REO.s And Short's.. The More Offers We Make The More Deals We Close!!

Every property is different, how are houses moving in the area,what are the comps,who is going to be your end buyer.

You can make a hundred good offers a day but if you can't offer it to the buyer at a good price you will be stuck with it. So you need to do the research.

Lol, I'm a Buffalo NY Native myself. Actually went to high school there in Rochester at School Without Walls.. Lol I don't miss the snow Ill say that..
Of course research in necessary I'm really just searching for a common rule of thumb. I don't have the time to really dig into the research until the offer has been accepted due to the amount of offers that I'm making. And this would go for anyone using this strategy. We are essentially making offers in the blind knowing that the more we make the closer we get to that one that will be accepted. I'm just looking for a rule of thumb that will get my offer in their desk to be looked at and considered. I just want to get the most out of the time and energy that's being put in.

to the amount a bank will accept. In our area of Fl. two or three years ago
banks would jump at offers at 30 cents on the dollar of the judgement amount(the amount which they were owned). At this price you could buy, rehab & sell making 20% to 50% return on your investment with ease.
But recently it seems the banks are accepting only offers at 50%, 60%, or more the the judgement. This coupled with it harder to find qualified end buyers can make profit margins drop. Be careful to make sure you know your market, there is no set percentage.

Exactly what should be know about my local market?

Oprice when did you go to school with out walls, I was one of the original ones when the hippies started it in 1972.

You can't bypass the research, if your offers start getting ecepted and you can't get buyers because the price is to high you will be out of the game before you get started.

I understand, but if all my offers are well below ARV wouldn't that pretty much ensure me a safe position if one was accepted? So I seek to learn the golden rule of thumb. I'll be out and about this month making my rounds to the REI clubs so Ill be able to determine the average investors are paying but I'm still curious to know now.

There is a line between making a bunch of low offers so that you are safe and making an offer than will actually be accepted. Every deal is different. Repair
costs always are different, actual quick sell ARVs are always different, unless you offer on several properties that are within a couple of blocks of one another.
In Denver my Rahab buyers like to purchase at 70% or less of actual quick sell ARV, not from zillow or an appraisal, but what the property will actually sell for TODAY. So 70% of quick sell ARV minus the repair costs is where THEY buy. That means I need to buy at 65% or less of quick sell ARV minus repairs.
This strategy is for wholesaling distressed properties. There are many other strategies to acquire RE. But, REOs that go to investors at the low offers we make are usually properties the end buyer does not want until we get them and rehab them! Know which ones to offer on!
Then you must have POF and a copy of earnest money with every offer to be looked at! If an offer is accepted be ready to supply the earnest money!
Remember, 99% of REOs are not assignable contracts!

Michael Manghem
MD Home Acquisitions LLC

Michael I'm glad you steped up where have you been hiding.

I too am glad you came aboard Thanks Mike! Ok to re-cap 1) No assignable's. 2) Have that POF Letter and Transactional Funding Ready to go. 3) Select distressed properties 4) Identify Quick Sell ARV's.. 5) Make offers at ARV * 70 to 65% - Repairs and - desired profit. ? Correct me if I'm wrong?
Ok so then my next question would be am I sending my contractor in to assess every property that I make a offer on to determine the repair cost?

Michael your up again!!!!!!!!!!

Finishing one of my rehabs, all major work done, just need to get the final detail work done, final punch list with my contractor on Monday. These guys are great. Closed on this one the day before Thanksgiving and the rehab will be done next week, should have it listed Friday. $50,000 re hab done and listed in 6 weeks!!

Did not hit 20 for 2010! I tried but could not do it. I have a wholesale deal closing the second week of January so it was close! I have a 2nd re hab listed already, trying to pick up at least 8 properties in January. All I have to do is find them, my buyers are waiting. Need 2 more for myself!

Working with and mentoring 6 local new investors now. Seems like I'm adding 1 a week! Working with guys in Southern California, Orlando, Arizona, Kansas City also. I am keeping busy. 2011 the sky is the limit!!

Happy New Year,

Michael Mangham
MD Home Acquisitions LLC

today to check out another foreclosure. He told me he attended a meeting in Orlando regarding Fannie Mae properties; and the reason you don't see a big
discrepancy between listed price & a low sales price is because they are taking more BPOs into consideration & are only lowering the price at 30 day intervals.

i was watching dean show tonight he talk about a website were you look up the property the site tell you the value,how much renting for , how much property last sold for in area around property i have his book your town...but i need that site

with the strategy you are doing you;

1. Will burnout very quickly and lose the credibility of your buyers

2. Will have your offers ignored

3. Doing yourself a serious disservice

Do the work. Putting out 5 offers a day just to put them out is part of the reason why alot of banks and sellers stand firm on their prices becaue people like yourself, though your intentions are good, aren't taken serious.

Don't half-arse. You want a check, do the work for it.

Good advice Elix, how are things going in the big apple?

Me and Agent sat down and discussed this strategy in detail, I have since been focusing my effort on wholesaling and lease options, essentially just following the path of least resistance. I've been running a online and newspaper ad campaign with ghost ads for Tenant Buyers and for Cash Buyers. Also I've been running ads for We Stop Foreclosures. It's working leads are coming in at a rate of 3 to 4 per day. Mostly tenant buyers, which is fine because Im being fed pre-foreclosure notices as well. Ill be implementing a bandit sign campaign this friday to catch the weekend traffic. Its snowing down here in Atlanta so that should keep people in for the week.

Now here's a good question that Im going to ask here and else where: What is "Quick Sale Value" exactly? I have MLS access so Im able to run CMA's but no where in that CMA do I see a field or a term for "Quick Sale Value" I this some specific percentage off of FMV? I wonder. Also please check out my new website listed in my signature. I still have work to do on it but I believe its coming along just fine. Wish Everyone The Absolute Best..

http://metroatlantawholesalerealty.com

I agree with you 100%

Your questions don't reflect that of someone who's been doing this very long

I am a newbie Lol.. So take it easy on me. I've been at this now full time for close to 30 days. I've made this my core focus. Prior to this I did SEO and Web design. Regardless I've always been a serial entrepreneur so for me this isn't too much different. I'm familiar with networking, sales, marketing, and leveraging the knowledge of the professionals around me. So I can ask my agent for a quick sale value but that doesn't mean that I understand how she's coming up with the info she's giving me, especially now that I see the CMA's and how that's done. I just would like to have a understanding of the things that I'm talking about before I go running my mouth. And is there any place better than here to get a answer to my question? Would you be willing to answer the question for me? I'm sure your knowledge and expertise far surpasses my own, would you be willing to contribute some useful information to this thread?

....The Quick Sale Value (QSV) is the price you would need to list the home at to sell fast. Each area and home is different. However, here is an example: If you have a home that is 3 bedroom 2 bath and is 1,500 sq feet. Based on comparable sales ("comps") homes maybe are selling at $150k in the past few months based on this size, age, etc.

Currently, there may be 5 homes listed for sale in the same area around $145k to $150k, a quick sales value (a price to list the home to sell it fast) might be $134k to $139k. The QSV is a price to sell the home faster based on similar comps of what has sold and what inventory of similar homes are on the market. Your local realtor should be able to give you an idea of QSV for each price point of homes you are considering. I hope this helps. Good luck with real estate investing. Believe and Achieve! - Joe

That part I understand, really I was just thinking that it was a specific percentage off of the FMV that would give the Quick Sale Price. Essentially it sounds like I just view the Quick Sale Price as any number below what the lowest price home is selling for in the area of my property? Again this is always for the purposes of making offers. I would like to pass that savings on to my rehab buyers, knowing that I locked up the prop. with the quick sale price in mind.

that you're putting the cart before the horse in regards to your methods

And it also seems like you really don't have a strong grasp of the basic fundamentals. If I am wrong I stand corrected, but what I would do is hold off even thinking about making offers and learn on your own, reading and researching and asking questions on here.

It seems like the way you're headed is the equivalent of jumping in head first into an empty pool; you'll go frantic to make all these offers and when little to none clear, frustration will set in. Take your time. Deals aren't going anywhere.

Endless opportunities in this business; don't blow them trying to speed up a process not needed

I'm a avid Dan Kennedy reader and in his book Wealth Attraction For Entrepreneurs he actually recommends jumping in head first.. Lol I refuse to be one of the many who sit here staring at my computer screen while there's money out there to be made. Analysis Paralysis is what they call it. My agent, my lawyer, and the rest of the members of my dream team are there for a reason. This stuff isn't that difficult, buy low sale low, know my exit before I get in and if the numbers don't work don't do the deal. If I don't know the numbers my agent will give them to me, if I doubt her Ill call my other agent. If I'm applying a strategy that's questionable I run it by my lawyer who is a results driven kinda guy. He get's paid to tell me HOW to go about doing what I want to do and not for telling me that I CANT do it. So I Thank You for taking the time to give your valuable advise but I apologize, because I'm jumping in. The water is full of money, and there is no better way to learn than by doing.. Also Deans Books and the Edge Dvd's are nothing to sneeze at either. The techniques are there and they work. One must have the initiative and determination to work them though, NO MATTER WHAT!! No matter what my brother, sister, mother, wife or any other nay sayer has to say. No matter how much I dont know, or how inexperienced I am. Dean tell us how to over come that, Him and my Lawyer who is the greatest, Love You John!!

SOME AGENTS MAY BLACK LIST YOU...INCREASE YOUR CHANCES ON ROE BY GOING WITH LISTING AGENT YOU WILL BE SURPRISED HOW MUCH MORE INFO YOU WILL FROM SELLER'S AGENT... A LOT OF AGENTS ARE DOUBLE ENDING MOST OF THE ROE DEAL BY DOING IT THEMSELVES OR USING THEIR OWN BUYER'S AGENT THAT WORKS FOR SAME BROKAGE

I have since stopped making such random offers, now I am more precise and my volume of offers is way down. Ive began to focus on Lease options and assignments much more, a lil less labor intensive and almost just as profitable. My lease options are marketed to a more affluent demographic here in the Atlanta area and I believe I will have success with that. And you are right agents and broker will do that. But I do understand, for them times have changed and they of course are doing what the feel they have to in order to change with it. I'm fortunate to have two straight shooters that I work with. Thanks for taking the time to post.

I see you talk about what percent of ARV should you offer. I caculate my offers usuing a different method. First get a minimum of 3 comps in same area. Determine an average price per square foot of FMV.. See using before repaired fmv instead of it's after fixed up ARV.As that is the condition you are buying it in. Take the house square foot times the average price per square foot you calculated. Subtract repair estimates, subtract, closing costs, subtract 3 months of holding costs to cover mortgage,insurance, and utilities, subtract amount of profit you want to make. Then offer a little less than what's left over from your estimated FMV to have compromise offers. That is how I decide what my REO offer should be. That will let you know if the deal will make you a profit or not. Indiana Jones had some great info. Good luck: Layman T. Scott President of Scott Housing and Rentals,LLC

Thank You Mr. Scott, now that's information that I can take to the bank.. Your time and effort, as well as the value of what you contributed is most appreciated.

I agree with you completely on the fact that you should just jump in. I had no idea what I was doing but took Dean's strategies and just did it. I got my team together and am now offering on quite a few properties and am closing on deal #1 this week where I should make about 25-30k. I feel that you learn so much more by doing it as opposed to overanalysis paralysis by just reading about it. Good going and keep it up! I actually know another wholesaler in Macon GA PM and maybe I can get you too hooked up...