House #13 – Megan’s Law

images_1331613696We now have over 10 offers on House #13.  After isolating our 3 favorite offers we sent them all the same counter and the two responded quite interested.  We did some additional negotiation and one couple was going to re-submit their offer today.  The agent called and said the couple was going to withdraw their offer, they looked up the address on Megan’s Law web site and there is a convicted sex offender on the same street.

I’ve never really looked into this before, but I typed in a couple addresses and it seems like there is way more out there then I would have ever guessed.  Even in the neighborhood I live in there is quite a few of them.  The site is well done, you can type in your address and it has pictures and stars where the people live.

Does this change our buying strategy?  I think from now on I will look up any address before we buy, but don’t know if it will stop us from buying a property in a certain neigbhorhood.  It is sad to me that there are so many in each neigbhorhood.

Just another thing for Real Estate Investors to watch out for!

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7 Responses to “ House #13 – Megan’s Law ”

  1. Alex says:

    What type of contingencies are you putting in your contract when putting offers on 10 houses? I would think that you are putting in something, since there is the possibility that you would get more then two or three offers accepted. Are you using an inspection clause?

    I recently started making offers and Im understanding that it is a numbers game. I was thinking in order to get some counter offers and an offer accepted, I would have to make at least 10-12 offers at a time. Seem right?

    Newbie Investor

  2. Steve says:

    Alex, I think you have misunderstood this post. Our house has 10 different buyers who have made an offer on it. So we have not made 10 offers at once.

    To answer your question, all the time we have 5-6 property offers pending, we probably make an average of 3+ offers a day. With REO properties, you will always get a counter, if many get accepted, you can just simply refuse to agree to the counter, making the original offer null and void. But with the prices we offer to pay the banks, we would be ecstatic if we got 10 accepted contracts. Since we don’t have the cash to do 10 at once we’d probably wholesale 50% of them.

    There is no set formula for how many offers you need to make to get an accepted contract. It depends on your market and what % of ARV you are typically offering. This winter, the market was slow and we had a great relation with agents, we would get 75% of our offers accepted. Now we are getting less then 5% (over 100 offers with 2 accepted contracts), we are close on a couple more, but not accepted contracts yet.

  3. Alex says:

    Steve,

    Thanks for the response. Im trying to buy the properties at 65%-70% LTV minus repairs. This brings me to my next question if you dont mind. Are you only submitting offers on properties that have a lot of things wrong with them? Things like kitchen remodel, some demo, etc.? I ask because not every property I have visited needs much rehab. Most just need paint, landscaping, and carpet. I don’t feel right making low offers on properties that just need this type of work done to them. However, I don’t mind making low offers when the properties need kitchens, garage doors, vanity’s, mold remediation, etc.

    Thanks

  4. Steve says:

    We will buy a property in any condition, from burnt down to simply new carpet. That being said we have had the most luck with properties that need a new kitchen, have issues with the bathroom. If you can buy something at 65% less repairs, you will be in good shape, but make sure you do your comps well!

    Most agents don’t mind low ball offers, they can always ignore them until the bank is ready to dump the property… Be persistent until you find something that works… we made over 100 offers before we got out first one!

    Just be careful to make each offer look genuine, this post might help you.
    http://buildbankroll.com/2009/01/dont-use-the-bulk-offer-strategy/

  5. Alex says:

    Thanks for link Steve. Im not going to stop until I have one under contract!

    Alex

  6. Steve says:

    Good luck Alex!!! You make money from buying right, if you get a good deal locked up, you can do just about anything with it profitably.

  7. Ben says:

    Hey Steve,

    I tend to agree that it’s not critical but something to pay attention to. I used to own a house (I sold in 2006) and someone mentioned how to check for sex offenders near where you live — so I did. I too had a few very close to me — unnerving but what was more surprising was just how many there were.

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