How We Buy Properties At 30-80% Below Fair Market Value – And Pass Along Great Deals to Our Clients!

I just wanted to give you an idea of our buying and selling process, and what it actually takes to get to the point where our clients receive an outstanding buying opportunity in their inbox. 

First off, to find great deals, we have multiple fishing lines that provide a consistent stream of potential deals to look at.  How many properties do we have to look at and analyze to find that one golden nugget?  75-100! 

That’s right.  We end up acquiring only 1-2% of all the properties we look at!  That’s how discriminating we are when it comes to acquisitions.

Our properties come from multiple sources:       

#1) From properties we obtain directly from our sources of asset managers and liquidators (it’s taken years to develop these contacts and relationships).

#2) From REO agents we work with and have strong relationships with, who will notify us of opportunities before they hit the market and/or will hold off other offers since we have a proven track record of performance.

#3) From our extensive “Network”, which includes property managers, private lenders, investors, hard money lenders, and various other types of highly motivated sellers.  This has been one of our primary sources of deals over the years!

#4) From our direct mail campaigns to out-of-town landlords, abandoned properties, and Expired Listings.

#5) From the thousands of opportunities currently available in the regular Multiple Listing Service (MLS).  We have a full-time designated person who primarily works this source – scouring, analyzing, and securing only the best deals on the market.

#6) From ads that we post in multiple mediums.

As I mentioned, we have to look at 75-100 properties to find that one property to buy.  Once we find a buying opportunity, we then put it through an even MORE rigorous analysis!

Factors we look at include:

·         Stability and perception of the neighborhood

·         Churn Rate – this is a % that measures how fast homes are turning in a given area (very important if you’re flipping)

·         Schools

·         Proximity to shopping, schools, parks and any other amenities

·         Forced appreciation possibilities (i.e. adding a bedroom, bathroom, or square footage)

·         Is it easily rentable and/or saleable?

·         Overall “feel” of the area

The above are all very important factors, but the two most CRITICAL FACTORS (from an investor standpoint) are:

ð     After-Repair Value (ARV)

ð     Repair Estimate 

This is where the bulk of our time and analysis goes into. 

Who comes up with these 2 critical numbers? A whole team that includes our Senior Acquisitions Specialist with over 50 rehab projects under his belt; a general contractor with over 30 years of “in the trenches” experience; a licensed appraiser who’s done valuations on over 1,200 properties in his career; and yours truly – with personal involvement in over 100 transactions so far.       

That’s why, when we come up with an After-Repair Value and Repair Estimate, those are numbers we’re pretty darn sure of.  Those are numbers you can bank on!

And it’s why we don’t negotiate on price. 

You see, when we come up with a Purchase Price for our clients, we absolutely know both sides will win.  Our clients definitely win, as most of our fix & flip deals have a built-in 20% net profit margin (i.e. on a property that’s sold at $100,000, the net profit would typically be $20,000 or more!)  

We win as well and generate profits for the company by slightly marking up each property. 

Most of our properties sell very quickly – usually within 24-48 hours.  What happens to the rare ones that don’t?  We gladly keep them ourselves to fix & flip or hold as long-term rentals.  Every single property we make available for sale is one we would gladly keep for ourselves!

And by the way, when I say we don’t negotiate on price, I mean both ways.  Not only is it rare for us to accept a lower price, we also rarely will accept a higher offer!

Huh?

Why is that?  Simple.  We’re so confident in our numbers, we know with almost 100% certainty that you’ll profit handsomely at the purchase price we establish.  In other words, we never want to risk your position and compromise your chances of winning – even if we could make more money by accepting a higher price!

We’re looking for long-term relationships and clients who buy from us over and over again, not one-time deals.  And the only way we can insure that happens is to make sure our clients consistently win!  

So that’s our process in a nutshell.  If you’re ever interested in any of our opportunities (which are usually distributed via email), please contact your assigned agent or our office as soon as possible (remember, most of our deals go in 24-48 hours).

My team and I look forward to working with you and developing a great, long-term, and prosperous relationship!

Happy Investing,

Bill Guting

THE GUTING GROUP

“Providing Cash-Flow & Wealth-Building Opportunities in Real Estate”

Phone: (916) 393-5400

www.TheGutingGroup.com