Is this a good deal or what?

Christa There is not any room for a profit if they have it listed for retail buyers at 268k , then you get it for 228k that is 85% of asking even at FMV it is only 78% I say it's not a deal.

Thanks James for your quick reply.

Then I really need help understanding what a good deal is because I figure if I ask $228 and it's FMV is $290+ with no repairs needed then that would be a $62,000 profit.

Please help me understand.

What are your plans for the house considering there is little to no wiggle room here for profit. What is up with the tax assesment?

Well, If it were a good deal, I would pass it on to someone else, but it seems like maybe I am seeing something different. I have no idea what's up with the tax assessment. Why would it be higher than the property is worth?

and there are many investors in CA that will take 80% of ARV. However, you will need a good list of comps and know what repairs need to be done. If you are going to offer $228K, make sure you put in your offer that you want written proof of service from the seller and try to include a list of repairs or upgrades needed with your offer to give you the most chance of getting the offer even considered. Things are pretty crazy here in CA.

Personally, I'd offer much closer to $190K less repairs/upgrades to try for the 65% ARV, but in CA, really I see investors picking up 80% of ARV all the time, but I'm in Southern CA. Plus, subtract your assignment fee so you get paid. Do you know if its an REO, Fannie/Fredie, short sale or regular sale?

Thanks so much for your response,

This is a regular sale I believe. What is a fannie/fredie? I think I understand better what a good deal to investors look like. I think I had it semi backwards. I think I may offer the $190. Who knows, maybe they'll accept it. You never know unless try. So after offering that, should I tell the investor 195 to make a 5,000 profit?

Also, How do I get a Real Estate Agent on my team while trying to do assignments? Is it possible? How will they get paid?

Hmmm maybe $2,000 would be more practical

Like Tammy, I am figuring between $190 and $200, should be good enough. You will then have some money to put in the bank.

God Bless
Sandra

In response to your reply to James. If the property is listed at $268,000 and not selling what makes you think you could sell it at $290,000? The MARKET is telling you it is worth $268,000 or less. What a property is worth is what it will actually SELL for today. (When wholesaling by assigning or double close, LLC etc)

Hope this helps,
Michael Mangham
MD Home Acquisitions LLC

Do they have to sell fast?
Do they need quick cash?
What about the property? how much repairs does it need?
How are you funding the purchase? All cash i hope.

If the right motivation to sell is there and you are offering a cashing deal, I agree with the other to make a lower offer.

This way you buy the property wholesale and you can then turn around and still wholesale it back to another investor or do a no-season refinance.

The max I would be willing to pay is likely 175K....
I would go in low with an all cash offer for 145K, depending on the sellers motivation and how long it's been on the market. The longer it's been on the market the lower i would offer.

I would give them an opportunity to counter it, and mostly the going to come back somewhere over 200K, but i still would move from 145K, i would just explain to the seller about my repair cost and more important, that i'm paying ALL CASH, also can close in 7 day or less and I only use all cash for a really great wholesale deal. @145K i would be will to tie up some cash to buy your home. Once the come down under 200k, I would go up about 5k to 10k or less, depending on how much they came down under 200k. Create a WIN/WIN situation for both the seller and yourself.

Seller gets:
1. a quick close,
2. cash in hand
3. gets rid of the property that's a pain quickly
4. may even save their credit if it's a foreclosure.

and i'm sure you can think of more benefits for the seller wholesaling their home to you.

You get the property for a great deal, and your able to wholesale it to an investor (as they say w/some meet still on the bone) or even do a non-season refinance. Which ever exit best fits your plans.

Always Create A WIN/WIN situation!!!!

Hope this helps,

De'Von

Okay so let me understand your logic. Whatever a property is listed at, that is what we assume the property is worth at this time in the market even though several similar houses have sold for more. This was their first open house so I don't know how long the house has been on the market. What my question is, how do we know what a good deal is or not when looking at the sale price only? I'm just trying to get a better understanding so I can put this all into action. I'm tired of sitting behind a computer reading other success stories. I want one of my own darnnit! lol

I've been looking at the totalview website with all the properties I see for sale and that is where I get all my info, as I do not have a Realtor yet. It shows similar estimates on the FMV from Zillow and epprasial.com along with comps from the area and so on. Do you think I should rely on this site to come up with offers?

for instance. I just came across another property that's listed for $78,000 and on totalview it says it's estimated at $217. That's a big jump and I don't know if I should get excited about the numbers or not.

Please HELP!

Thank you so much. That actually did help a whole bunch! Thank you for all the details too. I really appreciate it!

People what are you talking about I'm willing to bet that the Realtor had a hell of a time convincing them to list it as low as they did. And don't you think a retail buyer will be trying to offer less than list. I assure you it will not be .54 cents on the dollar.

You can not turn every house you come across into a deal that suits your ideal of a win/win where is the win for the seller in your theory.

That's very true also. 145 is a huge leap from 268 lol. Maybe I should look at properties that have been on the market for longer and listed at a lower amount. But can someone please answer my question about the Totalview website? What do I tell the investors what the property is worth. Should I just tell him/her the listing price?

Thanks a million times!

Christa many thing go into figuring out the value of a property but you need to start at comps 60 days or less old because prices keep going down. Then you need to know what the repairs if any will cost, then you can start to work backwards into your offer.

Do you even know if the seller has a mortgage on the property, maybe they where already selling for less then they own, and then the bank would have to approve it. There are many factors to be aware of.

Don't always think that by saying you will pay cash if they take your low ball offer. Do you even have the cash? Besides the seller always gets cash if not from the buyer directly by the bank that is giving the mortgage.

No I haven't talked directly to the owner. I just saw the property and wanted to check into it before making any moves. I do have a couple of cash buyers on my list who are willing to pay cash for a good deal. As far as getting comps and such, How do I go about getting information like that? I don't have a Realtor yet. Is there a way to have access to that kind of information w/out one?

Also, eventually I would like to get a Realtor on my team. How do I convince one to work with me if I'm not really purchasing the properties for myself?

Thanks so much!

Christa theirs to much to go over like this back and forth on the post. So go to my website and get my # and call I'd be glad to go over everything that I can offer as advice. I will be glad to help.

Cool thanks so much!!

I think making a "good" deal sometimes is subjective. There are so many moving parts that there may not be a perfect number. it depends on what you are planning to do with it, how quick you can get rid of it, what repairs are needed, personal or investor use, and lots of other things.

For example, if you could put it under contract for 228K and sell it tomorrow for 233K CASH, then an assignment deal would be fine. But if you have to put it under contract for 228K and do repairs of 15K and have holding costs of 5K for a hope of selling it under FMV at 250K; then the deal would not be fine.

Each deal has to rise or fall on their own merit AND every real estate deal is different.

It can be exciting to look at the potential profits.
Also look at the potential risks.

How is your buyers list?
How fast can you assign this property and in a steadily declining market, what is your margin if you have to hold 30 days, 90 days, 180 days? Will your deal still have a profit if you cannot assign it within the first week? What is your exposure in the deal if you are still holding the deal in 30+ days?

Unless you have a strong cash buyer list, and you have a great profit built into each deal, and can show the profit necessary, you may find yourself holding.

All buyers will tell you they are in the market for a good deal. Do you know what parameters they need to make a quick decision? There are too many good deals out there for them to pick up a marginal deal from an investor who they may not know. Do they have a history with you of providing them solid deals? Let them tell you what they need, and deliver above and beyond what they want. Listen to their profile of a good deal. They have the money. They have to want to give it to you. For a good deal that meets their buying profile. They will tell you how to present it, they will tell what profit margin they will buy. Remember it is about what they think is a good deal, not what the person bringing it to them believes. Let them tell you how to present it with the profit margins they want.

And they will tell you.

Regarding getting an agent, start talking to agents. Be transparent, tell them what you want to do and find out if they specialize in what you are trying to do.

Happy Investing!

If you already have a few cash buyers on your list; what have they asked you to find for them? if you know what your buyers want, it's easier for you to go out and find the properties that they want to buy.

wishing you success,

valerie

Thank you everyone for your responses. I think I have a better idea of what I need to do. I do have a few cash buyers on my list who just gave me their criteria. They are all different, but all willing to pay cash for a really good deal that meets their criteria. I am very new to all of this and starting to make some moves in the right direction. I think I'm going to start looking for distressed properties that are FSBO. Post some bandit sighs with my number. Talk to everyone I know and pass out business cards. Maybe join an REI club in my area to ad people to my buyers list. Start interviewing real estate agents. I know something good will happen once I get my foot in the door. I'm really excited and nervous at the same time. But I have to start somewhere. If I keep doing what I'm doing, I'll continue to have what I have, right? Gotta take action! Fake it 'till I make it!!

Again thanks everyone for all your help. I look forward to my first success story!

Christa

I hope my last PM I sent helped you, too. If you didn't catch the conference call with Dean Graziosi & Matt Larson last week, I highly recommend it. Matt talks about HOW to present your ddeals to investors, and how to be a full-service investor wholesaler. You wanna make it so the buyer knows what taxes are going to be, how much rent he can expect, what his equity wil be when he buys the house from you... it's a really cgood conference call packed with great info, and you can listen to it from the main page on the website. Eventually you wanna make it so all the buyer needs to do ask you when they can see the house, and when they can buy it. The less homework they have to do, the better. THey will respect you for that, too. And, they will come back for more.

Christa87 wrote:

Thank you everyone for your responses. I think I have a better idea of what I need to do. I do have a few cash buyers on my list who just gave me their criteria. They are all different, but all willing to pay cash for a really good deal that meets their criteria. I am very new to all of this and starting to make some moves in the right direction. I think I'm going to start looking for distressed properties that are FSBO. Post some bandit sighs with my number. Talk to everyone I know and pass out business cards. Maybe join an REI club in my area to ad people to my buyers list. Start interviewing real estate agents. I know something good will happen once I get my foot in the door. I'm really excited and nervous at the same time. But I have to start somewhere. If I keep doing what I'm doing, I'll continue to have what I have, right? Gotta take action! Fake it 'till I make it!!

Again thanks everyone for all your help. I look forward to my first success story!

Christa

In Hayward this sounds like a short sell to me Christa. This will change a lot about how you would make this house a deal. The best thing is you came to right place to learn. Some of the people helping you out here are the best on this site.

Not every house for sale is a good deal for you and me we have to make them a good deal. The more you are on this site and the more you understand about REI you will know soon what make a house a good deal or not.

Steve.