This can be done by a variety of means, including bright colors and flashing lights, or can use Physiological triggers.  Ever notice that a McDonald’s quarter pounder does not look NEARLY as good in person as it does on the commercials, with the steam rising from the bun and some smiling beautiful woman taking a sexy bite from it?

So, this guy used a VERY simple message, but definitely got my attention.

He used two REALLY great triggers: SEX and anything CONTROVERSIAL.

On a minor note, he used a “play on words” as well.

I hope this fella makes a million bucks on this advertising cause he deserves it from the creativity alone!

Until next time,

Al

P.S. For those of you who read this in Arkansas, This sign is in front of an auto shop between Otter Creek and Bryant on Hwy 5 heading south if you wan to see it in person!

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 This is a sign that I had installed in a bus stop at the intersection of two of the main collector roads on the south side of town. The south side is where many of the good “working class” rehab type homes can be found, and I figured out from some of my snipe signs that a more permanent sign might be a good idea here. Besides, the city was really hassling me about the snipe signs.

It was approximately 4 feet wide by 6 feet tall, so you know visibility was not an issue. Or was it? I learned a bunch with this sign. First off there is WAY too much information on it. Remember when I mentioned “business card syndrome”? There is NO WAY drivers are going to read the whole thing. BIG lesson in the rule of K.I.S.S. (Keep it simple stupid!) Second, the choice of colors SUCKED! Lesson here, never listen to an advertising guy who  makes less money than you do and drives a beat up car that smokes and smells like it is on fire. Although the colors look pretty hip when you see it on a white sheet of paper, it looked like a sprawling mess when compared to the background around it. Third, yep you guessed it…location. Did I mention in was INSIDE the bus stop? It was only visible in its entirety when there was nobody sitting there, which is pretty much the middle of the night.

Now, this is not to say that bus stop ads are not good.  I know one investor here in town that uses them for the largest part of his advertising.  But he is smart. He only puts them on the OUTSIDE of the stops, and he uses SIMPLE color schemes like the snipe signs. Oh, and by the way, he waited to do the bus stop ads until after I did them, figured out what I screwed up and fixed it.  He also took the liberty of breaking my balls about it over lunch one day. What are friends for eh?

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I found this picture of a “wrapped” trailer (below) online and thought it was another great example of passive advertising in action. It’s a little busyfor my tastes, i tend to go a bit more simple, but I would assume the trailer is parked at a home just as much as it is being pulled down the road. It is like a moving billboard.

Never contacted the guy who owns it because there was no way to know what area code to call first so I hope he takes it as a complement that I used his picture and considers it free advertising rather than suing me for copyright infringement!

See, passive advertising can be just about as creative as you want to make it; it’s limited only to your imagination.

The main thing to remember is to keep it simple, straightfoward, andalways remember to convey what’s in it for THEM.

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There are drawbacks to passive advertising though.  Passive by its very nature will not generate as many good hot leads as will active advertising.  Sure, the phone will ring, but more often than not it will be people who are just curious as to what you are doing, or people who really don’t need to sell but definitely want to waste your time telling you why you should buy their home at retail, or even worse, other investors who are wanting to pump you for information.

Snipe Signs

 These are also called yard signs, bandit signs or roadside signs. Snipe signs are cheap if you buy them in quantity and extremely effective if used   correctly.

I recommend that you buy the standard 24 x 18 inch signs.  I have seen investors use the 12 x 9 inch signs and they are simply invisible to a driver whizzing past them at 40 mph.  You have about 3 to 5 seconds to impress your message on drivers. That being said, you need to be careful about how much information and how busy you make your signs.  Too much information and people cannot digest it all as they drive by. Note that the two most important pieces of

information on the sign in the example above are the phone number and the message, “WE BUY HOUSES”. We want them to know what we do and we want them to have a number to call.  That’s it. It is that simple. Do not get “business card syndrome” with bandit sign messages. Keep the snipe sign blunt and to the point. There is no need to add extraneous information. All it does is clutter the sign and make it more difficult for the customer to retain important information like the company’s phone number. Statistically, consumers will write the number down whereas they tend to try and memorize website addresses. Make sure the phone number is the most prominent aspect of the sign.

I use only two colors for my signs and I know some investors who use three colors with good results but beware…full color signs are actually LESS effective. I would like to be able to give you some great reason for this, but I am not a psychology major, I just know what works and what doesn’t.  If you want my opinion, I think they are too busy and folks get lost in the “picture”.

Where color is concerned, you should get a few color schemes made up. I use blue/white like the example on the previous page as well as red/white and black/yellow. Again, I have been told that statistically, a blue and white color scheme achieves the most results. While other bright colors will get noticed, research has shown that a blue and white color scheme will draw far more attention than other color combinations. I have found this to be true in my market. This should not be an excuse for you to be a cheapskate and only buy one color scheme. One scheme alone will not work nearly as effectively as using three.  The reason is a phenomenon I call “sign blindness”. I know from talking to folks that people become “blind” to my signs after a few weeks of seeing them at a particular corner. So, when the city takes one down, or it gets knocked down or stolen, then I replace it with a different color scheme. Suddenly there is something “new” to see on the road, and the same folks who missed my sign before will now see it.

 Prices for signs vary. The best deals I have found are online, not local.  The local Little Rock sign makers wanted like $10 per sign and I think the last time I bought signs I paid about $2.00 each including the shipping.

There are some gurus out there teaching that you should use a “hand written” sign, because it does not look like a “big time professional home buying conglomerate”. Well, that’s true it looks like a third grader did it instead. Ask yourself something, would you call a guy who says he will pay any price in any area for a house and can’t afford to have a decent sign made? There is a local wholesaler who uses this method exclusively and he has whined to me more than once that he does not make enough money and only has 5 or 6 “real” investors on his buyers list.

Course then again, Try it! Who the heck am I anyways; your market may be completely different.  Sure, I have actually made money doing this, and sure I don’t have to get up and go to work every morning like most of you, but then again you never know.  The real estate game, like every other market is forever changing.

Basically there are two ways to put these signs out. You can nail them to a telephone pole or you can get the wire sticks and place them in lawns. I cannot recommend one way or the other, they both work equally well; however, if you put the signs on poles and trees high enough, they will not be taken down as often, and you will not have to replace them as often as a result.

 Here are a few other things you should know about snipe signs.  In most cities they are illegal so whatever you do, DO NOT put a number that can be traced easily back to you on the sign.  If you are doing all of this the way I teach it, then you will be sending these potential sellers to Patlive or some other voicemail where the account will be held in the name of some company and you will never be calling the city back, but beware…first off, I am NOT telling you to do something illegal, second there are plenty of ways around this. For example, you can check the boundaries for your city and put the signs on the edges; although many cities have regulations regarding these signs, few counties do. You can also get permission to put them in certain areas, like a neighbors’ yard, or a business you frequent often. You can put the signs in front of the houses you are rehabbing or those that you have under contract but are not quite ready to sell. What to find an owner of a vacant house and having a problem doing it? Put one of your signs on his house. I all but guarantee he will be calling you soon! How do you think I know that?

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A HELOC, or Home Equity Line of Credit, is the right to borrow money from a lender up to a certain amount of money. The “line” is a credit line guaranteed by your house, meaning that if you can’t live up to the terms of the line, then the lender has a right to foreclose on your house. Typically HELOCs (pronounced HEE-lock) have floating interest rates that can change periodically.

Who should get one: Someone who might need extra cash for home improvements, or is looking at borrowing money to buy a different house; i.e investors.
   
Who shouldn’t: Do not use a HELOC to splurge for things like vacations or to finance other consumer debts, like credit card . HELOCs are guaranteed by your house, which means the stakes are very high. Think about it guys…Your credit cards are UN secured, whereas the HELOC will be SECURED by your home.

The good news is, Home equity lines can be used by the borrower to pay for anything. You literally get a checkbook for the HELOC and you can write checks to your heart’s content until you’ve maxed out the line’s limit. Although HELOCs were originally designed for homeowners to pay for home improvements and other house-related projects, nowadays borrowers use home equity lines for almost anything. Most HELOCs also have online Internet access so you can pay bills online using your HELOC just like you would with a regular online checking account.

HELOCs and home equity loans can also be used as second mortgages at the time of purchase. Frequently they are the second purchase mortgage for 10, 15, or 20 percent of the purchase price when buying a home. Home buyers can avoid buying mortgage insurance (PMI) if they take out two loans instead of one, with no single loan exceeding 80 percent of the purchase price. HELOCs can fill this gap, wherein the first mortgage is frequently 80 percent of the purchase price and the HELOC is the second mortgage.

Like a credit card balance, you can pay down a HELOC at any time, without penalties.

There is bad news about HELC’s too. Home equity lines are serious stuff, since they’re secured by your house. If you can’t meet the payment obligations such as your minimum monthly balance, your homeownership is in jeopardy.  Make sure you do your homework and fully understand all the consequences as well as the benfits.  What may be a quick fix for debt relief or vacation plans could end up costing you your best investment.

The other thing is, like all mortgages, they are getting harder and harder to come by.  I even know several investors who have had their limits reduced repeatedly for no other reason than the bank just “re-evaluated” thier credit line.

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Landlords have a right to show the place, and it is usually outlined in the lease. Your landlord should have given you just one notice of what days the unit was going to be showed. Also, notice to entry is not the same for all states. some have no statute regarding entry. others differ in the time required prior to entry. see below.

• Alabama  – No statute
• Alaska  – 24 hours
• Arizona  – Two days
• Arkansas  – No statute
• California  – 24 hours
• Colorado  – No statute
• Connecticut  – Reasonable notice
• Delaware – Two days
• District of Columbia – No statute
• Florida – 12 hours
• Georgia – No statute
• Hawaii – Two days
• Idaho – No statute
• Illinois – No statute
• Indiana – No statute
• Iowa – 24 hours
• Kansas – Reasonable notice
• Kentucky – Two days
• Louisiana – No statute
• Maine – 24 hours
• Maryland – No statute
• Massachusetts – No notice requirements in statute
• Michigan – No statute
• Minnesota – Reasonable notice
• Mississippi – No statute
• Missouri – No statute
• Montana – 24 hours
• Nebraska – One day
• Nevada – 24 hours
• New Hampshire – Notice which is adequate under the circumstances
• New Jersey – No statute
• New Mexico – 24 hours
• New York – No statute
• North Carolina – No statute
• North Dakota – Reasonable notice
• Ohio – 24 hours
• Oklahoma – One day
• Oregon – 24 hours
• Pennsylvania – No statute
• Rhode Island – Two days
• South Carolina – 24 hours
• South Dakota – No statute
• Tennessee – No notice requirements in statute
• Texas – No statute
• Utah – No notice requirements in statute
• Vermont – 48 hours
• Virginia – 24 hours
• Washington – Two days
• West Virginia – No statute
• Wisconsin – Reasonable notice
• Wyoming – No statute

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Now a days, a simultaneous closing can also occur when an investor wholesales a property, or even when a property is “Optioned”.

In wholesaling, the buyer does a purchase and sales agreement with seller to purchase seller’s property for some price.  The buyer then simply assigns or sells his contract to another buyer.  The important thing to remember here is that the purchase and sales agreement must not have language that prohibits this “assignment.

My personal favorite way to do a simultaneous close is through the use of an “option” and “transactional funding”.  The way an option works is that instead of the seller and the buyer entering into a Purchase and Sales Agreement, they enter into an Option Agreement.  An Option agreement allows the buyer to buy the home for a particular price for a specified  length of time.  Unlike the Purchase and Sales agreement, he is not bound by the contract itself to close, but rather has the “option” to buy it or not buy it during the option period.

Transactional funding is pretty much self explanetory…it’s funding for the length ofthe transaction; ideally a few minutes.

Each state has different laws or regulations when performing or structuring a simultaneous, “double” or “back to back” closing and the laws are always changing. What we were able to do 5 years ago, may or may not be legal now. Some states don’t allow simultaneous closings, others do. Some title companies allow this, other’s don’t. Double closings and simultaneous closings have been around for a years so don’t give up after you talk to several title companies and they all tell you it can’t be done.  Talk to investors and real estate agents who invest, get referrals until you find a title company that is creative and knows what you’re talking about. You guys have heard me say it before, the right title company is worth their weight in Gold.

I am going to go over two ways you can perform a simultaneous closing double closing, or back to back closing. In the first  example, the home will be  foreclosure.  Basically it works like this:

First you do the Sales and Purchase Agreement so that a short sale can be negotiatied, then  take control of the homeowners property via the Land Trust using their name on the trust; like the “John Smith Land Trust”.  This will stop any other judgments or liens going on title before you get it closed. Either you or (preferably) your company becomes the Trustee of that Land Trust. Beneficial interest is signed over from the homeowners to another company with the proper paperwork. You can’t have the same company being trustee and beneficiary or you have a conflict of interest and may cause title insurance issues.

Once you have negotiated a short sale with the lender, your company purchases the home from the homeowners for the agreed negotiated price. Your title company will prepare a HUD-1  for this transaction. Your end buyer will then provide funds in escrow at title company. When your end buyer runs a title report, it still shows the homeowners last name in the form of a trust on title; so there shouldn’t be any title issues.

Next, your company sells the property to the end buyer. This is done simultaneously through your title company. Your title company wires the negotiated debt amount to the foreclosing lender. This must be the same as the first HUD-1. You get to keep the difference from the negotiated payoff amount with the bank and your end buyers purchase price minus any closing costs.

The second way using the option is basically the same only, we would use it more for those properties which are not in danger of having liens attached to them, and are not in default.  Since we have the “option” to buy, we also have a vested interest in the property so are well within our rights to sell it.

At closing, two HUD-1’s are generated, just like in the first example, and the property does pass through you again just like in the second example. Remember that since the property passes through you it IS a taxable event…talk to your CPA about the capital gains.

It is best to consult with a legal professional or title company to find out if your state allows simultaneous or double closings, and how you can best  structure  them. Each state will vary on procedures and your title company will assist you in the process.  We’ve found the best option is to do a back-to-back or same day closing using transactional funding because it’s clean, safe, legal and everyone qualifies. Transactional Funding has made it possible again for anyone now to flip real estate.

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This particiular blog was not written by me, but was so good, I have reproduced it so you guys can have the info….enjoy!

Homeowners should be careful about how they hold Title to Properties

The manner in which homeowners hold title to their properties has significant legal ramifications. Consequently, it’s not wise to leave this important decision to chance. Escrow agents will ask how you would prefer the title to read. But often the question isn’t posed until you near the close of the sale, and by then it may be too late to give any real thought to your options.  With that in mind, here’s an overview of some of the more common forms of ownership.

Tenancy by the entirety: In most cases, this is the correct way for married couples to hold title. In fact, it is available only to married couples.  Tenancy by the entirety creates an estate in which each spouse has an undivided interest in the property, or the equal right of possession and enjoyment during their joint lives. It also vests each spouse with the right of survivorship so if one dies, his or her interest transfers to the survivor.  Since probate is unnecessary on the death of the first spouse, the property won’t be tied up in court. Instead, it can be sold right away if that’s necessary. Also, the survivor takes title to the share of the property attributable to the deceased at its “stepped-up basis,” or its fair-market value as of the date of the spouse’s death.  Equally important, the individual creditors of either spouse cannot attach a lien on a property held as tenancy by the entirety. If a judgment is against both of you, the creditor can put a lien on the house, but not if the judgment is against one of you.

Tenancy in common: Under this alternative, each person owns a set but not necessarily equal percentage. And there is no right of survivorship. Thus, the decedent’s share vests with whoever is named in the will. And unless the deceased holds his share in trust, it goes through probate just like the rest of his estate.  Furthermore, the share that transfers to the survivor counts against the federal estate tax credit. So if the husband is very ill and may not survive, it might be a good idea to retitle the house as tenants in common with him holding a 99% share. That way, when he dies, his share will pass at the date-of-death value to his wife. And then, if she must sell shortly thereafter, there may be less capital-gains tax to pay, if any.  This is often the preferred method of ownership for unrelated co-owners and for remarried couples who want to leave their share to children from previous marriages.  Co-owners may have unequal shares, and each can convey his portion without the consent of the other. When a tenant in common dies, his share is passed on according to his will or, if there is no will, by state law as it applies to intestate succession. But there is no protection from creditors.

Joint tenancy with right of survivorship: This is similar to tenancy by the entirety, except that the property is not protected from the individual creditors of each owner. Another potential drawback is that regardless of what the deceased’s will says, his share will pass to the joint tenant.  Because of the right of survivorship, joint tenancy may be the best way to hold title for parent-and-child owners. Since it is more likely that the parent will die sooner, the child will receive the parent’s share at its current value.  But under this form of ownership, all joint tenants are presumed to have an equal share, a situation that may leave the co-owner parent a bit uneasy. Also, in many states, one co-owner can dissolve the joint tenancy without the other’s approval, which might not make any of the owners comfortable.  Sole ownership: For the most part, a single, unmarried buyer will take title as the sole owner in his or her name alone. It is sometimes known as “ownership in severalty.”  Holding property in this manner gives you complete control. If you marry later, your spouse does not automatically acquire ownership in that property. And if you divorce, your ex may still have no claim to the property.  However, you won’t have the benefits that come with other forms of ownership. You won’t be able to avoid creditors or the probate process, and the property will be considered part of your estate for federal estate tax purposes.  Married persons also can take title as sole owners. But in some states, the spouse not on the title must sign a quitclaim deed, giving up any claim to ownership in that property.

Trusts: There are many types of trusts, but the revocable living trust is probably the most common and useful for holding title to real estate. You convey title to a trustee — who can be anyone, including yourself — who manages the property on your behalf.  Sometimes known as an inter vivos trust, this is a tax-neutral device, meaning that all the tax benefits and burdens of ownership continue to accrue to the grantor even though he or she no longer owns the property directly.  Holding property in this manner is useful if one of the co-owners becomes incapacitated or incompetent. Then, his or her trustee can make whatever property decisions are necessary without petitioning the court for permission. Also, property held in trust passes without probate. But creditors cannot be avoided.

Courtesy of LA Times

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Adjustable Rate Mortgage (ARM Loan): An ARM Loan has an initial interest rate that is often lower than a conventional fixed-rate mortgage. This initial rate is usually locked in for one or more years. Once the initial term is over, the interest rate on an ARM loan may go up within specified limits over predetermined intervals during the course of the loan. The lower initial interest rate associated with an ARM loan translates to a lower initial monthly payment. The tradeoff, however, is the potential for a higher payment if interest rates go up as the ARM loan progresses.

Annual Percentage Rate (APR): The APR for your home loan is an annual calculation that includes the interest rate quoted by your mortgage company plus additional home loan costs such as origination fees and points. The important thing to keep in mind about your loan’s APR is that it will be higher than advertised interest rates because of these additional factors.

Closing Costs: With each real estate transaction, there are many expenses to pay and agencies to compensate. These fees, which are often shared by the buyer and the seller, are referred to as the closing costs. When you buy a home, the closing costs might include loan origination fees, escrow payments, title insurance, attorney fees and even discount points paid to lower your loan’s interest rate.

Escrow: During the home loan process, a neutral third party known as Escrow holds documents and money (including earnest money deposits) for safekeeping until the real estate transaction is complete. An Escrow account is also used once you complete your home loan to hold the property tax and insurance monies that are collected with each mortgage payment.

Fixed-Rate Mortgage: A conventional fixed-rate mortgage means that your interest rate will be the same for the entire life of the home loan. Financing for this type of loan is typically spread out over 10, 15, 20, or 30 years, depending on the needs and payment capability of the buyer. A fixed-rate mortgage provides buyers with the security of knowing exactly what their monthly house payment will be during the entire loan term.

Lock-In: Home mortgage interest rates vary from day to day. While you buy a home and secure financing, you may decide to lock in a particular interest rate with your lender. This lock-in guarantees that your home loan will be processed with this rate, even if interest rates rise before your loan closes.

Points: There are two types of points that can be applied to a home mortgage. Discount points are used to reduce the loan’s interest rate and origination points may be added to cover the expenses associated with processing a loan. One point equals one percent of the loan amount. This means that, to lower your interest rate by one point on a $300,000 mortgage, you’ll need to pay an additional $3,000 at closing.

Private Mortgage Insurance (PMI): When you finance more than 80 percent of your new home’s value, your lender will require you to purchase PMI. This protects the lender against loss if you default on your home loan. Your monthly PMI payment is added to the cost of your mortgage payment. It is important to note that when you have accumulated 20 percent equity in your home, you will want to check into canceling your PMI to lower your monthly mortgage payment.

Title Insurance: A home mortgage requirement, title insurance protects both the buyer and the seller against legal defects in a home’s title. This policy ensures that a property owner has the legal right to transfer a home’s title to the seller. If a problem occurs, the title company pays the associated legal fees to correct the situation.

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