All Forum Posts by: Account Closed

You are right, as an auctioneer in Maryland, we do about 200 sales a year - what a great way to sell properties - you need to make sure you have the right auction company and that they know what they are do and they advertise the property right -

• Don't depend all them to do the right kind of advertising
• We make up flyers - take them to businesses - but them in supermarket and on bulletin boards
• Get mail list of absentee owners - send hundreds of post card
• Auctions can be profitable both for the buyer and the seller
• Sellers like our type of auction sales since there are no commissions or settlement costs and the property is sold in "as is" condition.
• Auctions are great because you don't have to deal with contingencies and demanding buyers.

Feel free to call me anytime for advice on auctions - Charles - Auctioneer

Oh! The auction method is the BEST way to flip real estate that you control - all cash is the way to go on flips - selling real estate you don't own is the highest leverage you can ever have.

Too bad that agents are not educated about auctions - what a great way to sell real estate - we do 200 auctions a year - representing investors and home owners - there are times when we sell for more than the reserve - sellers are over-joyed when this happens------ so are we.

It is important to select the right auction company and auctioneer and to pay enough money for advertising - you should always get a written advertising proposal from the auction company so that you know where your money is being spent.

Does the auctioneer charge a commission, flat rate or buyer's premium? You might get more bidders without charge a fee to the buyers - it may be worth it to pay a commission to the auction company.

Call if you need any suggestions or help flipping those properties  - I recently did a sale in Ohio - clients walked away with $45,000 profit -

Charles ---- Baltimore Auctioneer -- Doing sales everywhere ---

COMMENT - I have a property we are looking at that the owner wants to take bids via email. They will take bids for a week then broadcast out the bids to give bidders a chance to make another offer. 

My suggestions --You need to see the inside first before you do anything -The seller is playing the seal bid auction game - I did a few of those years ago at my auction company.

• I'd like to see the seller's contracts first before making an email bid - who does what - and who pays for what, is settlement cost split or all on the buyer - when will possession be?
• Does seller have a license - bonded - insured - is there insurance on the property - how much - will you be on the policy if your bid is accepted - can you get insurance before settlement?
• Is the seller for real -----  or just testing the market to see how much he can get?
• Will the seller take back some of the financing?
• Check public records - make sure seller's name is on the deed - Great way for a con-man to make a killing (rents a house advertises it for sale - cheap - takes cash deposit and disappears - check references!
• I'd want to know his base line acceptance price - don't waste your time if you can't get some number - make sure you know the values in the area.
• What's sellers motivation - is he real or a slick investor?
• There are times when a seller is trying to avoid commissions, agents and other cost - and that's OK if seller is for real.
• The seal bid methods have certain rules to success -
• expose the property as much as possible - signage - newspapers- internet -
• Have contract and terms at the ready for those interested to review them befroe bidding.
• Comps and pictures on a tri-fold stand should be present for all interested parties to view.
• Hold several open houses - lots of advertising.
• Agree to cooperate with real estate agents - they often will inform their clients to bid.
• Check the terms - as is, all cash, will take financing contingencies - seller agrees to -(help with settlement costs, leave the car and the furniture, contribute $5,000 to buyer, guarantee  appliances and furnace and roof for X years ----etc) We call this Contract Candy.
• Don't be shy - ask seler to contribute something if you are the high bidder - ask before bidding.
• Observe your competition if you can
• Talk to neighbors - there are times when the neighbor will tell you all about the house and problems the seller has had in the past.
• Have friends and paid agents assist you and look at the house and to listen for clues of motivation.
• Get all the information about everything you can....
• Why do you think the real reason the seller wants out - has he done this before or is just a creative seller?

Be sure to Verify - Verify - Verify everything ...... Have fun - any you'll do well - Charlie - Auctioneer

A good way, but expensive is to advertise on the radio - have been doing this for years and always get great deals --

• The important thing here is how to capture that lead, hold their interest and set an appointment
• The important information you need to as is about how much they OWE - HOW MUCH THEY WANT - The MARKET VALUE - these answers will give you the potential equity.
• When you get these answers you'll know about how much equity is involved.
• When negotiating - understand you are negotiating for equity - makes no different where the property is located or what it looks like  - you need to know how much equity and how much you can negotiate for yourself.
• Don't take yourself too seriously - have fun ---
• Most important - look at houses everyday - try to look at 50 houses in a month - don't buy or make offers on any of them - just keep good records
• This will get you into the market and knowledgeable

 Have questions - give me a call ---- Charlie

If you can't get an answer that satisfy you - I'd be glad to help - just call - pro bono -

As far as doing your first deal - I know how you feel - I teach others all the time about investing and it is very frustrating.

You may have to start with the basics of power prospecting and negotiating - 

Charles 

Passive Income  is always good - I like to do a system I call Control and Roll - it's way of controlling real estate with a skinny contract of sale with special clauses that allows me to sell the property at public auctions during my contract period - if it does not sell - I don't have to go to settlement --

• You need to make full disclosures
• Find a suitable auction company
• Be prepared to pay the advertising for the auction
• Have a complete and disclosed assignment agreement
• Example: We did one recently where we controlled the property for $50,000 and sold it within 4 weeks for $90,000 - we kept the $40,000
• Control and Roll type of investing is the highest leverage in real estate that you can get
• C&R is a great way to build cash capital

Wishing you good luck -

Hello, Charles here, investing and developing in Baltimore now for over 40 years, we also have a REIA, do join us - we meet the first Tuesday of every month,

Good luck with your investing program ---

Take a look at my blogs here on BP

You don't need to know everything about real estate to start making money - focus on just a few things to start -- get personal help.

• One way to motivate a person (Mentor) to work with you is to share the profits - the Mentor can see you as an extension of themselves, their down line or an opportunity to clone them-self.
• Your Mentor (he or she may not see them-self as a Mentor - but a teacher, a partner - an opportunity to make more deals - a way to multiply their income).
• Become a Locator (also known as a Bird Dog), get into the market, go to auctions, talk to title company associates - agents and hard money lenders - ask who's THE MAN who is the most active buyer/investor in the area.
• What you want to know is who is THE MAN! Who is closing deals in the area - who is most actively flipping real estate - doing renovations - what is the name that keeps popping up. Look for ads - We buy real estate...... whom do you see more often at a auctions - talk to real estate agents who deal with investors - who is their best client -
• You are looking for THE MAN - the person who is making things happen - this is the person you want to connect with.
• Don't over-look active investors on Bigger Pockets - it is OK to have a long distant Mentor as long as they are qualified - active in the market and can prove it.
• When you find THE MAN - the person who is making deals - bringing in $20,000 or much more a month - this is the person you want to FOLLOW ---
• So - how do you you worm yourself into his center of influence?
• Approach THE MAN in the field (at auctions), ask for an introduction from title companies or agents - send a text, a letter or email. Expose yourself in every-way you can (well not every way) to this knowledgeable person.
• I always like the approach of GIVING TO GET - offer something of value - something to make your potential Mentor sit up and think about you and dream of how he can profit from his association with you.
• What would that be? As they said in the move SHOW ME THE MONEY!
• Let him know that you are always looking for (Locating real estate) good real estate deals, that you'd be willing to be a locator for him or partner up on a great equity based property - would he be interested in working with you, giving you a referral fee.
• Let him know that you have some skills in pounding the payment- farming and power prospecting, that you are always talking to motivated sellers --
• Ask him what kind of deals he likes - meet him -- have lunch -- ask lots of questions --
• Call him every opportunity you can - tell him about a FSBO you just discovered, a tax sale motivated sellers, a seller on Craig's List, a motivatedexpired listing.
• Remember you got to GIVE to GET!
• Create an Input Sheet of questions to ask sellers - work from this when making calls -
• There are three (3) important things you need to learn from a seller --
• About the existing FINANCING - how many loans - the amount of liens if any - the terms (balloon payments, interest rate and status and balances (current - payments due - foreclosures or tax sale pending)
• Next about the SELLER - why selling - where moving to - how fast do you want to settle - what are they going to do with all that cash - how can they help with financing - GET PERSONAL talk about yourself a little, but get them to talk about their job - their hobby - their work - their selling motivations.
• Next the PROPERTY - does it need any work, are there any violations - what are properties selling for in the area - how much would it take to fix or renovate the property - is it vacant?
• You shouldn't be on the phone no more than 10 minutes gathering this important information
• You need to know the potential EQUITY - how much do they owe - what's the potential value - subtract one from the other and you get EQUITY!
• Equity is the key to your success -
• EQUITY is what you need to know - Equity is what you will be negotiating for - if there is $50,000 equity - the questions is how good are you in negotiating some of that equity for you or part for your MENTOR!

Charles Parrish

Sounds good to me - if you refer properties to me and can confirm that there is lots of equity and you have some sort of written control in it, I will write an offer - the offer will be subject to me assigning my contract to another within our contract time period and will be all cash -plus your fee.

I do these sorts of contract weekly and would be glad to do business with you provided you are skilled enough to find really motivated sellers; residential - commercial, land or non-conforming properties.

Charles

Rich Hupper:

Rich,

There are real estate formulas that are too creative and misunderstood by most readers. Agents not educated in some of the creative ways of contract engineering will always question or find negative aspects or reason it will not work.

As an auctioneer and principal buyer in many states I prefer representing myself rather than others. There’s much more income and cash flow not to mention isolation from the general market. I use a system that has been working for years now – thanks to creative formulas and owning a real estate auction company, oh and the support of my wife of 46 years.

I may have some ideas that may help you increase your non-commission income.

Yes - I have profited from negative equity many times - the technique is called - Contract of Sale with Right of Possession with a Delayed Settlement Subject to the Existing Mortgage, Assignment with Release.

First you have to understand that there are potential buyers out there in your market who cannot get a loan due to their credit rating. This could be due to loss of job, illness, family situation or other reasons - this does not mean that they are bad people - only people with bad problems. They still have a right to own a home. Your job is to find them – this what I have done.

Since they can't get a loan, many of these poor credit folks have cash

Let the match game begin ---

You find a sellers who have had their house listed for a long time - no sale because they have no equity and the house was priced too high.

Their other problem is they moved after purchasing a another house - but now they have two mortgages - they need to get rid of the negative cash flow that the two mortgages have created.

The old house is vacant - sitting there with all the same expenses, taxes, insurance, mortgage payments and the risk of vandalism ---

So here is the plan -------

1.Make an offer to purchase their property for the amount of the mortgage (sometimes you can have the seller pay you for this service also)

2.The contract will have a delayed settlement date - like 5 or more years

3.It will be subject to the existing mortgage (the mortgage should be current)

4.You will have right of possession (with the key)

5.You advertise - For Sale - all credit accepted $5,000 moves you in today

6.You assign your agreement with the new buyer - they understand all the terms and feel that they will have their credit situation cleared up within 5 years when they will be able to get a loan. They benefit from the equity build up.

7.Introduce them to the owners and make it clear about who does what

8.Seller signs your release and assignment agreement

9.You make your $5,000 - or what ever you negotiate

This is not the perfect situation and it has some issues.

All parties should understand the liabilities and benefits

OPTIONS:

Seller signs the deed to buyer and deed is held in escrow, not recorded, until the mortgage paid in full and all the terms of the agreement are satisfied.

The assignment agreement is recorded - this should notify any creditor that there is an existing agreement.

Inspection agreements - seller does not want buyer to destroy the property before the 5 year settlement date.

Clauses that protects the seller in the event of default

Full disclosures as to what position you represent (if agent) was there a fiduciary relationship, were you acting as a principal

Protect yourself from liability - releases -

Make Full Disclosures - all the time

I hope this was helpful ---- Here are the details of one I just did – my fee was $41,000 – seller lost his cleaning contract and income – paid $1,000 subject to the existing mortgage, that I would pay – found a taker – assigned my agreement – offered some financing – they signed a release and assignment agreement. Mortgage amount was $340,000 – house valued for $400,000 – settlement to be in 7 years, assignee benefits from the equity build up.

Good luck ----