SCARED in Texas

Hello Everyone,

I bought Vena Jones Cox’s wholesaling program and read it twice. I’m so excited and ready to get started. I made a post on Craigslist looking for a business partner to do it with me as I am somewhat of a chicken. I received this email:

Don’t do it. The Dallas market is on the verge of>> rolling over big time. $5K in potential profit is not even close to worth the risk of making a mistake and ending up with a house in foreclosure. Dallas credit quality is horrendous and the properties are way overpriced. I am one of the leaders of the Housing Bubble Blog, a hugely popular national blog with 50K plus unique visitors every day. Read us for two weeks and then see if you still want to do this. By the way, I was at a large Dallas law firm in the bankruptcy section during the savings & loan mess in the early 90s when the Dallas market crashed. If you had seen that, you’d run as fast as you could from this now. Here’s our URL. Free site. I am “TXchick57” on there. I hope I have saved you from a terrible mistake. Kerry>

to which I responded:

Hi Kerry, Well the investing I am wanting to do requires no money. Basically I’ll be a wholesaler. Finding distressed properties and motivated sellers and> buying the properties way below market. And then assigning these to rehabbers, landlords, etc. They would provide the cash for the buy. I’m not going to be working with financing that much. Mainly working with cash buyers. I also have an inactive real estate license which I plan on activating. But I do appreciate you looking out. Thank you, Le Anna

to which she replied:

You will get taken. The sellers are not motivatedyet. That’s two to three years down the line and theywill be lenders who have taken properties back. I know I can’t talk you out of it, but you will notmake any money on this. Let me know when you need abankruptcy lawyer, I know plenty of them. There is absolutely no money to be made in Dallasresidential RE for years now but the people who makemoney selling “home study” courses don’t want you toknow that. If they had any great secrets, theywouldn’t be telling you about them. They make moneyselling books. I’m a professional stock trader now and I’ve seenevery scam in the book. This is just another one. But good luck with it.

My question is am I still good to go? BTW its been 1 day and no one has responded to the Craigslist post except this person. I’d love some reassurance, possibly from Texas pros doing the business and making money not just people with books or programs to sell.

Thanks in advance,
Le Anna

I a newbie myself, however… Don’t get discouraged. You should go ahead and do it anyway. You won’t have any risk, and you’ll kick yourself for not trying. I’ve been researching some local real estate investment clubs, and I think you should do the same. Hang around people who encourage success, not discourage it. Good luck!

Thank you Raquel! I really needed that. Good luck to you, too!

Ignore that message… it is from someone who is starting out and scared, or just discouraging you. The market is fine and prices won’t fall. Besides, as a wholesaler if you find out you have a bad deal just ignore it.

Our Metroplex is still growing by leaps and bounds. Less then ten years ago, we were at 4 million in population, we now running around 6-1/2 million people. With no state tax and being centrally located in the Southern part of the Mason Dixon, do you really believe the bunk you hear from someone upset that we have so many new investors diving into the Metroplex!

Just stay in the lower end of the market to start and you will be fine. Some of the scares this past couple of years were from one of our fastest growing cities in the U.S. (Frisco, Tx), which consequently is one of the highest bankruptcy areas (jonesing it and overspending)…much like Plano a few years before that. However, people are still flocking to those areas for employment. Overbuilt areas like Mansfield that are fast growing are probably better for buy and holds right now - just watch and learn the market areas. Older smaller subcities are always safe as they are centrally located (i.e., Richardson, Addison).

These bankrupt executives throughout ALL MAJOR CITIES IN THE U.S. who’ve had their homes foreclosed on will need houses to rent for their families with their high end income and screwed up credit from overspending. They are great for rent-to-own’s (limited to 6 months in Texas or you have to put their name on the dead), and leases.

So whatever people say to you to “scare” you out of the business as there are way too many investors in our market right now…ignore them.

There are so many investors in our market that it’s harder and harder to find the fabulous equity spreads. I’m trying to find a desktop look up appraiser to verify my comps and an estimator who’s willing to jump and run at a moment’s notice as competition is getting tough for this supposedly messed up market.

This time last year I found nearly 100 homes with 30%-50% equity spread. This year I’ve only found an average of around 40 homes that I can even get close to showing my investor group - they’re selling just too fast for my regular investors to grab them! They still think it’s last year and we have a couple of weeks to “think about it,” - not any more - buy when I email it to you or it’s gone in a couple of days with multiple offers on the table…aaaargh! I’m having to work twice as hard this year as the banks are budging less and getting more offers. Kind of the opposite scenario this lolly-gagger was giving you, huh!

If there weren’t buyers in this market, then why can’t I grab the deals as easily as I could last year with my investors…hmmmm…ignore the ignoramous! Use your common sense. Stay with the low end ($1,000 in low income areas rent…older/smaller sf homes, and $1,500 in middle income areas, and max at $2,500 rental in high income areas due to all the foreclosures from the overspenders right now)…and, you’ll be fine!

Take it slow, don’t overbuy as a beginner as that will always get you into trouble!

Hope it helps…Linda

Wow. Talk about raining on someone’s parade. The person who wrote you that email should just go ahead and commit suicide now and put themselves out of their own misery.

There are people like that in every market. People who will tell you that you can’t make any money in real estate for whatever reason (the market is too hot, the market is too slow, interest rates are too high, blah, blah, blah). What they really mean to say is, “I can’t make money in this market because I am A BIG FAT QUITTER, and couldn’t hang with the big boys, so now I sit around and try to discourage others from investing so I won’t feel like such a LOSER.”

The truth is, you can make money in any market if you are WILLING TO PUT FORTH THE EFFORT.

I figured out pretty quickly that seeking advice from people who are not having success in what I am looking to do (wholesale properties), was a huge waste of time, and a huge drain on my energy. So, instead, I sought out the most successful investors in my market, and only take advice from them. I take them out to lunch, help them sell their properties, and spend a lot of time studying what they are doing- how they are marketing, who they are selling to, what areas they are buying in, etc.

People tell me every single day that you can not make money wholesaling in this market. I don’t even bother to argue anymore, I just smile and nod my head.

Perception is reality, so be very careful who you are getting your advice from.


There is a secret that everyone knows but few really believe. It is:

“Buy when everyone is selling and sell when everyone is buying.”

This is a Buyer’s Market. That means it is a wonderful time to buy because many sellers - including hundreds of thousands of mortgage payers who have ARMS that will go up soon and cannot be refinanced in the current market - are desperate to sell now.

Sellers are desperate to sell right now! Desperate sellers need someone to buy their properties, but it takes an investor who has some courage with smarts to do it. Opportunities are now.

Yes, you can make mistakes and lose monty, but if you learn and listen to the advice of people here and at your local REI club they can help you through.

Good luck

The big difference between a good market and a bad market is the discount level. If you could do deals before at 70% start looking at 50%. If you get it under contract cheap enough it will sell, FAST. 2 years ago if you over paid you could simply wait a month or so and sell it at a higher price, it was so easy cavemen could do it (thanks Geico). Now if you do the same you won’t move the house, plain and simple. You have to be 100% aware of what homes are worth and buy right. Talk to rehabbers, find out what they will buy. It’s CRUCIAL to know their criteria and buy for them. You wanna know what a wholesaler is? A waiter, simple as that. Welcome to LeAnna’s house buying, how can I help YOU? What are you looking for? What kind of discount do you buy at? Where are you looking? Oh, you like fire damaged homes mostly in the Dallas area? Oh, you are looking to buy at 70% or repaired value minus repairs? Oh you’ll buy at 85% of value because you have a different exit strategy? This is the game you play.

I talked to a guy a few weeks ago at our local REIA’s annual conference, he said call me if you have any deals the other investors won’t take and that he will buy all the way up to 95% of value. You just never know what people are looking for unless you ask.

Last and certainly not least is knowing your market. It is IMPERATIVE that you know EXACTLY what something is worth or you will go down like the Titanic. If this means teaming up with a realtor so be it. If it means going to open houses so be it. If need to have a realtor show you a town of houses do it.

2 years ago if you over paid you could simply wait a month or so and sell it at a higher price, it was so easy cavemen could do it (thanks Geico)

That’s funny! It would have been better put if you said 2 years ago if you over paid you could simply wait a month or so and sell it at a higher price, it was so easy even a Homevestors Franchisee could do it (Ug, the other caveman).