Mark Ijlal’s 10 Rules For Writing Killer Offers For Michigan REO’s and Short Sales

"You don’t get what you deserve in life. You get what you negotiate." Jim Camp, Author of Start With No - Negotiating ToolsThat Pros Dont Want You To Know

How to buy Michigan foreclosures fifty cents on the dollar in 2007 from the banks when they don't need nothing more than paint, carpet and cleanup in Michigan? What is the first step? It is the OFFER which constructed properly especially in Short Sales and even in REO's that will make all the difference in the world on what kind of check you will end up once you flipped the house.

My students routinely pick up Michigan foreclosures using short sales AND knowing how to write killer offers for huge discounts in all parts of Michigan. Rajesh Patel, a Quick Start 2007 grad, bought a foreclosure for $75,000 that is worth AS IS $250,000 - no repairs needed; fully furnished in Freeland, Michigan in June 2007. Flipped within 3 weeks. What does he know? What is he saying to get big discounts while most Michigan investors struggle to get a lousy $20,000 discount from banks?

Here are my 10 Rules for Writing Killer Offers for buying Michigan Foreclosures with big discounts:

1. What is the top most number you are willing to pay for this Michigan foreclosure? Do you even know? Do you even know how to calculate that or do you think somehow things are going to work out for you in the end and there will be a check left? You always decide what you are going to pay for a foreclosure before you start doing anything. This is not an EBay auction for an iPhone where you are letting your emotions and ego driving you instead of your head. Got to know you FINAL NUMBER before you even write an offer.

2. Do you know how much money you want to make on this flip? Cindy Crawford once said that she will not get out of the bed for a modeling gig unless she was making $50,000 that day. You number may be lower that Ms. Crawford but you should have a “get out of the bed number.”

For every deal that you intend to do. For every Michigan foreclosure you want to make an offer on. I have a spreadsheet that actually calculates what is the least amount I got to have in anything and everything I do before I even bother looking at or making an offer. If the spreadsheet says “NO” then I walk away. Bigger question is of you don’t know that number then who does?

3. Do you know that this is NOT THE ONLY foreclosure available in Michigan right now in 2007? There is a whole lot more if you know where to go and find them. Which means that you don’t need to have a desperate look painted on your face, your voice does need to shake and you should be perfectly calm and happy and alright with walking away from the foreclosure if the numbers are not swinging your way. Another important thing to know is that most of times in 2007 banks are coming back “afterwards” and saying we tried selling the darn thing and now we are O.K. with your lowball offer. Off course at that point in time you need to lower you number even more.

4. The bank might tell you that they have “other offers.” You need to open your mouth wide open and yawn when they say that.

5. This is a hard thing to sallow for most new real estate investors in Michigan but here it is – if your foreclosure needs rehab than sure you can ask for and get bigger discounts. But if your Michigan foreclosure DOES NOT NEED MAJOR REHAB you can still ask and get big discounts in Michigan no matter what city you live in or intend to buy and sell foreclosures in.

6. Just because somebody asks you to pay a price for a house; it does not morally obligates you to say YES. Learn the word “NO” – it is the best word in English language. If you have problem saying “NO” then stand in front of a tall mirror and practice it. After a while you will get it right. I am really good at saying NO. Most people choose to sit in the muck and buy bad deals by forgetting to say the word NO.

7. Deduct $5,000 from the FINAL number that you really want to buy the Michigan foreclosure at and start your offer from there. At least now you have $5,000 to fool around with and go up.

8. Ask for Seller Concessions – at least 3% on every Michigan foreclosure you make an offer on. Banks are pretty cool about giving out seller concessions on REO’s; a Short sale requires a different treatment though.

9. Pretty much every self help book out there talks about developing a “Prosperity Mindset” – if you ever read one or set thorough a self help seminar then you know what I mean. It sounds really good to ears but nobody practices it real life. Prosperity Mindset to me in flipping foreclosures is simply knowing beyond the shadow of doubt in my head that there is always “more” – more deals, more houses, more buyers, more money – where this is coming from.

So even the bank / sellers says NO or wont budge to a price that makes sense to me – Oh Well! There is always more. I am not going to fall to the floor, curl up in a fetal position and cry hysterically just because they are not taking my number. Who cares? There is always more.

10. One is the worse number – always have more than one offer in the pipeline – REO’s or Short Sale – the same way a bank comes back and says “we have another offer” you should also tell yourself in private “ I am looking at several Michigan foreclosures – THIS IS ONLY ONE OF THEM. Screw them if they don’t take my offer at my number and my terms.”

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