couple of Practical Open q's for the pro's Delondon Can bro get a hand?! LOL

Bird Dogs, Wholesaling
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OK folks, let me just get it out in the open that this forum is the shit, no joke, god knows what I’d be paying to learn all the info I have scoured from here!! And I have to thank all the people that post like crazy, Delondon, and EricMedem, are the ones that immediately come to mind, but there are plenty of folks putting in lots of work to help out the newbs like myself and I just want to say thanks!! you ahv eno idea how you guys are changing my life from being a wage slave to working for me and my fam and making things better!

That said, I just have a couple of practical end questions for anyone to throw some knowledge at.

I get the wholesale process, all the way down to a couple of practical issues;

  1. So I have some buyers, and I put out ads and get a few sellers, now the issue is, how can I qualify the sellers over the phone, if I can at all? Also, how can I make a decent repair cost estimate, I’m not in construction or anything, so I’m unclear about this part, OR do I just try to negotiate them down to a certain percentage of the market value of the homes in the area, then show the buyers around the place and let them draw conclusions?

  2. What’s a good way to go about showing investors the property without having the seller there? (assuming seller still lives there)

  3. Can anyone share some info, or point me to some that talks about tactics with talking the seller down on asking price, I have had a couple approach me that seem like they could be good deals, but the negotiation part is rough, not because I’m embarrassed to go to low, but because maybe I’m too harsh with it, and they think I’m ripping them off.

  4. Last question (for now at least haha)
    Let’s say I go check out a place and it’s in pretty good shape, the owner still owes money on the mortgage, about 100k on a 300k house, but they want to sell it off, how does this operate in terms of creative real estate? I can’t talk them down right? Because they still owe the bank, or can I somehow talk them into signing the mortgage over to a new guy for the remainder? I don’t mind hard sells, I can wait out the best of them, just curious.

thanks you guys, and riches all around be with you all!!!

you guys are the best!

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Hi Stevie…Welcome to the world of Real Estate Riches!! :smile

If you really want to qualify sellers you can get a proof of funds letter from them. Now the buyers that most wholesalers cater to are not your average investors, so a lot of times they are unwilling to put their personal information out there. If they are not willing to do so, you may want to get a list of properties they have bought in the recent past ( a portfolio would be great). If you have built your alliances correctly you can also speak with realtors in the area who can pull up every property that your “investor” has bought within each county. If you notice that they have purchased numerous property within a small time frame more then likely you will have no problem cashing :banana in at closing.

:smile These are just a few examples of what can be done if your buyer has been investing in multiple properties. Some investors are just starting out and have the funds to put their money where their mouth is, however, they have not yet established a solid background purchasing property. In these cases, you will not find a long list of properties that they have closed on, so you will have to select another method of verifying their legitimacy.

:smile Wholesale investors typically purchase very quickly so you’ll know how serious they are within a matter of days of moving forward with the deal. If you are still Leary, you always have the right of accepting an earnest money deposit from them as well. This ensures that you are not wasting your time and you at least will pocket something out of the deal if it falls through. If you have enough buyers this should never be an issue. BUILD YOUR LIST!!!

:smile If none of these methods work for you then you either have to try another or wait until close.

:smile The best way of showing the property if the seller lives there is to arrange a time where the seller will not be at home to show the property. I typically do not have this problem because most of the homes I proceed with are vacant. In the contract I have a clause that states that upon acceptance of my offer I will be issued a key to be used for future showings.

:smile If the seller still lives there you may want to set up a time once or twice a week where you will have access to the home for an hour or two for showings. Any serious buyer will make it their priority to be there between the hours it is available to show. Come on now, your doing them a favor :-)…Your Building their NET WORTH!!!

:smile As far as your negotiation style, you may want to build value in reasoning that you must buy low. Explain to your seller’s that you need to buy low in order to make a reasonable profit. Let them be aware of all the costs involved, such as holding costs (mortgage, etc), repair and maintenance costs, upkeep, etc, etc. Let them know that after that you will be reselling it for at least 15% below market value for a quick close and you still need it to make sense for you. Once they realize that you are not going to be living in there, but instead that is the way you put food on the table, they tend to understand… Give them the sad face :embarrassed… It works GREAT!!! In addition, let them know that it has to be a win-win situation for all parties involved (meaning YOU too).

:smile If someone owes 100k on a 300k mortgage and the home is in good shape…there is no reason to talk them down…That’s if they are willing to sell it for what they owe, which is 100k… Find deals like these and investors will be knocking down your door… :bouncemulti They WILL FIND YOU (once you build a reputation 4 yourself)!! Nothing creative needed here… Investors will pay CA$H all day long for deals like these. You may want to target your creative deals to fair market value properties.

Hope this info helps!!! :beer

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Hey REI Millions!

Thanks for the detailed intense response! Just what I have come to expect here! You rock!

I have found some info on negotiations, mostly here

http://en.wikipedia.org/wiki/Negotiating

http://en.wikipedia.org/wiki/Getting_to_YES

ah wikipedia, endless source of info! the internet is really amazing !

anyway, I hear what you are saying about that mortgage situation, would that be handled as a subject - to?

also one more topic,

What would be the best way to handle the opposite situation, say if the owner owes more than the balance? So 300k mortgage and they have paid off say 100k or thereabouts.

Thanks REI Millions! Where are you located? I hope I live close to you!!!

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Hi Stevie,

If you have cash buyers or they can qualify for a loan, pull it from their retirement funds or whatever it may be, you would NOT do a subject to.

You would get the property under contract through your normal purchase agreement, have all of the terms outlined and structured appropriately.

You would then flip your purchase agreement to an investor for an assignment fee.

In order to do that you will need to use a simple form that is better known as an “Assignment of Purchase Agreement Contract”

That form is short, sweet and to the point. It is important that it states (through a clause) that you will no longer be held liable for anything that may go wrong. It should state that the assignee (your investor) assumes full responsibility to close on the property. This form is simply a transfer of rights and liabilities from one party (you) to another (your investor). When you become great at this you’ll have tons of investors willing to pay you the assignment fee upfront before close, but more then likely you will not receive it until the closing occurs. This one page contract is the paperwork that will put more money in your pocket then you can have ever imagined. It will do it time and time again like clock work.

Next Answer:

If there was originally a 300k loan on a property and the seller paid $100k off this leaves the seller with $200k remaining. It is possible that you can get a cash investor to purchase the property and the only way to determine this is to know what your buyers are seeking and cater to their needs.

Let’s say that you had no Cash buyers at $200k. In this case you can get the property on creative terms and either flip it to another investor or hold it and lease purchase it out yourself. I’m sure it would make a good monthly residual income for you.

If you wanted to obtain it on a “subject-to” you would do your normal purchase agreement, however, your method of purchase would be subject 2, so make sure that is written in the contract. Depending on how good you are at negotiating and your sellers motivation level you may also be able to get the deed to your property in your name immediately. Personally, I have had it done in last then 24 hours. If they are willing to transfer the deed in your name or in a trust (that you benefit from), you would simply use a contract that transfers the deed into your name. There are several types of deeds that are available and it would depend on how you want to proceed to determine, which one you want to use. You’ll learn about this more in the future. The main concern is that you get the deed.

If the owner is unwilling to transfer the deed, you can also use a “contract for deed” form that will secure your interest in the property as well.

I really can go on and on forever about this, but I would suggest you get as much information through Forums and FREE Reports online. They can give you enough information to start making a substantial profit with no money or credit.

Good Luck to you!

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REI Millions you are kicking my mental ass with knowledge!

I cannot thank you enough, I’ve got piles of energy to spare, my only real issue is being “creative” with deals, just due to my low experience level, as soon as I’m moving along with one I will start a thread because I’d like to outline an “amateur” deal from start to finish for others to learn from and also for the pro’s like yourself to tell me where I’m making mistakes!

THANK YOU SO SO SO MUCH!!!

:beer here’s to everyone making money and freeing themselves from the damned rat race!

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No problem Stevie! I am glad that I was able to help out.

I would love to see the thread you start. I think your idea will help so many people struggling to make it out there!!

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Steve, you are asking plenty of questions that should have some cash tied behind it! Good grief! lol.

You don’t have to be an expert construction guy to estimate repairs. But you do have to have the ability to walk into any house and quickly see what needs fixin and jotting it down in your notebook, calculating the expenses later. With practice you will be able to do this on the spot. You should have asked the seller about all of this stuff before even going out to the house.

You can show the house to anybody, if the house is vacant, ask the seller for a key so that you can bring your contractors by the house to further estimate prices on repairs. They say yes every time.

Negotiation tactics are my psychological than anything. Position yourself right, as the person that can help them solve their problem, you should have no issues with getting the price down. :biggrin

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My initial thought as well :slight_smile:

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Steve, how far have you actually gone with this? :shocked