I think conservatively the numbers
should be 350 on the back end to be safe
which means you know to make a few bucks
and be worth it you really kind of need
to be around that 1/10 number welcome
back to this special video series this
is video 3 where I get on the phone and
show you how to make offers on distress
real estate properties using real case
studies and on this video you get to
look over my shoulder and watch me make
an offer on a bank-owned home live in
Des Moines Iowa that has Foundation and
mold problems you'll see firsthand how I
negotiate and work with the listing
agent representing the bank and how I
motivate them to get me this deal at my
desired buy price bank properties are my
speciality so don't watch this video
unless you're ready to learn some
advanced blackhat strategies all that
and more coming up the real estate
funding kit is out now learn how to get
100% funding for all your deals without
dealing with the bank's claim your free
coffee at my funding kit com hey if
you're new here to this channel I'm
Gerry Norton with flipping master comm
and this channel is all about ways to
help you make money wholesaling and
flipping real estate so you can live
your dream life be sure to subscribe to
my channel and click the bell I kind of
get notified when new videos are
released
one of my favorite things to do is get
on the phone and make offers on
distressed properties following my
three-step offer process which you're
going to learn on this video that's why
I put this video series together so you
can learn firsthand by seeing it in
action my hope with doing this video
series and showing you how to make
offers on the phone is to give you
confidence so that you can do the same
and because this is a really tricky deal
with mold and foundation issues and it
needs a huge rehab and because it's a
bank owned property this video is
advanced but just like on the other
videos in this series we're gonna cut to
a live call and then I'm gonna do my
best to break it down and show you
exactly what I'm doing and why now once
we dive into the video you're gonna see
me adjusting and updating my offer price
while on the phone using my deal
analyzer tool now you'll see this as I
adjust the numbers it automatically
updates my formula and it recalculates
my maximum allowable offer by the way
this tool comes Stan
with my wholesaling in house flipping
deal management system called flipster
and if you've never heard of flipster
it's an all-inclusive cloud-based
platform to help you organize streamline
and automate all of the steps to
wholesaling and flip you houses and the
deal analyser tool is just one of dozens
of tools so if you're in the wholesaling
and flipping you owe it to yourself to
check it out to learn more and see it in
action just go to get flipster com over
the past 15 years I've wholesale and
flipped hundreds of bank owned
properties and so I'm very familiar with
the process now before cutting to the
call let me share with you a few
important things when going after bank
properties when a property goes to the
foreclosure auction typically the
opening bid is for the amount owed to
the bank now if no one buys the property
at the auction the bank takes it back
and now owns the property this is called
an REO which stands for real estate
owned knacks the bank assigns the
property to an asset manager the assets
manager job is to liquidate or sell the
property to do so they list the property
for sale with a designated listing agent
who puts the property on the MLS for
sale now the asset manager typically
follows a very logical sequence of
events to get the best price they can
now to determine the listing price they
get what's called a BPO which stands for
broker price opinion it's basically an
appraisal then they consider offers
received and they strategically lower
the price over time until they determine
they've received the best offer and as
time goes on they'll reevaluate the
asking price they'll perform regular
BPOs and I did a video where I break
down the top 10 tips for getting aarya
you lined this video really helpful so
I'll put a link to that video in the
description box below and you can watch
it later oftentimes getting an REO deal
requires patience and persistence the
key to winning the REO game is all about
your relationship with the listing agent
now my goal with every REO I go after is
to get the REO agent motivated to get me
the deal now this is where my double dip
strategy is critically important if
allowed I'll let the REO listing agent
represent me as the buyer's agent on the
deal that way he or she gets both sides
of the Commission now if my double dip
strategy isn't
so clear then I'll put a link to a video
in the description below that really
breaks it down for you
on this video I used the double dip
strategy which really motivates the
agent to go to bat for me and I
effectively get the listing agent to
tell me exactly what I need to do to get
this deal and commit to helping me get
it which you'll see in a minute so keep
watching it's pretty sweet now because
this deal has foundation problems and
mold and it needs over a hundred
thousand and rehab this is an investor
cash buyer only deal meaning there are
no retail buyers to compete with just
other investors and since it's a big
scare here rehab there is very little
competition the property is for sale for
a hundred and sixty nine thousand nine
hundred and my offer price is a hundred
and ten thousand so I need to be about
sixty thousand dollars lower than the
bank's current asking price so now they
have a big picture overview of REO s and
also a little bit about the situation
I'm going to show you how I make my
offer using my three-step offer process
step one is to build a relationship of
trust step two is to reset expectations
using market data and step three is to
make the offer with confidence now this
is the first time I've ever spoken to
this agent so watch now as I do step one
and build a relationship of trust and
then we'll come back to discuss what
took place let's cut to the call yeah
nice to meet you too so yeah we're
taking a hard look at this project yeah
what can you tell me about it it's been
on market for forty to forty three days
right what they don't understand is the
longer property sits the more it gets
tagged as a problem even I'm like well
if this is such a great deal why is it
sitting here after 42 days like that
just doesn't work that's not what
happened I automatically think oh maybe
the mold in the found
is a bigger issue because it's still
sitting here what it is I know what it
is the further up you go in price the
more the more intimidated people are
with capital as flippers which is why I
like higher end because there's less
competition that's been part of the
thing we're trying to figure out so is
the mold the only issue that you've
heard from because our photos show off
so a little bit of foundation issues has
that come up at all part of the
challenge with that is um I'm not too
scared about fixing it what's scary is
disclosing it to a retail buyer when
you're asking full price and then having
them be worried too because you know
retail buyers freak out about stuff like
that same with mold it's never really
molds easy it's just the perception now
that's what I've done before yeah you
get a bunch of tests done then you show
them those reports and then it still
scares some people where they just won't
even think about it so those are some
things that make it tough to flip
whenever you have mold or foundation is
just overcoming that fear because it's
an older home and they know you rehabbed
it and
yeah Matt told you that will let you
submit it for us are you allowed to do
that awesome okay so you can get both
sides by doing that perfect so right
away the agent reveals to me that there
have been two cash offers so far one 489
thousand which I have a lot of respect
for that investor and another for a
hundred and twenty five thousand which
the bank turned down now he informed me
that he's currently working with the
asset manager to get a price reduction
then we talked about the bank's listing
strategy and other investors in the
local market and how many showings he
had and we talked about the mold and
foundation issues a little bit but
here's the thing what we talked about is
not as significant as that we're talking
I want to do everything I can to portray
that I'm legit then I know what I'm
doing and then I'm someone he should
work with now if you're brand-new I hope
this gives you some ideas on how this
conversation may look now the most
important part of step one was the very
last thing I said which was where I made
sure he knew that we were gonna let him
submit the offer for us this is my
double dip strategy and he said yes he
could do that so now it's time to move
to step two which is to reset
expectations using market data now
unlike the first two videos in this
video series this agent was already
right in line with where I need to be
but even still I use logic and market
data to justify my offer price and to
get him to align with me take a look
there's a comp right nearby that has a
similar type thing where you walk up
stairs and the garage is underneath that
did really well as a comp it was kind of
like the most similar comp I could find
where it had the garage below and you
walk up and they did a pretty good job
on it whoever did that one what do you
think it would sell for if it was done
right
[Music]
yeah I I mean when I look at comps and
stuff I mean I can make an argument for
like four hundred thousand but then I
get all but then I get worried about I
got a stairs up to my front door it
could go a lot better or it could not
it's just a tricky deal you know like
like if it goes for four then okay yeah
now I can pay like almost asking price
but if it's 350 now pips we back down it
like the 110 number or if the rehabs
want 100 instead of 130 you know what I
mean it's I think and certainly the
numbers should be 350 on the back end to
be safe it could get more but that's a
safe number and then probably 125 on a
rehab which means you know to make a few
bucks and be worth it you really kind of
need to be around that 110 number so
step 2 is not about the offer price it's
about justifying why the offer price is
what it is so I focused on the after
repair value and since this agent seems
pretty smart to me I asked him what he
thinks this house will sell for once
fixed up now even though I've already
done my analysis and I never blindly
follow what an agent says I asked him
this question strategically I want him
to feel for me that I respect him and
his knowledge of the market in fact he
was right in line with what I already
decided which was an ARV of 350 to 400
thousand now getting him to agree with
me on the value is important to later
get him to agree with me on my offer
price
so I delicately explained why I think
the ARV is three hundred and fifty
thousand and not four hundred thousand
and why as a result the right buy number
is a hundred and ten thousand which he
agreed so now that I got him to agree
with me on a hundred and ten thousand as
the buy price it's time for step three
which is to make the offer with
confidence now this is where my
knowledge of how to finesse bank-owned
properties comes into play and remember
I've got this agent in my back pocket
because since he's submitting the offer
for me he'll essentially make double the
Commission if I buy the property versus
another investor using a buyer's agent
now watch now as I get him to commit to
do his best to get us this deal what do
you
think the chances are of them coming
around to more of a 1:10 number okay he
just has to justify it
yeah 1:10 feelin right I think 110 is
feeling really right just to be safe I'm
glad you're thinking that way I really
like that at that mindset because you
want to win I mean it's a big it's a big
job you don't want to find out halfway
through you're not okay at the right
time we'd love to have you kind of just
keep us in the loop with what's going on
like whatever we need to do even if you
get another offer that's kind of close
and you let us know and we can kind of
come in slightly higher or whatever we
would love that opportunity well let me
ask you this question what if I
submitted a separate independent offer
for 90 and then Matt's offer at 110 okay
yeah this two separate entities to
separate everything we're gonna submit
10 different offers at 10 different
prices all under a hundred thousand do
you want us to do that already or wait
till you have like another $80,000 offer
and then you got three to put in at once
do it now okay okay perfect
okay perfect okay thank you we'll be in
touch okay so I got him to agree with me
again that a hundred and ten is the
right price and then he coached me on
how we can get my offer accepted he told
me it's all about timing and that the
asset manager is getting ready for a
price reduction and we can get our offer
in right now and he also said if he gets
another offer he could put our offer in
again at that time then I point-blank
asked him to keep me in the loop and let
us know exactly where we need to be
which he agreed to do and finally I used
an old trick from my are you--oh
playbook which was to submit a separate
offer for less than 110,000 offer to
make my hundred and ten offer become the
clear winner my next move is to stay in
close contact with this agent and
there's a good chance the cards will
fall my way and we get this deal time
will tell I hope this video inspired you
to get on the phone and make offers
remember the three steps step one build
a relationship of trust step 2
reset expectations using market data and
step 3 make the offer with confidence
now this is video 3 in this special
video series of live videos where you
get to look over my shoulder and watch
me break down how to make offers using
my three-step process now put all of
these videos in a playlist and I'll put
that playlist link in the description
below so you can watch the other videos
in this series and if you like this
style of video training and you want to
see more videos like this do me a favor
and hit that like button right now and
leave a comment and let me know your
biggest takeaway from this video I'd
love to hear from you and if you haven't
yet be sure to subscribe to my channel
with hundreds of videos and new videos
released every single week this is the
number one channel on YouTube for all
things wholesaling and flipping and
don't forget it's not about the money
it's about having the time and freedom
to have be do and give everything God
has in store for you that's what it's
really all about and I'll see you on the
next video