About 2 months ago, I hooked up with an investor that got a number of leads for inner city properties for sale that he was just throwing away. I offered to try to work those deals as a wholesaler, and split the assignment fees with him.
Well, I have put 3 properties under contract at this point (all within the last 2 weeks) one of which did not work out (mortgages that were not disclosed) but the second one I just received a $5000 check for today. (I collect the check up front, then they have 30 days to close on the contract before it reverts back to me). I expect to have the second check within the next week or so as the same investor that purchased the first one will be buying this one. (This investor pays for an ARV appraisal prior to writing me my check, so we are waiting for that to come back.)
I have about 8 or 10 other buyers waiting for properties at this point, but at this point I am giving this guy first shot.
I am excited and looking forward to averaging one or two of these a month!
I am not trying to gloat, I just wanted to share some positive experiences.
DING! DING! DING!
Nice job. Was it easy to line up buyers for these deals? Did you have contacts from the mortgage busines etc?
Thanks,
Jeff
That’s great to hear!! I’m hoping for something like that to happen for me as well.
When you put those under contract, what kind of information did you gather before you assigned it to your investor? And it what way do you present the information to your investor?
Is it in a neat little binder that contains all the information that you gathered or do you just e-mail your investor the information?
I’m trying to figure out once I have something under contract, what type of information do I need to gather as part of my due-diligence to give to the investor so that he can make an informed decision whether to purchase my contract or not.
What type of leads were they that he would just throw them away?
The deals I have the chance to work on, are city deals where buying rehabbing and reselling is not an effective strategy, but where buy, rehab, cash out, and rent section 8 or rent to own is a better approach. The investor that was not working these deals mainly looks for suburban deals to buy, rehab, and resell with a certain minimum profit.
Most of the buyers that have expressed interest, I met through local real estate investing clubs(yes while I was looking for mortgage customers) and these clients like the buy and hold (or rent to own) city deals, so this seemed a natural match.
The current one I am working on pans out like this…City property with 5BR and an approx ARV of 50-55k (realtor listing 2 doors down for 53k). Property needs between 10 and 12k in work. I have it under contract for $8,000 + 5k assignment totalling around 23-25k or 40-50% LTV of after repair costs.
Once the investor closes, he can rehab, refi his cash out (at this point I remove myself from the mortgage end so as to give no appearance of impropriety), and then either rent section 8, (5BR= $850/month) or rent to own.
With deals like that, everyone makes some money and is happy!
I certainly hope it continues to work out like this!
You put a $50k property under contract for $8k?! That’s incredible. Congratulations!
How were the homeowners when you spoke with them? Willing ot talk? Receptive? Steadfast?
Thanks.
That particular deal (8k) the guy had just purchased the property last year himself for 8k. He went in and started a lot of work himself (‘top quality’ drywall work and the like), but the one good thing he did was to put a new gas furnace in with all new duct work. He then tried to hire out some work (when he realized he could not do what needed done himself) and got burnt by a series of contractors. At this point, he decided to cut his losses and move on…that’s where I come in! He mentioned 9k on his first call to me, so I offered him 8k and viola!
Since my last posting, I have assigned that deal out as well one more, and have investors asking for more. I am currently working on 3 others, and wondering where the time is going to come from to do mortgages.
I still have a waiting list for properties not in the city(with at least a 20k investor back end profit on a flip), but have not found any of them yet.
As far as what I provide the investor, at this point I am giving a comp search from an appraiser, a general repair estimate(usually, they look at the property and work their own numbers as well), a title search, and bang, we are off to the races!
Congratulations PA Broker Dave
Keep us posted on your success.
By the way, did you invest in any wholesaling/assigning courses or did you strickly get your knowledge from your investor friend?
Sounds great. Where do the investors who give you these deals they don’t want get their leads from? Have you considered doing whatever they are doing to get the leads directly?
All my ‘knowledge’ was from people I have been exposed to over the last year or so, and I did not have any formal training. I actually just happened into this situation with the investor that did not want city deals. This particular investor buys many billboards and TV adds to generate his leads. (Spending over 70k per year)
I am working on some basic grass roots ideas right now to begin to hopefully generate my own leads so I don’t have to split assignment fees.
Any time I am inspecting a potential property, I spend about 1/2 hour or so introducing myself to all the people hanging out on the street and hand out my cards offering a $250 finders fee if they find me a deal. I currently have 2 properties I am looking at that were generated that way. While I certainly would not mind more of those, I am somewhat content working these incoming leads for a split. I can easily see 2 or more of these a month as things move forward (which would be a very nice supplementary income).
I will keep y’all posted on how things are going.
WOW, Dave!
sounds like you happened upon a great scenario. I wish I could find any type of property here in CA for less than $250K with some flip potential.
keep up the good work.
Wow, Dave. I’m in the Philadelphia area and I need to find a good place for leads. Where can I go to get good leads?
What is a good book that describes the wholesaling process? I have been reading the board for about 2 months now, and the entire bird dog and wholesailing process is confusing to me.
Way to go Dave. I know how it feels to get those checks. It changes your life. I did a wholesale deal a few months ago and took home a check for $34,900. It was an awesome day. My problem is that I have a hard time riding on that momentum. I get a bit lazy. I need to step it up another level and just keep the deals coming and going like a revolving door. I like your approach to hang in the neighborhoods and hand out cards. Way to go.