Posted by David Alexander on March 15, 2000 at 20:59:36:
If your doing all that and feel your marketing is sound, then I would seriously look at methods of negotiating, closing and slaemanship techniques.
David Alexander
Steve Cook-How In the world do you do what you do? - Posted by Betty
Posted by Betty on March 15, 2000 at 11:27:30:
I’m getting a little discourage.I have made over
100 offers on handyman and foreclosures from the
MLS all at 70% of arv minus repairs and they have
all been turned down.The banks are holding out for
90% arv and there getting it.I do other marketing-
{ Ads,billboards,bandit signs,direct mail } What
is the secret?
Thanks
Re: Steve Cook-How In the world do you do what you do? - Posted by SCook85
Posted by SCook85 on March 15, 2000 at 23:25:05:
Betty,
To be honest with you I don’t know exactly how I do it. It just works. I don’t do things the way that I used to. My ratios have vastly improved. I get about 1 in every 5-7 offers accepted now, but I think that just comes with experience. I know where my best chances are.
Over what time period did you make those 100 offers? You may be getting phone callse over the course of the next 6 months wondering if you are still interested in those homes. I have a full pipeline now. Just when I think nothing is in the works, the phone rings- “are you still interested in that property you made an offer on back in October?”. My response is usually, yes but it’s not worth as much to me today as it was then. I almost always get them for less by this time.
I also made well over 100 offers before I got my first deal. It took me that long to find out what a real motivated seller was.
A couple of advantages that I have now:
I know my market like the back of my hand. It doesn’t take me more then 5 seconds to decide if I want a property and how much I’d pay for it. My offers get in right away and they are clean (no weasal clauses).
I have a good relationship with MANY realtors. They know me well, and I know what the banks they represent like to see in my offers (so they see it).
Apparently I’m in a good market for what I do- I really think that my methods will work best in Large metropolitan areas. It will work anywhere but ratios are going to change.
Contrary to what most people believe. I don’t just shotgun LOW BALL offers out there. My offers make sense, and typically I’m offering on homes that are listed below market value.
Here is a good example of the kind of deals that I find easier to pick up:
$70,000 ARV
Home needs $10k worth of work they are asking
$55,000
Retail buyers don’t want to buy the home. And investors wont’ even look at it because it is to much so they don’t bother. I’m the sole guy with a offer at $35k. They just blow me off to begin with, but 3 months later the phone is ringing. I forgot all about the property and now I can buy it.
Properties that come out listed very low get a ton of offers. If it is a good deal I typically offer above list price right away.
If they come out listed at FMV, I usually stay away unless it is a listing agent that I don’t like I might screw around with them and offer very low (it’s entertaining to listen to some of the messages that come back).
Estate sales are great. Especially when multiple heirs are involved. $25k reduction in price split between 5 people is only $5k each. Many of those get accepted.
This was not the direcion that I wanted to go with this post but I was just trying to think about the scenarios of how my offers get accepted.
Recently I have bought some more FSBO’s. I’ve gotten better deals with a couple of them then any REO’s lately.
I have been working on my selling machine for the last few months and that is doing well. I will soon be working on a full blown buying machine to go along with it. I’ll keep you posted.
Happy investing!
Steve
He Does What Works - For Him - Posted by B.L.Renfrow
Posted by B.L.Renfrow on March 15, 2000 at 19:02:21:
Betty,
If “plan A” isn’t working for you, go to “plan B.”
Personally, I rarely make offers on listed properties. My best deals have come from FSBOs and expired listings. RE agents/brokers just haven’t proven to be a good source of deals for me. Now, is that because it doesn’t work here? No…it just doesn’t work as well for ME as it does for others. I know Steve Cook has had remarkable success with his system. It works for him. His market is different from mine; his personality and style of doing business are different from mine. Is there anything wrong with the way he does business? Absolutely not. In fact, he probably does more deals in a month than I do in six!
But if that system doesn’t work for you…find something that does. If the banks in your area are holding out for 90% ARV…and getting it…it’s not too tough to figure out why your offers aren’t getting accepted. Why would they?
What you need to do, Betty, is find a niche that works FOR YOU. The sellers with whom you are dealing don’t sound motivated. That’s a problem. You can fire off low ball offers all day long, and if the sellers aren’t motivated, you’ll get nowhere.
Learn how to find the MOTIVATED sellers…the ones who HAVE to sell…because they got a job transfer, because they’re getting divorced, because they can’t afford their mortgage payments, because they don’t want to be a landlord any longer, because…ad nauseum.
Terry Vaughan says to become a “PROBLEM SOLVER”. Nate Tyler says to get the seller to the kitchen table. Pat also stresses finding motivated sellers. It’s all great advice, from people who are doing plenty of real deals.
Bottom line: If you want to be successful, stop what you’re doing! It’s not working. Learn how to get your name in front of the MOTIVATED SELLERS and it won’t be long before you have some accepted offers!
Brian (NY)
Re: Steve Cook-How In the world do you do what you do? - Posted by PBoone
Posted by PBoone on March 15, 2000 at 17:53:42:
Location, location, location. It really depends the buyers in your city. Here in portland oregon houses sell for retail minus repairs, so we have to purchase from motivated sellers, but in St Louis Mo or Springfield you could purchase using steve’s method
Pat
Re: Steve Cook-How In the world do you do what you do? - Posted by Tyler
Posted by Tyler on March 15, 2000 at 12:05:12:
The problem I see is that you’re throwing lots and lots of mud on the wall, hoping some will stick…and none has yet.
I’ve taken this approach before, and never had any success.
My success has come from one thing: motivated sellers. No big “secret”. In fact, I’d say anyone on this board with any amount of success would agree.
If you shift your focus from looking for “houses”, to looking for “sellers”, in my opinion you’ll have better luck.
Concentrate harder on your marketing. Get your name out there EVERYWHERE so that when motivation strikes, a seller can find you. You can also TARGET sellers who are more inclined to being motivated. For instance tired landlords, out of area owners, pre-forclosure owners, abandoned property owners.
These are the people you put your MESSAGE in front of. Once you have your message in front of them, if they are motivated they will call you.
Then it’s a matter of getting them to the kitchen table. And that’s no joke. Then you can find their motivation, and find a solution.
In my opinion, blindly flinging low-ball offers is a waste of time, if you’re putting very much energy in it.
On the other hand, if you have a “mud slinging” agent writing these cookie-cutter-low-ball offers without you around, then no big deal. If you get one,…bonus!
Just don’t spin your wheels doing it.
Concentrate on marketing.
Marketing, marketing, marketing.
Then get good at negotiating. I’ve made more money in 30 seconds of tongue flapping in this business, then I’ve made in a full month in the corporate world. It’s pretty powerful.
Go get 'em.
Nate
Good POINT Nate! - Posted by Terry Vaughan
Posted by Terry Vaughan on March 15, 2000 at 14:32:43:
The MOTIVATED seller! The key to BIG profits!
It doesn’t matter how large or small the deal, when you learn to become a “problem solver” for people who become motivated to solve a problem and look at selling their property as the solution, you have moved into the relm of the proffessional, where all the best and biggest profits are.
A good friend of mine made $50,000,000 (that’s right, a big player) on a deal last year in northern California. His comment about the deal?
"You know, Terry, it never fails. It always boils down to a “motivated seller!”
Message from the pros?
Re: Good POINT Nate! - Posted by Betty
Posted by Betty on March 15, 2000 at 20:01:39:
Terry,I agree that motivated sellers Is the key to the gold and that marketing Is the map to the treasure.but how do I find them? My marketing is 1.Billboards 2.ads in newspapers 3.Direct mail to pre foreclosures,out of state owners,fsbo,condemn sfh,tired landloards 4.Bandit signs 5.Business cards and flyers every place What else should I be doing? Thanks for your help,
Betty
You may be OVER doing it! - Posted by Terry Vaughan
Posted by Terry Vaughan on March 16, 2000 at 24:34:29:
Bob Allen used to tell us (you will find it in “Nothing Down”) always keep five lines in the water.
It looks like you’re following that advice, but are you really getting to the “people” with the problems.
Perhaps david is right. Perhaps it is your message. It should be a K.I.S.S. type message.
K.I.S.S. = Keep It Simple Simon
The main message you should be sending is, “You are a problem solver!” People should contact you with their problems related to selling their property.
Don’t over complicate, just keep it simple. Example; postcards in the laundramatte, small ad in the Penny Saver. Make the postman your bird dog. etc., etc., etc.
Keep the message uncomplicated no mater what level you are working with.
I let the message be known even with banks that I do business with, that I solve “bad loan” problems for banks.
Hope this helps.