Transcript BUYING AND SELLING REOs- Bank Owned Properties

Week 3
REO Boot Camp
with Nancy Geils
Let’s Get Started
I have created a “back office” where you can access all
the replays, documents, bonuses and everything I
promised you in the Bootcamp! I have added a new
ebook on “Exploding Your Business on Facebook”
**Website: www.nancygeils.com/membership
User name: REO
Password: bootcamp
What We Will Cover
 Review Last Week
 Building Your “Cash Buyers” List
 Networking At Your Real Estate Group
 MAO
 FMV, ARV
 How to Estimate Repairs
 How to talk to your Rehab Buyers
 Proof of Funds, One Day Funding
Networking!
 Contact your local area real estate investors. One of
the simplest ways is to become a member. These
groups meet on a monthly or weekly basis. They will
discuss real estate issues, local market, opportunities,
network and even exchange properties or deals! Go to
Google and type in “real estate investing association in
Your Town” You will start to learn and understand
what your retail flippers are looking for in terms of
properties, margins and more. Once you are sure that
you have an investors who fixed up property for resale
to the public (retail flipper – your cash buyer) then you
should ask them some of these questions
Questions to Ask Your Buyers
 Do you purchase many homes? If so, how many?
 Which type of properties do you specialize in?
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Price range, number of bedrooms, size, town
Do you have an email address and phone so I can send you
information and details on properties I get?
How do you typically buy your properties?
If I brought you some wholesale deals, would you be interested?
How quickly can you close if the deal is right?
Do you have access to lines of credit? Or do you use your own
cash?
What type of price range properties do you like to work with?
Always Think Like Your Customers
Think like a retail rehab flipper!
2. Don’t forget that your customer is the rehab flipper
and depending on your market area, will want a 20 to
35% margin on the property. This means that you
must give thema built-in profit of at least 20 to 35%
on the transaction.
3. For example – If the property in “fixed up” condition
or (ARV) is worth 100k, and your cash buyer wants a
25% margin, tnhey would be interested in buying the
property for $75K
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They Have More Risk!
 Your Cash Buyers (Retail Flippers) are exposed to more
risk and will spend more time and more money than
you the Wholesaler.
Call Ads In The Paper
 When you see an Ad or a Sign in your town, you should
call these ads and talk with the investor. Find out
quickly what they do and what type of properties they
buy. Are they a wholesaler too? Do they also Rehab
properties? Many investors will use both strategies
and use a combination of wholesaling and full rehab
project ….which some of you also might want to do!
Other Investors In Your Town
 Don’t ever take the stance that other investors are your
competition. Some of my best dealings have come
from other investors who may be selling or providing
similar services. You can always “team up” or “join
venture” with other investors on a real estate deal.
 Make friends with them!
Place Your Own Ads
 Here are a few Ads that work great on Signs!
 I sell Fixer Upper Properties! Cheap!
Fast Closings! Call 555-555-1212
I buy Houses For Cash!
Fast, Fair, Friendly
Call 555-555-1212
Start Thinking Like An Entrepreneur
 One of the most important “shifts” in your journey as a
business owner will come when you truly begin to
think like a entrepreneur.
Inspecting a House For Repairs
 My Husband, The Home Inspector
Inspecting the House
 Are you ready to learn how to inspect houses? You
need this only if you are thinking about holding,
rehabbing and then flipping!
 Here is your Tool Box for Inspecting Property:
 Flashlight
 Binoculars: To Check roofs if you cannot go up there.
 Poncho or Rain Gear – Oh Yes, for those rainy days
 Camera – Digital camera so you can download pictures.
A great way to remember all the houses you have seen
 Clipboard with a pocket: Here I can keep all my
business cards, flyers, pens/pencils and even contracts
Inspection
 The house inspection has several areas:
- Exterior – siding, veneer, roof, etc.
- While you are outside and inside the house you will
write about the systems, whether they are missing,
broken or good condition
- Electrical, HVAC, Plumbing, Structural issues
What To Look For Outside
 Look for evidence of termites, dry rot and cracked
foundations as you walk around the property.
 Look for evidence that the foundation may have
settled.
 Look for discolored roof sections or indications that a
portion of the roof may need replacing
Septic Tanks
 If there is a septic tank, look for lush green grass on
top. This might indicate poor absorption due to bad
drainage or broken pipes.
Water Damage
 Water causes 78% of the damages in a property
 Water causes wood to rot, roofs to sag, ceilings to
crumble and fall, walls to split and foundations to
settle and crack. The other main problem with real
estate is PEST INFESTATION.
 Be alert for water stains on the walls or ceilings and
cracks in the wallboard. Different colored carpeting in
one or two rooms may mean a good sale at a local
carpet store or it may mean that the carpet was
replaced because of water damage!
Should You Get Licensed?
 Because Real Estate Investing is our only business we
do full time, I became a Realtor and my husband is a
Certified Home Inspector. If you are going to do this
business full time, having these licenses make it easier
but they are NOT necessary.
Maximum Allowable Offer
 You should know this “like the back of your hand”
 Handy and Simple Way of Calculating your Maximum
offer in just 5 Steps:
 Step 1 = Retail price in “fixed up” Condition – After Repair Value
 Step 2 – X .65
 Step 3 – MINUS Repairs
 Step 4 – MINUS Your Wholesale Fee ( The fee you intend to earn $1000 –
10,000 – Always be reasonable!
Determine Fair Market Value
 You Must obtain “comps” on the property and make
sure that you are looking at properties that:
 Have recently sold at least 30 to 45 days ago
 Are similar to the property you are considering, this
means the same number of beds, baths and year built
 www.sitexdata.com - 1ac1198 : 32911
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www.zillow.com
www.realtor.com
www.trulia.com
Margins
 The next step is to determine how much margin the
retail rehab flippers in your area will need.
Remember that the retail flipper will be buying the
contract, which you place on the house from you.
They will then own the property, rehab it and then sell
it to another retail buyer. Before you can determine the
price to sell to your cash buyer, you must have a very
good idea of what type of margins these rehab cash
buyers need. This is not something I can teach you,
you must meet or talk with the rehab cash buyer in
your area and determine what margins they want and
need.
Try to Think Like a Rehab Buyer
 Always think like your customer! Your customer is the
rehab cash buyer. Most of the time these rehabbers
will want a 20% to 35% margin on the property. This
means that you must give them a built –in profit of at
least that amount!
 Keep in mind that they will be exposed to more risk,
time and money than you as the wholesaler.
Getting Your First Deal
 1. Stick to properties that appear to be in very good
condition. Many of the REOs are in good condition.
 2.Learn this business inside and out. The highest paid
people in all industries are those who have specialized
knowledge. Get accustomed with the price of materials,
repair costs, renovation procedures, etc. the more you
know, the better deals you can put together and the more
deals you can do!
 3. I suggest you increase your repair estimate by 10%. Most
repairs always cost more than expected and unanticipated
costs seem to come out of “nowhere”. Buy adding 10% to
your estimate of repairs you increase the likelihood of
putting together an outstanding deal for your rehab
flippers!
You Got a deal, now what?
 Great Tip: Seek out and locate the biggest landlords in
your city. There is at least one in just about every city.
This is the guy/gal that owns 200+ rental properties in
his portfolio…and pays cash for them. Call the
president of the REIA, it might be him. Talk to people,
Ask around as to who the major buyer of rental
properties is. When you find him/her call them on the
phone and tell them what you do. You wholesale
properties for .50 on the dollar! Ask what kind of
property he looks for . Get to know him or her. This is
GOLD!
Some Sites To Post Your Deal
 www.postlets.com
 www.rehablist.com
 www.local.com
 www.hoobly.com
 www.propsmart.com
 www.theinvestmentpropertylist.com
 www.hotbargainproperties.com
A good thing to do also is create flyers and pass out at
local REIA meetings.
Signs To Sell Your Property
 Put out 5 – 10 Bandit Signs in busy intersections
around the property” AND Put on Craigslist.
 HANDYMAN SPECIAL!
 MUST SELL IN 3 DAYS,
 TONS OF EQUITY!
 CALL 203-555-1212
Send Your Emails
 Send out mass emails to your buyers list and everyone
you know. (Sell it! Put the address, specs, ARV, selling
price and pictures. ( I will show you my Flyer again
below)
Buyer Seems Serious and Able,
Now What?
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Make sure your buyers are serious and have the money!
Ask these questions first:
- How do you plan on funding this deal? Cash?
- I require a $1000 earnest money deposit if you approve of
the property and we sign a contract.
The most experienced investors will not spend a great
deal of time asking questions about the features of the
house or the neighborhood. If you are responding to a
call back from an experienced investors, they will have
run the number and will know what the property’s true
comparables are and wherher the deal is a pass of go!
(This is what I do!!)
Let’s Review!
What have we learned so far?
How To Find a Good REO Realtor
 The secret is developing Relationships! Google REO
Brokers in your town. Try www.REOBroker.com
 Go online to www.Realtytrac.com (trial 30 day)
 Ask other Realtors when you call if they have Realtors
in their office who specialize in bank owned
foreclosures and talk to them
Sites to Visit To Find Deals
 www.homepath.com – My personal favorite
 http://reo.wellsfargo.com/WBREOHome.aspx
 Bank of America - REO Search
 Branch Banking & Trust (BB&T) - REO
 Chase Bank - REO Search
 CitiMortgage - REO Search
 EMC Mortgage - REO Search
More Sites for REOs
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GMAC Mortgage - National REO Search
HSBC - REO Search
IndyMac Bank - REO Search
IAS - Integrated Asset Services - REO Search
M&T Bank - REO Search
People's United Bank - REO Search
Regions Financial Corporation - REO Search
Suntrust Mortgage - National REO Search
U.S. Bank Home Mortgage - REO Search
Wilshire Credit Corporation - REO Search
How to Work With Realtors
When you speak with REO Realtors(your language and
what you say is important)
Tell them what you are looking f0r
-Have them put you on an automatic email list of
all new foreclosures that come available!
-Tell them you are a Real Estate Investor in the
area and have cash to Buy and you have many buyers
in your group (Real Estate Investing Association) that
have cash and can buy quickly.
Best Tips for Finding Deals
 Ask your Realtor to send you the hot list every week of
new deals and especially the deals that “have come
back on the market” These deals have fallen thru
some reason and now the banks will be even more
anxious to sell that deal and you can get it for an even
lower price!
Build Your Team Before A Deal
Comes!
 You have already talked with and lined up the
important power team to help you close your deals!
 Attorney’s, Title companies
 Realtors
 Perhaps Partners???
 Accountants
 Friends that you have networked with at REIAs
 Hard money lenders – I recommend Brookview
Financial – Go to www.brookviewfinancial.com, ask for
John Mcewen and tell them Nancy Geils sent you to get
preapproved!
The Steps to The REO Deal
 Build Buyers List
 Make Offers and Get one Accepted by Bank – make sure
it has the 10 – 15 day inspection contingency in the
contract so if you don’t have a buyer you can walk
away from the deal!
 Call or email your cash buyers and tell them about the
house. The more info the better!
 Tell them it is a first come first serve basis!
 Get it under contract with your cash buyer (get a deposit
from them. I get the amount I had to put down with
the bank!) Make sure they are paying CASH! (Get them
to give you proof of funds)
 Submit your info to ivisionary for the 1day funding
 Close the deal. With Cash there are no snags that can
happen! You cannot close these deals if your buyer is
getting a mortgage…(Unless they are using hard
money and that is okay to do)
 Now Rinse and Repeat!!!!!!!!!!!!!!
Proof of Funds
 You must have a proof of funds letter when you are
submitting there offers.
 http://www.ivfinancialsolutions.com/pof
 Keep this website link above because this is where you
get automatic proof of funds letter!
One Day Funding
Here is your website to get your One Day Cash
http://www.ivfinancialsolutions.com
Transactional Funding was created For Short Sales and
REOs Can Help You Break Into Real Estate Investing
Without Any Of Your Own Money or Credit!
Got This Deal Under Contract
Short Sale Approved!
 On MLS for 45 days at $116K,
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Price lowered to $109k.
www.Google.com
I got this under contract for
$85k
Needs 10k Fix Up
ARV = $150k
My wholesale will be 10K.
My Flyer To Find My Cash Buyers
Your Price- Only $95,000
Fair Market Value- $150,000
123 Main Street, Bridgeport CT
3/1 1200sq ft Very Good Condition, Cosmetic Repairs Needed
only (Approximate $5 - 10k) – Great North end neighborhood!
Major Profit Potential on this one- you do the math!
First Come - First Serve!
Call me at xxx-xxx-xxx
New Deal I Am
Looking At:
Trumbull, CT
Bank Wants $265k
Needs $25 – 40K
ARV = $ 400 – 450K
4 Bed, 2 ½ Bath Open Floor Plan,
built in pool in back. Needs new
kitchen, 2 new baths, paint and
clean up
I will offer FULL
PRICE $265K –
My offer will be 265k,
CASH, no
contingencies and
close in 30 days
Nancy Recommends
 Ring Central for a telephone number- $100/yr
 www.ringcentral.com
 Bandit signs www.banditsigns.com
 Vista Print for Business Cards – Free
 www.Vistaprint.com
 www.Sitexdata.com – 30 day trial - 1ac1198
32911
Real Estate Websites
 If interested in getting a website put up for your real
estate deals, I can set up a website for you. Contact me
separately at 800-804-5390 or email me at
[email protected]
 I can set up a site similar to
www.BuyThisHouseSite.com
To Do’s Before Our Next Training
 Keep putting Ads on Craigslist to build your buyer’s
list. Use the ones I showed you!
 Find REO Brokers and talk to them! Build relationship
with them.
 Look at least 5 properties that you get from the
Realtors and learn the MAO and the After Repair
Values! (Practice) Call me and I will help you! 800804-5390
Homework For You To Do
 Get signs ordered if you haven’t already
 Continue networking with Realtors! Find at least 2 REO
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Realtors that will work with you – Remember tell them you
have cash and are a member of investors who can buy
quickly and have cash!
Get Organized…Set up your “business” i.e. phone, fax,
internet if you haven’t already
Go to a REIA meeting in your area
Call me for support and questions anytime you need help! I
am here to help you
If you are successful, I am successful!
Next Week We Will Cover
 Review
 How to Get One Day Funding and complete the one
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day funding
More on ARV and MAO
More on Building Your Team To Help You
Hard Money and Financing
Holding and Rehabbing (If you find a really
Good deal and don’t want to Flip to investor)
GO GET A DEAL!
 Walk past your fear, fake it till you make it!!
Have a Successful Week
Nothing can stop the man with the right mental attitude
from achieving his goal; nothing on earth can help the
man with the wrong mental attitude.
-Thomas JeffersonAnd one quote just for fun.....
If at first you don't succeed, try, try again. Then quit.
There's no use being a damn fool about it.
W.C. Fields
Call Me For Support
 My Number is 800-804-5390
 Your Private email is [email protected]
 Go to www.nancygeils.com/membership This is
where you will find replays, copies of this presentation
the 6 part training bonus on “buying/rehabbing and
flipping house training.
TUESDAY NIGHT 8PM – REPEAT TRAINING – Feel free
to come to that too!