OfflineHi:
First, let me say that I have not purchased any of Deans books directly. Someone I know that is close to me purchased them. I read Be A Real Estate Millionaire and Profit From Real Estate.
It is very hard after investing in real estate for the length of time I have been investing, to utilize new strategies, but I did find out some interesting new things.
I wholesale real estate and I enjoy it. I make opportunities available to others and that is a cool thing.
I don't assign deals anymore. I did when I got started, but most of the investors I deal with, have major concerns about all the new laws that they will not do deals like that anymore.
It is no big deal because I prefer to do things the following way:
1. Locate a deal. In Florida, they are all over the place, especially in Fort Lauderdale, Davie, Miami, and other places in South Florida. You need to really be looking everyday and have a good idea of what the marketplace wants.
I have seen investors look at two very similar houses on the same street and choose only one of the two, and for the simple reason that there was a distinctive something that caught their eye and signified a deal for them.
2. Immediately move on any opportunity or lead: I dont care if it's 10:00 am or 7:00 pm, when the deal comes available, strike while it's hot. If you don't move on it right away, the deal could be gone. Good deals and great deals go very quickly.
One of the keys to my success is finding the properties that the majority of those investors in the marketplace are not consistently looking at.
3. Immediately make an offer and lock it up: I carry and you should as well, blank contracts with me. I also carry what is called an addendum agreement as well. What I use this for is the earnest money portion of the deal. If you are going to become active in real estate investing, and when doing so, you will look at many properties and will in turn make alot of offers, you do not want to keep putting checks in with offers.
My addendum says: Upon acceptance of my offer to purchase your property at the following address: , I will provide a earnest money deposit in the amount of $ One Hundred Dollars and Zero Cents, as my good faith deposit to originate our real property buy/sell transaction.
Now some sellers, especially one's who hold a realtors license and you will come across these types of sellers from time to time, they will expect a deposit with contract. This is one of the things they have been taught in real estate school, then I will Give them a check for $100.00.
One more note on this subject: From my experience, the sellers who expect $500.00 or more as earnest money are those who are selling a property at retail pricing.
If I am asked for more than the one hundred dollars I customarily pay as a deposit, I ask how much and once they tell me, I say two things: A) Legally, $1.00 is suffucient to make a contract legally binding and B) Paying you that amount is not going to make me buy your property any more than paying you the $100.00, does that make sense to you?
3A) I also place a call to my transactional funder and I have them email me a proof of funds letter. Once I get that, I email it over to the seller for inclusion with my offer.
This is very important because it builds credibility, especially if the seller is a realtor, attorney, etc. They need to see that they are dealing with a professional.
4) I take digital pictures of the property. I take one of the front of the property, one of each side, one of the back of the property, several inside and I don't take flattering pics, meaning of just the nice areas, I take them of the bad areas as well. I also take a picture of the neighborhood. I want the investor(s) to see what they are buying.
5) In all my offers and contracts, I state 30 days to close or as soon as 14 days, will advise. I do this so I can properly put together the deal. I also ask for one 15 day extension to be allowed in the event I need additional time to put together the deal.
Now, I fully advise the seller that I will be buying the property but plan to resell to another investor and may need to have additional time to get the deal done. I also advise that I can still close the deal, resell or not.
6) I then get out of the field and into my home office and I begin to go through my buyers directory. This is something I put together on my own. All it is is a one or two page per buyer setup sheet, that gives me their contact info, their buying parameters, what they need to see to consider the deal, whether they have readily available cash or need to get funding, time frame needed to close, areas they will buy in. Also included is their birthday, anniversary date, wife and kids birthdays if applicable. I send cards to them on these important dates in their lives.
7) I then email the buyers and say the following:
Hi, This is Paul Jacobi. I have a deal ready to go that meets your needs. I will be sending you a complete file via email at five o'clock pm today. I need to have confirmation of your level of interest by five o'clock pm tomorrow. Upon receipt of the file, please reply with a note of acknowledgement, that you received the file.
I look forward to hearing from you.
Once the buyer has stated interest in the deal, I then show them the property.
I then ask them, what is the most you will pay for this property. This enables me know immediately if I can sell to them or not.
I only schedule an appointment with the first buyer to show interest. Once that buyer says no, then I immediately call the second buyer and go from there.
Remember, I wholesale and as a result really do not want to rehab a property. I will rehab a property if I can buy it low enough to justify getting into that and only if it builds into a bigger profit.
Once I get a buyer to commit to the deal by putting in an offer complete with a deposit of $100.00 and a proof of funds letter, I will then strike to close the deal and setup a double closing and close the deal, making my profit and going to the bank.
It really is a simple process. The keys are being able to find deals, having buyers, having a transactional funder that can do deals and being able to repeat the process.
The business is simple if you keep it that way.
That was great info! Thank you for sharing. I have been so hung up on the whole earnest money thing and have posted several times on here with no answers! I am glad to hear your method of handling this! I was afraid that if I didn't offer at least $500.00 the seller would not take me seriously. I am still concerned about making offers through realtors though becvause they are pretty insistant about earnest money! So at what point is the earnest money check cashed? thank you for any advice, tips on the earnest money thing.
Another question I have is with the paperwork. What exactly do I do with the Offer/Contract after seller has accepted by signing. Do I take it somewhere? File it? Record it? what?
Any insight so much appreciated!
The only way to predict the future? CREATE IT!
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Thanks for sharing! I am originally from south Florida are you currently investing there? I still get deals from time to time, so you can PM me your criteria and contact info and I will send those deals directly to you! Look forward to working with you!
Set a goal to achieve something that is so big, so exhilarating that it excites you and scares you at the same time. It must be a goal that is so appealing, so much in line with your spiritual core that you can't get it out of your mind. If you do not get chills when you set a goal, you're not setting big enough goals." (BO Sundberg)
Vicky Diaz
thanks for the info
tom
I do not know about your area, but in my area, it is ok to deal with realtors because I deal only with those realtors that pass my interview process. I realized early on one very important thing about them and that is not all are going to work with you or for you.
Here is how I learned that. I actually attended real estate school. I lasted four days. I am not kidding. I realized that it was not for me. Everything they were about or going to be molded into becoming was not going to work for me. Nothing against realtors, it was just not my thing.
I find that the best realtors for me, are the young and hungry. Those are realtors who have been in it for six to twelve months, deal with investment properties and actually listen to me and do not delve away from that.
My interview goes like this:
Hello, my name is Paul and I guarantee you that I will be one with whom you will want to work. That guarantee comes from success in this marketplace.
I am a wholesaler. I am not a buy and hold kinda guy, so attempting to show me properties other than what I tell you I will buy, will result in you being fired and my buying properties from your competition, and I assure you I will buy from your competition. Side note: Every realtor is their competition.
I buy single family properties all over South Florida. I buy properties that are being sold as is, have code violations, are abandoned, are being sold by the bank or fsbo. I look for properties that need minimal work meaning cutting the grass, paint, carpet. I generally do not buy where significant rehab is required, however, if I am buying for 30 cents on the dollar, I may consider buying it.
I buy for cash, I generally resell to another investor after closing in my name, however, I am able to buy resell or not.
I pay $100.00 earnest money and generally will never pay more. I also will pay that upon acceptance of my offer. You and I both know an offer is an offer, it is not a contract or formal agreement, so the earnest money will be paid upon acceptance of my offer and when the formal and legal contract is ready for signing by all parties.
Now allow me to ask you a few questions...
1) Do you want to make money on a regular basis?
2) Can you work with my business model and me?
3) Do you have access to the kinds of deals I buy?
4) Do you have any issues with being part of my team?
5) Do you understand what it is a wholesaler does and where I fit into that?
6) Are you hungry and aggressive?
7) Are you willing to show me deals on a weekend, sunday included?
9) Do you understand transactional funding and double closes?
10) Do you have access to other investors who you could introduce me to?
This is how I deal with realtors.
combined with Matt's screening is so valuable! I have a hang of a time getting realtors and having them work. They just don't want to do the work, they want to bring one listing to me and have me just focus on that one listing or they won't put in multiple offers, are afraid of their reputation, or don't understand lowballing on a bank owned property that's been sitting on the market over a year! Thanks for your valuable info!
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Mike
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Mike
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