New Investor in Dallas ... No Deals Yet ... Need Advice

Bird Dogs, Wholesaling
1

Hello all! I am brand new to the forum … just found it today.

OK, here’s my situation.

My interest in real estate began earlier this year after I attended the Learning Annex Expo here in Dallas back in February. Since, I have been reading books and material, ranging from Ron LeGrand to Steve Cook, with the mindset of beginning a career in real estate, starting with wholesaling properties.

Fast foward to this September, I was let go from my job and I took it as a perfect time to take on real estate full-time. Over the past couple of months, I have continued reading materials, learning on the different methods of investing from wholesaling and rehabbing “ugly” houses to getting-the-deed and optioning “pretty” houses.

Over the last month, I decided to begin my quest in completing a wholesale deal by using the ant farming method to find motivated sellers. I have driven through numerous areas and came up with a combination of many vacant houses and FSBOs. However, after researching the owners and calling these potential sellers, I have found that all are either un-motivated sellers, “wanting” to sell not “needing” to sell", or investor-owned properties.

Knowing that I probably need more that one way to find the motivated sellers, I decided to run an “I Buy Houses” ad in the Dallas Morning News, which began today. I know I will get a lot of unmotivated sellers calling - but I thought it was worth a try.

In addition to running the ad, I am tinkering with using a real estate agent to locate / make offers on MLS properties. My concern though, is I’ve learned that when dealing with agents, you 1) can’t assign contracts when dealing with banks 2) you have to give fairly larget down payments, and 3) you have to provide proof of funds.

My current financial situation is not great being unemployed for over two months (a.k.a. - I’m broke). I didn’t anticipate finding a motivated seller through ant farming would be as difficult as it has been. I feel like I’m going back to the drawing board so-to-speak.

I thought wholesaling would be my best bet, but maybe I’m wrong. I would love to rehab down the line, but I am needing a deal soon.

Any advice would be extremely appreciated.

Jerry

2

Jerry have you ever heard the phrase its now what you know, its who you know? Both certainly help but this is a business that revolves around your roladex. you need to network yourself and find the big dogs that are cleaning up all the deals. LOTS of business in Dallas thats for sure.

3

Jerry,

Let’s be real here. I know that a few of the gurus say that it’s a blessing when your layed off and have no job. That is simply NONSENSE! The way to succeed in real estate is NOT to start jobless and broke. That’s ridiculous!

Get a job to cover your living expenses and pursue investing in addition to your job. Notice that I did not say part time. There are 24 hours a day. You have time for two full time jobs and still a little sleep.

Good Luck,

Mike

4

Can’t agree more with what PropertyManager said in his reply… Get a job!!! NOW!!!

A job will give you income to run your home and make you credit worthy. You should be part time in REI until you do few deals and feel comfortable.

You can also consider doing bird dogging …PM with some good deal if you have some extra.

A job will give you good pre-qualification to close on deals financially… lenders will not look at you until you they know that you can repay them.

Good Luck… Welcome to DFW REI.

DFW

5

I don’t have much to say because I am also a beginner but I was also thinking that you should probably get a job first. So what both dfw_rei and propertymanager are saying makes alot of sence.

good luck!

jesse.

6

Find buyers, then find houses, I cant stress that enough. Call the cash for your house people, find out if they wholesale, find out what they buy. If homes arent flying off of the market in your area have a realtor send you homes that have been listed for at least 150 days. Typically homes are listed for 6 months so you will get them 30 days before they expire. I would advise buying from the selling realtor in a situation like this. They maybe willing to drop their commission knowing that the listing will be lost in 30 days, also they may give you valuable insight as to what the seller has to have for their home.

To get around the preapproval letter clause, have your realtor call a friend who is a mortgage broker or befriend one yourself and have them give you a preqaul letter. Most realtors dont call the banker, they just want a letter so give them one. or Have one of your buyers print off their bank statement if they have cash and cross out their name and account numbers and send it over, realtors wont dig to far into the cash statement, they will just be happy to have an offer on the table.

  1. Tie up the home under contract if you can with an assignable clause
  2. Use an escape clause such as “contract is contingent upon the buyer approving the home after a 10 day inspection period”,
  3. Ad to contract to have the earnest money deposited after your 10 day inspection period.
  4. Get your buyer through during the 10 days
  5. Collect the deposit money you will need from him if he wants the property
  6. Assign the contract to your buyer
  7. Close

This is the short version one idea I have seen, I hope it helps a bit

Eric Medemar

7

Yes, definitely find BUYERS before SELLERS. But after you’ve done that, if you’re having a tough time finding motivated sellers with newspaper ads, try online (Craigslist.com is a great place…today alone I found 5 motivated sellers in my area with about a $20k to $100k profit margin for the investor). Sometimes it’s better to go out and find sellers yourself, instead of trying to get them to come to you. To them, you’re just one of a hundred “We Buy Houses” firms. Seek them out with a good offer, and you’ll be more credible in their eyes and it’ll be easier to business with them. And by having a list of buyers first, you can find properties that THEY want to buy, instead of trying to find houses you think or hope someone will want to buy.

Best of luck!

8

Definitely get a job first till you become a more experience investor. It’ll be much easier to get a loan from the bank.

9
To get around the preapproval letter clause, have your realtor call a friend who is a mortgage broker or befriend one yourself and have them give you a preqaul letter. Most realtors dont call the banker, they just want a letter so give them one. or Have one of your buyers print off their bank statement if they have cash and cross out their name and account numbers and send it over, realtors wont dig to far into the cash statement, they will just be happy to have an offer on the table.

OR instead of being dishonest, maybe try doing things right and honestly. Eric may not know the difference, but if you make a habit of doing everything in a shady manner, you will not prosper in the long run!!!

Mike

10

In my state, California, doing what eric suggested

“or Have one of your buyers print off their bank statement if they have cash and cross out their name and account numbers and send it over, realtors wont dig to far into the cash statement, they will just be happy to have an offer on the table.”

would be considered fraud. Fraud is an intentional misrepsentation of fact by words, conduct, or concealment that is intended to deceive the other party. This would make any contract voidable since it is a material fact which led a party to contract. In California a person has three years from the date of the discovery of fraud to request a court to reverse the sale and return title. All of which means that years after the deal was done, the seller could move against the one who committed fraud in a court of law and probably recover the property. I think that this holds true for most states.