Cash offers - Posted by Jess (NJ)

Posted by Redline on July 31, 2003 at 10:20:09:

Yep, keep that attitude. It’ll get you far. You’ve made quite a first impression.

RL

Cash offers - Posted by Jess (NJ)

Posted by Jess (NJ) on July 30, 2003 at 18:37:12:

My area is hot right now and the only way to get good deals off the MLS is through quick all-cash offers. Since I have never done a cash offer (which would be an assignment, because I also do not have the cash to close it myself), I am wondering a few things:
In a hot market, on a nice house, what kind of cash offer should I make? What percentage below value/asking and what kind of time frame - 30 days, 45 days?
Also, if the offer is accepted, since I don’t have any serious REI contacts yet, how do I go about finding a buyer to assign it to?

I know these are relatively amateurish questions, but in all of the courses I’ve read/listened, they just say, “Put in an all cash offer … and assign it to someone else.” OK… HOW?

From one NJ investor to another… - Posted by IB (NJ)

Posted by IB (NJ) on July 31, 2003 at 24:48:50:

quit looking on the MLS for deals. Every newbie and their Mother (literally) are looking there for deals. Aas a result the competition is stiff and the prices are being bidded up to a point where it doesn’t make sense for an investor.

Read the archives of the board about finding “motivated sellers”. Then forget the MLS and other arenas where middlemen (realtors) control deal and start dealing with the sellers direct.

Re: Cash offers - Posted by John V, FL

Posted by John V, FL on July 31, 2003 at 24:11:06:

Since it is so hot don’t you think you’ll get better opportunities when the market cools off or do you really think your market will stay hot forever?

My views. - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 30, 2003 at 21:48:26:

Jess–(NJ)-------------

Sounds like you are not ready to be making offers to me. I’d suggest you concentrating on studying real estate investing and the market where you are planning to invest for a few months. Then you will be more ready to proceed.

And I agree with JS(IN), too. Mostly the good deals are found out in the wilderness, not the feast table of the MLS.

Good Investing************Ron Starr************

Re: Cash offers - Posted by js-Indianapolis

Posted by js-Indianapolis on July 30, 2003 at 18:51:39:

“My area is hot right now and the only way to get good deals off the MLS…”

Then quit looking to the MLS for deals.

Re: From one NJ investor to another… - Posted by Jess (NJ)

Posted by Jess (NJ) on July 31, 2003 at 01:25:41:

Thanks for not being so harsh with me like everyone else was…

Apparently everyone just locked in to the fact that I was looking at the MLS for ONE deal that I was interested in and overlooked the actual questions I was asking about how to make a cash offer in general…

I suppose I don’t need to defend myself, but since this turned out to be a hot thread, I guess I will:

LISTEN UP - EVERYONE WHO IS JUMPING ON MY BACK ABOUT LOOKING AT THE MLS:
It is true, I have a realtor who forwards me the new MLS listings in my farm area… and this is just ONE of my venues for looking for investments. Is it so wrong? Am I supposed to drop all my realtor/MLS attachments and NEVER EVER look in there? From the responses I’ve gotten from my post, it certainly seems so…

Re: My views. - Posted by Jess (NJ)

Posted by Jess (NJ) on July 30, 2003 at 23:32:28:

Ron,
I don’t understand - why do you say I am not ready to be making offers? The fact that I do not have enough contacts lined up, or do I sound like I do not know what I am talking about? Please elaborate.
-Jess

nope - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 31, 2003 at 10:19:55:

Jess–(NJ)-----------

Nope, you don’t have to ignore potential deals from the MLS. You can choose your own sources for finding deals to satisfy you. You don’t have to listen to anybody.

It is just that you have a limited amount of time to look for good deals. And there are very few good deals to be found in most places in the good old USA. So, it is sensible to concentrate your efforts on the sources of potential deals that are more productive. The MLS is one of the least productive sources of deals in most parts of the country.

My view is: if you have real estate people who are feeding you listing that actually make some sense, go ahead and encourage them. You might make a good deal there. However, my projection is: after a while, you will find that there is not much of value there. The licensees who contact you will stop when you don’t buy anything because what they think is good you will not.

It is not easy to find bargain real estate deals in most parts of the country. I would guess that it is less easy to do in New Jersey than in an average town. I say this so you can know the reality and deal with it sensibly. Beginners who expect it to be easy to find great deals get discouraged when they keep hitting up against reality. Then they quit and never succeed. You can succeed in real estate investing. The secret of real estate success: persistance.

Good InvestingRon Starr*

P.S. What is the secret of persistance? Ah, that is where the learning comes in.
R *

Re: From one NJ investor to another… - Posted by Redline

Posted by Redline on July 31, 2003 at 02:23:31:

Jess, if you intend to succeed in this business then you better grow a thick skin.

If you think people are jumping down your throat here, you aint seen NOTHING yet.

RL

More - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on July 31, 2003 at 09:59:54:

Jess–(NJ)------------

I was not trying to critize you. As Redline said: you are what you are. But, I worry that you will make bad mistakes if you stumble forward without at least a rough idea of what you are doing.

Thanks for clarifying where you are at. You need to understand that while we like helping people people with difficulties, we who help here cannot be writing a course on real estate investing for each post. This is a short question and answer medium.

My view is that you are responsible for making the effort to study on your own. If you are not sure what to study, I’d suggest that you read my post for beginners, if you have not done so, which you can find by putting “beginners success” into the archive search function at the top of the page on this main board of this CREONLINE.COM website. There I recommend how to inexpensively acquire information.

Beside that, you can use that archive search to study topics here on the CREONLINE.COM website. For instance, you ask about finding buyers for the properties you get under contract. I’d suggest an archive search under “finding buyers” “finding rehab people” etc.

You seem to have some attitude as shown by complaining that you have not received good advice yet. You might want to rethink it and ask yourself “am I resisting the advice I am getting?”

Sounds like, while you live in New Jersey, you’re originally from New York City.

Good InvestingRon Starr******

uhhh … - Posted by Redline

Posted by Redline on July 31, 2003 at 24:48:36:

Maybe because you’re asking very newbie type questions and don’t seem to understand what it is you should be doing.

There’s nothing wrong with not knowing - but if you can’t admit you need to learn more, you’ll soon find yourself in alot of trouble.

Just my opinion.
RL

NJ market… - Posted by Ben (NJ)

Posted by Ben (NJ) on July 31, 2003 at 12:04:45:

is still insane. A couple I know just told me a story
of how they looked at a house the very first day it hit the market. As they were discussing the pros and cons with each other, someone drives up, walks right up to the owner with a deposit and a contract for full asking price and took it right out from under them!

Jess responds again - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on August 03, 2003 at 17:19:11:

I received this on e-mail. I have a policy of rarely responding to personal e-mail questions privately. However, I don’t see any privacy issue here and would like others to have a chance to respond to Jess.

--–* The E-Mail ----*

Ronald,
I am writing you personally to thank you for taking the time to answer my questions and steer me in the right direction. First, I would like to start out by attempting to explain the posts I left (if you care

  • if not, just skip to the next paragraph :slight_smile: ). The reason I got an attitude is not because anyone “hurt my feelings” or anything, but that RedLine decided to post back a message that simply called me a newbie… yet didn’t answer any of the questions I had posted!! Constructive criticism (like the kind you always give in your posts) I take very well, however criticism that contains no real, meaningful information with which to better myself with really gets to me, and that’s why I
    responded to RedLine’s posts that way - and I never meant any of that toward you or anyone else who actually took the time to respond to my post with a meaningful message.
    On a more personal note, I was (and still am) wondering exactly why you said you don’t I am yet ready for investing because of that one question. Did I really exude that much of an air of “I don’t know what
    I’m talking about”? Your response really surprised me, because I have been studying any book and assette/video course on creative real estate that I can get my hands on for the past year and feel that I understand pretty much all of it. I have found all of your posts on this forum highly informative and highly value your ideas, and all I was looking for from the beginning (when I left that post that started this mess - “Please elaborate.”) was just a little further explanation of how you came to the idea that you thought I wasn’t ready yet.

Oh, and I would also like to add that you got it right on the head - I was born in New York City and raised in Jersey. :slight_smile:

Thank you for all your posts, and I hope this adds a little light to the background of my posts.
-Jess (NJ)

----- RESPONSE -----
Jess–(NJ)------------------------

Thank you for your kind words. I try to understand clearly what is going on and try to make that understanding available to others.

I am impressed that you have been studying for a year. That is what I recommend in my post for beginners: “beginners success.”

I worry that you have not thought through your whole investment program. Thus, you may make buys that are not very good.

However, the question you originally asked is hard to answer in the general. Here in Coastal CA where I am, one could do alright buying a property for 10% below market, as a lot of the houses cost $400K to $700K. A profit of 8 or 10% is a big pay off for one deal. If one were buying in ghettor older towns, one might require much bigger percent discounts to make a deal worthwhile.

Each person has to set criteria themselves. It seems to me that you have ask why you are buying: for appreciation, for cash flow, for instant appreciation through bargain buying, etc. Then there are the aspects of the financing. I buy all cash. However, if you have a seller who is carrying a large part of the cost in a loan, that affects how much of a discount might be acceptable to you.

What is a bargain? The generally accepted definition is at least 20% below fair market value. A super-bargain is buying at less than 2/3 of market value. However, some of us require even lower prices. I typically do not like to pay more than about 50% of market value. But I usually only buy 1 or 2 properties a year.

You have to develop an invstment approach that satisfies you. Then, from that investment approach you will know what to offer to owners.

There are an awfully lot of people who think that they can get rich quick with real estate without understanding the business. Perhaps you are not in that category. You may be a little more knowledgeable than your orginal question suggested, given that you have been studying quite a bit. However, I still worry that you understand what you are trying to do. The orginal question did not give me that reassurance.

Good InvestingRon Starr*

Re: uhhh … - Posted by Jess (NJ)

Posted by Jess (NJ) on July 31, 2003 at 01:21:02:

I never said that I didn’t need to learn more - I JUST ASKED WHAT IN PARTICULAR I WAS THINKING WRONG!!!

I am a newbie. I bought a tri-plex last year and about 3 or 4 real estate courses since then. I have no experience with creative real estate… Hmmm… what else can I ADMIT?

Look - everyone who wants to jump down my throat – take a step back and think that maybe I was not being defensive, but that maybe I actually MEANT what I said. I would like clarification on just WHY I sound like such a newbie. I KNOW that I sound like one, but I would like to know why so that I can learn some more!!!

Re: NJ market… - Posted by Wayne-NC

Posted by Wayne-NC on August 03, 2003 at 11:55:35:

Great! I have one in Pt. Pleasant almost ready to go. I thought the market had slowed down a little. Anybody interested in the shore area?

Good! - Posted by Redline

Posted by Redline on July 31, 2003 at 15:59:40:

I’ll be marketing a two family in a nice area in Bergen County soon and I need top dollar. Send me your buyers! :wink:

RL

you must be kidding. - Posted by Redline

Posted by Redline on July 31, 2003 at 02:18:36:

I didn’t jump down your throat, I am just amazed you don’t get why Ron told you that you’re not ready.

Let’s look at your post:

“My area is hot right now and the only way to get good deals off the MLS is through quick all-cash offers.”
– Looking on the MLS for deals is usually futile. Most investors ignore the MLS, except for comps.

“Since I have never done a cash offer (which would be an assignment, because I also do not have the cash to close it myself)”
– Most investors have cash, access to cash. Only newbies say “I can’t close it myself”.

"In a hot market, on a nice house, what kind of cash offer should I make? "
– Newbie generic question.

“What percentage below value/asking and what kind of time frame - 30 days, 45 days?”
– No idea how to structure an offer.

“Also, if the offer is accepted, since I don’t have any serious REI contacts yet, how do I go about finding a buyer to assign it to?”
– Don’t have a buyer and have no idea HOW to find a buyer.

“I know these are relatively amateurish questions, but in all of the courses I’ve read/listened, they just say, “Put in an all cash offer … and assign it to someone else.” OK… HOW?”
– If you don’t know how to flip a property, you’re a newbie.

Jesus … you are what you are. And I said before, there’s nothing wrong with that. We were all new at once. But don’t post what you did and then wonder why people tell you to read a bit more before you jump in. And don’t get all crappy about it, to boot.

Is it blatantly obvious for you now, as it is for all of us?

Happy to clarify,
RL

Remember that condo in North Brunswick… - Posted by Ben (NJ)

Posted by Ben (NJ) on July 31, 2003 at 17:38:03:

got SIX offers the first day out, they all bid against each other and I ended up with $10,000 above asking price! It’s good to be a seller!

Re: you must be kidding. - Posted by Jess (NJ)

Posted by Jess (NJ) on July 31, 2003 at 02:55:27:

Three posts and not a valuable nugget in any of them… Thanks for your input.