Exit Strategy

We have always maintained that a targeted direct mail campaign lives and dies by the list that you use. When you are reaching your specific target market, your campaign will be more successful and much more cost efficient. The following testimonial illustrates that a consistent direct mail program, targeting a specific market, will increase your bottom line.

Dear Lance and Terry:

Like a lot of busy marketing professionals, I haven’t taken the time to
thank you for your service.

As I have mentioned more than once, since launching our direct mail
foundation program, the US Lead List is the top performing list in our
program - both in aggregate over the past five months and monthly as
well. Response rates over 3% are common and the lowest response rate we
have seen was at 1.75%. Considering we are asking people to call us and
sell their houses to us for well below market value, these response
rates are truly incredible.

What is amazing is that these lists outperform a custom-compiled list we
get from a local data provider who uses weekly court and tax records as
a sole source!

In addition, the letter you have developed is magnificent. I do have to
admit something here: we revised it slightly and placed it in our
standard DM format, but the content and call to action are really doing
the trick in getting people to contact us. Your program is a great
“one-two” combination punch for knocking on doors and knocking out the
competition.

I strongly recommend that, if given the chance, potential customers
should climb into the ring and try that combination for themselves.

Harold Maurer
Director, Marketing
Express Homebuyers USA, LLC

US Lead List is the easiest, most efficient way to find discounted properties, just ask Harold.

The new summer list is debuting today and as we talk to current customers, we ask how the list is working for them. Here is a quick story that we found incredible and you may find very interesting. Many of our investors have bought houses with our list over the past two years but this Real Estate Investor bought three houses on his first mailing. His first mailing!  This is direct mail at its finest.

Josh bought the Spring list with 1200 names and received phone responses from 67 interested parties. He used a variation of our letter that he felt worked well for the target market. From that group he was able to buy the three houses and is now hooked. He told us that he has been looking for a list like ours for over 2 1/2 years.

So if you are looking for a marketing tool to find discounted properties on a consistent basis, you should give direct mail a good hard look and if you want the easiest, most efficient way to find discounted properties, you should use usleadlist.

[In addition to the list, you will receive a 30 minute informative consultation on the best practices for your targeted direct mail campaign with your initial purchase.]

Last quarter we sent out an email to our members touting the importance of a quality direct mail campaign. As an example, we told the story of Al who was a first time buyer in the middle of January and was new to direct mail. For the first quarter of this year he spent $373.80 on his list and started mailing. The emails from Al below tell the story, Al turned $400 into $45,000 on his first mailing.

We just received a new email from Al concerning his second quarter list and thought you might find it interesting. Remember this is an investor who didn’t use direct mail as a part of his marketing campaign until this year.

Email received June 25, 2009 — purchased list April 8, 2009

Just wanted to let you know that you can put us down for the list for 3rd quarter.
We first purchased the list in first quarter of ‘09 and I told you about the $45,000 wholesale deal we got off that one.
Well, now off of the second list we have two deals.  One is a rehab that will sell for about $175k.  It needs about $35k worth of work.  We got it for $80k.  So after commissions, closing costs, holding costs, buyer incentives etc we should make somewhere around $30k or $35k on that one.
The other is a single family home in a rental neighborhood.  It’s ARV is about $105-$110k and needs about $10k-$15K to make it a real nice rental.  We got it for $50k and it should bring $900-$1000/month in rent, or we could sell it for $105k-$110k and make $25k or so.
So, for the cost of purchasing a few names I think we’ve done OK with your list so far.  Your list isn’t the only marketing we do but so far I’m happy with the return on our investment.
Thanks again and let us know when the new list is ready.

Al Domescik
Anchor Property Management, LLC

Al’s story is not an isolated event. All across the country, investors using US Lead List are finding houses at discount and making a profit.

How $400 turned into $45,000

Email received Janaury 15, 2009 — purchased list January 22, 2009

Dear Terry

As I said on the phone, we have been discussing branching out to direct mail, your call was timely.  I would be interested to know if the other list buyer in our area has recently purchased Jefferson Parish. Also, I’m wondering how many names are on the list, and how many list buyers, for Orleans Parish.  If we buy and get a good response from Jefferson Parish we may try Orleans Parish. We are going to discuss this tonight and my thought is we will order Jefferson Parish tomorrow.
What do we need to do to get started?  Can we do credit card over the phone?  Do you e-mail the list etc to us?

Thanks,

Al Domescik
Anchor Properties Management, LLC

Email received April 3, 2009 — Purchased Spring list April 8, 2009 and added Orleans County

Hey Terry:

We purchased your list for the first time last quarter.  We had 267  names, we got a good response from our mailing and we wrote one contract.
The contract we wrote was for a 2 story house in the Lakeview area of New Orleans, about 1700 sqft.  The bottom floor flooded and gutted from Katrina, the top floor pretty much undamaged.
We got it under contract for $25,000.  We estimated $80k for repairs and an after repair value of $225k.
We were all set to rehab the place ourselves when a fellow investor saw the place and offered us $70k for it.
We are now set to do a double close on May 1st with a potential profit of $45k.

Not too bad.

Thanks,

Al Domescik
Anchor Properties Management, LLC

I’ve been making my own mailing lists since 1985, combining databases, trying different ideas, and looking for clues so to speak. I love direct mail, always have and always will. When you’re successful at attempting something early in your career and it works, there is no better feeling.

In 1985, interest rates had just fallen to the nine percent range and I was spending some time with my good friend James Campbell, my appraiser for over 20 yrs. We were down at his office. I had just been hired at Security Pacific bank as a loan officer and had just come from a meeting about loan types. I was pumped to get some loans but I was frustrated with real estate agents because they usually were closed minded to my suggestions. I had to find a better way and James’ office was a safe place to go and think. I was just shooting the bull and looking through his “comparables book,” actually called the comp book, when I noticed some codes down at the bottom that said “Type Financing” and it had a f,v,c. With some more searching, the Comp book showed complete details of the transaction: type financing, loan amount, last name, address, and Interest rate. Unbelievable. I had an instant flash; did he have these books for the last three years when interest rates were 14 and 17 percent? He did! I couldn’t believe it. With a little more research, I found that the data source that made the books also had it on microfiche. I know, how old school. I spent the next three weeks staying up all night manually making my first mailing list. Talk about easy. I knew the last name, complete address, type of loan with the most important ingredient the “interest rate.” With any new idea there are problems, especially when you work for a large bank like “Security Pacific.” My boss was just like my realtors, a non-believer. But the guys in the office were all over it and one of the other loan officers started crafting the letter. After wearing the boss down, we finally got the mailing approved by corporate. Remember this was the dark ages before fax machines so we had to call the banks attorney to approve the mailing piece. Once we started to mail, the phones rang off the hook. Our loan production went through the roof, over 400 loans originated in a 3-month period. Of course, we knew everything about the client — how much they owed and how much they could save monthly. Truly unbelievable.

It was just like going to the trout farm when I was a kid, easy fishing. Mortgage data at that time was in its early stages. Was I an idiot for giving the idea to the bank? Probably, but I also had no funds in which to test and I was really brand new in the business. I was young and I know better now — I handed them a million dollar idea. Even though there are some regrets because the bank ended up with most the profit, I learned a great deal from that experience.

My list making skills have been honed over the past 24 years. Our inherited properties list, designed specifically for real estate investors, is a culmination of that experience. One client is a new investor, who mails our list, but has yet to buy a house. I hope to change that. Another investor has bought over 3000 properties but still seeks our expertise. Whether you are a part time or full time investor, USLeadList is the easiest most efficient way to find discounted properties. There is no other list like it.

The Spring list comes out next week and we limit sales in any one area to three investors. Call now for your free consultation before your area sells out. Call today at 866.711.1688.

Over the past few years, the large inventory of bank owned homes and short selling of foreclosed homes for sale has been a wonderful opportunity for real estate investors to buy cheap homes, but the competition for these bank owned homes is fierce. Never in our past has there been so many short sales and bank owned homes available. But there is talk that with the new president in office and the amount the bailout has run up so far, that change may be in the air.

We already have seen many states write legislation making it more difficult to market to and purchase foreclosed homes, foreclosure estate and bank owned properties and homes. Money is tighter and banks are looking for the established real estate investor who has credit lines to cover the purchase amount of these foreclosed homes.

There has to be an easier way for real estate investors to find cheap property and homes than foreclosure estate and short selling. They need to find a niche market that is targeted for their industry and has less competition. US Lead List has a direct mail list that has many real estate investors saying it’s just better than short selling, bank owned homes, and even the popular foreclosures for sale lists. US Lead List is a niche, ongoing market targeted specifically for the real estate investor looking to buy cheap homes with little or no competition.

The industry is changing, and to survive, real estate investors need to widen their scope, finding new markets that create success. Foreclosure real estate homes for sale and short selling will always be available but the market is changing and will shrink. The nationwide direct mail list offered quarterly by US Lead List targets a consistent and ever present market that is better than probate estate, foreclosure estate and short selling. For more information visit www.usleadlist.com or call us at 866.711.1688

Ok, we have to admit we haven’t done much with our blog is quite awhile. As we celebrate our one year anniversary, we feel that it is time to freshen up a bit and start using this blog to get you updated. Over the past year we have talked to many RE investors with varying degrees of experience with a multitude of questions. Questions we can’t always answer. So we have set up a site where you can post your questions, sell your properties and interact with other investors. This site has been created for you and those in the industry. If you want to know when new information is posted subscribe to a RSS feed. We will post a note when the new lists are ready and throw our newsletters on the blog. We hope that you use the site and become involved, ask and answer questions, invite your friends and help make it a useful tool for everyone. Please take a moment and visit the site at http://socialrei.ning.com

On another subject the following is a reprint of our newsletter that went out to our email subscribers that we hope you will find interesting. It is the first in a series that is designed to give you useful information. In this issue we discuss how commercial loans can consolidate your residential loans and provide you with the means necessary to buy more property.

As most of you probably know, Lance had been involved with the mortgage industry for more than 25 years. He was directly involved with residential mortgages and owned his own firm for 15 years before starting US Lead List. His education and experience ran the gamut from good credit loans down to the difficult to fund bankruptcies and hard money loans.

What we are going to discuss today Lance (and most mortgage lenders) never ran across before and it is critical information for you as a Real Estate Investor. What you need to understand is that residential lenders and commercial lenders typically don’t cross paths. They work within a certain framework, which is fine except you may be missing some opportunities.

One of our clients brought this to our attention and we have mentioned it to a few of you, who asked for more information. With all the trouble and difficulty associated with residential lending in the current market, this just may be the avenue that works for you. So we asked him to give us an overview and an example.

So, here it is:

As a Commercial Loan officer and professional real estate investor involved in the purchase of more than 50 homes, I have developed knowledge of what works and what doesn’t work when it comes to financing. Quite often I am asked to provide blanket loans that encompass multiple residential properties. This type of loan has been key in taking the average investor (8-12 homes) who may be getting stuck or frustrated dealing with stringent residential guidelines to many more homes playing in the flexible commercial arena.

A recent deal involves a real estate agent (John) who owns his own brokerage. After years of finding deals in the 60-70% of market value range, John has built a portfolio of 16 houses, 8 of which were owned free and clear. Like many investors, when John reached his 10th house (financed through Countrywide on a residential loan) the bank declined him. With the loan request looking similar to his previous 9 purchases, he couldn’t understand the decline. The residential lenders typically meet a comfort level that varies from bank to bank and may range from 4-7 financed properties.

After receiving a blanket loan letter from Reliant Commercial Loans, a nationwide lender, John decided to call. The lender was able to take 8 of John’s rental homes, which range in value from $85,000 to $120,000 and provide an 80% LTV blanket loan for a total of $760,000. The first mortgage balance on the properties was $435,000. The mortgages were paid off, John was able to pay down his business unsecured revolving debt of more than $140,000 to zero, take $80,000 in cash out and use an additional $80,000 as a down payment on his new “owner-occupied” mixed use property where he will operate his real estate agency. This loan truly was able to unlock the power of his properties’ equity. Not to mention, due to the payoff of his residential mortgages and revolving debt, his credit score went from 642 to 765 within 45 days.

We hope you see what opened our eyes — there are many benefits to blanket commercial loans.

Here’s a quick summary:

• The loan is considered Commercial and therefore does not get reported on your personal credit report. In the refinance, residential home loans will get paid off which will significantly increase your personal credit score and free you up to purchase more properties.
• Rates are currently in the 6% range
• Up to 25 year amortization
• Up to 80% LTV
• Unlimited CASH OUT
• 1 loan payment
• 3-week turnaround – Easy and flexible approval process

If you own multiple residential properties, this may be the program for you. If you are currently working with a commercial loan officer, ask him about a Blanket Loan. If you want more information from someone who has experience with this program, call Dennis Lynch at 888.215.9728.

As we were writing this newsletter, another client sent us this information which goes hand in hand with this newlsetter’s topic.

Attached please find some updated Freddie Mac guidelines from their website.

Two things stand out effective August 1, 2008:

1. They are reducing the number of loans to one person (full or partial ownership) for second or investment properties to 4 from 10. This eliminates new loans or refinance loans by Freddie Mac for someone owning more than 4 properties. It is unclear whether a primary residence is counted toward the limit of 4. My past experience was the 10 included the primary residence.
2. It appears the other area which was addressed on www.taxloopholes.com (Diane Kennedy, CPA) refers to all cash out refinances. The new guidelines specify the property most be owned by the refinancing party for six months prior to Freddie Mac accepting the loan for purchase. It doesn’t appear to be a specific LLC problem; it is a length of ownership problem. And, generally, neither Fannie Mae or Freddie Mac allow financing in business entities.

The next question is whether or not Fannie Mae will make the same ruling(s). Fannie and Freddie tend to march in lockstep.

Disclaimer: As you all know, this is not legal or accounting advice. Please seek proper professional advice before acting.

After my first blog, I got to thinking.I believe the credit scoring system is partially to blame for the rapid rise in the prices of homes across the nation. Beginning in 2002, lenders started to change their programs to fit what America was bringing to the table as far as borrowers. Clients had less down payment to offer and wanted to provide less documentation for the self-employed. A whole set of new programs, based on good and excellent credit scores, with stated income and very little proof of income became the norm. Stated Income made the business of lying on applications seem ok. Every loan company had to have these programs just to compete. Every program imaginable became available. How about stated income non-owner 100%? This is a loan where you don’t live in the house but you can borrow 100% — a no-down payment program and you can state your INCOME too?? Just five years ago this program would have required at least 20% down payment and provable income from tax returns.

I believe it was easy money that drove housing prices up with reduced down payments. This is hard to prove but with the rapid growth and the ability to buy owner and non-owner properties with no down payment, using programs based solely on credit scores, it makes you wonder. Clients wanted to make money and the market was poised to be a seller’s market. However, many of the clients who received these loans got into adjustable rates that increased the loan balance right away. They charged up credit cards, bought new furniture and new cars always on credit because no one pays cash anymore. Low rates gave them the ability to create more debt. Now with the adjustable rates going up, these clients are trying to get into fixed rates but with the additional debt and housing prices adjusting down, it becomes much more difficult. So more pressure has been added to pay the bills and not affect your credit score that you worked so hard to get.

It is the American dream to buy a home and far be it from me to say not to, but plan your purchase wisely and, ideally, with a six month “reserve” in the bank. Buy something that makes financial sense. Keeping credit is ok, but if you can stay off credit cards you’ll like your life much better and feel more in control.

The banks, credit card companies and credit bureaus want to do business and that’s what they’ve done over the past 5 years. They are getting fat off us. The lending industry needs to understand, if, at some point, a client can’t buy food to put on the table, how long do you think they’ll care about a credit score or a home where they put no money down and the value is questionable. Just a thought.