30 Days Quick Cash Formula

Talk about pound foolish....
I just got back from my meeting with the agent. I explained the problems my mentor had with the exclusivity contract so we went to work on a compromise. I reminded him that my Mother was an agent so I was looking out for him as well as myself. The biggest sticking point was his commission if I do a FSBO. He told me his idea for that and I explained that he was screwing himself by attaching a flat fee addendum. I explained that I would pay him more if I made more,however, on the other hand, my partners would be within their rights to only pay him his flat fee should I not be part of that particular deal. I explained that I was looking out for his best interest and wanted him to be well compensated. He spoke with his broker and we successfully came to an agreement. (Score 1 for the team)

Next I explained that my partner wanted a shorter time frame for the exclusivity but said that since he was willing to compromise on the big thing, I would not push the issue on this. He looked relieved. (Score 2 for the team.)

We signed the contract and I proceeded to show him a CMA report sent to me by a coach from the success academy. He said he could do this type of report. (Score 3 for the team.)

I proceeded to show him 4 properties from the list he sent me and asked that if they were still available, I'd need a CMA on them. He started to do the research while I was there then stopped and said " This is rather unusual to do a cma at this stage. I can give you a sold report but the one you asked for is too elaborate and time consuming for this stage of the process." He explained that he usually takes people to see the property first before doing any reports. I explained that even if he spent 1 hour doing these reports, it would be less time than taking me to see all these properties and how I was saving him the time and expense by bypassing that step because I was more interested in the numbers than I was in the house. He continued to say that once someone is interested in a property, then he performs a CMA report after they show him POF. I immediately opened my folder and whipped out my letter from Coastal Funding in the amount of 150K, (twice the amount of the houses we were looking at.) He read it carefully and said that this letter wasn't good enough. He would need to see the financials from the person whose signature was on the letter. That's when things went down hill.
I explained that I get money from different investors and am not going to ask each one or anyone for that matter for their financial records. I was showing him a letter from a funding company that funds real estate deals. If that wasn't good enough, we had a problem. He then went on to say that no agent would accept this letter as proof of funds so we had a problem.

I had come prepared to walk away with no agent and that's what happened. I told him to tear up the contract because I needed an agent to be part of my team and what he was complaining about the most was counter productive to the team's goals. He tore up the contract and dismissed me by just going back to looking at his computer screen. I took the higher road and put out my hand to shake his and thanked him for his time.

Talk about pound foolish! He didn't even give it a chance. Maybe that's why he USED to work for Keller-Williams.
Oh well, I guess it's FSBOs or bust!

Andy Sager
DG's AndyS

Hi,

I guess I'm needing encouragement here in San Diego. I've heard thus far nothing but negative comments from folks in SD about wholesaling. I've heard alot of it from agents, I've heard it from a previous, DG student, now even from Carol Stinson. Everyone says the market here is still not at the bottom and that its difficult to get really inexpensive real estate property here. Also that the banks are not budging on their prices. I'm having a rough time finding an agent willing to do this with me.

I need advice from someone here in San Diego

Thanks

So only re agents are able to access the information necessary to run a comp or a CMA report? I didn't know you needed an agent to run comps. I've heard of exclusive buyers agreements before, which is an agreement that no matter what property you buy or sell, FSBO or listed, you have to pay the realtor a commission. Which sounds ridiculous to me. Why pay an agent for essentially doing nothing? I was asked the question by an agent, do want to sell on your own or through a realtor? Andys, do you think this sounds fair to the agent? If you bring me a deal through the MLS, I will sell it through you. If I find a FSBO, I will market the property on my own.

Thanks!

Ruben

Thanks to all that made suggestions on how to handle rude people. It is encouraging to hear from other people how they handle the same situation. And yes Elix, I did move on and got thru this.

I did not use a script because I believe it make me sound phony to others and I do want to sound genuine. Another idea I have is getting better ideas from some of the scripts that others have used just mainly to help me touch on points that I need to mention.

I do talk to mostly wholesalers and some agree to sign contracts with me when my partner sends properties they are interested in. Last Friday, I talked to a couple of young guys that are really enthusiastic in St. Louis that want me to find properties for them and they are hoping I will buy from them.

I also would like to know what people think of the We Buy Houses ads on the internet. I know some will say they don't pay much but if there is something else I need to know about them, let me know.

agent that is with it. This is old school....very old school, and you dont have time to educate him. Good luck lady!

Here are the numbers from your(Rays) buyers perspective.
By price $47.000
Rehab $12,000
Sell it for $95,000
Selling costs to your buyer ( This is what new investors always forget)
Commissions, closing costs, taxes, insurance, utilities, cost over runs etc. based on a 90 day hold = 10% This is if the buyer is 100% cash. If he has private money or hard money costs they must be subtracted to determine NET profit.
So, cash deal, 10% = $9500
So actual Net profit to your buyer if he is cash with no money costs is:
$26,500!! IF it sells for $95,000 in 90 days.

Michael Mangham
MD Home Acquisitions LLC

Can someone tell me all the members that a power team should consist of?

I have a question and I was wondering if someone has faced the same thing. I am submitting offers with a agent on a REO that is willing to do everything. She is a amazing agent, however, she says the the Banks here In California that are holding the REO's wants to see a Bank Statement not a POF from somewhere like coastal-Funding.com. Here is what I was told, "Also the only problem with those proof of funds letters isn't enough for our offers to be looked at. The banks are pretty strict and need a bank statement for these REOs"

I know they work on same, and not on others. How would you go by handling this small set back. Anyone please help and coaches please help too, Funds from those sales are my ticket to the Success Academy.

_______________________________________________________________________________
Darrell Ford
Lifetouch Properties LLC
www.lifetouchproperties.com
"Failure equals my Death, So I shall Not Fail."

How is anyone finding a banker to loan you money? Since the property you are buying is consider an investment property. Do you use a commercial loan officer instead of a Mortgage loan oOfficer? Especially if the house needs some work.

Trying to find a banker? Any ideas.

Thanks
Shelly

Cheer up! First, you're in high priced market as I am (only on the other coast). Assuming that you have your list of cash sales, you could analyze that data to determine the price-points at which the investors are buying in the area(s) where you're trying to do deals. It's possible that the investors in your area are buying with tighter spreads as they are doing here (at least in certain neighborhoods).

Second, Foreclosures (and other MLS listed deals for that matter) aren't the only game in town. Check out some FSBOs, probates, tax sales, and other deals. If the Realtors are giving you the blues, then leave them alone for a while, and do some co-wholesaling. Go to the SD county courthouse to check out some eviction cases; you might meet a frustrated landlord or 2 who might be willing to do a deal with you. You don't need an agent for that. You also don't need an agent to cold call some of the rental ads. Perhaps, you did that only for potential buyers at first, but you could also do it for potential deals. Call several of the escrow companies in your area, and ask if they have any transactions that recently fell out of escrow. Those are another great source for potential deals.

Third, you don't only have to wholesale deals to investor buyers. You could also wholesale them to retail buyers. For example, you could wholesale a deal with creative financing to a retail buyer.

And the list goes on. . . .

The irony with all of that POF rejection nonsense is that I know that most institutional buyers (ie Wall Street hedge funds, insurance companies, pension funds, etc), and many serious players--especially in NYC--won't "paper up" (or proof) before having received a copy of the ratified P&S. (I learned that firsthand on a commercial deal in Vegas a few years ago.)

Since then, I take a similar approach. I tell agents and wholesalers upfront that I won't "paper up" until we've executed the P&S. I've had several agents try to persuade me further: they usually explain that showing my POF is the way to show that I'm serious. I counter with 2 questions: how do I know if that bank is going to negotiate in good faith with me? and has he/she ever represented any pre-qualified buyers with POFs on deals that eventually fell out of escrow due to no fault of the buyer? (I've never received a "yes".) More times than not, the agent says something along the lines of "I see your point."

Here's a technique that I learned from Tim Mai on this: I assure him/her that I won't waste his/her time. I sometimes ask for a compromise: to put a flex option or P&S on the property for long enough (typically 48 to 72 hours) to run it past my partners. It works for me roughly 80% of the time.

Hey guys, I'm implementing the "buy & hold" strategy presented by Ali Safavi in The Edge 2011.

The criteria are:
1) 30+ Cap
2) Lease tenant in place
3) At least $10k in instant equity
4) Property management in place/on the ground
5) Positive cash flow

My question is: If you find properties that fit the criteria in an okay/so-so neighborhood, would you grab it? I'm sending the list out to my wholesalers, but I'm personally seeing properties like that in the neighborhoods that I wouldn't wanna live in. I feel like it won't be worth all the trouble and worries you'll get, but just wanna hear your thoughts.

Thanks!

Thanks dp2 and Cali Troy for the encouragement. I think when I heard Carol say the same thing that everyone's been saying, I lost heart a bit. Maybe it gave me an excuse to through in the towel on the program.

I'll keep at it. I have an issue with fsbo's, I've been looking there, but many of the sites give you the number of an agent even though it's supposed to be an fsbo site. Also all of their properties are way above the fmv.

I will try the rest of the suggestions and see how things go.

Those properties aren't for the faint of heart. They're typically in low-income neighborhoods; many of them would make great Section 8 rentals. Every neighborhood has its own set of challenges; yet, some landlords naively purchase properties in those neighborhoods without having done their research ahead of time. The right kind of property management will make the difference between making one of those properties a "cash cow" versus a "I want out now" deal.

You'd need to market those deals to landlords who already like to own properties there.

I grew up in this part of the business, so I know it very well. Feel free to bounce more questions off me on this.

Hi Ruben:
I need to clarify a couple of things. First off, depending on who you listen to, Comps from an agent's mls are going to be the most accurate. Sites like TotalViewRealEstate.com will give you comps but there is talk that they may not be the most accurate or up to date. What I have been hearing is that it varies from state to state. Here in Florida, non of the REIA members in either of the clubs I go to trust Zillow as being accurate. I've been told that Zillow can be manipulated by a seller to say that their property is worth more than it truly is. TVRE uses Zillow's numbers as well as other online appraisal sites which is why I don't use that site for my comps.

The most recent buyer's who have responded to my letters want properties in other cities near by to where I am but I have never been to these towns. I wanted an agent so that they could steer me into the right areas and away from the troubled areas.
The benefits of the agent was that I got a cash sales list for the past 120 days so I was able to locate where the investors were buying.

I'm not sure how many Exclusivity contracts are out there but the one I was given stated that I was responsible to pay a minimum commission percentage if the seller didn't offer that amount. Also, I was to inform the agent of ANY property that I was contacted on. Also, any property that my agent gave me was exclusively theirs for 90 days even if I had terminated the contract. I didn't agree with the contract which is why I negotiated the terms. We started out with him doing nothing for me if I do a FSBO and ended up with him doing a COMP or CMA to which I would pay him for his work. Fee to be negotiated. Where he was wrong, I believe, was that he wanted to get a flat fee for doing this. What I proposed was that I would pay according to how much I made on the deal. The more I made, the more I would compensate him. What I think annoyed him was that he thought I was unable to do anything without him. He was very wrong. I explained that I wanted to build a team and make sure that every member on my team was going to make money. He started out okay with that but today was more about the me,me,me and not the we,we,we which is why I said NO DICE.

What I would suggest to you regarding your agent, try to negotiate a compromise with doing FSBOs. If you plan on buying and selling them, tell your agent that you will give him a fee for his front end work and he will make his higher commission as the listing agent when you sell. This way he has a vested interest in you getting the deal done. My agent was more of just a buyer's agent so I didn't have that ability to negotiate.

The mentors on the RBBP have all suggested that we not sign an exclusivity contract. I called my coach at the success academy and explained my situation to which she said that if I felt comfortable with the contract, I should sign it. I didn't feel comfortable after reading it which is why I negotiated less stringent terms. As you read, it all turned out for naught.

All I can say is that EVERYTHING is negotiable. Just remember to be fair. If you screw the agent, you lose more than the agent does. I just didn't like the agent screwing me.

Hope this helps.

Andy Sager
DG's AndyS

I also heard that same call from Carol Stinson but what she also said is that there are pockets in every market. That is the case here in SD. There are pockets where investors are very successful. Your 90 day SOLD for CASH list from an agent will reveal those pockets. Carol also suggested, if your own market is too hard, go outside to other markets or other states if need be. You can make it happen. Also, I remember sending you info on the local REI club meetings. Get yourself there. Get around people who have the same goals and you will begin to SEE and FEEL how it can be done! There are two major REI clubs in SD. SDCIA and FIBI. Get to them! You can do this!!

Hey, guys,
Just an update on what I've been doing.
I told my agent exactly what I'm planning on doing,
which is shooting multiple low offers on props,
that have high likelihood of offer being accepted,
and he is all in.

I'm glad I just told him how it is.
So we are starting making offers right now.

Also got 2 more people from Graigslist, one is a buyer
in Silverlake and another is broker who has cash investors,
but don't have time or knowledge to find great deals.

So that's what I'm gonna do

Thanks

Dennis

Hi Ogal,

I'm glad you are posting again. Thanks for sharing your story. Discouragement is a tough one because it tends to beat one down, but it's great that you are coming back engaged. Your persistence WIll pay off. Just keep following the program, even if it takes longer the results are so worth it. You have encouraged me too by recovering from your setbacks! I wish the best to you, and hope you will keep everyone aprised of your progress. Hang in there!

Sincerely,

Northwest Susan

"I can do all things through Christ who strenthens me". Phil. 4:13

Appreciate the info. I'm currently trying to get my re agent in place. Sent some emails but no response yet. Please keep posting your experiences with re agents, they really help.

Thanks again!
Ruben

Have you tried insiderscash.com? They will give you a POF and a letter stating a certain amount in an account that you can use. Fortunately, you have an LLC which is they only way a person can use that website. Good luck and let everyone know if it worked for you.

Yes I am using insidercash for my other offers, However some doesn't want it, they want like from BOA or Chase. So I am looking for hard money loans now.

I'm getting the same response from my buyers (who buy-and-hold) regarding a prop I have under contract. It meets ALL other requirements (at least 3 bedrooms, basement, garage, central air, etc) but since the street it's on has a bad rep a couple of city blocks away (this is the 27th block, and this street has a bad rep around 13th street), no one is willing to bite!

Here are the numbers:

Selling price (includes my fee): $27K
Estimated Cost of Repairs (materials + labor): $10,500 (less if doing the work individually)
ARV: $63K
Rents for: $550-$600 per month

I'm going to start calling For-Rent ads in the paper to market to other landlords and post flyers. Today is only day 3 of the 14-day "free look" period as specified in my contract (inspection period) so I'm doing okay w/time.

I've been deligently putting out bandit signs here in diego, and someone has been deligently coming behind me taking them down. Some dude called me asking how deep are my pockets, do I have cash? Very rude and aggressive. I listened to him go on and tried to be polite etc. Finally his tone was too much to tolerate and So I told him basically it was none of his business how deep my pockets were or any other aspect of my business. I told him if he had business then state it otherwise get off my phone. That was followed by the click. (Dial tone) Boy I guess there's lots of competition here.

Keepin At It,
Karemah

I guess rude people are everywhere, I talked about this a few days ago and some of the responses may help you too. Good luck and keep at it.

Thanks Joyce.

I didn't see your post, but yeah you're right. I'm sure San Diego doesn't have a monopoly on rudeness. I'll read your post and replies.

Karemah

Thanks Joyce.

I didn't see your post, but yeah you're right. I'm sure San Diego doesn't have a monopoly on rudeness. I'll read your post and replies.

Karemah

I blissfully neglected the #1 rule in the real estate business: location, location, location!

Instead of calling all For-Rent ads, try finding people who have bought houses in the same area -- those landlords are HIGHLY qualified. For me I'll have to find flippers in the area since the deals are not amazing rental props. Let's keep at it Michelle! Take all the NOs in the world until you get a YES!

This feed was very helpful. I just registered.... I'm currently looking for a REA. Wish me luck.

dp2, do you know if Ali was buying properties in those neighborhoods in Cleveland? I've been looking hard, but getting 30+ cap rate on a property seems to be pretty tough even if you're working with many wholesalers/asset managers. The only possibility I see is in those so-so neighborhoods.

I'm planning to hold them myself mostly, might not be a good place to start with. Looking at this deal, estimated positive cash flow of $200 per month for a possibly $80k townhouse. If I utilize some no-money-down strategies I'll be able to get huge ROI, and I could get hold the property for a few years and possibly sell them for a profit. In addition, if the value is right, I could find a small local bank to refinance it and pull out the cash to get another property. At the same time, I could keep using the same strategy to acquire more properties, the cash flows add up!

What would you do? Feel free to point out the flaws in my strategies

I'm calling for rent signs and we buy houses signs as well.
So far added another buyer to my list.
I'm also looking to go to REI club.
Moving forward all the time.

Thanks for all motivation, guys

Good luck, everybody.

Dennis