Jay is right in the middle of his recent deal at 109 Broad Street in Beaufort, North Carolina.
In this video, he will tell you how he found this deal, how it is funded, and all the numbers that made this deal possible.
First lesson: How to find this type of deal? You need to have a Bird Dog.
What is a Bird Dog?
A Bird Dog is someone that you have who rides around town looking for sale by owner sign or signs of distressed property. They then take a picture of the sign, the property, and take notes of the address and other important details.
Through that, you can now find out the information about the property such as the name of the owner then start reaching out to them.
In this particular story, Jay’s bird dog sent him a picture of this property with a phone number on the for sale sign. Then, Jay forwards the details of the property to his “acquisitionist”.
An acquisitionist is in charge of talking, negotiating, and getting information on the properties initially before Jay gets involved in looking at the numbers.
Through Jay’s acquisitionist, they learned that the selling price of the owner for this property is $299,999. In addition, the owner specifically said that she will not take any offer that is less than the said amount.
Next step, get your realtor to calculate the after repaired value of the house. Now, Jay’s realtor prepared the Comparable Analysis of this property and the after repaired value that came out is $350,000. The difference between the seller’s asking price and the ARV is only $50,000.
What comes next? When they make the calculations of the rehab to make this house a beautiful property the number is $20,000.
Now, what in the world is Jay going to do to make this deal possible?
Watch the full video and discover all the lessons that you need to learn on how to make over $100K profit on a deal just like this.
What can Jay Conner and The Private Money can do for you?
First of all, Jay has got a new book entitled “Where to Get the Money Now?” You can get the book at www.JayConner.com/Book and learn the step by step process on how to get all the private money that you ever need for your deals.
Secondly, Jay has got a monthly membership called The Private Money Academy. He is there, live twice a month for at least one hour of zoom coaching for all the Private Academy members. You are invited to join for a free two-week trial at www.JayConner.com/Trial
Lastly, sign up for free at his upcoming live event. If you want to know what is happening in this live event then check out this link. www.JayConner.com/LearnRealEstate
Real Estate Cashflow Conference:
https://www.jayconner.com/learnreales…
Free Webinar:
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
#RealEstate #PrivateMoney #FlipYourHouse
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I’m right in the middle of this deal at 109 broad street that just started a week and a half ago. And in just a moment, I’m going to tell you how I found it, how it’s being funded, all the numbers, how I structured it and how you too can make over $100,000 in profit on a deal just like this.
Well, hello there I’m Jay Conner, the Private Money Authority. And welcome back to another episode of Real Estate Investing with Jay Conner. I’m Jay Conner your host of the show. And as I said, the Private Money Authority, if you’re new to the show, a very special welcome. We talk here on the show, all things real estate. We talk about how to find deals, how to fund deals, how to get them rehabbed. If rehabbing is involved, how to get them so quickly and how to automate the entire process to where you really can make realistically a six figure income or more, and working less than 10 hours per week. I started in this business back in 2003, investing in single family houses. And since that time we’ve rehabbed over 400 of them done a lot more deals than that. But as far as rehabs go, we’ve done over 400.
Well on today’s show. I want to share with you this deal, that I’m in the middle of right now, and I tell you I haven’t even closed on it. And there are so many lessons to learn from this one deal. So again, it’s located at 109 broad street, right over here in Beaufort, North Carolina. And so, first of all, let me just go through the steps as to what happened first and the kind of profits that are taking place on this deal and the lessons that you can learn from this, that you can apply into your real estate investing business as well. So about a week and a half ago, I got a text right here on my cell phone. I got a picture of a for sale by owner, also known as a FSBO sign in front of a house over here in Beaufort.
Well, the text came in from what I call one of my bird dogs. So what in the world is a bird dog in the real estate investing world? What a bird dog is someone that you have as they ride around about town. When they see a for sale by owner sign or signs of a distressed property. Alright, it may look vacant, may have newspapers on the front porch may have grown up, you know, grass, et cetera, either FSBO signs or distress properties. And you have your friend or hired bird dog. You have them take a picture of the FSBO sign and the address of the property. Now, if there’s no FSBO sign and it’s a distressed property, just have them take a picture of the house and text you the physical address, you can then skip, trace that information and find out who the owner is.
And then start reaching out to them either by direct mail, outbound phone calling, et cetera, on this particular story. I want to tell you exactly what happens. So one of my bird dogs took a picture of this FSBO sign. It’s going to have the phone number of the cell phone number of the owner that was selling it. And they also sent me a picture of the house. So I received the text, looked at it and I forwarded the text on to my acquisitionist right? And so acquisitionist what’s an acquisitionists. This is Kim in our world, mine and Carol Joy’s world. And Kim’s been with us since 2004. She’s in charge of talking and negotiating and getting information on properties. Initially, before I get involved in looking at the numbers. So Kim got that text from me, and she called up the cell number.
Got the owner on the phone, and got the initial information on the property. So first lesson learned is I would not have gotten this late at all. I would not have this house from the contract, which I now do. I would not have it under contract unless I had my bird dogs in place, because I’m not riding around myself, looking for FSBO signs or distress properties. I have other people. So first lesson gotta have a bird dog, or I would’ve missed out on this deal. Now, Kim calls up the owner, gets the information on the property. This house was built in 1910. So this is in the historical district. It’s only one block from the water fantastic location. So she gets all the information on the property, sends it to me. I look at it and yes, I want our realtor to calculate the after repaired value of the house.
Now let’s just see if there’s any kind of spread, between what the seller is asking and what the actual repaired value is. Bear in mind at this point in time in the timeline, we do not know what the repair estimate is yet. So we know what the seller’s toes, but of course, we’re not going to know what it is until we actually go look. But first we want to see if there’s some kind of spread between after repaired value, also known as ARV and the seller was asking price. The sellers asking price is $299,900. And make note, the seller said, do not call me back and offer anything less because I’m not going to take one penny less than $299,900. So we have our realtor go ahead and calculate the after repaired value. This is based on sold comps that are near the property.
So, our realtors figures it up in less than 24 hours, we get a complete CMA also known as like comparable market analysis, emailed to us from our realtor that knows this area, like the back of his hand and the after repaired value comes back in at $350,000. Sounds like a pretty good spread so far, but what are the repairs? Well, there’s been 299,900 and 350 is only $50,000, right? So there’s any kind of repairs whatsoever. Then I know those numbers aren’t going to work. So anyway, we want to go take a look at the house. We’d go to $50,000, spread, less repairs. So I have Kim our acquisition get back in touch with the seller. We found out that the seller and her brother are the heirs of this property, the house is vacant. Nobody’s living in it. It’s free and clear.
There’s no mortgages there’s no liens attached to it that we know of. Of course, we’ll have a title search done by our attorney before we closed. Always get a title search done before you close. And so we want to go take a look well, in just that short two day period between getting the lead from a bird dog, sending it to Kim the acquisitionist getting the seller on the phone, getting the information, getting our realtor to give us the ARV in that two day period of time Kim calls up the seller and we find out that the seller has already listed the property with their real estate agent. No problem. It’s listed with a realtor. That’s fine. I’m planning on buying it with private money anyway. So, when heirs are involved, it’s going to be very, very difficult to negotiate any kind of buying a property on terms with creative financing, with seller financing or what have you.
So I don’t want to use private money, paying all cash. And I’ll make my offer with all cash and no contingencies. So we set the appointment and my realtor and my contractor go out to the house to take a look and estimate repairs. I’m out of town, I was visiting family. So I’m not even here. Another lesson learned you don’t have to be looking at houses yourself, but you must have trustworthy boots on the ground. They can be your eyes for you. So my realtor and my contractor to go and take a look. I get a complete budget sheet sent to me. Repairs are coming in at about $20,000 in repairs to make this home look absolutely beautiful. And it’s all cosmetic.It’s only got 891 heated square feet, It’s a little cottage there in 1910.
Why is it so valuable at $350,000? Number one, location, one block from the water. Number two, these historical houses are hotter than pancakes. So location the attraction of this 1910 cottage, all the stars are lining up. So let’s run the numbers. So remember, in order to calculate your maximum allowable offer also known as MAO, your maximum allowable offer. When the after repaired value is above $300,000. In this case, 350. We’re going to multiply times 80%. Now I will tell you, I believe the 350,000 is very conservative because my real estate agent, our realtor is very conservative. I believe in this hot market. When I fixed it up, I will be able to sell this house for 375. I really do. Let’s run the calculations both ways. If we use the ultra conservative figure of $350,000 and above 300,000, we’re going to multiply times 80%, that equals $280,000.
So let’s run that again, just to make sure $350,000 times .80, we’re leading up to figuring our maximum allowable offer is $280,000. Now repairs are how much $20,000. I’m not going to subtract $20,000 from the $280,000 figure. That gives me a MAO, a maximum allowable offer of 260,000, a thousand dollars. Now, do I ever offer MAO? of two or you know of what it comes up to? Excuse me. And the answer is no. I always throw in at least a $10,000 buffer below the maximum allowable offer to account for who we call Murphy, right? Murphy is the unexpected evil one that might show up with unexpected repairs, Murphy lives in every house, right? So I’m going to subtract an additional $10,000 from the $260,000. So now my offer to the seller is $250,000. Now, do you remember what I said a moment ago?
When my acquisition is Kim talked with the, the sister, she said, don’t call me back unless you’re and try to offer one penny less than $299,900. Well, we’re not calling her back, right? I can’t call her back. Now. Maybe I could, but there’s no need to call her back because she now has the property listed with a realtor. So all communication now is going through my realtor to their realtor, bear in mind. And remember whenever I’m making offers through my real estate agent to another real estate agent, that’s got the listing. Well guess who is paying my real estate agent to represent me. If I get the offer accepted, not me. The seller is paying all the realtors for when are acquiring and purchasing a property. So I communicate back to my real estate agent and his name is Chris. Make the call offer for $250,000.
And here’s how I want you to know, make the offer. Lots of lessons here. First of all, tell them it’s going to be all cash with no loan contingencies , all cash, no loan contingencies. That’s very important. This is called the and this is a writer down right here. The cleaner your offer, the more offers get accepted. In other words, don’t put conditions. Don’t put contingencies on your offer. If you wanted to get accepted, right? Now, when I say no lung contingencies, can I still buy the house with private money? Absolutely. Yes. When I say I’m making the offer with no loan contingencies, all that means is I’m not making the offer conditional upon me having to go get approved for a loan. Right? So, I told my real estate agent made the offer all cash $250,000, no loan contingencies, even though I’m gonna use private money to pay for it.
And I’ll close within two weeks. I also instructed my real estate agent to make the offer and tell them this is a maximum offer, one time only offer. This is a maximum one time only offer. In other words, here’s my all cash offer, take it or leave it, you ain’t getting this offer from me anymore. That’s called fear of loss, right? So remember the seller had told my acquisitionist, they wouldn’t take one penny less than $299,900. And here I’m coming with an offer all clean at 250. Guess what? The same day the offer was made, they accepted the offer $250,000 just as we presented the offer big lesson right here folks, huge lesson. And that is, and you wanna write this down, seller of a property does not know what they will accept from you went from your, with your offer until you make the offer.
That’s huge. The sale. I don’t care what and I’m not saying the seller lied. When the seller, at that point in time said, we won’t take one penny less than what we’re asking, but there’s a big difference. There’s a whole different paradigm going on here between the seller saying, I won’t take less than X and you actually making the offer. So what’s the lesson learned on that piece of this deal. If there’s a property you’re interested in, make the offer and let the math make the decision, make the offer, regardless of what the seller said they would take or wouldn’t take. And let me tell you this as just another side important lesson, if you’re a real estate agent says they won’t accept that they didn’t accept that two weeks ago or whatever. I’m not even making the offer. You tell your real estate agent and by law.
They’re required. If you make an offer, if you give them an offer, they’re required by law to make the offer. You tell them to make the offer. So I’m scheduled the close on this property. We’re under contract, I’m scheduled to close he’s on it next week and let’s review the lessons learned lots of lessons here. Number one, if I didn’t have a bird dog in place to take pictures of FSBO signs and send in to me and us, I wouldn’t have gotten this deal. Number two lesson, if I didn’t have private money lined up, ready to fund this deal to where I could close in two weeks. I wouldn’t have got this deal. Number three, I didn’t listen to what the seller said and said, don’t make me an offer. Listen 299,900. We offered 250,000, 50,000 less than they said they’d take.
And they took it. Next lesson. I had my contractor had a relationship with my contractor to where the contractor could get out there within 24 hours and estimate repairs. So the contractor relationship was very important. Number the next lesson, my real estate agent, my relationship with my realtor. If I didn’t have a relationship with Chris that can get out there right away and also look at the property. And also in less than 24 hours, get me the after repaired value as to what that property would be worth after it’s all fixed up, I would have missed out. Another important relationship is the relationship with my real estate attorney. You say, I can’t make an offer that I’ll close within two weeks, unless I’ve got a relationship with a real estate attorney that can actually get it done in today’s hot market. If just somebody off the street called up my real estate attorneys and say, I’ve got a property that I want to buy.
They are booked out at least four weeks before they can do any closings. But since I’ve got the relationship and you should as well, you got the relationship with the real estate attorney. They can get the title search done quickly, never buy a house without a title search, never buy a house without title insurance, and we can get it done. Also another relationship, a home inspection company, when you’re doing a rehab like this and this kind of money, you never buy a house without a home inspection and make sure that you, you know, you don’t have a big old Murphy showing up that you didn’t expect. So you want to have the relationship in place with your home inspection company as well. So there you have it. Now, I’m going to tell you in an upcoming episode, very shortly after this, when I’m actually going to be on location with my videographer taking me through the house and you actually seeing what we are doing in this house.
So there you have it folks, 109 broad street, and a lot of lessons learned that you can put to use as a real estate investor. So let me ask you a question. What can Jay Conner and private money do for you? Well, there’s a few things that private money and Jay Conner can do for you. And here’s how you can get plugged in. First of all, I’ve got my new book, which is called where to get the money now, and you can go get the book at www.JayConner.com/Book and get that downloaded and, or get it shipped to you. And you can learn step by step on how to get all the private money you’d ever need for your deals. So you don’t miss out.
Number two way how to get plugged into private money. And Jay Conner, is I’ve got a monthly membership called the Private Money Academy and I’m on there live twice a month for at least one hour of Zoom coaching for all the Private Money Academy members. And you can come join the party at, for free for a two week trial at www.JayConner.com/Trial and come check us out. And I’m telling you, it’s just amazing the interaction that we have with all the Academy members. And then thirdly, come on over and get involved and sign up for free in my upcoming live event. If you want to learn what goes on at the live event, you can check it all www.JayConner.com/LearnRealEstate.
Again, that’s www.JayConner.com/LearnRealEstate. And I see Cynthia has commented in here, Cynthia, thank you so much for saying hello. Yes. Being new to real estate, investing in Charlotte, North Carolina, looking on mastering subject two deals. As a matter of fact, Charlotte, I mean Cynthia and my upcoming live event, I teach the subject to strategy so you can get to the upcoming live event for free again, www.JayConner.com/LearnRealEstate. Well, I’m so glad you joined us here for another episode of real estate investing with Jay Conner, I’m Jay Conner, the Private Money Authority wishing you all the best and here’s to taking your business to the next level. We’ll see you on the inside on the next show.
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