I got another call on one of my bandit signs today. The lady has an older home in a bad area that needs lots of repairs (My Favorite)
She owns it free and clear and is tired of the place cuz everything is in such bad condition including the roof. House was build in the early 40’s and actually moved to its present location where Maria has been living since 1970 with her kids and now grand kids.
I asked Maria if she had a price in mind, she tells me she’s thinking of $40,000
I know the area and I know I can flip this house for a lot more so I immediately set an appointment to get the contract signed.
My favorite buyer Matt soon thereafter emails me & asks if I got anything. I had flipped a house to him in the same neighborhood 2 years ago and I made 5k and Matt flipped it and made 17K So what did I do on this one?, I attached a ridiculous finders fee on the top. I told him the price on this house is $55,000 It’s interesting cuz Zillow says it’s worth 116K
Within 5 minutes he emails me back to say he wants it.
Now I know $15K finders fee shud be enough to make anybody smile, but what if when I go over there tomorrow and my go for the throat training kicks in?
You know Maria, This house needs a roof, a kitchen, it shud probably be tore down, I can do $30,000 only because I like the you & the area, my Granma lived down the street and I can still taste those servings of delicious coffee cake.
Anyways, can I live with myself after I rip out the heart and chop off the legs of this nice old Mexican lady just for more profit cuz I want a new airplane? I’m sure I can justify it in my warped greedy mind.
What the heck would you do?
Rando
I would do it.
Not that anyone cares what I think.
(Can’t wait until my bandit signs get here, so I can stop being annoying and start making meaningful posts)
Maybe my post implies that it was quick and easy. But actually I paid a girl $2 each to put them up, I wud sometimes drive by one of my signs and it wud be upside down cuz she only put 1 nail in it, and I got a few calls that they were on the ground, and I seen one that was only up about 3’ She had her kids with and helping her.
And I had her put them up about 4 months ago. So I went 3-4 months with no calls and then got lucky.
But it looks like she did something right, made $8,000 last week, and even this one might pan out.
Let’s make some money…
Rando
I’ll put mine up myself.
I’ve already scouted locations and will be expanding into Kissimmee, Lakeland, and Tampa.
I just wanted to illustrate how we can come across these difficult decisions.
99% of the time sellers want more than we can pay and occasionally something like this comes up.
For all I know the house is a tear down, Maria said the house was moved there 45 years ago, I suspect there will be foundation issues & a multitude of problems.
I will check out the house today.
Rando
I have a feeling that when I get my first leads, they are not going to go as planned.
I’m relying heavily on bird dogs.
That, and those bandit signs that should be getting here shortly.
I also just registered we - buy - your - house.com
Just read a book called “How to Become a Wholesale Millionaire,” by Mark Lane.
Apparently, about 80% of deals should be coming from the MLS.
And I should be making 250 offers if I expect to get 10 deals.
I need to get on the phone with a title company and attorney tomorrow to make sure I understand the process exactly.
And am I really supposed to physically inspect every one of these homes? That sounds impossible.
In which case, I still don’t know how to accurately measure repairs.
How do large wholesalers handle this problem?
I have explained this several times in detail to you, You must be preoccupied or have ADD or you don’t want to listen.
I refuse to play your game anymore. Go back and read our answers, re read the books I sent you.
Watch videos on You Tube. Stop asking the same questions over and over.
I just reread every post. Nowhere does it say how to accurately measure repair cost without going to see the house.
I do not believe it’s humanly possible, unless there are about 100 pictures.
There’s just no way to get every specific. I wouldn’t know if the plumbing needed to be replaced, if there was mold, etc.
Even if the owner or realtor told me every specific, I would still want to see it myself.
Except that that doesn’t make sense because if I’m doing this in different cities, there is no way that I can see every single house.
And if I’m making 250 offers per week, like I’ve been instructed to do by the book, there is no way that I can see all of these houses.
How, then, do I get an accurate assessment of repair cost. I went back and looked at every single post and have not found the answer to the question.
Do I just ask the realtor what’s wrong with it? When I called my buyers for practice, they seemed to want to know specifics.
Do I just estimate based on square footage and assume the place needs a new roof? Should I assume that it needs new bathrooms and a new kitchen also? With new cabinets?
However it’s done, I’d still be trying to sell a property that I’ve never even seen.
Also, I’m looking through the MLS (realtor.com), and can I wholesale condos? What about vacant land?
Okay I’m just going to offer 60% of list price.
Ready, Fire, Aim.
We’ll see how it goes.
Ready, Fire, Aim.
Just as an FYI, you should aim BEFORE you fire. Good Luck! :beer
I tried that, but it resulted in 1,000,000 questions and no action.
I wish I had a better way to estimate repair value. It is not humanly possible to look at all of these houses, so I don’t know how it’s done.
Especially wholesalers who work in multiple cities at once. Obviously, they can’t be looking at every house they make an offer on. That is impossible. I am still wondering how it’s done.
I also am hoping that my escape clause is airtight. The last thing I need is to be stuck paying $40,000 for a house when I don’t have $40,000.
"AS IS” and INSPECTIONS
Property is subject to physical inspection by buyer and approval of buyers principal partners within 21 days. This contract is contingent upon the inspection and approval of subject property prior to transfer of title. The Seller agrees to provide access to the subject property to the Buyer’s representatives, with power and utilities on, prior to transfer of title. If accepted, property will convey in “AS IS” condition. If not accepted, Buyer will notify Seller within 21 days from the date of this contract.
I hope that would hold weight in a courtroom.
The first Guru that I ever learned from was Ed Beckley, I actually emailed him a while back and he responded that he was now doing some internet marketing thing and no longer doing Real Estate.
Anyways, he used to use a clause that said, subject to termite inspection. He says if at some point he decided not to buy the property, he wud use that escape clause. Then he says if the seller says, wait a minute, we had a termite inspection and there were no termites. He wud smile and say, well, I happen to like termites.
I’m gonna say this one more time. You don’t have to inspect the frikin houses. Just get them on contract for the lowest price you can.
Then market the house to your buyers and let them inspect them. How frikin difficult is that for you to understand???
If you don’t have any buyers interested in buying it in 10-21 days then walk away.
If I cant sell my house in the allotted inspection period that gives me an opportunity to get an even lower price.
If this concept is difficult for you to comprehend it’s time to go back and regroup.
As for estimating repairs, that’s something the buyers can do. Well Mr. Redstar, what is the estimated repair costs? Well Mr. Buyer, this house is ready to fall down, the roof is bad, its sinking into the swamp, there is a tree growing up thru the floor, there’s no windows, and a family of wombats have taken up residence, you better go check it out for yourself.
Now get out there and screw things up, that’s how we learn.
Rando
Okay so today I got about 300 listings from a realtor. Are you saying that I don’t have to go see any of these houses? I couldn’t imagine wasting the time of a realtor to ask her to look at 300 houses with me.
Should I just take the list price (or use comps to get ARV) and then offer a certain percentage of that? If so, what percentage?
Some of the listings say “in need of repairs,” and some of them don’t. Obviously, I can’t know what they are or how much they would cost without seeing them.
If a house on the list has an ARV of $80,000, what should my first offer be?
$80,000 *.7 = $56,000 - $5,000 = $51,000. So I need to take the repairs out of $51,000, which I have no idea what that would be.
Are you honestly tell me to do something like that “I like termites,” thing? That was a joke, right?
Still have Craigslist ads up… not a single response.
And if I don’t get any responses from the bandit signs if I put 50 up… then I don’t know what to tell you. There’s no way the people looking at my signs would know if I had been doing this for years or just started last week.
Here’s a list of 40 properties. What would you do with this list? Would you visit any of the properties? Would you just made estimated offers without seeing them?
Gold River was telling me to go see hundreds of properties. I don’t think I could even find a realtor who is willing to do that.
How do I know the roof is bad if I haven’t even seen the house? Same with a tree growing up through the floor.
I want my buyers to take me seriously.
I think what I need to do is just drive by the houses. I can tell a bad roof from looking at it. But this only works for vacant houses.
Am I really supposed to ask a realtor to see 300 houses with me? Or I’m supposed to just make blind offers without knowing what repairs are needed.
Never mind, I just got my answer. I talked to my realtor on the phone… she said that I should make offers and that these offers have a contingency that I can back out upon inspection. Therefore, I only need to go look at houses that have an accepted offer on them.
I’m feeling optimistic now. Once I get a few practice runs out of the way, I’m just going to start offering 50% of ARV and see what happens.
Why do you want to target MLS properties? Why do you think I was joking about the termites? Why do you insist on inspecting these house? Do fish feel pain and have feelings? Is life abundant throughout the Universe? Is it really impossible to go faster than the speed of light? What is dark matter? Is our Universe going to expand forever and then eventually cool and go dark? Or will it be pulled back by gravitational forces into itself to explode into another big bang?
Will Redstar ever stop asking questions?
I don’t want to target only MLS properties, but it is my best option right as I’ve gotten no leads from my ads.
I think I could write a better escape clause than the termite one, so that’s a non issue.
Why do I insist on inspecting the house? Because I have to know the cost of repairs. Right?
If I’m talking to a buyer and he asks me what kind of shape the house is in, I can’t tell him that I have no idea or that I’ve never seen the house.
Why do you have to know all this crap that don’t matter? Why cant you have the potential buyers check out the property and make their own repair estimates? Why have I repeated this solution multiple times? Is that concept too easy?
Why don’t you use Gold River’s suggestions to find FSBO’s and my suggestions? Have you ever heard that term paralysis of analysis? It’s a fatal disease and you got a terminal case.
Because if I don’t have a reasonable estimate of repair cost, I don’t know how much to offer.
ARV * .7 - repair cost - $5,000 = the most I can pay if I want to make $5,000.
I talked to a very sensible realtor today who understood what I was doing. I am optimistic about that.
I HAVE NO LEADS AND NO IDEA HOW TO GET THEM!
Craigslist has proven ineffective. I’m unwilling to spend money on online advertising when that one doesn’t even work.
I am hoping the bandit signs will work and I am optimistic about that, too. I may just end up with calls from other wholesalers.
The only other methods I’ve been told to find leads are:
Put business cards on cars at the unemployment office, send letters to attorneys…
I’ve also been told to do direct mail to absentee owners. Okay so if there are 10,000 absentee owners in this metropolitan area, you’re expecting me to spend $4,900 on stamps?
And why would I be looking for absentee owners? Aren’t the majority of the people I’m hoping to do business with facing foreclosure and therefore living in their house.
How many leads have you gotten this year? Where did they come from? How many of them did you close?
Giving back to the forum, as I like to whenever possible…
If you find the owner of a vacant house, on the property appraiser or whatever, and you were going to write them a letter…
You can go to www.anywho.com and probably find their phone number…
(Or any number of similar sites)…
And if it’s an LLC or corporation, go to the website for that states division of corporations, search for it and find the registered agent…
That could save A LOT of money on stamps…
My brain is imploding here, a few questions answered results in even more of the same and similar questions that have already been answered, Will it ever end? Just kidding I actually enjoy the pain and frustration of trying to get you going.
I don’t count the leads that have come in, maybe I shud. I’ve got 5 deals so far this year and only made $22,500 I was depressed about that but then I thought, hell that’s over 5 Grand a month.
And I have 3 in escrow, one is paying out 12K One is paying out 15K and one is paying out a frikin $28,000 Out of that I will pay out 14K in bird dog and partner fees. The 28K one I been working on for awhile, it’s a probate, got an appraisal finishing up and I hope to close on it in the next 30-60 days. It’s a junk house not quite falling down, but in bad shape, I got it on contract for 12K and have it sold for 40K
I never calculated the repairs, my buyer looked it over and decided he wud pay my 40K asking price.
The seller knows how bad it is, that’s why I got it for 12K. So why not just negotiate the lowest price with the seller and let your buyer deal with the inspections. I know that’s too easy for you to comprehend but try to grasp that concept.
I buy my absentee owner lists in lots of 2500, and that will cost you about $1,500 to mail out that many post cards if you print them yourself. out of 2500 post cards I might get 50 calls and do 1 or 2 deals, average deal is $7,000 Then the next month I run it again, yea, the same list, and I might only get 20 calls and no deals. Next month I run it again and might get 30 calls and do 1 deal.
It’s a big gamble, but it usually pays off, I usually double or triple my money. The direct mail experts say to mail to the same list 7 times b4 you give up on it.
I explained that 4 ads in Craig’s List is pitiful, and if you gave up, you deserve to be broke. I have explained several times it takes many freaking ads, I had 50 going before I started doing deals. You seem to lack the main most important ingredient to wholesaling success, persistence and the never quit attitude.
Targeting absentee owners is one of the best ways to find motivated sellers. Most are landlord types, there is a small percentage that are fed up with late or no payments, evicting tenants, their houses being trashed, living in another location and not being able to get to property to do repairs etc. Some of my best deals were from fed up landlords
Why don’t you read some books on wholesaling, then read them again and again, you wont have to subject yourself to looking like you have a learning disability on this forum?
Calling a lot of sellers can be a big waste of time and effort, I like to soften them up with an introductory post card. Calling can be depressing getting hung up on and yelled at and told no many times. But if you got the guts for that sort of thing.