Have you ever wanted just one phrase that you could say at the right time, and it save you hundreds, or thousands of dollars?

When it comes to getting the best price from contractors, plumbers, electricians, HVAC techs, you name it, there is a simple phrase that often works like magic in reducing your costs.

These specialties are always competing for work. However, if you ask any of them they will likely tell you that they are extremely busy!

They might be. They might not.

There’s a game going on here. They need to appear very busy so their services are in demand and support the prices they will ask for. At the same time, you need to appear to be willing and able to get prices from many sources. (Don’t just make it appear that way, get multiple bids whenever it’s practical!) It’s a balance that must be struck.

The good part is that now you know the game…so play both sides since you know what the other side’s play.

How to turn the tables

* Have an idea of what the job will cost. Just a ball park idea will do.

* If you are told something that you think it high, ask why so high. There might be more to it than you know. The reason for the high price might be reasonable. Discuss alternatives.

(For example, if you electrician points out that the breakers you need are especially expensive, ask if he’s got any used breakers that are still in good shape.)

* Then use the magic phrase…

Here it is…

“Is that your final and best price?”

Very often the person you are talking to will squirm a bit at this point. They are having to think…

“Is my price fair?”

“Am I over pricing something here?”

“Can I save this customer some money?”

“Does the customer know something I don’t?”

While your contractor/laborer thinks about this, don’t say a word.

I’ve experienced many reactions from “That’s the best I can do” to “If you give me the job, I’ll knock it down to…”

Often I’ve gotten a range of options that could save me money. More often than not, it saves my money!

* They understand that they aren’t your sole source of the service they provide

* They know you are willing to wait for the best price

* They know you aren’t a push over

* They know you might be a source of future income

But, it WILL work like magic when properly applied. In my own experience, I can point to many thousands of dollars of savings using this simple question.

We like to save money by keeping prices for services reasonable, true enough. At the same time, I advocate and approach of “don’t let anyone get hurt.” If you award a job to someone and it winds up costing them more than expected, I help that person out. I don’t want someone to lose money on a job and leave with a bad taste in their mouth and never want to do work for me again. Be aware of when someone gets hurt. That said, watch out for those that claim to get hurt with each job.

Try out that phrase today. It works in many situations…not just rehab real estate, but in just about any competitive environment.

Why You Should Ignore Trends In Real Estate

In this modern information age, you can learn just about anything on a particular subject. While access to information is usually a positive development, things can get a bit crazy if you get overloaded with it. Look long enough and you can find two pieces of information offering exactly the opposite views on a subject. Obviously, that doesn’t really help you make a choice.

In real estate, the information offered in the media is usually uniform. For the last six or seven years, everyone with any brains at all has reported the real estate market has been hot. Now, many of these same pundits are suggesting the market is cooling off. Some are even predicting a crash in the market.

As a potential buyer or seller, how should you evaluate the information being produce in the media? The simple answer is you should ignore it. The problem with these reports is not the accuracy. Instead, the problem is they are reporting national trends in real estate.

National trends are great and all, but they have little or no application to your specific area. Consider the following if you do not believe me. The real estate market for the last few years has been reported as hot, hot, hot. In Colorado, however, the market has been flat throughout this time. If you were considering buying or selling in Colorado, the information being provided for national trends simply did not apply to you.

If you think Colorado is the exception, it is not. The state with one of the worst appreciation rates over the last four or five years, for instance, has been Texas. Put in practical terms, this means homes in Dallas, Houston, Denver, San Antonio and Houston have not followed national trends. The only real estate trends that matter are those in your local markets. Never rely on national data.

If you are considering buying, you have to be very careful when considering real estate trends. If it looks like a seller’s market in your area, you may make the mistake of not buying. Even in a seller’s market, buying a home is better than renting. Every day you are in the home is a day you are growing your personal wealth through equity accumulation. Don’t stay out of the market simply because you feel it isn’t the right time.

It is easy to get caught up in real estate trends since they are plastered in front of your face on a daily basis. In truth, they really should not play much of a role in your decision making process.

Realtors spend years learning the art of selling and how to interpret the real estate market. They can offer you insight and information that only comes from years of experience. Realtors are also experts on their area; they know the communities and what they have to offer, the location of schools, transport routes, and how the current market will affect the sale of your home.

Using a Realtor to sell your home has several advantages over a FSBO. Perhaps the most important of these advantages is exposure. The marketing of your home is of the highest importance. Without a robust marketing plan, your home will not be seen by prospective buyers and as such, will take much longer to sell. Realtors utilize the latest in internet technology to ensure that your home is seen by as many buyers as possible. Also, realtors have a large budget to purchase newspaper ads, hold open houses, and create flyers and information packs about your property. Realtors can also utilize a CMA to evaluate the correct value of your home and to price it correctly in your local market. This will enable your home to be competitive and attractive to buyers. Remember, homes sold by a Realtor sell for an average of 20-30 thousand more than homes sold by the owner. use a professional to sell your home, and free up the time you need to organize yourself for the process of moving your own new home.

The answer in one word is: UGLY. You need to have a motivated seller (DON’T WANTER) and property that is ugly. Great buys in real estate are in rough condition. I can count the nice properties on one hand that I got great buys in over the years. I am talking about thousands of properties. So if you have not guessed it yet, if you get in this business you are going to need to be in the rehabilitation of property business. What do I mean by ugly:

a. Weeds two feet high in the yard

b. Gutters hanging down from the house

c. Holes in the roof are good

d. Maintenance neglected

e. Out dated kitchens, shag carpet, unpainted walls for 10-20 years

a. “Keep cool indoor pool”. I bought a house in Pontiac once such that when you walked in the front door, the paint was pealing from the walls. The house was full of moisture. When you got to the top of stairs to basement, you ran into crystal clear water. The water was to the top step. Someone had stopped up the floor drains and broken a water pipe. Water was running out of the basement windows. I had no competition on buying this house. We called the water department and had the water turned off at the street. We had the house dried out and got a great buy. The point is that there was little competition to buy this home. They could not see past the water coming out of basement windows. This was a foreclosed property and the bank was a motivated seller.

b. “A little smell” I purchased a house where the owner had a dump truck load of sand poured into the basement. The sand was for a permanent litter box for her 25 cats. I had to take my clothes off in the garage when I got home. Again, I had no competition on the buy. The rehab on this house was labor intense.

c. “Moving walls” In this house, you opened the door and roaches fall on you or better said, “the walls move”. Again, the competition fell away- this required an exterminator and all was well.

d. Also look for backed up sewers, fleas, houses full of trash, as things to look for when looking for a great buys.

This business requires hard work but the rewards can be great. The majority of properties that people donate to charities meet the above conditions. There are great buys in real estate but it requires investors with a talent to restore the homes to a classic condition. Restoring homes, and putting them back in great shape, is for me, part of a process of fulfilling the American dream for homeowners and is what I love most about this business. The investors who look and see fully restored homes instead of the above are ones that get the great buys on homes they otherwise couldn’t afford. If you are new investor, I recommend you focus on the lighter rehabs, paint and carpet changes for example. Some of the examples above were light rehabs they just had obstacles that others could not see past.

The appraiser that you hire for your commercial investments before you buy can have a great impact on the amount of money you spend and your chances of getting funding from a lender. Most lenders will not accept just any appraiser. So, if you get an appraisal with an appraiser that a lender does not accept, you have just wasted your time and money, and you are no closer to getting the property you want.

Let’s look at what makes a qualified appraiser, and who it is you want to hire to evaluate your potential investment.

It is common practice for a lender to appoint the appraiser that is to appraise the property in question. This practice is in place because there are dishonest buyers who work with certain appraisers that will inflate the property’s true value. This, in turn, allows the buyer to borrow more money than what a lender would normally allow, thus increasing the lender’s risk.

Inflating a property’s true market value is surprisingly easy because appraisals are simply guesstimates of a property’s true market value. They are interpretations based on the surrounding property and selected criteria. An appraisal can be “fixed” according to a person’s interest. That is why the two parties must not have any prior dealings or common interest in the subject property.

A very widely used and accepted type of appraiser is one that is certified by the American Institute of Real Estate Appraisers. They are members, making them M.A.I. designated. Most lenders will require that you use only an MAI appraiser. These MAI appraisers have gone through intense study, years of practice, and have had to perform under tight supervision while appraising many different properties.

Most MAI appraisers will not conspire with a borrower because there is too much to lose and too much invested in their practice. For this reason, most lenders will accept MAI appraisals regardless of whether or not they know the appraiser personally. For the most part, lenders will have trusted appraisers that they work with all the time, and will require that you use only their appraisers. Be sure to get clarification on this issue before you hire an appraiser because you do not want to pay for two!

An MAI appraisal costs more than a non-MAI appraisal because of the added expertise and experience of the appraiser. In fact, the cost for a single appraisal can run from $2,000-$5,000, or two to three times the cost of a fee appraiser. Be sure to include this in your total cost of purchasing the property so you are prepared to cover the cost.

If you have been in the commercial real estate business for a while, you may have a few lenders and appraisers that you work with often. They may even be considered as part of your team. This can greatly increase your productivity because you have professionals at your fingertips to get many properties handled quickly, if necessary.

You can trust MAI appraisers to perform an accurate evaluation of your prospect property. With this appraisal, you will be able to get the proper amount of money loaned on the property and not come out short.

It is always a good idea to research your appraiser and view some of the work that he or she has done. The appraiser and the appraisals should be of the utmost professional quality because so much is riding on their appraisal. Even if it costs you more money, always use an MAI appraiser to avoid problems with the lender and unnecessary expenditures.

Before the Auction

You’ll likely find out about the foreclosure auction in a local newspaper and on the flier may be information to pre-qualify for bidding. This will allow you to put down a deposit so that the auctioneer knows that you are a serious bidder and can fulfill your bid if you are the winning bidder. Being pre-qualified just sort of speeds up the process so that you don’t have to mess around with the deposit on the day of the auction. During this time you should also do some research on the house by looking into any liens that may be against the property, how much the property is worth, how much it has appreciated in the last few years, as well as property values in the area. If the home looks as though it will need some repairs, you should consider this as well when trying to come up with how much you will be willing to pay for the house. Without this research, no amount of knowledge about what goes on at a foreclosure option will help you because you won’t know where to start when it comes to actually making a good bid.

What Happens At the Auction

The auction will typically start with the auctioneer reading legal notices as well as a legal description of the property. The auctioneer will usually then begin taking bids on the property. If the auctioneer has pre-qualified bidders the process is more streamlined, if not, each time a bid is made the auctioneer will then ask for the bidders deposit check, which is typically right around $5,000 for residential auctions. After each bid the auctioneer will attempt to solicit bids for higher amounts. Each auction is different, but the auction increments usually are set by the auctioneer and may be by $100, $500, or $1,000 per bid. The auctioneer will continue to solicit bids by this increment until it is clear that the highest bid has been reached. Then, the auctioneer will announce, “Going once, going twice, three times, sold!” indicating that the auction is over and the property has been sold to the highest bidder.

Once the bidding has ended a foreclosure deed and purchase papers will be drawn up and validated by the new owner or purchaser and the mortgage holder. A grace will likely be given to allow the purchaser to find financing or to come up with the funds to cover the full amount of the bid. This grace period is usually 30 days unless the purchaser and the mortgage holder agree to other terms. After the grace period a closing will take place, so that the new owner can formally take the title to the property.

What Happens, Now?

The purchaser can do what he or she intended to do with the property, whether it is to move into the home or to sell it for full market value. The money paid by the purchaser will be distributed in order of priority, first of which would be taxes. After taxes money will be paid to the mortgage, then the second and third mortgage if applicable. If there is still money after paying these debts, remaining money will be paid to lien holders and creditors. There is a very slim chance that there will be money left over after all of the debts are paid, if this is the case then the monies will be paid to the former home owner.

What about the Original Owner?

The original owner will often be at the auction so that they can bid on their home, and this is legal as long as they have the deposit required. If the owner of the home that has been foreclosed does bid on the home they must remember that the deposit is not refundable and the deposit assumes that they will be able to finance the home within the grace period. Owners must also remember that if they buy the property back old debts may merge and become reinstated such as second and third mortgages that became void when the first mortgage foreclosed on the property unless one has filed bankruptcy and is truly free and clear of these debts. Owners will often drum up the funds to make the deposit so that they can have another 30 days to try to save their home. Owners may or may not be successful in their attempts to save their home at a foreclosure auction.

As you can see, there are a lot of things that go into a foreclosure auction, but none of them are all that difficult to understand, but knowing about them makes the auction more enjoyable. The auction itself is not all that complicated, but it can be very fast paced. At some foreclosure auctions there are a lot of people, at others there are only a few because of the location or just the debts attached to the property, or even the state of the property. If you are serious about the property you should pay close attention when bidding starts so that you are sure that you can get your bid in when you feel it’s time so that you have the best chance of being the top bidder.

The appraiser that you hire for your commercial investments before you buy can have a great impact on the amount of money you spend and your chances of getting funding from a lender. Most lenders will not accept just any appraiser. So, if you get an appraisal with an appraiser that a lender does not accept, you have just wasted your time and money, and you are no closer to getting the property you want.

Let’s look at what makes a qualified appraiser, and who it is you want to hire to evaluate your potential investment.

It is common practice for a lender to appoint the appraiser that is to appraise the property in question. This practice is in place because there are dishonest buyers who work with certain appraisers that will inflate the property’s true value. This, in turn, allows the buyer to borrow more money than what a lender would normally allow, thus increasing the lender’s risk.

Inflating a property’s true market value is surprisingly easy because appraisals are simply guesstimates of a property’s true market value. They are interpretations based on the surrounding property and selected criteria. An appraisal can be “fixed” according to a person’s interest. That is why the two parties must not have any prior dealings or common interest in the subject property.

A very widely used and accepted type of appraiser is one that is certified by the American Institute of Real Estate Appraisers. They are members, making them M.A.I. designated. Most lenders will require that you use only an MAI appraiser. These MAI appraisers have gone through intense study, years of practice, and have had to perform under tight supervision while appraising many different properties.

Most MAI appraisers will not conspire with a borrower because there is too much to lose and too much invested in their practice. For this reason, most lenders will accept MAI appraisals regardless of whether or not they know the appraiser personally. For the most part, lenders will have trusted appraisers that they work with all the time, and will require that you use only their appraisers. Be sure to get clarification on this issue before you hire an appraiser because you do not want to pay for two!

An MAI appraisal costs more than a non-MAI appraisal because of the added expertise and experience of the appraiser. In fact, the cost for a single appraisal can run from $2,000-$5,000, or two to three times the cost of a fee appraiser. Be sure to include this in your total cost of purchasing the property so you are prepared to cover the cost.

If you have been in the commercial real estate business for a while, you may have a few lenders and appraisers that you work with often. They may even be considered as part of your team. This can greatly increase your productivity because you have professionals at your fingertips to get many properties handled quickly, if necessary.

You can trust MAI appraisers to perform an accurate evaluation of your prospect property. With this appraisal, you will be able to get the proper amount of money loaned on the property and not come out short.

It is always a good idea to research your appraiser and view some of the work that he or she has done. The appraiser and the appraisals should be of the utmost professional quality because so much is riding on their appraisal. Even if it costs you more money, always use an MAI appraiser to avoid problems with the lender and unnecessary expenditures.

More and more people are using and accessing the Internet. The National Association of Realtors contends that 96% of the Americans who would buy houses will access the Internet to find their dream homes. Most realtors do not understand the power of the Internet in generating the sales that they need. They do not realize that the generation of leads through the Internet can significantly increase your sales.

The easier it is for potential buyers to find you and your properties, the more likely it is that you will gain clients. Having an Internet presence will allow your clients, potential clients, or other interested parties, get in touch with you and the information you have to offer anytime.

However, creating your own web site requires some work. There is a lot that goes into it such as design, hosting, search engine marketing and updates. The good websites often require a professional to get it off on the right track and optimized properly. http://www.fixpad.net is a good place to start if you need help with your website.

Having an experienced webmaster will really help.  There are several things you need to do in order for your website to be found among the millions of sites out on the web.  An experienced webmaster will be able to optimize your site for the search engines and get you listed in the top results for your area.  The webmaster will help you with your email newsletters, link strategies, marketing and advertising.  It’s a lot of work, but the payoff is great once everything is in place.

Also, it is important to keep your website interesting and full of information.  If your website is just an advertisement people won’t stay on your site for long.  However, if you provide useful information for your potential clients such as the latest mortgage rates, mls search, home buyer tips, articles and other useful information visitors will stay on your site and come back for more at a later time.  Search engines, such as Google, like constantly changing and updated websites and rewared those sites by giving them top search results.  Since most people only look at the first page of search results it is important to be there.

Another way to reach potential customers is by blogging. If you want to develop a rapport with your customers, make regular postings about the local real estate market and gain interest from other media outlets or potential customers. You would certainly benefit from starting a blog. Because blogs by nature are considered a source of information rather than a commercial advertisement it makes perfect sense for a realtors to use blogs as a means of establishing a reputation in their market.

A website should be the primary marketing tool for every realtor. Almost everyone who looking for a new home searches the internet first.  If you are not there you are missing out on a lot of potential clients.internet first.  If you are not there you are missing out on a lot of potential clients.

When you locate only great deals, you can do fewer deals per year and make an exorbitant amount of money. Great deals are characterized by a return that equals three to four times the amount of your investment. However, if you find only average deals, the return per deal can be considerably less, causing you to either not make as much money, or do more deals per year. It takes the same amount of work and identical processes for each deal, so you might as well do less work and see a greater return.

You must use trusted and solid resources to locate your deals. Although there are many options to find properties, as they are available in every city and state, you must use resources with updated and accurate information. Below you will find the best resources to assist you in finding deals. You can use each resource to locate the properties that fit within your property investment criteria. Some resources may work better than others, depending on your area of specialization.

One of the best and most common places to find commercial property is through commercial brokers. This would make sense, as they are the ones who actually have the properties listed. You can go to them with a criteria sheet or specific information on the type of property you would like to purchase.

You can find brokers on a local or more widely spread basis, even going as far as calling brokers in other states. Most will be more than happy to call other brokers and find listings that best fit your criteria. They will bring you properties as they become available.

Another great advantage of a commercial broker is their ability to find pocket listings, or listings that are about to go on the market, but have not yet officially been listed. You can get a jump ahead of the competition and find excellent deals. Get in contact with a few brokers every day, and watch targeted properties roll in!

Another place to locate properties is on the internet. There are many sites that have hundreds of commercial properties for sale ranging from raw land to large retail and apartment complexes. These sites have information on both the property and the broker, so you can easily get in contact with the broker and learn more about the property. You can filter the information as you see fit, usually according to your specific criteria.

One of the best sites is Loopnet.com. This site houses hundreds of brokers all over the United States who post their many listings. You can filter through deals very quickly and reach a larger audience than you would in just your own community. Your ability to build contacts also increases with so many brokers and agents at your fingertips. I urge you to check out these commercial real estate sites and see what deals you can find.

Auction houses are great places to locate properties of all conditions and types. Many times you can get excellent deals on properties that you may otherwise have to spend a lot more for if they were listed with a broker. You can get on mailing and e-mail lists of different auction houses so they notify you of properties that will be going to auction. This allows you time to investigate the property as an investment, before the actual bidding day.

Auction houses also sometimes provide the option to purchase a property at a certain price before it goes to auction. You never know what opportunities will come along, so it is a good idea to stay in contact with several auction houses to be privy of the properties moving through their hands.

Although there are many ways to locate deals, these are among the best offered to the commercial real estate industry. The properties are abundant, and contacts can constantly be made, allowing for an ease of influx of other possible deals. A secret in this business is that the more contacts you have working for you, the more opportunities will be brought to your attention.

If you are working locally, and using only local resources such as newspapers, listings, and magazines, I urge you to use these other options. You can find local deals this way as well. It might even give you incentive to move out to your comfort zone and into areas where you will find even more opportunities.

Use these resources- commercial brokers, internet commercial real estate sites, and auction houses to find targeted, up to date, and numerous properties that could possibly bring your next big commercial deal!

A Zero Down Example

I’m selling a small rental property right now, with payments of $400/month. The buyer has a good credit report, and the $5,000 downpayment covers closing costs and even a foreclosure, if necessary. So at this point, I don’t care where he gets the downpayment. A $6000 cash advance on a low-interest credit card for example, would cost him about $135 per month, and give him enough for the downpayment and his closing costs.

In this case, with rent around $600 per month, he would be okay. In some cases, however, that extra $135 might cause negative cash-flow. So be sure that however you do it, the numbers work. By the way, I would have set the payments at $350, if he had asked, because it’s the price and the interest rate that are important to me.

Other Zero Downpayment Methods

While there are sellers (like myself) that are able to offer terms and low downpayments, usually you have to find a way to get at least 70% of the price to them in cash. Think in terms of how to get a primary loan, then how to raise the money for the remainder. A couple examples follow.

Some banks still do “no doc” loans, meaning they don’t require verification of income, source of downpayment, etc. They generally loan only 70% to 80% of the property value, but if the seller is willing to take a second mortgage from you for the other 20% to 30%, you are in with no money down. The seller gets 70% or 80% in cash, plus payments for years to come. You’ll have two payments, of course, so be sure the numbers work.

You can borrow against your home or other property to come up with downpayment money. If you borrow for a “vacation,” and leave whatever you don’t spend in your checking account for a while, you can use it without violating bankers rules about borrowing for a downpayment.

Even if you live in a small town, there are usually a few “note buyers.” These are investors that buy land contracts, mortgage loans and other “notes” at a discount. If a seller takes a purchase money mortgage from you for $100,000, for example, a note buyer might pay him $85,000 for it. So how does that help you or him?

An example: A seller prices his property at $195,000, and expects to sell it for $180,000. You offer $205,000 in the form of a mortgage  for $160,000, and another for $50,000. You have arranged for the sale of the first mortgage at closing for $136,000 to a note buyer. The seller gets that cash now, plus payments from you on the second loan for $50,000. Notice that this adds up to $186,000, which is more than he expected to get out of the deal.

These are just some of the ways you can buy with zero down. Real estate investing is about making the deal work for all parties. Find a way to get what you want, and get the seller what he wants. That is more important than having big cash on hand.