How to Acquire Your First Deal

How to Acquire Your First Deal By Jay Castillo & Maria Senger Interview by Trace Trajano Copyright 2009 Trace Trajano

* Who is Trace Trajano? Check out the last page to find out!

CHAPTER 1 Fears & Formula Acquiring your first deal is one of the hardest thing you will ever do as a real estate investor. Why? You don’t have the luxury of experience to guide you. you. You have fears and doubts. The first fear: you’re afraid to pull the trigger – that is sign the purchase contract that stipulates you’re buying the property. Questions like: “what if I can’t sell the property?”, “what if accept my offer?”, “what if I offered too much?” are coming up in your mind. I have those same questions. How do you overcome fear #1? Education – you need to know what you’re doing. You need to know how much to offer and why. In my book “Think Rich – Quick” I revealed a formula for making offers. You can get it in my blog – http://tracetrajano.blogspot.com Once you overcome fear #1 and you are able to buy a property – undoubtedly, a second fear comes up – not being able to sell the property. How do you deal with this fear? eXtreme Marketing. I will tell you more about this in this eBook. In this eBook, I interviewed 2 of my students who recently acquired and completed their first deals. This webinar was so inspiring – one of my students acquired his very first deal one week after listening to this webinar. Here’s the transcript of my interview with them: Trace

All right folks! Thank you for joining us. This is a student-only webinar. Today we will talk about how two of my students acquired their first deals under my mentorship. Definitely, you will learn a lot from these two students. Believe it or not, every deal that I do, I still learn something new. Jay Castillo and Maria Senger will be presenting and I’ll be their interviewer. The title of the webinar is “How to Acquire Your First Deal”. Before we start the formal presentation, Jay and Maria, why don’t you introduce yourselves. Starting with you Jay. Tell us a little bit about yourself.

Jay

Hi! I’ve been in the real estate investing business for almost two years now. I’m an IT professional so I’m really not into real estate. But, I ventured into real estate when I first read the book Rich Dad, Poor Dad by Robert Kiyosaki and Think Rich Pinoy by Larry Gamboa and Grow Rich Pinoy and then Think Rich Quick by Trace Trajano. I’ve been quite passionate about real estate investing. For the past two years, I’ve been focusing on bank-acquired assets and I’m going to talk about my first completed deal.

Trace

Good! Alright, what about you Maria?

Maria

Hello to everybody! I’m Maria based in Michigan. I just started doing real estate just this February after I read the book of Trace Trajano. Before that, I actually joined Trace’s blog since October last year. After reading those blogs that I received, I’ve been thinking about doing this. I’m a stay home mom right now and I was also an IT professional. But after having two kids, I needed to stop. Now, I have two toddlers: a 2-year old and a 4year old.

Trace

I have a 2-year old too so I can completely relate!

Maria Trace

Whenever I go out to see properties, they are with me! Great! Excellent!

Jay

I have a 4-year old, too, so I know how it feels!

Trace

Alright! The reason for this webinar is for you guys who are in my mentoring program. A lot of you have not yet done your first deal yet. The first deal is always tough because you have no experience as your reference and the fear level is highest. Actually, I heard this from a guy who became a millionaire at 16-years of age, “Everything worthwhile in life is on the other side of fear!” People with courage are not those who don’t have fear but rather those who have fears and they face them anyway. Doing your first deal is really difficult and I know this for a fact when I was acquiring my first deal. The first deal is always the hardest because they would ask themselves; “What am I doing?” or “What if I succeed?” and “What if the offer gets accepted?” Hopefully this interview will enlighten you on 5 things namely: 1. How these guys found their first deal 2. How they know it’s a good good deal 3. How did did they negotiate the deal 4. What’s their exit strategy and 5. What did they learn Jay, starting with you. How did you find your first deal?

Jay

I found it from a listing of bank-acquired assets. I had two bird dogs. One was my mom who looks at all listings ever since I went into real estate investing. Then the other is a friend who looks at listings for me. Of course, I personally look at foreclosure listings. I also network and let them know I’m into real estate investing. Of course, I “bribe” them by offering them P10,000 if they give me leads on good deals and if I end up buying it. But for this particular lead, I found it in one listing. I checked the numbers and ended up buying it. But, as mentioned, I keep on telling everyone that I’m into real estate investing. I give them my calling card and until now I still get call or text message from them. Sometimes, I get leads of motivated sellers from these guys. But for this property, I got it from a foreclosure listing. I also get email listings from the bank. I call them up and they include me in their list so I get regular listings from them.

Trace

Good! So, how do you get the banks to give you a copy of their listings?

Jay

I actually hang up on my first phone call with a banker because I was very scared as I couldn’t answer his questions. But I overcame my fears and just called these banks. My confidence grew and I was able to get the listings from them. I also attend a lot of auctions and I get to meet the bank people and they actually volunteer to send me the listings without me asking.

Trace

Folks, the reason why banks are basically rolling the red carpet for you is because they are the motivated sellers, right Jay? Don’t be afraid of banks because they want you to approach them and they will hand you their listings on a silver platter. Attending auctions will give you the opportunity to meet buyers even if you don’t a house to sell yet. They will get the impression that you are a real estate investor when you

show up several times. One thing that you have to realize, is that, you have to believe you are a real estate investor because if you don’t, you will have a hard time to talk them. Having the right mindset is very important. Alright, how did you know that your deal was a good deal?

Jay

I forgot to mention that I am a licensed real estate broker since November 2007. I was actually invited to visit a project in that area where the property was. In that subdivision, I found out how much the cost of the lot was. I had an idea how much the property would cost as brand new! I found out that the cost of an exact replica of the property i was buying in that same subdivision was P2.5M so I knew it was a good deal. The house I was going to purchase was only 4 year old so it was practically new. It only needed a new paint job and some new tiles, and my estimate repair cost was about P30k-P100k. And I was going to buy the property from the bank for only P1.194M! I was luck y when I visited the site because of what I learned from the neighbours. One guy approached me asking if I was going to buy the house that was a replica of the house I was going to buy because someone approached them already about it. I asked him, how much did you the buyer offer? And he said, P1.9M, but he said, “We are not interested.” From there, I got the impression that P1.9M will be a price of the house that will easily sell. Then, I also learned about two other properties in the area which were sold within one week. So, I knew that properties in that street were very sellable.

However, the handlers of the property I was going to buy told me that there were bidders already for the property I was interested in. Nonetheless, I still went to the auction. Trace

Is that the reason why you used a cost factor of 0.9 because you knew that the property was very sellable?

Jay

Yes.

Trace

For those of you who are new, the: Maximum Allowable Offer = Cost Factor x After Repair Value – Repairs – Profit. The cost factor is arbitrary and is dependent on the market conditions. For example, in Detroit, Michigan, I advice Maria to use a cost factor of 0.7 because houses don’t sell fast. In Jay’s case, houses in the subdivision subdivision sell fast, so he wisely used used a CF of 0.9. I have students in Canada where the market there is hot. So, in that case you should use a CF of 0.9. Sometimes, you can even use 1.0 or even higher. But to be conservative, use 0.9. As a guide, if a house will sell within three months, then use a CF of 0.9 but if a house will sell within 6 months, use a CF of 0.85. I put that CF in there so that the formula will work in any country and in any market. Alright, so the next question is how did you negotiate the deal? You have a funny answer because you were the only bidder!

Jay

Actually, that property already had a bidder, who was the sister of the owner. Because of that, I said “They deserve to get the property because they are family.” But I said, maybe I could still attend the auction just in case they back out. So I still attended. And it turned out they did back out! Because, my broker told everyone who were interested in that same property that there was already someone bidding for it, no one bothered to bid for it anymore and I was left alone to bid for that property.

Trace

(Laugh) Good. Good.

Jay

During the registration, I was told by my broker to register at the last minute so that the bank will be surprised. It’s because, some guys say that banks put a dummy bidder to raise the bid if a certain property has only one bidder. So i registered last. In fact, I registered 30 minutes after the registration closed.

Trace

(Laugh) The lesson there is be persistent! Some people don’t even bother trying and they wonder why they are not successful. Here, even though the broker told you that there was already a bidder, you still attended the bid and actually won because you were the only one who bothered to go when all else were discouraged to go. For that, I commend you and you deserve this great deal!

Jay

Thanks!

Trace

Alright! So, tell us about your exit strategy. Rent-to-own is your exit strategy for this one,

right? To read the rest of the interview, intervie w, go to Chapter 2. For now, allow me to summarize the key points here:

1. Fear is normal – but what the heck…just heck…just do the thing thing you’re afraid of and just make offers 2. Make offers offers based on the following formula: formula: MAO = CF x ARV – Repairs - Profit 3. Getting leads is crucial for your business as a real estate es tate investor. You can get leads

from real estate agents, talking with w ith banks about their foreclosed properties, putting out “We buy houses” signs and just telling people you are into real estate. In the next chapter, Jay reveals how he made money on his first deal.

{To get the remainder of this eBook, send me $9.97 through paypal at [email protected] . Put the following note: “How to Buy First Deal” under the notes. You will also get $307 worth of BONUSES just for buying the eBook. One of the most important BONUS you will get is a 30-day trial membership for the Real Estate TV as your BONUS for buying the eBook that’s a $39 value. Read the next page to find out what it is and it can do for you. HINT: you will get me as your “virtual mentor”}

“The Truly Rich Real Estate TV” Garrett Stevenson has read books about real estate investing. He knew real estate investing is what he wanted to do but despite all the books he has read over many years, he never acquired any investment property.

Until he met me.

I mentored him….and in about a week, he has a property under contract. In about 6 weeks, he sold a property and made money. Years of reading books books equals NO RESULTS. Weeks of mentoring equals $$$ (that’s real money that one can take to the bank!)

Having a mentor is probably the missing link to your success. BUT, mentoring programs are not cheap. I know some real estate mentors charge $10,000 for their mentoring programs. I cannot blame them because mentoring someone is time consuming and time is money. But most people cannot afford $10,000 - which is precisely precis ely the reason why they need the mentoring in the first place!

What a dilemma!

BUT what if I tell you that you can get me as a mentor for less than the price of a tall Frapuccino coffee at Starbucks? That’s right…you get me as a virtual mentor via video that you can watch on your computer. This is how I can mentor you so cheap. I call this…

The Real Estate TV! With Real Estate TV, imagine if you get results like… Maria Senger from Michigan, USA who acquired and sold her first deal successfully successfully under my mentoring. m entoring. She said her husband was skeptical in the beginning but not anymore! Look at her very first deal…she acquired it for $48,000 and had it sold for $55,000.

Or what about Thea Santos from Marikina, Philippines? She didn’t know anything about real estate…and yet under my mentoring, she acquired her very first deal and made P260,000 – that’s over $5,000! What made this awesome is the fact that in the Philippines, the average per capita ANNUAL income – or the average income per year is only $2,000. Imagine making 2.5 times the average annual income – this feat is equivalent to someone making $75,000 profit in the US!

And their experiences are not unique….

I have success stories like Bobby Fojas from Illinois, USA who made $15,000 profit on his first deal…

Jay Villar from Manila, Philippines who showed me his P500,000 check (that’s almost $11,000!)

or what about Jessie Raquel from Bulacan, Philippines who is now a real estate millionaire?

I can go on and on with success stories like these and I can fill this page with checks and pictures of properties…but what is important is what’s in it for you . And here’s what’s in it for you… 

You get me as your “virtual” mentor – I won’t be there talking to you face-to-face…but you will hear me explain powerful and profitable real estate concepts via video

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You get mentored not just in the field of Mastery – that is the techniques and principles of real estate investing but you will also get mentored on how I think (mindset), how I reach buyers, sellers and investors (marketing) and how I develop, lead and manage a team who does the work for me (management). I don’t know any mentoring program that is as holistic as this.

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You get me as your virtual mentor 4 times a week ! You’ve read that right…4 times a week not once a month or once a week but 4 times a week!

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These videos are short – 3 to 7 minutes long but profound, powerful and profitable. Don’t let the brevity of the videos fool you. Just one idea from one of these videos can spell the difference between you wishing you’re investing in real estate…and you actually buying and more importantly, profiting from real estate!

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I am even bribing you with with $268 worth of INSANE BONUSES. Look at these bonuses… a. A $74 eBook entitled, “How I Raised $1 Million on One Deal”  b. A $97 webinar on “How to Sell Houses FAST in a SLOW Market” ; and c. A $97 webinar where you can ask me any questions you may have on real estate investing – LIVE!

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Oh and by the way, do you know that you can get this virtual mentoring for free? As a subscriber you’re also an affiliate of the program. What that means is you get paid a “referral monthly fee” per every person you refer to the program. More specifically, if you refer 4 people, your subscription is FREE for LIFE! If you refer 40 people, people, you will make $400 a month!

All successful real estate investors I know have mentors. Heck all successful people I know have mentors and coaches. Even Tiger Woods has a golf mentor. Warren Buffett, the world’s most successful investor had been mentored by Benjamin Graham. Donald Trump, a billionaire billio naire real estate investor has been coached by his father Fred Trump. If you want to succeed, you need a mentor. Period. And The Real Estate TV is the cheapest mentoring program, bar none! And Garrett Stevenson? Garrett and I are now partners in my real estate business. I’ve made him the Acquisition Manager of my real estate business. He now helps me acquire 1 house a week! His life has changed for the better because of my mentoring. Allow me to change yours. Dedicated to your success, Trace

P.S. As part of your purchase of this e-book you have received a 30-day trial membership into the Truly Rich Real Estate TV. To access over 80 real estate videos and start learning NOW, go to: http://tracesrealetv.blogspot.com (NOTE: you should use the email address you used in purchasing this eBook to access the member-only website) P.P.S. If you DON’T want me to mentor you and if you want to LOSE access to life-changing videos email Kristine Aganon at [email protected]

Who is Trace Trajano?

Trace Trajano is a real estate investor, millionaire-maker mentor, best selling author, husband and father. As a real estate investor, Trace has acquired over $13 Million worth of investment properties from land, l and, single family homes and apartment apartment complexes. Trace’s technique of acquiring real estate allows him to profit from real estate in a few months, a few weeks, even in a few days. His techniques allow one to get into the real estate game without using money, or credit. As a millionaire-maker mentor, his mission is to help create, directly or indirectly One Million Filipino Millionaires worldwide by 2020. By 2009, Trace has helped 4 Filipinos Fili pinos to become millionaires and countless others in becoming successful in real estate investing. Trace has students in Canada, the United States and in the Philippines. Trace is a best selling author of the book “Think Rich – Quick!” with co-author Larry Gamboa. The book was published in the Philippines in 2007 and can be accessed online in eBook format via http://tracetrajano.blogspot.com Trace is a loving husband to Bonna and a great father to 2 smart, charming boys – Nathan and Johan. Trace and his family lives in Mason, Ohio (near Cincinnati).