All Forum Posts by: Jonathan Greene

It's very market dependent and based on comparable sales in your area that match the BR, BA, amenities, and general area as your target property. Other factors that play a role in how low you can or should offer are:

- days on market (the longer the property has been on the market, the more likely a lower offer will be considered)

- if it's a short sale or REO or a straight market listing. There will be less wiggle room in the beginning for short sales and REO properties as the final price comes from the bank.

- feedback from your agent after talking to the listing agent about how firm they are on price (the listing agent cannot make comments that run against the seller's best wishes, but often times your agent can get a general idea if they think they listed too high or if it's just right)

With that said, there really is not a too low offer as long as you have reasons to back it up. No buyer's agent wants to write up lowballs without reasoning and if that is all someone does, agents will catch on and not expect much.

Have your agent send you all relevant comparable sales in the past year with the same bedrooms and bathroom and general amentities within a half mile to a mile of the subject property and compare what they sold for and their condition with what you want to offer and see how it shakes out.

Why would anyone sell their house to you if you can't close on the deal if you don't find a third party? From your post, you have no money, no buyers, and no real-life REI experience so what is your value proposition in the letters to distressed homeowners?

There are several other issues with the structure, most that would be an issue for the brokerages involved. All commission and bonuses run through the brokerage and are subject to your split. The real question is why would someone do this? Any time you are trying to create scenarios to help yourself get property at a discount by using your license as a conduit, legal issues will arise. The mortgage company would never be on board with this and neither would the title company or the other brokerage.

@Matt Pine Your mobility is the key here because you can go anywhere and learn about the market. I would pick a place where you guys are interested in sticking around for a while and go there, learn the town dynamics, go to some local REI groups and meet some other investors, and then slowly find one property to work on and learn from. Too many new investors who have the capital go in too big to start on multiple properties or a big flip, but it doesn't usually go well because there are so many things that go wrong. Turnkey is an option, but it's low profit and no learning, soft passive income. If you want to learn to do REI, you are in a great spot to do it because you have a capital and mobility.

@Benjamin Greene you should definitely ask for a supervisor if they can't resolve it with your loan officer. It should not have gotten that far when you disclosed the car loan on the initial application. You want to try to force them to close the loan so you don't have to dump the car. Super frustrating.

@Benjamin Greene your loan should be able to go through as long as it was approved with the loan and it was fully disclosed. It doesn't make sense that they would try to bounce it now when you had it on there the whole time. I too would go over her head. Why turn in the vehicle if you don't have to? But on reading it more closely, it's not the property closing Monday so maybe it was during their due diligence that they bounced it. Still, you should not have gotten a loan approval upfront if the car loan would be an issue in underwriting. I can't tell the timeline, but there is a chance the loan officer did not make a mistake and that underwriting for this company is where the final say is made on outstanding loans like that. What did the loan officer have to say?

If you aren't going to live there, I think it'll be hard to find a downpayment of less than 20 percent. The best site, in my opinion, for checking rents without MLS access is Rentometer. Plug in the address and bed and bath and see what kinds of rents that would get.

Goals are set out in front of us as something to strive for, but oftentimes we just end up chasing our ambition the whole year. And when we can't catch up to it, we either give up or put our heads down and say we will do better next year. Instead of a "How Many Doors Do You Want to Buy in 2020" post, I thought picking just one thing to add to our REI business might benefit us all. So, what's the biggest addition you are going to make to your REI business in 2020?

- - -

My smartest addition is going to be a streamlined and controlled offer sheet for the seller that is really just an enhanced LOI. This is what will be in the document:

1. Offer Summary page/Offer Options - this page will have the major deal points only. Offer price. Earnest money. Financing or POF explanation. Closing date. Inspection minimization clauses.

2. Offer explanation. Why my offer is "so low" to the seller and how I support it. This will include short comp analysis, block value, and renovation costs, as well as the ease of transaction discount I expect for bringing cash and closing ASAP with limited inspections.

3. Comp and full market analysis summary. This is a focused group on truly comparable properties that have sold within the last year, within one mile at most, and with only similar characteristics.

4. Personal transaction history. This is segmented into currently held properties and deals completed.

I prefer this type of document to sending a contract first because it is straightforward and much easier to read and process. It also shows them upfront that you have done your full research and are a neighborhood and investment expert and not just looking to lowball every house on your hit list.

I would send this out to sellers who I have previously made contact with on the phone and seen the property. It would be the first follow up after a property visit, but I can see it being used in advance of property visits as well.

What about you?

I've had many properties in Westchester over the past 20 years and still have some holds there and your standard two-family options are harder to come by than in other areas. I've done very well with single-family homes in Westchester. High-end townhomes work as well. You can find affordable single-family homes that will rent very well at lower price points, so it would be a different strategy. You could live in it for a year and then keep it as a rental, but house hacking multi-family homes in Westchester will top you out based on your numbers.

Great points by @Max T. and @Account Closed. I think that group showing windows are the best option because it also creates demand when others are looking. So if you have ten people interested, set them all in a one-hour block. And if you can pre-screen like Kris with a set of questions you will end up with a much smaller pool, but all people who are qualified and really interested.