RULE OF THUMB ON BUYING ANY PROPERTY for wholesale, rehab, lease to own, etc

Bird Dogs, Wholesaling
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  1. Find it
  2. Analyze it
  3. Get it
  4. Get it done !!!

I understand some if not all of you are eager to buy a property but the majority DO NOT know how to run their numbers and they’re running around trying to find an investor or distressed homeowner.

Everyone should be lined up before acquiring ANY PROPERTY especially for the beginners. Your buyers need to get prequalified and you need to be in contact with 3 investors prior to making the deal. Investors will not look at any of your numbers unless you present them in a professional looking binder or folder. All they care about is “when am i getting paid and how much am i getting out of this deal”. As i said RUN YOUR NUMBERS!!! And it seems everyone is jumping the wagon without knowing where to go.

Just because REO, BPO’s, realtors, etc. says a number that’s their opinion and it doesn’t mean you have to buy it for that number that they want or put it in contract. the lower the number, the better it is for you. Again, if you run your numbers correctly, then you will not listen to what they say and it will protect you in all your future transactions.

I cannot stress the importance of ANALYZING the property prior to making contact with a distressed homeowner. You have to run your numbers and if the numbers look good, then get it in contract. Otherwise, you will be running around, wasting gas trying to find a homeowner that’s willing to work with you. Better yet, have them contact you and tell everyone what you do.

When you have to beg a homeowner to sell their house to you for a shortsale or whatever the case maybe, you are knocking @ the wrong door. I hate to sound mean, but YOU are there to bail them out of their mysery and if they can’t/won’t cooperate . . . NEXT . . .

With all the foreclosures everywhere, if i will not make any money on the deal. i will walk away and for some of you that keeps asking the same question about wholesaling. Folks, you need to be knowledgeable about your state laws and contracts required prior to meeting with your client. In fact, there are a lot of articles on this website discussing wholesaling, not sure if they discuss what contracts to use.

Like they said, it takes money to make money and unless you invest in educating yourself on real estate, sorry to say, but there’s no such thing as free lunch.

Good luck and happy hunting !!!

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“Investors will not look at any of your numbers unless you present them in a professional looking binder or folder”

I have to disagree with this statement. I have never presented a deal to another investor in a binder or folder. Most times, I just make a phone call or send an email.

Steph

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I wholeheartedly agree with Steph – and I think “Rocks’” statement was ridiculous!

Keith

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A binder? People really do that? I’ve used email, the phone and craigslist, and it’s worked great so far.

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just curious for the people who made the comment. when you send them email or contact them, did they fund you the money, i think not! i can bet they want to see the numbers clearly not just a discussion over the phone or email.

i think you guys completely missed the whole subject of the letter. the only reason why those investors are dealing with you is because you know them . . . private investors, but for anyone out there in general, hard money lenders will not look at those numbers unless they are PRESENTABLE regardless of how it’s presented to them whether it’s binder, folder, etc. as long as it’s legible for them to read the numbers.

and it’s always business first, friendship second for anyone who will lend you the money.

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:shocked I almost laughed when I saw the binder thing. I’m not sure where you heard that people use binders, even on high cost deals. Those would just be a prospectus that can be emailed.

I could care less how pretty your binder is. I just want to act fast on a good deal. We just get email blasts or calls that have the property address and what wholesalers are asking for. We sometimes don’t even get the number of beds, baths, size,. repairs, etc. If it’s in our area, we know what properties should go for and don’t trust any of their information anyway. If we’re the wholesalers, it will

I have to agree with analyzing and knowing your area before messing with a seller. I’d add not to work with anyone who isn’t motivated, doesn’t have to move, etc. They’re the ones who stick to their guns and will sell you a bad deal.

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“Rocks” - is that what your head is full of?

Sorry, couldn’t resist.

Seriously though, if you have a good relationship with these investors - what do they care about presentation?

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Rocks,

I’m really confused about some of the things you are saying…

“Just curious for the people who made the comment. when you send them email or contact them, did they fund you the money, i think not! i can bet they want to see the numbers clearly not just a discussion over the phone or email.”

I’m not even really sure what this means. When I send my investors an email, I am not looking to borrow money. Maybe we are talking about two different things? In either case, though, any serious investor is going to do their own due dilligence, so it really doesn’t matter how the deal is presented.

“Your buyers need to get prequalified and you need to be in contact with 3 investors prior to making the deal”

Again, I have no idea what this means. Can you clarify? Why would I have to be in contact with 3 investors before making the deal? I don’t get it.

“I cannot stress the importance of ANALYZING the property prior to making contact with a distressed homeowner.”

This one makes no sense whatsoever. What good does analyizing a property do if you can’t get the property at a good price, or on good terms?

I’m not trying to be mean, but I think you are giving out some bad information.

Steph

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I thought there was a lot of good information there.

Surely, at some point, when doing a deal, numbers are put down on paper? Don’t any of you people use contracts?

It certainly doesn’t hurt to have paperwork neat, contained in a folder, and well organized. The good old boy network isn’t going to send a hitman after you if you put your paperwork in a folder. There’s no law that says all paperwork must be in a pile on the floorboards of the car, under a candy bar wrapper.

Tampasteph apparently goes out to try to buy proeprty without a clue cocerning what it might be worth, or what the surrounding comps are. Not me. I know when a price is a good deal and I can accept or reject on the spot. I don’t have to leave my seller hanging for a couple of days while I run comps. They want to sell cheap; some other investor will have that property if it is a really good deal and you don’t tie it up.

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Lighten up there, French Fry…

I agree that there was a lot of good info there. Some of it, however, is not good information.

Telling people that “Investors will not look at any of your numbers unless you present them in a professional looking binder or folder” is just not true. At all.

Also, the comment that “I cannot stress the importance of ANALYZING the property prior to making contact with a distressed homeowner” is also not good advice, unless you like to waste your time. Why spend time analyzing a property before you know what the situation is? If you are doing a lot of marketing and getting, say 5-10 calls a day, do you think it’s good advice to analyize every property before you talk to the homeowner? I don’t.

Now, if you are talking about learning the values of homes in your market or farm area, then that’s a different story. It’s my opinion, though, that if you haven’t taken the time to study your market, learn the values, and have a general grasp of what is going on, then you shouldn’t be talking to sellers in the first place.

One last thing- you said “I don’t have to leave my seller hanging for a couple of days while I run comps”… Not sure if you are relying on the Pony Express to deliver your comps from the other side of the state or what, but if it takes you a couple of days to run comps, you might want to rethink your approach.

Steph :cool

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“Now, if you are talking about learning the values of homes in your market or farm area, then that’s a different story. It’s my opinion, though, that if you haven’t taken the time to study your market, learn the values, and have a general grasp of what is going on, then you shouldn’t be talking to sellers in the first place.”

im brand new and would like your guys opinion on the best way lean the value of homes and study the market in my area.

all info is greatly appreciated

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you guys are so funny with your comments :rolleyes

have you guys been investing for more than 10 years and if so, have you made at least $50,000 per deal, not per week, not per month, not per year, but PER DEAL because money is made in real estate PER DEAL.

it seems to me, no offense, that the majority of you are NEW in this business. it’s good that whatever you’re doing is working, but if you guys are not making $50-$100K per deal, again, you guys are not doing what an average investor should be making especially in the market that we’re in.

my best advice, please spend money on educating yourself on real estate. not only will it save your life, but it will also save you for making dumb mistakes especially as a first-time investor.

you must always have an EXIT STRATEGY before you ENTER any real estate transactions.

good luck and happy hunting . . .

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so your best advice is “please spend money”

wow i thought the point of this site, for newbees, was to learn and discuss rei with active re investors

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but discussing it alone will not save you, unless you actually do it yourself.

spending money means going out and actually read information. you can go to a library and check out books on the subject, that’s spending money because you’re going out and using your gas. looking at websites, that’s spending money because you’re using your electricity.

hopefully you get it :rolleyes

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Wow…this is a stretch!

Keith

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Rocks,

What market are you in, and what type of investing are you talking about that is netting average investors 50-100k per deal? I’m curious.

I know a guy who is making in excess of 100k/month as a wholesaler, but he does a high volume of deals each month.

Steph