All Forum Posts by: Patrick Henderson

One very quick way to find buyers is to go to a local REIA and take a few good wholesale deals and stand up in front of the room and announce I have wholesale deals please come talk to me after the meeting. You will almost always be surounded by buyers immediately.

Hi bill, You guys keep talking about secured positions and wraps but I don't see that as a subject to deal. In a situation where the owner is behind on payments and you want to assume the the note I could see bringing it current and taking poccession that way. And as far as assigning it, Due on Sale clause is the crux of the argument but that can be an issue as well in a wrap. So if you want to clarify a bit more on that it would be welcome.

I have done many Subject to deals for short sales. Around fifty. Here is my position and what I need to make it secure for me.

Purchase and sale aggreement (that price will change once the Bank and I have agreed on a price)

Special Warranty Deed (signed over to me)

Power of attorney (Everything that has to do with the property)

Authorization to Release Information

Cover your Assetts Aggreement (spelling out exactly what I will and will not be doing) That must be understood by both parties. I will not bring it current or take over the loan in any way.

While I will take over payments, or a wrap around, it must make sense financially of course.

My understanding of a Subject to deal is the deal subject to the existing mortgage, liens and or encumbrances. In my view a Subject to deal is one where the seller must give up certain provisions for subsequent short sale ie the five things above. Yes it would reconvey to the seller if no agreement could be reached. I have not used them in any other instance.

Hi joe,

Education is deffinitely the first step. I personally would advise you to look into whats called creative investing. It boils down to coming up against almost any deal and find a way to make it work for all parties involved. Once you have even a basic understanding of that then get into negociations, over coming objections. wholesaling is a great way to get started but if you can't overcome the objections it can be very difficult to get anywhere. Wholesaling is basically this, Get the property under contract for a term usually 30 days. and find a buyer before those terms come to an end. Keep your earnast money as low as possible. I have personally tied many deals down for ten dollars but it may take more. It's a very simple transaction. You should strive to become a transaction specilist, if that's a good term.

I just acquired three properties that I tied up for a total of $100 two weeks ago and wholesaled one that paid for all three in 8 days. It's a rare transaction but they are out there. One of the people that influenced me when I got started said, "What most people think of as a once in a lifetime deal comes along about once week when you marketing is consistant".

A good rule to stick with is the 70% rule. find the property determine the after repaired value (ARV) take 30% off of that, estimate the repairs reduce your price again for the repairs and then leave at least 3,000 for surprises and there will almost always be some. Example; $100,000 house minus thirty thousand. that needs $15,000 in repairs making your maximum allowable offer (MAO) $55,000 Now with that said my offer would probably start at about $46,000 to $48,000 looking to max out at $52,000 but if my estimates are good $55,000 is fine for me.

Don't go into analysis paralysis. If you find a deal that makes good sense make the offer. You are dead in the water until you make offers. Then the fun begins.

Get up, get started, take action. Action is the key.

Patrick

A note on dealing with banks. How sure are you of your agent. Do they truly understand the shortsale process. How many have actually been succesful closing at the wholesale level. Many will be succesful at retail. There is a difference. You might consider doing some of these yourself. And you can even call them and get the exact information they want, Many times in writing.

Pay attention, The list is in a certain order for a reason. Send them all and I mean all of the reqested info and in the order they asked. That way you will be giving them what they want the way they want. It saves time and energy.

No one person makes the decision. It's done by groups, with a loss mitigation clerk at the front, that for the most part take the calls and relay information which they for the most part only deliver if you persistantly call and update. You will never get to talk to the group directly at this level.

Something that has helped me in the past. Be freindly with them and make a friend. These mtigation officers talk to people who get frustrated with the process day in and day out. While they won't reveal much info. you can ask things like this. Look **** can you just tell me what a bottom dollar is to these guys? I've had 3k to 5k drops in price on occasion.

Patrick

Additionally and a bit more to the point.

Is it listed? If it is, it will be difficult to sell as a wholesale deal. People do check the history of property listings. BTW You should know rehab costs no matter the exit strategy.

Depending on the relyabilty of your numbers repair and ARV.

Sounds like it's a wholesale deal already. There is plenty of room for you to easily make 3K and cover closing costs leave more meat on the bone than these would-be wholesalers, I get emails form. How is your market? What swing is it in? Seller, Buyer or somewhere in the middle. Is your market saturated with deals like this. Is the crime level so high that if it's vacant for a week, all the copper is gone? If not, then take the deal in front of you.

With that said, Nothing wrong with offering less. If someone else knows about the deal it will likely disappear before you act.

First things first, "MAKE AN OFFER"!

I can't stress this enough. The key to every endevor no matter it's form is action.

Ps. $27,000 is near top of my range if my only exit is Wholesale.

Patrick

Well said Bill.

Hi Ted, It looks as if you have a good Idea of how things work with incoming calls. I hope I'm not breaking BP rules and I certainly have financial affilliation with this company. Patlive is targeted at real estate Investors aims. They get info and they have many scipts already in place from others doing what you plan to do. If you have had success doing this in another form then you will propbably have success in this endevor. You only want to talk to the motivated sellers, I get it. Take what they offer and minipulate it. to your tastes. I think that was the original question. Wasn't it?

Patrick

You say it's the negociation process you're asking about but without the ARV the negociation is pointless in my opinion, It's difficult to give you advise without the ARV and the exit strategy or strategies you have in mind. Those will determine many other things in buying process and negociations.

Ok, I don't know where Wayne gets the idea that just because it needs $30k in repairs that it worth every penny after that towards the ARV. To me is flat wrong. If you're going to give cash or hard money niether scenario is a good investment and never will be. In simpler words, no way. My max offer, meaning the very most I would pay is $47,000. It must mak since as an investment. Just a note on banks. They have it way too easy. Look up the acceleration of money (old term, I know) and think about how this bank gets money from the FED at many times throughout history at %0 interest then loan that money to a home owner who defaults, they get it back and keep all the profits, often wanting as nuch as possible without regard to the buyer. they have virtually no money in the deal besides the acquisition. Builder may make $30,000 or more on a $100,000 house. wholesaler $5,000 or $10,000 the bank will make a couple hundred thousand if the loan goes to full term.

Oh, this is not a bulk sale, for sure. Those deals are done at steep discounts for myriad reasons. They're buying in bulk. 10 to 15 percent will have title issues and so on.

I hope that helps.

Patrick

It sounds like you want to whaolesale this house with the profit you're looking to make. If you're looking to rehab and flip then there will be plenty of room to do that as well. With that said. Do you have experience rehabbing? Repair estimates are many times wrong and so are ARV estimates. Do your homework be sure of the factors that are concrete to your common sense. Here is a good rule and it's worked well for me and I live by it. 70% of ARV minus the repair costs. Fomula, ARV $100,000 Repairs $18,000 Maximum allowable offer is $52,000. with that my first offer would probably start around $44,000/ 46,000. With any deal I'm a liitle conservative with my ARV and a little leberal with my repair estimates. All business people are aware that you never take the first offer. Don't let deals go, by over analizing. There is a time to analize and a time to act.