Question on putting in very low bids ...

Each area will be different. California is seeing low offers accepted regularly where as properties in Wyoming are not seeing any where the discounts. This is where you will need to get to know your own area. Understanding your area and its competitive offer amounts will help you get more accepted.

Do not be afraid of giving low offers. There will be many times that you or your Realtor will get contacted and told that you are ridiculous for putting in such low offers. - Just brush this off and move on.

I am sure that those giving low offers will note the same.

I, with the help of my Realtor, make about 30 offers per week. All of these offer range from 60-68% of the value. In just a one month period of time we have made 136 offers. The large percentages of the sellers have rejected the offer. A large percentage of these that have rejected me have given harsh words for me and the low / quality of my offer.
One thing that a great investor needs is to have a tough skin. There will always be people who will question what you are doing. Even those close to you may question you. You just need to go ahead and do what you know. Make offers. Great going making offers.

I believe every area of the country may be slightly diffeent. However, here in the midwest, I am looking to only buy at properties for 50% or less of FMV. I can get as many properties as I want for 80%-85% of FMV, but I am trying to find the best deals at 50% or below.

Thus, I believe Matt has a great strategy with the 25:1. I have been very fortunate with a few Bank REO purchases during the past 3 months. We actually purchased them for less than 30% of FMV. Thus, keep searching for the deals and keep making multiple offers and a few good one will take seed. Good luck on all your deals. Believe and Achieve! - Joe

It would seem that one could find a happy medium between getting the lowest offer vs the 80-85% offer accepted where you have no wiggle room. This way one would have "some" income, build experience at completing a deal(s), building relationships with lendors, etc. There seems to be a lot of hand wringing and time put in to get nothing in return (except frustration). The question is, how far do you adjust your profit margin?

When low ball offers are provided, are there counter offers being given, or are each these seen in such disgust that they don't bother?

Right now, I would rather complete a few $3-$5k deals than try to hit a home run on just one.

Hi guys,
I just want to share this with all of you about getting REO Properties. I met an investment group that works directly with banks on REO properties. They get them for huge savings and sell them at around 40-60% LTV. Right now they have many properties in Detroit, MI. If any of you would like the list of properties I can have him email them to you. Most of these properties are in good locations with renters already in place, so they are easy to resell. Just email me at [edit: please do not post emails or phone numbers]
I would be glad to share this info with all of you. Check out this deal that I'm currently looking into buying, I'm in California but I'm doing my due dillegence through realtors and investors in the area.
Price: $38,000
Fair Market Value: $95,000
LTV: 40%
3Bed/2Bath
Detroit, MI 48224
Tenants already in place.

I'm very excited about this deal and I just wanted to share it with all of you who want to take advantage.
[edit: please do not post emails or phone numbers]

We should not be scared to submit low ball offers. The most the seller could say is, no. Remember with agents working with you, the seller has no idea who you are. But out of all those offers, one will come back as positive and produce the deal you are looking for. I believe putting in low offers could be fund and maybe produce huge profit in the long run. Good Luck.

Sandra

O I don't mind them saying I am crazy I was just wondering.

Thanks

John

I follow Mr. Larson's advise and just make a few adjustments. I have my Realtor send me properties over 90 days old that are within about 1/2 an hour from me. I then look through these and try to get a feel if they are listed at least at fair market value or below. I don't waste my time with houses that are over priced because there's no chance with those. I use Zillow to give me a quick but not very accurate FMV. I also try to go mostly with those that need some TLC because these are the one's listed at a discount.

I then take these to my Realtor where he lets me use his system to pull up comps on these houses. After I have comps ready, I try to come up with my offer price. If the houses looks like it is a REO or needs a lot of repairs, I will discount about 50% of FMV, not the listing price! If the house looks ok and not an REO, I discount about 30-40% of FMV. I then give these numbers to my agent who submits verbal offers. Most of the time it's an obvious NO, but when they say yes then we write up the offer.

I wish I could say that I made money doing this but I only been trying this for about 2 months and made about 40 offers. Well actually right now I have 2 accepted and 2 maybe's and we just wrote up those contracts. If they sign the agreement then I go see the house and have my contractor give me estimates on repairs. I will keep you posted on that.

I want to conclude by saying that this strategy probably does work better in some parts then others. I think that here in Pennsylvania, I am looking at discount of 30-40% but not 50% and under. All we can do is tweak and try out what works. Good hunting guys!

Hi John,
Its a matter of what works for you in your area. Where it might take me 30 rejections to get 1 yes. Where it would take you 10 to get a yes. Every area is different. so you make a chart of your offer record and see where it leads you. Much success........Lubertha

Thank you very much everyone

John

Hi Ivanlambo,

Can this company help me with finding properties in S. Florida ?

What is LTV?

I only know FMV.

John

OK

The loan-to-value (LTV) ratio expresses the amount of a first mortgage lien as a percentage of the total appraised value of real property. For instance, if a borrower wants $130,000 to purchase a house worth $150,000, the LTV ratio is $130,000/$150,000 or 87%.

Just reading it again so I understand it .

John

Some people just can't seperate business from personal. When you're dealing with people who are selling their homes, it's very hard for them to take less for a place they have a lot of fond memories of and a built-in value for. People will take lowballing as a slap or an insult, but there's also some people that understand you're just trying to make money.

You're going to have all types of people in real estate. The primary objective is to make money. So I would feel no shame in offering whatever YOU think you can get for it.

Keep pluggin'.

alot of homeowners are so emotional about their houses. That's where they lived their lives; bringing up children (if they have any), celebrated the holidays, throw parties, etc. You just have to present them with evidence of what they house value really is in this market instead of just bellowing out a number. If they see it in black and white then they're incline to not get all emotional but there are exceptions.

Time is the only thing that will make them see reality when their house sits on market for over a year; they eventually come to realize they have to drop their asking price.

I too have had people including my first agent-who refused to put in such low offers and even other agents that I interviewed, look at me like I was crazy. I remember one thing that Indiana-Joe stated to me once. "It just takes one to get accepted for it all to be worth it. So go to it! The most successful people don't wait for others approval. Good luck in all your endevors.

hillvalley

Thank you everyone

John