Streamlining for Efficiency and Results

Dallin's Streamlining Tip #2--Overlapping Cash Buyers
In my previous post, I mentioned that our criteria should be dictated by our overlapping cash buyers. I felt a need to explain this. Although this is not often mentioned in the program, your results will be greatest and you will be able to get all your properties easily wholesaled to your cash buyers IF you will build your list until you have a minimum of 4 to 5 cash buyers who are all looking for basically the same property. That way, you can direct your agents and your own searches to be specific to what your 5 cash buyers have indicated they will say yes to--and ONLY those types of properties. Wouldn't you rather be dealing with properties where you have multiple buyers rather than just one or two who will be interested in it?
It may take you 10 to 12 interviews to get 4 to 5 overlapping cash buyers, but I will guarantee that you will have greater success with matching properties and buyers if you will take this tip to heart. It will absolutely help to streamline your actions and quickly get results with the properties that you present to these buyers.

Dallin's Streamlining Tip #3--Using a Standard Addendum with Contracts
Rather than having to add multiple additional clauses to every real estate contract, which takes additional time for you or your real estate agent, create a standard addendum with all the clauses you use regularly. Place these on a sheet of paper that says "Buyer's Addendum" at the top, and has signature lines at the bottom. Here are a few suggestions for clauses that can be included, you may wish to add to or modify the list:

1) “Subject to an acceptable full inspection by buyer and/or associates within 14 business days after acceptance of offer.”
2) “This agreement is assignable in its entirety.”
3) “The Earnest Money Deposit shall be $________________________, and shall be due and payable at the office of the closing agent within 72 hours after acceptance of offer.”
4) “Closing shall take place within ______________ days after acceptance of office at the offices of:__________________________________________, located at ____________________________________________________________ (Address).”
5) Time is of the essence. This offer expires at 5:00 P.M. on the business day following presentation of offer to seller.

Good stuff Dallin, will use that in my contracts-the addendum that is & use the other tips you shared. I do try to do that have 5-10 buyers who want the same thing.

question, the addendum, I email my agents my contingencies & tell them to include them in the purch agreement, how does this differ from that? Thanks.

Tony, first thanks for your positive words. The only real difference between emailing your contingencies, and having your agent have a standard addendum is formatting. It will probably save them some time, and part of streamlining is finding ways to improve your usage of your agent's time. They will appreciate the fact that you are conscious of how much of their time you are using.

Dallin's Streamlining Tip #4--Use the Formulae
As a part of our training processes, we teach new investors to be very hands-on in the evaluation of properties. Go look at properties, inspect them, identify rehab needs, spend time with the real estate agent, etc. These are designed to teach you what you need to know as an investor via experience, and should NEVER be bypassed as a part of your early training. We are more interested, in the early stages with your knowledge than with your earnings. You are building skills that you will use throughout your investing career, and it is important to be good at them.
There will come a point in every investor's career where they begin to realize that you just cannot keep up that pace in reviewing properties thoroughly and still be able to make the number of offers necessary to make serious money as an investor. Each investor will need to decide when they make the shift from hands-on to streamlined. When that shift becomes necessary, one of the key changes is that you will not inspect any property until you have an accepted offer.
Instead, we use a formula to estimate rehab work, along with our formula for calculating ARV from sales comparables $/sf averages, and our formula for calculating Maximum Allowable Offer (MAO).
The formula for rehab estimating is simple, but may require some adjustment up or down depending on property and rehab costs in your local area.
$10/sf for minor rehab--cosmetic, paint, carpet, cleanup.
$20/sf for moderate rehab--Minor PLUS Kitchen and Bathroom Updates (fixtures, flooring, appliances, cabinets)
$30/sf for major rehab--Minor PLUS Moderate PLUS one or more major rehab projects (Roof, foundation, sewer/septic, plumbing, electrical, mold, termites, etc.).
If you have a real estate agent or someone familiar with the property who can help assign the level of rehab to one of the three categories, use that to estimate. If not, I always use the middle range/moderate level to estimate.
Now, if you have estimated incorrectly, if your offer is accepted, and you visit the property, and say: "Man, I really blew my estimate there" then you always have the right to terminate the offer, or see if the seller will adjust the price. If you have to terminate, move on.
My reminder is always: "Deals are like buses, if you miss one, wait 15 minutes and the next one will come around the corner."