRS shut them down and EVERYTHING was taken away, including their home, business savings. They have NO idea how much they inspired me and people of faith are rewarded. Their second year with me over $100,000 in net cash flow per month. The primary reason that compelled me to distill my method into this book format is to get my message out to the homeowners who like me went through the experience of foreclosure themselves only to recognize that it’s not these experiences that make a person but how you handle these experiences that determine the quality of your life. For those who seek a better life and transformation after foreclosure I salute and acknowledge you. Remember, the ultimate human resource is resourcefulness. Master this and you’ll not just survive, you’ll thrive in this economy. I want to acknowledge the passion and ministry of the folks at www.LivingWatersFortheWorld.org. A global organization who give me another reason to bring my method to market. An organization of volunteers who travel to impoverished areas like the Yucatan Peninsula in Mexico. I teach my method with the basis and desire to create a community that searches out accomplishments that enrich their lives through wanting to enrich the lives of others. I’ll never forget one of our mission trips to a small village in Kancabdzonot, Mexico where my nephews Todd and Jacob, my dad and the rest of the volunteers helped install a water filtration system to purify water for a village of 1,000 people, as my mom taught health and hygiene and played with the little bare foot kids in the community. (The people living in this region spend 30% of their income on bottled water.) A portion of our profits on each book goes to Living Waters. I am totally acknowledging my support staff (who I call my girls in the office) for supporting the umpteen barrage of last minute innovations they help bring to reality. Especially Courtney, our long time loyal director of coaching services who takes care of our clients with relentless service. And Marybeth, my personal executive assistant for mastering the impossible task of managing the details in my life. Also Casey for typing every handwritten (yes, handwritten) page of this book. A special acknowledgement to Todd, my right hand man who manages the dozen plus partners in our personal house buying team. Todd’s learned the true meaning of strategic leverage as our house buying team spans three states and is comprised of a massive network of realtors and acquisition xi
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members. I’ll share how he manages this team with freedom and ease. Gwen our controller for holding together the multiple companies we run, and my sister in law Mary for completely managing our personal and household finances, so Sofia and I can focus on our business. I acknowledge and thank the Bank Loss Mitigators I brought into my organization who helped create the foundational methods, tactics and strategies that changed how short sales are transacted. Specifically, Rod Charest, Steve Dillion, who used to work for me, and many others who contributed a tiny piece to my method. Notably Suzanne Erickson, once an employee now a business owner for her unique strategies on concessions as she worked with us and our coaches. You’ll see some examples of those strategies in the book. To my many students, who never give up, and find a way to make things happen. Each of you have incredible courage to be inspiration to others. I want to acknowledge my wife and business partner of over 20 years! We started working together in kitchens when I was in college at Appalachian State in North Carolina, she was one of the wait staff and I was a chef. Then we nearly worked ourselves to death until we started in real estate, what I call the “old way” buying and rehabbing then reselling. She’s been instrumental with knowledge of short sales, and how to maximize revenues through concessions, which I’ll share in this book. She has always been an amazing example of empathy when working with people facing foreclosure. To my daughter Allie, with whom I have traveled to eleven countries on Dad and Daughter trips and who supports my long hours as I fulfill my passion in life. And I acknowledge you individually as you embark on the most amazing journey both business and personally. For supporting my mission to save 1 million families from foreclosure and in the process transform your own life. The combined fruits of our labor in our quest together will create a $50,000,000 (billion) dollar stimulus back into the economy of this great country and 37 billion back into the hands of clients just like you who deserve to have it, for this I acknowledge you. I acknowledge my publicist Lissy Peace for her immense expertise in the publishing arena. She guided me through my journey of distilling my method into words and helping make it possible to get this into your hands. And finally, Andrew in my office who’s ability to design and put up with my hundreds of grueling edits this book has gone through. xii
Preface Over the first years and during my real estate educational journey I frequently searched out our country’s most astute, most acclaimed and respected names. As I began to develop my short sale method I learned very quickly which of these trainers were still actively buying houses and which were not. My wife Sofia and I made a promise to ourselves when we began to teach others our very unique system We would become Educational Leaders in our field because of the active, everyday passion of finding, negotiating and selling ONLY short sale deals. Today and everyday of the week my personal house buying team consisting of my wife, Todd and I, work on closing a short sale transaction. We are constantly improving our strategies and the process of building our real estate empire. Every month, we update our training materials to reflect new cutting edge strategies. We have a network of 60 close advisors, lenders and negotiators that give us industry updates. You may be challenged because you took a seminar on short sales or purchased a course off the Internet only to discover there were huge missing parts or gaps in the processes. That’s because there is a distinctive method to how all of the pieces fit together. In fact, the way I organized this book is critical to how you master the material. This preface itself is a shining example of this. It could have been written by Donald Trump who I hired to come speak at one of my events, or one of two dozen BIG TIME GURUS with whom I have shared countless platforms as served as key note speakers at educational events. These individuals are at the top of their game. They are leaders, movers and shakers, whose historic efforts help change the real estate economy we live in today. While strong endorsements are great credibility builders, I believe they may not be the most impacting thing for you. I want you to experience the wisdom of clients who are shining examples of exactly where you want to be. I’ll share many of their stories and insights throughout this book. Sure, there is something to be said about the contributions and powerful experiences of an ultra wealthy author or speaker. Frankly, I couldn’t care less about that. This book was written xiii
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for you. It’s meant to find its way into the hands of a person who just lost his home and watched his family get torn apart, or for the doctor or dentist who just sold her practice and is searching for a new opportunity. It is especially for the patriotic Americans who recognize the need to take their personal financial matters into their own hands and in the process make our country stronger one life, and one house at a time. I want to be remembered as the guy who founded a method to buy and sell houses so amazing it profoundly transformed our country. The mission is already in place as we help troubled lenders, entire communities and especially homeowners facing foreclosure. Let me explain… Although I think transformation starts on an individual level, it’s an empowering cause that easily spreads like wildfire. One person who lost their home to foreclosure really can change the direction of a nation. Everyone I touch is a potential seed that will grow strong, wide, and help spread the branches of our family as we grow to help others. Although I have thousands of clients who eagerly support my Crusade to Save America, I’d like to share with you one story that exemplifies the transformational power of the unique investment strategies in this book. Steve and Pauline McAloon agreed to share a shocking account of their actions that transformed one person’s desperate life story into a story that would inspire countless others. Following my teachings, they selflessly gave their own money to save another person’s life. They tirelessly carry my torch to others who in turn continue to touch the lives of others. I asked this couple, as long time clients and now close friends of mine, to share their wisdom and insights with you. Their amazing story of overcoming adversity to rise to such a level of personal achievement was so powerful I was inspired to give them my personal vehicle, a new Hummer H2. Steve and Pauline McAloon from Scotland represent the essence, really the primary reason behind my teaching method. As you continue to read this book you’ll note that their varied accomplishments have little to do with money although I should tell you that their last transaction netted them a check for over $400,000 in profits…yes one house, one deal. They came to me when their personal house was in foreclosure and Steve had just lost his job. They joined our intensive coaching proxiv
gram and in doing so entered my car contest for the “Most Improved” in my Lifestyle Transformation Contest. During that year in coaching, there was some tough competition for my car, including Hunter and Debbie Paschal, who today own a 10 million dollar plus short sale empire as well as Chris and Diane Burhans who broke over $100,000 in monthly income in 18 months... Chad Baker and Tommy are two college grads who transformed their lives, and many others to numerous to list. What Stevie and Pauline did in four months was nothing short of amazing. I’ll let them tell you for themselves, meet Steve and Pauline… and get ready! Once you become a serious student of my short sale method, you will be next… Stevie and Pauline truly articulate the real reasons why I wrote this book.
Steve & Pauline McAloon
When Jeff asked us to create the forward in his upcoming book we felt compelled to share how inspiring this business can really be for you. Although originally from Scotland, we were living in Florida in 2003 when we met Jeff. Pauline, a devoted mother and housewife and myself, a 20 year executive with a Mercedes. My 20 year career ended abruptly and we found ourselves looking for any new opportunities when we stumbled across real estate. We had ZERO experience, no investment capital, much less money in the bank. At the time we jumped on board with Jeff’s system he was running his Lifestyle Transformation Contest with several hundred students competing to win his personal car, a Hummer H2. We were chosen to lead one of the 3 teams of students who were also competing individually for his car and together as a team against other teams. (I’m told Jeff still runs that contest and still gives away his car every year) Using his unique system we inspired our brand new team to create over $1,690,000 in NET SHORT SALE PROFITS IN LESS THAN 90 DAYS. In less than a year we were making hundreds of thousands of dollars. xv
Secrets to Short Sales Success
But it’s not because of the money or even Jeff’s car (still in my garage as our trophy) that we share our story with you. It’s because of our desire to help other people facing foreclosure that fulfills us. Sure, we reap enormous financial rewards, 20 times my best year at my job, but it allows us to teach others and give back. Because of Jeff’s Teachings We Saved Another Person’s Life Our marketing brought us a foreclosure client, a single mom, whose home had been devastated by a hurricane. But it gets worse; she was in the advanced stages of a rare medical condition with her intestines that was poisoning her body. She was left with no medical insurance, no job, and no homeowners insurance and was rejected by doctors who knew she was dying. Her son would be homeless and motherless. Following in Jeff’s footsteps, having become supporters of many other charities, we decided to take this humanitarian act into our own hands. Using the powerful techniques Jeff is sharing in this book, we quickly created just enough profit to donate for the homeowner’s operation and medicines that saved her life. Jeff has always taught that behind every foreclosure is an opportunity to enrich someone else’s life. Jeff and Sofia were so moved by what we did they helped by paying her rent in a brand new apartment for one year. Today we live in sunny California in a 3 million dollar home and have ZERO DEBT…we continue to generate a very above average income while helping others. Our children are now 20 and 23 years of age and already have started learning the short sale business for themselves. They are empowered with the skills to become wealthy while being compassionate young people. Jeff Kaller will share his knowledge with you in hopes you too will accept the responsibility we have to help ourselves and others who aren’t exposed to these incredible techniques. We salute you in advance for not waiting on some government bailout that will never come. In your hands is the power to change your own life and those of countless others. Jeff’s transformation contest helped set the foundation for an amazing life. We’ve established a non-profit and Pauline has become a very qualified wealth and well-being coach. xvi
I suppose the reason for telling you all this is so you are aware who Jeff is and what his short sale method can do for individuals and our great country as a whole. In this book are words of hope. Jeff, we wish you every success with your book tour and national crusade and we are grateful to you for giving us this vehicle to make a difference. With great gratitude and appreciation always, Steve and Pauline McAloon
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Welcome to Our Family of Short Sales Insiders / Introduction
Introduction Welcome to the Family of Short Sales Insiders An Introduction To Our Recession- Proof Business
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Is There Really Such a Thing as a Method to the Short Sale? There absolutely is. Unfortunately 99% of all the books written, gurus who teach it as a sideline, or Johnny Come Lately short sale experts miss conveying this as a method. In their defense, they are rehashing, recirculating old and dated information, and they don’t actually run a short sale business. In their wake, they leave their students to try a few deals, get discouraged and walk away without truly reaping the amazing pure profit these deals provide. This information is new, cutting edge, and recognizably different than what I created over 12 years ago when I first began to break ground on this unexplained, uncharted territory. I began cutting my teeth on radical strategies in my own very active pre-foreclosure business. I used this as my test laboratory, then I would release these strategies to my network of thousands of students who would go on to apply them in their own business. Lenders would begin to recognize these techniques and negotiating concessions as status quo, thus allowing me great consistency and the ability to articulate the truest formulaic approach to short sales possible. Right now, in your hands, you hold the ultimate authority to create deep discounts on overleveraged properties. How can I make such a bold statement? Look around. There are dozens of courses written on this subject,..“The hot, new, cool, sexy way to buy real estate.” Some by real estate brokers and others by well known authors. Still others by people I’ve met in my audiences as students over the years. This program, however, is a unique documentation of the result of literally hundreds of my own personal deals, all short sales, and countless hours in the trench teaching, consulting and still to this day, transacting deals. This hasn’t been a fad or a passing side line; this has been my life’s work now fully crafted into the ultimate real estate method. I’ve been recognized by Mr. Trump. Heck, I even hired him to come speak at one of my landmark short sale events. Why am I telling you all of this? To impress you? No way, I checked my ego at the door; this program was written for you, and it holds the power to change your financial life forever. I tell you this because I respect you. Maybe you, like so many of my other student clients, are wealthy retired business owners or true entrepreneurs. Or like other clients, com-
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Welcome to Our Family of Short Sales Insiders / Introduction
pletely destitute, desperately broke with no credit, divorced, searching for a vehicle to change your financial future so you can begin to put the pieces of their lives back together. I don’t know where you are right now in your life. What I do know for certain is once you take the information I’ve spent my life assembling, you’re going to see some amazing results. You’ll tap into my recession proof way of investing, where the worse the housing crisis gets, the more chaos in the markets, the worse the mortgage meltdown, the more opportunities await you. Deals are literally falling into the laps of my house buying. My method defies 90% of what you’ll ever read or could be taught in any seminar. I’ve already shattered the Paradigm of conventional wisdom. Literally, you will not be able to read this book and then put it aside and do nothing. The techniques are so compelling you will want to jump right in and get started! The method refutes EVERYTHING you’ve heard, read or been trained in real estate investing. How do I know this? Because I have over $300,000 in self education, countless trainings, and a top notch advisory board who are in the business everyday. If I could show you how to buy an endless supply of luxurious, gorgeous, high-end properties with virtually zero risk, no investment, no credit check and without ever having to make a payment...would that get your attention? It gets better, because I will show you how through my method and my formulaic approach, you too can walk away with an $80,000 net check on your next deal. Here’s the best part: you could be bankrupt, just gone through foreclosure, living with your mom and dad and in the next 90 days be living in a drop dead gorgeous property with 40% real equity and cash in the bank. If you are already investing or even actively doing short sales, isn’t it harder than the late night infomercial guy said it was? If you are already active in real estate, I’m going to show you how using this method you can literally double your profits on the very next deal. The Basic Assumption to My Short Sale Method Revealed
Exactly twelve years nine months and two weeks ago, I went
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through foreclosure. I did everything that a solid, contributing member of society does. I went to college, graduated in resort and hotel management, went on to be a chef in some high end restaurants, lived on St. John, a U.S. Virgin Island, and finally settled back in High Point, North Carolina to build the real estate empire I always wanted. Real estate investing was all I ever really wanted to do, but because I wasn’t sure how to get into it, I kept putting it off. Then I finally got the guts to buy a course off TV, despite hearing the doubting little voice in my head say, “Hey, if this is so great, why isn’t everybody doing it?” As I studied my new program at my restaurant, I was ridiculed by EVERYONE at work who saw me listening to my tapes and reading the books. They didn’t want me to break free. They wanted me to stay right there in the same rut with them. But I was miserable, unfulfilled, unchallenged and living paycheck to paycheck. I kept hanging on to the thought that real estate would be my way out. It was something I could control and do on my own time. At that time, Carlton Sheets and Tom Vue were running their infomercials. Tom was perched high above his six huge boats with gorgeous women everywhere. What the heck! After I took my first leap of faith, I went on to purchase over 66 properties in less than 24 months! I had amassed over $2,000,000 in equity just like the guys on television said it would happen…Hooray!
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Six Steps to Success / 1
Chapter One Six Steps to Success Jeff’s Method Revealed
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Six Steps to Success / 1
How We Make Millionaires: The Six Steps Revealed The short sale scuttlebutt - Don’t you believe a word of it! How we make money with virtually no risk and no investment Six processes to short sale success
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Did You Hear The Short Sale Scuttlebutt? Although beauty is in the eye of the beholder, I can’t think of a safer, more secure and rewarding business than building a collaborative team around buying and selling houses. But with the housing market in the toilet, what is one to do? To the normal person’s untrained eye, there appear to be no deals with equity on the market. Any fool can recognize that today is the worst time to be retailing a house on the market. The money has all but dried up. That’s the kind of casual conversation you might hear from two people who don’t know our world. They are oblivious that an opportunity even exists, nor do they care to learn more. Then there’s the much smaller group who have heard about this short sale niche, even tried their hand at it, maybe as a real estate agent, mortgage broker or new investor. They have heard about a property in default or with the owner behind on payments that has not been sold at an auction. They have had enough experience with the short sale process to have formulated an opinion regarding the processes required to complete a transaction. The process was a means to collect a commission or even a profit. This group generally has a nasty disposition regarding short sales, and would never consider proactively searching out pre-foreclosures to build a business. Why the bad rap and extensive discontent? Here are the most common explanations: • • •
Its been said they take too much time It’s a struggle to get the intended outcome you want The time invested doesn’t pay off
If you’ve done one of these deals, my comments probably ring true or certainly make you recall a recent deal that was more difficult than you expected. You may be saying that short sales and dealing with this process is an idiotic, frustrating, moronic waste of your time. You’re ready to tell the bank to take its short sales and stick them where the sun doesn’t shine!! That’s OK- You can have your temper tantrum but I’ll tell you how to break through your frustration. There is another side to this business. Some people may be offended, but the act of creating a complete business around this niche is not for everyone. Just because some people can’t do them doesn’t mean
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Getting the Best Deals to Find You / 2
Look! Foreclosures are everywhere
Chapter Two Getting the Best Deals to Find You How To Effortlessly Get Your Phones Ringing Off The Hook With Tons Of Customers Who Need Your Help
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Getting the Best Deals to Find You / 2
Pre-foreclosure Lead Generation Secrets Revealed The Key that Unlocks the Door to Massive Wealth Deal Pipeline Terms Made Simple Marketing Crash Course: Our Evolution To The Best Outbound Rifle Marketing Into Non-Default & Default Lists Pre-foreclosure Deal Timeline: 30 Days to a Six-Figure Income Deal Pipeline Building Strategy #1: The Secret Behind the Sign Deal Pipeline Building Strategy #2: Create a River of Referrals Through Your Deal Pipeline Support Triangle Partnering for Profits Strategy #1:Working With Real Estate Agents Partnering for Profits Strategy #2: Working With Other Investors Partnering for Profits Strategy #3: Mortgage Broker Referrals Profit Pulling Mailing Lists Letter Deployment Strategies - Do’s and Dont’s My Personal “Deals to Dollars” - Deal Pipeline Action Plan
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EVERYTHING - Including Techniques, Skill Level, Bank Insights - is Preceded by an Exact Lead Generation Plan This chapter will show you how to generate NO LESS THAN 40 SOLID PROSPECTS that will say “yes” to you and want to work with you. Remember that in your little foreclosure processing factory, our filter system will ultimately narrow down the number of prospects you are working on. The goal of this chapter goes beyond just getting you excited about buying and selling Pre-foreclosure properties. It’s about helping you to understand how this house buying business can become self-sustaining. By essentially automating nearly every step of the process, you can create a business model that will provide you a financial stake for the rest of your life. This business will run independently without you twisting the knobs on the machine every single day. You will have time to pursue other business venture opportunities and other streams of income. This method will give you the exact plans. Having said that, you must learn and understand how to automate lead generation very quickly. The Key that Unlocks the Door to Massive Wealth No, it’s not lead generation…it’s automation of your lead generation. Think this through. You have six processes to master. This chapter will give you the EXACT STEPS to generate 40+ prospects in the next 30 days – GUARANTEED! By following the plan, you will accomplish this, as did thousands of my students who have been able to leave behind their day jobs in just a few months. However, you must follow each of the sequential steps. These steps are: Lead Generation Evaluation Conversion Control
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Sell the House Short the Loan
Evaluation of Deals / 3
Chapter Three Evaluation Of Deals The Top Strategies To Quickly Eliminate Dead End Deals
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Evaluation of Deals / 3
Evaluation Of Deals How strategic evaluations earn you $2,000-$4,000 per hour From Chaos Comes Cash: Sifting Through Your Deals Essential Elements to the Evaluation of Deals Negative Deal Filters (1-12): #1:
The loan requires a short sale to create equity and the seller/debtor wants cash
#2:
The seller will not sign all the disclosures, hold harmless agreements and our purchase and sale agreement.
#3:
Angry Distrusting Seller
#4:
Spouse involved, not willing to sign disclosure package
#5:
Seller demands their attorney be involved through every miniscule detail
#6:
Seller is currently in Chapter 13, 7, or 11 business bankruptcy
#7:
House needs many repairs and your exit is to sell it to an end user who wants to live in it
#8:
The mortgage is with an undesirable lender known for time-consuming challenges
#9:
The subject property is below the median price range and you want to sell it to an end user
#10:
You run your numbers and determine there is no way to generate a 10% or greater margin
#11:
The interior B.P.O. is complete, came in way to high, and you have no compelling reason to convince the loss mitigator to do another one
#12:
Property is a townhouse or condominium
What Attributes do the Best Short Sale Deals Share? My Personal Plan to Build My Deal Funnel
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Evaluation Of Deals: How Strategic Evaluations Earn You $2,000 - $4,000 per hour! As you start to apply the marketing blueprints and learn a generation of foreclosure prospects, you’ll begin to see just how many people out there are desperate for your help. When I lost my house to foreclosure, I was searching for a way out that never came. You get to be that privileged person who will be helping give the homeowners options allowing them to begin rebuilding their life. You should feel honored. Unfortunately, you cannot work with everyone who contacts you, nor should you want to. I want to set the stage, the real framework to a successful short sale, if you will. You must learn the right way to use my evaluation filters. They will save you time and prevent you from spinning your wheels on deals that will never close. Most people entering this amazing business will spend on average about 17 hours from start to finish on a deal. With the average net profit of $37,000 per deal, you are generating over $2,176 of income per hour. Is this a good use of your time? Of course it is, the math speaks for itself. I know these numbers are completely accurate because we recently polled our students and reviewed a sampling of 25 closed deals based on hours spent vs. net profit. And I’ve validated those numbers for myself time and time again in our own deals. To see the sampled list of students and their actual numbers, visit www.InstantEquityProfits.com. So if you’re ready to generate between $2,000 and $4,000 per hour for the time you work, you’re going to love this opportunity. However, with several slight miscalculations that number could be WAY OFF. I want to help you understand how to choose the best deals on which to focus your time and effort. Some investors I know might work four deals to get to one that closes. That error in evaluating deals using my numbers still yields them just under $700 per hour. Because these techniques are so forgiving they still win, but to a lesser degree. In fact, I would say, they never should have been working on the other deals in the first place. They should have used my 12 evaluation filters up front to significantly increase their chances of working the right deals. I’m about to share those filters with you, but I need to ask you a favor. You will be tempted, as it is easy to want to violate the negative filters and work a deal that has say five or six of these components within them. The seller or his real estate agent will give you a compelling argument to take the deal. But you must hold your ground; you must control 56
Throwing the Seller a Lifeline / 4
Chapter Four Throwing The Seller A Lifeline How You Can Easily Get 9 Out Of 10 People To Want To Sell Their House To You
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Throwing the Seller a Lifeline / 4
Throwing the Seller A Lifeline Giving the homeowner a reality check: The options you offer your prospects depend directly on their ability to keep the house vs. their intent to keep the house My Greatest Negotiation Strategy Revealed How to Overcome Any Seller’s Top 5 Objections How to respond to homeowner’s who want to keep their house Dealing with a homeowner who doesn’t trust you Working with a homeowner who has given up How to work with homeowners who want all of their equity in the house Additional Seller Objections Let’s Make This Easy - here’s exactly what to say: our outbound and inbound call scripts Nine Proven Questions prior to the visit to the Seller’s home Productive Strategies you can use to present offers during house inspections My personal plan to get homeowners who want to work with me
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Giving The Homeowner A Reality Check: The Options You Offer Your Prospects Depends Directly on Their Ability to Keep the House, vs. Their Intent to Keep the House By now you are well aware of the opportunity that’s at hand - the opportunity to buy and sell just about any kind of property you want at a deep, deep discount. In fact, we are purchasing our single family houses at a 50% discount of the mortgage balance. Because every property we evaluate is 100% financed we are essentially purchasing most of our properties that need minimal repairs at 60 to 70 cents on the dollar. Fixer-up properties should be substantially less than 50% of as-is value. It’s extremely difficult to buy real estate at these types of deep discounts, unless you are dealing in defaulted properties. A motivated bank and motivated seller make this possible. You normally can’t locate truly deep discounted properties utilizing traditional real estate strategies because those properties are so few and far between. If you did find a property with 50% equity, could you imagine the negotiations that would take place to get the seller to relinquish that equity and just walk away? It wouldn’t be possible because the person who has 50% equity is not going to be in default. With that much equity and no threat of foreclosure, the seller’s motivations are much less, because they still have the options this equity provides for them, such as a HELOC (Home Equity Line of Credit), refinance or low payments. Yet I see and hear people complain about getting deep discounts on short sales because “It’s just too much trouble.” Interestingly, some people are complaining about getting deep discounts on short sales but, in fact, these people aren’t closing any deals. They refuse to develop a niched marketing plan that will enable them to find those equity rich deals, yet won’t do what it takes to learn how to create the equity they need! Sounds like a cop out. That’s why 97% of the population works for the 3% who actually accept responsibility and take on finding out the truth, instead of bumbling around like the masses. The exception to having to negotiate huge discounts comes from exits that “bottle up” smaller equity portions but simultaneously captures cash flow while building equity. I will cover this extensively in Chapter 9. For a guaranteed check, let’s examine someone who’s over financed, has no options and can’t sell. You would think every one of these 78
How Easily Mastering Bank Communications Will Lead You to A 7 Figure Income / 5
Chapter Five How Easily Mastering Bank Communications Will Lead You To A 7 Figure Income
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How Easily Mastering Bank Communications Will Lead You to a 7 Figure Income How to Create a Successful Short Sale on 80% of the Deals You Work Key Words, Acronyms, and Phrases Used in this Chapter 7-Step Process Overview of the 7 Steps in Loss Mitigation. Your Introduction to a Fascinating, Predictable New World True Story: My First Customer Was a Flat-Broke Sweepstakes Winner The Evolution of this Information How You Control the Size of Your Check Why Banks Lose Without our Help Crushing the Top 5 False Conclusions Top Three Myths Most Investors Believe and Suffer Greatly From Collecting Intelligence: What you do prior to speaking to the loss mitigator Exact Fool-Proof Steps to Contacting Loss Mitigation Identifying the 3 Types of Mitigator Personalities Case Study: How to Sell a House with $845,000 in Costs for $410,000 and Still Make Over $79,000 in Profit! My personal Plan to Mastering Bank Communications
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Effective communication with banks is one of the key secrets and common denominators among all of my students, whether they are closing their first deal, or, like Steve & Jeannie Campbell, effortlessly closing multiple deals in one month. An individual closing a short sale with no training or clear understanding of how to effectively communicate with the lender would be considered an anomaly. I’ve seen some realtors work for months and months on one transaction, loading in countless grueling hours and somehow, out of sheer tenacity, get the deal done. This is not my idea of a business that provides freedom and ease. In the process, they were tossed about aimlessly, chasing needles in a haystack. No wonder these deals get a bad rap. Similarly, surgeons don’t practice open heart surgery on a patient to try and get it right. Once you have mastered bank communications, it will be ridiculously easy to make five times the salary of a top surgeon, simply by learning the easy-to-follow steps I’m about to share with you in this chapter. Soon, you will begin to recognize that my clients enjoy 7 figure incomes in real estate, and do so regardless of what the market is doing: up, down, hot, cold, calm as a summer day or in total turmoil. It all boils down to using my formulaic approach to structuring an offer the bank can’t refuse. More so, HOW you communicate to the bank and move your file through Loss Mitigation. Here’s a great example of what I mean. Recently, I spoke to a Real Estate agent about sending me her pre-foreclosure candidates so our team could create the short sale and get her paid a commission. She defensively told me the same story I’ve heard before...so many times in fact, if I just had a nickel for every time I heard someone plead this case I would be a gazillionaire, with my own private island right next to Richard Branson’s. “What are you doing differently than me when you do the short sale? I know how to call the bank and submit a package...I even know how to present an offer...what are you going to do that’s so special??” My answer was simple. “EVERYTHING.” I had to tell her, “Just because you struggle with these deals, it doesn’t mean they are tough. Have you ever stopped to think there might be a system to how you do this?” The “system” of how to create effective, reliable, and replicable results on your deals will come from what you learn in this chapter. Admittingly, not knowing and applying the information in this chapter will cause you to question the validity of these deals. Before we start, let me give you a case in point: This agent went on to build a con112
How to Control the Value of the Property / 6
Chapter Six How To Control The Value Of The Property Managing the B.P.O.: The $30,000 Per Hour Job
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How to Control the Value of the Property The $30,000 per hour job The Power of the Broker’s Price Opinion Key Documents Used to Verify Values Common Misconceptions Regarding the B.P.O. The Inside Steps to Developing an Acceptable B.P.O. Understanding “Event Sequencing”: Timing is everything when quickturning a house Understanding when to use our money: Can a poorly timed B.P.O. put us at risk? My Personal Plan To Mastering The Broker’s Price Opinion And Controlling The Value Of The Property
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We are able to generate 10 to 20% net profit margins in short sales because we understand how to control the value of the property. The lender must have “as is, where is” market value of their property. This is established by the Broker’s Price Opinion (B.P.O.). As a buyer, we want to purchase the property at the lowest distressed value we can, because our primary intent is to resell quickly at what I call a “Retail” price. This relationship between distressed and retail value is what creates our profit. The big distinction you can take away from this chapter is that how we manage this process directly determines the size of our check. It’s mind boggling when you understand that so much is riding on the turn of fifty bucks. What am I talking about? That’s the average fee a lender pays to have a Realtor perform a B.P.O. In this chapter, I’m going to show you just how greatly this “field value” can vary. Even something as simple as the skill level of the Realtor doing the B.P.O. will determine the lender’s decision to short the loan and cut their losses, or repossess the property and ride it out. The bank is hoping, after months and months of holding the property, that they can minimize their loss once they own the property and resell it themselves. It’s my goal to show you how to become effective at meeting the B.P.O. agent hired by the bank. You will be the contact on record. The B.P.O. Agent will have to contact you to gain entrance to the property to perform the interior B.P.O. inspection. When legitimate deficiencies exist, it is your responsibility to make sure the B.P.O. Agent documents them and the lender is aware. It’s these deficiencies and problems with the house that effect the marketability. Poor marketability drives a lower value. I will give you the exact steps so that when necessary, you too can help the lender recognize the value of an acceptable B.P.O. Lastly, I want to share with you the timing, and event sequencing, so you don’t put your profit at risk. Notice I didn’t say “your money”, or “the money you invest”, because in this case you don’t put any of your own money at risk. There can and will be opportunities for you to put money into a transaction with calculated risk. I’ll share with you a case where I lost over $40,000 in profit potential, yet still netted over $62,000 once all the dust settled. These next few pages aren’t about if you will win...but how to maximize that win. 160
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Chapter Seven How To Create The Ultimate Short Sale Package That Sells Your Discount
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How to Create the Ultimate Short Sale Package: Learning the Difference Between Strategic and Tactical Activities Short Sale Package Items to Collect From the Seller Short Sale Package Items You Must Collect - The Justification Package Three Ways to Profit From One Deal Want to Make an Extra $100,000 to $250,000 Your First Year? A Success Certain Short Sale Package That Created Over $433,000 in Lender Discounts Strategic Analysis of The Final Acceptance Letters and Leverage Points About This Short Sale Package My Personal Plan on How to Create the Ultimate Short Sale Package
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I want to share with you just how easy the process of creating compliance with your short sale can really be. The backbone of this acceptance is a well thought out and carefully constructed short sale package. In these next few pages, you will see the documentation the lender requires us to collect. This is an easy task, because much of it comes from the debtor. The debtor provides you with the financial documentation, while the offer and supporting documents come from you and me. It’s this collaboration of information that supports our request to the lender to accept less than what is owed as a payoff. The short sale package proves to the lender the Seller cannot afford to keep the property. It eliminates any chance the lender will be able to construct a workout plan (such as a forbearance, debt restructure or loan modification). Once all options are eliminated to stave off the foreclosure, the lender will begin to structure a short sale that fulfills their mandated guidelines and act to liquidate the property at a discount. This chapter is comprised of a detailed explanation of those documents. Each and every lender must have this documentation prior to making a decision to liquidate the property via the short sale. There is equally important supporting documentation that is often overlooked in short sale packages. In addition, each short sale package has a “strategy” behind the documents submitted. That is because my method requires we recognize important distinctions in creating a short sale package. Let me explain... We seldom, if ever, submit a short sale package with an offer and get an immediate acceptance back from the lender. Of course, we must submit the request for the short sale, AND the debtor’s financials. But there is an even more important piece to the short sale package. It’s the part that most everyone misses - the justification package. This is what triggers the acceptance letter from the lender. I am going to introduce the critical “justification” documents that will generate your acceptance letter for eight out of your ten short sales you decide to spend time on. Before we begin, let me clarify the two strategies I want you to learn to use in your short sale packages. Your offer will always be supported by the current liquidation value of the property. That value is driven by the property’s marketability. The attractiveness, or lack thereof, is driven primarily by the CONDITION of the property. Therefore, with a property needing repairs, we use a condition based strategy. Our justification is built on a distressed, quick-sell value because the subject property is below average. This justification package will in-
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Chapter Eight How To Make An Offer The Bank Can’t Refuse
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How to Make an Offer the Bank Can’t Refuse / 8
How To Make An Offer The Bank Can’t Refuse My Two Formulas Revealed: The Tale of Two Friends Deal numbers guaranteed to generate you $2,000 per hour How loan to value becomes a measurable indicator for all calculations The components that control how we formulate our equation. Formulaic Approach #1: The B.P.O. to offer alignment Formulaic Approach #2: Gross the lender more, net them less Student Case Study: How to Maximize Profits on a Gorgeous Property Understanding how to structure effective preliminary HUD statements Strategic Overview: How to double your profits with half the work. My Personal Plan To Make An Offer The Bank Can’t Refuse
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My Two Formulas Revealed Through my real estate investing experience and the help of my amazing short sale advisory board consisting of 60 students, loss mitigators on staff and my coaches, we have developed 100% of what’s in this book. Even more complete instruction is presented at my live events. You can uncover knock-offs and cheap products from people who have collected our information over time. I cannot and never will be able to control that. Although they call imitation the ultimate form of flattery, the information you are about to read is exceptionally new and comes only from the Real “Jedi Master.” But I have a bit of a confession to make; people around me call me a bit of a mad scientist because I’m always tinkering around in my short sale laboratories, concocting new methods to extract greater profit margins on my deals. I’m about to share these concepts with you because you deserve to have them. I have mastered and defined two distinct formulaic approaches when presenting an offer the bank can’t refuse. Both of these approaches provide the critical justification points the lender needs to accept your offer. Because most investors haven’t recognized these distinctions, they fumble around in the dark throwing darts at a moving target with the light switch off. Not only am I going to reveal these to you, I’m going to show you how to master them for yourself. In one chapter, I’m going to turn you into a real short sale expert. Like my house buying team, my students and my own private group of personal in-houses bank mitigators, you too will see an 80% acceptance of the deals you decide you want to spend your time on! Those success numbers are not possible to the masses and even the best of the best most seasoned, self-proclaimed short sale gurus on our planet. Let me introduce my first formulaic approach: The B.P.O. to Offer Alignment. It’s an offer to the bank based on the B.P.O. value, condition, and the lender’s delegated authority. This is a distressed value based offer justified by the property’s marketability, and the duration it would sit unsold on the market. My second formulaic approach is based on well-developed industry standards for what the bank will accept in concessions that lessens 274
Hybrid Sales Strategies Guaranteed to Work in Today’s Market / 9
Chapter Nine Hybrid Sales Strategies Guaranteed to Work in Today’s Market
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Hybrid Sales Strategies Guaranteed to Work in Today’s Market / 9
Hybrid Sales Strategies Guaranteed to Work in Today’s Market Why I’ve had to develop my own sell strategies Four variables you must consider before selling Two selling methodologies we use to stop a foreclosure sale Introduction to four unique “cash out” strategies (Chart 1) The basic elements that require you to employ the cash out strategies Principles to sell a property on terms Introduction to three unique “sale on terms” strategies (Chart 2) The secret behind my strategies revealed Plug your deal into a score system Cash Strategic Sell Formula #1: “Wholesale Blitzkrieg”. How to wholesale a marginal fixer to an investor, contractor or bargain shopper for all cash Cash Strategic Sell Formula #2: “Auctioneer Blitzkrieg”. How to sell a luxury house in one weekend utilizing auctions. Sub-hybrid Strategy: The Highest Bidders Circle, Safety Net Strategic Sell Formula #3: “Playing the Listing Game”. How to wholesale a property to an end user using the Multiple Listing Service Terms Strategic Sell Formula #4: “Sweat Equity, Rent to Own”. How to sell a marginal fixer to an end user for long term equity growth.
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Why I’ve Had To Develop My Own Sell Strategies Congratulations! You made it to the home stretch, the tough part is done - now its time to sell your property and collect a check. This chapter will do more than just give you a couple of techniques that you can immediately implement to sell houses. It will complete your circle of acquired knowledge to do pre-foreclosures and short sales. There are specific strategies you must learn and implement when selling. RELAX! None of these strategies are difficult. On the contrary they are VERY SIMPLE. So simple, in fact, that once you follow my instructions you too will make the leap to my world of real estate investing. In my world we laugh at conventional wisdom and are continually able to shatter the proverbial mindless chatter that continually slays 90% of real estate agents and 100% of anybody else who’s trying to sell a house in today’s market. I’ve developed seven distinct selling methodologies over my thirteen years of buying and selling short sale transactions. In this chapter I will detail my four best. Once implemented, you should be able to stop a foreclosure and “cash out” on any property in 30 days or less. These three exit strategies provide immediate cash to you at the sale. I routinely use the other two Hybrid Sales techniques to stop a foreclosure sale so we can help find the homeowner another home. Then, using these techniques we can take over the existing debt, not acquiring a new loan, but bringing the first mortgage out of foreclosure so we can move a future buyer into the property. We never resell a property back to the person who was in foreclosure EVER. Because of space limitations in this book I will detail five of my seven. You can gain access to all seven, plus $900 in other materials for free just by visiting www.InstantEquityProfits.com Notice I said “anybody else who’s trying to sell a house.” This buyers market actually creates a massive opportunity for those of us who have learned how to play the selling game. With short sales, we are creating instant equity once we get the discount from the bank. But we actually get the money, in other words we get the profits when we sell the house. Understanding everything that we’ve discussed to this point has led us to receive the big pay day. The great news for you is that I’ve been forced to develop systematic and hybrid selling strategies from my very first foreclosure deal over hundreds and hundreds of houses ago. Because of the pending foreclosure date on ALL my deals, I’ve had no choice but 324