Shocking Agent Responce, I Think I Had It Coming... HELP!!!

"All men dream, but not equally"

Davillion,

As investors we need to get that deep discount, 20%-40% is not unreasonable. The question is whether or not you need a new realtor, perhaps he doesn't understand what exactly it is you want. Maybe he's afraid for himself, his business, his reputation. You need to discuss it with him and see if you need to find another realtor, or if you need to train him as to what you need. Remember, money comes to good deals.

Live abundantly!

Are you sure these properties fit the criteria that MATT and DEAN set forth the other night in the livecast ??? as is, price reduction, vacant. etc....
best of luck to you man.

WALT

"We received 30 cash offers on this property all over asking." Welcome to the CA real estate market. Find a younger, greener, hungrier agent that you can train. 25-1 works better in markets like Fresno, Modesto, Bakersfield. A shadow property that I have been trying to deal with for over a year just hit the mls 5 days ago for $275,000. The property didn't sell at the auction in December of '08 for $273,000 and has been sitting vacant for over 3 years. The day it hit the mls it had an offer for $331,000. I figure the ARV is $340,000. It's common for properties to have multiple offers over asking price here. As I wrote in an earlier post, the people I see having success in Southern CA are people who have been doing it for 10 years and have the network in place to get pocket listings from realtors before the properties hit the mls. Another investor I know has success picking up deals that fall out of escrow. These investors have the track record to close on a deal, that's why the realtors deal with them. Once it gets to the mls here, expect multiple offers over asking price. As Matt Larson said the other night, the formula may be 80% of ARV in CA. I see people trying to do deals at 85-90% of ARV - repairs and scratch my head. If you want to wholesale in the larger cities in CA, you have to be a marketing machine and fish upstream of the mls or already be connected with the realtors.

What I would do is call you realtor and ask to meet with him. Explain that as an investor you have to buy at a discount and assure him that you are basing your offer on educated calculations. If you are unable to do a deal not only do you not get paid neither does he. Be completely upfront with him and ask him what his thoughts are. Maybe he knows something that you aren't aware of. Maybe its an opportunity to learn. Listening to others and trying to understand where their coming from will be a learning experience for the future, plus I believe if you end up staying with him it will create a tighter bond between you. I have learned that most times when you are completely real with someone they are willing to share what they are thinking. If after putting your best effort into finding out all of the information, you can decide at that time if you need to move on. Share with him how you feel about him and your hesistance on moving on to someone else. If he doesn't want to submit these deals someone else will. Which is unfortunate for him but that is his decision. You are going to make money regardless whether he works with you or not. I hope this makes sense and I helped you some.

we've been taught over and over that you need to know your market when making offers. If investment props are being bought continually at 20% below ARV, your offers at larger discounts will not result in success. So what you need to know is if your buyers are willing to buy at a smaller discount. If they aren't you need to refilter the properties you are looking at for more motivated sellers who just want out and don't want to wait.

Remember, your market dictates what you have to do.

Hope this helps...

Andy Sager
DG's AndyS
CFIC member

TSRD has a point, investors may be paying in the 80 - 90 percent range. If that's the case, then your agent is correct. 50 - 70 percent of asking price will not fly.
You need to find out what other investors are paying for these properties. Take that list of buyers your agent sent you and contact them. The buyers on that list that own multiple properties are the ones you need to talk to.Some want a certain amount in equity, others want to buy at a certain percentage below ARV, others just want to be able to cashflow each month. After talking with a few of the guys, you will know at what percentage of asking price you need to submit on your offers.
Im not an expert but this should help.

Never mind my original post on this topic, these guys have waaaaay better insite than I do. It makes sense that every market is different and perhaps that doesn't work where you are. Thanks to all, I know I learned something new today.

Thanks to all above, i know California is a tight market to be in.
I really appreciate the feed back from you all, i don’t think i know my market that well because im a new investor. I have talked to a few of my buyers on what they want but im sure it will help once i send out letters to this huge list of cash buyers i have. So i can get more into detail on what they want. Also yes, i have followed Dean & Matt’s method for the offers. (To the T) I think im just coming in a little low & have to bump up my offers. But most of my offers were from 20-40% off FMV not ARV. That may have been my miscalculation...

Thanks To You All, i really love hearing different thoughts on little hurtles we have to jump over. Ill try to mend & patch things up between us before i fire him...lol...
Thanks Again DG Family

Tom:
What you don't seem to realize is that this agent did what Matt had suggested in an earlier teaching lesson to help not burn out your agent. He spoke with the listing agent via phone prior to submitting the offer and was told the offer was too low. What would submitting this lower offer accomplish? Not much if you ask me.

I would stick with this agent for now as he is following the "plan" and seems to be willing to work with investors. Until he does something unscrupulous, he sounds like someone you want on the team. He sounds like he knows his market and can better guide the offers to an acceptable amount. It's now up to Davillion to produce buyers that will buy at those prices or change strategies to one that will work in his market.

Remember, as Matt mentioned just the other night, the object isn't to "shotgun" lowball offers. The object is to make calculated offers to highly motivated sellers (whomever they be).

Hope this better explains things

Andy Sager (former NJerseyite )
DG's AndyS
CFIC member

* 1366 S. Euclid Av., San Diego 92114. Listed at $119,900; ARV about $220k (on a busy street, bordering Lincoln Park). Completely trashed (I went inside) Just closed escrow at $145k.
Sold on 03/07/2012 $225,000

* 6381 Lake Badin Av., San Diego 92119. Listed at $225k. Described on MLS as "major fixer," "cracks throughout the slab," "major setttlement issues." It sold for $252,500.
Sold on 09/30/2011 $434,000

* 1581 Doncarol Av., El Cajon. Listed at $209,900. ARV about $280k. Needed some floorplan changes (I went inside). Closed escrow at $218k. If I remember correctly, the broker told me they had 17 offers.
Sold on 02/24/2012 $300,000

The above post was from a realtor on a local board. Note that all 3 examples sold for above listing price

That makes since TRSD, I can see from examples you have up that i need to adjust my offers sum because i was offering much lower then i thought. Common rookie mistake...

Thanks...

Another post on a local board from an investor named David regarding San Diego:
"In many markets there is a retail sector and a wholesale sector. Non-pros pay retail prices, and the pros pay wholesale. The wholesale deals are very hard to find, and unless you have the right contacts, reputation, and belief that this wholesale segment of the market really does exist, you will pay retail."

Davillion, investors I have spoken with share the same insights for northern CA. It's all about reputation and contacts. If you don't have the reputation or contacts, you need to be marketing and dealing with Sale by Owners...bandit signs, direct mail, fliers, bird dogs, phone calls, etc.