Our first deal!!!!!! Accepted offer that is.

Hey Lance,

Sweet deal, love hearing stories like this! Can't wait to hear all the deals, this is one of many I am sure.

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In your offer you submitted to HUD, did you have proof of funds?

Also, what escape clauses were in your contract?

I am interested in getting deals this way I am just not 100% sure on all the technicalities. I have been wholesaling FSBO's now for almost a year but this is a little different.

Thanks for any input you can provide!

Way to go Lance. It is so inspiring to hear about a great first deal. Thanks for sharing!

What we've done is a very logical process. The biggest thing I can say is we looked for properties that have the following criteria.

1. Days on Market -- The longer, the better. This doesn't mean that we didn't look at properties that have just been listed, just means that the longer the property has been on the market the more MOTIVATED the seller tends to be to more it.

2. Fixer-upper -- We want properties that need work. One man's (or woman's) trash is another's treasure. We started with an arbitrary number of $10,000 in total work, including the basics of carpet and paint. Bottom line here is be comfortable with the type of projects you want to take, even if you are not doing the work. The more work, or assumed work that the seller is aware of the better the opportunity to buy at a bigger discount. BIG POINT HERE...DO WHAT YOU FEEL IS ETHICAL AND MAKES IT A WIN-WIN SITUATION FOR EVERYONE. Pointing out legitimate work and having that reflected in your offer is the right way to go. Be able to sleep at night, it's the only way to live life.

3. Win-Win for everyone. We always make sure the deal reflects a quality opportunity for our end buyer whether they are the homeowner or another investor. Selling to another investor with a price that is 60-70% of the ARV, this leaves plenty of meat on the bone. 85-90% of ARV to a homeowner is plenty of equity given that they haven't even put a down payment yet. Then they can come in with 5-10% down and be in a pretty good position. Again make it a win-win for everyone and your profits will be there. You can skin a sheep ONE TIME, you can shear a sheep over and over and over again if you are patient enough to wait for the right time to take those profits.

4. Don't forget ALL your other costs. Take the time to talk with your agent, title company and lender to get a true idea of what your purchase costs AND sales costs will be. I won't go into what all those are, there are other great posts on what those costs are. Just don't forget them in calculating your offer.

5. When you are analyzing a property, be accurate but build yourself some wiggle room. This is where we spent most of our time. When we started this whole process we were really, really scared. Because of this we REALLY, REALLY overestimated our repair/purchase/sales/holding/ect. costs. By talking with local contractors, agents, title companies, local government and anyone else that we could talk to, we were able to really narrow down our costs and be much more accurate in our thinking towards what kind of offer is low enough to meet our needs but also stands a pretty good chance of having someone at least look at the offer without laughing us out of the building. There's a fine line between ridiculous low ball offers and legitimate low offers. Every market is a little different and will require you to adjust your strategies just a little bit.

6. UNDER PROMISE and OVER DELIVER ON EVERYTHING YOU DO. I CAN'T BE CLEAR ENOUGH ON THIS. Don't forget to build in your over estimates (wiggle room based on your market) on your numbers. Don't sell yourself short.

7. LAST BUT NOT LEAST...TAKE ACTION. I've been analyzing this process for 2 years now (Since June of 2009). I just started taking action in February of 2011. My advice to you is DON'T WAIT, take action TODAY!! You have everything you need to get started. If you can't afford the Academy or Insider's Edge or the RBBP, THAT'S OK!!! Spend $100 and get all of Dean's Books. Stay on this website and read about EVERYTHING. There's a wealth of knowledge here, take advantage of it. Get to your local REI Club. They are a great resource. Network, Network, Network! TAKE ACTION AND DO SOMETHING EACH DAY, no matter how small the task seems, DO IT! ASK QUESTIONS, HAVE FAITH, BE PATIENT and the world is your oyster. I can't wait to hear from all of you. Thanks again for inspiring me to move forward and grow myself, my family and everyone I come in contact with.

Man, you are on your way. What a great first deal. That was definitely worth the 2 year wait. Keep up the good work!!

Congratulations! Way To GO!

Congrats on your first deal! You are now on your way.

Wishing you the best.

Congratulation and way to go! That is just awesome!

It sound great what you are doing. It sound like you guy will be doing it again soon, now that you are off to a great start.

Keep up the good work!

Rodney

CONGRATULATIONS!! Great Deal!! On to the next one.

Great Job! How did you find ut what the land was worth. I have been researching sites, but don't know where to look to find land value. Can you give me a hint on that?

Jo Ann

We asked our agent and checked comps for land in the area

Way to go Lance!! You've inspired me to get off the DG site and onto the PMI site. I just registered for the Success Academy on Friday and my 1st Lesson awaits.
From my limited experience it sounds like the rest of your deal is details; stayed focused and shoot for 3 weeks to finish closing. That way you have an extra week if you need it.

Cheers,
DB

Congrats!! Keep "plugged in" to all the resources both on PMI AND DG.com they are both important to your success. Best Wishes to you and to your success.

Regards,

Lance

But I'm kind of with Michael M. on this one. I'll wait to taste the sauce when the check is in your hands and I will do the victory dance with you.

The fact that you have a cash buyer waiting on the other side is a huge PLUS for you in this deal as I am fairly certain you'd have zero chance of getting a buyer going FHA/VA to be able to double-close on the house because of new "seasoning" stipulations.

I also thought that HUD foreclosed homes were beginning to have clauses in the contracts stating that you are the final end-buyer, but maybe not. I haven't seen any of their contracts or if they are requiring they're own to be used. That's actually a good question for you. Did HUD require you to use their contracts? If so, were there any clauses that are potential "gotchas"?

Like Michael said, there is typically a very short period of due diligence and then your money is non-refundable (good you only have to put $100, which I'm surprised that's all they're requiring on that much of a sale price).

I appreciate you sharing it because it ultimately shows positive momentum and encourages us all that those types of deals are out there! Way to go Lance and thanks for posting this.