Holy Cow... I Just Made My First Offer!

Do I want to assign these deals, do yuou think the listing agent will allow this? I guess it doesnt matter. I am going to try anyway. Thes people are going to lose there home in couple weeks. So I am gonna see what I can do. The family still lives in the home. But I dont have the cash but I have a buyer who would probably be interested in picking this prop up. His cash will fund the deal. But I will negotiate it.
Kingjuss,

Just go for it! The worse thing that could happen is they say NO. Add an addendum stating that it's assignable or no deal and thatit ia subject to business partner's approval. If the agent questions that you tell them that you work with several investors. It is your responsibility to find the deals. Tell the agent and bank that most of the time you take title, but they provide the money. Occassionally, for tax purposes you may decide to put the property in an LLC or your partner may want to take title himself. However, you must have the addendum attached because at the last minute you and your partners may want it in your LLC. This way it gives you options. At this point, the bank doesn't have any more time to be picky. Be like Matt, you call the shots!

KimmyJ

Nice job Kimmy on putting your deal together. Has anyone gone thru a double closing? I have prop under contract with HUD and a possible end buyer interested. Hud doesn't accept addendums to their contract so the only way is a double closing.

For me, the banks only want to use their escrow companies, so double closing were not an option for me. You can do a double closing through coastal-funding.com Check them out online.

I finally took that step, after all the reading and learning. I found a home in my area that had a For Sale By Owner sign on the front lawn. It is a nice house.Very little repairs is it appears. Have not seen the inside yet. Its in a little private community. The house was built in 1997. They tried selling the house with ang agent before. The they decided to do it on there own. Anyway I called theowner this afternoon and we have an appointment tomorrow afternoon to talk about the property. So does anyone have any tips or important deatails I need to include in the discussion so I dont forget anything. I am going pleasant, but pretty direct in trying to obtain the information I need and to determine how motivated he is.The house is worth 258k they were trying to sell it for 358k. I don't know....Now I dont know what the seller wants for it. He wouldnt say. He wanted to meet first. So I said fine, I can see you tommorrow. So I will see what happens. Let me know of any opinions or thoughts on my approach. Thanks peeps.
Kingjuss,

I always try to look up what is owed on the house so I have an idea on what price may work if it works.
Then you can maybe work something out where both of you win.

A few quick qustions:

1. How much money are you putting down to lock up the deal? Just wondering if you have to put say 10% down or just $500 earnest money. Also, say for whatever reason you can't find an end buyer in the time alloted, what escape/exit clause(s) are you using in your land trust to so you don't lose whatever you put down?

2. And someone asked this b4, how much does it cost to set up a land trust? And you say it dissolves after the closing happens. That means you have to create a new land trust every time you lock up a deal, correct.

Look forward to your response so I know what to tell my realtor so I can give her CONFIDENCE that I know what I am doing. The land trust is a TERRIFIC method, thanks for the insight!

Neil

Hi Neil,

The land trust is costing me nothing. I found one through another investor. The land trust does not need to be recorded, you only need to have it notarized. However, my strategy is to call escrow once I find my end buyer and "hopefully" have my name taken off as trustee and have the end buyer's name added. If I can do this, then I don't even need to fill out the land trust. I used NO MONEY down by going to coastal-funding.com and printing out a proof of funds letter with the exact amount I want to pay for the reo property. I offered $60k, so that is how much I am able to get. Right now, I won't be using coastal-funding, but in the future I know at some point I will need them for double-closings. So, due to their generosity and helpfulness to investors, they will definitely get my business. As far as earnest money, I am putting down $500 which will eventually be paid by my end buyer. So, really no money is coming out of my pocket. Due to my inexperience, I feel I was not forceful enough with the agent, so I only came up with a 17 day inspection clause. So, that only leaves me 2 weeks to find a buyer. In the future, I will try using a 30 day inspection. When the agent asks why, I will tell him/her that I have several investors who are putting private money into this deal and that they live out of town and therefore I need the extra time to allow them to see the property.

Kimmy, thanks for the quick response. As far as the land trust, can you forward us a copy of or a link in word format so we can see what this doc looks like? Or ask your investor to direct us as to where to find one. I will also check out zoom.com and speak to my realtor's atty (which I want to do either way).

So in a nutshell, sounds like you use the land trust doc in lieu of a purchase agmt because the bank won't accept the verbiage "and/or assigns" and using the land truct helps you circumvent this by naming a beneficiary.

And I fully understand the Coastal scenario using their proof of cash letter in order to lock up the deal (do you know if the bank called them to confirm that that the letter was legit....just curious because it looks like anyone can type up this letter with all the technology out there today).

And you answered my question that all you needed was the $500 earnest money. My realtor is a little uneasy with this (I have to educate her). She thinks you always have to place a down payment.

And you said it best about the inspection period......YOU ARE THE ONE RUNNING THE SHOW......you tell them how much time you need. If they don't honor your request, walk away. There are hundereds of more deals ripe for picking!

Thanks so much for yours and everyone's feedback. Best of luck to you! Gotta fly.

Neil

Kimmy, thanks for the quick response. As far as the land trust, can you forward us a copy of or a link in word format so we can see what this doc looks like? Or ask your investor to direct us as to where to find one. I will also check out zoom.com and speak to my realtor's atty (which I want to do either way).

So in a nutshell, sounds like you use the land trust doc in lieu of a purchase agmt because the bank won't accept the verbiage "and/or assigns" and using the land truct helps you circumvent this by naming a beneficiary.

And I fully understand the Coastal scenario using their proof of cash letter in order to lock up the deal (do you know if the bank called them to confirm that that the letter was legit....just curious because it looks like anyone can type up this letter with all the technology out there today).

And you answered my question that all you needed was the $500 earnest money. My realtor is a little uneasy with this (I have to educate her). She thinks you always have to place a down payment.

And you said it best about the inspection period......YOU ARE THE ONE RUNNING THE SHOW......you tell them how much time you need. If they don't honor your request, walk away. There are hundereds of more deals ripe for picking!

Thanks so much for yours and everyone's feedback. Best of luck to you! Gotta fly.

Neil

Kimmy, thanks for the quick response. As far as the land trust, can you forward us a copy of or a link in word format so we can see what this doc looks like? Or ask your investor to direct us as to where to find one. I will also check out zoom.com and speak to my realtor's atty (which I want to do either way).

So in a nutshell, sounds like you use the land trust doc in lieu of a purchase agmt because the bank won't accept the verbiage "and/or assigns" and using the land truct helps you circumvent this by naming a beneficiary.

And I fully understand the Coastal scenario using their proof of cash letter in order to lock up the deal (do you know if the bank called them to confirm that that the letter was legit....just curious because it looks like anyone can type up this letter with all the technology out there today).

And you answered my question that all you needed was the $500 earnest money. My realtor is a little uneasy with this (I have to educate her). She thinks you always have to place a down payment.

And you said it best about the inspection period......YOU ARE THE ONE RUNNING THE SHOW......you tell them how much time you need. If they don't honor your request, walk away. There are hundereds of more deals ripe for picking!

Thanks so much for yours and everyone's feedback. Best of luck to you! Gotta fly.

Neil

Neil,

I just put out a new thread titled "How to Wholesale Reo Property Using a Land Trust." I attached a land trust to the thread.

KimmyJ

You're the best!

N

How does coastal work and what are there fees. Have you gotten money from them? Did you refinance that loan to pay them back or did yu use the investors money to pay them back.

I am just using coastal-funding for the proof of funds letter. I am not borrowing any money because my end buyer will pay for all the closing costs and the purchase of the property. My initial money out of pocket is $500 earnest money for escrow, but the end buyer will be paying me that back to me through my fee. You can go to coastal-funding.com and look at their website. It's something like $3200 to do a double closing with them. They only do double closings. They are not a hard money lender. You have to be creative in how you present your offers. Coastal-funding wants your business so they're willing to give you the proof of funds letter online hoping in the future you do business with them. I will definitely use them if I ever need to do a double closing.

I totally get you. You slick....Lol. Good Idea.

The realtor just emailed me and told me the bank counter offered with $90k. He told me they like to counter high when the offer is so low. This is what I wrote to my realtor.

Good Morning Dan!
I know the banks like to counter high. Can you blame them? They have property every where. Dan please increase my offer amount to $62,500. Please tell the bank that the property needs approx. $25k to $30k in repairs, the kitchen is completely gutted, there are no floors, the yard needs landscaping and the fence needs repair, just to name a few. In addition, I have not been able to ascertain whether the property has been hooked up to sewer. I am leaning to the side of "NO." Not uncommon for the top of the cove. That will cost me an additional $15k to have the house put on sewer. Oh, and I want the inspection period to be extended to 30 days so that I can get the septic/sewer thing hammered out. Thank you for all your help. I really appreciate it. Honestly, this is the smoothest transaction I've done lately.

Kimberly
###-###-####

I know, it sounds demanding and gutsy (or bossy), but I finished reading Dean's new book last night and I'm all fired up. Of course, I embellished a little on the repairs and the septic/sewer thing. I pulled that one out of my hat because on the listing it is noted as unknown. It doesn't really matter because it is common in the area that I am purchasing, but the bank dooesn't know that. Also, I thought due to the sewer thing I could use that as an excuse to get me more time on the inspection, thus giving me more time to find a buyer. Man, I'm starting to like this negotiatiing stuff and I use to dread it! I

This is a great thread of info! Kimmy - you are taking action and playing the game right with the banks. I did an offer on an REO a few weeks ago - heres a quick rundown. Asking 124,000. Offered 90,000. Countered me at 114,700, I went back with 95,000. They countered 114,500 so I pulled my offer because the numbers wouldnt work going any higher. Today the bank called my realtor and asked if the 95,000 offer was still available! I told her to say yes, but that its firm and to include closing costs. So we'll see. Great job taking action. Just run your numbers and be smart. Sounds like you have a good deal going here! Keep us posted!

I received an email from the listing agent. Another person put in an offer for $76k. I asked my guy if the offer was cash, he said he wasn't sure. So, I am thinking like an agent now. With my offer he gets both comissions. With the other offer he only gets the seller side of the comission. So, hopefully, he is going to control this thing and make sure my offer gets accepted. After all, we know who controls the bank owned properties... the agents. I'll keep you all posted.

I tried to buy a short sale house Kimmy that had two roof leaks, needed new carpet, had grass two feet high in the backyard, etc and was only 10 years old. The bank had turned down one offer of $75,000 from another buyer they wanted $85,000 which was to high for the deal. The bank even stated that they would let it go into foreclosure than to take less money.

I give you credit push the bank and see if they will move. Just do not push to much.

Keep us informed and by the way I like reading your posts they are very informative.

Thank you Hoosierman. If it doesn't go through I'm not going to cry about it. There a 1,000 more deals for me. At least I took ACTION!

You don't know how low they'll go unless you push. It's not like they'll be offended anyway, they just won't accept if they don't want to. GREATTTT experience and more confidence to draw upon for the next one.
Like Dean & Matt teach, just put in ENOUGH offers and you are BOUND to get one for the price that YOU want. I'm glad you have so many to work with. That's a plus too!

Thank you for sharing, Kimmy, and for your patience! You are unshakeable!

Rina

Hope you hear something soon. It is really exciting just to move forward and participate in the activities of a REI. It's funny about the whole land trust thing because i had researched this very topic 2 weeks ago. It's very hard to get some clear direction on this subject. I eventually found 2 websites that explained their use and benefit. From one of these sites I purchase the land trust document for $19 and now I can use that document for every purchase (wholesale or otherwise) I make....I love it. I do not want my name to be on any document for even 2 seconds. LOL

I like how you get around the bank requirement to not even have trust name because I too had heard that banks do not what to see 'and/or assigns', partners or trusts. But clearly you are thinking out side the box. BRILLIANT! I have bookmarked this post. Land trusts are extremely important to protect your privacy in REI.

Good luck....I will be watching to see how you go.

P.S: I closed my first deal this week so I know what you have to look forward too!!!

Well, we did it! We placed our first offer! We had planned to make 3 offers this week, but one house absolutely would NOT look at ANY offers without 3-5% earnest money, which would have been $3,000 to $5,000 on our $100K offer. Plus, the place was still occupied so it would have been up to 2 months before we could even see the inside. We told them that we were interested in the property and that we would make an offer contingent upon our and our partner's inspection, but that we WOULD NOT put down that kind of earnest money. Well they said no, so we walked. The third offer we are still working on but were not quite ready to put an offer on it. We'll put an offer on that one next week. But we did put an offer down on the third one!! We offered 45% of FMV because it needs a ton of work. We are willing to go as high as 55%, because our end-buyer wants 60%. However, this property is Fannie Mae owned, so it will probably not be accepted. Oh well, at least we are in the ACTION!! We'll keep you updated!

Well, my offer was kicked out because the offer was ALL CASH as well. I have a feeling it's the other wholesaler who has been helping me out, but oh well. I live in a small valley. So, I will continue to put offers in on houses. I have my eye on two right now. Also, last night I was out of town and was able to see the growth of some of the surrounding communities from the freeway. So, I'm going to check out those communities, virtually first, and then if I find some good deals, I'll make a day of it and look around.

Congratulations on making your first offer! How does it feel? Did you use the land trust method or the something else? There are too many reos to get hung up on one. You did the right thing walking away.

That's too bad about your deal, but you're right, we cannot get hung up on any one deal. That first house I REALLY liked, because it was a very nice house that needed very little work and was in a GREAT neighborhood. It was hard to walk away -- in fact, my husband was the negotiator on that one because he is better at being tough! I'm really glad that we walked, though, because WE have to be in charge and NOT let the banks bully us. There are soooo many houses out there and I have learned my lesson about not getting attached. I KNOW it will happen for us, as long as we are persistent and smart.

What strategy did you use to make your offers?

Way to think outside of the box Ms. K. I'll pray for you on this deal. It sounds like you left yourself a few options and that takes creative thinking. I just learned a little more about how land trusts can work in your favor. Thanks for the info and believe this deal will close and it will. The ground work is already laid!

Time is one thing that will bring these lenders back around. It sounds like they have unrealistic expectations of what they can get for these properties sometimes. They really don't want it to go into foreclosure because it costs them. Just make an offer and wait them out. They may call back.