Struggling to Get Started » How I Learned

Mid Week Update and Books!

Scott Costello — Wed, 24 Aug 2011 13:33:40 +0000

It’s Wednesday and I’m happy to say I’m right on track with my mailer goals so far. I’ve got 58 letters sitting in my car ready to be mailed out at lunch time. The getting back up to speed part of the week is now over and I’ve got to kick it into high gear if I’m going to get another 150 letters done by Friday evening.

I’ve identified two towns that I’m going to pull Out-of-State owner lists from (Bound Brook and Somerville), not sure how many leads will come from those two, but I usually average around 45 per town. I also have a second mailing that needs to go out (forget the town) and that should get me my 150 mailers.

Great Books for Real Estate Investors

As part of the Diva Money Club that I joined earlier this month, they gave me a list of books that would be great reads. Over the past year I’ve really slacked on reading and have slowly begun watching TV more and more in my down time. That always happens to me when baseball season starts.

During my vacation I decided to bring my Amazon Kindle and see if I could re-kindle (yes…that just happened!!) my interest in reading. One of the great things I love about the Kindle is that you can download any book that you want right onto the device from anywhere there is a wifi connection. Since I got the Kindle about 9 months ago, I’ve yet to really use it so I’m just now figuring out everything that there is to it. I highly recommend it!

In total I read 2 full books and finished off half of another that I failed to finish over the winter. The first book I read was called The Dip by Seth Godin. I’ve read a few other Seth Godin Books before (All Marketers Tell Stories and Tribes), so I’m already a big fan. The Dip is a quick read and really helps you decide if something is worth quitting. We have always been taught that “quitting” is a terrible thing. I used to think the same way until a read this book. He really opened my eyes to when I’m in a Cul-Da-Sac, Dead End or just a Dip. You should read the book. Get it here

The next book I read was Shae Bynes’ favorite, The Go-Giver by Bob Burg. I am completely a convert now and this is my favorite book to date. The concepts in this book I believe can truthfully change my life and the best part about it is I agree 100% with the 5 laws of success. Giving! This is a must read book, so go get it or borrow it from somewhere. Here is an affiliate link for those that are interested, Get it here.

After reading those two books, I decided to go back and finish off another Seth Godin book, Purple Cow. I don’t know where Seth gets it from, but this is another good book. It’s about standing out in a crowd, but not just any crowd, your tribe. It goes very well with his book Tribes as you might have guessed. If I could take one thing out of the many lessons in this book it would be to not do what everyone else is doing. Get it here.

Even though I’ve gotten some great ideas from the Seth Godin books, the one book that I’m definitely going to read again is Go-Giver. I truly want to model my life and business after the ideas in that book. I love giving and the feeling I get from helping someone else out. I’ve always wondered why I never minded helping my friends move. haha

Has anyone else read the Go-Giver?

**Links to products in this post are amazon affiliate links. **

So, How Was My Real Estate Investing Follow Along?

Scott Costello — Tue, 01 Feb 2011 04:39:33 +0000

Let me start off by thanking Jon Zorrer and Kasey Smith for putting on one hell of a 3 day training. They held nothing back and literally walked us through every part of their business model. Everything from which lead types they are targeting to how they comp properties and make the offers. With out a doubt they showed us what works and how to make it work. As Jon said a few times, this weekend was like drinking water through a fire house. The information was coming fast and heavy.

In today’s post, i’m just going to summarize what we did each day and then as the week goes on I will be sharing some of the notes I took to hopefully help everyone out a little bit with some ideas.

Day #1: Marketing Strategies

This day started out at 9 am and we didn’t finish up until 6:30pm. There were only 9 of us in the training, and we all knew each other so the environment was very friendly and fun. This day was spent going over things like

Which leads to market to that would yield the highest return of motivated sellers.
The different types of letters or postcards to send to each lead source
Making your letter stand out
How to build your lead lists for each type (probate, out-of-state owners, etc..)
Frequency for subsequent contacts
Managing and tracking your leads
Internet Marketing
Researching your target areas
Bandit Signs
Using Skip Tracers to find people
Fax Broadcasts
and more…

Day #2: Field Trip!

On the second day, we all piled into a van and drove to look at 9 potential deals. In these houses, Jon and Kasey took us from room to room and explained what they look for and how they estimate the repair costs. They took into consideration the level of the neighborhood (level 1, 2,3 or 4) and if they were thinking this would be a rental or a fix and flip property. It was such a huge help to do this repetitively because it really sunk in as to what needs to be considered as a wholesaler.

Jon also called all the “We Buy Houses” signs that we saw on the street and demonstrated how he talks to them and how common it is to get a disconnected number or how rare it is to actually speak with a live person. In total, after leaving 4 messages we got one call back.

Another great thing, was Jon called some of the sellers that had responded to his marketing. Just hearing someone else talking live with a seller was invaluable. There really wasn’t anything mind blowing that Jon said or did, but what it showed me was how easy it can be. Just go through the lead sheet and it will be obvious if the seller is motivated or not.

Day #3: Comp and then Comp again, and for good measure Comp some more

We were back at the house for day 3. We went over each house and then comp them using the MLS. I was hoping for some magic way to comp properties using the GS MLS system (it’s kinda a pain in the but) that I wasn’t doing before, but I had the right technique (Damn!).

If we didn’t find any good comps for a rental property, Jon showed us how to use the “Trash Flow Analysis” to back into the price we should pay. This technique is just figuring out what the rent rate is and then pulling out all the expenses to see what you can pay. Pretty simple.

The last thing we did was building our buyers lists. Kasey called up people who had responded to one of their bandit signs looking to buy the house that the sign was advertising. Again, not rocket science but good to actually hear how someone else does it. We also went through many many ways to build your buyer’s list quickly and easily.

Conclusion

You couldn’t really spend your money better then this with regards to real estate investing education. Jon and Kasey in no way pumped our heads with million dollar visions. They just gave it to use straight and told us what is working for them right now.

Well Done Jon and Kasey!

A Simple Way to Prevent Time Wasting

Scott Costello — Thu, 20 Jan 2011 04:13:39 +0000

Working a full time job and then trying to fit real estate investing in between eating, sleeping, exercising and spending time with family and friends is a very difficult thing. I have to make sure I use all my free time wisely and make sure I can concentrate on one task at a time. Like most people I tend to lose track of time and underestimate or over estimate how long certain tasks actually take.

Talking with Kasey last week we decided that I’m going to be keeping a daily timesheet. This time sheet will be strictly to record my real estate activities and how long each of them is taking. This I think has many benefits…

I’ll be able to look back and see what I have done each week
I’ll be able to actually see how much time I spend per week on real estate activities and then decide if I can increase or must decrease my time alloted
I will be able to see what tasks are taking the longest time to complete
I will be able to see if certain tasks are taking too long and figure out a way to speed them up

There are probably many more advantages for keeping a time sheet that I will realize once I have done it for a few weeks/months.

I am going to set my time sheet up with the following information..

Year
Month
Day
Activity Description
Start Time
End Time
Total Time

The idea is not to spend to much time recording what you are doing, just simple and quick entries.

In my next post I’ll give you another activity you can do that will really help streamline what and how you spend your time.

Do You Have What It Takes To Be Financially Free?

Scott Costello — Thu, 11 Nov 2010 04:14:17 +0000

Not everyone has what it takes to get to the point where we have no debt (mortgage included) and have multiple passive income streams that easily pay for any and all of our expenses. I’m slowly working my way towards that as my wife and I only have a car loan, that will be paid off by March and our mortgage. I still need help in figuring out the next steps to take in order to achieve my ultimate goal and Shae recently released a product that is really going to help me out.

I believe in promoting things that I have used and have found to be greatly beneficial to myself. A while back Shea Bynes of Good Faith Investing invited me to take a sneak preview of her new guide called Financial Freedom GPS. This hit right at home for me as my most concentrated goal over the last few years is to eliminate all of my debt in order to help me gain my financial freedom more quickly.

After receiving a copy from Shae, I gave it to my wife to read and we are going through it together. I’m very excited to go through each step of the guide because I know, even if it’s a small step it will get us closer and closer to becoming financially free.

If you have read Shae’s blog, you know how great she is and how much she loves to help people out. If you have any motivation to become Financially Free, take a look at what Shae is offering.

Click here to view more details

(links to products are affiliate links)

I’m not used to houses like these

Scott Costello — Wed, 10 Nov 2010 15:18:28 +0000

I first wanted to say thank you to all those people who wished me a Happy Birthday this past weekend. It was incredible to see the 40+ wishes on Facebook that I got, considering I only got a handful last year. I must have been a nicer person this time around..haha! Thanks everyone, you made my day.

On Saturday I woke up early and met Jon (my coach) in Linden to take a look at some houses in order for me to get a better understanding of estimating repair costs. Since I haven’t done a lot of repair estimates in my life, this was a great learning experience for me. My goal was to watch how Jon went through the house, what he was looking for and how he thought through developing his estimate.

What did I learn?

Figure out what kind of neighborhood the house was in (level 1,2,3,etc..; Rental or SFH)
Include about $500 for power washing
Understand that for rental neighborhoods you don’t have to fix every little thing (like cracked sidewalk or driveway) if the neighborhood doesn’t call for it
Pay attention to functional obsolescences
Announce yourself when entering a vacant home
Carry a flash light even in the day time
If you notice something structural, call a trusted contractor to give you an estimate (guestimate) of what something like a falling balcony would typically cost to fix
Patch, Carpet and Paint is about $400 per room
Check the manufacturer of Electrical boxes (there is a certain one that MUST be replaced, I wrote it down but can’t find the paper at the moment. Can anyone help a fella out?)
Murray Hot water heaters are good, but most should be replaced if older then 15 years

I learned so much more, but the main thing was that estimating repairs is not that hard. You spot the big stuff and then work in a miscellaneous budget for all the small things and then add on a fudge factor.

I will say from where I grew up, I’ve never been in houses in as bad a shape as these were in. They were in your typical #2 and #3 neighborhoods and I am definitely not used to that. If those houses where all cleaned up I couldn’t live in them. It’s all relative I guess, but it was an eye opening experience and I thank Jon for taking me through those houses.

Money Making Activities vs Non Money Making Activities

Scott Costello — Thu, 04 Nov 2010 03:00:24 +0000

One of the most difficult parts of becoming a real estate investor is making sure you are always limiting your activities to those that will make you money. Many times I get caught up with things such as working on my blog or wasting to much time trying to come up with the perfect probate letter. It’s very easy to trick yourself into thinking you are being productive when in fact you are just doing busy work.

I tend to do busy work when I am not sure what I should be doing. This happens more then I would like to admit, and the reason is because I don’t have a plan to refer to when i’m feeling a bit lost. During my last master mind meeting we discussed the differences between Revenue Producing Activities and Non-Revenue Producing Activities. Many of the items in the Non-Revenue list where things that I had considered to be revenue activities. It was very eye opening and is a great list to refer to the next time I’m feeling lost and not sure what to do.

Non-Revenue Activities

These are sometimes necessary activities that must be done in order to get to a revenue activity. We must realize the truth about these items however, that they, by themselves will not have potential to put money into your pockets. Such activities are…

Going to Rei meetings
Educating yourself
Tracking results
Creating new mailer pieces
Building Lists (buyers or leads)
Getting supplies such as envelopes, stamps, etc…
Creating marketing materials
market research
looking threw mls

As I said above, it is necessary to do quite a few of these items. Just don’t get caught up in them and it was suggested that we set aside one day every week to work some of these.

Revenue Activities

This is where the money is. The more revenue activities you do the more chances that your wallet will get fat. Most of your time should be concentrated here and if you do this I guarantee you will make more progress then you ever thought possible, and quickly. Lets take a look at some of these activities

Calling Sellers
Putting out Bandit Signs
Sending out letters
Evaluating deals (running comps, getting bids on repair costs)
Meeting with sellers
Posting adds for buyers on Craigslist
Answering phones/take seller calls
Driving for dollars
Door knocking
Writing contracts
Going to closings
Finding private money
Placing newspaper ads

The problem with many of these money making activities is that they touch on our fears. I know every single one on the list above makes my stomach a bit unsettled but I do them because that is what it takes.

What are some other Revenue Activities and Non-Revenue Activities that you find yourself doing?

How Many Bandit Signs Can Two People Put Up In 2 Hours?

Scott Costello — Tue, 02 Nov 2010 01:25:13 +0000

Bandit signs are a proven marketing technique for getting your phone to ring. Sometimes you’ll get angry people who will complain about uglifying (i just made that up!) their neighborhood, code enforcement threatening fines unless you take them down, but mostly you’ll get people needing to sell their house. I have never put out a bandit sign before because I’m simply afraid of getting fined the first couple of times. The funds are low as is, and getting fined will put a serious dent in my wallet.

This however is not going to stop me and to at least partially get over my fear, I agreed to go out with Lance last Friday night and hang some of his bandit signs. The plan was to meetup at 10:00pm at the Bridgewater Mall and then hang about 30 signs. We figured that would be a good start since we both are first timers. Lance had some H-Stakes so we could put some in the ground, and a sign stapler that would allow us to tack some up on telephone polls. We were ready!

In total we spent about 2 hours putting out signs. So how did we do? 4 Signs! A grand total of 4 freq’n Signs went up!?!?!?! Please don’t be in awe, if you work hard enough and don’t give up, you too can reach such great heights.

These are some of the obstacles that we ran into that kept us from putting out more signs

Many business fronts that we could not put signs out on.
The intersections were COVERED with political signs and ours would just get lost so we passed
We didn’t really know the area so wasn’t sure were the good places were
Traffic Jam that slowed us down
Some of the good spots did not have any place to park the car without stopping traffic.

In hind site, we probably should have stuck some signs up amongst all the political bandits, and should have been less choosy where we wanted to put signs. We also decided to go back during the day and plan out some good spots before the next time. It’s much easier if you can see the spots during daylight ours.

Now it’s my turn to pick out an area and a day to hang some of my signs. I’m shying away from Mercer County because it’s just to dang far away, roughly 90 minutes. I’ll keep you all updated when I decided, which should be by the end of the week.

By a show of hands, how many people have put out bandit signs? and how did you do the first time out?

I Am Proud To Have Accomplished

Scott Costello — Tue, 26 Oct 2010 12:54:05 +0000

It was time for another master mind meeting this past weekend and as always it was very helpful. The assignment leading up to the meeting was a very easy one. We had to answer a few questions on a worksheet and then we would all go over it during the meeting. In the past I found it very hard to be critiqued by other people. I knew it was good for me, but my natural instinct to justify myself always kicked in. These meetings are really helping open my mind more.

Here are the 3 questioned that were asked on the worksheet…

List some items that you are proud to have accomplished since the last meeting,
List a tool/website/information that you discovered that was really helpful
What area do you think you struggled with over the past month

The last section was about setting your goals for the upcoming month. This was to be done at the meeting with the help of the other members.

Here are my answers to the questions…

1. List some items that you are proud to have accomplished since the last meeting

Making an offer on a house
Doing a full repair cost estimate based on what needed to be fixed
Using my relatinoships I’ve built over the past year to help me accomplish some tasks I’m currently weak on.
Buying bandit signs
Continuing my probate marketing

2. List a tool/website/information that you discovered that was really helpful

COA Telephone Service. Being able to use the voice mail script has given me the ability to describe what I do to sellers who respond to my marketing even when I can’t answer the phone. It also serves as a filter because people who are just tire kickers are more prone to just hang up then listen to the message.

COA network also gives me the tools to keep statistics on the callers like their phone number, name (if listed), how long they listened and more. Every day I discover a new feature that I could exploit to help me out.

3. What area do you think you struggled with over the past month

Estimating repair costs for a property
Getting over the fear of putting out bandit signs.

I was able to get help from Lance with the repair costs which not only helped me come up with an offer, but also helped opened my eyes to what to look for when walking through a house. I’m also going to be setting up an appointment with Jon or Kasey to walk through a few houses with them and practice doing a repair cost estimate. That will be very helpful indeed.

As for my fear of putting out the bandit signs (i.e. getting fined), i’m going to be heading out with Lance one Friday this month to help him put some signs out. It’s a good step in the right direction of getting over my fear.

Goals for November

Put out 100 bandit signs
Begin to mail to Out-of-State owners for 4 towns
Continue Probate mailers

Real Estate Mastermind Meetings are a Must

Scott Costello — Tue, 28 Sep 2010 01:54:56 +0000

I’ve always heard other successful investors like Steph Davis, David Alexander, Steve Cook and many others credit much of their successes to master mind meetings. For those that aren’t quite sure what a Master Mind group is, it’s a handful of like minded individuals who meet every so often to talk about their business, share ideas and hold each other accountable.

As part of the coaching program I’m in there is a mastermind meeting with Jon and the other students once a month. This past weekend was my first meeting and I must say that I can definitely understand why so many people rave about them. Even though I have a strict rule about no real estate investing on the weekends, these meetings are very important to my success so I had a chat with my wife who agreed it was a good idea to go.

In total, the meeting lasted about 4 hours. The way it worked was that each person went over their progress from the last meeting and then brought up 3 areas/questions in which they believe they needed help with. At this point the others would chime in with advice to help solve the problems. I brought up the following…

What is the best way for me to spend my limited time in order to be successful?

I got some pretty good advice and I also found out that there where 2 other people at the meeting who are in almost the identical position I am in with work, family and rei. Here is a quick hit list of ideas that I got…

Get a call service to help filter seller calls
Call people back during lunch hours and right after work before eating dinner and working out
If I don’t have time for a deal or it’s out of my area, refer it to another person in the coaching program and work it together
Hire a help to hang bandit signs, and answer phones

I got a lot out of the suggestions and I realized I’ve been handling my time a good way this year. Until I get things rolling I need to get the most bang for my time as well as buck!

Should I continue to invest in probate in Morris County?

This was a question I asked in one of my last posts, Using My Money Else Where. The suggestions and information I received from the group helped me answer the question. For one, my probate lead provider doesn’t supply leads for Mercer County because he actively markets to that area and doesn’t want the competition. That combined with the fact I’m getting responses from my mailers has lead me to continue to market to Morris County.

Over the past week I’ve advertised on Craigslist to try and sell some of the leads and have gotten a few hits but nothing has gone through just yet. I’m going to continue that path for the next 30 days, posting every other day, to see if I can get some one who is interested.

Should I try and involve my wife more in my Real Estate Investing?

It’s always good to have help and with out opposite work schedules, having Valarie participate would make some of the daily tasks much easier. My biggest hold up was that she never has really shown much interest and if I forced her to help, or if she was just helping because she loved me, we would end up in some unnecessary arguments.

Some of the other students suggested that I bring my wife to one of the meetings. That may help, but it also may backfire depending on the meeting. What happens if she talks to someone that just lost 20k on a bad deal? She’d be even more against this. Jon gave me some good advice to just let things go as they have been going. Val understands what I’m trying to do and it’s obvious she doesn’t want to know all the details. In the end I agree completely.

I look forward to the next meeting!

Finding Buyers The Obvious Way

Scott Costello — Thu, 23 Sep 2010 02:12:47 +0000

Every week my coach and I are going to be identifying some action items I must complete before our next accountability call the following Monday. This method really works well for me as I’ve been trying to do the same thing for myself since a started. The only problem was that the person holding me accountable was myself. Now I’m pretty good at following through with what I say I’m going to do, but it’s so very easy to put things off. With Jon calling me every Monday and holding me to task, it really kicks up the motivation level.

Building a Buyers List

My action plan for this week from my coach is to build a buyers list and start calling them to see what they are all about. Jon has suggested quite a few different methods for me to try and find buyers that should rapidly grow my list. So far I’ve found 45 potential buyers just by using one of the methods (I will cover that method shortly).

Cold Calling

Finding the buyers is not a problem for me, but my fear concurring activity this week will be cold calling the buyers. I really don’t know what I will say but I am at least going to follow the buyers sign-up form that Jon gave me. What sort of techniques do you guys use when cold calling buyers?

Building Your Buyers List

Google Local: A very quick and easy way to build up your buyers list is to do a search in Google Local Businesses for something like I Buy Houses NJ. I am not quite sure why I never thought of something so simple, I must have convinced myself it was more difficult to find buyers.

Craigslist: One way I have used in the past is to search craigslist for foreclosure specialists or people buying houses. You can surely find a dozen or so at any given time.

There are definitely more ways to find buyers that I’m not going to go over just yet. I just wanted to tell you about the methods that I will be using this week.