MLS 25/1 Strategy

ANYONE, SOMEONE Please answer me this question?

You are looking for:

Starter homes: Usually 3 bedrooms 2 baths in the lower price ranges

Hot areas: Where the investors are buying. You can find this by asking your agent to pull the 'cash solds' for your area and make a list per zip code. Where the most cash solds are will be the hot areas.

Vacant: Homes that are vacant have no income and will always have costs associated like a mortgage, or at least property taxes and maintenance costs

Look for comments: Price reduction, TLC, Handyman Special, As Is, Cash only

There are plenty of these on the MLS but getting a realtor to actually want to make these offers is the hard part especially in a market that is on the up swing. Realtors and sellers alike know they can usually get more than what a cash buyer needs to buy it for.

You next question should probably be: What to offer for the homes.

Hope this helps.

Wendy

Nice going Wendy. I would add this; watch this Weekly Wisdom http://www.deangraziosi.com/content/weekly-wisdom-246-unfair-advantage-3 and fallow it step for step. I think you're missing the boat on this. That is if you have a REA you're already working with.

If not, read Dean's book 30 days to find one 1st. Matt Larson has a post here on finding the perfect REA.

Key here is to get as much knowledge as possable BEFORE jumping out there. You're only setting yourself up for frustrations. Good luck. Hope this helps.

My concern or confusion you might say is that I wanted clarified was if REO/Short Sales are different from Starter Homes or if all these are considered the same for the 25/1 strategy?

Also, if I see that an MLS was sold but I see that it was bought with a 20% down payment, then I know that's not an Investor but a Retail Buyer, right? Since it was bought technically "Cash" but not "ALL CASH" since those two search criteria exist in the MLS system.

FLAREI,

I am following everything Matt Larson has to offer, I use his script to look for Agents but some agents aren't too bright or open-minded, so I'm still in the look for one, but I always use the Matt's Script on looking for an agent and doing the 25/1 strategy since I purchased the 30days to Real Estate Cash book.

Jose,
REO and short sales can be all different types of homes. If you let your Realtor know what you are looking for than REO's and short sales will most likley (in today's market) be a part of that. They are still motivated or distressed sellers.
Good luck and Success to all!
John W

I agree w/ John & Julie: if you have a Realtor that is WORKING FOR YOU, you give them the search criteria, they pull the MLS listings, you review the findings and edit the criteria from there. I would imagine there will be REO, short sales, etc in the findings in the target market you search; especially in starter home markets. A 20% down deal sounds like a retail buyer deal. "Cash" is cash for the entire purchase or should be. If the MLS is calling a 20% down deal cash, they need to fix that.
Ken
Twinvestment Properties, Ltd.

Ok, so it's safe to say that REO are part of the Sellers Bucket, and by Seller it would be a Bank or Agency holding onto these properties, correct? If so, would I have to show a proof of funds before doing business with these businesses, instead of dealing with them like I would with a FSBO where I'm dealing with the specific person right there and then, and no extra paperwork necessary before starting a conversation.

And, the Short Sale already tells me that it's an actual person like myself just looking to sell before they go into a bigger burden.

First - what is your financial goals?? Are you looking to buy n hold? Wholesale for fast cash ? Or looking for a seller financed deal ??? The answer to these questions will bring you to the next course of action.
Wholesale- you would make multiple offers on AS IS , vacant , price reduced, handyman special,MUST SELL ,needs TLC
MOTIVATED SELLER.
Buy n holds - fixer upper, and most of the above
Seller financed- you would obviously not want reos, for closures, minimum days on market, no price reduction
Don't forget to check ads every day on Craigslist and type in the search box AS IS, price reduced, must sell, vacant
You ONLY want to sift sort and screen to get MOTIVATED sellers with these key words or else precious time is wasted
Good luck. N go gettum !!!
Jay

REO stands for real estate owned meaning the property has gone through the foreclosure process and is owned by the bank. You would have to to a double close for this type because many banks will not accept a contract for the property with an "and/or assigns" clause in the contract.

What I'm trying to do is wholesale, since I still don't know anything about Seller Financing. Eventually, when I have enough cash I'll look for good deals for my own portfolio do do buy and holds, since I have plenty of friends who would like to do deals with me since they have the money but don't know much about Real Estate.

Anthony,

In FL, we have a purchase contract already that states the "and/or assigns" in it but with a bank would I have to show a proof of funds unlike dealing with a seller personally? Also, If I do a double close, wouldn't I need to pay closing cost or any fees with the bank in the beginning, middle, and end or the process or no?

Thank you very much guys on your feedback! This really helps me understand more as I go along.

You are asking some important questions. As far as the properties that you are looking for, as a wholesaler, the specific criteria for properties should be identified through your interviews with your cash buyers. After all, you are making offers for properties on behalf of these cash buyers. If they want low end bread and butter properties, and that is what they will buy from you, that is what you are looking for and what you will tell your agents to look for. If they want high end properties, then that is what you are looking for.
I suggest you interview enough cash buyers to reach the point where you have 4 to 5 who are looking for essentially the same properties, and that becomes your search criteria. It also means that you will sell your properties quickly to these buyers because you can tell them honestly that if they don't act quickly, you have other buyers who are interested in the property.
A proof of funds letter is required by almost all real estate agents as a means of determining that you have the capability to actually pull the trigger. Proof of funds letters are available from companies that offer transactional funding, such as americancashfunding.com, besttransactionfunding.com, or transactionalfunding.com. They are free, and are specific for each property you are interested in offering on. In some instances, a proof of funds letter may be insufficient if the market you are in is very competitive and there are multiple bids on properties. In this case, Verification of Deposit (VOD) letters can be obtained that make your offer even more solid. There is a cost to use these VOD letters. If you need to access VOD letters, please contact the program's training staff.
In answer to your question about closing costs in a double close situation, you are correct. There will be an additional closing with additional costs. We recommend that you calculate an additional 3% for Transactional Funding costs and another 3% for other closing costs in addition to the profit that you intend to make. That's an additional 6% of costs to insert into your numbers in any instance where you will be using a double/simultaneous close.
We are glad that you are asking questions, and by posting them here, many people can learn from the questions you ask.

Thanks for the feedback, I will definitely check those websites out for a POF Letter, but as far as contacting the "Program's Training Staff" who is this specifically? Like phone #, or a path to follow, where I can get this information.

Jose, I am part of the training/coaching staff for Dean's Real Estate Program. If you have attended events where you have enrolled in training or access to the program's advisory line, that would be the access I am referring to. If not, we spend all day Monday through Saturday helping people with their strategies, property evaluations, running numbers, additional ways to find properties and buyers, etc. It's a service worth checking into.

This is what I learnt from MATT on using 25/1 strategy

example 1: when you get the listings from your REA and one of listing is asking $275,000
$275,000 x 0.80= $220,000 (your offer) (if it gets accepted you have to fall back because you offered too much and reoffer again)
$275,000 x 0.75= $206,250 (your max offer)

Example 2: Lets say one the listing is asking for $250,000
$250,000 x 0.80= your offer (if it gets rejected dont worry and reoffer again)
$250,000x 0.85= Your new max offer

Thats basically what 25/1 strategy means...

HOPE THIS HELPS

"Any Time Wasted Can Never Be Regained"- Unknown

MY Buyer website http://www.igwiloproperties.com/
My Birddog Website http://www.igwilohousefinder.com/

This is good info and they are good qustions good job Dallin & Jose