For those of us who live in “Hot Zones” like California and are having difficulty getting that first offer accepted: there is hope! I’ve tried the 25:1, 50% off listing price method and returned a big ZERO! I know the method works, but I think in some areas of our great Nation the 25:1 strategy needs to be tweaked to fit our unique market. Through grueling hours of research (okay, it was rereading some information from a local wholesaler and it took approximately 20 minutes) I learned why he and his wife are successful wholesalers. They approach are market completely different. They have a method and it works. They make approximately 12 offers a week and close on 4 houses a month. Below is a quick outline of what I learned.
1. Target Your Offers; this means no willy nilly offers with no rhyme nor reason.
2. Your offer should be within 10-15% of a deal ALREADY before you make an offer.
For example:
FMV $200k
For it be a deal it needs to be 50%-70% of FMV, depending on condition and area.
So: $200k X 60% = $120k for a deal.
Therefore, you need to find a listing no higher than $140k to offer $120k.
3. Prime times to make offers on REOs;
1) Day 1 On Market
2) Massive Price Reductions
3) Fall Out of Escrow/Closing
4) Board Ups (houses that are boarded up)
5) Trouble with the City (code violations, illegal additions, etc.)
If you come upon a hidden “gem” that has been on the market for over 90 days, and the listing agent tells you the bank is desperate then by all means shoot for the 50% of the listed price. I will be trying this method starting 8AM tomorrow morning! I will let all of you know how it goes. If you have success please share it with us. I would also like to thank Kurtis and Cindy (my local wholesaler) for their great information.
KimmyJ
“Ability is what you’re capable of doing. Motivation determines what you do. Attitude determines how well you do it.” Lou Holtz, Norte Dame Football Coach
This makes very good cents!! Just a little clarification please...
You wrote: "For it be a deal it needs to be 50%-70% of FMV, depending on condition and area. So: $200k X 60% = $120k for a deal. Therefore, you need to find a listing no higher than $140k to offer $120k."
Are you saying that we need to find a house that is "worth" $200k (thru comparing comps), but is on the market for $140k, and then offer $120k (to fit the 10-15% rule)?
How does your wholesaler fit into this equation?
Without a vision the people parish. Prov 29:18
Good job Kimmy
Every little bit of new info counts. Just more ways for us to approach different strategies.
See you there soon..
Jason S.
San Diego, CA.
**All CASH House Buyer!**
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You have it right. It needs to comp at $200k, but be listed low enough that you can come in and make an offer at 10-15% off giving you 50-70c on the overall property. This is why it is so important to know your investing areas, so when you come across a deal, you can quickly run the numbers and make your offer. My local wholesaler gives out the information freely. His attitude is that most new investors do not have big buyer's list therefore you will come to him to find a buyer. We then split the deal 50/50 and he really didn't do any work. His list has over 2,000 names on it. In my area, houses are snatched up within days of being on the market. Other investors are offering close to asking price. This strategy is working for him. He is doing $40k plus a month.
Thanks, Kimmy for always searching out new/additional avenues. You are awesome!!!
Your wholesaler's strategy: This is very similar to what I do. Waaaatch those props! When the price drops to your target range IMMEDIATELY jump on it! or someone else will. That is happening a lot here. Even if you've offered several times on a bank-owned and been rejected (while they've still got their head in the sand, and have the prices too high). If you are the one that keeps up on the activity for that listing, you may have the chance to snatch it up when "reality" hits their door.
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Finance contingency will screw you almost every time. There are many ways to work around the $ part.
Use your inspection contingency. Almost all sellers will expect that, and it won't kill an offer.
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
The least contingencies the better. How many do you use. Just Inspection?
Jason S.
San Diego, CA.
**All CASH House Buyer!**
Refer Us To Neighbors, Friends & Family, Earn $1,000
LIKE my FB page http://www.facebook.com/JandBHouseSolutions
Most of the time with the REOs, just inspection. Sometimes if I already know what needs to be done on them and I know there are other offers, and I KNOW the deal is great enough that I have options, I will go with NO contingencies. I can't remember ever being beat out on those, even when my offer price has been lower than the others. Of course the bank will take the sure thing over just about anything else when they get to a certain "motivation level". I'm not saying to do that, but for the people that are just having a hard time getting something accepted and you're sure of your exit strategies, like you said the less esape clauses the better.
Disclaimer: TRY the 25:1 FIRST!!!!!!!!!!!!!! If you have exhausted all avenues with this strategy, THEN start eliminating variables. Just my opinion, remember.
Rina
"Obstacles can slow you down, but they can only stop you with your permission." Dean Graziosi (BARM pg 101)
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
For a little about me, welcome to the site, and a few tips for new DG family members, click on this link: http://www.deangraziosi.com/user/3249
Hey KimmyJ!![Smiling Smiling](http://mail.deangraziosi.com/modules/smileys/packs/example/smile.png)
Great advice, thanks! Would it be possible to get some information regarding your wholesale investor? I am in Southern California, in the Oceanside area, and while there are a ton of properties to try and lock up, I have no end buyers at the moment. I am working on other strategies for finding them, but if I could close some deals in the mean time, it would really help, which I am sure you know what I mean.
Thanks!
Heather
"I can do all things through Christ who strengthens me" Phil 4:13
I tried a few contingencies, but of course, my agent said, "Don't do it!" At first, I said we're doing it my way, but after seeing the competition, I am using no contingencies except when it comes to illegal ad-ons. I write, "Subject to buyer verifying permit approval" This gives me more time to find an end buyer and great escape if I can't find a buyer. Also, the banks expect it on the illegal units. I always offer all cash to get the deal accepted and I use the standard CA 17 day inspection period. I don't have enough buyers to feel comfortable not giveing myself at least 17 days to find an end buyer.
I am in Los Angeles, CA and have the same struggle getting offers accepted. Thanks for the great info. I just got a call from seller's agent asking about the cash offer which I use coastal-funding proof of fund letter, they want to make sure there is no contigency on the cash part. I can still use the inspection as exit clause, like some people said if you don't like the color of the wall when you inspect, you can back out. By the way, does anyone know other sources to get proof of fund letter as convenient as coastal funding? The agent doesn't like back-to-back closing contigency. Appreciate any help.
I live in FL and all I hear on the TV is that everything is going close to asking price and that the investors are grabbing everything up. But I have an agent that has a lot of foreclosures and she says to put in real low bids.
Several of them have been on the market for some time.
But right now I can't work with the bank owned because I have to built up some cash and most of them say they can't be assigned.
I'm looking for the for sale by owner and short sales.
What do you mean by ...The agent doesn't like back-to-back closing contigency.
What is back-to-back closing?
Thank you
Hi everyone, I just finished reading DG's book. I'm very excited and motivated to get started on my first deal. This information provided here is very helpful. The only thing I'm having trouble with is the funding source. Is anyone out there using any funding source that will allow you to use their money to do double closings? I will appreciate any helpful information.
Thanks.
Thanks.
Check out this website I hope it helps.
http://www.coastal-funding.com/pof.html
Thanks for the website, I will check it out. I live in Santa Ana, CA 40 minutes south of Los Angeles. If anyone working around this area has any tips for our local market please advise.
Thanks again,
Thanks again,
Ivan,
Your welcome. I am just starting out to. Maybe we could help each other out. I live currently in Westminster California. I am also doing research. I am currently looking for investors in the area.
Hi,
A back to back closing is where you lock up a property then find your end buyer. Once you have your end buyer, whether it be another investor on your buyers list, or a retail buyer, you then schedule a COE for the same day with both the seller and your end buyer and close with the seller and then turn around and close with your end buyer. That is where Coastal Funding comes in play. They do "flash" lending which means they loan you the money for 24 hours. That is why you need to make sure that you close the same day so you can pay them back once your end buyer pays you.
If you go through the forums they really help explain everything in great detail. I live on this website. You can learn so much!![Smiling Smiling](http://mail.deangraziosi.com/modules/smileys/packs/example/smile.png)
Niki
Thank you for the great info..
OK, what if I want to buy a property and hold it for a while, say for a fix-it-up period?
So then Coastal Funding is not going to do a deal with me, right?
Now, the Costal Funding POF application requires to give them property address, but I am going to make a bunch of offers on REOs and don't really know what address I have to write down, so how do I get a POF letter?
And yes, I really like the forums and spend a lot of my time reading very valuable info, but the thing is that everything goes through my dictionary first,LOL
Thanks to everyone
Makes total sense...Especially since I was having the same problem as you...I don't think I am going to do it on REO's since they don't like the and/or assigns, but if the house isn't, then I am all for it...Then again, maybe a bank would except it...It is possible...
I think with the low interest rates, the first time buyer programs, the market is heating up a little...At least in my area(and sounds like yours also)So def going to try the different strategy...Hopefully my agent will be on board...
~TAKE ACTION AND THINGS WILL HAPPEN~
***Something to Believe In***
"If you want something, GO GET IT...PERIOD" Will Smith
***"I CAN'T IS NOT A EXCUSE...IT JUST MEANS YOU WON'T"***
"Obstacles are those frightful things you see when you take your eyes off your goal" Henry Ford
~"Success doesn't come to you...You go to it" Marva Collins~
Don't give up on wholesaling REOs. There are a ton of methods to wholesale your deal and not use and/or assigns.
Ima read some on here that deal with that...Didn't you write a posting on here as far as wholesaling bank owned properties?
aw never mind...Got it
http://www.deangraziosi.com/real-estate-forums/buying-foreclosures-reos-...
~TAKE ACTION AND THINGS WILL HAPPEN~
***Something to Believe In***
"If you want something, GO GET IT...PERIOD" Will Smith
***"I CAN'T IS NOT A EXCUSE...IT JUST MEANS YOU WON'T"***
"Obstacles are those frightful things you see when you take your eyes off your goal" Henry Ford
~"Success doesn't come to you...You go to it" Marva Collins~
You can just put in one address and then once they send it to you, you can save it in a word document like I did and alter it with another address if needed. I completely restructured the document sent to me because the selling agent did not like the way it looked so I just re-did it and sent a copy of it to Eric at coastal funding to make sure it was ok and he was fine with it. Just make sure you email him and let him know what you are doing. They are very easy going peeps!
Niki
Wonderful idea, thank you!!
I also would like to know about holding a property, so if I want to buy a property and hold it for a while, say for a fix-it-up period are they(Costal Funding) going to give me some funds?
Thanks again, I appreciate any help.
No, I don't think so. They just strictly do the flash lending for double closings. What you should do is look on Craig's list in your area on just do a Google search for HML. There are SO many out there right now that will lend you money for 3 to 6 months or however long you need to fix and flip. They normally charge you a higher interest rate but if you get the home low enough, just work that into your budget.
Thanks,
Niki
Thank you very much, you definitely helped me to understand much better about the flash lending for double closings.
I joined Dean's Success Team a couple weeks ago. I am familiar with how real estate works however not having the money to snatch up homes is what I'm facing. Scared about getting in there and putting offers down without an exit strategy (end buyers) put in place. After reading all this, my direction is going to be REO's. Can someone explain a little on the contigencies in the offer contract? How/Where to state them so that I'm not stuck if unsuccessful with finding an end buyer. You can PM me if you'd like. I'd really appreciate it.
its sooo cool to know that im in the company of soo many, with the energy towards the same like minded goals. it has been said that superior men and women invest the time necessary to develope absolute clarity about themselves and what they really want...sort of like designing a detailed blue print of a building before they begin construction. i just want to say how much i apreciate being a part of the DG family...and to those who give so freely.... sincerly, mikestime
Are we suppose to be putting in offers at 50% of the FMV or the listed price of the REO?
This strategy does not call for putting in offers at 50% below FMV. You are finding REOs or homes that are priced below FMV, and then making your offers at 10-15% off the listing price bring the home at or near the 50% below FMV mark.
Thanks KimmyJ.
I sent you a PM. Did you get it?