$3500 with the 25 to 1 MLS offer strategy

I am learning a lot from your posts.

Susan do you recall the 3rd contingency that you used on your contract?

Thanks,
Litia

Thank you so much for sharing your experience and success with us. It motivates my wife and I to know that it can be done >

Here are some details about the contract we use:

It is the standard oklahoma state board of realtor contract that all realtors use (and love).

Closing in 45 days. (Note, for this deal, we did use 30 days, but 45 is better...a couple weeks for you to find the buyer, a couple weeks for them to get their cash in order, a couple weeks of slop. Seller may negotiate down, which is fine, but we'll be starting at 45 from here out.)

There is a section called "Additional Provisions" to which we add the following 3 contingencies:
- This offer is subject to approval of Buyers Associate within forty five days of acceptance.
- This offer is subject to property inspection by a licensed home inspector, the results of which must meet Buyer’s satisfaction.
- This offer is subject to Buyer’s walk-through inspection and/or Buyer’s Partner’s walk-through inspection and acceptance of same delivered to seller within forty five days of Seller’s acceptance of this offer to purchase.

And that's it. Buyer pays buyer's normal/conventional closing costs, seller pays seller's normal/conventional closing costs (which in OK does include realtor fees...negotiable, of course).

Signed as "Lobdock Properties LLC and/or assigns" and shipped out at a clip of 5 to 7 per week. Every week.

Stop sweating the details, worst case is you might not get something just right and learn something from the mistake. Maybe that's the best case, now that I think about it.

Steve

Lol yea its easy not to sweat the details with a llc. I looked into getting one set up and can't spare the $1200 my lawyer wanted. Though thank you for providing the all the details you have. I know others and myself loved reading every word. One more time, congratulations and thank you. On a side note because I'm just so excited my realtor finally finished dealing with the hospice issues regarding his father and just set everything up today so I will receive the deals through the mls with my criteria on auto drive to my email box from now on to view decide and hit him back with my offers to put in using this 25-1 method now that I know every detail I felt I was lacking before. I hope that didn't sound like I am heartless, but after a week I don't feel like I wasn't sympathetic. I was professional and told him to take his time last week on Sunday and we would talk on Monday (seven days later). So now hopefully I can get some freakin offers in via mls lol.

This is awesome information! Thank you so much for sharing!

You don't need an attorney to set up an LLC and you certainly don't need $1200 to set up your LLC. You also don't need an LLC to start making money at real estate.

You say: "yea its easy not to sweat the details with a llc", what do you think the LLC protects you from in an MLS listing that you as a private party are subject to? If the contract falls through, the ONLY thing you have on the line is your deposit and you don't get your deposit back if your an LLC, a corporation, OR a private individual.

You're making this way more complicated than it is. If you want to learn to do this stuff, you have to quit being afraid. And, if you want an LLC, if it makes you feel better, then go on line, pay $75 (wihtout an un-needed attorney) and whaaalaa! The reason we have an LLC (we didn't have one until deal #2) is because it makes tax season friendlier and also, once we end up owning several properties, it's better to not have them in our private name. If you are just wholesaling, you are not risking anything.

-Susan

You say that "...we usually do a bit more work with the numbers." What else do you do? Go over the comps? Just curious.

Thanks,

If it were me, I'd just take the list price and offer 50%. That is also what Matt Larson does. But, my husband is a numbers guy and likes to make sense of his offers, so he takes the comps in the area to figure ARV for the property, then subtracts estimated repairs (which we still are not good at, but we're getting better, estimating by sq ft is not a great way to do it), and then takes 60% of that number to give us our maxinmum allowable offer.

So....

House is worth $100,000 using comps in neighborhood after all repairs are made
We estimate repairs to be $20,000...that takes us to $80,000 and 60% of that is $48,000. So, we'd probably go in with an offer of $38,000 and give ourselves room to negotiate up to $48,000. If the seller will only go as low as $50,000, then there is no deal. If the seller will only go to $48,800, no deal. If the seller will go to $48,000, deal!

The reason I say not to worry about this before submitting MLS offers is because you are shooting from a shot gun hoping one hits a target. That means, you are throwing out offers to see who is ready to sell at a greatly reduced price. At that point, you don't need to justify your numbers. Once you get a counter offer on your offer, then you do this formula to know how high you can go before it's not a deal anymore. This also allows you to submit offers without even seeing the property. Once you have a counter offer, then get your team ready to go in to estimate repairs and find out if you have a deal on your hands. BUT, if the seller counters with just a tiny bit taken off his list price, move on, don't bother with it, that is not a motivated seller. If they counter a small percentage over your offer, you have a hot deal in the making.

I hope this helps.

-Susan

This helps a great deal!

Thanks again,

Congrats Susan and Steve! I'm a newbie and I am on track to getting my first deal. I am reading the "30 Days to Real Estate Cash" and here is my first bump. Dean is pointing out that I (and my agent) need to look at the MLS for all the cash buyers within the last 90 days. The problem is that the MLS (maybe just in my area?) does not distinguish between those with a mortgage and those without (meaning then, bought with cash). So, I had to spend a ton of time in two town halls this week going through the land records to see each purchase and whether or not a mortgage is showing. I'm stuck right now in the "Days 5-10" section of this book because of this and I really need some advise on maybe another way of getting this info. I am, in the meantime, taking the info I have and I am sending out the letters to these people that I found. Hopefully you've read this book as well so that you can better understand my question. If anyone else out there who sees this post wants to help, I would be greatly appreciative. Thanks in advance Susan and Steve! Dave

Hi again Susan and Steve. One more question....I am in CT and I asked in both Middletown and Meriden about putting up bandit signs and they said "they are not allowed at all". What can I do to get around this???? I really want to implement everything I'm instructed to do in the "30 Days..." book but this bump in the road is a bit unsettling. Thanks again in advance for your help. Dave

Dave,

Great questions. First, I find it hard to believe that the MLS would not have record of the cash sales. It's possible that your agent doesn't know how to find them. Ask him/her to call the MLS helpline to get them pulled for him/her. If your agent gives you too much grief, find another agent to find the information for you. It's never a bad idea to work with more than one agent anyway. Also, when you ask for it, make sure you state that you are just trying to find the record of all the cash sales, so you will just be getting the addresses. Some agents will tell you its confidential information and they can't give it to you, they are wrong. You will not get a list of names. Once you get the addresses of the properties that sold for cash, you look up on the county assessors website to find out who owns the property and where the tax bill goes. That's where you send your letter.

When we did this, we sent 50 letters and got 2 responses. We have since sent the letters about 10 different times and every time, we get about 2 responses. But, the buyers we get from these letters are solid, so it's worth it.

If you are correct and your MLS does not store the information for cash sales, then it will be a lot of extra work, but the good news is, not many people will be willing to do that work, so that's going to be one hell of a valuable list. The reason I find it hard to believe that the MLS does not have that information is because the value of the MLS and its existence is for the data it has that nobody else can easily attain. So, not storing this types of data would decrease the value of the MLS in your area.

Your second question about bandit signs is: Bandit signs are illegal everywhere. But, we do it anyway. So do the politicians, tag sale people, ect.ect.ect. You can set up a google voice phone line for FREE through google and that phone number will ring to your phone, then use that number on your bandit signs and then nobody can tract it back to you. Put the signs out on Friday afternoon (after the city workers go home) and if you want to be earth conscience, you can pick them up again on Sunday night. Or, just leave them and they will end up in the trash. Rinse, repeat.

We used to live in Windsor, I'm glad I'm not there for the winter, except I loved being so close to the slopes. Anyway, good luck on your journey.

-Susan

Thanks Susan! My agent is a good one and she actually called the MLS people and they are the ones who told her that this can't be done. I was told that there was a time when it was offered, so maybe it's just in my area?? That doesn't make sense though. Regarding the bandit signs, good advice! I was also thinking of having a magnetic sign made up and I would place it on the back of my truck so that people see it when I'm driving around. Lastly, when I heard you were in Windsor at one time, it made me wonder...do you know of other DGers that are doing this in CT already?

Thanks!

Dave

I don't know any DGers because we didn't do real estate investing back then (we moved here in the Fall of 2010). I did hear that Connecticut had some sort of revolt with their agents and the MLS, but I don't really know enough details about what I heard, but maybe that's why they don't have this data? It wouldn't hurt to ask another agent just in case.

Also, it took us 75 days instead of 30 days to quick cash. See if you can beat that.

-Susan

Okay, thanks Susan. I'll ask another agent. 75 days, huh? Okay, well I'll give it my best!! I really appreciate your help.

Dave

Oh, forgot to ask.....since that 75 day period, how are you both doing with this business?

Thanks again,

Dave

This was our 3rd deal and that 75 day period started at the end of October. We think we're doing well and we are wanting to get my husband to quit his $85,000/year job by the end of Feburary or March 2012 in order to dedicate his full attention to investing.

Good for you! He can do it!! I just gave notice on a job that I just couldn't do anymore. Every day became miserable for me and I had to get real way within myself. This is all faith (in action) for me now as I am walking away from a $190,000 annual income position. WOOHOOO!!

Thanks for sharing what worked for you and what hasn't. Very helpful!

Question: The 2 mls deals that countered... did they both fit all 3 of the criteria (vacant, as-is, price reduction)? Thanks and Congratulations!

Hey Susan,

When you sent out your Buyer Letters, did you use the exact letter in the "30 Days..." book on page 61, or did you type it a little differently?

I sent out 50 letters, and I haven't gotten any responses. I'm about to send out my next batch, but I'm wondering if I need to tweek my letter. Any advice is appreciated.

Thanks,

Hi Stephan. I sent out 25 yesterday and it was right from the book. My RE agent told me to remember the rule of 8 touches, meaning, you want to send these out 8 times (once every week) until you get a response. After that, you can probably disregard the ones who haven't gotten back to you.

Hope this helps,

Dave

Thanks Dave. I appreciate the feedback.

Good Luck to you!

Congratulations. I have heard of this strategy recently also, to make your deposit your full offer price. I think it really sends a message that you are serious.

How did you get your Proof of Funds letter?

Stephanie

One location that Dean has recommended (and I've been using when submitting my offers) is to go to www.coastal-funding.com.

They are a Transactional Lending company. And, if you wanted to use their service, and the deal meets their criteria, then they WILL loan you the funds. This means that on any deal, you do have access to the funds to purchase the property.

That being said, this doesn't mean that using them is what you SHOULD do on a deal, it just means that if you wanted to use them then you could. And, just because you get an offer accepted when using their letter, still doesn't mean that you HAVE to use them.

The whole point is to get the offer accepted. After that, you can use whatever means you want to in order to complete the deal.

Hope this helps,

Susan and Steve-
I followed you guys on RBBP 30 days quick cash; awesome job! I placed my first 15 offers on Oct 2 and got the first accepted Nov 2, but we negotiated after that for weeks-- the property was in very bad shape. Finally I closed my first wholesale deal and made $4400 on Dec 6th. By the end of Dec I closed 5 deals, partnered up with a "money guy" to do rehabs on 2 and wholesaled the other 2 (plus that first one). By end of Dec I did make $10,400 in all-- woohoo! Very happy and I know Dean's system works!

I'd like to comment on several items here since Susan did such a great job--
Realtor: everything Susan said, I agree with-- find the right fit

Contracts and Contingencies: since I was scared and unsure, I sat down with my agent and went over each page of the Las Vegas purchase agreement with her so I fully understood it. There were plenty of "out" clauses in it, so I did not worry about adding contingencies. Case by case I adjust the earnest money deposit and the due diligence period as the deals are negotiated.

Cash Sales: don't get confused with Dean's task of asking a real estate for cash buyers with asking for cash sales. A realtor will be hesitant to give you his/her clients (a list of cash buyers) but they should provide you with a list of cash sales... (and I too am perplexed that CT won't do that-- keep asking other agents for it).. THEN, that list in hand, you go to the County Assessor's webpage or office and look up MAILING ADDRESSES for those cash sales. This is to build your prospective buyers list to send the letters out to. And, yes, I also agree with Susan's recommendation of sending them out 8 times to get a response.

Assigns, etc.-- on REO's assigns won't be accepted at all-- but I found a way that works nicely here; same thing different wording: Your Name/ Exact Entity TBD

Earnest Money-- case by case, but I star with $500 on MLS listings, the most I have done is $1,120. On short sales I only do $100.

25-1: I was figuring Matt's 25:1 rule for offers, but as it turns out I really work the numbers on the offers and not as much of a shotgun effect, so mine have turned out so far at 15:1, and I have purchased at $.21- $.49 on the dollar to the ARV. So, I don't think my offers are too high, just more fine tuned. I currently have 55 offers in and still hope to lock-up at least 5 this month... but only 4 days left! I got very wrapped up in closing deals last month and did not get enough new offers out.

Great Job! The info and questions are so helpful; thank you thank you!

If I can help with anything else, please lmk. I haven't been spending enough time on DG, but it always makes me smile to see all the action and success!

Here's to 2012--

Tina

That is awesome! Keep up the great work!

Keep in mind, that you may want to add another sources of deals besides the MLS. Read the other blogs out there and see where they are having success.

Way to go Tina! I haven't used "Your Name/ Exact Entity TBD", but seen others use it and wondered what type results people were getting. Thanks for the info.

Tina, awesome comments and extra insight that will help us too! Your story sounds inspiring. I hope our paths cross someday soon, I'd love to hear all about what you have going on in Vegas. Oh, we matched up another contract this weekend, so we'll be closing on deal #4 in about 10 days. We are headed to SLC next week to do some face to face Dean Graziosi training! I hope we meet more people like you!

CBRbrindour, just to clarify, we use MLS as only one avenue to reel in deals. Out of the 3 we've closed, we've only done 1 MLS deal. The two we have in the hopper right now are also not MLS deals. We have multiple strategies working right now.

-Susan

Good morning Susan. I'm writing you in the hopes that you can help me. Here's the deal. My agent sent me info on a condo. The comps are $165K to $175K. The owner lives in Colorado and wants to get rid of it. She recently reduced the price from $139K to $130K. My agent (after looking inside it today) is going to make an offer of $120K. So, if I get a buyer from my list, what do I do? In particular, if we negotiate a find fee, what paperwork do I write up for this fee agreement? Also,is there anything else I need to do? I'm not even through the "30 Day" book yet and I REALLY could use some hand holding.

Thanks for considering to help,

Dave

Hi Dave,

If you're interested, here is a suggestion I have for you...

You don't directly negotiate your fee. Your fee is added into YOUR selling price. If you get the property for $120K and you want $2K profit, then you market it for $122K (actually, you would market it for a little more so you can negotiate down to $122K if you need to).

Hope this helps, and good luck on the deal,