What exactly is a credibility kit?
Why do you need a credibility kit?
These are the questions I hear most often from students when I am at real estate events.
Think about this for a second. Have you ever had a contractor come out to do a bid for you on some work you wanted done, say new cabinets, or siding on your house or new windows? Do you remember seeing the book they brought with them that showed photos of jobs they had completed, testimonial letters from satisfied customers and copies of their licensing and insurance? That was their “credibility kit”. As a real estate investor, why are you not doing the same thing?
Your personal credibility kit will not only build credibility and integrity for you with your sellers and lenders, it will give you a serious edge over your competition. Almost none of your competitors know about this incredible tool that makes you look like a true professional.
I mentioned above about contractors using a book like this to show you samples of the work they have done before. They do this because they want your business. Up to that point, you don’t know anything about them or the quality of their work. Your credibility kit serves the same purpose. Your credibility kit should show photos of properties you have bought and sold, letters from sellers you have bought properties from, copies of paid off notes and mortgages, before and after photos of properties you have rehabbed and letters from your “dream team”, including your title agent, real estate attorney, the Realtor you work with, your insurance agent, your pest control person, a home inspector, and your surveyor.
It should also contain personal reference letters from friends and business acquaintances, such as your boss if you are still working, your banker, your CPA, your pastor or priest or any service organization you are part of. It can also include copies of any ads you run, as well as your business card. These are all good ways for your sellers to see the professional you are.
Make sure you also include letters from your mortgage broker and your private or hard money lenders. These can really help you cement a deal when a seller has a question as to whether or not you can close the deal. I know there have been instances where I have been at a property with several investors and I ended up putting the property under contract simply because I had my credibility kit handy to show the seller, so they knew I could close the deal. I’ve even had sellers take a moment to call my real estate attorney or title agent to make sure I really was who I said I was and that I could really close on the contract before they signed it. What a powerful tool!
Your credibility kit tells a story about who you are and what you can do for the seller. It will list the benefits to the seller as to why they should work with you. The other main function of a credibility kit is to give you the confidence you need in order to create a win-win solution for you and your seller. It should have all the tools you need in it to get you through the offer making process.
For example, in the back of my credibility kit, I have a list of different types of offers I can make on a property. This helps me when talking to the seller and keeps me from getting tongue-tied or forgetting a strategy that could just help out that particular seller. It also includes a cost analysis sheet, which shows my sellers exactly how much it would cost them to sell their home in the traditional way and how much money I can save them at the closing table. I also have another “cheat sheet” in there that lists all the paperwork I need from a seller in order to make an offer.
This one tool will separate you
from your competition like nothing else can.
It can help to bring you more deals than you can handle. I use an abridged version of my credibility kit when working with out of state owners. Think about it, without this information, they have no idea who they are working with. They have to be assured that you are who you say you are. The copies of letters from my title agent, real estate attorney, insurance agent and private lenders are particularly helpful in these instances and on many occasions my sellers have called these folks to make sure I am “for real” before signing any contracts.
Not only that, I also use my credibility kit to find more private lenders! You already have all the information about yourself and your company and deals you have done in one place to show your potential lenders. Looking at your credibility kit leaves no doubt in their minds that they will be making a good investment in you and your properties.
Your personal credibility kit is going to be one of the most important tools you’ll ever add to your business. Nothing speaks more loudly or more clearly about you or your integrity than letters from sellers you’ve already done deals with, personal reference letters, letters from lenders, before and after photos of properties you have rehabbed and copies of ads you have run. The professionalism that a credibility kit presents to your sellers and potential private lenders is a real asset to your business.
Another great reason to use a credibility kit is that it gives your seller something to look at while you are looking at their property to determine the amount of repairs needed.
My personal credibility kit has given me the edge when buying property on many occasions simply because none of my competition has this amazing tool and the sellers choose to work with me because I look a lot more professional. Get the competitive edge on your fellow investors and start buying more deals by building your credibility kit today! You’ll never regret taking time to build this amazing tool for your business.
You have no idea of the power a credibility kit can give you until you put one together and start using it in your business.
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August 27th, 2009 at 8:33 am
Since marketing dollars are scarce, it is very important to target specific areas. You can do that best through neighborhood direct mail programs. This can allow you to become the “go to” realtor in desired neighborhoods.