BP Podcast 034: Virtual Real Estate Investing and How to Find Great Deals in a Hot Market with Anson Young

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Many investors find themselves trapped by a heated market – but today’s guest shows that it is fully possible to invest in real estate – even in a hot real estate market.

Anson Young, who lives in the Denver area, joins us today to chat about finding great deals locally and virtually, as well as tips for working with agents, dealing with assignments, and a whole lot more. Anson is a fun guy who has a ton of awesome tips to share with everyone, so don’t miss today’s show!

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In This Show, We Cover

BiggerPockets Podcast _ Real Estate Investing and Wealth Building 9.42.11 AM

  • The “crap jobs” that led to Anson’s real estate investing career
  • How Anson partnered on his first deal without doing any labor
  • Finding great deals on the MLS
  • How Anson finds the best neighborhoods to invest in
  • How to wholesale virtually
  • What to do if you don’t have direct MLS access
  • Using the “Short Sale Time Machine” to build equity
  • How to get around the “non assignment” clause when wholesaling bank repos
  • Mistakes made by Anson when getting started
  • And much more…

Links from the Show

The Real Estate Agent’s Ultimate Guide to Working with Investors
The Book on Flipping Houses
The Book on Estimating Rehab Costs
The BiggerPockets Forums
The 21 Best Real Estate Books Ever
The BiggerPockets REI Resource Center

Books Mentioned in the Show:

Rich Dad Poor Dad by Robert Kiyosaki
Millionaire Real Estate Investor by Gary Keller
The Four Hour Workweek by Timothy Ferriss
Crush It by Gary Vaynerchuk

Tweetable Topics

Working crappy jobs can be a good way to get started with real estate investing (Tweet This!)

Plan with the end in mind. (Tweet This!)

You are either consistent or non-existent. (Tweet This!)

Connect with Anson

Anson’s BiggerPockets Profile

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About Author

Brandon Turner (G+) is the BiggerPockets.com Senior Editor and Community Director. He is also an Active Real Estate Investor (Flips, Apartments, and Buy-and-Hold), Entrepreneur, World Traveler, Third-Person Speaker, and Husband. Come hang out with him on Twitter!

34 Comments

  1. Great podcast and I love the juicy info on virtual wholesaling (the field services tip is gold!). I’m fascinated by the fact that you wholesale off of the MLS but the big question hanging over my head is this: what’s your value proposition as an MLS only wholesaler?

    For wholesalers that market for proprietary deals the value add is clear: off market properties. Maybe the answer to my question is as simple as making tons of low ball offers until you get one under contract at a price that would make a deal compelling? For example, let’s say a property listed at $80k with an arv of $125k and repairs of around $15k would be a compelling flip opportunity if it could be purchased for $65k. You offer, $60k and tack on a $5k assignment fee and package it up to market it to your buyers. Am I on the right track?

    Thanks!

    • Brandon, The value add is that 1. its a deal and 2. much less competition. Most times I’m handing guys deals on a platter, no competition from the 10,000 agents who have access to it and no longer do because I locked it up. I fought like hell to get it locked up, so my end buyer dosnt have to. Of course it HAS to be a deal, and to me a deal is a deal is a deal. MLS, probate, pre-foreclosure, etc, they can all be deals.

      You talk about below list price a bit there, and the thing is some times I’m offering a property back at list or above. You might say that is crazy, but, a deal is a deal is a deal and if those numbers work, its a deal for the right buyer. The value is they dont have to fight 10 offers at that price anymore, and can lock it up by texting me back. List price is just a number someone decided to start out at, it could be worth much much more and still be a great flip or rental for someone (and the ones I’m getting usually are).

  2. Great episode, I picked up a couple new tips that will be very handy. I am an active broker in Denver as well as an investor and would love to connect with locals who have more questions about accessing the MLS or navigating deals in our area.

  3. Anson,

    Thank you for sharing your experience. I do have a few questions that I would like your advice on. Based on the podcast, I know you would have the answers.

    Could you please contact me?

    Thanks.

    • Joshua Dorkin

      Sandy –
      Please pose your questions here in the comments or send Anson a private contact request through BiggerPockets. Of course, asking any real estate questions on our forums is a sure way to get multiple answers from experienced investors.

      Good luck!

    • Thanks for reaching out Sandy, keep at it in Ft. Collins (reminds me I need to get back up to Horsetooth for more hiking before winter sets in!)

  4. Brandon Bennett on

    Great show! I am interested in getting my real estate license here located here in Dallas. To get access to MLS, is all I need to do is pass the exam or how does that work?

    • You need to take the required courses set by your state (usually 2-6 weeks, depending on state), pass the state and national tests, hang your license with a managing or employing broker, and pay the MLS fees and you can have MLS access!

  5. Wait @Brandon Turner tell us more about this deep fried candy bar wrapped in bacon!
    My left arm is tingling just thinking about that!

    Oh and great podcast Anson. :)

    • There is a place in east denver I know of that lets you choose any candy bar off the rack for deep frying… I had it once and am convinced I shaved a year off my life because of it…

  6. When you spoke about finding buyer who bought similar properties on the mls, how do you locate the buyers if they have an llc on file?

  7. Dashon, secretary of state website usually lists members, then whitepages.com from there. Corporationwiki.com can sometimes list members. At the very least I would have an address to mail to if I needed.

  8. Great tips, short sale time bound is real cool, I have three short sale properties locked under contract, and waiting on the bank and lawyers negotiating while the properties are appreciating.

    • Exactly, it can work the opposite direction too, but you can try and renegotiate the price if the market is falling, or back out if it no longer meets your needs! Anson

  9. ANSON! You totally rock.

    Okay. Two questions:

    1) When you are searching for sold listings on MLS to either find investors who may be interested in similar properties or narrow down a targeted area by looking as CASH sales… are you only able to see transactions that have happened through listed properties? I’m assuming if there was a cash purchase of an off-market property it would not show up on MLS… correct?

    I *feel* as though our market still has a strong MLS but there is definitely a large number of wholesalers in the area as well. I’d love to find a way to see those cash transactions but I assume I would have to dig through tax records or friend the title companies :)

    2. Are most of the deals you find on MLS shortly after they are listed? Or are you finding/making offers on old deals that are nearing expiration?

    Thanks!

    • 1. My MLS finds only solds that were listed. To get FURTHER sold data, you would need to hit up your tax records. I think 90% of sales are on the MLS, I feel confident enough in the 90% data to get a good snapshot of an area.

      2. There are multiple ways to play this game. Most are VERY time sensitive. First on the market requires an offer in the listing agents hand with a check within an hour or two of listing. I also watch for offers falling out, sometimes blasting emails to pendings and under contract properties “let me know if this falls through for any reason, you can be my buyers agent, I pay cash, quick close, etc etc”. You would be surprised the calls you get even a month or two later of “hey, this just fell out, you still interested?”. Another is to hit the ones that are 120+ days on market, there is usually more motivation at that point as well.

      Thanks for the comment and glad you enjoyed the show!!

  10. Anson, I have a question about the LLC transfer- you say in the podcast that this happens while the property is still under contract and it’s a ” literal zero money out of pocket” deal for you. Doesn’t the formation of an LLC cost several hundred dollars? What about earnest money to put the property under contract? How much is that typically for the type of properties you’re wholesaling?

    • Great questions. It works a few different ways, depending on my buyer. LLC formation where I’m at is $50 and takes 3-5 minutes online on the secretary of state website. Usually I can get my end buyer to put down the earnest money for me, that usually how fast these can sell. I guess $50 out of pocket isnt ZERO money, but its pretty darn close. EMD where I’m at is usually $500-1000, with $1000 being most typical.

  11. Hi Anson,

    Great Stuff!!! Can you describe how you tie up a property you come across on MLS that you intend to wholesale? Specifically, I’m wondering how Joe Blow, with no proof of funds can tie up a property?

    Let me describe the method I’m envisioning and fill in blanks or correct my misconceptions.
    1. Search MLS based upon minimum profit margin criteria
    – (purchase + repair = COST) – ARV = MARGIN.
    – COST / ARV = Margin Rate% (70% minimum)
    2. Inspect property and obtain BPO to vet the forecast profit margin.
    3. Submit offer (what contingencies, terms, earnest, buyer entity, duration, etc? And, describe what exactly you do by “fought like hell to get it locked up”)
    4. If offer approved (how to locate wholesale buyers and at what price?)
    5. Closing (what does this step look/feel like?)

    Thanks,

    Glenn

    • I’d say, get a POF/lender letter as quickly as possible. Get one from a hard money lender, a transactional funder, or your rich uncles bank account. Its near impossible to be credible without a POF/lender letter.

      I’m a bit different than you described, I feel you have to move IMMEDIATELY on these things, offer first, then run your numbers.

      1. I usually start with the offer, if I’m shotgunning offers out, I’ll just send out 30 or so that are in the areas I’m used to buying in. If I’m using a rifle approach, I’m scouring through listings to find the ones I want, and run the numbers in my head before sending out an offer. I search MLS based on areas I’ve worked in, and once you have done this for a while you will be able to spot deals from a mile away. You get the numbers locked up in your head, what a 3/2 will go for fixed up in xxx neighborhood.

      2. If an offer looks like its going to get accepted, then I will do a CMA to find the ARV (comparative market analysis), go out to the property or send the field guy out for pics, and estimate rehab. If my numbers still work, I’ll wrap up the deal.

      3. Once under contract, I’ll send it to my regular guys, give them 24 hours to get back to me. If none of them want it, the deal might be marginal unfortunately, I will then broaden my blast, to my larger list, start cold calling recent sales in the area, etc.

      4. once a buyer is found ,we decide if we are going to double close or sell the LLC that has the property under contract.

      5.1 if double close, I get a purchase contract from them and earnest money. We submit it to a title company and the day of closing I close on my end, then I close with the new buyer pocketing the differnce.

      5.2 if LLC sale, I draft an LLC sale document and collect a deposit (same amount as earnest money). On the day of closing, we will submit a document to the secretary of state removing me from the LLC entirely and placing this buyer as the manager of the LLC. He then cuts me a check for my fee (if the fee was $10k, and the deposit was $2k, he would cut me a check for $8k difference, making $10k total).

  12. Great Podcast! When wholesaling off the MLS are there any provisions in the contractual arrangement allow you to back out of the deal if it isn’t as good as you initially thought?

  13. @Anson,

    That was a great podcast and also great overview of how you go about your business!
    I’m very much interested in the “virtual part” of your deal-making since I’m currently living abroad and looking for ways to gain experience in REI.
    Thanks for sharing.

  14. Anson,

    Have you revived your flipping business yet? It has been a year since this podcast and I barely had an opportunity to listen to your expertise.

    I find that I truly want to do some flip projects but am having a problem starting. Seems that is probably everyone’s hurdle. Once the momentum is there, we should be able to jump each hurdle with reasonable ease. Where I am, I have an investor that will allow me to use his credit if needed, but no cash. Where do I go with this?

    Either way, I would love to hear from you. Answers or just simply a hello.

    Thank you,

    Warren

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