Welcome to Memphis Tennessee Real Estate Investing Case Study – Day Two. Lorena Gerlach here with Day Two of my 1:1 with student Kay Kirkpatrick in beautiful Memphis, TN.
Part of any good plan is a “dream team”. Kay needs a group of professionals to help her reach her goals. We set an appointment to meet with an REO listing agent Kay knew. This same agent is also willing to provide Kay with MLS expired listings. Two birds, one stone. I love leverage!
To prepare for our meeting with the REO agent, we decided to review a few of the properties Gerald provided that were in our target market. Gerald provided sold and rental comps which enabled us to quickly eliminate properties that did not fit Kay’s buying criteria. This left us with a few solid prospects to walk through with Gerald.
I introduced Kay to some other lead generation tools – Foreclosure.com and BidSelect.com. Foreclosure.com is a paid subscription online service that provides REO’s, pre-foreclosures, for sale by owners leads throughout the country. BidSelect is a free online service that provides government and other foreclosed property leads. Either is a good tool when targeting either REO’s or pre-foreclosures. Through these two tools we identified additional properties that Gerald could show us in Kay’s target buying area.
Time to focus some time on one of Kay’s obstacles – selling her current flip property. Her marketing to date consisted of listing with a local real estate agent, MLS and the agents sign in the yard. No flyers, no other online ads. Using Craigslist to advertise these homes is free, other than your time, and is effective if used correctly. Kay already had an account, so I had Kay create a series of generic ads on Craigslist since we had no photos to use yet. One ad highlighted the property. Another ad highlighted owner financing. And so on.
With the property ads posted, we left to meet Gerald, Kay’s real estate agent. We reviewed four properties and quickly eliminated two. This left Gerald with a good idea of the type of property Kay was looking for. He asked if we would be interested in a new build community where the builder was rapidly going out of business. YES! Yes, we would. I like a team member that will think outside the box.
The homes were incomplete. Most needed a finish out – floor coverings, lighting, appliances. A few needed a driveway. We asked Gerald to get us information on the properties and the owner. Kay will ask her handyman to stop by and prepare a repair budget. With comps and contacts in hand, it will be time to play let’s make a deal!
We stopped by Kay’s flip property on the way back from working with Gerald. Staging a home is important in today’s market. You have to do something to make your home look different. I had Kay make a supply list the night before as part of her homework. She had a few supplies and we tried them out.
Staging materials do not have to cost a lot. I love Big Lots, Wal-Mart, and other low cost providers. You don’t need to fill a home with furniture, just a few key pieces to tell a story. I like a welcome mat and planter box with colorful flowers on the front porch. In winter, I’ll use silk plants, plus they are low maintenance! I put dishtowels and a few accessories in the kitchen.
I’ll put towels, soap, candles, shower curtains in the bathrooms. I’ll put a camping bed frame covered with a bedspread and an inexpensive side table in the master bedroom. Vanilla or citrus scents will make the home smell welcoming. If there is a fireplace with a mantle, I’ll put a large framed piece on the mantle to highlight the space.
Kay made notes on some additional items she needed for staging, including flyers highlighting a buyers assistance package, appliance package, and other items a new homeowner may be interested in. These flyers will be strategically placed around the home.
We returned to Kay’s home office and reviewed the contents of her 1:1 binder that she received in the program. Besides having hundreds of references for a real estate investor, it also includes useful tools such as a seller credibility kit, private money presentation, and forms an investor may use on a regular basis.
Forms in my binder include property information sheets, a letter of authorization, an option agreement and a basic purchase contract for my state.
We ended our day by participating in the weekly coaching call with Scott Carson. Each week, we cover specific items in profit mapping and also cover current topics we believe our students should be concerned with. We’re at the half way point!
I left Kay with additional homework assignments and called it a night!
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