Posted by Ed Copp (OH) on June 29, 2001 at 19:37:49:
of proving my point.
My point was simply this, if you send faxes to brokers in excess you will appear to be a moron.
cover letter for shotgun offers - Posted by tom nunes
Posted by tom nunes on June 27, 2001 at 22:45:51:
Hello CREONLINE,
I’m taking the advise of a few gurus and will start doing “shotgun”/mass offers to start working the numbers in my area. The reason for this? There are only 21 “ugly” properties listed in MLS, but a large # of vacants in my county. (580+) I plan to start sending out mass offers at 50% LTV to see who the motivated sellers are.
My question is, is anyone out there using a good coverletter to explain to agents what they are attempting to do and giving reason for the low offers? I have access to private money loans up to 70% LTV and thus want to start out with rediculously low offers. I don’t care if i shock the listing agent, i just want a coversheet to ease in the offer without “offending” them.
Also, if anyone is doing this, please give me a few pointers.
Thanks in advance,
Tom Nunes
tanunes_us@hotmail.com
Second Tier Marketing Fills the Gap - Posted by J. Clifton
Posted by J. Clifton on June 28, 2001 at 18:34:43:
Shealey’s advice below is good. But it might be better to fax at least an additional page with your offer of intent, consisting of a proof of funds letter from your lender, to placate the agent. There are “first tier” prospecting methods (targeted mailings, houses wanted ads, signs, etc) to pinpoint motivated sellers, but even they don’t work all the time, and “everyone” seems to be doing them. Shotgunning offers, leaving “I Buy Houses” messages on answering machines, or offers left at owner open houses, are second-rate methods that can make things happen during slow times.
Re: Don’t plan on being taken seriously (NT) - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on June 28, 2001 at 16:30:23:
Here is what i did - Posted by Tony Shealey
Posted by Tony Shealey on June 28, 2001 at 11:44:29:
Tom,
This is a technique I use whenever nothing else seems to happen. I do not use a cover letter I just try not to fax too many to one office. I can’t imagine a realtor taking you seriously if you fill up his/her fax machine with 20-30 offers. But to clarify one point I do not send out signed contracts I send out very non-threatning letter of intents. While it is true that I never hear back from most of them, the results my first time were really quite amazing out of 2 afternoons of work and about 70 offers I bought 3 houses all from the same seller. He was really motivated… Talk about a “don’t wanter” Bought one with FMV of 26,500 for 9,100. The second had a FMV of 20,000 picked it up for 5100. And the third was a nice brick home rented for 375.00 appraised at 42000. Got it for 24,700…Oh and I forgot to mention that the seller is paying all closing cost… So I cant say it is better to use a cover letter or better not too. My results were just simply with a one page letter of intent. But if you look at the goal you simply want to flush out the motivated sellers, so if the Realtor is doing their job and submitting all offers then if the seller is motivated he will counter. Just be sure that when you go up in price (you are willing to go up over 50% arent you?) that you get something in return.
The right to advertise and place signs prior to closing.
The right to a key prior to closing to show prospective tenant/buyers.
Just my .02
Tony Shealey
Re: Don’t plan on being taken seriously (NT) - Posted by Tony Shealey
Posted by Tony Shealey on June 28, 2001 at 16:46:32:
Ed,
I would have to disagree with not being taken seriously, at least in my area. While I will agree that it is not an effective enough strategy to build a realestate investing career out of solely, it is however an effective way to find motivated sellers. Take for instance. How many of the “normal” mls listings does an investor normally make offers on? I mean excluding the Handymans, fixer uppers, and vacant properties that obviously could be better handled by dropping by to meet with the listing agent. So why not shotgun offers on all the other properties to see if you can “stir” something up. Sure you may not get many if any, but you surely want if dont offer.
Just my .02
I have bought property this way and would not rule it out as an option. Just don’t try to build your investing career around it because it is unlikely it will produce enough.
Tony Shealey
Re: Theory - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on June 28, 2001 at 20:09:29:
Tony,
Your post is based on theory, and mine is based on experience.
Lets presume that my office receives your FAX, offering lets say $30,000 on a house that I have listed for $60,000. First off as a working real estate broker I do not consider a FAX as discussed here to have any more valadity than junk mail. That said I would read it, and probably LOL. Then I would probably tell the seller about it. Bear in mind that I do not consider this to be an offer (no signature, and no earnest money deposit). Now when we do an offer it will be on my form too (if at all possible) that’s just my policy, and that is based on experience too.
Now when I talk with the seller and he goes into his laughing routine and then gets quiet I know that he is thinking about a price reduction, but not 50%. Well if he says that he would take $40,000 and I know the house will sell for $55,000 who do you think will make him an offer on the spot, you or me? I think it will be me, because your offer was never taken seriously, I mean you were not serious enough to put it on paper. So in my mind I would be saying thanks Tony.
Then I might call you back and say the seller (that’s me now) is aware of your offer and he might consider $52,000…Your move.
Mostly the incoming FAX ends up in the trash pretty soon, oh we read them and we LOL. We often share the amusement with the seller, but if there is a deal here I guess that I am first in line, as a working broker. Thanks Tony…
Re: Theory - Posted by Lazaro
Posted by Lazaro on June 29, 2001 at 08:57:52:
I think it is brokers like you that give them the bad name. It should be illegal for you to do as you said. If you do as you said you have VERY low business ethics. I would not want to work with a broker as your self. I like to work with reputable people with HIGH business ethics. IMOHO you should rethink your approach. Just My Opinion.
Cordially,
Lazaro
Re: Theory - Posted by J. Clifton
Posted by J. Clifton on June 28, 2001 at 22:53:40:
Aside from the issue that many brokers are too dim to leave their 9-5 job comfort zone to invest, and wouldn’t jump on a good deal if God Himself spoke unto them to buy it, I think this ‘theory’ misses the point. No doubt shotgunned investor offers get laughed out of the water and/or disregarded 99% of the time by agents and owners—even if they’re mailed, signed and accompanied by earnest money. But then, so do non-shotgunned investor offers. So do ‘I Buy Houses’ letters, ads and bandit signs. So do buyer contracts, addendums, land trusts, take-over payments suggestions, or any other outlandish kind of creative approach.
As with all the rest of the standard reactions to investor methods, we’re not supposed to care—we’re after that non-standard 1%. There are optimal ways to find the right sellers, and sub-optimal ways that are still effective. Shotgunning is one of the latter.
Re: Theory - Posted by Tony Shealey
Posted by Tony Shealey on June 28, 2001 at 22:12:17:
Ed,
While I havent bought alot of properties this way my point is I have bought properties this way, now I don’t know much about realtor laws in your area but in mine I have been told that a Realtor cannot buy a property that he listed.
I am not saying this is one of the best ideas out there but I do it from time to time when things slow down. And it sometimes brings me deals, if it is a bad thing to do, then I have made quite a bit of money doing “bad” things. It has worked for me buying properties. Sure I occasionally get a realtor to call and tell me that he is not going to submit my rediculous offer and that is ok. Not worth arguing the point in my opinion to time consuming, unless it is a property that I really want. But just as you say, If I offer 30k on a 60k property and the seller says that he will accept 40k, and the realtor does his “JOB” which is selling the property, and not buying it then “BINGO” I have a live one. But I guess now I should start being more aware of the fact that I may be “competing” with the realtors. Might be time to actually check on those laws afterall.
Now look at it from a different angle, who would you trust more, someone who you had a feeling faxed out 50 letter of intents or 50 SIGNED offers? I would be afraid of the guy that sent the 50 signed offers? What will he do if all 50 are accepted? Afterall, doesnt a signed offer mean that you are going to complete a transaction? My letter of intent states at the bottom that if there is any interest on the sellers part then we can begin to finalize the details of the transaction. Now is time for the purchase contract and the earnest money, at least that is the way I do it. Have you ever actually took a deal by letting someone else talk the seller down with an offer? And then fall in and buy it without their knowledge? I hope all Realtors arent this way. I think I am gonna call a few that I work with tommorrow and make sure that is not why things have been slowing down for me.
Anyway,
Happy Investing, I think I will go fax some offers out just to see what I can drum up, I will be sure to let you know.
Tony Shealey
Re: Three at a time… - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on June 29, 2001 at 13:11:08:
Well lets see? In my state a broker can buy his own listing. Any info to the contrary is coming from a misinformed person.
Yes it is ethical, and often is the only way a property is going to get sold.
Yes the practice of shotgunning faxes might work. It also might work to send unsolicited e-mails, or to just call all the numbers in the book. All might work but some work better than others.
The comments here presume that all brokers are realtors…not so. That all brokers use MLS not so.
Now consider this what if the selling broker is already the owner, or controls the listing with an option rather than a listing. What disclosure of this info would you guys consider ethical? Consider the fact that the option will stop the business of circumventing the broker.
I would suggest doing business in a business like way. That would include accurate info, on the law before commenting on it; and well perhaps ethics could become a two way street (not just reserved for those of us who have a license to protect).
I give up! - Posted by Tony Shealey
Posted by Tony Shealey on June 29, 2001 at 18:33:23:
Ed,
If I listened to all of your what if’s I would be scared to do anything. I would think it was all a waste of my time. I did not pretend to know the law in my state, I simply stated on what I was told and said I would have to check on it. I will continue to do it my way because I buy property that way.
And what exactly is
“Yes it is ethical, and often is the only way a property is going to get sold.”
Are you trying to say that often the only way property gets sold is if the broker buys the property himself? That is the craziest thing I have ever heard.
And what about this?
“Yes the practice of shotgunning faxes might work. It also might work to send unsolicited e-mails, or to just call all the numbers in the book. All might work but some work better than others”
Now are you trying to compare shotgunning offers on properties listed on the MLS to calling all the numbers in the phone book? Come on Ed. That is no comparison geeze? What will you actually say to prove your point here? And what exactly is that point? That you can’t buy properties by faxing in offers? Or that you should be aware that if you talk the seller down with an unsigned offer that an UNETHICAL broker will snatch it away from you, knowing that you done his dirty work for him? If he is anything but a “Wannabe” investor then he will sense the owners motivation when listing the property. If he doesn’t and someone else uncovers it for him, then you are saying it is ok for him to snatch it up?
Now Ed, I agree that some ways are better than others, but if you want to know the BEST way it is simply this.
AS MANY DIFFERENT WAYS AS YOU CAN DO! No one way is going to out do a combination of different approaches. Now if your point here is to discredit shotgunning offers, then the point is you are out of line, because you can buy property that way. If your point however, is to say that occasionally you will run into “unethical” self-centered brokers and realtors that will snatch your deal away if you don’t dot all the I’s and cross all your T’s. Then I appreciate the inside info on the dark side of the buisness. A brokers job is to sell homes, and if I had a broker working for me him to I would expect do just that. The time to buy the home is BEFORE YOU LIST IT. Not after!!
And one last comment on this statement
“I would suggest doing business in a business like way. That would include accurate info, on the law before commenting on it; and well perhaps ethics could become a two way street (not just reserved for those of us who have a license to protect).”
I never said "Ed, the laws in my state say that a broker cannot buy one of his own listings. I simply stated that I was told that he couldn’t. Normally, I would not even relay such info but I am good friends with a realtor in a nearby town that informed me that he cannot buy REO property that he lists, so I thought maybe that was a state law that pertained to other areas, it may be restricted to the banks policy (Although why would a bank care if it wasn’t breaking the law and it got their property sold?)Other than the fact that the realtor does the Market Analysis for them to base their sales price on.
I also think that alot of “guru"s” suggest shotgunning offers in their courses and now you are saying that it is a waste of time and you want be taking seriously, and if it does work and you dont use the signed offers instead of letter of intents, that brokers such as yourself will steal your deal away.
I guess what they say is true there really is all types out there. Thanks for the “heads up”.
Tony Shealey