The secret formula that works! Kurtis and Cyndy have some secrets from the CA market have helped me significantly beat the competition. For those of you who live in “Hot Zones” like California and are having difficulty getting that first offer accepted: there is hope! I’ve tried the 25:1, 50% off listing price method and returned a big ZERO! I know the method works, but I think in some areas of our great Nation the 25:1 strategy needs to be tweaked to fit the unique market. Through grueling hours of research you have to approach the market completely different.
Here is he method that works! You have to make a 12 offers a week and then you will close on 4 houses a month. Below is a quick outline of what I learned.
1. Target Your Offers; this means no willy nilly offers with no rhyme nor reason.
2. Your offer should be within 10-15% of a deal ALREADY before you make an offer.
For example: FMV $200k
For it be a deal it needs to be 50%-70% of FMV, depending on condition and area.
So: $200k X 60% = $120k for a deal.
Therefore, you need to find a listing no higher than $140k to offer $120k.
3. Prime times to make offers on REOs;
1) Day 1 On Market
2) Massive Price Reductions
3) Fall Out of Escrow/Closing
4) Board Ups (houses that are boarded up)
5) Trouble with the City (code violations, illegal additions, etc.)
If you come upon a hidden “gem” that has been on the market for over 90 days, and the listing agent tells you the bank is desperate then by all means shoot for the 50% of the listed price. I will be trying this method starting 8AM tomorrow morning! I will let all of you know how it goes. If you have success please share it with us. I would also like to thank Kurtis and Cindy for their great information.
You have it right. It needs to comp at $200k, but be listed low enough that you can come in and make an offer at 10-15% off giving you 50-70c on the overall property. This is why it is so important to know your investing areas, so when you come across a deal, you can quickly run the numbers and make your offer.
Kurtis and Cindy give out the information freely. Their attitude is that most new investors do not have big buyer’s list therefore you will come to him to find a buyer. ( me too ) . They then will split the deal 50/50 and he really didn’t do any work. His list has over 2,000 names on it. In my area, houses are snatched up within days of being on the market. Other investors are offering close to asking price. This strategy is working for him. He is doing $40k plus a month
MY OPINION: Offer cash!
Finance contingency will screw you almost every time. There are many ways to work around the $ part.
Use your inspection contingency. Almost all sellers will expect that, and it won’t kill an offer.
I tried a few contingencies, but of course, my agent said, “Don’t do it!” At first, I said we’re doing it my way, but after seeing the competition, I am using no contingencies except when it comes to illegal ad-ons. I write, “Subject to buyer verifying permit approval” This gives me more time to find an end buyer and great escape if I can’t find a buyer. Also, the banks expect it on the illegal units. I always offer all cash to get the deal accepted and I use the standard CA 17 day inspection period.