OfflineI am excited to share this deal with you because the way my partner and I found a buyer for the property was a miracle. Call it luck, but I call it destiny. Knowing nothing about real estate, however, every little step I took a year ago brought me this success and it couldn’t be otherwise.Talking of Delayed Gratification, Dean! 
Reading Dean's books, going through a real estate academy, taking action and, most important, having faith, created a fortune formula that I slowly starting getting used to and it's fun! You might call it crazy, but real estate became an obsession for me. So let me tell you how we locked on a property and were able to resell it in a few hours.
We used my partner’s budget as proof of funds to write offers with our amazing agent/friend, Viktor, specifically targeting bank-owned properties. After conducting a marketing evaluation and choosing the best homes for quick resale, we made an offer for a property that seemed to stand out from everything else. Location, price and condition of a property all gave us enough confidence to double close; of course that depended upon whether or not the bank would agree with our offer. After a few days of negotiation, we were able to lock the property for about 35% below fair market value. The day we signed all of the addendums the bank sent us we chose to look at the property one more time. After spending some time going through the house and having a walk through the neighborhood, we saw someone pulling into the driveway.
After a few minutes of talking to the guy, we realized that the man was looking into buying this property a few months from now. While I had signed addendums in the back seat of my car, he told us about all his plans for rebuilding this house, and my excitement rose with every second. After about twenty minutes of conversation we told him that, actually, we technically owned the house and our intentions were to resell for quick cash, not to hold onto it for profit. After agreeing upon a price, he brought us a check in a few days!
A couple of tips I learned during this transaction:
When making offers to banks, use larger earnest money of 3-5K checks with your offers, asking 60% off the fair market value. Larger earnest money checks give more room for negotiation.
Also, later on we found out that we don’t have to use the same title company that the bank uses for their transactions, since many title companies that banks use don’t do double closing.
What might happen is that you might use your company, and the banks will use theirs, but in the long run it will save you money anyway, since doing double closing instead of two closings is still cheaper, and you don’t have to run two-title searches.
Another tip: always ask the title company to break down all the closing costs to present to your end buyers. In our case the numbers kept changing the closer we got to resell the property.
Thanks Dean, you guys, my family, and business partners for all your support and all the knowledge you bring to these forums.
Lets keep closing more deals!
Sounds like you and your partner are off to a great start. Your explanation of the transaction was very clear, but why don't you throw in the actual numbers so we can get an idea of what you were dealing with. did you make 2k apiece or combined? Look forward to more of your deals!
Cathy B
Follow my progress at:
http://www.deangraziosi.com/real-estate-forums/investing-journals/44397/...
Artom,
I agree with a larger down you'll get better service
GOOD JOB- keep going
Was it THAT hard to do? NNNOOO
Mike
https://tvallc.isrefer.com/go/RehabLite/renvestr/ Free tools
Thanks Cathy!
Bank had the property listed for $22,000 and after running some comps we determined that the fair market price was about right.
Fair Market Value $22,000
Subtracted ( about 30% of fair market price) $6,600
Subtracted repairs $3,000
Maximum offer amount was about 13,000, however, due to a good condition of a property and nice location we were willing to go a little higher and finalized a deal for $14,700. Resold for $17,000. After paying extra closing fees and taxes we made $2,000.
Also,
Absolute Cash Flow (Income) (Rent - (all expanses: taxes + insurance + maintains: $30-$50 + management costs, etc))
Rent ($ 7800 )-(all expanses ($ 1054+300+50+ 90 ))=$ 6306
Mike,
We figured that if we would use larger earnest money checks and still make ridicules offers like 70% of FMV, this would still give us higher rate of acceptance at least 30 or 40% of FMV.
thanks
Good fortune = good deal. lol
To get something you've NEVER HAD
DO something you've NEVER DONE.
thanks, this deal was truly amazing, i hope it will stay this way lol
Congrats on completing the deal.
Sandra
"You can never get to the top, if you are not willing to climb. Do not look at the difficulty of the climb, only anticipate the view from the top."
"Can't even walk without you holding my hand." (Song)
"Is anything too hard for the Lord ..." Genesis 19:14
"In all things, wait on the Lord."
"Think not of your own deliverance, but trust in God who will give in abundance."
"When you are down to nothing, God is up to something." Unknown
"Our lives begin to end, the day we become silent about those things that really matters." Dr. Martin Luther King Jr.
You said that you and your partner were able to provide proof of funds. How does that work? Was the money in the same account and you provided that, or did you use separate accounts and show the separate accounts? How does that all work?
I wanted to do an assignment or double close with a bank, but I don't have the cash to show proof of funds so obviously my offers don't really mean much to the banks. How did you work around this issue, or how could I work around this issue?
Thanks for sharing the details!!! and congratulations:)
Irosias,
When we make offers to banks, we use my partner’s bank statements as proof of funds, just a simple print out from a bank showing checking or savings account with available funds to close a deal. In terms of separate bank statements, banks don’t really care who specifically has available funds. Two people might be involved in the transaction but only one person has actual power to buy.
Now if you don’t have cash to show to the bank, what about your credit line? You might be able to take money from your line, place it into a checking or savings account, make a print out and place the balance back on your credit line? Now you have a proof of funds. And if you double close, make sure you find out the rotation period for your credit cards (the time you have to pay). For example if due period is the end of a month, you might be able to use your credit line to double close at the begging of a month without them even know you ever used money.
You might also be able to use transactional companies that actually provide you with proof of funds, as well as, help you double close, as long as you have buyer in place. However, many times, banks don’t like to deal with transactional funding companies. I will send you a list later.
Hope it helps and with any questions feel free to pm me!
Good luck!
Sassy!
and thank you!
about making larger EM deposits is outstanding!! Congratulations and please keep us posted.
Steve
We seldom get what we want, but we will always get what we expect.
Artem,
Congratulations! Thanks for the tips too. Good luck on your next deal!
Cheryl & Dave
Summer should be fun and good luck to you as well!!
Artem
Thank you! Yes, this summer will be busy but, it will all be well worth it! Best wishes to you!
Cheryl & Dave
You are a great example of determination and persistence!! Co
ngrats on your deal for you and your partner.
This is very uplifting to see your rewards for not giving up and you now know you are going on to learn more and more .keep up your strong desire to succeed.
Jay
Click Here For homepage www.jaysthilaire.com
need to sell ? http://www.jayhousebuyers.com
Need me to FINANCE a home ? http://www.jaysrenttoown.com
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Jay thanks so much, it means a lot to me!!!
I hope you can make real estate business full time soon!!! and say hello to Dean at the event!
Have a great day
That is wonderful, great inspiration to me to keep going and learning. Thanks for sharing.
When you trust in yourself, you are trusting in the wisdom that created you.
your perserverance has paid off; I hope this is just the beginning of many deals in your career as a real estate investor.
thank you for sharing!
wishing you more success,
Valerie
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
Yes!, Way to go!, Congratulations!
Thanks for letting the DG family share in your
excitement.
Nathalie
I really feel uplifting when I can give a little spark someone to not give up and keep going!
Thanks
Artem,
Congrats on your deal!! I was wondering if you had to put in the earnest money with your offers? In my area, the bank wants the earnest money with the submitted offer or when the contract is signed.
Valeria and Angela thank you so much! Just got another property on a contract with my partner through a probate! Looks like probate deals are more responsive then expired listings!
Wish you much success as well
Artem
Mellisa,
Yes, with banks we use earnest money checks, I think almost all major banks require earnest, however, to protect ourselves in case we want to exit from a deal, sometimes we will include addendums with a contract feel free to use below
Hope it helps!
Artem
Few common clauses you might consider putting in an addendum before buying or wholesaling a property.
1. Buyer has the unqualified right to assign his interest in this contract prior to settlement to any person, corporation or entity, which he may designate.
This clause gives a better understanding to the seller your intentions in the transaction, note, while this clause verifies your rights to sell the contract, you always have to putt “and/or assigns” after your name when you sing the contract.
2. Buyer reserves the right to show the property prior to settlement for the purpose of either renting or reselling it, and seller agrees to permit access to buyer at any time from the date of this agreement up to the settlement date.
This clause gives you more flexibility to market, rent or quickly resale the property before you even have a legal possession of it.
3. This offer is subject to approval of buyer’s associate within 20 days of acceptance.
4. This offer is subject to buyer’s walk-through inspection and/or buyer’s partners’ walkthrough inspection and acceptance of same delivered to seller within 20 days of seller’s acceptance of this offer to purchase.
These two clauses are especially affective when you are working with a partner who is requesting the approval before the purchase. Also, they are great to use to exit a deal that has turned bad without violating the terms of the contract.
5. This offer is subject to property inspection by a licensed home inspector, the results of which must meet buyer’s satisfaction.