Important Qestion 4 every dg member!! PLEASE ANWSER!!!

The first question you should ask your self first in finding a good deal is this:

Where are my buyers wanting to buy at? You can have a great deal and all the numbers work but if your buyers are not buying there then it does no good.

Once you have that answered then you need to ask your self and your buyers:

How much do they want to spend? How much do they want to profit? Do they go by percentage or a flat amount? Are they looking for a rental or a flip?

When you have that answered then you can consider what would be a good deal.

Example:

Buyer: Likes SFH's, in the southern area of " city, or zip code, or what ever",
The want to profit at least 20K. Only like 3bd homes and has to have a basement. Minor rehabs are ok but nothing major like foundation problems.

OK so I look in this area. I look for 3 beds with basements. I know my buyer wants to make 20k so here is how I run the numbers.

The house is listed for $89,900, The compareables show that if the house was in perfect condition it should retail sale for about $100,000. It needs about $15,000 worth of repairs.

ARV= $100,000
Take off 15% for closing costs, holding costs, along with other costs
$100,000 x .85 = $85,000
$85,000 - ( repairs ) $15,000 = $70,000
$70,000 - ( his profit) $20,000= $50,000
$50,000 - ( your profit) $10,000 = $40,000

Your offer $40,000.

This is just one example. There are many other offer formulas especially for a buy and hold investor the numbers will be different.

Hope that helps.

Here's a simple answer for your question. As long as your buying 65% or 50% below FMV = Fair Market Value minus the repairs that are needed your fine. It doesn't matter the location or the condition of the home. You will just need to know what you will do with the property once you have it under contract. assign it, buy fix and sell, or hold and rent it out.

ex: You get a client that has called you about a house that he has for sell that is worth about 100k. You negotiate him down to 50% minus the repairs. The house needs about 10,000.00 in repairs. Your purchase it at 40k and you assign it to a cash buyer for 50k. You will then walk away with 10k.

Bottom line is, as long as you buy 65% or 50% below FMV you will make money. Just make sure to start off at 50% when negotiating. You don't want to purchase too high or you will lose money.

thank you for your comments your examples were great, this is why i love this site, everyone is very helpful... i wish you all the best success with real estate..

I just wanted to suggest that, (while you should always build your buyers list) if you find a deal that is good enough, such that fits the criteria in the examples above, you WILL find a buyer as long as you work your tail off advertising.

I just don't think a great deal should be turned down because you don't have a buyer in place.

Use yellow bandit signs 18X24.

You can get them at http://victorystore.com/ or a many other sites.

I put 15 out on Tuesday and I have recieved 25 calls in 3 days.

hand written:

I BUY HOUSES ANY CONDITION and your number

Place them at the busiest intersections in your town.

Matt Larson suggests to put them near all Mcdonald's and Wal Marts.

IT WORKS!

I have one seller that told me twice that she is what you would call a motivated seller.

If you can't afford signs now, use printed copies of hand written flyers with the same message.

And I suggest using your own number, I switched from my recorded message to my own number and WAY more people left messages.

Also, answer whenever you can.

And use the formula above to make your offer.

READ, STUDY, READ, STUDY. Then take action!

I would suggest sticking to one simple strategy to start out. Trying to focus on several is just too overwhelming for most people.

Just some things I have learned that work.

Hey Ismael, I thought you were in the Success Academy?

I don't know if you're aware of it but you do not necessarily have to do the lessons in order.
Jump right to the lessons on income analysis, what's it worth and others.
Call the advisory line, you've paid for it.

Understand I'm not saying these are bad questions or nobody will benefit from them but you paid for an education with the Academy, utilize it.

To your success!

i am in the success academy, and i did do the what its worth video i just wanted to know everyones opinion on what is a deal to them so i gave an example so that everyone can follow. at first i was confused now with everyones opinion im not anymore. so thanks everyone for your help.. and im taking advantage of the academy and the RBBP, im working on 3 deals right now and should have my first deal under contract by next week... im excited.. well thank everyone!!

Great that you received 25 calls from your bandit signs. While you suggest using your own local #, investors may want to consider using Google voice. You can set up the google voice # to transfer to your local #. If you choose this option, use your local area code and not an 800 #. Using your local # may create problems if your city has ordinances that do not permit bandit signs. They can trace the bandit signs back to you with your own #; with google voice they cannot.

Also, what was your response when you had callers wanting to sell their homes? Did you receive positive feedback from the caller and if so, what was the feedback?

Thanks,

MW

Thanks Ben for that Real Life answer it realy but a visual perspective to everything I am reading in theory!

--Kathy

---"You have circled this mountain long enough. Now turn north."
(Deuteronomy 2:3)
--I was made for more than to be stuck in a vicious cycle of defeat.

Whole Heartedly Agree Mark but call the Advisory line before 3pm MST or you'll be on hold too long, tried it!

--Kathy

(SA student )

If I'm on hold for 2 minutes or longer I'll hang up and call the parent company directly and ask to be transferred to the real estate success academy.
Sometimes the whole Success Academy office is in a meeting and that's when you get the recording that their staff frequently attend meetings to stay up to date (something to that effect) but the recording never says directly "all of our advisors are currently in a meeting".

kmacias wrote:

Whole Heartedly Agree Mark but call the Advisory line before 3pm MST or you'll be on hold too long, tried it!

--Kathy

(SA student )

I have to agree MW:
In my town, bandit signs are a big problem because the inspectors take down the numbers on the weekends and call during their working hours. My REA group also preaches stealth while being reachable because of that. As suggested, Google voice should solve that problem.
You may want to learn from DG's Carol Stinson's experience. She said that her sign cost her a $5,000.00 fine. I'm in this business to make money not pay fines. How about you?

Just my 2 cents.

Andy Sager
DG's AndyS

kmacias wrote:

Whole Heartedly Agree Mark but call the Advisory line before 3pm MST or you'll be on hold too long, tried it!

--Kathy

(SA student )

Kathy,
I was forced to call later in the evenings because of my work schedule. I got through quickly every time. In fact, many times they would tell me during our conversation that "They had closed about 15 minutes ago so if I had any further questions...". Maybe calling a bit later might help you get through faster. It should also eliminate them being in meetings as suggested.

Good luck

Andy Sager
DG's AndyS