All You Need to do is FOLLOW THE SYSTEM!

It is inevitable that if you go outside of the system, there will be SERIOUS turbulence in your business. If you were given guidelines to go by, and you decided that you wanted to add a little extra, chances are you shot yourself in the foot. Stay within the guidelines and do not buck the system. This will always hold true. Anyone that thought there business was different or anyone who thought their employees were different, can tell you that a system is nothing to ignore. There was a reason it was put in place and systems generally have a proven track record of success before they are used by many.

So there is a system of investing that is very simple, but somehow people decide to put a little twist on it and they end up with not so good deals. Check out the formula here: "We generally offer between 70 and 85 percent of the market value less repairs. Market value is determined by the average of the properties sold in your subdivision, with the same specs, that have sold in the last 180 days." I am very unsure WHY investors ask whether a property valued at $___ and listed at $____ is a good deal. The system is in the formula.

Unless you have personal goals that prompt you to make decisions that would otherwise be considered careless investing, stick to the formula. You may ask, "When do I offer 70% less repairs?" Offer 70% as a cash purchase. If the seller wants the loan out of their name and they want a cash deal or new financing then 70% less repair is the maximum you would pay for that property. AND NOT 70% of the listing price, 70% of the value determined by a comparative market analysis aka CMA or comps. Between 71 and 85%, offers should be made leaving the existing financing in place. We like to call these "subject to" purchases because they are transactions subject to the existing financing. "Is this an assumable mortgage?" Absolutely not. Assuming a mortgage originated after 1979 is illegal. When you purchase a property "subject to" existing financing you are simply taking over the payments. As the investor, you are taking title to the property but the loan (trade line) stays in the seller's name. The maximum offer "subject to" would be 85% of market value less repairs.

Stay within this system and deals will see very quickly whether to pursue or walk away from a deal.

Blessings to your Real Estate Investment Business,

Milton B. Yates
www.miltonyates.com