There are only 2 kind of real estate
investors in Michigan – one who do deals and the rest who want to talk about deals. It is very easy to spot both of them.
The first one will walk into a house knowing well ahead in advance what is the fair market value of the house, what is the After Repair Value of the house, what is the SEV of the property, how is the neighborhood, how long this house has been on the market and will never ask the dumbest question of all – why are you selling the house with equity and not keeping it?
I know for a fact at least four Gold Plus members who are doing it the right way and saving themselves lots of valuable time and frustration.
Then there are the other guys and gals – who walk in to a property without a notebook and a pen to take notes on the condition of the property, who are asking the seller what the property values in the area are? Who are have no idea about the SEV of the house or long it has been listed? And the punch line is delivered when they start worrying about why the seller is selling the house with equity?
I got an email last week for a property listed on Ebay and this is the exact text produced verbatim,
“Mark, why are you giving me the gift of equity? What is going on? I have asked several of my friends about this and everybody has told me that is not possible. I mean what is the catch?”
I just deleted the email, never ever bothered replying to him. But the answer to his moronic question is this – the reason I am selling it below market value is irrelevant. The more important question to ask is:
1. If I bought the property, can you refer me to some good contractors who can fix the house?
2. Have you sold any other property in this area and if so what was you experience like?
3. How long it took you to sell your property?
4. What would you fix in the house if you were selling it yourself?
5. Can you help me in financing this deal as a No Money Down deal?
6. Can I get Cash back at closing to fix this house so I don’t have to use any of my money?
It is very rare that I am the only one looking at a property – most of time it is 3-4 people looking at it or considering making a offer. But most of the time rookies just like to look at properties. It is kind of a hobby for them. “Hey nothing good on t.v. tonight – lets look at some properties instead!”.
I make offers – lots of offers every week – some of them get accepted – most of them don’t - truth be told majority of them don’t get accepted. And that is just fine..
And that is how I can buy a house for $13,000 with a ARV of $83,000. I sold a property yesterday - the investor who bought it took exactly 20 minutes in deciding his decision. He walked out with a No Money Down deal with a huge equity stake left in the property. No Closing Costs. I got what I was looking for my profit target! Win-Win for both of us.
I am always harping the importance of taking quick action when you come across good properties—they don’t last that long unless they are scary looking.
