Weekly Video Blog #127 - New Awesome Addition to Blog!

Hi, this is Dean Graziosi and welcome to this week's blog. Hey. I was in our conference room here doing a training with the team, so I figured, hey, why not just shoot the video blog here? First of all, I just got an update from Megan in my office. We're going to be doing and writing these short market updates three days a week that you can come back here to DG.com and check them out. They look really cool. I just got the three right now. My team's putting them together. My information, our external information that we're gathering, it's really cool stuff. So look for those somewhere on this page. I don't know where they're going to be. You'll see market updates. Check those out. Okay, so here's what I was thinking on sharing today. The states, first of all, the states with the private money, we just sent out an email, I think last night or today, if you're one of those states, you'll see we're just testing it in three or four states. If that goes great, we're going to send it to everybody. So be patient. We're getting there. Okay? So everybody will always ask me, how do I know what to pay for a piece of property. Here's one thing. Matt and I literally just went over Matt Larson, one of our top students. I bounce a lot off him because he's doing so many deals. He's doing 15, 20 deals a month. The exact deals I want everybody here to do. Not the million dollar deals. Not skyscrapers, not multi units. He's buying single family houses that he could buy at such a discount that he could either wholesale them and make 5, 10, 15 grand, buy, fix and flip them and make maybe 20 or 30 grand. Or buy, go to the bank, pull all his money back and rent for cash flow and someday cash out, right? So he's doing this. So I like to bounce everything off him. So when you're thinking of a piece of property and you want to know what you should be paying for it, remember this, there's two levels in today's world, okay? There's retail, right? Can you see this? Okay, Mike, there's the retail or after repair value, kind of the same, right? And you want the comp on that. So. So you want the comp on what that property is selling for, not what people are asking. Don't ever have anybody go, well, there's three in that neighborhood. People are asking 100 grand each for. No, we want to know the three that sold for 87,500, right? So we know that with comps, but what we want is we want the comp, the comparable on retail and arv. What will this property realistically sell for after it's repaired? So let's just use round numbers. You find out that this house you're looking at, this three bedroom bedroom, two bath brick in a certain area of town are selling for 100 grand once they're done in retail or after repair value. Now here's a really good thing. If you want to know real quick on where you should be looking. If you're going to wholesale, if you're going to buy for a profit, if you're going to buy, fix and flip or you're going to buy, fix and hold, then there's a whole other level that this market created and that's the foreclosures. The foreclosures are where the investors are buying or maybe somebody buying for their own personal use. But they understand there's going to be repairs, right? When someone thinks of a foreclosure, they know or they think this house is in trouble, it needs work, it's as is, it's vacant. Maybe somebody ripped the plumbing out of it, whatever it is. So the foreclosures think find their own level, right? So let's just use round numbers here and say foreclosures are selling in the neighborhood of $65,000. Okay? Now again, you don't know what's wrong with these houses, but some of them need a lot of work, some of them need paint and carpet, right? But there's going to be this level. And when you're moving quick, if you did three comps here, can you see that mike with the camera? Three comps here and three comps here, you would know what the spread is between the two. Because this is where the average person, new home buyers are buying. This is where wholesalers, where investors and smart people that handyman specials, they're buying in here. So what you want to do when you're pricing out, what you want to pay or if you want to get such a deal that you're going to pass this off to a wholesaler or another, I mean, you're going to be the wholesaler, you're going to pass it off to an investor. And this is the number that you want to look at. Because if you're passing it off to an investor, he wants to make this spread because he has to fix it. He has closing cost and he has a profit, right? So if you're wholesaling and you find a great deal and you find foreclosures at 65 and you think, hey, retail's going for 100 for this three bedroom, two bath brick house. And you find it for 75k, is it a good deal? Not really. Because investors are going to look to, investors are going to look here. So where do you want to buy? You want to buy down here, this $65,000 house, if you're wholesaling it, you want to be able to maybe offer it at 60. So you're beating the competition as a wholesaler. And if you want to make five grand real quick, what do you have to pay for this house? Or lock it up, as you have to lock it up at 55k, is this possible? Absolutely. My students all over the country are doing it every day. Sometimes it's not about what you can get it for, it's about knowing what to pay for it. Because here's the thing. If you're frustrated, if you locked up a deal and you already have your buyers and you sent this deal out at 75k and nobody's biting, you know what that means? It doesn't mean your list is bad. It means you're asking too much. Because when they run, investors are smart, even the new ones, when they run the comps and they realize, I could buy a foreclosure at 65 and he's asking 75, this isn't the deal for me. So this is a really quick way. I'll teach you some more next week. This is a really quick way to get a snapshot. Three comps of retail, three comps of where the foreclosures are at minus. So you can be a little less than the competition or what's on the mls, put your profit in there and that's what you want to wholesale it for. And now if you're buying this for yourself, why wouldn't you still want to buy it at 55? I know that sounds like, hey, of course you want to buy cheap. But if you follow our method, follow the 25 to 1 ratio, the make sure you're looking at properties when you're going through the MLS that are as is vacant. They had a price reduction when you look at those and then you make low offers, that's how you get deals. This is a good snapshot on figuring out what to pay. I'm Dean Graziosi. Thanks for watching. I'll see you next week.