If the ARV is 55K and you are going to flip to a wholesaler that wants to make 10-15K then they can’t be in it for more than 40K. Subtract your profit and what you think the repairs will be and you have you maximum allowable offer. Since this value will be below the 60-65% that a hard money lender would require then you could even do a rehab if you wanted.
You also need to find the rehab investor to flip the proprty to. Find out what areas they want to work in, how fast can they come up with the cash or other criteria for buying. You then know what to tell your realtors.
Hi Guys, I AM SO EXCITED!!! I can barely contain myself. I
bought Ron LeGrands course for Wholesaling, and I have found
four real estate agents that are willing to work with me. It has been so hard finding an agent and in the course, Legrand says it is better to find an agent to achieve better results. I am really ready to go to work. I feel so very good right now. I feel like all my dreams are about to come true. All I need to do is get my criteria together so that the agents will know what I need. Since I will be looking for houses that are priced well below market value, I am trying to establish what those prices should be? Like if a house is valued at $55,000 what should I offer. This is the area I am trying to cover the most.What else do I need to tell the RE agent? I would love the ideas and suggestion.Please help me!I don’t want to blow this opportunity by not being not being knowledgable as to what I should tell them SOMEBODY PLEASE HELP ME!!!
Thank you all
Pat
PUT THE TAPES DOWN AND STEP AWAY FROM THE MACHINE!!! Sorry, but you were so excited, I thought I should be careful.
All the other posts offer good suggestions. I suggest that you delve into Ron’s tapes. I’ve been through them and they cover just about everything you need to know to get started. In addition, I’ll give you two pieces of advice:
Pick an area to concentrate in. Ron gives you an idea about the type of areas, but basically there one level above the war zones…areas that you might not mind visiting during the day but would rather not be caught in at night. Also remember that they should be areas where people want to own a home. In Baltimore and Jacksonville, the median property values are around $110,000. I think Ron looks for properties in the $60,000 to $70,000 range. The areas I look at for wholesaling have values in the $45,000 to $80,000 range, though most are between $60,000 to $75,000. Again, all of this is in his tapes.
Get to know the property values in the area you select. Realtor comps, www.experian.com ($10 for a set of comps), or public record are some ideas. Listings may be close with some cushion added (10%-15%?) for seller profit/agent commission. Do this as you go through the tapes so you’ll be ready to hit the ground running. Just remember, though it helps to know values off the bat, you can always have a Realtor run comps for you. Just be sure to respect their time and not overburden them with an unreasonable amount of requests. You might even offer $20 or so for each set of comps they run for you. In a pinch, www.experian.com will do it for $10, maybe $15.
Hope this helps. Gotta run. Good luck in your investing!
You want to end up at no more than 65%, so other investors can qualify for the typical hard money if you want/need to flip. So offer way below. You may not get many positive responses, but the ones you get will be worth it. We put a house under contract that retails at $80; they were asking $65, we offered $40, they countered at $45 (for the quick “cash” close - but aren’t most closings for “cash?”). We took it. Like the posts below said, now we wish we had offered less! Who knows, if we’d offered $20, would they have sold it at $25???
As far as your realtors, be kind to them. Give them as specific a criteria to search as possible - what areas, how many minimum bedrooms, baths, construction, etc. And give them each a different set of criteria - otherwise, they will all pull up the same info. What I’ve done (I have access to the MLS), is look at 6 or so neighborhoods once a week, and pick out the 2-3 cheapest homes in the subdivision and make even lower offers. Has been quite successful in getting responses. Find out what the values are in specific neighborhoods, and the “good ones” jump out at you after a while.
Pat,
While finding a house that is “priced” below market value can be good, there is a definite reason to forget that mentality all together.
Most properties are listed at what the seller “hopes” to get from it.
If a home listed below value is still for sale after a time, WHY? is it not sold?
Go for the homes that fit the profile Legrand gives you, the “UGLY” houses.
Then, make offers according to the criteria he gives you. (< M.A.O. Use his formula’s, he teaches them because they work!)
If you are embarrassed to present your offers, GOOD!, if you are not, they are too high!
Just make your repair estimates and and analysis as accurate as possible, but do it QUICK!
You cannot steal in slow motion, as they say.
I talked to a guy last week on the phone that bouhgt a home for $35k, and was listed for $80k.(I’m still upset I passed this one up, i could have “flipped” it to him!)
I’m sure the seller “wished” they could get the $80k, but they also wanted it sold NOW!, So, he got it for the lower price. He will now rehab it and make some good money, all because he “offered” the lower price.
Follow the course material. It works!
Do not be dicouraged with REJECTED offers, or counters that are too high. Just remeber to follow up.
Eventually you’ll find that seller willing to take your first offer, and others with followup will be accepted as well.
and you know what?
Even then, you’ll have doubts and concerns.
You will think, “DARN! I offered Too much!”.
and then you get paid!(sort of takes the sting out of the “too high offer concern”)
Good luck, and go make offers!
NO offer will get accepted UNTIL IT IS PRESENTED!