Marko Rubel s Tele-Coaching Q & A Call TRANSCRIPTS

Marko Rubel s Tele-Coaching Q & A Call TRANSCRIPTS December 2015 Good evening, everybody. Marko here. Hey, Mike, are you there? Page 1

Yes, I am, Marko. I'm here. Do you hear me nice and loud or maybe not? Nope. I hear you loud and clear. Okay. I'm getting here the recording ready, so if you can just tell a few words about what we've been talking about, the market, how students are doing. I know Mike is one of our coaches who work with our coaching students and he is out there doing deals every day, so Mike, give them your point of view and then I'll chime in after I just play here the recording, just testing, making sure everything is fine here. Okay, well first of all, I'll welcome everybody to tonight's call, and we've got a lot of good questions to go over here. To me, the market is real good. Now's the absolute best time to be in looking for properties, and just know that over the holidays, a lot of times people tend to slow down because of the holidays, so for those that don't slow down, that gives you that edge to be marketing to people that other people aren't marketing to because they're slowing down. Just because, like I said the holiday season coming upon us, still keep your marketing out there. If you're not marketing yet, then keep working towards what you need to do to get your marketing out there so you can get your marketing going, because that's what this business is all about, is marketing, looking for motivated sellers. When we talk about motivated sellers, we're talking about people that have to sell their property versus somebody that just wants to sell their property. Like I said, we've got a lot of great questions here that we're going to be going over, all different aspects and topics and stuff. I just also wanted to mention that Marko does have a seminar coming up, an event this coming weekend in Dallas, Texas, so I know that we'll probably be seeing a lot of you there, and that's fantastic, to really get a jump-start and get a lot of knowledge base over the 4-day seminar. Lots of great information you'll be getting, and so just be prepared to have an open mind and take lots of notes, and do some networking, talking with a lot of like-minded individuals just like you. Mike, yeah, that's basically... Good evening, everyone. Marko here. People are still logging in. Our system is showing me that some people are late, but you know what? Better than never, right? Anyway guys, I'm glad to be here with you. Now, let's talk about business. Should you continue marketing? Okay, there are probably a few groups of people on the call: Those who are brand new and they haven't started marketing yet, and there are also people who are already in the system and they're marketing. Look, it's a good time for you, if you haven't started marketing, then be ready to start January 1st. If you're already marketing, then you should not stop. You should continue. The one question I often get is people go like, "Okay, I'm marketing my business, I'm rolling it, but should I stop my marketing during the holidays? The holidays are coming, Christmas is coming. Should I stop my marketing?" The answer is no. Don't stop. Maybe you slow down, but not even that. You should continue, and the reason why you should continue is that there are a lot of people who put up properties for sale back in September, October, and they didn't sell, and then Thanksgiving came, and now in the holiday time, market is bad, so nothing is happening, and these people had houses for sale for months. Guess what? In January, they'll be pretty desperate to sell, so if your marketing is going out, you'll catch those people. Historically, January, February, and basically half March, historically those months have been one of the best months for us in terms of acquiring properties. We get a lot of properties in those few months, and the reason that I figure out after talking to those sellers, is that they had a house for sale, it didn't sell, then the market slowed down due to Thanksgiving and holidays, and then pretty much they are now desperate in January and February. Just so you know that, so don't stop with marketing, right? Continue. Now, also, in general people are asking, "Okay, how is the market doing? How is all of that doing?" Guys, this is the best time to be buying. Page 2

When I think about years back, 3, 4, 5 years back, it was hard to find properties with equity. We would need to market a lot, and then we would need to obviously do short sales and everything. Today, you have plenty of houses with equity, and at the same time, economy is not going up like crazy and it's like properties are skyrocketing and selling overnight. It's still not that. Some markets are hot, but not that hot, so you still have decent market, which is moving, houses with equity, but not overheated. You're really in a good position, and you are in the position with a good strategy, because think about it. Now going out and finding all these houses for wholesaling, you've got to get them at 50, 60 cents on a dollar in order to make sense. That's hard work. You got to spend a lot of money marketing before you find those deals. At the same time, if you want to do fixer-upper deals, you're going to spend a lot of time fixing up, and then guess what? You need to find a retail buyer, someone who's going to qualify for the loan and buy a property, and we know that the lending guidelines are pretty tight and it's hard to get a loan, so guess what? You have this rehabbed house, where you're paying hard money loan on it with a high interest rate, and you can't sell it because buyer comes, can't qualify. Next buyer comes, can't qualify, and guess what? In our case, we're buying properties at 80% because we have existing financing, an automated funding program, and we're selling them as a no-qualifying. Man, we're in the perfect position, so guys, as I said, there's no reason for you to look around, look for other methods. You don't need it. You have everything what it takes. Now, if you come across a deal that's selling a house, you want to wholesale it, guess what? In the foreclosure investing course, in the system, I teach you how to wholesale it. In your diamond membership, you have cash buyer list. Go on to Money Finder and you'll see you have cash buyers, private lenders, you have everything there. There's really no reason to look around, because you have everything and truthfully, what the case is, to get everything what you're getting here in diamond membership somewhere else would cost you thousands of dollars per month, so use what you have, and the most important thing is to take action. People say, "Oh, I have this, and need this." Let me just be up front. All you have more resources than you need at this point. I'm giving you so many resources, so many different things and tools. You don't need all of that at the beginning, right? You have more resources. What you need is desire to go out and do it. That's where rubber meets the road, right? Mike, anything to add, and we can start with questions? No. I think we can jump right into it. We've pretty much covered it, and it's all about learning the system and getting set up so you can get your marketing out there so you can be talking to people, because that's where the business is really at, is out there talking to motivated sellers and doing your sorting and sifting. Yeah, Mike, I think we're ready for questions. All right, so the first question is they're asking the lease option forms, is that the same as seller financing? Okay, so the question is is the lease option the same as owner financing? Not really. Selling a lease option is when someone is leasing the property from you, renting it, with an option to buy. You keep the deed, you keep the ownership, and you still own the property. You can still depreciate the property, use it as a tax shelter, and all of that, because you own it. Someone else, all they have is the rights to possession, to a rental agreement, and an option to buy, which gives them exclusive right to buy. That's a lease option. Now, owner financing, that's a different thing. Owner financing is when they get ownership, right? In general, a lease option, someone could call it owner financing, but in creative real estate in terms, over financing really is a few things. Land contract selling on installment land contract, selling on a wrap, or selling on all-inclusive [inaudible 00:09:29] date. Page 3

Usually that's what owner financing basically, it's the name for the group where you sell, but you are the owner. You are financing it. You have installment land contract, you keep the deed, but the buyer gets the equitable ownership. They can write all the interest paid to you, et cetera. With a wrap or all-inclusive [inaudible 00:09:48] date, the buyer gets the deed, and you have the lien back, but they're paying you, but they have the full ownership. They have equitable and legal ownership. With installment land contract they have only equitable ownership. That's owner financing. Lease options are different than owner financing. Now, which one would you use? It depends on how much down-payment you get from that buyer, because with lease options you give them a little bit of control. It's easier to get them out. Now with owner financing, you need more down because obviously it takes longer to get them out. Okay, let's go to the next question. All right. The next question they're saying that they're signing a lease option deal tomorrow and the seller, the owner of the property is giving them $3,000, and they're giving them 60 days before they got to start making the next rent payment on it, right? Lease option renting. The question is, he said there's not enough equity for a,subject to, so they want to know do they have to actually give any dollar amount to the seller or to the option consideration where they'll be taking over the payments after 60 days, [inaudible 00:11:00] an option consideration. Okay, let's see. The question is they're signing the lease option deal tomorrow and Mike, do we understand, the owner is going to give 3,000? The owner is giving. I'm not... Yeah. Yep, the owner of the house is giving them $3,000 and giving them 60 days, 2 months, before they got to start taking over the... It sounds like their rent is basically going to be the mortgage payment, and so their question is is on the lease option agreement... Okay, so let me get this right. This question is the person, that student, our member, is going an appointment tomorrow, and has a seller who doesn't have a lot of equity, and the seller is willing to pay them $3,000 and give them 60 days to find the buyer on a sandwich lease option situation. Now the question is do we need to give any option consideration to the seller? Here's how I would structure that deal. You do need to give some option consideration. Look, some [inaudible 00:12:19] will tell you that consideration, just you considering doing this, it's enough consideration. But, why not give them 50 bucks? Give them 50 bucks as [inaudible 00:12:31] option consideration to seal the deal, and then have them escrow 3,000 to make the next 2 payments, or next 3 payments. The money that they... They're not giving you. They're actually making 3 more payments. By the way, that's a lot easier to negotiate because sellers are, it's a lot harder for them to just write you a check for $3,000. It's a lot easier to get them to make the payments for 3 months, because then they know they're making payments on their own loan, so it's easier to get them to make 3 payments than give you cash. If I were you, I would give them 50 bucks. I would say, "Okay, to make this [inaudible 00:13:04] here's the 50 bucks option consideration, and you're going to make the next 3 payments." That would be the way I would structure that. Then the next question they're asking is about short sales. They're asking is it only possible to do a short sale when the property is underwater? Okay, so the question here is can you do a short sale... I guess the question is does the property need to be under the water, basically upside-down, have negative equity, in order to be able to do short sale? Okay, let me give you a couple of points here. First of all, in this market, you don't want to be touching short sales, because short sales are too much work. The only short sale niche you want to be even considering is P-J-L, Paying Off Junior Liens. That's the strategy I teach you, because that has [inaudible 00:13:55] financing. You get property with the financing. Every other short sale you've got to come up with the cash once the short sale's approved. In this market there are plenty of properties with equity. You should not chase short sales. Page 4

Now, to answer your question, just for you to learn. The property doesn't need to be underwater for the bank to consider a short sale, because if the house is 200 and the loan is 98, that property probably cannot be sold for 98, and the bank will have to take a little bit less. It also, if the BPO comes to be 95, the loan is 98, the bank will, gain, entertain short sale, right? The house doesn't need to be big-time under the water in order for the bank to consider the short sale, but technically yeah, if there's a negative equity they'll consider it. But again, my point is, in this market you should not chase short sales. Only exception is P-J-L, right? Why? Because there are plenty of houses with equity and why? It's a lot easier to make money when the house already has equity than when you've got to go back and negotiate with the bank to create equity. One step less. The next question is they're asking where do we get leads for homes that are under water, so that obviously would possibly fit the P-J-L strategy? The question is where do I find properties for P-J-L strategy, so the Paying Off Junior Liens short sale [meet 00:15:21] strategy? That's probably the question is, right? Where do you find them? If I were you, I would not market specifically to those properties. I would market to people in foreclosure, in pre-foreclosure, the normal way of doing it, and then you'll get 3 types of deals. You'll get some that have a lot of equity. Great. You'll get some that have no equity, only one loan. You don't want to do short sale. Pass. You're going to get those that have the second loan that's big and the first loan is below 80%. You could short sale the second, and once you pay off the second and reinstatement to the first, it's all below 80%, and that's a perfect candidate for the P-J-L strategy, right? I would not look for those properties. I would [inaudible 00:16:07] for everything, because if you have a motivated seller that has equity, that's better than P-J-L strategy, right? But you will get both, and you will get also some garbage that you don't want to touch, so that'd be my recommendation. Okay. Next question. When we're selling on owner financing, how can we report to the credit bureau that they're paying their payments on time so that'll help build their credit? You know, I looked into that, and I looked into registering some corporation with some mortgage broker to do that. I was never able to... It wasn't worth the effort. If they keep canceled checks or you keep the record of their payment, that way you help them that they made timely payments, but to improve their credit on owner financing, you're just not going to be able to do it. Okay, then the next question is warranty deeds versus quick claim deeds. Which is the better deed to get? Okay, so this question is an important question, and a simple question. If I'm buying a property and getting a deed from the seller, should I get a warranty deed or a quick claim deed? Guys, let me tell you. Quick claim deed is the weakest form of a deed. With quick claim basically the seller is saying, "I'm quick claiming whatever I have. I may have something or I may have nothing, so no guarantees, but I'm just giving you whatever interest I have." That's the weakest form of a deed. You don't want to get ownership using quick claim deed. You want to use warranty deed or whatever deed is custom in your state. In California, grant deed, in Florida and some east states, special warranty deed, in Nevada grant bargain and sale deed. Whatever deed is custom in your area, that's the deed you want to use and not quick claim deed. Quick claim deed is used for inter-spousal transfers, for removing someone's collateral title, interest in the property, or things like that, but not for to get ownership. If you do, you may have a problem 2 years down the road if you're selling the house, whenever you're selling it, you're going to have a problem getting title insurance, so do not buy houses using quick claim deed. Okay, and that kind of answers the next question, then about if I do get a quick claim deed, can I give the new buyer a warranty deed? You just basically said [crosstalk 00:18:35]. Page 5

That's even worse. You're getting less interest and you're giving more. How can you give them warranty deed and warrant something when you got a quick claim where there were no warranties? You're doing it totally upside-down. Don't use quick claim deed. Quick claim deed is only used to remove an option agreement, remove the collateral title, inter-spousal transfer, things like that. You don't need quick claim deed. Stay away from a quick claim deed. Next question. It's from somebody that lives in Texas and they were getting ready to start their marketing campaign and they discovered that Texas is a non-disclosure state, and so there's a lot of missing information. Let me answer this question. For those of you guests who are in Texas, there are foreclosure list providers that you will get the foreclosure list in Texas. You'll get it as well. Now, also, important thing for everybody on the call is to understand, guys, listen. This is really important for you to understand. The foreclosure system that you have is not only to buy foreclosures. The methods that I'm teaching you, and the whole strategy, everything, works with houses in foreclosure or not in foreclosure. The only difference is, as I said, with foreclosures, you have the reinstatement and catching up payments and all that. It's all the same, so don't shy away from marketing to expired listings, cancelled listings, out of state owners, divorces, and bankruptcies, whatever. The unlimited funding methods that you have will help you with all of that, so it's not only foreclosures. This is a comprehensive system. In our business, back when the market was slower, foreclosures were 60, 70% of all the leads. But as the market gets better, that percentage goes down, so don't think that my deals... I don't remember ever that I had... Most of my real estate investing career, when I counted at the end of the year all the houses I bought, they were pretty much 50/50. 50 were in pre-foreclosure, 50 were maybe payments behind, maybe not even behind, maybe they were just moving, bought a second home, vacant home, whatever. Just keep that in mind. All right. Next question here. They say they live in Texas, and can we offer owner's financing or lease options on our own home that we're currently living in? Okay, so the question is can I live in a home, I'm in state of Texas, can I offer lease option or owner financing on the home I live in? Yeah, I mean, if you're moving out you could. In every other state you can offer the home owner lease option, rent-to-own, get tenant who's going to have an option to buy, but in Texas you cannot do that. The rule is that you could, but that option would have to be less than I think 180 days or something. Whatever the rule is, we have a lot of coaching students in Texas, and we talked to a lot of attorneys, and they talked to many, many different attorneys, and conclusion is lease options are not practical to do in Texas. We don't do them, but guess what? You don't need to do it in Texas, because you can sell on all-inclusive trust deeds in Texas. That's better, because the foreclosure period is so short in Texas you get a house quickly back, and with an AITD, all inclusive, you can get a lot larger down-payment, so an AITD, All-Inclusive Trust Deed, is the way to go in Texas. Okay, very good. The next question is they desperately want to attend your event this weekend, but they absolutely cannot make it, so they were wondering if you could give the date of the next event, so they can plan for that. The next event is, I believe, February 19th. Okay, so the next 4-day event will be the weekend over February 19th. Then they're also asking what an inner circle members is? What are inner circle members? Inner circle members, our personal coaching program. That's where we work with people one-onone. That's the inner circle program, but you don't need to worry about that, because you have diamond, and this gives you group coaching, this gives you plenty of things to do deals. You get deal consulting, you have plenty of things. For you to do anything else at this point, going to a Page 6

coaching program at this point is premature, especially for people who did not attend the live training. Guys, I don't want to restate this many, many times, but those of you who haven't attended the live seminar, you have no idea how important it is to attend the live training, because we spend so many hours going there over strategies, over different things, it's really super valuable. Let me just tell you that. Super valuable, so make sure you show up whenever you can for the training. All right. The next question here, they're saying that they have a tenant that are renting from them right now, and they want to purchase the property they are currently renting. Is it okay to do that and if so, how would I go about doing this? Okay, so the question is, the investor asking the question has a rental property with a tenant in it, and tenant wants to buy the property. Okay, so the first question you need to ask yourself if you want to sell. Now, if you don't want to sell and the tenant is paying on time, tell them that you'll consider selling a few years down the road, and let them basically continue, not move out, and continue being your property and then you can consider selling to them a few years down the road if the market is going up, and you don't really want to sell the property. Now, if you want to sell the property, you could also give them rent-to-own. Rent to them for another year, raise the price a little bit, and then, in a year they get a loan and they basically refinance. Because many times a lease option buyer, when they're getting a loan, it can be considered as a refinancing loan because they had the lease option agreement. That'll be one way. A third way is obviously do the comps, see what the house is worth, and maybe give them a little discount and sell them the house. They got a good deal, you save the money on real estate commission, and more importantly, you'll save money on not having vacancy and making payments on the vacant house, and you save money by not going in and changing carpet and doing touch-up paint or repainting the house. Because believe me, when a tenant moves out, carpet and paint is minimum you need to do. Think about it. Carpet, paint, few months of vacancy, and here you have them. Does it make sense to give them a 5% discount? Absolutely. You still come out a lot better, so yeah, that would be my advice. Next question here, they're asking, it's regarding ProfitGrabber. Will you be covering and going over anything about ProfitGrabber at the upcoming seminar? Okay, during the seminar we will spend... I'll show you guys in the seminar how I get my foreclosure mailings, my expired listings mailings, plot routes for door knockers, how I get everything done in 10 minutes a week. I'll show you how get done things in 10 minutes which people usually spend, I would say a day or 2 to get done. You'll see that, and I'll give you the live demonstration, I'll jump on the MLS. I'll show you a lot of things, but as I said, the seminar is not about me answering questions about ProfitGrabber because you have under help menu, 20, 30 videos explaining how the ProfitGrabber works and everything, so you have everything you need. I have a lot more important and important money-making strategies to teach you. That's what we're going to do at the seminar. Make sure you come rested, guys. Come rested and bring a sweater because we keep the temperature a little bit cooler, so you guys don't fall asleep and you can retain more. Because there is a lot of information coming. My goal is to work hard for 4 days, guys. You work hard for 4 days, you don't have to work hard for all your life. That's what we're doing. Okay, the next question we have here is how can you find out if a property has an IRS lien against it? Here's a simple question. How do you find out if the property has an IRS lien against it? Do the title search? Do the title search and title search will show what it is, and if they do grand you a title search, they'll find out what's against... Title company can pretty much do the search and find out what's against the home owner's personal name as well, and will tell you everything that attaches Page 7

to that property. You yourself cannot do that search. It's the title company's search. You either pay for a preliminary title report or there is also called different names in different states, the lot book report, and different approach. Basically it's preliminary title report. That's what it is. All right, very good. The next question here, they said that they downloaded your buyer's list from the website, and they were wondering where to locate the letter that you're referencing in mailing the potential buyers. Okay, so you guys talking... Let me just make sure you know what we are talking about here. You're talking about you downloaded the cash buyer list. Listen, that's your not first step. This is the mistake that some of you make. You start doing things without going through the blueprint and through reading the manuals I gave you. Come on. Spend one afternoon and read the manual. Your first stop is not to be mailing to buyers. You're not going to get rich mailing to cash buyers. Cash buyers want a bargain. Cash is king. If they have cash, they want a bargain. You're not going to get rich selling to them. They want to get rich buying from you. What you need to do is, you need to focus on the properties where you can sell, properties that you can sell for above market price, zero down, sell it for above market price, to people who can all get a loan and are willing to pay you premium price. That's where the money is. Money is not in selling to cash buyers. Don't be confused. I'm giving you those resources for the deals when they come your way and they don't meet our criteria, and they are wholesaling deals, then you have the buyers list. But this is not where you should be focusing on, so just keep that in mind. To answer your question, when you click on the Money Finder, look in the menu in the Money Finder, and the letter should be there. All right, so the next question we have here, they say that they have Realty Track, and that's mostly for people that are in foreclosure, and how do I find other motivated sellers that may not be in foreclosure? The question is how do you find motivated sellers who are in foreclosure and also those who are not in foreclosure? I'll answer that so you guys get a full understanding. People who are in foreclosure you basically find the foreclosure list provider, so there are a couple of ways to find people in foreclosure. You first figure out what is the document that gets recorded when the foreclosure is filed? Usually that's called Notice of Default, lis pendens, or Notice of Trustee Sale. Then you can go to county recorder's house, search the county recorder's office documents on the computer there, and figure out the list of people who just got that recorded in the last week, and those are your pre-foreclosures. A lot easier to do that is by subscribing to our list provider and just get a list downloaded to your computer. That's easier, right? Now, where do you find people who are not in foreclosure? Some of the best lists for you to market is expired, canceled, withdrawn listings, because those are the people who have house for sale, they couldn't sell, listing expired, now they might be motivated. Then another good list is 30, 60, 90 days late. Those are people who are 30, 60, or 90 days late on their credit cards, or some other credit obligation. Those are really good as well. But you've got to be careful with that list, 30, 60, 90 days, because that list, it depends on the list provider. It depends a lot on the list provider. If you have a list provider that's good and gives you good lists, and not making promises and you're paying for something that you're not getting, so 30, 60, 90 days could be a good list. Then the list of the divorces, bankruptcy lists. Then again, you guys know, out of state owners. A good list also is, the one I like, is mailing to certain ZIP code. You get a very low postage, because you're mailing to every house in the ZIP code, but guess what the benefit is? It's a kind of shotgun approach. It's not as targeted, but the benefit is that you get people who are now willing to sell and they've never talked to a real estate agent, no one. Page 8

They were just so down and they didn't think they could sell the house quickly. They didn't want to deal with months of people going through their house and blah, blah, blah, and now they got your postcard, Sell Your House in 7 Days. They, "Oh, honey, we can sell the house without real estate agent. We don't need to do open houses. We can sell it as is. We don't have money to fix it, but we can sell it as is." Then they call you. Going to some of those not targeted lists, it's also benefit. Anyway, but you got to start somewhere, so start somewhere, and then you build from there, and to automate it, use ProfitGrabber. All right. We've got another question here. One of the methods is supposed to be zero down, but how exactly is that possible when you have to reinstate loans? The question is can you buy a foreclosure property where you got to catch up back payments and still not spend any money out of your pocket? How would you do that? Look, if you're getting a property that's in foreclosure, you've got it subject to that first mortgage, let's say there's one loan, and there's 5,000 in back payments. Now, the foreclosure's going to continue. It doesn't matter that you got the ownership. The clock is ticking, and it's going to go into the sale if you don't catch up those back payments. You need to come up with 5,000 in this example, and catch up the back payments so the foreclosure can be stopped. The question is how do you come up with 5,000. Obviously the easiest way is if you have 5,000. Then the other way is to get a private lender give you 5,000 and you pay them interest. There are plenty of people out there who have money in their retirement plan earning nothing, and they'll be very grateful to you if they can give you 5, 10, 20 grand and get 10 or 15% interest. You can pay them 10 or 15% interest no problem, because it's a very small amount, so it doesn't really make a big difference if it's 10 or 15. They will be pretty happy. Another way, one of my favorite ways, is I get a house, I get a deed. I already have the buyers basically from previous houses lined up. They come in, they give me 10,000 down. I file a suit for them. Out of 10,000, I lose 5,000 to catch up the back payments. A couple different ways. You can use your buyer's money, you can have seller also do a forbearance plan, where those 5,000 get broken down to 6 monthly payments or whatever, so you get it in a monthly payment. You don't need to come up with the money up front. There are multiple ways to do it. I answered the next question, which is what are the best ways to get money to reinstate loans? All right, so the next question we have here. They're saying that they need to know how to fill out contracts and what to be focused on before they go into doing marketing. Listen, to fill out the contract is... Have you printed out the contract? Print it out and take a look at it. It's so self-explanatory. It's very simple. You'll just have the buyers and sellers, you'll have the address of the property, you have APN, which is Assessor's Parcel Number, which you can even leave blank. You don't really need to fill it in, and then you have what stays, what goes, fixtures, whatever, and then it's a purchase price. How much you're giving them as owner's deposit, how much you're giving them as a cash down if any, loan balances, and you just add those numbers and that's your purchase price. The rest is who pays the closing costs, and that's it. If you really read the purchase selling agreement, it's so self-explanatory it's super easy to do it. Plus you have it in the manual. I already gave you a filled in example, so you can have it there as well. That's not a big... Don't worry about that. You're saying that you have the marketing down. I'm telling you, the marketing is the key. That's the hardest part, so just go get that going. Don't wait. Get some leads. Remember, you have the deal consulting guys. Once you go an appointment, you have a legit deal, we'll help you. Fax in, the deal consultant will help you, so no worries. All right. The next question here is they're saying that they have a rental property that they've had for quite some time, and they've got the house half paid down, and they have an existing financing of 6.75%, but they do have positive cash flow on it, and they live in Texas. They're trying to get rid of the tenants. They don't want the tenants and the toilet mentality anymore. They're saying Page 9

what would be your best advice to maximize your profit, selling it outright or possibly doing a lease option, or selling it with owner financing? Basically the question is we have a tired landlord, who has the property. He's tired of tenants and toilets, right? Now he's asking what is the best exit strategy that'll be the most profitable? Now, if you don't want to keep renting it, you could rent to own. You can have someone give you option consideration, down-payment and they're renting with an option to buy. But that doesn't work if you're in Texas. Everywhere else, you can do a lease option, get a down-payment, small downpayment. It's going to usually be 3 to 5% of the purchase price. You get a down-payment from the tenant, and the tenant is paying you monthly payments, and then it's possible for all minor repairs. You cannot delegate it to management and you actually selling the property at the full, full price without real estate commission, using lease option strategy. Now, if you are in Texas you cannot do that. The other option that's left in Texas, beside selling outright when someone gets a new loan, is called an AITD, All Inclusive Trust Deed. You're going to get someone who's going to give you 10% down minimum, and you're going to sell it to people who don't have good credit, who gave you 10 or 20% down, and increase the interest rate. In today's market, you can legitimately charge 8, 8 1/2%. I have students every year in the country charging 8.95 in today's market. You could no problem charge that kind of interest, because those people who are coming to you have really bad credit, but they're giving you a nice down-payment, and that's security they'll actually make payments. As I said, you either sell with a lease option if you're not in Texas, and in Texas you sell it on All Inclusive Trust Deed. The next question is they say you talk about the back end profit. Is that only attained when a buyer refinances a lease option? How would you go to calculate that? Yes, the back end profit is whatever you get at the back end, so if you have a house that you sold for 100,000, someone gave you 10,000 down and they owe you 90, right? They gave you 10 down and you financed them 90. Let's say you bought the property for 80, zero down and your loan is 80, so what is going to be the back end profit? A few years down the road they're going to be paying you whatever is left on the $90,000 loan and you're going to be paying whatever is left on the $80,000 loan. That's your back end. Whatever is at the back. Then you also have situations where you sold the house for 100 and you bought it for 70, and let's say you put 10,000 down and you loan is 60. Now, you've sold it for 100, someone gave you 10,000 down, their loan with you is 90. At the end they're going to give you 90, you're going to pay off the 60 and you're going to have 30 back end in that example. Now, guys, keep in mind, what I just said, some of you are going, "Huh? What is he talking about? This went by so fast." Listen, the recording of this call will be posted in the diamond area, in the diamond membership area at the end of the day tomorrow, and I'm also going to have it transcribed and send you a CD. All what you need to do at this point is is something that we're talking about is particular of your interest, write down the minute in the call. Whatever time is now, just write down that time, 40 something minutes in the call, and then just scroll in the recording to 40 minutes in the recording and you'll be able to hear the question of your interest. That's how you should keep this, because I'm telling you, these calls, I have videos from people thanking us for these calls, how many of them went out made money and they were so thankful for being able to fax in the deal consulting, get questions answered and all that. Don't ignore. Write down something of your interest and then review the call once you get the CD and once the recording, the mp3 is up on the website. The next question we have here is when owner financing, what is the most common term period in selling the house? Is it 15 years or 30 years, and should the term be the same as the seller's loan time period? Page 10

This is a good question. It's about owner financing. When you sell on owner financing what is the term of that owner financing loan that you're giving to a buyer? Is it 15 years? The person is asking is it 15 or is it 30? Look, here's the thing. You actually give them a 5 year term, or depending... Let me just, back on this. If you are doing a lot of this, then you've got to comply to Dodd-Frank Act. It's not hard to do that, but it's more, and I'm going to answer this question, right? But if it's 1 or 2 that you do a year, 3, then you don't need to. In that case you can actually give them only a few year deal. Give them a 5-year deal, but the amortization term of the loan is 30 years. You extend the amortization time to be 30 years, which determines the monthly payment, so the monthly payment is small because if you make the loan 5 year term amortization, the payment's going to be huge. What you do is you make the amortization 30, and if they cannot afford it, don't lower the interest rate. Make the amortization term 40 years. Now, 40 years brought the payment down, but you make up the loan in 5 years, let's say, or you're increasing the interest rate. You don't make up the loan, but you're increasing the interest rate, and that makes them refinance faster. One of those things obviously would work with you. Next question we have is regarding property radar and they're asking do you have a reference document that would best describe the search option criteria to find motivated sellers? (silence 42:23 to 43:38)... It's about Florida and they say they don't see any mention of reinstating a loan that's in foreclosure, so does that mean that you cannot reinstate a loan once it's in foreclosure in Florida? Here's the thing. You could but it's too much... What I tell people who are in Florida, because I actually do some deals in Florida, too. What you do in Florida is if they have a lis pendens recorded, then... Okay, sorry, basically in Florida, what you do is if the lis pendens is recorded against the property, don't buy,subject to. Only wholesale it, because the foreclosure period in Florida is long, and then use my special agreement that I have, 3 pages that is specially done for situations where you had this longer period of time. Use that, and then wholesale it. But then if the property is one payment behind, then you can do,subject to, no problem. For all other properties, subject to fine, if it's a lis pendens recorded against it, then at that point, all my coaching students in Florida, I tell them don't do,subject to if the property has a lis pendens outstanding recorded against it. Let me just briefly cover the next question, if you should buy mobile homes. You should not buy mobile homes. Unless you have money to buy the whole park, and play the big game, don't even go there, because it's more hassle than it's worth it. Then the next question is they're asking, in a competitive marketing area, what's the best low-cost way to stand out in your marketing to try to find motivated sellers? Guys, the best mailing letter that I told you, it's in the system, is the check letter. Half letter works well, and the check letter works well, so use that. Yeah, the next question, they're saying I am a notary. Can I notarize or do I need someone else to notarize? Even though you're a notary, you cannot notarize your own documents or your own deals, so the answer would be yes, you would want to get somebody else to notarize any of your paperwork. Then the question after that, what is the best voice recorder out there, and is it better to video or voice record? (silence) Yeah, it doesn't say, but I imagine, 2 points, number one, we do recommend that you get a voice recorder, a digital recorder, so when you're talking to people over the phone you can have them on speaker phone. You can record both sides of the conversation. That's a good, helpful, useful tool. You shouldn't... Sometimes we don't say things and we think we do, so after the fact you can go back and listen to it. It's a real good tool to help critique yourself in improving, and then when you're doing a deal, buying a house, selling a house, it always is good if you could get a little video testimonial on either you buying or you selling, and then most people have Smartphones. I would say you could Page 11

use your Smartphone, the camcorder in there, and just record a little video testimonial on there as well. Good, Mike. Good answer. All right, let's see here. Someone's saying (silence). Basically this question is that there is someone who has $200,000 cash and wants to buy a good deal, and now the student is asking what can I do to make money with this? Look, you could find a good foreclosure property for her, and you're going to get a finder's fee or assignment fee, or you can talk her into being a private lender and say, "Hey, let's do 3 deals together. I have the skill, I have the knowledge. You have $200,000. Why would you buy only 1? Let's buy 5. I'll find them, I'll structure them, and you put the money." Then you go, you find these people that have a lot of equity. You give them $20,000 for their equity, put $10,000 in reinstatement, and you do a great deal, and you both make a lot of money. Because, guys, if you find a property that has $100,000 profit in it, but it takes $23,000 to do it, if it doesn't need any repairs, I'll partner with you. I'll put 20, 30 grand, but I just don't want to touch anything that has repairs because I don't want to be in a position where I'm counting on you doing repairs and I don't know if you have skill to do it or not. If you have a lady like that, you find a great awesome deal that has 100,000 profit. She can give you 20, 30 grand and you do it together. That's how you could make money with someone like that. Otherwise, you're not going to go around looking for property for her, because once you find a good deal, you don't make money on it. That's basically. Then the next one, I have a leak for foreclosure listings of 8 homes. It's registered to an LLC. They've got the information on the LLC, and they're just looking, how would they proceed contacting this entity with the 8 homes that they have in foreclosure? Let me see. This investor came across an LLC that owns 8 properties. It's in foreclosure. He saw it on the foreclosure list and now he's asking, "Hey. What's my next step?" The next step would be to go to Secretary of State website, and search for their LLC to find out who is the owner. The managing members, that's a public record, so you can go there and see where they file annual reports, and you'll find the names. Now once you find the name of who owns it, you can use the address that's there or you can skip trace that name and find the address, and then contact them. That's really worth your time doing, because guess what? Those steps may take you only half an hour to do, but most investors will not go through that. They will not find it, most beginners, so less competition for you. Do that. Secretary of State website. Mike, there was also another question up there. I think you missed it. The referral from a mortgage advisor. Okay. Someone got a referral from a mortgage advisor that they cannot help them to get a loan due to their credit, and they have a commission job. They're wondering what they could do with it and how and it looks like the person has $2,000 for a down-payment and they make $3,000 a month, and currently pays $1,000 a month rent. How could I find them a house and if so, how would I go about doing it? They said you mentioned in Chicago, that on a lease option, a certain percentage, which is basically 3 to 5% of the purchase price, is typically what we give for an option consideration [crosstalk 00:51:51]. Let me answer that, Mike. Basically we have a member here who came across someone who has $2,000 down-payment and they could pay 1,000 bucks a month. So you're asking what to do with it. It's not even worth your time. People like that, you're going to find there's so many people like that who want to own a home, and all what they can put down is 2 grand, 3 grand. There are plenty of people like that. There are plenty of people who will be able to put down 5,000 down. You want more. Don't even think about that. Get a house... Guys, the most important thing for you is to go out on appointments and get a house. Once you have a house, the way I'm teaching you, with inherent financing on it, subject to Page 12

... With a financing on it, with a good interest rate, at 80%. Don't worry about selling it. You're going to get buyers pretty quickly. Put the house for sale there are going to be plenty of people who will love to get no qualifying way to get in on a lease option, owner financing, or whatever. Your first priority should be to look for houses, not worry about this, how are you going to sell it. All right. The next question, you already answered it, but I'm just going to read the question. Yeah, you don't need to, Mike. They're asking what other sources for marketing. We already talked about that. Yep. All right. [crosstalk 00:53:10] Another person is also asking... Let me answer, Mike, let me go to this one. We're on a quick call, so I've got a person who's asking if she's not getting a lot of response on the marketing, should you make cold calls directly to [inaudible 00:53:23]? Absolutely, guys. How many students found deals on the Craig's List by calling ads from the Craig's List or Zillow or even using the email in Zillow, you know emailing people. Yeah, absolutely. In my book, you should not be even spending money on marketing unless you spoke with 100 hundred owners that you called for sale by owner. Why would you spend money when you could call people and practice first? Very good. The next question here, they're asking how do you form a land trust to use on doing a short sale like you explained in [crosstalk 00:54:00] Okay, Mike, let me do. This person, he has got a mailing list, is starting to mailing to foreclosures. Great, congratulations. Go on appointments. That's all good, but as far as using the land trust, don't worry about it. I don't want anybody of you guys who, if you haven't done your first or second deal, to even worry about land trust. You don't need it. I buy every property in a land trust, and I'm telling you you don't need it on the first few properties. I don't have time to explain now, but it's totally unnecessary. It adds complexity that you don't need. It's for you more important to go and do deals. The benefit that land trust give you is totally irrelevant for the first few properties. Don't worry about it. Don't make it more complicated. All right. The next question here, they're asking how do you handle the home owner's insurance on a property you purchased, subject to? Okay, so the question is I'm buying the property subject to. What should I do with the insurance? The person already suggested that we should leave the insurance in place. There are a couple of different ways to handle insurance and I'll tell you the simplest one. Leave the existing policy in place and just get another policy that doesn't name the lender. That way the lender doesn't see any change in the policy. They don't care. They have that policy and you have another policy. That's the simplest way. All right, so the next question here, when you go and meet the seller, what kind of documents do you need to carry with you for the first meetings? The call is when you're going for the first appointment, all what you need to do is purchase or sell agreement. That's pretty much all you need. Just have that. Okay. Let's see here. The next question, they're just saying they've been running across a lot of people that they've got liens on the house more than the house is worth. Is there any way to help these people out or is there just nothing we can do? Look, if there are more liens on the house than the house is worth, in this market, pass. It's too much hassle. There are plenty of houses with equity, with motivated sellers that you can help, instead of dealing with houses that have too many liens. Guys, the problem is with short sales, they do a short sales, except P-J-L, then once the short sale is approved, you have to pay cash. That's why I don't do short sales. The only short sale I do is the P-J-L. Page 13