running numbers on property before seeing property

Many of these investors are in the rental market. They know the rental rate for the area and per bedroom. They then figure the market value backwards to come to a maximum purchase price. If the listing is equal to or less than the determined purchase price, they will put the property under contract subject to an acceptable property inspection. If major faults are found with the property, then the price is renegotiated or the contract is nullified.

they interview seller, ask questions, estimate repairs based on what seller tells investor, on square footage, age of house, recent sales, etc. and if their offer is accepted, then they go do an inspection of the property.
This saves time from looking at every property you put offers on that don't get accepted...
The better you know your area and the more properties you do, the better you get at estimating costs...

From a training standpoint, we encourage all new investors to become familiar with critical elements of investing, such as transactions, negotiation, contracts, and inspection. These are things that you must know in order to be effective long-term. Visiting properties you are interested in and evaluating their condition, talking with realtors or owners, all of this is great for building your knowledge and skill base.
As such, it isn't just about the quickest way of doing things, it is important to learn and master the elements of being a real estate investor.
As time goes on, most investors look for ways to streamline their processes, especially if they are interested in expanding into remote markets. This can include making offers sight-unseen, based on calculating rehab costs from general formulas that estimate costs based on square-footage. You can roughly estimate minor at $10/sf, moderate at $20/sf, and major at $30/sf. Most agents or sellers can generally identify the work that needs to be done on a property in those categories--minor, moderate, or major.
So just to drive the original point home, if you short-change yourself on the learning processes, you will damage your success long-term. Real estate investing is actually more about the people than the properties, and the experience of dealing with the agents, sellers, etc. is invaluable. For remote investors, one of the first requirements that we assign is to have someone to be your eyes and ears on the ground to inspect properties as needed, so even in remote investing, proper inspection of properties is a necessity.

That is so true. Many times investors get caught up in the trend to "make it big" without the experience. Don't rush the process. Take the time to know your business and your market well. Then, and only then, does the anxiety quiet and a comfortable security come with sight unseen offers.

Dallin- Great information of how to evaluate, and what process needs to be not only learned but, internalized so that the end result is what we as investors not only expect but are pleased with.
Valuni- Yes it can be a time saving technique IF and only IF you are familiar with the process and the evaluating techniques. For the first few deals, inspect and recognize how people describe certain types of damage, and learn how to ask the right questions.
Campbellsimon- It is refreshing to hear this from someone other then the fellow trainers. Going at the right pace so you can learn about the necessary steps builds such a great foundation.
If you know your steps you need to go through, you can teach them to someone else to do them for you as well.
Keep on investing and moving forward.

...

You have to know the market and what your buyers want.

Rent rates, ROI's and the market prices where you are working.

Not all buyers are the same and neither are the sellers or properties.

There is NO 'cookie cutter' approach.

The 'offer formula' will help you get to negotiations and differs in all areas.

The Strategies and negotiatons are where deals are made by being a 'Problem Solver' and Helping ppl.

Best wishes

Just wanted to add a couple of comments here. REinvestor42, you have made the two comments that are probably the most important keys to real estate success that are possible to be made.
Being a problem solver and helping people should be the goal and objective of every real estate investor. The more people you help, the more problems you solve, the better you are paid in this business. And there are lots and lots of problems to be solved in real estate ownership. One out of every five people at any given time are looking to buy, sell, rent, or lease a property, and someone is going to help make that happen and make money from the process.
Although we focus a lot on wholesaling properties as your initial strategy, as you grow in the industry, you begin to discover that there are other approaches, other strategies that you want to try. The fully matured and seasoned investor who truly has an attitude of helping other people goes into each property negotiation trying to find out what the needs, wants, and desires of the seller are, and how they can assist them in obtaining enough of those needs, wants, and desires to make them happy. There are a whole arsenal of techniques available, and it becomes a great fulfillment to creatively apply these techniques to solve problems. Which brings me to the other great statement that you made--No Cookie Cutter approach. What I have just described is exactly the opposite of cookie cutter, every person and every property is treated as a unique opportunity to assist people creatively.
Before concluding, I'll just indicate that John Free is absolutely an Official Coach with the program, and I'm sure he will soon post some biographical information. It took me a while to get mine posted because our time is pretty full helping people who are enrolled in the program, which is another area where you cannot use a cookie cutter approach. Be patient, John has a solid background, and I feel honored to be working with him.

Just to make sure that everyone understands, ask us who we are we really do not mind.
Above all make sure that you are using this forum as a way to help encourage other people in their investing path.

that seem to care and are posting on here often now. Thanks so much to the coaches with great information as of late!

It's a real privilege to be working with Dean in coaching/training, but the real excitement comes in working with each of the people in the program and assisting with their success. Being an active investor and making money from our own deals is terrific, but there is something even greater about being able to give something back to the industry that helps insure its future.
I just want to encourage everyone to stay on the moral, ethical and legal high ground that constitutes the backbone of Dean's program. There is plenty of money to be made without sacrificing one's integrity to greed, ego, etc. I am finding myself communicating with some very sincere people seeking success in this forum, and a lot of brilliant minds with valuable information to share.
And thank you to femailceo for your positive words.

I hope that I am not misinterpreting your post, brandonwoods. From looking at your website, it looks like you design and install landscaping, and it appears that your focus is commercial. I am a little unclear if your business is exclusively the design and management of construction/installation, or whether you are actually a landscaping contractor as well.
Without reviewing your marketing plan to build your business, I will provide you with a few suggestions:
1) Be clear on who your target market is. Is it commercial? If so, how much of this focus should go to new construction, and how much to existing. You would be clearer than I am on how much new development is going on in the commercial arena in your area of Houston.
2) The average successful business has over 25 methods of introductory marketing employed to let the world know that you exist. Not all of these have to be traditional advertising, but your methods should include both online and offline marketing. I learned a "forever marketing" approach, that once you have a method of contacting them, like an email address, that you will continue to market to them forever. Your marketing, however, cannot be annoying, it needs to be 80% informational and educational, and 20% promotional. Become a valued source of expert information for your potential clients, send weekly emails, and do other marketing to them regularly. Use both online and offline marketing methods, work on forming relationships with commercial developers and look for properties that are in need of landscaping upgrades.
3) Offer a free evaluation that gives some idea of what you can do for a company to improve their first impression with clients. Have different grades of work that can be done depending on budget.
4) Make sure that you are using sales scripts and have salespeople who are trained in closing sales. If necessary, bring in consultants or other professionals to help assess and refine your marketing and sales processes.

People have to know, like and trust you in order to give you their business, they also have to see that what you have to offer is something that they need and want, and can afford to pay for. You may also want to see what you can do to get some positive reviews posted for your work on some of the review sites, angie's list, yelp, etc. These days, people will research you on line. Another thought that occurs to me is that there are four times in the ownership of a building that people are willing to invest money into the appearance:
1) When they build it or buy it;
2) When they have a vacancy;
3) When they upgrade it;
4) When they sell it.
Find ways to connect with people when they are in one of these four situations.

When I started the post above, there was a post from someone who needed help with their landscape architecture business. When i came back to complete the post later on, that post had disappeared. I decided to leave the above post because some of the content has a much broader application. I've spent a number of years helping people with marketing, both in real estate investing, and in other types of businesses. Maybe some of the content included in my post above will be beneficial to some of the work each of you are doing as real estate investors.

It is very intimidating when you first get started making offers. You won't always get it right, and that's okay. I lost count of the times we drove 60 miles each way to check out something on our first deal - which wasn't all that long ago.

Already there is less gut-clenching now about making a first offer, or a site unseen offer. And here's why:

One of our buyers has been doing REI for 12-years in that one area. He can give us a ballpark on whether the deal can make money or not over the phone.

One of our contractors has been doing business for a long time. He knows how much is going to be spent on rehab for each of the bench marks Dallin Wall wrote about.

For many of us there is an incredible learning curve in this business. Knowledge can only be assimilated so fast, and no one can know everything. That's why we are taught to build power teams. Someone far smarter than I am gave us the 'I don’t need to know everything; I just need to know where to find it, when I need it' rule. We "find it" when we "need it" by working with these professionals that we have qualified. We didn't just decide they were good, we did our due diligence on them. We know we can rely on their insights and experience.

Learn the processes. Success has to come to you through knowledge and action, but it doesn't always have to be just your knowledge alone.

RoxieM, I think there are parts of your post that every new person should copy down and post on their wall as regular reminders. I actually have only one more thing I would add, and that is: "Don't be afraid to ask, and keep asking."
This is actually an industry where there a lot of people who have had some successes, who don't really have anyone around them who even gives a fig about what they have done, or how they did it. These people are actually starving for an opportunity to share some things with someone who wants to hear from them.
Take a successful person to lunch, buy their lunch, and ask them questions. Include some open ended questions that give them an opportunity to talk at length, and you will be amazed at what you come home with.

Thanks for the information that was my biggest question about the 25-1 formula. I wasn't sure if I had to visit each property when making offers due to different rehab costs. I know it the training it's $10,000 but I am sure many properties require more than that.

Been looking at some properties on mls and saw one that was a good starter home for investors but looks like it needs a ton of rehab. I will tell my agent to show me the property and ask them questions to see if they can estimate the costs just so I can get experience under my belt.

After looking at comps the average price is close to $130,000 the house has price deduction and is currently listed at $110,000. After doing my formula I am looking at a $58,300 offer depending on what the rehab estimate comes back as. Thanks guys

Thanks to everyone who participated in one way or the other on this post. Usually when I interview my sellers, I ask them if I buy your property, what repairs must I do? If they say no repairs I be like how about the rug and paint? Sometimes thats when you see these sellers now saying oh it might need some updating. Then I go ahead and help them out by asking how about the roof, kitchen, bathroom, plumbing, (like when was it last remodeled). This would give me like a generally picture in my mind on the condition of the house.

Once again great post and I appreciate everyone for sharing his/her thoughts on this.

Happy holidays

great info

Hello All,

I am about to step into this wholesaling but there is a couple things that have me thinking too hard...

1. As a wholesaler on the 25:1 or other accepted offers, rehab costs are important to the end buyer and the formula. Being new it will be very difficult to estimate rehab costs other than what the seller suggests. WHO PAYS FOR THE INSPECTION SO YOU CAN HAVE A BETTER QUOTE? That seems like an out-of-pocket expense that could become costly. Don't want to give the buyer numbers for that which are way off the mark..

2. As far as the purchase agreement, is it best get one drawn up by a real estate attorney or just use the one's provided by a real estate agent and just add the clauses??

Just want to go in with these questions answered...

B Hall.. Afghanistan, on the way home to the ATL soon..

Those are certainly some understandable questions in getting started. I'll provide my perspective, perhaps there are others with something else to add as well.
It would not really be logical to pay someone to inspect properties that we are considering and making offers on. However, once an offer has been accepted, and we stand to make a substantial profit, then it is valuable, if not imperative that we market the property to our cash buyers with some substantiation of our offer. They may want to conduct their own inspections, but are much more likely to be interested enough to take action if we can present them with a marketing piece that includes an actual contractor's bid on the work. The exception would be if there is minimal work to be done, just cosmetic items like paint, carpet, and cleanup. Those items do not necessarily require an expert to evaluate the property.
I solved this problem for myself by using Angie's List, an online review site for people to evaluate work done for them. I went to the handyman section and found a couple of handymen who always receive sterling reviews. I contacted them and discovered that one of them is a retired contractor who still likes to putter around (his description of what he does). We arranged that for around $80 to $100 per property, depending on distance traveled, he will go into a property that I have just placed under contract, identify the work needed, and take about 25 photos. He will then go back to his office and prepare a bid for the work, and forward that and the photos to me. I can then prepare the estimate I used to make my offer with the actual anticipated costs. If they coincide, I can move ahead with the property to prepare my marketing piece and start contacting my cash buyers. If not, then I either have to terminate or renegotiate. So there is one person's solution to your question.
As far as purchase agreements, it is my understanding that all real estate agents are required to use the state board of realtors approved purchase contract form. It is considered to be a real estate agent's role to fill out a purchase contract on any listed property, although I have found that in New York, a lot of agents seem to want to pass that off to an attorney. And if you are working with a FSBO property, there are no agents involved, and usually people do not enlist the help of an attorney to draft a purchase agreement (although I have to take a role here that protects the program and say that it is always a good idea to have an attorney review any legally binding contract with you).
Best wishes in all your investing.

I appreciate you sharing your knowledge with us. I'm glad I stumbled upon this post again to read on how you use Angie's list to contact handymen so they can be able to inspect and take pics for you.

Thats good to know and I will definitely do the same to contact a handyman from Angie's list to inspect a mobile home which I had contacted the seller a couple of weeks ago.

Thanks for sharing with us another great tool (angie's list) which I added to my REI business

God bless you

Hi everyone, would it be safe to say each property has a personality and a set of circumstances.Coach Dallin Wall were going to lunch and as many as you like, I want to learn more, love that experience not only from him but all that have contributed.I know when Mike shows up its really good stuff and important( want to pump you up Mike)!I love to help others and love to solve problems.I think there are some bright futures here at Dean Grazoisi, and yours truely wants to be one of them, much success, Jim

Thank's Dallin (& others) for all these comments...Dan

It's so great to connect with people in this forum, I feel like I have some very close friends, and most of them I haven't even met yet. We'll hope that becomes a reality in the future.
Thanks to Dan, Jim, and TC for your great comments and additions.
There is another website that can be used to find similar reviews, and does not have a subscription cost. It is www.homeadvisor.com. While it may not be as extensive, you can find contractors, handymen, etc. in your market area there too.
One additional mention, I know Angies List has something like 172 categories, so it might be valuable to check the site for reviews on other services you might need as an investor--carpet cleaning, plumbing, etc. I'm sure homeadvisor has a broad list of categories too, I just haven't used it as much.

great info from the coaches

What a coach he is, been around him in the past and would like to know where he went, if any one can be of help on that please let me know.Dean has some really good coaches, but I have know Dallin for some time and we have alot in common on other things he does as well, great guy, love him so much and his wisdom, much success, Jim

another company lured him away is all I know & yea he was exceptional he taught me a few things & I miss his posts here.