How to Make $49,000 in 4 Weeks Without Using Banks or Credit

[Guest24480]

Great post, very informative.

So tell me If I'm understanding this correctly..and I have a few questions

Someone wants to sell their home. Instead of doing it traditionally and paying fees and such (and waiting), they give you an option on the property. You then go out and market it and do a Highest Bidder Sale, and because of the option you are able to sell it to the highest bidder. What if you somehow fail at this and no one bids (not that this would happen, just curious), is there a certain time that you need to close it (a week, a month?) before it results in a breaking of the option contract?

My understanding is that you specify an amount that you will sell it for by a certain time (agreed upon in the contract), and then if you sell it for more then the extra money goes into your pocket? What happens if you sell it for less? Not too familiar with real estate, so thanks for the clarification.

Also, would this be realistic for a 19-year-old with no real estate experience to do in a month-two months time?

 

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[MoneyDoc]

Great post, very informative.

So tell me If I'm understanding this correctly..and I have a few questions

Someone wants to sell their home. Instead of doing it traditionally and paying fees and such (and waiting), they give you an option on the property. You then go out and market it and do a Highest Bidder Sale, and because of the option you are able to sell it to the highest bidder. What if you somehow fail at this and no one bids (not that this would happen, just curious), is there a certain time that you need to close it (a week, a month?) before it results in a breaking of the option contract?

My understanding is that you specify an amount that you will sell it for by a certain time (agreed upon in the contract), and then if you sell it for more then the extra money goes into your pocket? What happens if you sell it for less? Not too familiar with real estate, so thanks for the clarification.

Also, would this be realistic for a 19-year-old with no real estate experience to do in a month-two months time?

The beauty of this method is there is NO risk.

An option does not make you legally entitled to buy the house. It gives you the OPTION of buying the house, but you are not obligated.




Sent from my iPhone using Tapatalk

 

[randomnumber314]

I've offered to do this for 10 people in the last two weeks, no one has said yes. That being said, I'm going to keep trying. I wonder if reading the obituaries will work.

 

[CashFlowDepot]

The Option has a strike price - or the lowest price the seller will take to sell the house. It is much like a reserve. When you advertise the Highest Bidder Sale you advertise that the sale will only happen with approval of the seller, trustee, or who ever is involved.

It is rare that the sale will not produce a buyer for a price that exceeds the strike price. But if that happens, there are two things you can do

1. Renegotiate with the seller to reduce their price. If the seller was present during your 2 day open house ( which I recommend) then they say the effort you put in to getting people at the house and getting the price up. They know that this may be their best chance for getting their house sold quickly so they will usually reduce their price so they can sell and you can still make a profit too.

2. If #1 does not work, you can terminate your option to buy and notify the Highest Bidder that their price did not meet the sellers approval. They can either raise their price or the deal is off.

Either way, it is risk free for you! The worst thing that can happen is you spent time learning a new skill. You also built a list of buyers so you can go find them a different house.

 

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[CashFlowDepot]

and YES a 19 year old can do this.

Both of my children did their first deal when they were 18!

 

[Guest24480]

and YES a 19 year old can do this.

Both of my children did their first deal when they were 18!

I'm going to look into doing this then. Thanks for your help!

 

[CashFlowDepot]

Here's a spin on the Highest Bidder Sale method which I have written about before - it's called a MAGIC BUS

You find an older landlord with multiple properties he wants to get rid of. Could be 10, 20, 200 properties.
They will probably need work. Most will be vacant.

Instead of doing a Highest Bidder Sale for 1 property - you do a Magic Bus to sell 20-40 houses in 2 days.

My last Magic bus I sold 40 properties in 2 days making $190,000.

I'm planning my first Magic Bus in PANAMA for January. It will be fun.

Here are more details
http://www.cashflowdepot.com/blog/a...eid/446/crazy-option-deals-the-magic-bus.aspx

 

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[randomnumber314]

Still haven't had anyone say yes to my offer. I must have a bad pitch

Any advice for finding people divorced/death/illness/etc? It's hard to get in before an agent...and you mentioned that won't work.

 

[CashFlowDepot]

Like dating, there is definitely an ART to the process.

You can't just say, hey give me a contract on your house so we can do a Highest Bidder Sale. That will not work.

 

[randomnumber314]

Like dating, there is definitely an ART to the process.

You can't just say, hey give me a contract on your house so we can do a Highest Bidder Sale. That will not work.

Understood. I'm going to keep refining my pitch. Someone will say yes.

 

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[Bigguns50]

@CashFlowDepot Great thread ! Thank you for sharing your knowledge.

Question: Will this method work in any area ?

I live near Detroit, MI and the housing market here is terrible.

I see a lot of ads on Craigslist and signs posted at busy intersections advertising they buy houses for cash. Lately, I've seen ads looking for people to find houses for sale for companies and earning commission.

Could the competition for buying houses be too saturated here ?

BTW, I worked for a hard money lender so I know a little about real estate.

 

[nskitts]

So, you don't have to be a broker because you take title of the house for a limited time, correct? If the high bid is higher than your offer to the seller, then the option exercises, you buy the house and then sell it to the high bidder, correct? How long does your option last? Does it have a time limit or is the time limit defined by the time frame of the open houses and bidding?

I am still concerned with two things. f1, this still seems like I am brokering a deal and thus operating like a broker and 2, is it legal to carry on an auction and not be a licensed auctioneer?

 

[randomnumber314]

So, you don't have to be a broker because you take title of the house for a limited time, correct? If the high bid is higher than your offer to the seller, then the option exercises, you buy the house and then sell it to the high bidder, correct? How long does your option last? Does it have a time limit or is the time limit defined by the time frame of the open houses and bidding?

I am still concerned with two things. f1, this still seems like I am brokering a deal and thus operating like a broker and 2, is it legal to carry on an auction and not be a licensed auctioneer?

These questions can be answered through a google search. No one is going to hold your hand.

 

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[100k]

Came across this video today.... thought it might be useful to someone that's reading this thread.

 

[justbreathe]

Thank you for this wealth of information CashFlowDepot!

 

[CashFlowDepot]

@CashFlowDepot Great thread ! Thank you for sharing your knowledge.

Question: Will this method work in any area ?

I live near Detroit, MI and the housing market here is terrible.

I see a lot of ads on Craigslist and signs posted at busy intersections advertising they buy houses for cash. Lately, I've seen ads looking for people to find houses for sale for companies and earning commission.

Could the competition for buying houses be too saturated here ?

BTW, I worked for a hard money lender so I know a little about real estate.

 

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[CashFlowDepot]

Yes it will work anywhere

@CashFlowDepot Great thread ! Thank you for sharing your knowledge.

Question: Will this method work in any area ?

I live near Detroit, MI and the housing market here is terrible.

I see a lot of ads on Craigslist and signs posted at busy intersections advertising they buy houses for cash. Lately, I've seen ads looking for people to find houses for sale for companies and earning commission.

Could the competition for buying houses be too saturated here ?

BTW, I worked for a hard money lender so I know a little about real estate.

Yes it will work anywhere, including Michigan.

Do not work with the people who want you to find deals for them - then they make all the profit instead of you.

You should have your hard money lender at all the Highest Bidder Sales to pre-qualify buyers on the spot. It will help you sell the fixer houses faster if financing is readily available. And it will help the hard money lender get more business. win - win!

 

[CashFlowDepot]

So, you don't have to be a broker because you take title of the house for a limited time, correct? If the high bid is higher than your offer to the seller, then the option exercises, you buy the house and then sell it to the high bidder, correct? How long does your option last? Does it have a time limit or is the time limit defined by the time frame of the open houses and bidding?

I am still concerned with two things. f1, this still seems like I am brokering a deal and thus operating like a broker and 2, is it legal to carry on an auction and not be a licensed auctioneer?

You decide how long the option lasts. It is written in to your agreement. Usually I allow 30 days for the initial option with a 30 day extension for closing after the Highest Bidder Sale.

1. You are not acting like a broker. You have an equitable interest in the property because you control it with an Option Contract

2. You are NOT doing an outcry auction like auctioneers do. A Highest Bidder Sale is completely different.

 

[nskitts]

Thank you for your answers and for starting this thread. I am reading "Confessions of a Real Estate Entrepreneur" James Randel and your explantions about options is spot on.

 

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[randomnumber314]

Good news, I have a house I can sell!

Now to do my homework and re read everything @CashFlowDepot has ever written.

 

[CashFlowDepot]

That is great news Random Number 314.

If you just follow the information I have provided (and you have a good option price), you will have great success!

YOU CAN DO THIS!!!!!

 

[ShadowX]

Is there a certain age limit for doing this? Do you need to have business bank account + good credit history etc?

 

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[randomnumber314]

Is there a certain age limit for doing this? Do you need to have business bank account + good credit history etc?

Ask better questions.

 

[CashFlowDepot]

ShadowX

On the young side...You need to be old enough to legally sign a contract or have someone else who will sign for you. I think that is 18 years old in most places. My kids both did their first deal the week they turned 18 (with a little help from Mom)

On the older side... there is absolutely no limit.

You do not need good credit.

You can set up the bank account after you make money. You do not need it before doing your first deal.

 

[Cruiser]

great thread, learning a lot////

 

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[Cruiser]

How hard is for you to convince the owner to sell you the house well below market price? What is your pitch? Do you promess the owner that he will get the money in a month?
I want to start doing this, couldn't find a property though.

 

[JayJustCruising]

*Bump.
It might be afew years old, but have anyone tried this method and succeeded?

 

[CashFlowDepot]

YES, the Highest Bidder Sale strategy is being used by people all over the world.

Listen to a free audio to learn how Brian made $148,000 NET profit on a highest bidder sale

http://www.cashflowdepot.com/podcasts.aspx

About 3 weeks ago, he did another one and made $50,000.

Yesterday I got an email from a student in London who did a Highest Bidder Sale and made $17,000 in a week.

Also listen the audio by Patti to learn how she is doing 2-3 Highest Bidder Sale each month with an average profit of $25,000 per sale.

 

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[CashFlowDepot]

This Easter weekend reminded me of a Highest Bidder Sale I did a few years ago. I accidentally scheduled the open house for Easter Weekend without checking for holidays.

I had an option to buy the house subject to the mortgage with a contingency that I had to have a successful Highest Bidder Sale.

The owners had 4 big dogs in the house and it smelled terrible. So I got the carpet cleaned two days before my open house hoping it would help with the smell.

But, when I went to check on the house the day before the open house I noticed the smell was WORSE, not better. So, I placed an emergency call to my regular carpet installation company. They came out first thing in the morning and got all the carpet and pad replaced before the open house started at 11am.

This house was being sold with seller financing to the person with the most down payment. The asking price was $165,000.

Even though it was Easter weekend I had a steady flow of potential buyers and a lot of bids.

The house was sold for $50,000 down. I got $350 a month cash flow until it was paid off 2 years later.. in cash

 

[thinkandgrowrich]

Damn great post, thanks for all the info.

We're actually selling our house right now so I might actually go ahead and try this, I'll let you guys know how it goes lol. Got any other tips lol