September is off to a great start! 25/1 does it again.

I told them the rehab/repair estimate came in higher than expected and the resale value was lower that we originally projected.

Michael

congrats Michael!

as you say, never give up, think of creative ways to solve a problem... and to make the deal happen!
Val

Wow! That's going to be me one day soon! How do you state the three must haves when you send out your blast emails with the deal? Meaning how do you word it in your emails that you want the money up front?

Kim

Michael I could totally imagine your face all lit up! Like Xmas came early

Got a few questions if you don't mind:
1) What's the actual ARV and rehab estimate for this property?

2) Did you negotiate through your Realtor for this MLS estate sale? I find MLS listed properties more difficult to negotiate since you're not dealing with the owner directly (don't get me wrong, it still works). Any specific negotiation tactic/strategy that you used for this deal?

Onto the next one!

REI is great when working involves about an hour worth of activity. I LOVE THIS BUSINESS!!!

Thanks, every deals has it's little ins and out. I will give up a few dollars for a long term relationship any day!

Michael

If someone wants to buy one of my properties I them tell them non refundable earnest, non assignable, no inspection period, do all your due diligence before signing the contract.

Michael

1. ARV is $435,000
Rehab/remodel $65,000

2. My awesome agents do all the communication with the listing agent. I tell what to offer and why and they work it. My agents are motivated because I make them good money.

Good luck,
Michael

I used to have a J.O.B. I am so thankful for REI. Spare time and good money. Thanks Dean is all I can say!

Michael

Michael,
Seems like most of your 25:1 deals are from private seller mls listings (estates, landlords, etc)than from REO/Hud deals....would that be a correct analysis?
Any reason for that?

You are correct. REOs are few and far between right now. The banks are asking full price on properties that need $50,000 rehab! HUDs are still workable. Private sellers and unlisted motivated sellers will almost always have a better deal that the banks. In better shape a lot of the time to!

Michael

Hi Michael!
That is great! Still working on our first deal and would like some insight (from anyone that also maybe reading this)

Found a property that has about a 27% Return On Investment
We’re selling it for $35K Cash, which is considerably low for the type of property it is. It's a really great buy & hold property.
I'm guessing we just need stronger cash buyers outside of the area with more cash? Not sure.

But the property rents well & consistently between $800-$1000/mo (records to prove so, as well as a current waiting list for approved tenants to move in)
It's literally move-in ready for tenants.

Does anyone have any suggestions as to the best way to market this deal?
We've done bandit signs, newspaper ads, craiglist, collaborated with fellow wholesalers etc.. and still nothing seems to be coming together especially with this being the type of deal it is.
Any suggestions would be greatly appreciated

Perhaps you could make it a complete turn key rental. Have a tenant in place, a management company ready to go and have a refi bank ready to go so your buyer could refi and cash flow.

Just some thoughts,
MIchael

Thank you for all your wonderful advice, you keep it simple and real! Congrat's on a great start to September!
With gratitude,
Shawn

Thanks and see you soon!

Michael

Hi Michael,

I was wondering, do you assign all your contracts to cash buyers only?

I assign the contracts that are assignable. Some contracts are not assignable like REOs and Short Sales. Those I do entity transfers. I.E. sell the LLC. You can also double close deals that do not have deed restrictions. Some people quit claim after closing when there are no deed restrictions.

Michael

I'm excited, we have our one on one mentoring training sessions this Thursday and Friday! I've busy studying all the webinars and reading Dean's new book. One thing that this preparation is helping me to accomplish, and that is, attention to details. I thought that I was a detailed person, but after listening to Matt expound on the keys to success and Dean's words of wisdom with simplicity, in his book; "30 Days to Real Estate Cash" has helped me a great deal. We still haven't closed our first deal, but we will not get weary in well doing, for in due season (and due season always comes!) we will reap, because we refuse to give up, cave in or quit! WE WIN...ONLY BELIEVE!!! Bernard (Mk.11:24) and Esther

I know you are satisfied with the $5,000, but what did your investor stand to profit by purchasing with such a small margin. In other words, what was the FMV?

I guess she would rather net $40,000 in this very competitive market, (low inventory, high demand) keep her crews working, that type of thing. This buyer is also VERY good at listing her properties higher than my ARV, getting them to appraise and selling them!!

I don't know what FMV is and I don't care. What I care about and what ALL MY REAL CASH FIX/FLIP INVESTORS care about is ARV. Period. FMV does NOT determine their buying decisions AT ALL. Never has, never will. Its a useless term. All they care about is what they can buy it, fix it and sell it for.

To my buyer I guess her FMV was $275,000, that is what she paid, that's all I care about.

$435,000 x 78.2% = $340,170 - $65,000 = $275,170

Deals are going at 80% to 85% in this market. Low inventory, high demand, she got this deal a little cheaper than market trends!

Paul, have you made any offers in the last 30 days? If not go make some and quit worrying about irrelevant stuff. Keep it simple!!

Good Luck!
Michael

So ARV is $435K, I did not see that in your initial post.

I am also aware that FMV is nonsense. It's just that it is revered by most here.

The real formula is:

Eventual selling price
Minus rehab cost
Minus holding cost
Minus profit
Equals offer/buy price!

Michael,
WOW, I love reading that the 25/1 is working for you. I wanted to ask the readers if any of them are from California and working the 25/1. I have submitted over 600 overs adjusting the percentage all the way down to only a 3% discount and non have been accepted. So I am looking to see what we need to do different in CA.
Congratulations on your success.
Jim

Michael,

I'm a So Cal cash buyer. Let me know if you have any deals in the works.

I know people in California doing deals. I think most of what they are doing comes from their marketing efforts to find unlisted, motivated sellers.

As far as your MLS offers. Are you offering on properties where you are competing with owner/occupant buyers? You will be out bid every time if you are doing that. I assume you are looking at distressed properties that need so much work that they won't go FHA or they are so ugly that a homeowner buyer would turn around as soon as they walked in the door.

Using the 25/1 to bid on nice move in ready houses usually does not work. I
think the people I know are really looking to bid on buy and hold properties in California. They bid on distressed properties owned by distressed motivated sellers. Using the MLS and their own MASSIVE marketing campaigns.

Hope that helps,

Michael

Do you invest out of state? If so shoot me a PM, I have several projects in the works.

Michael

CONGRATS Michael !!
You Guys are Rocking out There We never know unless We ask
what seller will accept, You made it A Win-Win-Win for everybody,
And Earned a Great Long Term Relationship with a Definite Return Buyer
for your Next Deal:)And Made some more Spending Money, LOL
Have A Great Day,
Darren From calif

Congrats Mike Once Again, Mike Can You Shouw Me How To Do This In The MD Area?

Tony

I was told that there was a Video posted to this webs site that explains the 25:1. for the life of me I can not find it. can anyone send me a link?

It is really pretty simple. For every 25 offers that you make on properties that have a motivated seller, you can expect to get one accepted offer.

Read Dean's book 30 Days to Real Estate CASH. That book explains the 25/1 system.

Good Luck,
Michael

Congratulations on your latest deal!!!