Motivation is key. There needs to be a higher level of motivation from the seller. Whether you are dealing with a individual home owner or a company such as the bank, courts or city entity, they have to be motivated to sell. That does not mean desperate, but if they have no want or need, you likely hood of getting a good price is much lower. You need to look closely at the motivation and if you do not know then you should find out. Ask the owner why they are selling and see if you can help them solve a problem. The banks motivation will be to bad a bad asset off their books, but if they have multiple offers then their motivation level changes and they are in the drivers seat.

 Numbers are vital. You have to be able to buy the house or building at a discount of some kind. Determining the current market value quickly, understanding repair costs and them formulating the price you can pay is a process that you must understand and get good at. If you plan on reselling quickly for a profit, then you have to buy below market value. The old MOA (maximum allowable offer) formula is an investors quick rule of thumb. ARV (after repair value) X 70% – Repairs = MAO. There are many different ways to invest of course. There are short sales were you can create your own equity. You can buy property with owner financing and no money out of pocket. You can assign contracts and never own the property. In all cases you will need to look at the numbers. If you don’t buy at a discount, you are simple a retail buyer acting like an investor.

 Problems turn into profit. Usually the amount of problems with the seller or property will be directly proportionate to the profit. The more problem there are, the greater the profit. If the house has been in a major fire, you have problems. Therefore you should be able to buy at a deeper discount. If the REO has fallen out of contract 4 times, the bank has problems and is motivated to sell quickly and for a lower price. Now there are exceptions to this of course, but in most cases, more problems will mean more money.

 Education puts you ahead of the curve. Fear is a lack of education. The more educated you are, the better you can evaluate leads and determine deals. That goes without saying. Also look at the other benefits. If you know more that others, they will look to you for answers and help with their deals. You become the authority in your circle and as a result, more deals come you way. Education will not only help you determine what a deal is, but can also bring more deals to you.

 While there are many things that make a great deal, these are 3 big ones that you should keep on your radar. Sometimes the best deal you will ever do is the one you walk away from!

First lets talk about were to find them. Agents are everywhere and you just need to know were to look. For starters, look inside your sphere of influence, who you know, family, friends and who they know. You should also be taking note of the For Sale signs you see in front of yards when you are driving neighborhoods. Look for the same names and companies that are doing a lot of volume. That can be a good indicator of a quality agent. It can also mean that they may be to busy with their current business to effectively help you. Real Estate club meeting, local agent association meeting and networking events can be another source. Just getting out there, looking at open house, looking at deals, talking to people in the business you will run into agents. Be excited about what you do, investing in real estate, and have that come through with everyone you talk to.

Once you have located agents, you then need to effectively communicate to them how you will work together. Here is a great list of talking points that you can adapt to fit your own personality;
1. We work with multiple agents but if they send you the lead first, that you do buy or make money with, you will honor that relationship and make sure they get paid.
2. When they send a property lead, they need to include MLS comps, active, pending and sold, all within 3 months and a ½ mile to 1 mile of subject property (if applicable)
3. This business is about speed and volume. Deals do not last long so the faster we communicate, the more money we can both make.
4. I do what I say I will do and expect you to do the same. I will not waste your time, so do not waste mine. If I can’t trust you I can’t use you.

You will not work long term with every agent you meet, that is just a fact. You only need a few really good agents to help fill your pipeline of deals. Remember, they do not get paid until you close on a deal. So you will always need to monitor them and keep their motivation level high. Good agents can mean good deals and more profits!