The Dominique Effect
How to Wholesale Real Estate FREE TRAINING!!!!!
The Dominique Effect
Myths to Avoid
1. Not enough deals
2. Ill get stuck with the property
3. Nobody will sell their house for that cheap
4. I don’t have enough experience
5. I don’t have enough money
6. I am a realtor I can’t invest in real estate
Websites not to focus on when looking for deals
Motivated Sellers
In order to find a deal, you need to know what types of people are willing to sell you their house pennies on the dollar.
Motivated seller – an owner of a property, willing to sell their property at a big discount because of a hardship or economic circumstance.
Ex. A property owner, who is about to lose their house because they can’t keep up with the taxes.
How do we know it’s a motivated seller?
Things they will say:
I need to sell my house fast
I need the money
I need to move out of state
Im looking to liquidate my portfolio
The house needs a ton of repairs
Im out of state
Im getting too old to manage the property
How much can you give me
This property was given to me
Non Motivated Sellers
Things they will say
Are you nuts
Im not going to give my property away
Don’t call me again
Stop sending me letters
Do not go on my property
Don’t waste your time on this type of homeowner
Hot zip codes
Before doing anything you need to find the hot zip codes buyers are purchasing homes in
You can ask an investor friendly realtor to send a list of zip codes with the most cash transactions for the last 6 months
Or pull the list yourself on www.listsource.com
Ways to find motivated sellers
Direct mail
FSBO signs
Driving for dollars
Bandit signs
Online real estate auctions
Internet leads
Direct Mail
Direct mail is when you mail a letter or a postcard directly to a homeowners address. Asking to purchase their property
In order to send a letter or postcard, you have to purchase or get a list of sellers/property owners and their address
Direct mail letter
Light blue and pink letters works the best
Use invitation envelopes
Use handwritten font
Be different
Don’t use same verbiage everyone else is using
The key is to get them to open your letter
Make your letter stand out
More expensive, some markets letters work better
Direct Mail Postcard
Cheaper than direct mail letters
Send out every Friday for 5-7 weeks(same list)
Better being that the owner doesn’t have to open envelope, once they receive the postcard they can start reading it
Some markets postcards work better
Be different; don’t use same verbiage as everyone else
Returned mail
Most cases will have updated address on the returned mail (send another letter to the updated address)
Research to find owner on facebook, www.whitepages.com , etc.
Returned mail is a great lead source because other investors don’t take the time to find the homeowner
Skip trace – www.TLO.com, www.accurint.com, and www.findtheseller.com
Different types of lists
Absentee owner list
Free & clear list
Probate list
Fire damage list
Pre-foreclosure list
Tax delinquent list
How to get a list
Investor friendly realtor Absentee - Owner and Pre-foreclosure
County’s tax department - Tax Delinquent List
County courthouse - Probate List
Go to courthouse
Ask for probate office
There’s a book with probate files
Go on their pc look up files to see if there’s a property that was left in probate (if so write down the names and addresses of owners)
Write down probate attorneys name email and phone number
Melissadata.com - Absentee Owner
Listsource.com - Absentee Owner
Usleadlist.com - Absentee Owner
Ok I have the probate list now what?
Send probate direct mail letter to the owner(s) of the property.
Send 1 letter a week for 5-7 weeks
Email the attorney the script (if they don’t reply, give them a call)
How to get Absentee Owner List
Melissadata.com -> Direct Mail -> Property -> Get Free Count -> Enter Hot Zip Codes -> Add Count
Property Type - Single family/Duplex/Triplex
Sale Date tab – go back 10 yrs from current day TO DATE. You want owners with equity in their house. Go back 50-70 yrs FROM DATE for more houses
Owner Type – absentee owners only, county owners, private owners only(without corporate owners), UPDATE COUNTS
TOTAL NUMBER OF ABSENTEE OWNERS
Select .csv format, click here to purchase in county list
Create an account
Enter job name, checkout, pay
Go back and purchase out of county list
OK I HAVE THE LIST NOW WHAT
Send out a yellow letter or postcard
What I normally do is send the postcard first because its cheaper and you know what address gets returned
Send letter the rest of the mailings
Handwritten font is best
Use invitation envelopes for higher open rate
Your money is in the list
Follow up is the key
Mail to your list at least 6-7 times (same list)
Be consistent (3-4 weeks)
Mail to the same list EVERY 30-60 days
FSBO
For sale by owner: a method of selling a property without the use of a broker or agent
Call them this may be a possible deal
What are you looking for when
Driving For Dollars
Vacant
Abandoned
Boarded up
Code violation
Older properties
Fire damaged
Flooded properties
Mold damage
Distressed
Ugly
You found a property now what
Write down the address on driving for dollars sheet
Find out who owns property on tax assessor website
Google – County Tax Assessor Appraiser –
Do a property search
Bandit Signs
Has anyone seen the signs around town saying WE BUY HOUSES
Good for finding motivated sellers
Always use local number
Can be handwritten or printed
Handwritten font is better
You can have signs printed with handwritten font
Dirtcheapsigns.com
Fastsigns.com
Home depot
Recommend putting out 75-100 per week
Recommend putting them out Fridays
Recommend hanging them up with a sign stapler not putting them in ground
Internet Leads
Posting on Facebook saying “ WE/ I BUY HOUSES”
Post on Facebook asking your Facebook friends to refer properties to you and you will pay a referral fee of $500
Facebook Ads
Facebook videos saying you buy houses
WE BUY HOUSES WEBSITE
Make youtube videos saying you buy houses
Post on all social media saying you buy houses
Craigslist.com, backpage.com, GoSection8.com
Online Auction Sites
YOU HAVE TO DO A DOUBLE CLOSING, YOU CANT DO TRADITIONAL WHOLESALE DEAL
Analyzing The Deal Overview
What is the ARV?
What are Comps?
How to determine repairs?
How to determine your MOA (Maximum Allowable Offer)
ARV
ARV – (After Repair Value) – The price a property can sell for, after all repairs
In order to find the ARV you need comparables (comps).
Comparable Sales (Comps)
In order to find the ARV you need to pull Comparable Sales (Comps)
Comparables Sales (Comps) – Are what properties are selling for in the same neighborhood as your property. With the same criteria as your property, after all the repairs.
How To Find Comps
Number one way is to pull from the MLS
Build a relationship with an investor friendly Realtor
A lot of agents will sell you Comps
Some agents will give you their login info so you can pull them yourself
Where to find agents?
Homesearch.com
Search City
Click on any property and call agent
Zillow.com (not always accurate)
Needs to be in the same neighborhood
Same square footage (you can go up or down 200 sq ft)
If your property is a wood frame only search wood frames
If your property is a block home only search for block homes
DO NOT CROSS MAJOR ROADS
The date of the property sold should be no longer than 12 months prior
You want at least 2-3 comps. The more comps you have the better
1 comp is ok, 8 is best.
I found comps now what
Once you find the comps you add all the sold prices and divide by the number of houses you have to determine ARV
Example
House #1 sold for $130,000
House #2 sold for $174,000
House #3 sold for $159,000
House#4 sold for $196,000
House #5 sold for $50,000
House #6 sold for $138,000
House #7 sold f or $145,000
House #8 sold for $88,000
House #9 sold for $134,000
ARV - $134,888.89
ARV
(AFTER REPAIR VALUE)
ARV(AFTER REPAIR VALUE) – is what an investor can sell the property for after all the repairs are made
Estimating Repairs
Cosmetic:
Paint interior ($600-$1000)
Carpet/Flooring ($1.47/sq ft)
Lights ($20.00 - $200)
Paint Exterior ($600 - $1000)
Landscape ($500-$1,000)
Quick Estimate
Cosmetic Only - $10K
If the property needs Cosmetics, new kitchen and baths - $20K
If the property needs Cosmetics, new kitchen, baths and roof - $25K
If the property needs Cosmetics, new kitchen, baths, central air and roof - $30K
If the property needs a full rehab - $35k- $40k
Quick estimate only applies to homes 1000-2000 sq/ft
For homes 2000 sq ft and above increase Estimate by 30%
For Rental Homes lower estimate by 40%
MAO
(Maximum Allowable Offer)
MAO (maximum allowable offer) – The max you can pay for a property
Assignment fee – the fee you charge for finding the deal
Fix and Flip MAO
ARV x .70 – Repairs – Assignment Fee = Your MAO (maximum allowable offer)
ARV Repairs Assignment MAO
Ex. $100,000 x .70 - $20,000 - $10,000 = $40,000
MAO
(Maximum Allowable Offer)
For a rental property an investor will be willing to pay a little more for a property than a fix and flip investor
Repairs are a lot cheaper, investor will only fix the property enough to make the property livable
Repair cost for a rental is normally no more than 10k
Assignment fee – the fee you charge for finding the deal
Buy and Hold MAO
ARV x .80 – Repairs – Assignment Fee = Your MAO (maximum allowable offer)
ARV Repairs Assignment MAO
Ex. $100,000 x .80 - $20,000 - $10,000 = $50,000
Assignment Fee
GREAT TIPS FOR GETTING STARTED
1. Take action. Just do it. You will never get a deal if you never get started.
2. Wholesaling is a marketing business. Be creative, stand out and be different. Stay away from what everyone else is doing. You have to make the homeowner say “I’m going to call this person over calling so and so.
3. If you’re not quick on your feet, you will miss out on A Lot of deals. DO NOT procrastinate.
4. When you get a deal, reinvest your money to get more deals. Once you get a steady income, then start taking a salary.
5. Go to biggerpockets.com to get any of your Real Estate questions answered. Meet buyers and people in your industry.
6. Follow everyone that has to do with real estate on all social media platforms
7. Contact a realtor, see what zip codes has the most cash transactions and buy a list in that zip code. Drive For Dollars in that zip code.
8. If you have $1,000 put all your money on one marketing strategy (preferably Direct Mail Letters)
9. You are going to hear NO a million times before you hear a yes. Keep going
10. Everything a motivated seller says to you write it down
11. When you have found a property driving for dollars ask the neighbors about the owner of the property they may have the information. (Neighbors will help you buy the property they don’t want their neighborhood with run down homes)
DO NOT FORGET
Take action. Just do it. You will never get a deal if you never get started.
Great Tips For Getting Started
(Questions)
What to avoid before getting started in real estate investing?
Fear, waiting for a logo/business name and stalling
Explain the roller coaster rides in investing?
Its not consistent, some months you do deals some months you don’t
Don’t build a rich lifestyle just b ecause you start getting a few deals
Explain the “always start never finish” mentality starting out?
If you start and don’t finish, you will never get results. You have to finish.
What should you do if you do marketing for a month and you don’t get any deals?
Keep marketing. You will never get a deal without marketing.
Getting the Property Pennies on the Dollar
Building Rapport with the Seller
If the seller likes you, they will do business with you
Show the seller you care about them
Know their why
Don’t sound desperate
Be a great listener (get to know the seller)
Make them laugh
Don’t make the seller feel like you’re only here to take their house and on to the next
Show them you are here to serve them and fix their problem or situation
Mirror the seller
Know the sellers WHY and find a way to fix their problem or situation.
Make sure the homeowner gives you their offer first!!!!
The Assessment Is Not the ARV
Most sellers don’t know real values. They aren’t familiar with the market values, most sellers don’t know the repair cost. They don’t know why we buy at a discount. They think the assessment is what the property is worth.
Follow Up Is Key:
Seller Situation Might Change from 2 months ago
Having your precious notes makes you look good
You get the deal (sometimes at a lower offer)
You find out the property has been sold.
Great Tips
When giving your offer, you should get butterflies
Listen carefully and document everything about your seller
When giving your offer go to the worst part of the house and ask how much do you really want for the property
If the owner states the property doesn’t need any repairs, ask what does the property need
Advise the owner you can close as soon as possible
CONTROLLING THE DEAL
Purchase and Sale Agreement
Purchase and sale agreement – an agreement to purchase real estate
How to fill out Purchase and Sales Agreement (pt1) (pt2)
Purchase and Sale Agreement Tips
When filling out the contract, if the property is an Estate only put the name of the Estate
If the property is in multiple names, each name has to be on the contract and every person has to sign the contract
If the owner has appliances you want, write on the contract the appliances go to you
You are protected by the clauses in the contract
Try to put the closing date out as far as possible (2-3 mos), but let the seller know you are looking to close sooner.(ex. Hey you know everyone isn’t perfect and the title company may have a few hiccups and cant close by the date we need to close by so we would have to draw up a new contract and I sign it and you sign it again and send it back which would cause a further delay. So to keep from doing all that I just extended the closing to avoid redoing the contract but I do plan on a lot closing sooner than the closing date.)
Put the full legal description on the contract from the tax assessor website (even if its long)
Email contract to seller to have seller sign the contract
You have the contract signed now what
Title Company
You want to find an investor friendly title company (on checks)
Email your contract to title company
If asked take your $10.00 EMD (earnest money deposit) to the title company (normally wouldn’t have to)
Finding The Buyer
What you will learn
Importance of a cash buyer
Traits of a cash buyer
Whats a good deal for a cash buyer
7 strategies to find cash buyers
Building a cash buyers list
What is a cash buyer?
Cash buyer – is someone who will purchase the property you have under contract with the seller. ALL CASH!!!!
These are the people that will be paying you for your deals
Someone who buys houses to fix them up and resells them (investor)
Someone who buys houses and rents them out (Landlord)
Cash buyers are important why
Without a cash buyer you don’t get paid
You cant sell the property
You have no business
Traits of a cash buyer
Must have cash
Should have a problem closing in 7-10 days or less
Must provide me with proof of funds (if never done business with)
Must provide a non-refundable (earnest money) cash deposit of $500-$1,000 upfront to the title company
Doesn’t care how much money I’m making
What is a good deal for a cash buyer
(How much can you sell the house for?)
You need to know there are two different types of buyers. A fix and Flip Investor and a Buy and Hold Investor
Fix and Flip Investor – likes to buy at a big discount because they are taking on the risk.
Buy and Hold Investor (Landlord) – will buy at a higher price because they are receiving an income on the property every month
Fix and Flip Investor
In order to sell IT HAS TO BE AT A CERTAIN PRICE
FORMULA-
(ARV)
After Repair Value x .70 – Repairs = Sale Price
Buy And Hold Investor
This type of buyer would love to buy at a huge discount but are willing to spend a little more for the property.
This type of buyer doesn’t do the extreme wow factor repairs just enough for someone to live in
FORMULA-
(ARV)
After Repair Value x .80 – Repairs = Sale Price
Strategies To Find Cash Buyers
Strategy #1 Bandit Signs
Very effective
Put out 20-25 signs out per deal (Rehab Special 4/2 SF Home Cash Only 59k net call for details 757-555-1212
Put most of your signs on busy roads and as close to home depot and lowes as possible.
Hang them up vs in the ground
Strategy #2 Craigslist, Backpage, and Facebook
Post 3 ads per day on each site
Stating ARV, repairs, and asking price
Ex: 7100 N 10 St Virginia Beach, VA 23456
Projected ARV $224,000
5/2 (originally 3 bd as reflected on the tax records) 2,657 sq ft on almost an acre
Repairs: $35,000
Asking $126,000 Cash As Is
Or Landlord looking for a property to hold: Current rent $1,200
Name: Anthony Boyd
Contact Me at 757-386-9252
Strategy #3 City/County Assessor Site
1. Click property search
2. Click Sales Search Tab
3. Property type – single family
4. Sales Date – go back 6mos
5. Search
6. Find All LLC buyers
7. Mail the Buyer a letter, letting them know you have a house for sale.
Strategy #4 Joining Local REIA Meetings ()
Go to meetup.com
Hover over discussion tab
Click on mailing list
Email to mailing list
Strategy #5 Google – We Buy Houses
Call them all
If they are paying for advertising they are serious about their business
Strategy #6 Realtors/Agents
Have the realtor send you cash only sales
Send them a letter to their address
Let Realtors know you have a property for sell. Most of them have a cash buyers list they can email property to
Strategy #7 Joint Venture (How-To)
Contact other wholesalers who have a huge Cash buyers List built up already
They can send the deal to their buyers
You pay the other wholesaler half of your profit for finding the buyer
When you build your buyers list you can bring buyers to other wholesalers so you can receive half their profits
Strategy #8 The List That You Build Up
Send email blast to list
Send text blast
Ok you found a cash buyer now what
Agree on a price to sell
Send Contract to Title Company
Mail or Email to Title Company
After this is received you will set a closing date and they will send you a Preliminary HUD-1 ***MAKE SURE YOUR ASSIGNMENT FEE IS ON THE HUD-1 ***
Different Types of Closings
Traditional Wholesale Closing
Double Closing
Traditional Wholesale Closing
Traditional Closing – is when the Cash Buyer brings his/her money, funds the deal, and pays you, the wholesaler, and the seller of the property all at once
Pros – No Extra Closing Fees
Cons – The seller can see exactly what you made (some sellers have a problem with that)
Seller Side Only – is a traditional Wholesale Closing but you are requesting for the sellers information to be only visible to the sellers, only the buyer can see the Wholesalers information and the sellers information
Pros – Seller can’t see what you make on the deal
Cons – None
Double Closing –
Also known as Back to Back Closing
When the Wholesaler acts as the buyer on the first closing in one room and you go in another room and sell the property to the cash buyer
· Pros – you only own the property for 2 minutes
o Sometimes you can use the cash buyers money
· Cons – Sometimes you have to contact a hard money lender and pay a fee to use their money
Step by Step Closing A Deal
Steps:
Find a list of properties (absentee, D4$, probate, etc.)
Market to the properties (direct mail, postcards, etc.)
Homeowner calls you, letting you know they want to sell the house. You get all their information (property details, sell price, and phone numbers). Let them know you are going to do a little more research and give them a call back. Set appointment to look at house.
Pull COMPS and come up with MAO
Call seller back with your offer and they accept.
Fill out contract, send to homeowner so they can sign it.
Send signed contract to title company.
Market for a buyer.
You and the buyer agree on a sell price.
Fill out Assignment of Contract with the buyer and sign it.
Send assignment of contract to Title Company
Buyer sends EMD (Earnest Money Deposit) to Title Company
Title Company does Title search and Title comes back free & clear
Buyer sends money to Title Company and everyone gets paid.
REPEAT!!!!
How To Automate Your Business
Why Automate Your Business
Your goal is to be an owner not an employee
Without a system you don’t own a business, you are the business
Learn to outsource, don’t do everything yourself
You don’t want any sellers calling your phone
START SLOW, LEARN YOUR BUSINESS FIRST
Don’t Use Your Personal Number
You don’t want any seller calls coming through your cell phone
Keeps you unorganized
Sellers will catch you off guard
Calls will come in all the time
Phone Solution
Patlive.com
Google Voice
· Free Phone Service
· You can set it up to send calls to your personal phone
· Create 2 accounts one for sellers one for Cash buyers
PatLive.com
· Free 14 day free trial
· Starts at $85.00 a month
· A live person answers the phone for you
· You can give them a script and they will say exactly what you want
· They will note everything down and send it to you
YellowLettersComplete.com
· Handwritten letters done for you
· Postcards done for you
· Saves you time
· Don’t have to be up for days licking and stamping envelopes
Outsourcing to a Virtual Assistant
Virtual Assistant – is someone generally self employed and provides professional services
Benefits of A Virtual Assistant
· Manage CRM (Podio)
· Building Buyers List
· Writing Contracts
· Manage Social Media Accounts
· Set Appointments
· Talk to your Sellers
· When you get a steady flow of deals coming in every month you will become very busy and won’t be able to do everything yourself
They pretty much do anything in your business that doesn’t make you money, so you have time to do the things that make you money.
Setting Up Your Company
· You don’t need to setup a business to close deals
· You can close deals in your name
· Speak with an attorney to see what type of business best fits you (LLC., Corp)
How To Setup Your Company
· LegalZoom.com
· Department of State
· Attorney
Build A Team
· Bird Dogs – find deals for finder fee
· Lenders
· Cash Buyers
· Partners
· Title Company
· Attorney
· Investor Friendly Agent
How to build a team
· Network
· Go to REIA Meetings
· Take people out to lunch or Starbucks
Dean Graziosi
The Two Bucket Wholesale Business
Dean Graziosi
You’ll do it by filling two buckets. The first is a bucket full of investors with lots of cash and eager for the right deals. We’ll call these people our cash buyers. The second bucket is filled with deals that real estate agents can’t find. It’s filled with deals from motivated sellers that most investors can’t find. By keeping a steady stream flowing into each of these buckets, you’ll be able to match killer deals from one bucket with ready cash buyers from the other bucket.
These cash buyers are people running businesses, many working longer hours than you are in your job. They don’t have the time to go out and find bargains. They rely on real estate agents to find deals because they’re the only resource they know of for finding deals. Most real estate agents have more than one buyer so their time can be limited to the buyer and the type of deals they find. You’re going to move into a position to offer a service that these cash buyers will value so highly that they will be happy to pay you every time you bring them a deal that meets their criteria.
The first thing I always tell everybody is that there are two companies out there that not only are more than happy to work with real estate investors, because some companies just don’t think like investors. They want to work with retail buyers.
But there are two companies out there that not only are they happy to work with real estate investors; they actually train their realtors that working with real estate investors is a good thing. It’s smart business. And those two companies are Remax and another up-and-coming company that’s fairly new but way up on the list now is Keller Williams. So those companies, they’re owned by real estate investors themselves. That’s how they were founded. And they teach their agents that working with real estate investors is a good thing.
So, what I always do is this. This is the fastest way to find a good agent, in my opinion, and I do it all the time.
One of the things you want to do is you actually can go to Remax.com, or KellerWilliams.com. I think Keller Williams is actually KW.com, if I remember right.
You can go to those websites and the actual process you’re doing, you’re not looking for an individual agent. Just hang with me a minute, and I’ll tell you how to get to that point. But you’re actually going to go to their website, and you’re going to click on “Find An Office.” Okay? There are two things you can click on. You can click on “Find An Agent” or “Find An Office.” You’re going to click on “Find An Office.”
So, once you click on “Find An Office,” you’re going to be able to type in a zip code or a city and state. So, type in your city or state that you’re going to be investing in, and you’re going to have a list of offices come up.
Okay. What you do, once you get the list of offices, is you can write that number down and write down the name of the office. I always say, “Hey, you’re not going to be good on the phone.” If you don’t normally talk on the phone, you’re not going to be good on the phone the first try out.
Write down five to 10 offices and numbers, and just practice calling them and going through this routine that I’m going to cover. By the third or fourth call, you’re going to be comfortable on the phone, and you’re going to sound like a professional.
So, don’t feel bad or don’t feel nervous if you’re just getting started, you’re brand new, you’re not used to talking on the phone, and you feel like you’re making a mistake.
Don’t feel intimidated. They don’t know you’re on the other side. They don’t know you’re brand new. Just be natural.
What you’re going to do is you’re going to call the office, and you’re going to talk to the receptionist. Most of these companies have a receptionist that sits upfront. When you call in that office, it goes right to the receptionist, which is what you want.
When the receptionist gets on the phone, you’re actually going to get the receptionist to do all of your dirty work. All of the hard work is going to be done by somebody else, which is the way I always try to build my entire business.
What’s going to happen is you’re going to tell the receptionist this. You’re going to say, “I’m an investor.” You’re going to say, “Hello. My name is Matt, and I’m an investor. And I want to speak to an agent that works with real estate investors. Is there anybody available?”
Now, the reason we do this, and the reason why we don’t just start calling agents, is because that receptionist knows what’s going on within that office. Some agents work with investors, and others don’t. Some agents are very successful working with investors, and others are brand new.
That receptionist is going to know which agent is always working with investors. That’s just the talk that’s going around the office.
So, once you say, “I’m an investor, and I’d like to speak to an agent that works with investors,” she’s going to put you on hold and she is going to go contact that agent.
That agent is going to come on the phone, and this is very important. Regardless of whether your exit strategy is buy, fix, and sell the property; regardless of if you’re exit strategy is to assign the contract or to double-close, or whatever your exit strategy is, that isn’t important.
When you talk to that agent, the important thing is you’re trying to find the agent’s mindset. Their mindset’s important.
Your entrance strategy should be the only important thing that the agent is thinking about. You don’t have to tell him. In, fact, don’t tell him, “I’m going to assign this contract.” They should only be concerned with how you’re going to lock the contract up.
So, when you talk to the agent, when that agent gets, finally comes on the phone, you’re going to say, “My name is Matt. I’m an investor. And my strategy is to buy, fix, and sell a property, and I want to turn a $20,000 to $25,000 profit.”
Now, when you’re talking to the agent, that’s the only thing you say. You don’t say, “Well, what I want to do is I want to lock up this property, and then I want to assign the contract.” Don’t mention that stuff. It’s only, “I want to buy, fix, and sell. So, I’m going to flip a property. And I want to make a $20,000 to $30,000 profit, or $20,000 to $25,000 profit.”
The important thing here is you’re going to buy, fix, and sell the property. I always tell everybody it’s the exit strategy that’s your business, it’s not the agents. The agent shouldn’t be concerned with after you purchase the property, what happens.
You’re going to say, “I’m going to/ I want to buy, fix, and sell the property. I want to turn a $20,000 to $25,000 profit. This is not a longterm strategy. I’m looking to be in and out of this deal quick.”
Okay, so why, the reason you’re saying that is you’re trying to find the mindset of the agent. Some of the agents you call are going to say, “You know what? In this market, the only thing you can do is buy and hold and rent it out, and wait for the market to go back up.”
Other agents are going to say, “You know what? Nobody is flipping right now, and you just can’t make money doing that.”
But some agents are going to say things like this: “Is that all you want to make is $25,000? I’ve got deals where people are making $30,000 and $40,000, or $50,000 on one deal, flipping it.” Or some of them might say, “Yeah, I can help you make $25,000. In fact, I’ve got an investor I’m working with right now that’s already done 10 of those deals this month.”
So, the important thing is, is you’re going to have to make a few phone calls most of the time. You’re going to be nervous the first time you do it. But once you get that agent on the phone, and you find the right agent, she says or he says they can help you, don’t let the conversation end there. Okay?
Always let the conversation keep going. Once they tell you they can help you, then ask them questions like, “Where’s the hot spots right now? Where are most of the investors active? What part of town or what zip code in this metro area are all the investors making all the money?” Let them lead you to the areas. Let them do the work. Let their expertise show you where to go.
So, ask them what price range of house are the hottest-selling right now. Because in some areas, like in my area that I invest in, the average priced house that sells is about $120,000. So, a lot of times, the $120,000 market might be hot, or maybe the $200,000 market might be hot in that period of time. Or maybe it’s the houses that are priced between $70,000 and $80,000.
Let the agents tell you what the market is doing. Then, use what they tell you to help formulate your plan.
Okay, now your intention is to go look at some properties or get some listings to look at. So, once you’ve discovered what part of town – and hey, three bedrooms, two baths, are the way to go, priced at $150,000 or whatever it is, those are the hot ones, hot properties, or hot areas, then you’re going to set up a time to go work with the agent or set up a time to look at some listings. Okay?
Many times, I ask that agent to email me those listings that day. I usually ask him, “Hey, I’m a very serious investor. I’d like to put this thing together, or put together some deals fairly quick. Is there any way you can email me some of those listings tonight? I’d like to look at 6 to 8 listings that you think, in your opinion, are good deals.”
A lot of times, they may not be able to give you that much information. They’ll say,”Well, what price range do you want to look at? Because I can show you good deals in all these different price ranges.”
Usually, what I do in that instance is I ask them, “Hey, let’s look at the listings that are starter homes.” If you say, “starter home,” in every market there’s starter homes. You can focus on just that.
So, even if you’re brand new and you don’t really know what you’re doing, you can say, “Hey, let’s take a look at some of the starter homes,” and that will give you a great place to start. Once she sends you some of those listings, then you guys can set up a time to review them and go look at them.
A couple of other things that I like to let the agent do for me while I’ve got them on the phone, is I usually like to say, “Why don’t you send me properties that meet these criteria? One is I want the house to be listed as-is.”
Now, if a house is listed as-is, that’s basically saying, “Hey, I’ve got to sell this property. I don’t have any money to do any fix-up work. You’re buying it as-is. I don’t know if it has problems, but it probably does, and I’m not responsible.”
Another criteria I like the agent to pull is a property that’s vacant. Now, if a property is vacant, that’s telling you one main thing. Somebody owns that property that doesn’t live there. So if they’re not living there, they’re living somewhere else. And if they’re living somewhere else, now they’re paying for 2 places.
Or if it’s a foreclosure, you’ve got a bank that owns a troubled asset and, in that case, they’re losing money every month.
So, vacant is definitely showing that the owner is motivated to sell, and so is as-is.
Another big key that I like to look at is I usually say, “Hey, why don’t you pull everything that’s listed as-is, vacant, and has had a price reduction.” If a property has had a price reduction, that right there is showing you that they put it on the market at a specific price, it didn’t sell at that price. They’re desperate to sell and they want to lower the price, and they’ve done it.
A property can be listed on the market 200 days. And that doesn’t mean that somebody is motivated to sell. That just means they’re willing to keep it out there long enough until it sells. But if a property has been on the market, whether it’s been on the market two weeks or two months, if they’ve had a price reduction, they’re motivated.
So, those are the main keys that I like an agent to send me, my first meeting with them. “Send me a property that’s listed as-is, vacant, and has had a price reduction, starter home area in this hot area that you say is a good place to start, and we can go from there.”
There you have it straight from one of my most successful students. It’s pretty awesome stuff! Now I want to take you through what specifically to do with Matt’s valuable information. We’ll also learn to do some market research to start the process for filling those two buckets.
Requirement #1
Tell the real estate agents that you’d like a list of the names of all of the cash buyers of real estate within the last 90 days. There are a few states where this information is kept private, but in most states it will be information that the agent has at their disposal or can get for you.
Many agents may not actually know how to find this information in their MLS system, so you’ll have to help. Have them call their MLS tech support to ask where that information is in the MLS system so they can pull a report for you.
If it’s not there, it will be recorded as public information at the courthouse and there will probably be a county website where they or you can look it up.
You can find your county assessor, treasurer, or courthouse by visiting Google and entering the name of your county and which department you are searching for.
You can find your county assessor, treasurer, or courthouse by visiting Google and entering the name of your county and which department you are searching for.
Another useful website to locate public records on property data IS https://publicrecords.netronline.com/ Website you can click on your state of interest and then select the county within that state. You will have direct links to that local county assessor’s website as well as other department within that county’s government. The county assessor’s or treasurer’s website will have a mailing address where the tax bills for the properties are sent. You can then contact these buyers by sending a letter to their mailing address.