25 to 1!! First deal of 2014!! $7,000.00

When I was starting out I went to every house I was going to offer on. 4 to 6 houses a day. This is how I learned the business. What comps really are, how they can very street to street. Pulling comps from say a 1/4 mile out can be highly inaccurate! I learned about rehab/remodeling costs at the same time. I have walked 100s of properties. Oh yeah, I forgot to mention I quit my 6 figure J.O.B. cold turkey and devoted 100% of my time to real estate investing (not recommended!)

NOW I offer blind, just running the numbers based on what I know and offering a % of ARV. We know what the bottom of the market is. When I get an accepted offer then we walk the property and do due-diligence. We arrive at ARV by looking at remodeled or great condition sold comps. Now I know what ARVs are in many areas in Denver because I researched 100s of properties.

My one and only escape clause is always a 7 to 14 day inspection period depending on how strong I make the offer. Lately I have been making 10 day inspection, 14 day close offers. Just because you buy as/is does not mean you don't have an inspection period.

Hope that helps,
Michael

You too are an awesome investor. 2014 here we come!!

Michael

Hi Michael,

Thanks for taking time and responding to my questions in detail, it helped me lot.

I am still starting out and when I think I know enough some new questions crops up. I was reading the old Forums on Assignment and came across AS-IS properties and that created a confusion for me. Your reply has cleared things out for me.

I have read 30 Day to Real Estate Cash and that is what I am following.

Thanks again.
Bimal

I believe our areas are very similar, good to know I'm headed down or actually up the right path.....CONGRATULATIONS 2014 STYLE!!!!!!

Hey Mike, it's always great to hear about your deals! Every time you post here, you give the DG family a breath of fresh air - proving that it works again. Hope to hear from you often My goal for the month is 100 offers, keep me accountable!

Great start to the year and thanks for all the responses. Huge help for me as I'm just starting to work the 25:1 hard.

Michael, congrats on your amazing success! No doubt 2014 will be another phenomenal year for you.

We're trying to streamline our MLS bidding process since each bid looks like a small book, so I have a couple of questions. Do you use a Letter of Intent to bid on listings - if the listing agent will accept it, then submit a contract with addendums once the offer's accepted? (An REO offer with addendums and POF can be over 20 pages.)

Also, do you submit the 25 bids through several agents at one time, or submit them over a few days or weeks with one agent?

Thanks, Michael.

Liz Eastlake

Thanks! You have to know your market!

Michael

It definitely works! It is a numbers game as we all know. If you want 1 deal a month you have to make 25 offers a month! Offers that take into consideration your local market trends. Inventory and absorption rates. How much is available and how long does it take to sell. Supply and demand! If REOs are consistently selling at 85% of ARV, a 70% of ARV offer is not going to produce results. You MIGHT get one every now and then but that is not how to build a business. Now if in your marketplace REOs are selling for 60% of ARV you don't want to offer 85%!
So strong, intelligent offers are needed in an upward market. POF and a COPY of the earnest money check with every offer is a good idea. Inspection period as the only escape clause!

100 offers a month is only 5 offers a day based on a 5 day work week! Get it done!

Thanks and Good Luck,
Michael

Hope it helps and thanks!

Michael

Congrats Michael! Keep making it happen!

Our agents submit a Board of Realtors approved contract for every MLS listed offer we make. We provide a POF letter and a COPY of the earnest money check with each offer. Our agents have a basic offer template set up for our offers. All they do is change the offer amount and the address. We just send over the MLS number, address and the offer amount and the send back the contract. Email is a wonderful thing! 99% of our offers are done using emailed contracts that we sign with our mouse and send back. NO PAPERWORK! We then save the docs in a working deals file.

We submit our deals to our top 3 agents. Usually spread out around 7 to 10 offers a day. We don't hit any of our agents with 25 offers at once.

Hope that helps,
Michael

Same to you in 2014 and beyond!

Michael

So great to hear you are killing it and in a hot market like Denver. I havn't had a buyers agent for a while my last agent retired so now I am going to get one.

I think out here in San Diego it is about 80%-85% of what buyers are getting properties off the MLS or even higher it is sooo tight out here about 2 months worth of inventory so buyers are sooo hungry for props.

God bless.

I think our markets are a lot alike. Yours may even be tougher.
Sorry about the Chargers!

Hope all is well!
Michael

Congrats on the first of many for 2014!

Closing one tomorrow for $5,000. Sold three today. Two for $5000, the other for $2500. Got one under contract that I have 8 to 10 buyers looking at in the morning. Should sell. That's another $5,000. Plus this one for $7000.
6 deals in January (so far) $29,500 for January. Looks like Karen may have me beat though!

Michael

Way to go!! Can you tell me what is 25-1?

thx Michael apology accetped, what are you gonna do they have management problems out here they really should be winning more games.

Way to go Mike & great job showing how the numbers work..Dan

You've done it again. I hope I can emmulate what you're doing.

I'm here in Southern California and have been doing 25 to one but can't quite figure out why it's not working. I have several buyers but most of them requires at least 70% ARV minus rehab. I followed their requirements but I can't even pass thru the first base. I already gone thru 2 good agents not because they're not of help but because they got tired of my low ball offers. I'm now with my third agent but because of the previous experience with the other 2 agents, I'm really analyzing the heck out of the property and trying to send a "reasonable" offer. Most of the listing she's sending me are brand new listings for depressed properties (mostly REO's, short sale, and pre-foreclosures). But everytime I make my offers, somebody else beats me to it even if my offers are cash.

I've seen you're deals and can't believe that you're doing it around the 80 to 85% of ARV. I thought CA is tight and didn't know that Denver (seems like) is tighter.

I do have a question. If the offers I'm making is not getting accepted, should I go ahead and disregard my buyers requirements and offer higher? Matt did say to make adjusments on the offer to optimize the 25 to 1 process. However, it is also a must that the requirements of my buyers have to be followed otherwise I won't have anyone to sell it to. Does anyone out there working in Southern California have an idea of where the bottom is because it seems like even the REO's are going out at the same level as retail. Would appreciate any help.

Thanks,

Dan

1. You need to offer more.
2. You need to expand your buyers list.

Obviously investors are paying what the market demands. You can make 70% offers all day long but that does not mean you will get an accepted offer. Ask your buyers if they could provide the addresses on a couple of the properties that they paid 70% minus repairs for in the last 18 months. You would like to see what and where they are buying.

Some one is paying the money, right? That is who you need to find and sell to! Find those cash buyers! Do cash sold in the last 60 days research and up your offers until you hit that 25 to 1 threshold.

To strengthen your offer provide POF and a copy of the check for the requested earnest money without being asked for it. Don't ask for an assignable contract or put and/or assigns after your name. Put 7 day inspection and 14 day close.

We have gotten offers accepted when some one else offered more money because the seller liked the cash and the quick close. Once you are under contract you can ask for an extension if needed. You can also ask for an amend to change the contract to assignable AFTER the seller has your earnest money and the inspection period is over. You would of course already have your buyer under contract and have his earnest money.

Hope that helps,
Michael

Thanks Michael for those recommendations. I will surely try them.

By the way where will I get the information regarding "cash solds"? Will it say how much it was listed for and how much it was sold? Will it also say who the buyer is? Is there a website that will provide this info?

Again thanks.