Do you have a deal? Bird-dogs and wholesalers

[DanL]

Local investor, experienced and capitalized, I can pay cash if necessary but I have a very specific deal criteria:

Under 30k
Not listed on the MLS
Single family only, no converted houses.
Any condition
At least 2 bedrooms
Under 1500 square feet
Des Moines Metro only, nothing rural


Bird-dog fee is $500, payable on closing
Wholesalers - $500 minimum $5000 maximum, payable on closing

[RENate]

Is there any particular area of the metro you prefer over another?

[DanL]

South-side is most convenient, I have invested in several areas in Des Moines though and found most to be generally o.k. for what I do. I care more about the block or 2 that the property is on, as opposed to the larger neighborhood or section of town.

If the property is in bad condition and/or boarded up, that doesn't bother me, in fact I like challenging houses if they're priced right. It bothers me if there are 3 houses boarded up on the same block though, since I can't affect what's happening with those other ones.

[shortsaledude]

Not listed on the MLS?

[DanL]

I have a good agent to help me with the MLS properties, I hope to make some more deals that way as well.

I have bought many properties over the MLS in my investing career and will continue to do so, I exempted the MLS from my offer because I already have a source for those deals as they arise.

The idea of advertising is to open up additional possibilities from all the great wholesalers out there that may have deals under contract, or bird-doggers that may have a lead from a motivated seller that I can negotiate a deal with. For example, I was brought a potential deal on a home for sale that was literally too cheap for any agent to bother listing it, of course a house like that has serious issues.

[shortsaledude]

Oh, I see. I didn't know if you were specifically excluding the MLS for some reason. Instead, you're trying to open your quest up for ANY property. Makes sense.

I have heard of some investors who seem to think the best deals are NOT listed on the MLS, which seems odd, i.e. if one is looking for motivated sellers. The more motivated one is, the higher the likelihood that owner will list the property for sale with a broker as they are willing to pay a fee to 'get 'er done!'

[DanL]

3 points.

1. Not looking for "ANY" property. i'm looking for a steal of a deal or a highly distressed situation. I shoot for 40% or more off -- this is a for-profit endeavor. also it helps if the deal arises at a time that fits in relation to other deals I have going, for example right now I have 1 for sale, another closing Thursday, a signed PA with an estate waiting on clearance of unpaid liens, another estate offer waiting on the city of DSM to agree to a short pay-off, and leads on around 15 other possible deals from numerous sources, anytime I look at the MLS i can find at least 10 properties that are worth evaluating. How many of all these will close? Probably somewhere between 2-4. Also I know 1 will close this month, those others fall in someplace between 2 weeks and never.....So if the deal of the century dropped in my lap tomorrow I would consider it but it's not as if I can pick up more than a few of these at once and be prudent about it. There are simply practical limits to how much distressed property you should own at one time, in addition to the financial and logistical concerns of running multiple projects.

2. MLS is "A" source for deals, but not "THE" source. (sorry realtors, you get your props on the retail side) The MLS is a good place to start looking and the place where most retail buyers and sellers do business, so to not look there at all is dumb. I also really believe that any serious investor that thinks there is only 1 way to find a good deal is fooling himself, regardless of which way he's convinced himself is the best. The truth is you can be uneducated and pay more than retail via the MLS, FSBO, through a Wholesaler, at Sherriffs Auction, from an Estate, Online Bidding, through the Tax Deed process, on Contract, with CASH, with Private Funding, Subject-To, or via Short-Sale. I'm confident there's more ways to buy than those, let me know what I missed.

If you know your market you can pay wholesale OR less than wholesale through any of the above means, or a combination thereof. On any property? NO, not even on most properties. You need the right property and the right situation, which can be a pretty elusive combination, but can be found often enough to keep the average investor plenty busy.

3. After you pull this off a couple of times, pinch yourself and remember that luck is a factor also. The smarter you think you are, the smarter you ain't.

The market can and WILL humble you. It happens to everyone sooner or later, so be careful out there.

[DanL]

UPDATE!!

30k upper limit has been lifted as long as the seller will take back a mortgage note on reasonable terms.

Don't worry if you don't have a track record, decent credit, or downpayment. I have all 3, but the motivated seller will sell at a discount with only one or two of the factors, the trifecta is not mandatory!

What matters is the discount, most of my buys are at 25-50% of current retail for a similar house that is dressed up for a retail sale, all repairs and improvements done.

Also I have a NEW policy that came about as a result of one of my recent deals. In a bird-dog case, it needs to be clear to the sellers that they deal with me and you are just introducing us because the house is not a fit for you. On a wholesale case, I require a copy of your signed contract before I will review the property. If you can't show me a signed contract, there is no way I could ever agree to purchase your interest in that contract. Any questions on that, contact me directly.