Asset Management & Recovery: Using Bonehead Offers for Profit

I must admit that being a bonehead agent and investor takes a lot of work.  The only way to make a good living this way is volume.  Numbers.  It's all numbers. 

Shocker - Investing is all numbers.

Here it goes.  I am going to roll the beautiful bean footage. (I love that line.  Bushes Baked Beans commercials)

Follow Bonehead Rich's easy steps and make money as a Bonehead property flipper.

• Weekend - Search online and find as many properties as you want to look at.
• Monday - Visit and anaylize the properties you are interested in.  Use Microsoft Trips ($99) to plan your route.  Use a spreadsheet with costs, etc. to estimate repairs and create a proforma. (Cost - buyer agent fee to guru of your choice) Note - Once you get comfortable, you can do 30 + residences in a day.
• Monday Evening - You or your agent comp the properties for AS-IS value and AS-Repaired Value.
• Tuesday - Draft all of your offers and fax them to the listing agents.  Make your best offer now or the negotiating will eat you alive.
• Leave offers open until Friday or Saturday.
• Wednesday - Call all listing agents to make sure they got the offer and remind them that the offer is only good until XXX date.
• If you obtain an acceptance, withdraw all other offers unless you may want to buy a couple at a time.
• If no offers are accepted you can either resend the offers again the next week or move on to another series of properties.  For the properties that I was really interested in, I would re-send the offer every week or two while the property stayed on the market. 

Ok.  Now you have just made 30 offers.  All were made at your price.  List price is totally irrelevant.  If you get a call from an angry listing agent, just let them know that you offered "WHAT IT WAS WORTH TO YOU".  It might be worth more to someone else, but you made the best offer you could based on your investment criteria.

The next question that you are asking is "how many offers like this do you make before you close a deal?"  Based on my investing criteria, about 75 offers per closed deal.

When I was doing this full tilt, that meant I was buying at least one property every 2 weeks.

In theory, you are making lowball, bonehead, offers and need to be taken seriously.  The first reaction from the seller on the price is going to be NO NO NO, so the additional terms need to be strong.  Here are some suggestions:

•·        Offer to buy AS-IS.  No repairs needed

•·        Offer a large deposit

•·        With your offer, send an approval letter from a commercial bank, not mortgage company

•·        Send a copy of your bank statement if paying cash

•·        Offer to close quickly

•·        Don't ask for financial concessions

•·        Send an estimated net sheet with the offer. 

Well, we are at the end of the thought yet again.  There is a lot of money to be made making bonehead offers.  It takes a lot of effort and paperwork, but if you work the numbers you can end up with good investments at low prices and little negotiating.