Change in Method?

[Becky Watkins]

For the past 10 months, my goal has been to wholesale to cover expenses of education and marketing, and to save up the capital to have a down payment for a fourplex. I'm getting impatient now because I'm getting a very low response to the yellow letters. The farthest I've gotten are callbacks, all of which have been under water. I don't know how to short sale, and as I understand it, it's not for wholesale. Where I have experience is property management, but I do not have the funds for a downpayment. I only have about $10k so far. 3.5% of $600k is $21k, and it would take me two years to save up that additional $10k. That's not even counting reserves.

I'm getting desperate because my husband says we can't start a family until we cash flow at least $2400/mo. I have no idea how much property it will take to obtain that goal. So at this point I'll take any suggestions. I went down to part time to be able to spend more time writing letters and looking for properties. I keep wondering if I should give up and go back to working full time with overtime so we can save more faster. Or if I should persevere because there ARE people getting deals, and I just need to find out what I'm doing wrong.

My method right now is to write to houses in preforeclosure in local zip codes trending up. I followup after a month when possible, but most of the auction dates are three weeks max from filing date, so most of the time properties have a new owner by the time I follow up. Taking the time to weed out houses whose amount of default is higher than estimated value, I only have time to send out about 50 letters a week. I was sending out as much as 50 a day, but getting so many return to senders and owners under water, I started filtering as mentioned above. Even with the supposedly high response rate that yellow letters get, I reckon this is going to take a while to get a deal.

For anyone else who invests in California, do you find wholesale a viable option? Is buy and hold SFR better? Is 4plex as good as SFR? How does one even go about finding a fourplex to buy?

My husband wants to skip right into apartment buildings, but we don't have the cash for a downpayment. Is owner financing something to realistically hope for? We have three years experience in apartment management (38 units), just no capital.

Any tips on finding a mentor? I don't want to spend the cash we currently have on a guru.

My post is long and questions vague, but I'll take any tips, answers, and advice that any of you have. I read as much articles as I can, but try to spend the majority of my free time looking for and writing to potential motivated sellers. Thank you in advance for taking the time to help out.