Hello everyone. I am in Miami, FL. and was just wondering about using MLS in this down market to find deals to wholesale . My wife is the agent and I would like to start making some offers through her. I already have a buyers list…it probably needs updating…as it is from 2003. Anyway thanks.
That’s what I do. Start with buyers first, then use MLS to find properties to option to them.
Hello and thanks. You say that you use an option and not a purchase and sale agreement? Can you explain please? Thanks.
guess I should have explained more.
-
Use the regular ways of marketing to find buyers (direct mail, ads, sign, etc)
-
qualify the buyers by getting them pre-qualified with one of your lenders
-
based on what they are qualified to and want to purchase, begin searching for about 10 privately held (not bank owned) properties in the MLS.
-
verify the values of the properties using the tax data and cma features of MLS to ensure that there is enough equity in the property to fund a deal and pay your fee
-
contact the seller for motivation and to verify the spread
-
view the properties and show to buyer only if it meets their expectations and qualifications
-
enter an option agreement with seller for a price lower than the buyer is willing to pay. make sure there is enough of an equity spread to cover your fee (5-10k) plus any closing costs the buyer will need assistance with.
-
have buyer sign a purchase offer contract for a higher amount than the seller agreed to accept as payment in full
-
manage the closing process and collect a check
using an option allows you make money on deals that you would normally pass up on. It also allows you to make money off of deals without ever having to take title or do repairs on them. this works best with houses that do not need repairs (move in ready) and that are privately held.
hassansr…
How in the world do you get the Realtors from the MLS to work with you? I realize that every market is different, but in my area, the 1300 licensed Realtors turn up their noses at me (*and i’m licensed too) when I even ask about options. It’s like i’ve got the plague and they don’t even want to speak to me or return my emails. :banghead And the Property Mgmt Companies/Rental Agencies are even worse.
The only way i’ve found to even sniff a deal is somehow find a motivated seller who dislikes agents (even more than I do), lock it up with a option contract, then sell the contract to a tenant/buyer on a Rent-to-Own.
I just go through the process of checking out the house as if I were going to buy it. Then after I have checked out the property to make sure it fits what I need, I let the seller/agent know what I am planning to do; they either will or the won’t at that point.
The key to making it all work is having a pre-approved, qualified end buyer to entice them with. In today’s market, if you can prove that you or your buyer can close a deal, 90% of sellers and agents will work with you. Then it’s just a matter of negotiating a deal.
And I’m assuming that you are a Broker and don’t have to split anything when it comes to commission.
So you’ve not created any agency relationship with the buyer?
Forgive me for asking a possibly stupid question…but… If they are a Pre-Approved, qualified end buyer then wouldn’t this be a normal MLS, buy/sell transaction?(maybe i’m thinking too much)
You will often have to educate the realtors who don’t understand what “we” do and “how” we buy. Many think we’re out to get their sellers while the truth remains that we’re looking to help get them out of a bad situation - win/win.
CP
I’m not a realtor. My buyers come to me from referrals and as result of the advertising I run for houses that I own for sale. Many of the buyers go through the process of applying for the houses on my applications which i forward to a loan officer after i review them. Out of ten applicants maybe one or two qualify for a home loan. If they dont qualify for my house but do for A house I start looking for them a house via mls, fsbo sites , my vast list of contacts on my email list and the other investors in my market.
by using an option i dont have an agency relationship with either party as i have a stake in the sellers property that i am selling.
hassansr…
Ok…that makes sense. Thanks.
I too love options. (Control Everything…Own Nothing) Sounds like the exact things i’m trying to do down here in South Carolina as an Investor.