My Wholesaling Memoir (keep myself accountable)

[Todd C.]

Hi all-

Similar to what so many have done before, I plan on using this forum post as step-by-step outline of the steps I take until I close my first few deals. First a little background on myself:

I am a 26 year old guy living in Manhattan, working a full time job that frequently requires me to be in an office for upwards of 70 hours a week. Beyond that, I'm in a self-study course for a test that requires 300+ hours of studying (the test is in June). I have a girlfriend that requires my attention and no car in the city. Long story short, this is a LARGE uphill battle. 

I've always had an interest in investing in both equities as well as in real-estate. I have liquid cash, but not nearly enough to put towards a project like a rehab yet - I just don't feel comfortable yet. With that said, Wholesaling was the avenue I wanted to sharpen my teeth on. 

I've started about a month ago. My first step was purchasing a list - came out to approximately 400 handwritten (yes, by me) yellow letters. I did this mostly while at work (20 a day), I would typically get in an hour early and write them as quickly as possible, and however many I had left I would do sporadically throughout the day when there was down time. About 200 of them have been sent out, with the other 200 just waiting to be stamped and mailed. Thus far, I've received 16 calls. No warm leads, no deals, just people wanting to find out more information. Beyond that, I've just created my website, www.cashfornjhouse.com - also yet to deliver any leads. Finally, I've also utilized craigslist as a marketing source and I've spoken to a number of home owners, again mostly people that would sell "for the right price." I did, however, have one guy that was motivated - his tenant just moved out and he subsequently had a leak in the kitchen that he doesn't want to deal with. The problem is he refused to budge on his asking price. He was asking for $105k with the house across the street listed for sale at $115 (bigger and doesn't need a whole new kitchen). I wanted my first deal so I told him I would see what I could do. No one wants anything to do with that house at that price, for obvious reasons.

I've since moved onto pre-foreclosures as, in my opinion, that's where the low hanging fruit is. After sending out my first 50 yellow letters to this list, I did some digging on BP and it seems like I could get in some serious trouble for sending them out? I sent it out to NJ and I really hope that that is not the case.

My marketing plan is as follows: 1) Month 1: 400 letters from List 1; 2) Month 2: Create website and start Google adwords campaign (done), 400 letters from List 2; 3) Month 3: 400 letters from List 3; 4) Month 4: Go back to list 1 and send a 2nd round to all 400 investors, repeat for Months 5 and 6 with lists 2 and 3, respectively; 5) Months 7/8/9 will be sending post cards to the first 3 lists (pay someone to do this), while starting on list 4. 

Hopefully at that point I will have closed a deal or two and can outsource some yellow letter marketing. My goal is to have someone send out about 600 letters/month for me, with me still doing my 400/month. 

I hope this wasn't too long.

Looking forward to updating everyone along my journey.

[Todd C.]

Week of 2/9 Update

My first deal has been resurrected! Prior to divulging, I continued on my quest and wrote and sent out 100 letters to absentee owners. With that said, I also received about 8 calls this week, none of which were qualified leads...all just called to get more information.

Now back to the deal..

I met this guy on craigslist a few weeks back as he recently had a leak in the kitchen and wanted to get rid of the house. However, his price was SET at $100k (his mortgage was right around there) with comps in the neighborhood going for $113k. He had at least $10k in rehab costs. I showed the house to two separate investors about 2 weeks ago - neither bit as there wasn't enough margin (I agree). Then luckily enough, today, I received an e-mail for someone asking to see the property. Low and behold, he made an offer. It was for $98k, so I asked the seller if he could go down to $96k - I'm awaiting his response. For my first deal, or for any deal for that matter, I will gladly take a $2k spread. Obviously not huge money, but it's a start. The only thing I'm toying around with now is (assuming the seller agrees) to try to negotiate a purchase price a bit higher. He knew my asking was $102, so if he could come up to $100k, that would be a nice bump in profit. Thoughts? Comments? Concerns?

Oh, also, I never got this house under contract. The owner has the contract, we've been in constant communication, but we never actually signed it - that shouldn't be an issue, should it?