I NEED ADVICE FROM OTHER CALIFORNIA DG STUDENTS!

A lot of us in CA are focusing on areas outside of CA.

Karen

Even though getting a good deal from a bank happens once in a blue moon(after multiple, multiple offers), your best bet by far at getting a 30% to 40% deal under contract is by dealing directly with a distressed/motivated homeowner on an unlisted property. No banks, no agents!

Michael Mangham
MD Home Acquisitions LLC

Good Morning every one is it true that you the Owners with real state agent won't accept any offer from me to pass it to a client unless I'm qualified for a loan? that is what my agent told me this morning any help please

Out here in many metropolitan areas of CA, BULK REOS go for 60-70% (30-40% below ARV) of their true value. It isn't like the midwest where bulk REOS sell for 40% of their value. That being said, getting bulk REO prices out here doesn't happen too often (although I have done it!) its important not to just look at listed prices and knock 30-40% off of the listed price here. You must determine your property values ARV, and narrow your target properties down to 25; then determine your offer price based on either going out to determine the amount of work the property needs or calling the agent (if listed) and seeing if an estimate of work has been done; then subtracting holding costs (if your buyer will be using a HML, HML costs need to be taken into account; as well as utilities, monthly payments), permits, repairs, your fee to assign, and the amount of profit your buyer is wanting to make. THAT is then your offer price. This is what I have found WORKS here.

You can also look up all the sold REOS in your target area and see what prices they are going for for a quick look to get a rough idea of a range you need to target for REO offers; and try to get the best price in town . Your factor out here is also agents; MANY will NOT even submit your offers to the banks (this is such a known problem they've even addressed it at the DRE and put out and APB of sorts on it with some regulations on submitting all offers).

Dealing with FSBO out here is also not an easy task. Many of them are very unrealistic in their pricing and are not flexible even after explaining the market and conditions. I'm not saying it CAN'T be done with FSBOs here, but, in my experience, I have found it takes a lot of talking to FSBOs out here to find one that will be a profitable deal.

Here's the calculation I use here in LA for REOs: ARV-repairs-profit desired by your buyer-holding costs-closing fees-home inspector costs-transfer taxes-realtor commissions on the sellers side (YOUR buyer, in case they will list with a realtor)- monthly maintenance (gardening is about $50-70/week depending upon the yard size)-property tax for the # of months the property will be held-insurance (for the amount of time the property will be held)-double close fees-your 'assignment' fees = purchase price. So, when you are building your buyer's list out here, there are several other questions to ask your buyers as to what they're looking for; number one being the amount of profit they are looking for in each deal, whether they use hard or soft money and what points and interest they pay.

Remember, you need to develop a system that works for YOUR area. Hope this helps. you're in Stockton, so the formula may be different for you; but in LA metropolitan area, this is what works; and you don't burn bridges with all the realtors you talk to that way either.

Thank you Vonny very much i will try that

Thanks everyone for this area specific input.
It's greatly appreciated.

I don't know about your area but here in San Diego you have to have Realtor/Investor relationships. The Investors who are known for closing on deals every week are getting the phone calls. "Do You Follow Your Local Investors Who Are Doing Deals Weekly??" Everything else you see on the MLS, is the crap that's left over & the newer Investors are also bidding those up, getting desperate for a deal paying to much & getting themselves into trouble. Also there's a lot of Investors with tons of Cash backing them & the spread doesn't have to be very large. They turn so many properties, they don't care if they make a small amount on a deal. If they sell a house every week & only make 5k, in there mind ,that's 5k a week.
You have to place yourself around these investors in your area & build the relationships with them & simply figure a way to keep taking action & get yourself involved.
My advice is not making offers on MLS properties unless you have a legit POF showing money in an acct & you have to be very aggressive on your offer & ready to close. I would Only focus on finding distressed home owners that need to sell fast or need a short sale. Get to them before a realtor does.
It is a hustle out there right now & as my coach always mentions, 98% of Investors don't make it & with all the new Investors coming in, doesn't help.