Just a little update on my Indy adventures…

Combine melted snow, a vacant house and tile and you get a YouTube classic:

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We had a saying when I was 10 year old playing outfield in baseball. Our coach, would gather us around with a blade of grass sticking out of his mouth like a toothpick and he would say,

“Men, when you snooze, you lose”.

Of course he was referring to one of us who was picking dandelions and chasing birds in the outfield, where nobody hits the ball, until this game. In all the yelling and screaming to “get the ball” I threw the baseball as hard as I could and it happened to go over the backstop and somewhere into the trailer park close by.

Well, its been a long time since that baseball moment, which my family remembers so well.  However, about a week ago I had a similar “you snooze you lose” moment with a valuable lesson attached.

It all started when I was pulling some comps on the MLS…

See, I like to teach my students to be an “expert” in their chosen area. One of most effective ways of being an expert identify a opportunity market, study the comps inside and out and then set up MLS searches that screen out the overpriced junk and bring to my attention the stuff that is decent or occasionally heart thumping forgot how to drive awesome.

Well with it being the holidays, I kinda ran my search once a week instead of everyday like I normally do…

…I mean, the searches take an exhausting 15 minutes a day and somehow I wasn’t motivated enough to do that.  As fate sometimes has it, I happened to find a deal that I missed in my searches. I missed it because it went pending to quick and was a multiple offer frenzy.

Here is the worst part…

I know this listing agent quite well. He doesn’t always think to pick up the phone but if I would have called him, I could have gotten this deal locked up at list price ($42,000).

Here are some more details of this deal:

• List price:$ 42,000
• Sold Price: $80,500 (gee, I wonder if it was a good deal)
• Terms: Cash
• Days on Market: 6
• Clean REO Price: $150-$180k (conservatively)
• Retail Comps: $200-$250
• Number of times I have double dipped with this listing agent: 4
• Strategy: Buy at $40-$80k, eat a steak, re-list the day after I close for $174,900
  

Click on this to see how I realized my laziness cost me –> Bob’s $100k goof video

Thanks,

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Craig Fuhr, a successful investor in Baltimore, MD and I got together to check out some potential leads in Indianapolis. It became apparent after a couple hours that the properties we were investigating were in border line neighborhoods (i.e. crap real estate). Stuff was worth $1-5k at most. I encounter this everyday in Detroit but having a flip video on hand, we were able to document how I negotiate warzone (Steve Cook’s Zone 1 neighborhood scale areas) and fringe warzone properties (Zone 2). Most of these properties were a Zone 2. We quickly noticed that a certain investor in Indy loves crap. After driving by 5-6 of their properties, I decided to give them a call. By the way, I did end up talking to them later on in the day.

Thanks, 

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Here is Southern Utah, where I currently live, I encountered some very interesting FDIC negotiation tactics….. verbal offers! Check out the video to follow my negotiation technique….so simple a GEICO caveman can do it!

Thanks,

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As real estate investors, lead generation is a vital part of our business. Whether its bandit signs, direct mail, Realtors, driving for dollars, probate lawyers or other wholesalers, a consistent lead generation system will keep you from staying dollar “skinny”. My favorite lead generation methods have always been Cultivating REO Realtor Birddogs and Cultivating Contractor Birddogs.

Yeah, I’m one of those leverage guys: Let everybody else do the work while I pursue other passions in life on my 101 list.

So, what’s my definition of a birddog?

Its simply somebody who wants to pass along a lead or deal for a fee. Example: I was looking at some foreclosures last week and I met a couple of buyers at a REO property. They did not have a Realtor and were “looking for a deal”. After 2 minutes, I made the quick conclusion that they needed a Realtor to hold there hand and spend some serious time with them. I got their name and number and called a Realtor I know and gave him the potential buyers and lead. This is my definition of birddogs. I’ve done hundreds of deals. I’m not a newbie. But I wasn’t interested in showing 40 houses as a Realtor.

Some people are birddogs because they lack the ability to make money in another way or they are are more focused on a different real estate niche. My REO realtor birddogs don’t have the inclination to rehab houses (and most of the time have a conflict of interests with the bank even if they did want to rehab one of their listings).

Big Question: How many “puppies” do you have in your “Finding Kennel”?

To illustrate some of the benefits of having lots of birddogs at your disposal, I’d like to share a deal that I did about 4-5 weeks ago in Metro Detroit.

On a business trip to Detroit, Mi, where I currently do most of my investing, I received a phone call from a guy that I have not talked to in almost 18 months. He was a contractor, so I was curious as to why he was calling me out of the blue. I am glad I took the call. Here is basically how the call went.

^{“Hey Bob, I got this guy who called me for a mold remediation quote in Clawson, MI. The house is a dump and I told him that he was better off just trying to sell it. Its condemned and I remember you telling me that if I ever found a guy who wants to sell a house that I should give you a call. I think he wants to sell it for $50k and I don’t know how to handle this. He wants to meet tomorrow, what do you think? Is there anyway for me to make some money with this?”}

^{“Brian, I need to check my comps but I can come out and meet you and the seller. If we work out some kind of deal, how much money are you looking for?”}

^{“I’d like to make $5000.”}

^{“Fair enough, but in order for you to make $5000, you realize it will have to be a good deal for me”}

^{“Yeah, sure. You know Bob I could really use the money…life has been hard…Contracting is slow right now….. (insert rest of his story here).”}

^{“Brian, This sounds like it has some possibilities, lets meet tomorrow with the seller”}

So, we meet the next day and I am able to negotiate the seller to a sales price of $30,000 on an option BETWEEN THE SELLER AND MY BIRDDOG. When the seller left, my “birddog” was going nuts. He was like, ok, please write the check out to ….! I had to calm him down, explaining that the we “optioned” the property because I didn’t have a buyer yet and I wasn’t completely confident I could sell it for my desired profit.

So, the rest is textbook perfect.

Pull some comps, looks like its a great deal. Make some calls, pass out lockbox codes, negotiate a little and sold it to a cash buyer for $50k, a $15k profit. Called my title company, arranged to be paid outside of closing by my buyer…total time invested…about 2 hours.

Now imagine if you had lots of contractors and Realtors bringing you leads…with you simply telling them if you can buy or not…this is why taking the puppies (new birddogs) and cultivating them is a means of creating easy cash flow without you doing the work.

Part 2 will cover how I cultivate birddogs, how to overcome birddogs fears and concerns and the proper paperwork needed to complete birddog transactions legally and legitimately.

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Welcome world! The BobNorton.com Blog is finally here. Before I share with you what this blog is going to be all about, I need to get something out in the open:

I am a house addict.

Well, maybe I’m not that type of “HOUSE” addict! (My brother loves this show and it would be safe to say that he is a HOUSE addict. I don’t watch the show but I’ve heard that this dude could use some serious therapy).

BUT I am addicted to BUYING and FLIPPING houses. It didn’t dawn on me until about a year ago that I really have a problem with stopping myself from doing residential real estate flips.

What does that mean for this blog?

Well, having completed over 400 real estate deals in the past 5 years to fuel my addiction, I sometimes come across some pretty cool stuff that other investors find very helpful (especially recommendations on how to avoid an expensive mistake) and I am going to share this info through my blog. This includes:

• Videos
• Documentaries of a deal from beginning to end
• Interviews with other investors and students
• Insights tips and advice on how to make your life easier and more profitable as a real estate investor
• How to cope with possible real estate buying adddiction
• Opinions on the current real estate investing news
• Current strategies on how to make money with real estate in today’s market, not last year’s or last month’s
• Lessons learned

Thanks for visiting my blog. Please post!

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