eCourse for Flipping Short Sales Module 11 Deal Flow
Short Sale Help
Short Sale Deal Flow
Seven Streams Flipping Short Sales MethodTM Lesson #11 Creating Short Sale Deal Flow By Richard Geller Calworth Glenford, LLC dba www.sevenstreamsflipping.org
Disclaimer – this limits our liability – Read it! In plain English, I did my best to make this the best eCourse I could make it, for someone dealing with other that are facing foreclosure, credit problems, and financial difficulties. But I am sure that I left stuff out, forgot some important stuff, and made some mistakes. Plus, I can’t know the laws of your state, and the facts in your particular situation. And I’m not a lawyer nor do I play one on television. Some of this stuff MAY NOT WORK. Or it may be ILLEGAL. Who knows. So… You have to take responsibility for whatever you do or don’t do after going through my home study eCourse. Don’t blame me!! I am not responsible for what you do!! If I were you, I’d find a good attorney to advise me. And I’d check out whatever it is that anyone tells you to do – me, the attorney, your mother-in-law, whoever. Then I’d take my chances. Life is full of risks. You could do great following my advice. Or you could fall on your face. Who knows, maybe some of the stuff I suggest is illegal in your state. I don’t know. But regardless, you can’t go after me for telling you to do something or not do it – because I am right now disclaiming any liability. You are on your own!! And with that out of the way, read on… While the publisher and author have used their best efforts in preparing this eCourse, they make no representations or warranties with respect to the accuracy or completeness of the contents of this eCourse and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended. 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.
And another important note – this one about ethics The techniques I outline in this eCourse – some of them anyway – may strike you as pretty outrageous. Unethical perhaps. You may find a few techniques that you can swear are illegal. I don’t advocate anything illegal. And I don’t want you to do anything unethical. These techniques exist. People do them all the time. I don’t want you do be at a disadvantage by not knowing them. So I tell you about them, no holds barred. I think it’s too easy to judge others when you haven’t been in their shoes. Some people are in frightful situations and they are frankly quite desperate. They need answers. I hope if this is your circumstance, you find answers, some of them here. That doesn’t mean I think you ought to do things that are unethical, or that things you choose to do are right for everyone. That is for you to decide. Okay? And a final important note – this one about plagiarism! You DO NOT have permission to resell this information. You DO NOT have permission to give it away to someone else. This information is sold under a license that lets you read it, use it FOR YOUR OWN USE, but not give it away, make copies, sell it or resell it. For another copy, contact me at: www.sevenstreamsflipping.org Thank you!
Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow
IT IS STRONGLY RECOMMENDED THAT YOU PRINT THIS OUT PRIOR TO READING Richard here, welcome back to your 11th eClass in the Seven Streams Flipping Short Sales MethodTM. This week’s lesson goes into detail about creating deal flow. Getting out and meeting people that can and will bring very profitable short sales to your office. This week we’re going to talk about: The types of professionals that regularly come into contact with people in distressed houses. People facing the very high possibility of a foreclosure that will severely damage their credit rating. You will learn how to contact these professionals and work with them to steer these people in hardship through the complex short sale real estate transaction. You will be given the right tools to convince other professionals they should be working with you. When a short sale comes to them, they will turn to you. There are different categories of professionals you will work with. You will learn the correct order to bring them on board so that you immediately have deals to begin working on. Your business will be a primed pump from the start. This is called deal flow. Having your short sale business pipeline continuously filled with more deals. Every business needs deal flow but not every business owner knows the most effective way to create deal flow especially in the short sale business.
This is how you create deal flow for short sales….. By the end of this week’s eClass, you’ll have the knowledge, tools, and skills that will have others bringing deals straight to you and they will perform much needed services. Specifically, you’ll have the following things in place… Who to contact to bring deals to you. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow How to find and make contact with them. Exactly what to say at each step. How to get them to say ―yes‖ to bringing you deals. How to handle their objections.
Nearly one-third of existing homes sold were either short sales or foreclosures, according to August 2009 monthly data compiled by the National Association of Realtors (NAR), and according to testimony by Federal Housing Administration (FHA) commissioner David Stevens, the mortgage servicing industry is about to see details of an incentive program aimed to prevent foreclosures by encouraging servicers to pursue short sales and deeds-in-lieu of foreclosure. The program is being finalized and will be announced as soon as possible – possibly in late September 2009. It’s hard to know beforehand what’s coming down the pipeline, but this is what we’ve got so far: Under the Treasury plan, servicers would get a $1,000 ―success fee‖ when a short sale is completed. The home seller would receive up to $1,500 to assist with relocation expenses, similar to the ―cash for keys‖ programs that various servicers offer. Fewer homes were repossessed in August than in July, but just as many Americans were behind on their mortgage payments, according to a report released by RealtyTrac, an online marketer of foreclosed properties. The number of homes that lenders actually took back from borrowers fell 12.7%, leaving a total of 540,222 homes repossessed so far this year. Banks take big losses on repossessions, so they may leave delinquent borrowers in their homes under the assumption that they’ll maintain the properties, thereby saving banks the time and expense of upkeep and maintenance. Plus, there is always hope that some of these borrowers will catch up on their loans without assistance — a recent report from the Boston Federal Reserve found that 30% of borrowers who have missed two mortgage payments eventually become current.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Increases in short sales could also be reducing the repossession statistics, since a lot of banks are delaying the foreclosure process if they see any kind of chance of making a reasonable short sale. However, the downturn in repossessions could be coming to an end based on a Fitch Ratings report forecast that of the $200 billion in option ARMs outstanding, $29 billion will reset to fully amortizing loans by the end of 2009, and another $67 billion will reset in 2010. The average payment will increase 63%, or $1,053 a month — an impossible cost for almost all homeowners that will be affected.
Who to Contact and When - to Create Deal Flow With billions of dollars in loans either in or headed to foreclosure, getting short sale deals is not difficult. If you’re good at completing short sales it’s going to be simple to find more deals than you can handle. In fact I recently learned of one loss mitigator that periodically calls trusted real estate investors when he has a potential short sale in that investor’s geographic region. What could possibly motivate a loss mitigator to ask for an investor’s help? It’s easy…. when the loss mitigator works with the right investor he knows he’ll receive a complete package to complete the short sale. Amazingly, the lenders are now seeking out short sale opportunities! So who’s going to bring these deals to you. These are the people you want to contact: Real estate agents and brokers Mortgage brokers and agents Other investors Attorneys and accountants Others
We’ll go into each of these categories in a moment but first let’s look at people by personality types. You’ll come across a type of person called an early adopter. These are people that make decisions with © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow little information. Sometimes they do it based on gut hunch. And at other times they are able to quickly grasp a good idea and run with it. These are the people that will be the first to bring you deals. After a brief explanation from you about how you conduct short sales, they’ll say ―let’s do it‖ and the first deal will shortly be on your desk. Generally, these people are less thorough about everything. They’ll probably be less thorough than you prefer when performing their part of the short sale. Over time, you’ll likely find that you prefer working with those that are slower to adopt new ideas and more analytical in making decisions. The more analytical individuals are deeper thinkers. They do more homework. They are more educated. They are more protective of their reputation. They are more dependable and will do better work for you. Of course, people come on a sliding scale from those that jump at every new idea to those that are stuck in their ways and never change. Over time, you need to find those with the right balance between the two and work with them on short sales. A Brief Look at Who You Are Seeking Out Some of the people you will learn about in this lesson can bring you deals immediately while others will fill the pipeline and bring deals over time. Real estate agents and brokers belong in the first group, those that can bring deals to you immediately. Mortgage brokers and agents can’t necessarily bring you deal flow today. They are being contacted by people not yet ready to sell their home. People still hoping to restructure their loan to stay in the house. But mortgage agents and brokers will bring deals when many of these clients realize they have no refinance options. Other investors are doing the same thing or something similar as you. With the hundreds of thousands and soon to be millions of possible deals, there is no reason to think of these people as competitors. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Instead, look for ways to work with them. Look for ways to work with them to complete more deals. Compliment what they are doing or find specific projects to work on with them. Cooperate instead of competing. A lot of people trying to complete short sales don’t understand how to negotiate or complete a deal. They have a lot of leads but close few deals. For these investors, you can offer to give a small percentage of your net profit in exchange for referring leads to you that they’ll never complete a deal for anyway. You’ll have a much higher rate of success based on your knowledge from the Seven Streams Flipping Short Sales MethodTM. A small percentage of something is always better than 100% of nothing. They will give you deals. Having seven potential income streams makes it easy for you to create an equitable position in almost any short sale. In almost every case, other investors will get more from the seven streams version than if they had been able to pull off the deal themselves. A bigger pie to split. Attorneys and accountants. People often turn to these people when they are in financial trouble. Specifically, you are looking for: Real estate attorneys Bankruptcy attorneys And to some extent probate attorneys
Anyone that regularly has contact with people in financial trouble. This can include attorneys that set up corporations and limited liability companies for small business owners. Most small businesses fail within two years and they know who is about to fail now. Attorneys that handle probate often become involved with real estate deals. People inherit a property they don’t want to mange. They certainly won’t want to make mortgage payments if the house is up side down as so many are in today’s world. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow So, now we know who the people are that we want to contact and get deal flow coming from. The next question becomes how to find these people. How to Find These People The first ones you want to contact are real estate agents and brokers. Pick up those free real estate listing booklets you see around town. Sometimes they are near the doorways of stores. Sometimes they are with newspaper stands. Look for listings that are ―contingent on 3rd party approval‖. Look for agents that run these ads in the listing booklets. You can go to Realtor.com. Type in your city and state to find a long list of realtors in your area. Call a few local real estate offices and ask if anyone in the office specializes in short sales. Tell them you are a real estate investor. A cash buyer. Hunt out mortgage companies that are advertising to distressed homeowners. Mortgage brokers are doing loan modifications but not all of their clients qualify. Call companies offering to buy ―ugly‖ and ―no equity‖ houses. You’ll often find these on bandit signs stuck up in high traffic areas. Look in newspaper classified ads for the same thing. And for rehabbers. Whenever you talk to someone, especially those that can’t or won’t work with you, ask them for a referral to someone that might. Next is the Face-to-Face Meeting Once you have found someone that you want to work with, schedule a face-to-face meeting with them. Do it at their office, your home, or Starbucks but make it a face-to-face meeting. A face-to-face meeting: Gives you a much higher chance of becoming a memory in the
person’s mind than a telephone call does. It demonstrates a strong work ethic. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow It’s a higher commitment level. It begins building a relationship.
You can use meetup.com to find local real estate meetings. Take the time to meet the presenter and those asking questions. These are hard working professionals. Something similar is REIT or Real Estate Investors Association. Simply type REIA [your location] into Google and you should find local meetings. Another way is to go to open houses on Sundays. You can easily meet 7 or 8 real estate agents there. Easy Tip: What you want to do here is use the people multiplier. Get in front of as many people as possible that know as many people as possible.
Now that you’ve found people to meet face-to-face, we’ll go through the all important first meeting next. Your “Assignment” for Stage #1 Start trying several of the ways you’ve learned to begin meeting real estate professionals in your town or region. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.org/e-classes2
What to Say and Do at the Meeting Let’s start by discussing the social aspects of different people. People fall somewhere on a scale that is very social at one end and all business at the other end. In the first few minutes of the meeting you should be able to determine where this person fits on the scale. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow You want to slightly mimic that person. People tend to like others that are like them self. They’ll respond well to that. They’ll like you and trust you more. What you’re after in the beginning is to build a network of people needing your short sale or loan modification services. Only after you establish your network is it worth direct marketing your services to homeowners facing foreclosure. The Chance Meeting –v- An Appointment Sunday open houses and the real estate investment meetings are great places to meet someone and shake their hand. But you aren’t likely to do any serious business at those places. The end goal of these meetings is to set up a future appointment for a one–on-one meeting. You want to sit down for a cup of coffee or meal to discuss possible future business relationships. If you can’t accomplish setting up an appointment, at least build rapport so that a future face-to-face can be scheduled. Your Script to Getting the First Meeting Appointment Here is the exact script that I suggest you use to set up the face-toface appointment. ―I’d like to set up a 30 – 45 minute meeting with you to discuss what I can do to help you make money with short sales.‖ Since you’re seeking out people familiar with the short sale process, you’re likely to run into people that are already using a short sale negotiator. Some back office operation that collects a fee but rarely closes a deal. They don’t actively pursue putting a complete package together. Instead, they collect whatever information the seller can quickly and easily provide and send off a package to the lender that falls well short of what the lender needs to make a decision. Certainly, they don’t make the effort to document all of the short comings of the house and neighborhood. There won’t be any equity in the deal to motivate them to complete the deal. At best it will languish © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow in a stack of paperwork until the lender forecloses or caves in to a poorly designed short sale if a buyer will hang around that long. When your prospective team member says they are already working with a short sale negotiator, here is your response: ―I’d like to meet with you to discuss how we can work together to increase the number of short sales we can complete.‖ Your emphasis is on increasing the number that you will complete for the team. Getting the Most From the First Meeting Come prepared with a brochure or printout of some kind. Something you can leave with the other person. Basically a summary of what you think you can do to help the other person’s business. It’s about benefits for them. A short introduction of yourself and the mission of your
business. What the business relationship with others might look like. Emphasize the benefits to your prospective team member. Include the benefits that all will receive – buyers, sellers, the
lender, your self. I’ve included a sample of a service summary as a separate file. You can use it as a beginning to write your own. The First Few Minutes of the Meeting During the opening moments of the meeting you’ll gage how social the person is. A highly social person will want to get to know quite a bit about you during the introduction. A work focused person will want to get right down to business. Most people will fall in between. Once you get down to business, your opening line should be something like:
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow ―What I’m going to show you today is a different way to do short sales. Not the typical way most people are doing them. And it’s been highly successful compared to the way others are doing it.‖ The best way to control a conversation is by asking questions. Questions steer the conversation onto the topics that you want to discuss. After the brief opening statement above, follow up with a question: ―What do you like most about short sales?‖ Assuming the person is knowledgeable about short sales, you can expect one of three answers: 1. The money 2. The abundance of deals that can be done 3. Or a combination of both of the above – the money and abundance The bright ones will give you answer 3. Both the money and abundance of deals to be done. Keep your ear peeled for these people in particular. Next, you follow through with another question. The answer to this question will give you the information you need to carefully structure the conversation to your advantage. ―What do you dislike the most about short sales?‖ Use the answer to structure your next response. I can’t give the exact words because I don’t know exactly how the other person will respond. But your goal with the next response is to assure them that working with you will let them keep the part that they like while discarding the part they dislike. ―If I can preserve what you like – the abundance and the ability to make money, while eliminating the hassles of (insert their dislikes here) taking too long and loosing your buyer, would that interest you in learning more and maybe trying a deal between us?‖ © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow You should get a ―yes‖ or at least a continued interest to hear more. If you get a ―yes‖ simply follow through with: ―Where’s the first file?‖ Most likely, they’ll want to hear more about your process. This is your script: ―Here’s how I work. When you present a file to me, I will immediately make a cash offer to buy the house. I also will immediately begin negotiations with the lender on that file for you. You won’t have to handle the negotiations. You do your work as a real estate broker and I’ll do the rest to close the short sale.‖ ―You are assured of earning the listing commission on the sale.‖ ―Because you brought me the deal and have an interest in how it’s going, I’ll give you a weekly phone call or email to let you know the current status.‖ ―Here’s all I need from you. Find listings that are short sales Put them on the market Take extremely detailed photos of the property and if needed
the neighborhood And I need you to resell the house for me‖
―That’s where you earn a second listing commission.‖ ―Here’s what I’ll do to close the short sale deal: Gather all of the necessary paperwork. This begins by
providing the seller with a checklist of what’s needed from them. I’ll stay in contact with the seller to get the paperwork to me
in a timely manner. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow I’ll enter into negotiations with the lender as soon as I have all
the paperwork. I will schedule the closing as long as you can find a buyer that
will show up prepared to close the deal.‖ That should keep them very interested in doing business with you. They might be a little skeptical still because you haven’t established your credibility but you have established that you know what you are doing. We’ll get into credibility in a few moments. Now that you know how to get the meeting going with real estate agents and brokers, let’s talk about the next category of attorneys and accountants. It’s a little different. How to Work with Accountants and Attorneys For attorneys and accountants, all they need to do is hand your card to their client when it becomes clear that is the best advice they have to give. They don’t need to answer any questions about short sales other than to refer those clients to you. In exchange for the reference, you will give the attorneys and accountants a cut of the profit you make. You need to decide how big of a cut to give them for the referral. It can be a flat fee or a percentage of your net profit. If you net $35,000 after all of your expenses a 1.5% referral fee will put $525 in the pocket of the attorney or accountant. Not a bad piece of change for handing out the business card of a trusted associate. Don’t try to approach accountants and attorneys to early in your business development. They won’t come on board until after you have successfully completed a few deals for real estate agents and brokers. Attorneys and accountants are by nature a more conservative bunch. They’re leery about putting their reputation at risk with someone that has not fully proven themselves. You can handle mortgage brokers in much the same way that you discussed short sales with attorneys and accountants. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow They Don’t Need All of the Details This definitely applies to the accountants, attorneys, and mortgage brokers. Few of them are interested in the low level details about how you quickly and successfully close short sales. They only want to know that you are a detailed person that follows through. In the end, you handle the short sale details and they get a paycheck. It will also apply to many real estate agents and brokers. They want to earn commissions from the high volume of short sales they see every day. But most are a people person not a detail oriented person. They don’t want to know the details, just like the accountants, they want to be able to hand the package to you and get a paycheck in return. Other real estate agents and brokers may want to know a little more about your process so that they can sound credible to house sellers. I recommend a brief overview of one of your completed packages if you have one. Otherwise go over the sample short sale package that came with your eCourse. We’ll get into more about how to show the package in the next section about credibility. Your “Assignment” for Stage #2 Write your service summary brochure to be handed out to other real estate professionals that you meet with. Use the sample that has been included to get you started. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.org/e-classes2
Establishing Your Credibility Obviously it’s more difficult to establish your credibility before you have closed a short sale deal. The way to go about it is to establish © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow yourself as part of the Seven Streams Flipping Short Sales Team. You just happen to be a new member of the team. Explain how you’ve taken top-notch training with the specific goal to get them closed in the shortest time possible. And do them honestly and ethically to bring happy people to the closing table. Describe it this way: ―I have a process in place to make sure the details get handled and nothing falls through the cracks. I use checklists and procedures, not random calls to the lender asking them what the next move is. When they receive my package of information they will order the BPO and make a decision.‖ When a Broker Already Has a Short Sale Negotiator You will come across brokers already in the business that are currently using a back office short sale negotiator. The best way to start this conversation is with: ―How is that working for you? Are they willing to make you an instant offer to buy the house?‖ They aren’t going to immediately admit to how bad the back office operation is. Regardless of how they answer, you can assume results of their operation are much less satisfactory than what you are offering. The back office is not making an instant offer on the house. In fact, the broker or another broker must find a buyer for the short sale. And then they hope the back office can pull off getting a ―yes‖ from the lender. In most cases, those back offices are taking on an avalanche of short sale cases. Way more than they can possibly manage or even hope to close. They make a few feeble attempts to gather the necessary paperwork and a few feeble attempts to get the lender to make a decision. Nothing happens and they just move on to the next opportunity. There’s nothing there to motivate them to follow through. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow On the other hand, you have control over the property. You have lots of skin in the game. You are fully motivated to complete every deal and collect a handsome paycheck. Easy Tip: If they do claim their back office is successful, it’s time to pull out a copy of your short sale package.
While getting started with your package, talk about typical experiences with these back office negotiators. Say – ―it’s been my observation that most short sale negotiators come up short on the details needed to get an answer from the lender. I hear it’s common for a short sales to take six months, even nine months is not that uncommon. Here, let me show you what I do that makes a big difference. This is how I get deals closed in 35 to 40 days.‖ More About Using Your Presentation to Show Credibility Besides the simple handout you gave them at the beginning of the meeting, the only other material to cover with a broker or anyone else is your short sale package. This can be done on a laptop or keep it very simple with a printed color copy. Open with the statement: ―Have you ever seen a short sale package like mine? This is my typical package. I don’t just submit what the lender asks for, I submit everything any lender has ever asked for and even more‖ ―I keep a detailed master checklist of everything a lender has asked for. It doesn’t happen often but if I come across a unique request I add it to my checklist.‖ ―No package ever gets turned in until my package is complete.‖ ―When they see it, the short sale is immediately pre-qualified. They order their own BPO shortly after the package is received. And I help them manage that BPO to get it done right the first time.‖
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow ―When I ask if you have ever seen a short sale package like mine before, I can assure you the loss mitigators never have either.‖ ―The short sale decision always boils down to having all the information to make the sale. I give them everything they need plus more.‖ You Can’t Offer That Low Price An observant person will notice the low short sale price offered in your package. They’ll claim you can’t make that low of an offer. Certainly not and expect it to be accepted. The truth is the lender has three options when they receive an offer of any kind. They can: Accept the offer They can counter offer They can out right decline or reject the offer
Obviously, the best scenario for you is if they accept the offer right away but that’s not likely to happen. And we know that missing or incorrect information most commonly results in the offer being rejected. So you explain that when the lender receives your package you expect to get a counter offer in return. This is where you begin negotiations with the lender. The back office guys either have their package rejected on arrival or begin negotiating what else is needed to get the BPO assigned. You are exactly where you want to be when negotiations begin. You’ve done your due diligence and have all the facts. You’ve shared the facts with the lender and convinced them that they have enough information to make a decision. So that decision wasn’t to accept the offer the first time. Your negotiation strategy is to get the lender to come to the same conclusion about the property value that you did based on the information. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow You’re not going to accept the counter offer. You’re going to continue educating the lender until they fully understand the property they are going to get back as a foreclosure. It won’t take long to educate the lender. They’re in the business and will quickly come to the same conclusion as you. How many Short Sales Have You Done? This is another opportunity to talk about the team concept. Try to answer this question before they even ask it. Hopefully towards the end of your short sale package overview. At some point you say: ―You might be wondering how many short sales have been completed using this detailed short sale package. I’m part of a team that has used this type of package to close literally over a thousand short sales. It’s highly effective now but still the team continues to find small ways to make it even better.‖ There you go, you’ve briefly walked your prospective associate all the way through your short sale process. All that’s left to do is close the deal. Your “Assignment” for Stage #3 Use the steps outlined here to strengthen your credibility. Prepare a copy of the short sale package that you will use to booster your credibility. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.org/e-classes2
Closing the Meeting By Getting a Commitment By this point you have established yourself as a short sale expert. You’ve shown them your checklists © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow You’ve shown them the short sale package You’ve pre-answered their questions You’ve shared your negotiation strategy You’ve briefly walked them through your entire process
It’s Time to Ask for Their Commitment One way to state it is: ―When can I expect the first short sale from you?‖ Here’s another way that I prefer because it implies you’ll deliver instant solutions to their problems and it can produce instant business for you. ―How many short sales do you currently have that you want handled correctly?‖ Always, Always Follow Up Once you get their commitment to work with you, it’s time to prove you are as diligent as you’ve claimed. You do this with weekly and monthly contacts. If you get a short sale from them right away, of course you’re going to go to work on it immediately. It’s extremely important to follow up with that weekly status phone call or email you promised. Do it. Follow up weekly even if they don’t give you a short sale immediately. Talk to them, leave a voice message, or send an email reminding them you are there to help. ―Hi Bill, I’m just calling to briefly follow up on the meeting we had last week to go over my short sale process. I simply wanted to remind you that I’m here to help you with any short sale listings you have. Remember I’ll take on the part that you dislike and get them done much faster than anyone has in the past. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Talk to you soon‖ Not only will they be shocked because no one ever does that but you might get a bonus by reminding them that they have a short sale file on their desk that they have been meaning to send to you. Make your telephone calls and emails part of your structured process. Pick a day of the week and time of the day to do these. Friday afternoons are often a good time. People are unwinding from the work week and in a good mood looking forward to the weekend. If it’s one of those social people, they might want to talk with you about their weekend plans for a few minutes. Leave voice mail if you don’t get a hold of them. Remind them that you can always be relied on to complete their short sale deals. Nurture the Working Relationship Regularly A monthly face-to-face meeting with each of your associates does a lot to solidify your working relationship. On the first Tuesday of each month, send out an email or telephone call asking when a convenient day and time is to get together for a cup of coffee or to have lunch. ―Hi Joe, I’m going to be over near your office several times next week. Is there a convenient time that we can get together for a cup of coffee?‖ Make it convenient for them. On their schedule At their location
Use this opportunity to drop off more business cards and brochures for them to hand out to short sale clients. This works just as well for mortgage brokers, real estate agents, and attorneys. Whomever you are working with. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Make up a simple brochure. Nothing fancy but probably on a good quality of paper. Something others can hand to prospective short sale clients. All it needs to do is very briefly explain the short sale process and have your contact information at the bottom. I’ve included a sample of a brochure as a separate file with this week’s lesson. While you are at it, do something different with your business cards to get them noticed. Make them a different size. Try post card size or square instead of rectangular. Try original colors. But keep the information on your card simple. The name of your business at the top Your name Address is optional Email address Direct telephone number Job Title: Short Sale Negotiator
Give your associate a business card holder. They might just leave your business cards in a conspicuous place like to corner of their desk. And be sure to stop by and refill them regularly and leave more copies of your brochure. Your “Assignment” for Stage #4 Order your business cards. Write your brochure using the sample provided as a template. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.org/e-classes2
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow This Week’s Assignments
Start trying several of the ways you’ve learned to begin meeting real estate professionals in your town or region. Write your service summary brochure to be handed out to other real estate professionals that you meet with. Use the sample that has been included to get you started. Use the steps outlined here to strengthen your credibility. Prepare a copy of the short sale package that you will use to booster your credibility. Order your business cards. Write your brochure using the sample provided as a template.
IMPORTANT NOTE: I am ready willing, and able to help you with EVERY PART of this week’s homework assignment! If you need any assistance at all in working through or understanding the assignments, login to the Lesson page at: www.sevenstreamsflipping.org/e-classes2 and let me offer suggestions, give feedback, etc. for each of these assignments. If you need help, I’m here! (or if you have any questions about the lesson at all!)
Go ahead and complete the assignments so you’ll be ready for next week’s lesson. Next time we’ll be wrapping up by fully covering all of the seven income streams and when you can apply each. Keep your eye on your inbox, because you won’t want to miss the eyeopening tips, tricks, and secrets that are coming your way soon!
Richard Geller Publisher, Seven Streams Flipping Short Sales MethodTM
P.S. Be sure to review all of the materials that are included with this week’s curriculum package. You should have received three other files: © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow 1. eCourse for Flipping Short Sales Module 11 – Checklist 2. eCourse for Flipping Short Sales Module 11 – Sample Short Sale Service Summary 3. eCourse for Flipping Short Sales Module 11 – Sample Brochure
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Short Sale Deal Flow
Seven Streams Flipping Short Sales MethodTM Lesson #11 Creating Short Sale Deal Flow By Richard Geller Calworth Glenford, LLC dba www.sevenstreamsflipping.org
Disclaimer – this limits our liability – Read it! In plain English, I did my best to make this the best eCourse I could make it, for someone dealing with other that are facing foreclosure, credit problems, and financial difficulties. But I am sure that I left stuff out, forgot some important stuff, and made some mistakes. Plus, I can’t know the laws of your state, and the facts in your particular situation. And I’m not a lawyer nor do I play one on television. Some of this stuff MAY NOT WORK. Or it may be ILLEGAL. Who knows. So… You have to take responsibility for whatever you do or don’t do after going through my home study eCourse. Don’t blame me!! I am not responsible for what you do!! If I were you, I’d find a good attorney to advise me. And I’d check out whatever it is that anyone tells you to do – me, the attorney, your mother-in-law, whoever. Then I’d take my chances. Life is full of risks. You could do great following my advice. Or you could fall on your face. Who knows, maybe some of the stuff I suggest is illegal in your state. I don’t know. But regardless, you can’t go after me for telling you to do something or not do it – because I am right now disclaiming any liability. You are on your own!! And with that out of the way, read on… While the publisher and author have used their best efforts in preparing this eCourse, they make no representations or warranties with respect to the accuracy or completeness of the contents of this eCourse and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended. 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.
And another important note – this one about ethics The techniques I outline in this eCourse – some of them anyway – may strike you as pretty outrageous. Unethical perhaps. You may find a few techniques that you can swear are illegal. I don’t advocate anything illegal. And I don’t want you to do anything unethical. These techniques exist. People do them all the time. I don’t want you do be at a disadvantage by not knowing them. So I tell you about them, no holds barred. I think it’s too easy to judge others when you haven’t been in their shoes. Some people are in frightful situations and they are frankly quite desperate. They need answers. I hope if this is your circumstance, you find answers, some of them here. That doesn’t mean I think you ought to do things that are unethical, or that things you choose to do are right for everyone. That is for you to decide. Okay? And a final important note – this one about plagiarism! You DO NOT have permission to resell this information. You DO NOT have permission to give it away to someone else. This information is sold under a license that lets you read it, use it FOR YOUR OWN USE, but not give it away, make copies, sell it or resell it. For another copy, contact me at: www.sevenstreamsflipping.org Thank you!
Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow
IT IS STRONGLY RECOMMENDED THAT YOU PRINT THIS OUT PRIOR TO READING Richard here, welcome back to your 11th eClass in the Seven Streams Flipping Short Sales MethodTM. This week’s lesson goes into detail about creating deal flow. Getting out and meeting people that can and will bring very profitable short sales to your office. This week we’re going to talk about: The types of professionals that regularly come into contact with people in distressed houses. People facing the very high possibility of a foreclosure that will severely damage their credit rating. You will learn how to contact these professionals and work with them to steer these people in hardship through the complex short sale real estate transaction. You will be given the right tools to convince other professionals they should be working with you. When a short sale comes to them, they will turn to you. There are different categories of professionals you will work with. You will learn the correct order to bring them on board so that you immediately have deals to begin working on. Your business will be a primed pump from the start. This is called deal flow. Having your short sale business pipeline continuously filled with more deals. Every business needs deal flow but not every business owner knows the most effective way to create deal flow especially in the short sale business.
This is how you create deal flow for short sales….. By the end of this week’s eClass, you’ll have the knowledge, tools, and skills that will have others bringing deals straight to you and they will perform much needed services. Specifically, you’ll have the following things in place… Who to contact to bring deals to you. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow How to find and make contact with them. Exactly what to say at each step. How to get them to say ―yes‖ to bringing you deals. How to handle their objections.
Nearly one-third of existing homes sold were either short sales or foreclosures, according to August 2009 monthly data compiled by the National Association of Realtors (NAR), and according to testimony by Federal Housing Administration (FHA) commissioner David Stevens, the mortgage servicing industry is about to see details of an incentive program aimed to prevent foreclosures by encouraging servicers to pursue short sales and deeds-in-lieu of foreclosure. The program is being finalized and will be announced as soon as possible – possibly in late September 2009. It’s hard to know beforehand what’s coming down the pipeline, but this is what we’ve got so far: Under the Treasury plan, servicers would get a $1,000 ―success fee‖ when a short sale is completed. The home seller would receive up to $1,500 to assist with relocation expenses, similar to the ―cash for keys‖ programs that various servicers offer. Fewer homes were repossessed in August than in July, but just as many Americans were behind on their mortgage payments, according to a report released by RealtyTrac, an online marketer of foreclosed properties. The number of homes that lenders actually took back from borrowers fell 12.7%, leaving a total of 540,222 homes repossessed so far this year. Banks take big losses on repossessions, so they may leave delinquent borrowers in their homes under the assumption that they’ll maintain the properties, thereby saving banks the time and expense of upkeep and maintenance. Plus, there is always hope that some of these borrowers will catch up on their loans without assistance — a recent report from the Boston Federal Reserve found that 30% of borrowers who have missed two mortgage payments eventually become current.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Increases in short sales could also be reducing the repossession statistics, since a lot of banks are delaying the foreclosure process if they see any kind of chance of making a reasonable short sale. However, the downturn in repossessions could be coming to an end based on a Fitch Ratings report forecast that of the $200 billion in option ARMs outstanding, $29 billion will reset to fully amortizing loans by the end of 2009, and another $67 billion will reset in 2010. The average payment will increase 63%, or $1,053 a month — an impossible cost for almost all homeowners that will be affected.
Who to Contact and When - to Create Deal Flow With billions of dollars in loans either in or headed to foreclosure, getting short sale deals is not difficult. If you’re good at completing short sales it’s going to be simple to find more deals than you can handle. In fact I recently learned of one loss mitigator that periodically calls trusted real estate investors when he has a potential short sale in that investor’s geographic region. What could possibly motivate a loss mitigator to ask for an investor’s help? It’s easy…. when the loss mitigator works with the right investor he knows he’ll receive a complete package to complete the short sale. Amazingly, the lenders are now seeking out short sale opportunities! So who’s going to bring these deals to you. These are the people you want to contact: Real estate agents and brokers Mortgage brokers and agents Other investors Attorneys and accountants Others
We’ll go into each of these categories in a moment but first let’s look at people by personality types. You’ll come across a type of person called an early adopter. These are people that make decisions with © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow little information. Sometimes they do it based on gut hunch. And at other times they are able to quickly grasp a good idea and run with it. These are the people that will be the first to bring you deals. After a brief explanation from you about how you conduct short sales, they’ll say ―let’s do it‖ and the first deal will shortly be on your desk. Generally, these people are less thorough about everything. They’ll probably be less thorough than you prefer when performing their part of the short sale. Over time, you’ll likely find that you prefer working with those that are slower to adopt new ideas and more analytical in making decisions. The more analytical individuals are deeper thinkers. They do more homework. They are more educated. They are more protective of their reputation. They are more dependable and will do better work for you. Of course, people come on a sliding scale from those that jump at every new idea to those that are stuck in their ways and never change. Over time, you need to find those with the right balance between the two and work with them on short sales. A Brief Look at Who You Are Seeking Out Some of the people you will learn about in this lesson can bring you deals immediately while others will fill the pipeline and bring deals over time. Real estate agents and brokers belong in the first group, those that can bring deals to you immediately. Mortgage brokers and agents can’t necessarily bring you deal flow today. They are being contacted by people not yet ready to sell their home. People still hoping to restructure their loan to stay in the house. But mortgage agents and brokers will bring deals when many of these clients realize they have no refinance options. Other investors are doing the same thing or something similar as you. With the hundreds of thousands and soon to be millions of possible deals, there is no reason to think of these people as competitors. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Instead, look for ways to work with them. Look for ways to work with them to complete more deals. Compliment what they are doing or find specific projects to work on with them. Cooperate instead of competing. A lot of people trying to complete short sales don’t understand how to negotiate or complete a deal. They have a lot of leads but close few deals. For these investors, you can offer to give a small percentage of your net profit in exchange for referring leads to you that they’ll never complete a deal for anyway. You’ll have a much higher rate of success based on your knowledge from the Seven Streams Flipping Short Sales MethodTM. A small percentage of something is always better than 100% of nothing. They will give you deals. Having seven potential income streams makes it easy for you to create an equitable position in almost any short sale. In almost every case, other investors will get more from the seven streams version than if they had been able to pull off the deal themselves. A bigger pie to split. Attorneys and accountants. People often turn to these people when they are in financial trouble. Specifically, you are looking for: Real estate attorneys Bankruptcy attorneys And to some extent probate attorneys
Anyone that regularly has contact with people in financial trouble. This can include attorneys that set up corporations and limited liability companies for small business owners. Most small businesses fail within two years and they know who is about to fail now. Attorneys that handle probate often become involved with real estate deals. People inherit a property they don’t want to mange. They certainly won’t want to make mortgage payments if the house is up side down as so many are in today’s world. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow So, now we know who the people are that we want to contact and get deal flow coming from. The next question becomes how to find these people. How to Find These People The first ones you want to contact are real estate agents and brokers. Pick up those free real estate listing booklets you see around town. Sometimes they are near the doorways of stores. Sometimes they are with newspaper stands. Look for listings that are ―contingent on 3rd party approval‖. Look for agents that run these ads in the listing booklets. You can go to Realtor.com. Type in your city and state to find a long list of realtors in your area. Call a few local real estate offices and ask if anyone in the office specializes in short sales. Tell them you are a real estate investor. A cash buyer. Hunt out mortgage companies that are advertising to distressed homeowners. Mortgage brokers are doing loan modifications but not all of their clients qualify. Call companies offering to buy ―ugly‖ and ―no equity‖ houses. You’ll often find these on bandit signs stuck up in high traffic areas. Look in newspaper classified ads for the same thing. And for rehabbers. Whenever you talk to someone, especially those that can’t or won’t work with you, ask them for a referral to someone that might. Next is the Face-to-Face Meeting Once you have found someone that you want to work with, schedule a face-to-face meeting with them. Do it at their office, your home, or Starbucks but make it a face-to-face meeting. A face-to-face meeting: Gives you a much higher chance of becoming a memory in the
person’s mind than a telephone call does. It demonstrates a strong work ethic. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow It’s a higher commitment level. It begins building a relationship.
You can use meetup.com to find local real estate meetings. Take the time to meet the presenter and those asking questions. These are hard working professionals. Something similar is REIT or Real Estate Investors Association. Simply type REIA [your location] into Google and you should find local meetings. Another way is to go to open houses on Sundays. You can easily meet 7 or 8 real estate agents there. Easy Tip: What you want to do here is use the people multiplier. Get in front of as many people as possible that know as many people as possible.
Now that you’ve found people to meet face-to-face, we’ll go through the all important first meeting next. Your “Assignment” for Stage #1 Start trying several of the ways you’ve learned to begin meeting real estate professionals in your town or region. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.org/e-classes2
What to Say and Do at the Meeting Let’s start by discussing the social aspects of different people. People fall somewhere on a scale that is very social at one end and all business at the other end. In the first few minutes of the meeting you should be able to determine where this person fits on the scale. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow You want to slightly mimic that person. People tend to like others that are like them self. They’ll respond well to that. They’ll like you and trust you more. What you’re after in the beginning is to build a network of people needing your short sale or loan modification services. Only after you establish your network is it worth direct marketing your services to homeowners facing foreclosure. The Chance Meeting –v- An Appointment Sunday open houses and the real estate investment meetings are great places to meet someone and shake their hand. But you aren’t likely to do any serious business at those places. The end goal of these meetings is to set up a future appointment for a one–on-one meeting. You want to sit down for a cup of coffee or meal to discuss possible future business relationships. If you can’t accomplish setting up an appointment, at least build rapport so that a future face-to-face can be scheduled. Your Script to Getting the First Meeting Appointment Here is the exact script that I suggest you use to set up the face-toface appointment. ―I’d like to set up a 30 – 45 minute meeting with you to discuss what I can do to help you make money with short sales.‖ Since you’re seeking out people familiar with the short sale process, you’re likely to run into people that are already using a short sale negotiator. Some back office operation that collects a fee but rarely closes a deal. They don’t actively pursue putting a complete package together. Instead, they collect whatever information the seller can quickly and easily provide and send off a package to the lender that falls well short of what the lender needs to make a decision. Certainly, they don’t make the effort to document all of the short comings of the house and neighborhood. There won’t be any equity in the deal to motivate them to complete the deal. At best it will languish © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow in a stack of paperwork until the lender forecloses or caves in to a poorly designed short sale if a buyer will hang around that long. When your prospective team member says they are already working with a short sale negotiator, here is your response: ―I’d like to meet with you to discuss how we can work together to increase the number of short sales we can complete.‖ Your emphasis is on increasing the number that you will complete for the team. Getting the Most From the First Meeting Come prepared with a brochure or printout of some kind. Something you can leave with the other person. Basically a summary of what you think you can do to help the other person’s business. It’s about benefits for them. A short introduction of yourself and the mission of your
business. What the business relationship with others might look like. Emphasize the benefits to your prospective team member. Include the benefits that all will receive – buyers, sellers, the
lender, your self. I’ve included a sample of a service summary as a separate file. You can use it as a beginning to write your own. The First Few Minutes of the Meeting During the opening moments of the meeting you’ll gage how social the person is. A highly social person will want to get to know quite a bit about you during the introduction. A work focused person will want to get right down to business. Most people will fall in between. Once you get down to business, your opening line should be something like:
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow ―What I’m going to show you today is a different way to do short sales. Not the typical way most people are doing them. And it’s been highly successful compared to the way others are doing it.‖ The best way to control a conversation is by asking questions. Questions steer the conversation onto the topics that you want to discuss. After the brief opening statement above, follow up with a question: ―What do you like most about short sales?‖ Assuming the person is knowledgeable about short sales, you can expect one of three answers: 1. The money 2. The abundance of deals that can be done 3. Or a combination of both of the above – the money and abundance The bright ones will give you answer 3. Both the money and abundance of deals to be done. Keep your ear peeled for these people in particular. Next, you follow through with another question. The answer to this question will give you the information you need to carefully structure the conversation to your advantage. ―What do you dislike the most about short sales?‖ Use the answer to structure your next response. I can’t give the exact words because I don’t know exactly how the other person will respond. But your goal with the next response is to assure them that working with you will let them keep the part that they like while discarding the part they dislike. ―If I can preserve what you like – the abundance and the ability to make money, while eliminating the hassles of (insert their dislikes here) taking too long and loosing your buyer, would that interest you in learning more and maybe trying a deal between us?‖ © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow You should get a ―yes‖ or at least a continued interest to hear more. If you get a ―yes‖ simply follow through with: ―Where’s the first file?‖ Most likely, they’ll want to hear more about your process. This is your script: ―Here’s how I work. When you present a file to me, I will immediately make a cash offer to buy the house. I also will immediately begin negotiations with the lender on that file for you. You won’t have to handle the negotiations. You do your work as a real estate broker and I’ll do the rest to close the short sale.‖ ―You are assured of earning the listing commission on the sale.‖ ―Because you brought me the deal and have an interest in how it’s going, I’ll give you a weekly phone call or email to let you know the current status.‖ ―Here’s all I need from you. Find listings that are short sales Put them on the market Take extremely detailed photos of the property and if needed
the neighborhood And I need you to resell the house for me‖
―That’s where you earn a second listing commission.‖ ―Here’s what I’ll do to close the short sale deal: Gather all of the necessary paperwork. This begins by
providing the seller with a checklist of what’s needed from them. I’ll stay in contact with the seller to get the paperwork to me
in a timely manner. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow I’ll enter into negotiations with the lender as soon as I have all
the paperwork. I will schedule the closing as long as you can find a buyer that
will show up prepared to close the deal.‖ That should keep them very interested in doing business with you. They might be a little skeptical still because you haven’t established your credibility but you have established that you know what you are doing. We’ll get into credibility in a few moments. Now that you know how to get the meeting going with real estate agents and brokers, let’s talk about the next category of attorneys and accountants. It’s a little different. How to Work with Accountants and Attorneys For attorneys and accountants, all they need to do is hand your card to their client when it becomes clear that is the best advice they have to give. They don’t need to answer any questions about short sales other than to refer those clients to you. In exchange for the reference, you will give the attorneys and accountants a cut of the profit you make. You need to decide how big of a cut to give them for the referral. It can be a flat fee or a percentage of your net profit. If you net $35,000 after all of your expenses a 1.5% referral fee will put $525 in the pocket of the attorney or accountant. Not a bad piece of change for handing out the business card of a trusted associate. Don’t try to approach accountants and attorneys to early in your business development. They won’t come on board until after you have successfully completed a few deals for real estate agents and brokers. Attorneys and accountants are by nature a more conservative bunch. They’re leery about putting their reputation at risk with someone that has not fully proven themselves. You can handle mortgage brokers in much the same way that you discussed short sales with attorneys and accountants. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow They Don’t Need All of the Details This definitely applies to the accountants, attorneys, and mortgage brokers. Few of them are interested in the low level details about how you quickly and successfully close short sales. They only want to know that you are a detailed person that follows through. In the end, you handle the short sale details and they get a paycheck. It will also apply to many real estate agents and brokers. They want to earn commissions from the high volume of short sales they see every day. But most are a people person not a detail oriented person. They don’t want to know the details, just like the accountants, they want to be able to hand the package to you and get a paycheck in return. Other real estate agents and brokers may want to know a little more about your process so that they can sound credible to house sellers. I recommend a brief overview of one of your completed packages if you have one. Otherwise go over the sample short sale package that came with your eCourse. We’ll get into more about how to show the package in the next section about credibility. Your “Assignment” for Stage #2 Write your service summary brochure to be handed out to other real estate professionals that you meet with. Use the sample that has been included to get you started. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.org/e-classes2
Establishing Your Credibility Obviously it’s more difficult to establish your credibility before you have closed a short sale deal. The way to go about it is to establish © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow yourself as part of the Seven Streams Flipping Short Sales Team. You just happen to be a new member of the team. Explain how you’ve taken top-notch training with the specific goal to get them closed in the shortest time possible. And do them honestly and ethically to bring happy people to the closing table. Describe it this way: ―I have a process in place to make sure the details get handled and nothing falls through the cracks. I use checklists and procedures, not random calls to the lender asking them what the next move is. When they receive my package of information they will order the BPO and make a decision.‖ When a Broker Already Has a Short Sale Negotiator You will come across brokers already in the business that are currently using a back office short sale negotiator. The best way to start this conversation is with: ―How is that working for you? Are they willing to make you an instant offer to buy the house?‖ They aren’t going to immediately admit to how bad the back office operation is. Regardless of how they answer, you can assume results of their operation are much less satisfactory than what you are offering. The back office is not making an instant offer on the house. In fact, the broker or another broker must find a buyer for the short sale. And then they hope the back office can pull off getting a ―yes‖ from the lender. In most cases, those back offices are taking on an avalanche of short sale cases. Way more than they can possibly manage or even hope to close. They make a few feeble attempts to gather the necessary paperwork and a few feeble attempts to get the lender to make a decision. Nothing happens and they just move on to the next opportunity. There’s nothing there to motivate them to follow through. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow On the other hand, you have control over the property. You have lots of skin in the game. You are fully motivated to complete every deal and collect a handsome paycheck. Easy Tip: If they do claim their back office is successful, it’s time to pull out a copy of your short sale package.
While getting started with your package, talk about typical experiences with these back office negotiators. Say – ―it’s been my observation that most short sale negotiators come up short on the details needed to get an answer from the lender. I hear it’s common for a short sales to take six months, even nine months is not that uncommon. Here, let me show you what I do that makes a big difference. This is how I get deals closed in 35 to 40 days.‖ More About Using Your Presentation to Show Credibility Besides the simple handout you gave them at the beginning of the meeting, the only other material to cover with a broker or anyone else is your short sale package. This can be done on a laptop or keep it very simple with a printed color copy. Open with the statement: ―Have you ever seen a short sale package like mine? This is my typical package. I don’t just submit what the lender asks for, I submit everything any lender has ever asked for and even more‖ ―I keep a detailed master checklist of everything a lender has asked for. It doesn’t happen often but if I come across a unique request I add it to my checklist.‖ ―No package ever gets turned in until my package is complete.‖ ―When they see it, the short sale is immediately pre-qualified. They order their own BPO shortly after the package is received. And I help them manage that BPO to get it done right the first time.‖
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow ―When I ask if you have ever seen a short sale package like mine before, I can assure you the loss mitigators never have either.‖ ―The short sale decision always boils down to having all the information to make the sale. I give them everything they need plus more.‖ You Can’t Offer That Low Price An observant person will notice the low short sale price offered in your package. They’ll claim you can’t make that low of an offer. Certainly not and expect it to be accepted. The truth is the lender has three options when they receive an offer of any kind. They can: Accept the offer They can counter offer They can out right decline or reject the offer
Obviously, the best scenario for you is if they accept the offer right away but that’s not likely to happen. And we know that missing or incorrect information most commonly results in the offer being rejected. So you explain that when the lender receives your package you expect to get a counter offer in return. This is where you begin negotiations with the lender. The back office guys either have their package rejected on arrival or begin negotiating what else is needed to get the BPO assigned. You are exactly where you want to be when negotiations begin. You’ve done your due diligence and have all the facts. You’ve shared the facts with the lender and convinced them that they have enough information to make a decision. So that decision wasn’t to accept the offer the first time. Your negotiation strategy is to get the lender to come to the same conclusion about the property value that you did based on the information. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow You’re not going to accept the counter offer. You’re going to continue educating the lender until they fully understand the property they are going to get back as a foreclosure. It won’t take long to educate the lender. They’re in the business and will quickly come to the same conclusion as you. How many Short Sales Have You Done? This is another opportunity to talk about the team concept. Try to answer this question before they even ask it. Hopefully towards the end of your short sale package overview. At some point you say: ―You might be wondering how many short sales have been completed using this detailed short sale package. I’m part of a team that has used this type of package to close literally over a thousand short sales. It’s highly effective now but still the team continues to find small ways to make it even better.‖ There you go, you’ve briefly walked your prospective associate all the way through your short sale process. All that’s left to do is close the deal. Your “Assignment” for Stage #3 Use the steps outlined here to strengthen your credibility. Prepare a copy of the short sale package that you will use to booster your credibility. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.org/e-classes2
Closing the Meeting By Getting a Commitment By this point you have established yourself as a short sale expert. You’ve shown them your checklists © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow You’ve shown them the short sale package You’ve pre-answered their questions You’ve shared your negotiation strategy You’ve briefly walked them through your entire process
It’s Time to Ask for Their Commitment One way to state it is: ―When can I expect the first short sale from you?‖ Here’s another way that I prefer because it implies you’ll deliver instant solutions to their problems and it can produce instant business for you. ―How many short sales do you currently have that you want handled correctly?‖ Always, Always Follow Up Once you get their commitment to work with you, it’s time to prove you are as diligent as you’ve claimed. You do this with weekly and monthly contacts. If you get a short sale from them right away, of course you’re going to go to work on it immediately. It’s extremely important to follow up with that weekly status phone call or email you promised. Do it. Follow up weekly even if they don’t give you a short sale immediately. Talk to them, leave a voice message, or send an email reminding them you are there to help. ―Hi Bill, I’m just calling to briefly follow up on the meeting we had last week to go over my short sale process. I simply wanted to remind you that I’m here to help you with any short sale listings you have. Remember I’ll take on the part that you dislike and get them done much faster than anyone has in the past. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Talk to you soon‖ Not only will they be shocked because no one ever does that but you might get a bonus by reminding them that they have a short sale file on their desk that they have been meaning to send to you. Make your telephone calls and emails part of your structured process. Pick a day of the week and time of the day to do these. Friday afternoons are often a good time. People are unwinding from the work week and in a good mood looking forward to the weekend. If it’s one of those social people, they might want to talk with you about their weekend plans for a few minutes. Leave voice mail if you don’t get a hold of them. Remind them that you can always be relied on to complete their short sale deals. Nurture the Working Relationship Regularly A monthly face-to-face meeting with each of your associates does a lot to solidify your working relationship. On the first Tuesday of each month, send out an email or telephone call asking when a convenient day and time is to get together for a cup of coffee or to have lunch. ―Hi Joe, I’m going to be over near your office several times next week. Is there a convenient time that we can get together for a cup of coffee?‖ Make it convenient for them. On their schedule At their location
Use this opportunity to drop off more business cards and brochures for them to hand out to short sale clients. This works just as well for mortgage brokers, real estate agents, and attorneys. Whomever you are working with. © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow Make up a simple brochure. Nothing fancy but probably on a good quality of paper. Something others can hand to prospective short sale clients. All it needs to do is very briefly explain the short sale process and have your contact information at the bottom. I’ve included a sample of a brochure as a separate file with this week’s lesson. While you are at it, do something different with your business cards to get them noticed. Make them a different size. Try post card size or square instead of rectangular. Try original colors. But keep the information on your card simple. The name of your business at the top Your name Address is optional Email address Direct telephone number Job Title: Short Sale Negotiator
Give your associate a business card holder. They might just leave your business cards in a conspicuous place like to corner of their desk. And be sure to stop by and refill them regularly and leave more copies of your brochure. Your “Assignment” for Stage #4 Order your business cards. Write your brochure using the sample provided as a template. Send any questions or comments about the material to me by logging into the Lesson page at: www.sevenstreamsflipping.org/e-classes2
© 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow This Week’s Assignments
Start trying several of the ways you’ve learned to begin meeting real estate professionals in your town or region. Write your service summary brochure to be handed out to other real estate professionals that you meet with. Use the sample that has been included to get you started. Use the steps outlined here to strengthen your credibility. Prepare a copy of the short sale package that you will use to booster your credibility. Order your business cards. Write your brochure using the sample provided as a template.
IMPORTANT NOTE: I am ready willing, and able to help you with EVERY PART of this week’s homework assignment! If you need any assistance at all in working through or understanding the assignments, login to the Lesson page at: www.sevenstreamsflipping.org/e-classes2 and let me offer suggestions, give feedback, etc. for each of these assignments. If you need help, I’m here! (or if you have any questions about the lesson at all!)
Go ahead and complete the assignments so you’ll be ready for next week’s lesson. Next time we’ll be wrapping up by fully covering all of the seven income streams and when you can apply each. Keep your eye on your inbox, because you won’t want to miss the eyeopening tips, tricks, and secrets that are coming your way soon!
Richard Geller Publisher, Seven Streams Flipping Short Sales MethodTM
P.S. Be sure to review all of the materials that are included with this week’s curriculum package. You should have received three other files: © 2009 SevenStreamsFlipping.org. All rights reserved.
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Seven Streams Flipping Short Sales MethodTM Lesson #11: Creating Short Sale Deal Flow 1. eCourse for Flipping Short Sales Module 11 – Checklist 2. eCourse for Flipping Short Sales Module 11 – Sample Short Sale Service Summary 3. eCourse for Flipping Short Sales Module 11 – Sample Brochure
© 2009 SevenStreamsFlipping.org. All rights reserved.
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