Real Life of a Real Estate Investor

[Wendell De Guzman]

Alright...I am going to post what happens every week in my real estate business. Why? So you will learn from my mistakes as well as get inspired by my successes. I also hope by doing this, BP Nation will help me achieve my goal of buying 10 houses a month (I am now at 4 houses a month).

So here is Week #1(highlights of what happened last week):

1. Property #1: Lake Forest home we sold during the Open House (March 15-16)...the highest offer of $840,105 backed out today (argh). We are calling the second highest offer of $831,075. This is a pre-foreclosure.

2. Property #2: Beach Park home...Worth $180K, Selling for $114,900 (got this deal from HUD).
I went to a real estate investors association meeting last night (Sunday) to market the property. I met 2 buyers interested and they are going there today. Two other members of BP are present also and I met them face-to-face. I got a letter from our attorney saying we need to close on April 18. I am not worried. This is an awesome deal and we should sell it soon.

3. Property #3: Calumet City - (got this deal from HUD). This is likely a dead deal because the numbers don't quite work out for investors but there's some discount suitable for end-buyers (worth $90K, selling for $80K). I will reduce the price today to see if we can move it quickly enough. I need to talk to Mark - our Sales guy for this property.

4. Property #4: Chicago (preforeclosure deal) - another dead deal. Bank did not accept our shortsale offer of $15,000 and countered $29,000. The bank (Chase) is so unrealistic with their expectations - they have to realize houses in the area sell for $5K to $20K and $29K puts them out of what buyers are willing to pay for.

5. Property #5: Bartholomew (Florida) manufactured home - we just got this last March 18 for a mere $13,800 (property value is $50,000). According to rentometer, rent is $850 a month. My business partner is going there to see the property and talk with the current residents (get them out or they pay us). Regardless, the return should be good.

6. Property #6: Ebson (Florida) manufactured home. We got this March 11 for only $7,000 (property value is $50,000). It needs about $8,000 in repairs. We should start renovation this week. Plan is to flip it for market value.

7. Property #7: Thigpen (Florida) manufactured home. We got this March 11 for only $9,700 (property value is $50,000). Same action step as Property #5.

What I learned this Week:

1. Right price + massive marketing + irresistible BONUS = sells a house (Lake Forest)

2. I was not a fan of manufactured home but that changed when we got Properties 5-7. The returns are awesome!

3. Marketing that worked this week: bandit signs. If they are positioned strategically with a compelling (but very short) message, they will pull a ton of people to call you. Now that the weather in Chicago is getting warmer and the ground is softer, we'll put our more signs.

4. Marketing that did not work this week: craigslist ads - some of our ads are getting flagged...need to figure out why and how we minimize this issue.

[Wendell De Guzman]

Alright BP Nation, here's Week #26 Business Update:

The Good

1) Marketing, Sales & Closing

We sold 1 house this week - a house in Zion (bank wants $25K, we have a buyer for $33K).

We have a buyer lined up for the fireburnt 3-flat in Chicago. The buyer's offer is $4K - $2K to the seller and $2K as wholesale fee. If this deal pushes through, it will be my smallest wholesale feein history. If we can help the owner move on with their life with a little bit of money in their pocket, that's a good reward: even with the small wholesale fee.

This week our Chicago operation is marketing 15 properties:

- a 2 bedroom house in Broadview (HUD deal): $100K
- a 3-flat in Riverdale (HUD deal) $40K
- land in a north suburb of Chicago: $1.1M
- a gas station in Chicago city: $150K
- 1 fireburnt house in Chicago: $10K 
- a 6-unit apartment building in Chicago southside: $180K
- 6 houses in Chicago city
- 1 house in Homewood
- 1 house in Riverdale
- and an 11-unit apartment building in Chicago southside: $300K

2) Acquisition, Offers, Leads and Renovation

We got 9 new properties through co-opetition (i.e., through the help of other wholesalers). Here's the picture of a house in Homewood we just got this week:

We got 1 HUD deal this week but decided to walk away from it because it's in a bad part of Chicago southside.

3) Raising Money, Organization, Systems, Training, Networking & Relationships

I've gotten 1 Marketing & Sales person who will lead the Chicago south suburbs territory. I need 1 more to complete the team. Through BP, I've gotten 2 volunteers who will put out bandit signs for us.

We're also organizing a BP Meetup on Saturday Sept. 20. I'm excited to meet other BP members there.

The NOT So Good

Unfortunately, the bank we're dealing with for Zion and other northern suburbs decided to list the remaining 8 properties on the MLS.

Another not-so-good fact: we failed to move the Riverdale deal. We might ask for an extension next week because there's only one week left on the contract and we don't have a buyer in sight.

LESSON OF THE WEEK: PROVIDE VALUE ON BP

I can't believe I have been updating BP on what's going on with my real estate business for 26 weeks already - that's half a year. I shared so much value on this forum thread - some of them are closely kept trade secrets. But by me providing value here on BP, I got so much more value in exchange. In 6 months since I started the "Real Life of a Real Estate Investor" weeky forum post...

1) over new 100 buyers signed up in my buyers' database;
2) I have gotten 8 new people who joined me in my real estate team; and last but not the least...
3) I made over $100,000 in wholesale profit (just the ones I bought from or sold to BP members)

So provide value in BP folks. That's the only right way to network. How do you provide value? Be engaged in the forum discussions. If you're new in real estate and don't know enough....you can still provide value by asking thought-provoking questions, providing links to useful information and resources...and by voting the posts that you find useful. Then network here and meet the BP members here face-to-face. You will develop long-term business relationships and you will make money in real estate. BP Works! Thanks @Joshua Dorkin and @Brandon Turner !