A DAY IN THE LIFE OF A JOGGER/ENTREPRENEUR

By Bill J. Gatten

A few days ago I was asked to give folks an idea of how my days came together. So we decided that a “Day in the Life of…” might be appropriate. So here it is for your perusal.

6:30 AM: Awaken prematurely to the noise of a garbage truck coming down the street, but continue lying perfectly still, eyes closed, pretending not to notice wife getting up to take out the trash

7:00 AM: Awaken again to a demanding, blaring alarm. Punch the snooze-alarm

7:15 AM: Second snooze-alarm punch

7:30 AM: Third attempt to hit snooze-alarm. Accidentally shut off the alarm instead and am forced to roll (more oozing than rolling) out of bed

7:31 AM: Half stumble and half crawl to shower and turn on water, wait for water to heat while glancing at face in mirror and wondering why eyes appear to need draining. Prop eyelids open with Q-tips and step into shower

7:41 AM: Gradually emerge from a 15-minute, early-morning standing stupor in the shower, becoming suddenly aware and concerned that hot water tank is running low, and that no scrubbing of delicate areas has taken place yet

7:50 AM: Step from freezing shower, now quite awake. Dress for the day (color coordinated Mohair sports ensemble). Put off jogging again, until afternoon

8:00 AM: Check phone messages and listen to first message: "Hi, this is Earl Splork, I'm returning your call about my house for sale. Yes, I might consider keeping the current financing in place, as you suggest, and leaving my equity in tact for a while…if you can take over payments, upkeep and all other costs"

8:01 AM: Return call: "Hi Earl, I'm returning your call. Thanks for calling...can you tell me a bit about the house?" (Yada yada yada) "Great! Let me run by it a little later and check some comps. If it looks like something we can do, I'll give you a call this afternoon or tomorrow. If it checks out, are you ready to put a deal together right away? Super! I'll call you this afternoon. Oh, by the way, how did you come up with that asking price? I see, and...and how much work or repairs would you say need to be done on it? OK, that’s not too bad. And about how many payments are in arrears at the moment? And, roughly, what's your current loan balance, not counting the arrearages? Ouch! Oh, and by the way, why do you think it hasn’t sold? Have you by any chance asked the bank for any kind of forbearance? Well, I'll give it my best shot and call you when I have all the data together. Fair enough?"

8:03 AM: Return second call: "Hi this is Bill Gatten returning your call. You had called about the property I have available over there on Fir Street. What can I tell you about it? (Yada, yada, yada). Great! Well, basically, if you like the house, there are three ways to get in: You can come in with 10% and closing costs and I'll carry the entire financing for you for, say 3 to 4 years. Or, if you’d prefer, you could come in with just half of that amount plus closing costs, and we’ll just agree to share in any future profits if there are any, over the next 5 or 10 years. Or...you might want to come in with maybe just 3 or 4 payments up front, on what we call a 'Tax Lease.' What that means is that you would lease the property from my land trust with full access to all of my income tax deductions: mortgage interest and property tax. The payments will, of course, be a bit higher than rent, but your after-tax monthly cost should be much lower, depending on your tax bracket, and you might save thousands of dollars per-year over renting.

9:30 AM: Pull comps on properties that I intend to try to get under contract today.

10:00 AM: Return as many phone calls and Emails as possible.

12:00 Noon: Drive by one of the properties that is just a few miles away, and call the owner to make an appointment to sign the deal up. (Put off jogging until evening)

2:30 PM: Call for appointment to meet with owner of first property: “Are you pretty much the decision maker for this transaction? No? Ok, then, will you need to confer with anyone else on this? Oh, I see…and will she be there for signing? Great!” (If the other decision maker/s won’t be there, I’d say, “then call me after you talked to her/them). And by the way, assuming that everything we’ve talked about turns out to be as expected and to your advantage, are there any other considerations we need to address before putting it all together?” “No? Good! So we can get everything signed up this evening if everything checks out…great!”

Laughingly: “I hate to have to be so specific on these points, but you’d be surprised at how many people give me the old “I have to think it over” stall after I’ve done all of everything I said I would. You won’t do that to me. Right (light chuckle)? How does 5:30 sound? Or would 6:00 be better? Great! See you then."

(At the meeting I’ll have my briefcase with plenty of Purchase Offer forms, Non-Exclusive Option forms; authorization forms (e.g., so I can speak to the creditors); a copy of the comps (to discuss with the seller, should there be any difference of opinion about value). All forms will be a completely filled-out as possible in order to save time and get to the point quickly during the meeting.

AS PART OF THE MEETING: "Yes, the 'fixed-up' value does appear, as you said it would, to be about $195 to $200K; and it appears that it'll take between $8-10,000 to bring it to 'Full Market' for resale.

Then considering my remarketing expenses...about 7.5% ($15,000); and even a minimum four or five percent profit (e.g., $10,000): unless you'd want to cover some of those costs, I'll come in at about $165,000.00, including, of course, taking over all of your payments, principal, interest, property tax, insurance, upkeep, management, maintenance, repairs, insurance, etc."

2:45: After making bank deposit and picking up mail, stop for a Veggie Burger, a Diet Coke, a small green salad, a Weight Watcher's 2-Point bar and a Double Bacon Cheese Burger with Chili Fries (…decide to delay jogging until after this evening’s meeting…it’ll be cooler then anyway).

2:50 to 5:00: Deal with matters of the properties I have on the market.

4:30 PM: Call a couple FSBOs and For Rent ads (“Hi I’m looking for folks who are selling on their own, who—for a full price offer—would consider leaving their exiting loan in place for a while and who can afford to leave their equity in tact for a couple years. In the meantime I’ll cover 100% of all payments, maintenance, repairs, property tax and insurance…then retire your loan and pay you off and, say 3-4 years”).

5:30 PM (At the meeting): I show Earl the unsigned Purchase-Offer and the signed Non-Exclusive Option Agreement, explaining that I’ll need about 30-45 days to get all my ducks in line: i.e., to run a title search; check on utility liens; check on the status of the hazard insurance and property tax; check on building code or ordinance violations; have the property appraised; have the property inspected; etc. I explain to him that I fully realize that the time all this could take could be a problem if he had to take the property off the market and wait for me: so, instead, we do the NEO so that he can leave the property on the market and accept a better offer than mine, if one were to be receiverd. I explain that if that happens, I’ll require only a five-day notice: i.e., five days within which to either exercise my option or relinquish it.

(After the NEO and the Memorandum of Option are executed, the next morning I record the Memorandum of Option at the County Recorder's office and call the local newspaper and Penny Saver to place my ad (No Bank Qual, No Down, No Credit Req'd, 3 pmts & cl. costs moves you in. $160K, 3-2 beauty w/pool, 1,450 sq ft, 2cg. Owner fin. Call Bill. 1-800-207-4273)

7:00 PM: Back to the office to answer Email, phone calls, website discussion groups until 10:30 PM. (Put off jogging until tomorrow morning)

11:00 PM: Ponder why I’m actually watching Jerry Springer while waiting for David Letterman to come on.

11:30: Fall asleep with TV blaring four minutes before David Letterman starts.

2:00: AM: Treat myself to a midnight snack, tale my final pee of the day, and amble bleary-eyed off to bed, and prepare to repeat as needed the following day (knowing that I can use my jogging time to make up for the late hour and lack of sleep).

Bill Gatten
www.landtrust.net



-----Original Message-----
From: JOHN WHITWORTH [mailto:johnlw@thegrid.net]
Sent: Wednesday, May 21, 2003 7:30 PM
To: Bill J. Gatten
Subject: Re: The Transaction Process, etc.
Bill,

Thanks! A diary of you, as the "investor" would help clear up exactly what paperwork I should be using, the detailed steps I should take, etc.

John :-)
----- Original Message -----
From: Bill J. Gatten
To: JOHN WHITWORTH
Sent: Monday, May 19, 2003 2:44 PM
Subject: RE: The Transaction Process, etc.

Hi John,

Give me a while to get situated here (just finished a week on the road), and I'll get back to with that diary of a day you're looking for.

Bill
-----Original Message-----
From: JOHN WHITWORTH [mailto:johnlw@thegrid.net]
Sent: Saturday, May 17, 2003 7:24 PM
To: Bill Gatten
Subject: Re: The Transaction Process, etc.
Bill and/or Staff,

I wish I could spend a few days following you around as you go about dealing with a Seller and Tenant-buyer. I wish I was privy to a "Diary" of Bill Gatten, where each day, a part of the "process" was documented. Specifically, including what forms you bring and fill out with each meeting with the Seller and then again with the buyer. I probably wouldn't have so many questions, then (sorry). Maybe I should have purchased the S.S.S.P. (Slow Start Success Pack) (ha, ha).

I have been reviewing the TRANSACTION PROCESS and I have some questions:

Since I've never done anything like this before, To build confidence, it is necessary for me to be able to visualize the details of the ENTIRE PROCESS (which includes the transaction process), as if I'm dressed in my suit, briefcase in hand, and going to see the Seller, or Tenant-buyer. What forms (all of them!) do I take with me? What is notarized and/or recorded when (prior to NARS involvement), etc? (Keep in mind, that I'll be working out of my home and don't have an office).
1. Is it correct to assume that when you go see the Seller (Step #1), you then proceed with Step #2 and Step #3 all in that first meeting?
2. Step #2: I am still confused what the investor does different from a Realtor. Does the INVESTOR use the "Purchase Offer" AND "Agreement For Option to Acquire and Interest in a Land Trust" (with the Seller)? Or, do I only use an Agreement For Option to Acquire and Interest in a Land Trust (with the Seller)?
3. I know I need to record the Memorandum of Offer to Purchase (Step #4). Does the Seller follow me down to a bank (or somewhere) to have us both sign in front of a notary, or do I just go by myself and have my signature notarized? Then, I take the notarized Memorandum of Offer to Purchase and record it at the Court House, right?
4. When the tenant-buyer fills out an Agreement For Option to Acquire and Beneficial Interest in a Land Trust and then the Memorandum For Offer to Purchase, he and I (investor) sign it (Memorandum...), notarize it, and then I record it at the Court House, just like I did with the Seller, right?
5. Step #3: Does not mention APPENDIX #1. What's happened to it? Does the Seller get a copy of it?
6. Step #3: Speaking of copies, once you present the Seller with everything, who keeps the originals? Do I mail copies later? (Wish I could read your "diary"!)
7. APPENDIX #4: Line 18-C: It say's "B & C above". Don't you mean "A & B above", since it is "C"?
8. APPENDIX 2: Term confusion: Is the "Transaction Fee" the same as the "NARS Facilitator Fee"? (I don't see "Transaction Fee" under the Fee Schedule or anywhere else than in APPENDIX #2).
I'm trying to personalize and integrate the information from the course. I've created some documents to help me define the process. I am making progress, but still need your help.

Thank you for your mentoring.

John Whitworth
(510) 525-7460

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