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DEALMAKERS - Do you have a plan?? - http://www.dealmakerscafe.com Forums

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dealmaker
Moderator

"DEALMAKERS - Do you have a plan??" , Sat 11 Nov 21:10

What is your plan of action when dealing with a seller?
What does your toolbox of strategies offer?
What many types of deals can you offer?
Can you pay cash?
Do you want to pay cash?
What happens when seller doesn't like plan A?
What is your plan B, C and/or D??
Do you always make an offer?

The best answer will receive a FREE Real Estate investment book or course out of my library or a month of coaching OR you'll receive my system verbatim!!

You do NOT need a plan to win!! Just answer the questions and state why the question is or isn't important?

LEGAL: We need at least 5 responses before a winner will be chosen

Dealmaker

Replies:

Lynn
Moderator

"Why Can't You Pay Cash??????" , Tue 14 Nov 17:20

This question is directed to Mark and Arlie because of their postings in this thread, but applies to everyone who doesn't think that they can make a cash offer "because they can't pay cash".

YOU DON'T NEED CASH TO MAKE A CASH OFFER!

Real Life Example: Hopefully we will close this deal on Friday, but it may be next week. However we will make a cool, quick $10K on a house that we have a contract on to buy for cash.

This property was not a candidate for flexible terms because the seller wanted ALL CASH. We offered him $40K, ALL CASH, for the house and later he came down to $37K because we discovered some more work that needed to be done.

The house needs $15-$20K in repairs and ARV (After Repaired Value) should be around $85-$90K.

After getting the property under contract for an ALL CASH purchase we advertised it to other investors. We sold the property to another investor for $47K,ALL CASH, and it should close within a week.

At closing the title company will take the new buyers money of $47K, pay off my seller at $37K and give us a check for $10,000 (our final buyer is paying closing costs).

This is just a quick example of how you can make ALL CASH offers without any money. Just negotiate a great ALL CASH price and give yourself time to find another buyer. Make sure your contract limits your liability to the earnest money and keep your earnest money deposit "very small".

Happy Investing!
Lynn

manneke

"Re(1):Why Can't You Pay Cash??????" , Thu 7 Dec 08:46

quote:
After getting the property under contract for an ALL CASH purchase we advertised it to other investors. We sold the property to another investor for $47K,ALL CASH, and it should close within a week. ...

How do you find other investors?

Mark

Lynn
Moderator

"Re(2):Why Can't You Pay Cash??????" , Thu 7 Dec 09:03

Until you have built a network of other investors (which we haven't done yet in Arkansas), you put ads in the same papers that your other advertising goes in.

We did close on the transaction that I spoke about in the previous post. That buyer originally called on one of our "Handy Man Special" ads.

As we were leaving the closing table the buyer and his banker said "Go find us some more". So it appears that I have at least one good contact for future rehab deals.

I would like to make a point that marketing for junkers is not a big part of our marketing plan. However, because of our other marketing we just happen to come across one now and then. We also never pass up a vacant or boarded up house. When we see opportunity we pounce on it.

Happy Investing!
Lynn

manneke

"Re(1):DEALMAKERS - Do you have a plan??" , Tue 14 Nov 06:26

My plan of action when dealing with the seller is to determine early on their level of motivation. I've dealt with several unmotivated sellers in my short 'career' and, although it was a learning experience, was a waste of time. Once I determine that they are in fact motivated, I need to find out more about their situation, i.e., why they are motivated, equity in the home, etc. Set up an appt. to meet asap.

Toolbox of Strategies (in order of preference):
1) Subject-to
2) CFD
3) L/O ?
4) straight option

The ultimate goal is to get the deed.

Can I pay cash? No. I don't want to pay cash. Take the property subject-to and you don't need any cash.
If they don't like plan A move on to plans B,C, and D (see above).

No, I wouldn't always make an offer. Only if the numbers look right. If someome offers you the deed on a home with no equity and a 13% interest rate, don't take the deed unless you can somehow get the numbers to work.

That's my 2-cents worth. This has been a good exercise. I'd appreciate any feedback from any and all on my thinking. Since I haven't done a deal yet this is still theoretical for me.

Thanks for the homework Professor Matt. Anything to get me thinking.

Mark

Arlie

"Re(1):DEALMAKERS - Do you have a plan??" , Mon 13 Nov 21:07

What is your plan of action when dealing with a seller?
I want to get the deed for free or 10-20 earnest money and then market the home and sell it on a Lease-Purchase contract. This questionis important to help excercise your brain to help you grow as a problem solver that has many solutions of how to purchase a home with other peoples money.

What does your toolbox of strategies offer?
Toolbox consists of #1 Assign the beneficial interest of the property first into the sellers name and then over into a Land Trust with my company's name on it. This should circumvent the due on sale clause that many of us fear. (Importance?) I feel that if you again have a fully loaded arsenal of win-win solutions your chances of purchasing no money down are heightened. #2 Buy the property with a wrap around mortgage

What many types of deals can you offer?
I can offer several types of deals but not rapidly I would first have to deermine the needs and wants of the seller and exit strategies of how to sell the house before I commit to any specific one. My goal is to learn one strategy inside and out first and then expand to two others for flexibility and problem solving success.

Can you pay cash?
I can not pay cash and neither do I want to at this stage of the game. There are ways to actually pay cash and borrow very quickly at high interest rates etc. but (and correct me if I am wrong) the whole thrust of this forum is why should I pay cash when I really don't have to.

Do you want to pay cash?
No! Why because having the ability to pay cash can be a stumbling block so save it for your kids college or for an upgrade on your current home.

What happens when seller doesn't like plan A?
Make sure your offer is put in writing and dated. Why? because the line between needs and wants are razor thin and the seller could change his mind very quickly. Explain to the seller that each offer is separate and independent of one another and that no two offers can be meshed together to satisfy the sellers wants without furthur consideration.

What is your plan B, C and/or D??
Kindly withdraw to your chamber and contemplate what you did right and how you would approach the same scenario if you had to do it over again. This is a great way to test you own tenacity and willingness to go the extra mile to help yourself and also the seller with his problem. There is an old adage that goes something like this "help yourself by helping others in need"

Do you always make an offer?
I would say yes but I am torn on this question. When saying yes remember to always be embarrassed by your first offer becuase you have no idea how low the seller might go and if they will say no at first and then agree at a later time.

Thank you for a wonderful opportunity to answer these questions Matt. I am learning alot and I apologize if the answers sound allof but all in due time. I will speaking (ahem writing) REI lingo with the best of'em

Can't wait to see what others have to say and who wins. i am trying to put together my mobile office commando kit and I could really use all of the forms necessary to handle all aspects of the transactions. With this in mind I will vote for myself as the winner. HaHaHAHAHA!! Boy I am a stinker huh?

Keep Smilin'
http://arlieanderson.homes.com