Make Cash Offers

Glad to see you guys are no longer teaching to add multiple contingencies to offers. Like subject to my partners approval, subject to financing (on a cash deal?) All those old school weasel clauses that do nothing but weaken the offer.
I've been doing inspection only for several years now. POF and earnest with every offer. I don't offer some silly earnest amount either. The more the earnest, the stronger the offer. Same principle!

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

Thanks for the reply. I agree with your reply. Some students struggle to come up with significant EM and need to negotiate that number down to a manageable number for them. Regardless the stronger the offer the better your chances of getting the offer accepted.

This does NOT have to be

It's EASY to come up with just about any amount of EM, especially if you're assigning or double closing.

Ask anyone for $1000-5000 for a few weeks and offer to pay them $250-500 extra, even take cash off credit card, its pricey, but gets the deal done.

It happens ALL the time!

EASY

Mike

Hi You guys are awesome, your the greatest, cant thank you all enough, Jim ( down to earth answers to down to earth questions, doesnt get any better than that)

I just been seaching for answers to this EM money question for days and when I'm not really looking for it anymore it just pop right up amazing how things come when your least expected. I put an offer in for a REO prop with a POF the seller want a 10% deposit. However the offer need to be re-submitted due to the comps and the condition of the house. I will place an attractive EMD to strenthen the offer and to let the seller no I'm serious. I feel much better about EMD now it's all starting to make sense.

Thank you guys

Everyone i know is so strict on lending money even $100 is hard to come by they make excuses complaining that you dont have a job to pay them back even when you do have a job to pay them back they end up with "it might not work out" even when i told them what i do "what if it doesnt close" yada yada....so if i cant borrow $100 what makes anyone think i can borrow 1000k-2000k for earnest $$$?

This happens when you personally have a strong deal under contract YOURSELF. You present it to your STRONG buyers list. You put it under contract with your buyer within 48 hours of YOUR offer being accepted by your seller. NO MONEY LOANED OR OUT OF POCKET!! Their earnest check covers yours!!
This requires a REAL DEAL and REAL BUYERS to work.
I do this ALL the time. 6 times this month and it is only the 21st!
I think you need to rethink how a guy with no money can do this business. You need to get your no money down wholesaling business going. How can you do this? It's all in Dean's books!!

Good Luck!
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

Have you ever been ask by a seller to put 10% down and if you did what did you do or say. Matt said he never put down more than $1,000 EMD. Please help me with this. Would you use the same strategy?

Thanks

you can do this, just read it several times until you understand it,

When I submit an offer on a REO I give then a COPY of the earnest money for 10% or whatever they ask. Does not mean anything until the offer is accepted. Then I have 24 to 48 hours to give the seller a REAL earnest money check. If you have real buyers and a real deal this is not a problem. Just like Dean teaches.
Use your buyers money!!
Depends on the seller too. If you are working with an unlisted motivated seller you can put up very little earnest. If you are dealing with a major lender like B of A or a Wells Fargo REO, if you don't put up what they ask, these days they will not consider your offer. WHY? You are making a cash offer right? Well if you ACTUALLY have the cash, the earnest money should not matter right? The asset managers at major lending institutions KNOW what you are trying to do when you make a cash offer but can't put up earnest. Make sense?

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

Makes awhole lot of sense, now is that a copy of a POF letter that have the 10% written on it or a copy of a bank statement? If it's a bank statement I don't have that much cash in my account. Michael what type of copy are you givin them? This will be the missing pieace to my puzzle and michael please don't stop posting your commits I really admire your knowledge I always read your post.

Thanks Michael you have been a very big help.

I give them 2 things with every offer, every time. (When making offers on MLS properties) You have to if you want to be taken seriously.
1. A POF letter. (see my website below)
2. A COPY of the earnest money check.

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

Does this POF Letter still work for you?

In making your offers are you making them a cash offer or are you using
The Pre-Approved Funding offer?

I would think that in using the Pre-Approved Funding statagy you would be using this on Forclosures and REO?

I also would think you could use this stratagy on Short sales?

Thanks Jay

There are still some us who dare not accompany that offer with an EM check!

Jay,

The POF letter is solid as a rock!! I have had just about every major lender call in to verify my POF. NEVER had an offer rejected, NEVER! These guys know just what to say and how to handle major lenders. They even offer their bank statements!! Try getting THAT from any other of the TF suppliers that are mentioned so often on this site!!

As far as offers, it depends on the lender and the individual circumstances of the deal. Sometimes we us "Pre-approved financing from a third party non institutional lender" Most of the time we just make cash offers. We also pay close attention to whatever the deed restrictions may be and offer accordingly.

We have a great strategy that allows you to get around the need for anything other than a cash offer.

Matthew,

If you don't supply earnest money when offering on REOs and Short Sales you can make all the offers you want all day long, does not mean the lender will consider them! The simple FACT of the matter is the more earnest put up, the stronger your offer. Period! Especially as we move out of the bottom market, prices are rising and inventory is decreasing. (sellers market) Except in Detroit or other extremely depressed areas.

Now when dealing with unlisted, motivated homeowners that is an entirely different situation. You can offer $1 as earnest if the seller agrees.
Remember, you earnest money does not mean a thing UNTIL you have an accepted offer.

Good luck to all and HAPPY 2013!

Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC

Thanks!!

So you are supplying a POF and an EMD on every deal?

Even ones that are homeowner occupied that are listed on the MLS?

And what is your standard EMD?

Not sure what you mean about the deed restriction?

Thanks
Jay

Looking for answers.

Thanks
Jay

Yes, we supply a copy of the EMD check and POF with every offer we make through an agent (MLS Listed). REO, Short Sale, Estate, Individual, etc.
We offer what is requested by the sellers agent. The requested Earnest amount is usually on the MLS listing. If you are making a cash offer the Earnest Money amount should not matter, you are paying cash right? It does not look very strong if you can't come up with earnest yet are saying you can pay cash. Now when the offer is accepted then you usually have 24 to 48 hours to supply a real check.(most states, check yours and what the contract states) If you have a buyer in place that should not be a problem. Worst case you put up earnest and if you can't move the place you get your earnest back within the inspection period.

The old " I dictate what earnest I put done" days are over. Inventory is decreasing, demand is up. We can't do what we did in a distressed, bottom market. Real World stuff. If we go back into another recession than WE (the buyer) can start to dictate again. Once again, what worked five years ago does not work now.

As far as deed restrictions we look at those and adjust our wholesale exit strategy accordingly. Say a short sale has a 30 or 90 day deed restriction, we can't double close because the deed would change twice with in 30 days. So we use another strategy that allows the deed to stay in the original buyers name and have one closing. We don't quit claim.

Happy New Year
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC