Now that brings us from Pre-foreclosures, dealing with the seller, dealing on Pre-foreclosures without talking to the seller, Short Sales, Liens, buying at the Auction, and now after the auction.

If you remember back in the Short Sale lesson, when I talked about how the shake-up of the Banking industry changed things, I told you there is good news and bad news.

The bad news is the banks are no longer required to hold much of a reserve amount of money when a loan they have goes into Foreclosure. They are no longer held back from making new loans because of old, bad loans.

They do still have requirements, but for all intents and purposes, they do not have a reserve. So they don’t mind foreclosing on properties like they used to.

Now here is the good news. The good news is because of that, there are more REOs, “Real Estate Properties Owned” by the Banks than ever before.

And I have got a formula for the highest cash price I am willing to pay for properties.

So you need to find some potential deals and pre-screen them so you are only spending time on the most likely ones for you to:

A) Buy at a price that works for you,

B) In an area you want to buy them,

C) And they are a property type you want to buy

Let’s attack this in reverse order.

First, you need to know what kind of properties you are trying to buy.

I prefer single family homes near or below median home price. They sell the fastest, for the highest price compared to their comps, and have great profit margins.

You also need to know where your market Area is. Hopefully this is an easy one 🙂

Then take a simple comps Website. I like zillow.com. You can use whatever comps program you like best.

Open another tab, and also open up Realtor.Com. So they are both open at the same time.

Take the area you want to buy houses in, your market area, and tell Realtor.com to show you all the three bedroom, two bath single family houses.

Now put them in order from least expensive to most expensive.

Starting at the beginning (the cheapest ones), look at the listing, and if it’s the kind of property you would like to buy or flip, copy the address and paste it into Zillow.com and look at the comps to see what it’s worth.

Here’s a tip:

DON’T EVEN LOOK AT THE PRICE ZILLOW SAYS IT’S WORTH!

Zillow.com is not necessarily correct on it’s price. That’s ok. Neither is any other home price site.

So make sure you look at the actual comps – the nearby comparable houses that have sold in the area. Don’t look at Zillow’s “Z-estimate or whatever it’s called.

Look up the comps for yourself.

One side note that’s pretty awesome nowadays- you can even see a picture on Google Maps of the front and sides of the house. Very cool.

Do this Realtor.com to find them/Zillow.com for comps process, and take any listings that are asking less than 75-80 cents on the dollar, and call those Agents.

When you call agents that are listing properties at 80 cents on the dollar or less, you’ll talk to thre different kinds of Agents (and flakes, too. Just hang up on those.)

The first kind are regular deals from private Sellers. They are not REO’s, they are people who are asking a low price because they have tons of equity, and they want to get rid of it and don’t want to fix it up and make it look nice for a retail buyer.

Lots of times they are inherited properties or the people have owned them for a long time. Often they are pretty run down.

If they are asking less than 80 cents on the dollar, when I offer 55 or 60 or at the most 65% of market value, they are much more likely to say yes.

The second category are agents that have REO listings, meaning it is real estate owned by the bank. And the bank is asking less than market value in an effort to liquidate the properties quickly.

Some of these are gorgeous properties in nice neighborhoods. And it would be nice if the agents were flexible enough to work with us so that we could get in there and work our pretty house magic but that is not reality.

What we do instead is we make cash offers on these properties, and that means dirt cheap cash offers below the cash buy formula.

So I am talking abut buying these houses for 40, 45, 50, 60 cents on the dollar and turning around and flipping them either to another investor and making $10,000 – $50,000 or more on each deal.

If we are going to flip the house for 70% of market value, minus the cost of repairs, we need to buy it cheaper than that.

Or if you decide to use the lenders I share and fund the deal, you can turn around and sell it to an owner occupant for full retail (because it is a pretty house that needs no work) that you bought for 50-60 cents on the dollar.

Now here is the funny thing.

At the “Ultimate Foreclosure Bootcamp” I took the student’s areas and I did this exercise. And in some areas we found as many as 140 properties that fit these numbers.

I have students all over the country who are doing four, five and six deals a month just making offers like I just talked about, not even sending a letter, not filling out a form, not working with the sellers one on one. Nope.

Just making offers on listed properties at dirt cheap prices.

And, of course, we are looking for the ones who are already asking a low price so that we don’t have to fist fight our way through agents and their rules.

You know…realtors will pretty much screw up anything creative you want to do. So you have to be offering cash.

And if you are going to offer cash it has got to be dirt cheap so you can either flip it to another investor, or finance it, turn around and sell it yourself.

Either way, you now have the resources to do so.

Now let me tell you how to take this to the next level:

Finding deals from your laptop or even your phone like this is great. And if it turns out to be a good deal, grab it and do it!

But really, the most important thing is having an agent who gets these kinds of properties listed, and working with them on a regular basis.

See, a good REO/Bank Owned agent is hard to find. They spend a lot of time, effort, energy and money getting to be a top REO agent for investors, building buyers lists and such.

It’s not something that just any old agent can do.

That’s why, if you’ve tried to get the WRONG agent to work with you, it was like pulling teeth just to get them to find what you wanted!

They probably told you there were no deals like that, or the deals always sell for more than the asking price in 20 minutes or whatever other nonsense they spout.

But when you find an Agent WHO ALREADY HAS GREAT DEALS…

…they’re like a gold mine!

That being said, just know that the “real player” agents don’t want to deal with anyone that they think is just going to waste their time.

So you have to be ready to present yourself right- like a player (which is what you are going to be, right?), not like the hundreds or thousands of “looky-loo’s” and wanna-be’s in your marketplace that this agent has to deal with constantly.

So you DO need to at least SOUND like know what you’re doing before the real Agents will work with you.

Everyone knows that REO’s are a great source of dirt cheap deals. Just look at how many serious cash buyers focus on them!

That’s why you’re smart to want to do these kinds of deals. And if you want to deploy these methods quickly and simply, and start getting these kinds of results from your kitchen table or laptop (I like to sit by the pool with a tasty beverage and look up deals and Agents), then you’re going to want to check out a brand new Course I’ve created that does just that for you.