Vacant House Gold: How To Flip Houses Quickly, Cash The Check and Repeat!

Today I’m going to show you how to flip houses quickly and repeat–creating a pattern and a rhythm so that you can flip fast and make money even faster (and repeatedly).

But….before we dive into that, quickly let me recap from my previous post. When we last met, we introduced the necessary steps to striking a deal with the seller. We talked about how to proceed with deals when the bank is the owner. Then we got into pulling comps and establishing values.

Starting to ring a bell? Good.

But that’s just a glimpse back in time, so I encourage you to rewind and start from the beginning if you need a refresher.

Okay. Ready or not, we’re moving on to tackle the art of the quick sell…

Steps to Sell

Build Your Buyers List

If you want to sell quickly to investors or rehabbers, you need to build a buyers list.

The best way to do this is to turn to the list – Craigslist that is. I know, I know – it has a bad rap for some things, and even listings in particular, but for our purposes, Craigslist is a winner. So use it to list your properties – multiple properties at a time – to attract those hungry investors.

Personally, I use my Cash Buyer Data Feed system to help build my own cash buyers list every single month. It’s fast, super affordable and hands you known cash buyers on a silver platter! In fact, if you haven’t already tried it, you can run a quick search completely FREE by clicking here! 

To flip houses build your cash buyers list

For instance, if I am investing in Dallas, I can log in and find all the known cash buyers for my deals just like you see above!

LinkedIn is another great online networking tool.

Oh, and don’t forget about good ‘ole bandit signs. Some consider them old school, but they work – very well, in fact – so place them strategically in high traffic areas with good visibility, where investors will see them and be sure to use strong (bold and brief) language to reel them in and get the phone ringing.

Place your FSBO signs effectively to help flip houses Now, if you’re freaking out about building a buyers list, don’t!

Just relax because you only need a handful of buyers to get started. (If you’re talking high volume, though, then that’s a horse of a different color for a different post). If you’re placing your ads effectively and in the right places where investors will see them, you should receive lots of calls from interested buyers.

Remember to prescreen these guys and gals to make sure they can close quickly, and use a script so you remember to ask the right questions and stay in control of the conversation. Then make sure that you are prepared with the right answers.

Being a rookie is ok, but you’ll want to make sure you don’t sound like one.

Pro Tip: The key to prescreening is to ensure your buyers can close BEFORE your contract expires.

You might be wondering, “Can you ask you seller for an extension?”

Yes. But it’s not ideal. So make sure that whenever possible, your buyers have the cash up front.

Assign the Deal

Once you prescreen your potential buyers and the right one emerges, you can assign the deal to your buyer or rehabber – assuming your contract is assignable.

When you do an assignment you’ll collect some cash now and the rest at closing.

We’ll look at what to do when an assignment is not an option in another post. This is where my “No Fee Transactional Funding” will come into play.

When we do an assignment, our buyer’s money is what funds the deal, and we sell differently than we buy. YOU always give the smallest earnest money deposit when you buy, but you want to collect the largest earnest money deposit possible when you sell.

Remember, whatever is due at closing, the title company will collect for you. Your buyer is essentially paying you to go away. And the best part? You don’t need the money to close and you don’t even need to be present at the closing!

And this is great because, as you know, your time is much better spent working on getting the next deal done.

So find the deal, flip it quickly, forget it and move on to the next!

Automate the Process

I can’t stress this enough: To build a sustainable house flipping business, automation is crucial, so you can repeat the process quickly and easily and eventually if it appeals to you, scale into other markets.

One of the ways you can “automate” is by using bird dogs. Have them find vacant properties for you. They need to be your eyes on the ground to take property photos, find estimate the square footage, and categorize properties to determine how much work is needed.

Have your bird dogs use a map that you’ve divided into sections based on your search criteria. Power through each section, then start back at the beginning. Keep the rotation going throughout the year, and work through your list of interested buyers.

The cream will eventually rise to the top.

While you’re working through the cyclical process, send an email blast to your wholesale buyers list to get them excited about your “deeply discounted” properties.

Wet their whistles but don’t get greedy.

Automation is a whole lot easier if you have a tool to help you manage and scale your business. I created and continue to use iFlip Real Estate, and I truly believe it’s the most powerful automated solution for real estate investors available today. Click here to test-drive iFlip 100% risk free today!

Now it’s all about repeating the process so you can cash checks often, and do it all over again… and again, (as often as you want).

It’s up to you to make that call based on your time, resources, and available funds but… you won’t need much.

In a Nutshell

Here’s to hoping that I’ve opened your eyes to the beauty (and profits) to the endless possibilities that vacant houses offer.

If you follow the tips and advice that I’ve shared with you along the way in this (pretty awesome, if I do say so myself) mini-series, you WILL be able to turn abandoned property (which are everywhere around you) into BIG paychecks–quickly and easily.

And those two powerful words, in short, sum up the theme of this mini-series– quickly & easily.

So… tap into those vacant properties, work the system, and keep repeating the processes that you’ve learned in this series. Want to start from the beginning? Want to start from the beginning? Click here to go back to part 1 now!

Start investing in your financial future today by investing in vacant homes.

What are you waiting for?

If you have any questions or comments about vacant properties, or anything that we have discussed throughout this mini-series, please feel free to leave any questions or comments below. I personally monitor and respond to them.

Best Regards,

Cameron Dunlap

 

 

Vacant House Gold: Striking a Deal with Sellers of Abandoned Homes

Here we are cruising right along in my 5-step process for quickly turning abandoned property into BIG paychecks. Today, we will begin by talking about the valuable details regarding abandoned homes and the science of striking a deal with the seller.

In my previous post, I gave you a bunch of strategies for finding those elusive motivated sellers. And as you know, some of them are decent options, but I encouraged you to focus solely on skip tracing as the easiest and quickest method.

If you want to check out all of the helpful and informative information about my vacant house deal process that I’ve been sharing over the past few posts, then you can start from the beginning by clicking here.

But first, let me start by reminding you what those 5 steps to the process are:

#1. Spot or Locate the Vacant Houses

#2. Find the Seller

#3. Strike a Deal with the Seller

#4. Flip the House to Another Investor

#5. Repeat 🙂

Sound familiar? Good.

So now….on to the good stuff– striking the deal.

Show Me How to Deal

Typically, striking a good deal isn’t as difficult once you’ve found the seller of an abandoned house.

Why?

Well this is because, oftentimes, these properties are junkers in need of repairs (and that makes your negotiating process pretty easy). It’s very unlikely that the motivated seller is willing to put in the money or time for the necessary repairs – or they would have done it already.

It’s important to keep in mind that the house being ugly and in poor condition is one of any number of things that motivates the owner to sell quickly and at a discount.

So here’s how to begin this part of the process…

Steps for Striking the Deal

Contacting the Seller

First, you have to reach out to the seller of the abandoned home. If you did a skip trace, then you’ll most likely have the owner’s new address and a phone number.

You may be wondering whether you need to send a letter or just call.

Well, that’s up to you.

Personally, I feel more comfortable picking up the phone. By talking on the phone, your relationship with the seller is likely to be more personable, thus allowing you to have a better understanding of the seller’s motives. Furthermore, by building this connection or rapport, you will ultimately make the deal with the owner quick and easy.

For instance, if you’re talking on the phone with the owner and he starts talking about his dog, ‘Cujo’. By asking him or her questions about their dog (and maybe you can share a relatable story about your 4-legged friend) you are able to build a connection with them….and in this case, it’s all about building a strong rapport, as people tend to do business with people they like.

Striking a deal with the seller is better with building rapport

Solving the Seller’s Problem

In order to do this, you must determine what their problem is. So…you might ask them the following questions:

  • What’s going on here?
  • What’s the situation with the house?
  • Is there some way I can help you with this?
  • What will it take to better your situation?
     

You might be thinking, “But Cam, these questions are personal.” Well, believe it or not, they’re supposed to be. In fact, the better you are at determining their problem, the better you’re going to be at solving it–which means making the deal!

So… the most important thing for you to do is to listen. And remember..this is not about you – it’s about them.

Accessing the Vacant Property

If you don’t already have an estimated repair cost from your bird dog, then you’ll need to get those numbers. However, if you do have the repair estimate, you will also need to have access to the house so that the end buyer you’re going to wholesale this house to, can see it.

Pro Tip: If you’re not sure how to get an estimate of what repairs cost in your area… check with other investors or local contractors so that you can best determine the typical pricing in your area.

If the seller is local, then you can just meet them at the house. If they’re out of town, they might have a local person, like a handyman or relative, who has a key.

You might also find that the person who has a key is a landlord. Perhaps over the years, the owner rented out the property and had a local landlord manage it.

Sometimes, one of the last things the landlord does before moving on is changing the locks to secure the property. This might mean that the owner of the abandoned home doesn’t have a key.

Well, it’s super easy to change a lock. Any handyman can do it. But you must be sure to get the permission from the owner before you do so. (This would come a bit further along in the process when you’ve actually struck a deal with the seller.)

This is a great opportunity for you to continue building rapport with the owner. For instance, you might offer to change the locks for them at no cost. Normally, a locksmith or handyman would charge at least $100, so by doing this, you have just solved a problem for them. And remember, it’s all about them, so not only will they appreciate you doing this, but it’ll help make you one step closer to striking that deal!

You’ll also want to hang a lockbox on the door. I know you’re probably thinking, “Why would I do this?”

Good question. Okay so…think ahead to your end buyer. By hanging a lockbox on the door, you can easily give access to your buyer by putting the key in that lockbox for him or her… and the best part? You don’t have to meet them there to let them in.

How to Proceed If the Owner Is a Bank

We also have to consider that the abandoned home might be bank-owned. If this is the case, then the seller of the vacant house is the bank.

If you started your search off right, then you would have already known this by researching the Tax Rolls, which would have contained the name and address of the person (or entity) that is paying the taxes on the property (in this case, it’s the bank). As you know, I talked extensively about Tax Rolls in my previous post.

So once you have the name of the bank, look on the bank’s website and search for the local agent who represents them. Or you can simply call the bank and ask.

Most likely, you’ll be ahead of the game here – you already know there’s no sign in the yard of the house, and there may not even be a listing on the house yet, which means it hasn’t hit the MLS.

For example, you may reach out to that agent and say:

“Hey Mr(s). Agent, I found this vacant house at 123 Main Street. It’s in need of major repairs, and it’s something I’d like to buy. I’d like to make an offer on it as soon as you have it available.”

By saying this, you’ll impress the Realtor by knowing about it so early. And when they do get the listing agreement ready, they’ll probably come back to you before they list it on the MLS.

Here’s why it behooves them to do this…

If the Realtor submits your offer and it’s accepted – they’re not only the listing agent, they’re also the selling agent –they get paid twice. And really, I don’t know any agents out there who don’t like double paychecks. Am I right?!

By doing the deal this way, not only does it give you a leg up on the investor competition, but it also serves a dual purpose – you’re building rapport with an REO listing agent.

Relationships with these Realtors can be very valuable.

Pro Tip: You have to follow through when doing deals this way. When working with listing agents like this, do what you say you’re going to do – and you both can continue to profit from your working relationship. If you don’t follow through – they’ll cut you loose and never work with you again.

Pulling Comps and Determining Price

Your next step is to pull comps to know what the house would be worth after repairs are made. In other words, you need to determine the After Repair Value (ARV).

Personally, I use the custom comps tool that you can access through iFlip Real Estate– my business automation CRM (and it works great for determining the ARV)! Click here to try it out risk free if you haven’t yet.

Where else can you get comps?

  • Your Realtor – with access to the MLS
  • Tax Assessor’s office – pull local, similar, recently sold properties (not the assessed value)

In order for us to determine the value of the abandoned home, we have to pull comps. Until we do this, we can’t make an offer until we know what the house is worth (taking into account estimated repairs and our profit). And remember, you can use my 3-categories method: Bad, Really Bad, Awful to help determine those repair costs. 

Here’s where we run my Purchase Formula, which is .70 cents on the dollar, minus repairs:

ARV x .70 – Repairs = Your Likely Sell Price (when Wholesaling)

Read this part carefully please…

Striking a deal with the seller is important with this information

 

Your end buyer is going to want a good deal on this property. When you can sell the house to him/her at or above the Sell Price above and you’ve built in a profit margin you’ll make money. And by doing so, you’ll be turning those abandoned houses into pots of gold as a wholesaler. 🙂

A simple rule of thumb to factor in your profit is to take 5% of the ARV. For instance, if the house has a $200,000 ARV, that’s $10k profit for you. Or, if the house has a $500,000 ARV, that’s $25k… (You get the point).

…So deduct that from your Sell Price and that’s the price you want to pay the seller for their house. Finally, you turn around and sell it to your investor at or above your Sell Price – and that’s where your profit comes from.

Make the Offer

Now you can make an all-cash offer or pre-approved financed offer to your seller. When you are pre-approved, and my funding clients are, you can waive the mortgage contingency. You may also want to waive the appraisal, inspection, etc. contingencies too. When you do, your offers are nice and clean, and banks like that!

Pro Tip: I have a super-informative course about PSA’s, which you can – and should – check out here.  And ALWAYS have an experienced attorney review your legal documents, before you use them, to ensure you’re protected.

Don’t be concerned about making a cash offer without actually having the capital. You don’t need it (and you’ll see why in my follow-up post). Actually, all you need is a small Earnest Money Deposit. And with these types of deals, usually a $10-$100 EMD is sufficient for the seller.

You may come across some sellers saying that you don’t need an EMD at all. But you do! In order to make that PSA (Purchase & Sale Agreement) binding and legitimate, you have to put up some deposit money.

You also want to set your closing date 30 to 45 days out – this allows you time to find your end buyer.

Once you and the seller have the signed PSA, you need to have the title checked to ensure there are no liens, encumbrances  against the property that might prevent you from moving forward.

So you turn over your PSA to either your title company or closing attorney and let them open escrow. Part of the escrow process is to do a preliminary title check–the results of which you want to get in writing. It should say something like this:

“Based on a preliminary title check on [date], we have found that the title for the property at 123 Main Street is clear and marketable.”

By seeing something to the effect of ‘clear & marketable,’ you’re good to go.

Okay, so if you’re at this point in the process – you’re close to closing the deal. The finish line is in sight…

One More to Go

Can you believe we’re just about finished with my 5-step process? Most of the hard work has already been done!

You or your bird dog located the vacant house, you found the owner/motivated seller (probably with a skip trace), you worked a deal with the owner of the abandoned home, and now you’re ready to wholesale this property to another investor!

… and in my next post, that’s exactly where we’ll pick up!

Until then….

If you have any questions or comments about striking the deal with the seller of abandoned houses for sale, please leave a note below. I personally monitor and respond to them.

Best Regards,

Cameron Dunlap

How to Sell a House Fast: A Wholesaler’s Guide

You are so close!

If you are reading this, there is a good probability that you have a contract on a house and now you need to know how to sell a house fast.

-OR-

You are in the process of doing deals and you can just about taste a deal coming.

Either way, you are in the right place!

In this guide, I am going to show you everything you need to know, from A to Z on what to do from the moment you ink the deal with your motivated seller until the moment you are cashing your profit check!

The Key to Selling Your House Fast, is Getting a Good Deal!

Good deals are always the key to being successful at Real Estate investing. Especially when you are wholesaling.

Assuming that you contracted the property well below market value, selling it will be relatively easy because you have the ability to make your wholesale profit and… leave enough additional profit on the table for your buyer!

Imagine yourself in your cash buyer’s shoes…

To run their rehabbing business, a typical day looks like this…

They raise money, manage contractors, drive by houses, inspect houses, estimate repairs, estimate ARV, find retail buyers (when they sell), manage a database, answer emails, take phone calls from inspectors, attorneys, brokers, appraisers, city officials, and all of the other Real Estate players… and just to top it off…

They Have to Find GOOD Deals

This is where you come in!

This is an important part of the value you bring to the table, as a wholesaler.

This is why cash buyers love you!

All of the deal-making pieces that require their time when buying a house cash are alleviated by you.

If you want to be the top wholesaler in your market with access to hungry buyers so you can spend more time finding hot deals, then follow these steps to selling a house now…

How to Sell Your House Fast in 15 Simple Steps – A Guide For Wholesalers

  1. Create a flyer to highlight the reasons why this is a good deal.
  2. Create a PDF version of the flyer and include it as an attachment to an autoresponder email using iFlip so that you can build your email list of investors in your market.
  3. Connect that autoresponder email to your buyers website using iFlip so that your buyers will get instant access to the flyer.
  4. Place ads on Craigslist in the “real estate for sale” section:

The fastest way to sell a house.

  1. Use an image like the one below or hand-write a text ad to use in Craigslist so you can attract potential buyers to your buyers’ website.

Ad to use when flipping houses for profit.

  1. Send potential buyers to your buyers’ website (via the url in your ad)
  2. Let technology (like iFlip) send the PDF to the buyer with all the details automatically
  3. Program/setup your autoresponder to automatically build rapport, sift & sort, and warm up buyers for future deals
  4. Place a “FSBO” sign in the yard of the subject property (with permission from the seller of course)
  5. Put out yellow road signs that say “Handyman Special – Cheap – Cash (123) – 456 – 7890.”
  6. Look on Google, Craigslist, your local paper, road signs, and anywhere else you can find your competitors advertising. Call them and let them know that you are looking to sell your house for cash and/or ask if they would like to get on your email list to be notified of your next deal.
  7. Add all good leads to your buyer database so that you can call/email them back on your next deal.
  8. Place “Pay Per Click” ads online to send local investors to your buyer’s website (Google & Facebook)
  9. Attend your local Real Estate Investors Association meetings to pass out flyers and let them know that you are looking to sell a house for cash.
  10. Send a postcard to cash buyers in your market

All of these steps are important… especially when you are brand new to Real Estate Investing… but, they are technical and complicated unless you have a system like iFlip that makes it easy and does most of the work for you. However, if you want to keep it simple and sell your property quickly to a cash house buyer then step #15 is one of the most important (and least technical) steps for you to focus on.

As a wholesaler, it is important to find ways to save time… working with known, cash buyers is going to save you a lot of time and hassle.

Plus, working with cash buyers allows you to avoid “tire-kickers” or “posers” who claim to be Real Estate investors but will end up wasting your time and promising to close on your deals, but back out at the last minute. This will NOT make your day.

Where to Find CASH Buyers

Here are two proven ways to find cash buyers for your deals…

    1. You can go down to your local courthouse and scour public records for recent cash transactions. I don’t love this method because it is so time consuming It can become a part-time job because every time a cash transaction occurs, you’ll have to find it and record it in your database for it to be up-to-date.Pro Tip: If you choose to go this route, be sure to find an assistant that you can easily train on the process so that you don’t have to be the person doing it.  

 

  1. Use the Cash Buyer Data Feed. Because of the challenges (time, effort, energy) with finding cash buyers via public record, I created a software program that allows any investor to automate the process of finding known cash buyers right from their desk.

Every month, my team aggregates the data from all over the country. We weed out all of the irrelevant information and keep only the most relevant and profitable data that helps us, as wholesalers who want to sell property fast. With the Cash Buyer Data Feed you can instantly access all of the cash buyers in your market, and everywhere in the USA.

With access to this highly qualified buyers list you can make offers with confidence knowing that you have cash buyers you can sell your deals to.

Click here to run a quick search (completely FREE) to see how many cash buyers are hiding in your market!

What to Say to Potential Real Estate Cash Buyers

You will save a lot of time and energy if you get good at screening out “un-qualified” buyers.

Some buyers say they have cash, but what they really mean is, they have an asset that they need to sell in order to get that cash.

Some buyers will say they have done a bunch of deals, when in reality, they bought their first home a couple decades ago, they bought their move-up home a decade ago, and they just closed on a new home.

Yet some are TRUE cash buyers who are buying and selling property every month.

It is important that you don’t waste your time… yet, it is also important to get “off on the right foot” with the real cash buyers for houses.

I have created a script so you know exactly what to say and I include it for free inside the Cash Buyer Data Feed.

How to Let Your Buyer Inspect the Interior

Remember… not all buyers are equal. Some will waste your time, while others are serious deal-makers. As soon as you have identified that a buyer is a deal-maker, you can tell them how to get in.

The best way is to have a lockbox on the property with a key. You would get the key from the seller and then head to your local hardware store and buy your own lock box.

Usually, a seller is OK with giving you the key. Naturally, they are hesitant to do this for fear of the unknown, but when you remind them that the house needs work and that there is nothing to steal… they will often give you the key. This is especially true when they are not local.

If you were not able to get a key, then try this…

Let the seller know that you tend to get a half dozen or more buyers, contractors, and partners who will want to see the inside. Usually they will give you the key once they hear this because they “have had it” with the property, and don’t want to waste any more time.

Once you get the lockbox up, you can give the code to your qualified buyers…

If your buyer provides you with “proof of funds” or they have done a deal with you before… the risk of anything happening is very small.

If this is a new person that you think would make a good buyer, but you are a little hesitant… you may want to actually meet them at the property.

What if the Seller Won’t Give you a Key?

If you were not able to get the key, you can either have the seller show the property to you and each buyer on separate showings, or…

To save everyone a little time and to create an “auction effect”, you could schedule a mini-open house. This is a window of time that works for you and the seller which you think potential buyers will be able to fit in their schedules. It could be 1 hour… it could be 4 hours… it could be on a weekday, or a weekend… whatever works.

Try to make the window of time as narrow as possible… when buyers run into each other, they see that there is demand for the property, and they are more likely to sign the deal right then and there.

If the property is bank-owned, this process is easier. The lockbox is already on the house; you just have to get the code from the Real Estate Agent. It’s generally easier to get access when there’s an agent involved because they are used to the process of showing properties and aren’t emotionally attached to the house.  They also understand that you’re saving them time and trouble.

What Contract to Use and When…

When you are planning to do a “double closing”, I recommend using the local Realtor Board Contract. This is what all of the local brokers, attorneys, and title companies understand and expect.

When you are doing a “single close” AKA “assignment” deal, all you need to do is assign your contract to your buyer. The buyer will want to review your deal with the seller and if acceptable, they will essentially agree to buy your contract.  Just be sure that you’re using an assignable contract!  See my article on buying from private sellers here.

You will get paid at closing. Your name (or company name) will be entered into the HUD1 as a buyer’s line item.

Here is an example what an assignment agreement looks like:

Use this agreement when closing on a house.

You can create something similar to this in your favorite text editor on your computer.

What to Do After You Sign the Contract with the Buyer

As soon as you find a buyer to sell your deal to, you need to let your closing agent know.

Call him/her up and ask where to send the contract.

When you are doing a double close, you will have 2 contracts… 1 with the seller, and a different contract with the buyer. In the case of a single close/assignment deal you will already have the contract with the seller and it should already be in the hands of the closing agent. Now, you’ll have an assignment agreement with your buyer, which needs to go the the closing agent too. It’s effectively your contract to sell. Either way, send your new agreement with your buyer to your closing agent as soon as possible.

Your closing agent will handle all of the paperwork, schedule the closing, and work with the title company to make sure that the property can transfer with a “marketable title”.

Your assignment agreement has to be “paid off” in order for the property to close.

All that is left for you to do is wait for the closing and then you can…

Cash Your Paycheck

This step-by-step list showed you how to sell a house quickly, however…

If you would like a complete guide on flipping a house with no money, credit, or experience (in 30 days or less), check out my blog post on flipping houses with no money.

Leave a comment below… I’d love to get your feedback and I always respond personally.

Best Regards,

Cameron Dunlap

8 Simple Rules for Making Offers on Houses That Are “Bank-Owned”

Bank deals are different than private seller deals.

Banks scrutinize your offer much more closely… but there is good news!

THERE ARE A TON OF REO DEALS AVAILABLE IN TODAY’S MARKET FOR YOU TO MAKE REAL ESTATE OFFERS ON!

Banks (specifically “REO” departments) do a lot of deals. They are in the trenches every day and get “blown off” all the time.

Because of this they are systematic in their approach…

Their “BS meters” are finely tuned…

You are not going to get away with anything.

You MUST do a double closing because they forbid contract assignments, whereas in a private seller deal, you should do an assignment and avoid a double closing.

Banks want YOU to close

A private seller doesn’t care who closes, as long as it closes under the terms initially agreed upon.

So when you are submitting an offer on a house to a bank, there are some differences.

The vast majority of banks will rely on their broker to list, negotiate, and manage the sale of the house… any red flags you raise in their mind, and you are toast.

You Must Play by the Broker’s Rules

I get calls and emails on a regular basis from brokers who’ve received an offer on a property from one of my clients (like you) who’s using my proof of funds and transactional funding. They call me skeptical that the money is really available for my client… so I quickly send them a bank statement, and when they see the proof their guard goes down.

I hear stories all the time about “newbie” investors who are doing it wrong. They use the wrong contract, they use too many contingencies, they call “pre-approved” offers “cash” offers, and so on.

Take a guess at what a broker does with your house offers when they sense that a “newbie” is presenting it?

If you guessed… “THROW IT AWAY” … you would be right!!!

They are experts at the “sniff test”. They get investors making offers on property day in and day out: who make exorbitant claims, but cannot back them up.

This is actually good news for you!

While the majority of investors are doing this the wrong way… you can do it the right way and whip your competition.

You can be new to Real Estate investing, and still look and act like a pro.

How? Follow my lead. I have been doing this a long time and in this article, I am going to show you exactly what to do when making offers on houses that are ‘bank owned’.

These rules are unique to bank deals because private sellers don’t think about these things… they are not “in the trenches” every day.

8 Simple Rules for Making Offers on Houses That Are “Bank-Owned”

  1. Offer Earnest Money

Offer at least $500. The more you put up, the more real you look… especially if you have no contingencies. Usually 1-3% of the purchase price is the agreed upon earnest money deposit.

  1. Be Careful With Contingencies

Use as few contingencies as possible. I always include a title search as a contingency, however. Every buyer should do that, on every deal. This is customary. This tells you that there are no outstanding debts, judgments, or “clouds” on the title. The rest (home inspection, partner approval, etc.) are frowned upon and make you look like a “newbie”.

  1. Use THEIR Contract

Brokers want you to use THEIR form, not yours. If you make it easy on the broker and they like you, they may have other deals around the corner for you. And don’t ask them to send their blank contract to you. This makes you look like you have never done a deal. You should look for the local Realtor Board Contract online and send it along with your “proof of funds” on your first offer to buy. And if you are a little nervous about using a big contract like this, I have created a training program called “The Purchase & Sale Agreement Line by Line” to help you understand it. You can find more information at CameronDirect.com.

  1. Make Sure You Have Proof of Funds

If you can’t prove your ability to close, the broker will not submit your offer to the bank. They are the gatekeeper for the bank and everyone is busy.

You need to include “Verifiable Proof of Funds” with your offer; which tells them that you are able to do, what your offer says you can do.

If you have cash in your bank, in a retirement account, or any other place, print up your most recent statement, “black out” your sensitive info, and then include that with the offer to buy the house. This is what a broker is hoping to see.

If you do not have the cash, then you will need to line up some funding. If you would prefer to find local private lenders who will give you a great rate, you can find known private lenders in your area, and all across the USA using my Private Lender Data Feed.

Or, if you are limited on time, you may want to check out my REI Trifecta Program where I will provide you with funding (and everything else you need to make quick cash).

  1. Shoot For A 30-Day Closing

Some banks vary a little, but 30 days is the sweet spot. Banks want to know that you can close quickly (while giving them enough time to get their “ducks in a row”). They use systems to make the process easier for them to dispose of their REO properties. Make an offer for 30 days, but be flexible in case they ask for something different.

  1. Expect Addendums

Each bank has their own set of rules. The best way to make an offer on a house is by using the local Real Estate Board approved contract because that makes the broker happy. But, that doesn’t mean that the bank is satisfied. They have processed thousands of these transactions and they know what is important to them and what is not.

So they have created their own contract which rides along with and supersedes your contract. This is what is known as an “addendum”. This is especially true when you are dealing with a major bank like “Bank of America” or “Chase”. They are lending and foreclosing all around the country, and they are getting offers from investors in all 50 states. Each state has several Board(s) of Realtors which means there are hundreds of different contracts.

The asset manager does not have time to read through each of them to make sure that there is no sneaky or otherwise unwanted language. So, they created their own addendum form and tell you that you have to abide by it, or they will find another buyer who will.

READ THE ADDENDUM! Then if there’s any question about what it says, ask the Real Estate Agent for clarification.

  1. You’ll Be Buying The Property “As-Is”

Banks will not make repairs after you get a deal with them. Their addendum will make you purchase the property “as-is”. I wanted you to be aware before you submit an offer on a house though, because I have seen many investors attempt to re-negotiate with the bank after a few days of putting the property under contract. That won’t fly! Include some margin in your offers in case you find something “behind the walls”, etc. after closing. If you are wholesaling the property, you don’t need to be exact on repair estimates anyways.

  1. Avoid Using “And/or Assigns”

Using “and/or assigns” is the fastest way to show the broker that you are “new”. In private seller deals, you would ordinarily include language in the contract that allows you to assign it. In bank deals, it’s a BIG ‘NO-NO’!

When you’re wholesaling you have to do a “double-closing” for foreclosure properties. You will incur extra closing costs, but the margins on bank deals make it worth it!   Plus, if you’re using my “no fee” transactional funding, those costs are greatly reduced.

Just be sure you are making offers according to my formula and you will be good to go. But whatever you do… do not attempt to make the contract “assignable”. Rather, plan to close on the property in the name of your entity and sell it same day to your cash buyer.

Take a peek below… and learn how to get access to my funds so you can do more deals.

Now that you are aware of these 8 rules, you will be making offers on a house like a pro and you won’t make the same mistakes that most investors make when learning how to deal with each type of seller.

Private sellers tend to believe whatever you say… banks tend NOT to believe whatever you say. You need to PROVE it!!!

If you don’t have the ability to prove it, let me give you the ability…

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