OK I am calling up a bunch of agents about some MLS listings. The basic questions I ask are what is the listing price (to see if it has gone down), how long it has been on the market, the address, and if I can get any disclosure info. My dilemna is that I can only get the disclosure info if I make an offer. Isn’t the disclosure info the same as what is wrong with the property? How am I supposed to make an offer when I don’t know what the repairs will cost? It’s hard for me to drive to these properties and evaluate them myself because they are very scattered in a 60 mile radius. What can I do? Thanks!
Howdy Djswizz:
Some agents put the disclosure on the kitchen counter for all to see and some will not disclose the disclosure until an offer is presented. They are all different in how they do things.
One idea is to hire a buyers agent. Agents can usually cut thru the red tape for you, find deals that have been on the market for years and find the motivated sellers by word of mouth between Realtors. You need to be hooked up to the grapevine and network with them and use them to help you find deals.
Another idea is just to fax offers to a lot of deals and see what happens. Without even trying to get inside to inspect or look at the disclosures.
Hope some of this helps.
You can also make an offer contingent on the disclosure report. Once you get the disclosures, you can modify your price based on what you find.
Hi DJWIZZ:
One thing you can do is try to see if you can find a real-estate agent who will give you MLS Access in exchange for writing offers for you. The MLS is a very powerful tool. With MLS Access, you will be able to: check revision to ‘list price’, run comps, check ‘days back’ and see all newly listed properties, do a daily ‘hot sheet’ which will give you a list of properties that meet your criteria, see what agents are listing the REO properties, etc…
In this business, learning how to estimate fix-up will be the key to your success as well. Some of your best deals will come from houses you have not even seen the inside! If you wait around to get access, another investor is going to come along and make an offer based on his or hers estimate of repairs and have an offer accepted while you are trying to gain access! Typically I will walk in a house and estimate $7k for an interior rehab if everything is there and then go from there. This is based on a basic 2-3 bedroom house. I then estimate the exterior and come up with my total estimate. If you could start by looking at each house and figure $10k as a ballpark figure, you will be alright.
In your case, I would figure $6-$7k rehab for the interior and then figure out what you are going to pay for rehabbing the outside for paint, landscaping, roof if needed, etc… and get your offer in! You can always back out!
I would really suggest you work on getting MLS Access. This will be one of the keys to your success.
Best Riches,
Jeff Adam