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Ayesha did her first Highest Bidder Sale a few months ago and she’s already working on her second & third Highest Bidder Sale. Join me March 21st a 7pm Central to discover how Ayesha:
* found her first HBS
* how she structured the deal,
* how she got buyers to the Open House
* what problems she ran in to
* what she learned and what she will do different the next time
* yes, she will discuss how much she made too
* what advice she has for anyone just getting startedThis call is sure to give you many great ideas and motivation!
Is this coaching call available to everyone? (Right now I’m on the free plan) If so, where can I sign up?
I am both a realtor and investor. We have two clients that we’d like to do Highest Bidder Sales as they are both fixer uppers. We have several questions regarding this process.
1) You advise an inspection, who pays for that? The seller or myself if I get an option on this property?
2) Value/Price: Is it advisable to have an appraisal done ahead of time if the value is difficult to determine? Or is it better to split profits over and above a set price so that the seller doesn’t feel they’ve been taken advantage of? If so, who pays for that?
3) We are thinking of having our investment LLC take an option to control this property then offer a Highest Bidder Sale. We are thinking of marketing everywhere BUT the MLS so that the seller is not paying commissions and hopefully the seller and ourselves make more money. Is this a good way of thinking?I think this idea of selling is amazing. I think we could get more FSBO sellers to go this way too. Being a “retail” realtor is not what I want to be. I want to be an investor and eventually own notes to supply our income. Looking forward to learning more and more on CashFlowDepot.
Thanks for your response.
Darcy
Hi Darcy
Yes, the coaching call is free for anyone to be on the live call.
You have a great plan. I agree that a Highest Bidder Sale will get sellers excited and they will agree to the option. Every situation is different. Sometimes you will get all the profit over the strike price. Sometimes you will split profits 50/50 or 70/30 or you get the first 10k and the seller gets the rest of the seller gets the first 10k and you get the rest. It is what ever you and the seller agree to.
I will send out a reminder about the call
Jackie
Kathryn, the first one I assisted with as a volunteer was in Phoenix, AZ. This I did when I already had a contract on conducting one on my own here in Fort Worth – ALL from reading Jackie’s book. I just finished one in Cleburne, last week, and shall be conducting another one with Patti, at the end of April, in Hideaway, TX.
In the interim, Patti, and I are working leads to see which exit strategy fits each property we are getting leads on. There are a few that may be great for general wholesaling, some great candidates for wrap-around mortgage to sell on an option, and then some ripe for a Master Lease.
Believe me I have been in RE as more of an academic, with analysis fever, or rehab fever for the last 10 years, but never made a concerted, and focused effort to make this my mainstream line of work. When I did REI, I would jump all in- head, foot, and sinker, and do complete gut rehabs; what can i do, I LOVE construction. Lately, I am staying away from that, as Jackie has been advising for a few months, this is NOT a market to have your money stuck in a rehab, when you can get great results from wholesaling, wholetailing, Highest Bidder Sale, Master Leasing, options, etc.
“ONE-TRICK-PONY” mindset is the worst mindset one can have if one wants to be a REAL ESTATE INVESTOR. Think of yourself as a problem solver, and let your mind lose to think outside the box.
READ, READ, READ. Learn from creative investors, like Jackie, Jack Miller, or from the fray of the non-guru ones of yesteryears. Stay far away from the Gurus with programs to sell. I literally slurp all the info and knowledge I can garner from CFD website.
Jackie has a mission to help people out selflessly. PLEASE learn from outstanding, ethical, and fair people like her. No, Jackie does NOT pay me to sing her praises. I have seen, read, dealt with many RE people to know the diamonds from the stinky rocks. I apologize for the long reply.
Hi,
I was just on the HBS call with Ayesha. I too believe that 2 heads are better than one, however i commend you for getting out there and doing it on your own. Great tenacity and drive!! Congratulations Ayesha. I am about to do my first one this weekend in NY. Luckily I am working with someone who has a lot of knowledge about the real estate world, but this is his 1st one too. I do have a few questions:
1. When did you start advertising the property prior to open house?
2. What are some ways to find sellers? I know your first was word of mouth and you would drive for dollars, any other ways?
3. How low should you start your sale price? Is there an average percentage to the FMV? ie: say the house is worth 510,000Thanks!
CookieCookie,
Thank you for listening in to the coaching call tonight. Before I address each of your questions separately, I would again like to reiterate the point, it is BETTER to have someone who has done it before to do it with you for at least the first couple of HBS that you conduct. There are many moving parts to it, and once you get your head wrapped around the concept, and the mechanics of conducting one, you’ll run with the idea.Every deal is different, and depending on the market, market dynamics, etc, your approach to marketing will be different. Case in point will be your particular deal in NY. For $510,000, I can get a very nice, large house in the DFW market, that in California may only buy you a shack, thus the focus market to whom you are selling to different. The lower end house in your market may be a mid to high end house in my market.
*So first define your market area’s buyer’s demographics – your marketing will change accordingly.
*If you are in the low end area, you may get away with bandit signs, but in a upper middle to higher end area, you may not be able to do so, and a lot of advertising, including social media advertising, press releases, videos, etc may be needed.1. I started marketing 2 weeks before the HBS with online marketing. First I claimed the Zillow listing as a “For Sale by Owner” one, since I had an equitable interest in the property through my contract.
a. Then I started putting ads on Craigslist 2-3 times a day in the immediate area, and the vicinity. As the day of the Open house approached, the frequency of the ads increased.
b. I started putting up the handmade Coroplast bandit signs at key intersections in the neighbourhood, and major retail stores like Home Depot, Walmart, etc
c. I distributed flyers in the parking lots of these stores too
d. 1 week before and the day before, I also distributed flyers to the neighbours (it was a non-gated community, but with an HOA).
e. I had my blog done and referring people to it through my flyers, and the bandit signs. On my blog were all the rules, timings, and basic information about the property.Part 2 of the answers:
2. I could write a book on ways to finding sellers, but I myself would tire out reading 10 of them. I would rather someone generate the leads for me, and I negotiate the deal, and acquire the contract, then also work on the disposition side of the deal, that could be the Highest Bidder Sale. For starters you can:
a. Develop a list, and send letters and postcards to them. ( 5-6 times to the same motivated list of Sellers)
b. Website with general information regarding what you do, and a fillable form where the motivated Seller can fill out his own need to sell, as well as general info about the property, loan details, etc.
c. Run a Pay per click campaign on Google, or a Facebook ad campaign directing people to your website/blog, or Facebook page.
d. Make Bandit signs with “Sell me your house for a fair cash offer” kind of verbiage, with your phone number.
e. Advertise on Backpage, Trulia, Zillow, etc.
f. LinkedIn will give you access to more investor buyers, and not sellers.
g. Flyers, and business cards.
h. Leave your business card, and flyers in all the places where you think it will be exposed to people who may have a need to sell, and will get lots of eyes. C-store, laundromat, car repair shop, pawn shop, charitable, and school events, etc.
i. Greensheet, or Penny saver newspaper
j. Local newspaper
k. Billboards
l. Pinup boards of laundromats, tanning and nail spas, etc.
m. Magnetic signs on your car
n. Wear a t-shirt stating you buy houses………
o. Post on multiple websites, and forums
p. Email, or talk to friends and family, and offer them a $500, or so, Finder’s Fee if you close on the house, and keep your word.3: How low should you start your sale price? Is there an average percentage to the FMV? ie: say the house is worth 510,000
I would run comps of the area, do a demographic search, crime rate, days on the market for a similar house, then determine the work required, the target audience, and negotiate a Contract Price AND a STRIKE PRICE. Both may , or may not be the same.
a. Let us say your neighbourhood price to sell it quickly is $450,000 as -is, and the ARV ( After Repair Value) is $510,000, then negotiate it at least at 70% of ARV depending on if it is a Buyer’s market, or a Seller;s one. If properties are flying off of the market, with low DOM, then you have to offer near retail -as is price. Then to get the maximum number if people through the door for an HBS, you’ll have to start at say $300,000. Remember, this is to get traction to your property, and to attract the maximum number of people to the house. Do not worry the bidders will take the price up to the fairest market value. Then you always have a choice to either accept it, or not.
b. Or you can do flat marketing fee HBS for the Seller,
c. or, a percentage of the sale price with marketing price shared,
d. Or, a percentage of the sale price, with marketing totally paid by the Buyer, or you, the Investor.
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