BiggerPockets

AFAIK, the assignment clause is NOT negotiable. If you find a bank that will accept it, you've found and unusual bank. You're going to lose on that one just about every time. Even if they leave it in your contract, they will make you sign a bunch of addendums that include a "this contract is not assignable" section.

If you're submitting "spagetti" offers, and asking the listing agents for pictures and comps, I'm not surprised they're blowing you off. You're asking them to do YOUR job. You need to get comps on your farm areas and learn the values yourself. You need to go have a look at the house, unless you're willing to buy sight unseen. You need to figure out what the rehab costs are.

If you really want to pursue this strategy, just submit the offer. Include an inspection contingency. Then, once you have a contract, go have a look and figure out what's really needed. If you go look at 50-100 houses, you'll get an idea of typical repair needs. Base your offer on this. If its less, yea. If more, renegotiate.

This is a hands on business. I know some people invest out of their area, but they don't do it hands off like this.

You learn the values in an area by looking inside and out at 100 houses. You drive up and down every street. You look at the houses, the folks walking around, the streets, the stores. There's no shortcut.

Get out from behind the computer and get out in the real world. I've heard claims of doing "virtual wholesaling" and no doubt there are a few people who actually do it. But IMHO, its all BS.

What if the house looks find and seem like a good deal, but the house next door is a crack house? Are you going to have the listing agent take pictures of the house next door? All up and down the street? I can guarantee if you ask the agent to do this your offers are going in the trash.

If you're determined to do this, pick a city and get on a plane. Go there, spend a week getting hands on. Learn the values. Look at houses. Meet people. Find some people you can trust. Don't think you can find people you can trust in a week? Maybe not, but more likely than finding them by email and phone.

Find someone who can be your hands on person. Pay them. Pay them to go take pictures and talk to you on the phone about the properties. Pay them to get contractors to give you estimates.

What are you going to do if you get an accepted offer? Without someone local, you have no place but to buy a short notice ticket and fly there.

If this is in driving distance, its much easier, but the same advice applies.

If you really want a very hands off approach, then find someone who sells turnkey investments in the area. You won't get a great deal, because you're paying for all the local work in the price of the property. But you may be able to find a good deal. And probably a better deal than you're going to find the way you're going.

Its only a matter of time before someone figures out what you're trying to do and really screws you. They send you pictures of a nice house, when the one you're trying to buy is a dump. They feed you some cherry picked comps. You buy a deal only to discover you're stuck with a house at a horrible price and they've gotten rid of a crap deal.

Jon,

I like your advice as I can speak first hand of the benefits. I am from Canada..and wanted to invest in the phoenix market. I went to phoenix and stayed there for 2 months. I have bought and sold a few homes there now but I stick to certain postal codes. I know my areas well enough now that I can make sight unseen offers after my agent views and then I fly in for contigencies.

I dont think this would work as a wholesaler as the profit would not be enough to justify travel expenses. JMO

If you are looking in Indy, we have had HUGE success in Warren, Lawrence, and Wayne Townships.

I think we have about 4 properties left in current inventory, but have about 3 more under contract right now.

Any advice you need, just let me know.

Have a Profitable Day!

Excellent Arlu. Spending time on the ground is the very best way to understand and area. Try to arrange to meet some of the agents you've been working with. I know Harrison and others here work Indiana, too, so maybe you can meet him or someone else and start making some contacts that way, too.

Arlu,
9 out of 10 houses i buy are REO's. My offers are high earnest money, no option, zero contingency, fast closing, contracts with a copy of EM, and a bank statement. My first call to them is after i sent the contract to make sure they recieved the fax. The next point of contact with the REO broker is when they send the "multiple offers sheet: submit highest and best", after that its a denial or acceptance. I get 1 out of 20 offers I submit. But even before this process, i physically went out to each property and did all due diligence (value/repairs). There is nothing I need from a REO broker other than a fax number to send the offer.

May i ask, do you plan to close on those houses or sell the contracts?

Well I thought the earnest money needs to be $1000 to show that u r a serious buyer for REO properties. The contingency clause s/b zero because any way the bank is going to provide their own.

REO docs include the 1 contingency your looking for as the bank will override the original contract with an addendum that grants you a 10 day option without a fee. you can submit as low as a EM as you like but if your planning on closing why not get their attention with a nice EM. Regardless of the amount, be sure to include a copy of the EM check made out to "title company", its part of the package (contract, copy of EM, bank statement/proof of funds).

The agents who list REO's, are who i refer to when I say REO brokers. I would say to use a buyers agent to submit your offers. As a buyer, I have never had to back out of a contract and I feel this had gained my offers and b-agent favor with certain brokers as it seems my offers keep getting accepted by the same set of brokers.

If you plan to close cash, and you are serious about wanting to buy, then use your buying power to get offers accepted. Beware not to burn you or your agents rep by not closing deals especially with big brokers.

Its good your out there trying and asking questions!

Originally posted by Jaime Vasquez

Arlu,
9 out of 10 houses i buy are REO's. My offers are high earnest money, no option, zero contingency, fast closing, contracts with a copy of EM, and a bank statement. My first call to them is after i sent the contract to make sure they recieved the fax. The next point of contact with the REO broker is when they send the "multiple offers sheet: submit highest and best", after that its a denial or acceptance. I get 1 out of 20 offers I submit. But even before this process, i physically went out to each property and did all due diligence (value/repairs). There is nothing I need from a REO broker other than a fax number to send the offer.

May i ask, do you plan to close on those houses or sell the contracts?

Jaime, when you say you put a copy of the earnest money in the offer package, do you write out 20 different checks each time? Also lets say you ony have 1000 to give as EM and you get 2 offers accepted ,what do you do?

Mike

Originally posted by Michael007

Jaime, when you say you put a copy of the earnest money in the offer package, do you write out 20 different checks each time? Also lets say you ony have 1000 to give as EM and you get 2 offers accepted ,what do you do?

I use the same copy for standard offers I submit. They are made out to "title company". If the offer is accepted, I deliver a fresh check to the title company, they have never said "O this does not match the copy you sent in the package". If the EM is a specific amount requested or i want to get some attention with say a 10% EM, then I will right a check specific to that offer. if more than one offer is accepted, as Will says, i would cherry pick one.