Get show notes at http://flippingjunkie.com/47
Jim has been a real estate investor in Northern Illinois since 2007, He is also a licensed real estate agent (IL) and has been since 2005. He started out as an aggressive new agent helping investors buy and sell their rehab properties. Then he quickly realized he was on the wrong side of that transaction and that is when he decided to become a real estate investor myself. These days his primary focus as an investor is residential redevelopment (aka rehabbing). He primarily works in Chicago and its NW suburbs and had used his local Multiple Listing Service (MLS) to get 75% of his rehab deals over the last 8 years. Since he got into the real estate business he has been involved in over 450 transactions.His company does 8-10 rehabs at any one time. Though Jim is an active investor he spends as much of his time as possible with his 4 year old twins, Liam & Claire, and his awesome wife who stays home with them. He told us "Everything changed when I had kids. Suddenly I looked at everything differently and literally changed almost everything in my life. I got healthy, quit drinking, lost 50lbs and have never looked back. Life is much more enjoyable on this side of your health".
Jim’s secret to getting great deals on the MLS starts with planting the right seeds with the real estate agents involved. Effective communication is absolutely necessary.
You have to convince the listing agent so that they will convince the seller that your offer is worth considering and ultimately worth accepting.
Jim has bought tons of houses where his offer wasn’t the highest but he convinced the agents that his was the best offer. To make his offers more appealing he does the following:
1. Waives the inspection
2. Informs the agent that other investors and potential buyers include inspections because they will likely renegotiate after the inspection.
3. If not a bank-owned property, he tells the listing agent to inform the seller that, when he through fixing up the house, most of his houses are sold to young families.
4. He puts up a strong earnest money deposit (around $5,000 for a house with an ARV between $400k and $500k).
5. He puts in for a 2 week closing.
Agents hardly ever know what a seller is going to be willing to take for their house. They all have assumptions and we know what assumptions do…
So, don’t ever rely on a listing agent telling you their client will never entertain a low offer. This is crap. They are obligated to submit all offers, so go ahead and submit yours and try to convince the agent of the real benefits of your offer (not just price).
Jim also mentioned that 90% of his MLS deals required follow up. He usually does this using hotsheets to automatically check for status changes for the listings.
If you want to win even more deals, it’s best to have a system in place to remind you to follow up just before typical price changes. There’s no way to guarantee when there will be a price change but you can set up reminders for yourself for each property very easily in REImobile so that you can set it and forget it.
The criteria for properties he makes offers on are usually based on location but also the presence of one of the following keywords:
estate sale, REO, bank-owned, motivated, needs work, original owner, handyman special, as-is, fixer