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48 days

Scott Costello — Mon, 06 Feb 2012 15:45:47 +0000

48 days from becoming a father

With January in the books already, I’ve only got 48 days till I officially become a father for the first time. It is an amazing thought and puts a warm feeling in my heart every time I add a new piece of furniture or hang some tiny, yet oh so cute baby clothes in the nursery.

One of the most amazing parts about becoming a parent is how generous the people around me are being. Everyone is giving us gifts, offering to help or just willing to give my wife and I helpful advice. With all this support it has really helped me to avoid most of the nerves that would come with being a new father. Yes I’m still a bit nervous, but the excitement far outweighs it at this point.

Reducing Work

As my investing partner and I gain experience I’m always trying to look for ways to make our lines of communication better and easier. I handle all the marketing and he handles the leads once they call. We each use SI Lead Manager to organize our parts of the process and it works out exceptionally well. The problem is that it works well, but only for each of us individually. The system fails us in two important ways…

My partner has to keep a separate Google Docs spreadsheet to record all the people who have responded. This is necessary because I need to know who responded so I can take appropriate action with my marketing.
I have to export each list that I mail to so my partner can import them into his lead manager. This is a must because once the leads start calling, it’s important for him to have their information in the system already so he can take notes.

The solution is simple. I have to figure out a way were we can access the same database with SI Lead Manager. Very simple if out computers where hooked up to the same network. I could just point both our SI Lead Managers to the same database file. This is not the case obviously. So the implementation is not going to be easy becuase I have to find an online database service that will allow desktop applications to access the DB.

Enter Windows SQL Azure. I’m currently working on a new version of SILM Beta 5 that can access SQL Azure. Microsoft offers a free 90 day trial, so I signed up. The integration is coming along very well and I’m quite pleased with the spead of the data access so far. I’m not quite sure how much the databae will cost on a monthly basis just yet though. I will keep you posted as my free trial runs out at the end of February.

I’m excited to start working off a common database. It should eliminate a few hours of maintenance and data syncing a week. If it all goes well I will think about releasing this version to the masses.

Well that’s it for today, have a great week everyone!

P.S. Congrats to the Giants for winning the superbowl! As a Giants fan I’m still in shock that they were able to win it after where they were in early December. Amazing!

Lesson Learned: What a Failed Deal Can Teach You

Scott Costello — Thu, 26 Jan 2012 14:49:31 +0000

Investing in Real Estate is almost never easy and many times you learn your most valuable lessons by deals that have fallen apart. The only real hope is that these lessons are not expensive ones, but many times they are. You can have all the mentors you want or have packed your brain with as much knowledge as possible and that still doesn’t mean you will escape the school have hard knocks.

My Lesson

Deal #2 is officially dead! After 2 weeks of calling the sellers trying to figure out why we haven’t heard from them after only getting the addendum signed (not the contract) we finally decided to call the attorney and got our answer. The sellers backed out because we lowered our price ($2000) from our original agreement (the one that they backed out on). They really needed 40k but we just couldn’t offer that to them.

The consequences for us are not huge…

Lost $75 for the title search that was performed
Lost a potential $5k wholesale fee
Had to inform our buyer the deal fell through (potentially lowering our credibility slightly)

The lessons learned though are valuable…

We learned we need to be a bit more forceful when it comes to getting the contracts signed. As the saying goes “Strike When The Iron Is Hot” applies here. What happened is that we gave the sellers to much time to think about the deal and our offer. They got cold feet.
We learned a little about human behavior. When sellers stop returning phone calls all of a sudden, it means they are getting nervous about the deal. Motivated people will be sure to stay in contact and not give you excuses for “taking so long to call back”.
Build up good rapport with the seller. The deal will go much smoother if the seller trusts you and feels comfortable talking about what they are thinking. I believed we did this, but I guess we didn’t or in some cases this just isn’t possible depending on the seller.

Even if Deal #2 is officially dead, we plan on following up with them next month to see how things are going. Our buyer is still interested if we can rekindle the fire.

What is your experience with sellers who suddenly stop communicating with you? How do keep the lines of communication open?

Marketing Monday: Planning Out My Year

Scott Costello — Tue, 17 Jan 2012 15:45:58 +0000

This year is going to be a hectic one for sure, so one of my early goals was to create a schedule for all my mailings this year. Last year I basically decided what to send out at the beginning of the week. I’d sit at home on Monday night and figure out how many mailers I wanted to send, see which of my current lists needed a 2nd or 3rd mailing and create those. If there weren’t enough, I’d pick a new town, pull that list and create that mailing. Some weeks it was harder then others to come up with enough mailings but I managed to make it work. This was however a disorganized system to say the least. I wasted a lot of time thinking about what I should be doing next instead of doing.

I can’t afford to do that again this year so I spent the last week looking at SI Lead Manager, the county tax records and the New Jersey Census data to come up with my 2012 Schedule. Here is the basics for how I determine my schedule…

Current Campaigns

I took a look at the calendar in SI Lead Manager and made note of all the 2nd, 3rd, 4th, etc… mailings that where already planned for 2012. I then transferred them to my 2012 Schedule Spread Sheet based on the week they were scheduled to go out.

NJ Tax Records

In my weekly phone call with my partner, we discussed which counties we were going to market too. I used the tax site to then pull out all the towns in each of those counties and wrote them down. I’m sure I could have used other sites to get this info, but NJActB.org I knew gave me that data so I went with it.

I then cross matched these towns with the my current campaigns and marked in green which towns I’ve already started mailing too. This was also a great exercise as it helped me see which counties we were concentrating on the most. We weren’t has targeted as I once thought.

Median Home Values

Because of our buying strategy we don’t want to target any homes worth more then $500,000. Knowing New Jersey, there are plenty of towns that average well above that number and we don’t want to market to them. This led me to look up the median home values for each town. There are a few sites you can do this with…

Trulia Home Prices
Government Census
MLS – Must have Agent Access (at least for gsmls)

I found the median home value for every town in our targeted counties and then eliminated all those towns that had a median value of 450k or higher. Now I could easily see which towns fit our criteria and I can put them in our schedule for this year.

Here is a glimpse of my schedule so you can see what I’m talking about…

I really think this schedule is going to help me out through the first few months of the baby era. I also think that the research and planning will definitely make a huge impact on our results as well. We used to guess as to which towns were good to target, now we will be able to look at the numbers and know.

For those that would like to schedule out your 2012, I created a word template for you all to download.

2012 Direct Mail Schedule Template

SI Lead Manager – Beta 5 has been released!

Scott Costello — Thu, 29 Dec 2011 21:23:22 +0000

Have you had a tough time managing your leads using Excel?
Did you find that other lead management software is just too Expensive?
Have you tried SI Lead Manager – Beta 4 and found it too confusing?

If you’ve answered Yes to any of the above questions, then you need to get SI Lead Manager – Beta 5After working hard for over 7 months, SI Lead Manager Beta 5 is finally ready for release. The interface has been completely redesigned in order to make it a more user friendly and intuitive software. I’ve been using ‘beta 5′ for about a month now and it has worked great!

I’ve added a number of new features as well as streamlined some existing ones. Here are some of the major items...

Interface Improvements

3 Pain view allows you to view leads grouped by Lists, Lead types, Currently Marketing to, Closed, Responded, Working, and more….
Mark leads “Top Priority” by placing a star next to them. You can then filter the leads to only view “Top Priority” items
Search all leads directly from the top of the screen by Name, Property Address, Owner Address, and more…
Easily add new Leads, Mailings and Tasks

Improved Lead Organization

In Beta 4 I always had trouble distinguishing the different statuses of leads once the person had contacted me. Beta 5 has a new organization method called BUCKETS. Once a lead responds you can place them in one of 7 buckets (Responded, Closed, Working, On Hold, Returned Mail (for undelivered pieces), Deal, Marketing)

Improved Mailing Campaign Tracking

Once you have scheduled all your campaigns, the Mailings feature will show you (All Mailings, Future Mailings, Mailings that are scheduled to be printed over the next 7 days, Mailings that have been printed and are waiting to be mailed over the next 7 days, Passed, Due Mailings,Recently Mailed)
You will also be able to filter the mailing campaigns by Lead Type or Lists
Click a mailing and you’ll see a detailed breakdown of the list. See who is Scheduled to get mail, which have been printed, which have been mailed and which have responded.
Setup Mailing Patterns so you can quickly reproduce a campaign.

Organize all your Contracts

Organize all your contracts by importing them into the system and giving them a label
Quickly call up a contract and print it when you need it
Use one of 50+ contracts donated by J.P. Moses (of REITips.com)

Google Calendar Integration (must have a google account)

Uploads all Events to your google calendar
Use google calendar to send you email notifications
View your SI Lead Manager calendar on your smart phone

Importing leads

Now you can import your leads directly from Excel 2007-2010 versions (Beta 4 only supporting Excel 2003).
Now only 3 steps compared to 5 in beta 4
Auto matching columns (dependent on excel column headings)
Improved method for manual match of columns
Duplicate Property Address detection on import (will not import)

Database Pointing & Multi-Database Support

You can share one database with multiple users if you are on a network.
Have multiple databases to add another degree of organizations

Tasks Interface

View all your Tasks (formerly ‘To-Do’) items in one location
Mark off and add new items more easily
See all your tasks on your Smart phone with the help of Google Calendar

Tasks on Calendar

In beta 4, only mailings showed up on the calendar. Now you can view all your Tasks as well.
You’ll be able to plan out your week much more easily by just checking out the calendar to see when you have to make those phone calls, comp a property or send out a mailing.

Improved Calendar interface

Each event is marked with a unique icon and a brief description so you don’t have to click through to see what it’s about.
Change scheduled dates for events directly from calendar
Print mailings by ‘right-clicking’ on the event
Expanded 3 month view to allow you to see how busy you are
Daily, 5-day, 7-day and monthly views

Data Transfer

Import all data over from Beta 4

And there is much much more!

Get it here: SI Lead Manager – Beta 5 and use beta as the password

-Scott Costello
StrugglingInvestor.com

Email Question: What Do You Think About Mentors?

Scott Costello — Fri, 23 Dec 2011 03:32:41 +0000

I’ve been asked quite a few times what I thought about getting a mentor or finding a coaching program. The main concern for those that are asking is it worth the money to join the flip vips or other coaching programs offered by various people. Most recently one of my blog readers Zac asked me this very question and after I took some time to reply to his email I thought it would be a great idea to post my answer here.

My Answer to the question…What I think about mentors and coaching programs

I definitely recommend finding a mentor, or a group of mentors where you can ask questions and get advice. I’m not big on paying for this however, at least not a lot of money. It’s also a good idea to find a mentor in your area if at all possible because at some point you are going to want them to help you analyze the repair costs of a potential deal by walking through the property with you. That was one of the biggest helps for me hands down.

My mentor actually found me through this blog, saw that I needed help and offered to help. I imagine he took the time and made the effort to contact me because he saw I was serious about making it in the business. I only got asked to the full fledged coaching program after I offered to help him out to develop his real estate webpages. He was greatful enough and when I offered to do it for free he offered to coach me. So I traded my help for his and it cost me nothing. The normal cost of his coaching program is thousands of dollars per year. I’m not saying you have to go out and look to build webpages for local investors in trade for help, but what I’m saying is that you need to prove that you are serious and willing to sacrifice to succeed.

The best way I know how to do this is to start marketing and get sellers calling you. There is no risk at that point, but you will gain experience talking with sellers. What will also happen is that you will be able to ask other experienced investors (that you’ve met at local REI meetings) their advice on dealing with the specific motivated sellers and their situations. You’ll be amazed at how willing people are to help you out if you bring up real life calls. Don’t bombard them with questions though, just ask a few open ended questions and see how much help they are willing to give. If they are the type of person that loves to help, they will give you even more then you expect. They also may say something like “Call me tomorrow and we can talk about it.” if they do, you better call them.

As long as you show up to meetings consistently you will recognize the people who know what they are talking about. These are the people you want to target and become friends with. Once they start recognizing you by name, you are in. Then it’s up to you to continue to work on the relationship by offering to help them out in some way they may need. Remember you have to give to get.

I hope my answer can help anyone with this same question. If you need more clarification or need another question answered about getting started, please feel free to contact me.

Marketing Monday: All Time Funniest Response

Scott Costello — Tue, 20 Dec 2011 14:18:51 +0000

One of the risks with sending out direct marketing letters is that you are going to piss people off. You shouldn’t take these people to seriously or feel bad that you pissed them off though. This is because I can guarantee that they were pissed off way before getting your letter. Sometimes they will call you up to tell to say that you are the scum of the earth and sometimes they will write you a letter like this one…

You wondering what it was written on like I did?

That’s right! it’s a paper grocery bag…Outstanding!! I’m still chuckling about this reply even a week after receiving it. I’m almost thinking that the person made it sound over the top hillbilly to have some fun with us. Either way it is a classic.

What are some of the funny responses you’ve gotten?

Deal #2 Update: How Patient Are You?

Scott Costello — Thu, 15 Dec 2011 14:34:50 +0000

How much patience should one have? I have plenty of patience and don’t mind waiting these people out, but is that always the best way? I’m glad our first deal went very smoothly or else I would think all deals are like this current one. Below is the time line of events and shows how sketchy these people can be. To me a lack of communication is the most infuriating thing.

September

The beginnings of Deal #2 happened September 15th when we got a call from the seller expressing interest in selling their house. By the end of September we had agreed on a sale price and we began the process of getting the contract ironed out. As you all know, we were dealing with their attorney at this point and things were taking FOREVER!

October

Spent the entire month waiting to get responses from the attorney for various questions and

Novembercontract addendum negotiations.

The End of October came and we had not gotten a signed contract and the sellers had stopped responding to our phone calls and emails. We attempted to contact them for over 2 weeks with no response. We even found out that they were calling other investors even after we agreed on a price. So we decided to pull our offer in hopes that it would wake them up. That worked like a charm when we heard from the seller no more then 24 hours after we pulled or offer.

December 3rd

Things were moving along smoothly again, we adjusted our price because of market conditions and everything was agreed upon, even the contract addendums that we got stuck on the first time. The addendums were signed off on by both parties.

December 6th

A few days after receiving the signed addendum, we realized that the sellers did not sign the actual contract. This was embarrassingly pointed out to us by our buyer (who we already got an acceptable offer from and was ready to go). We figured this out on December 6th and left a message for letting the seller know we needed to have the actual contract signed along with the addendum sheet that they had already signed.

December 8th

Called and left another message

December 12th

Called and left another message

December 15th

Today is December 15th and we still have yet to hear anything from the sellers. This is the second time they have “gone silent” on us. The first time we found out they were calling other investors looking for a better price. This time seems very similar and I wouldn’t doubt if they are shopping our offer around again or maybe even found another buyer.

I’m tired of these people

Marketing Monday: Bad Results

Scott Costello — Tue, 13 Dec 2011 03:02:21 +0000

During November I started to experiment with the envelope that I was using to see if I could increase the number of responses I could get. I was expecting at worst similar results to what I was getting with my white envelopes, which is about 10% response rate. It’s been roughly 30 days since I started and I have my results.

Granted I could still get calls from the colored envelopes, but I believe I have enough to report on.

In total I sent out 188 colored envelopes in 5 different colors Red, Green, Yellow, Pink and Blue. All of the letters were first time letters and were the same as with the white envelopes I send out.

Blue Envelope ( 1 )
Green Envelope ( 0 )
Orange Envelope ( 2 )
Pink Envelope ( 2 )
Yellow Envelope ( 0 )

That totals 5 responses and a 2.65% response rate. Not very good compared to my usual return, so what could have gone wrong?

This isn’t an exact science and for sure my smallish sample size is probably note enough to positively call this a failure. Here are some of the factors that might have caused my bad result..

Time of Year: This is the holiday season and people aren’t usually responsive to marketing like this. In past years, my response rate has always gone down in late November and December.
Area that I sent the letters too: Some towns respond better to letters, some are postcard towns. I’ve never sent letters to these towns before so you never know.
Bright Colored envelopes turned them off: I was figuring with the time of year, the bright colored envelopes would make the lead think it was a greeting card of some sort. Heck maybe that was my problem and it turned them off.

It’s interesting to see how this all turned out. Maybe I’ll be getting a slew of calls from these letters after the holidays. Some time in January I’ll update the stats to see if anyone else has called.

Marketing Monday Will Be Interrupted By The Following Announcement

Scott Costello — Tue, 06 Dec 2011 17:08:32 +0000

I’m going to postpone Marketing Monday for another day because I’ve got an announcement to make…..

Deal #2 is under contract!

My partner did some great negotiating and as of yesterday (12/5/2011) we have a signed contract for purchase. As with the first deal I don’t want to divulge the details until it closes and we get paid. I will tell you that this deal will not be a home run by any stretch of the means, but it will be another notch in our belts and we will have another verified buyer on our list.

As of now, we’ve had one buyer through the place and they are interested. The offer is decent, but is contingent on him getting a plumber out to the house to look at the bathroom. It may need to be rearrange, but I get into more detail on that at another time.

One dilemma that always seems to rush through my body is, how much of an assignment fee should I be looking for? There seems to be too camps setup in my mind…

Get as much as you can
Get what you can

Get as much as you can is the greedy side of my talking. An extra couple thousand bucks makes a big difference and I should push for it. These deals aren’t easy to come by and we should make as much as possible. Why leave money on the table?

Get what you can is the practical side of me speaking. If you get an offer that gives you a profit, take it and move on to the next deal. I don’t want to be stuck with a deal for two months when I could have sold for a profit and be working on my next deal already.

For me the practical side usually wins out because I’m not a greedy person. And to be honest I genuinely feel that is the correct path to take.

What is your opinion on this? Are you greedy, practical or some where in between?

SI Lead Manager Beta 5 – Almost Ready

Scott Costello — Fri, 02 Dec 2011 16:51:38 +0000

I’ve been using Beta 5 for about 2 weeks now and have been loving it. I’ve managed to work out many of the bugs during my testing. There hasn’t been any major problems and everything is working the way I’ve intended it to. There are still a few more areas of the program that I need to test out, but if everything goes to plan I’ll be releasing it in 2 weeks.

Right now I’m looking for 5 reliable people to help me test out my program. I want you to be able to put it through the paces and weed out any bugs or items you think I forgot to implement into the program.

As a reward for helping me out I will give you something you’ll find very valuable to your real estate investing. I’m not sure what just yet.

Here are some pictures of what you can expect.

[Show as slideshow]

[View with PicLens]

If you are interested in helping me test out Beta 5, leave a comment below and I’ll contact you.