For those of you who don't know me, I'm huge on marketing! I use yellow signs, letters, post cards,write articles, make phone calls, word of mouth ( I tell everyone I buy houses for cash with other cash investors throughout "YOUR COUNTY"), and I always follow up with potential clients. What I've done is arranged an email thread between myself and one of my newly committed cash buyers that I brought on board last night at a diner. It was one of those informal business dinner meetings. You will see that with a 28 cent post card, an ink pen, and a simple post card message to a cash buyer will pay big bucks down the road. Here you go - ENJOY!
From: Todd (Cash Buyer)
Sent: Tue, May 25, 2010 8:07:38 AM
Subject: Houses for sale
I received a post card that you sent me regarding a property I purchased in Goshen. On your post card, you mentioned that you have access to properties for sale. I wanted to find out more information - where do these properties come from? What condition are they in? Are they already listed on the MLS? I am interested in buying properties if you are for real, but I need some more information before I'm willing to move forward. I am interested in single and multi family properties in Orange and Southern Ulster counties, but not in the City of Newburgh and not too far west in Orange county. I primarily buy distressed properties, but I'm interested in anything that is a deal. I pay cash when I buy, and most of the single family houses I buy are in the 100k range. Let me know how you work and what kind of properties you have.
My Reply to Cash Buyer:
On Tue, May 25, 2010 at 8:39 PM, gary rabatin wrote:
Hey thanks for the email reply! YES, I have access to properties that are for sale AND I also have access to historical data on most properties throughout Orange county. I can do the same for Ulster county, but it is more time consuming and that particular database is less user friendly than the one I use for Orange county. Just so you know, I don't waste my time screening the MLS because there is too much competition on it and the better deals are the ones that take additional time to find, research and ultimately get it sold to an investor so they can flip it and sell it for a great profit! So you can rest asure that I'm not an MLS jocky that will send you anything and everything that pops up on the MLS and send it off to you using a generic message such as " i have found a great property that meets your criteria, let me know if there are any properties you're interested in." I do not and will not send you an email blast on something that is not what your looking. With that said, you WON'T receive any Newburgh deals from me. Besides, that place is a war zone - LITERALLY!
The following is a snapshot as to how I operate:
Any potential property candidate I find I will always look at what a property previously sold for which is huge during the negotiation process, especially with motivated/desperate seller! I also check to see if a property has a bank code on it. If a property does not have a bank code on it, then guess what.... IT DOES NOT have a mortgage on it. Again, this is HUGE during the negotiation process! How many agent are you going to find that can provide that information to cash buyers such as yourself? NOT many; if any. With this information, I then provide a full report on that particular property to include the year it was built, the section, block, and lot number (SBL), the square footage, number of beds, baths etc. I will also provide the comps for that particular property, it's tax assessed value, it's FMV, and the current estimated value. I can ballpark it's ARV, but I tend to leave that to the cash buyer because the cash buyers I find houses for have a crew lined up to do necessary repairs and remodeling to the home and they are better at figuring out the ARV on houses than I'll ever be so that's something I wanted to disclose to you upfront should you decide to allow me to work with you.
I appreciate you telling me that all the properties you buy you pay for with cash because that's the only people I am currently working with right now. I have a total of two solid cash buyers that I bring insane deals that you won't find on the MLS and I'm looking for a few more. So again, I appreciate you informing me that you're a cash buyer because it just makes deals flow and close much smoother.
I also target vacant properties that have been left for the city to claim, I come across probate properties, foreclosures, shortsales that I negotiate an "AS IS" "ALL CASH" offer with a full report providing justification as to why I am offering that particular amount of money for the home. I have found that by providing a good detailed market analysis on a property and being able to articulate it to a listing agent, they will feel more comfortable submitting, a "low ball" offer to the bank and I also request that they send my report to the bank along with the offer. The biggest factor with getting properties moved are four simple words, "AS IS" "ALL CASH" because that lets face it, a desperate seller knows the deal will close quickly and they know there won't be any further delays with getting a property inspected and so forth.
Another added incentive I provide for the cash buyers that work with me is this - for every house that I find and market to my cash buyers who are fix and flippers, I then begin to find end buyers for the exact same property I found for them at a deep discount to end buyers. This is great because I am pre screening end buyers that are looking for a property that meets the same criteria for a home that one of my cash buyers has. I then begin building rapport with them and I always always always follow up with them to keep them posted on deals in the making. I make sure they are pre approved or have cash themself so they can purchase the property once it's officially listed. No, I am not a licensed real estate agent and that's by design because most agents that I have interacted with simply can't do the type of leg work that I do with finding great buys and then finding great buyers to buy the homes I find for people. Another point to make is the agents I have interacted with just don't understand what property scouts do. Why there aren't doing this is simply beyond me but for some reason they just DON'T! Let me shift gears back to vacant properties because I wanted to make a few more comments on this.
Once I find a vacant property that has potential for a great fix and flip project, I then find out who owns the property and find out if it has a bank code on it and if there are back taxes owed on property. Often times there are back taxes owed so then we're dealing with a quit claim deed situation. I do a marketing campaign to the person that just left their home explaining that I noticed their house was vacant and that I'd like to pay off their back taxes and put a few thousand dollars back in their pocket in the process. This doesn't always work so then it's a waiting game. i wait to see when the county assumes ownship and then I offer to buy it for cash at a specified amount which is an amount that is worked out ahead of time between the interested cash buyer and me.
I'd love to continue to further explain how I can find great deals in the area but my girl friend has been asking me to come to the living room to watch AVATAR so I gotta run.... FOR now anyway...
Oh, one last thing, how far is too far west? Again, I only want to bring you deals that fit what you're looking for. I look forward to working with you and I look forward to your reply.
Gary D. Rabatin
From: Todd (Cash Buyer)
Sent: Tue, May 25, 2010 6:49:45 PM
Subject: Re: Houses for sale
OK, I'll admit I'm impressed. You sound like you know what you're talking about, and it sounds like you do have experience. I'm still not sure I understand how exactly you're locating your properties other than noticing that some are vacant and doing legwork, but that's OK, I really don't have to know as long as you're able to produce....I do have a few questions though...an obvious question I have is how are you compensated? And if you're already working with 2 other investors, how will you decide who gets first dibs on a property you find? And if you have those 2, why do you need another investor (why do you need me)?
To give you a little background on me, I've been buying for several years now, some properties I fix and flip (like the property in Goshen that you sent me the postcard on) and others I'll fix and rent. In Orange County I've done stuff in Newburgh, Wallkill, Walden, Goshen and Warwick. In Ulster I've done stuff in Pine Bush, Gardiner, Plattekill and Highland. I'm currently negotiating on a property in Marlboro.
To answer your question about how far west, I have stayed out of Middletown for now, and haven't gone any further west. I'm willing to go south and east to wherever a deal may lead us.
As I think I may have mentioned in my earlier email, I'm looking for deals, but I would rather buy 2 single family houses for 75k each than a single family for 350k, even if the 350k house is a better deal.....that preference being stated, I am still open to anything that is a deal, and am also interested in multi's.
So let me know about those questions up above, and let me know how this would work, and let me know if you have anything now, because I am definitely buying right now!
Sent: Mon, May 31, 2010 10:25:31 PM
To: Todd (Cash Buyer)
Sorry for the delayed repsonse, I had to go to Ohio for a week but I'm back I'm back now and reading through my emails.
Yes that's an obvious question and a great question at that. I have structured several ways I get paid depending on the deal of course. I'm either paid on the equtiy spread created from the sale of the property in the deal or if I place a property on contract with a seller and I can then give my cash buyer first right of refusal to buy it outright at a slightly higher price. So for example, if I find a property that is for sale the has a FMV of 250,000 and the seller wants 240,000 and has not received any activity on it ( these are obviously FBSOs I'm talking about or shortsales, foreclosures, or just great potential deals in the making) and over the course of multiple conversations, researching the property and running some numbers and explaining to them ( either the seller, or the agent) that I have cash buyers that are looking for a property such as this but in order for them to purchase it quickly they have to buy it at an aggressive discount so in order for a property like this to make sense, they would offer you an "AS IS ALL CASH" offer for 180,000 ( as an example) so that you can move back to PA to be with your daughter like you have stated.. etc. Through my research and finding out their selling motivation, I can then drive an aggressive price to them and give them the piece of mind that if it they want it to move quickly and not have to worry about conventional financing buyers falling through the cracks days before the closing, they usually have no issues with selling at a deep discount. This only works of course with properties that are either paid off, near paid off, or with people that really don't understand real estate and the true value of their home.
RE: Cash Buyers
The reason I'm looking for no more than 5 cash buyers is because I want to personally work with a limited number of people personally so I can better manage the properties I have and run the numbers by them to see if they make sense from their investing standpoint. The way the dibs will work is based on specific locations first and investor criteria. For example, a cash buyer I'm working with only will look at properties in Goshen, crawford, wallkill, Hamptonburgh, Monroe, chester, rhinebeck and select areas in Middletown. The other lady is only looking for run down properties for fixing and flipping purposes only.
I the areas and homes you are interested in will be filtered out and those homes will be given to you for first right of refusal.
I have a large number of properties right now in my binder but I'm going to try to get in contact with the bank verses the agent because I feel that the asset manager or loss mitigation department rep is more willing to sell their home quickly and will entertain more offers this way than a listing agent who will often times sit on offers ( which is illegal but they do it all the time) hoping larger offers fall in their lap. Plus, this will speed up the process.
Since you buy and hold some properties, do you work with a 1031 tax exchange specialist? If not, let me know because I'd like to mail you a DVD that better explains what a 1031 exchange is vs just googling it. Doing this will literally save you thousands of dollars during the course of your real investing career.
The best thing for me to do is to meet you so that i can formally introduce myself to you so I can tell you a little more about myself and work on getting some great deals closed in the up coming weeks and months ahead.
Oh, I have also made the decision to just go ahead and get my real estate license but I intend to use it ONLY as a benefit to the investors I will be working with that want to get their house sold for top dollar. I'm just fed up with lousy agents that just stick their sign in a yard and move on to the next "customer" and do the same with them hoping they'll get an interested buyer at some point. I intend to put together a small portfolio for end buyers showing the sales, FMV data, improvements made to the end buyer and so forth to make them feel they deserve the home i'm selling. All I want to do is provide a great service to investors and bring them great deals so that I can continue to find deals for them and keep the pipelines full.
What's a good number to call you at Todd? I'd like to call you first to set up a time to maybe meet if needed or to just chat more in depth about real estate so we move forward on some transactions.
Sort of jet lagged right now so i'm going to call it a night but we'll definately have to chat via phone and then meet at a diner or something at some point.
P.S. How'd that marlboro deal go for you?
We ended up meeting at a diner yesterday evening around 7 p.m. to discuss real estate and other things non real estate related. We ate dinner and talked for over an hour.
NOTE: THE FOLLOWING STATEMENT WILL SUM ALL THIS UP WHICH IS WHY I TOOK THE TIME TO ARRANGE THESE EMAILS FOR YOU DGers TO READ.
He simply told me the reason he responded to my post card was because it was HAND WRITTEN and personal.
LESSON LEARNED HERE: Take the time to hand write a message on a post card because it just might pay off, literally!
I hope this will help motivate others to do the same thing. I am looking forward to finding houses for my newly added CASH BUYER so that he can add more properties to his portfolio and in the process I will be able to continue "Building Wealth by the Numbers."
Certified Cash Flow Consultant
Founder & President of Gold Bar Funding Group L.L.C.
Private Real Estate Investor
"Building Wealth by the Numbers"