I think it may be mentor time

Wholesaling
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I think it may be mentor time

Steve Ramer
Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes

Hi guys,

You might know that I own a couple of properties in KCMO from previous posts. Those are rentals, and they're doing okay. I've recently been divorced, and even though I have my kids 5 out of 14 days, my maintenance and child support are going to be through the roof since I was the major breadwinner in our household and have 4 kids. I'd like to be able to put them through college (if that's what they want--if my business takes off, I'd be happy with them learning it). Salary was decent, but I'm going to be having very little left over after paying groceries, rent, and utilities. I'd like to, or rather, I NEED to improve this situation.

I'm at the point where I feel that I need someone who's been successful in this business in my neck of the woods to hold me accountable. I've talked to potential leads before, but I've never been great with inbound marketing, and I'm super-nervous about calling sellers (or their representatives) from sites like Zillow, or even county tax sale or foreclosure lists. I'm aware that I need to just get over this, but I haven't been able to figure how to do that. My other concern is making sure that I'm analyzing a deal properly and minimizing any risk. While I wouldn't be able to pay anything upfront, I'd be happy to give most of the profit from a deal to the person who was providing me the assistance, until I get to the point where I'm comfortable in my business.

I live in Aurora, CO, about 15 minutes from Denver, and would like to do a couple of wholesale deals until I can afford to cherry-pick and do some fix and flips. Is there anyone on here who thinks they could give me a hand, and hopefully make some large bills in the process? I'm not completely new to the game in terms of understanding, and I go to meetups when I can. Hasn't been very often lately, but hopefully more now that the divorce is final.

Thanks for your time, and happy investing,

Steve

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Jay HinrichsBusiness Member
Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
9y

well I am going to offer some other type of advice

your one of a million who want to make big money flipping houses.. hard to do very few do it well and its competitive as hell

I would in your situation spend the 1k and get a real estate license and hire on with a top producer and get PAID to learn.. in a hot Denver market with high price points you can stumble to 50 to 100k a year... and you work weekends .

that will give you a foundation and you will make far better contacts than at meet ups.. .meet ups that I have gone to at least in my perspective are a total waste of time.

you have the experienced guys just looking to take advantage of guys like you.. hey bring me a deal and I will pay you a few grand... there is no future in that..

and if you have no money no experience you need to get both..

so that's one way to get into the industry and become a professional.. you spend all this money on direct mail and such with no results.. if you do that and get one listing you have money in the bank...

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  • Jon Lee
    Investor 路 Las Vegas, NV 路 Member since 2014 路 471 posts 路 241 votes
    9y

    Hey @Steve Ramer.....the best advice I can give is to find a local mentor (even if you have to pay) through networking in your local REIA and/or investor meetup groups. Those folks are on the ground making things happen. it's also good for you to get out to connect with all the other investors & vendor professionals that will be part of your powerteam. Last but not least...you want to be plugged into the local investor community period. The strength of your network is going to help pull you through after you start taking action. Best of luck to you!

    0Reply
  • Bill S.Pro Member
    Moderator
    Rental Property Investor 路 Denver, CO 路 Member since 2013 路 4k+ posts 路 2k+ votes
    9y

    @Steve Ramer from my experience, people like to help people who are doing. Movement is your friend. If you are out there doing then it's easy to come along side and guide. Experience says, it's rarely worth the effort to help someone in a stuck state.  Newtons law - Objects in motion stay in motion and objects at rest stay at rest unless acted up on by another force. Much more effective to give a gentle nudge to someone moving to redirect than to get someone moving. 

    You are stuck so hire a coach or counselor to deal with your personal issues. Divorce takes a lot out of folks so don't overlook the hangover from that. Seek someone to help you deal with that. Once you are doing something you will be amazed at all the mentoring that comes from rubbing elbows with folks doing deals. 

    Knowledge is not the problem, it's the excuse. Almost every podcast covers people admitting that they had no idea what they were doing when they started. 

    5Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    @Bill S. No offense, but this just sounds like a catch-22, which would explain the stickiness. People say you really need a mentor to get started in real estate and avoid making really big mistakes. But when seeking a mentor, they say you need to get moving in real estate and doing deals. I WANT to get moving. However, I don't want to end up homeless, or worse, land myself in jail because I didn't cross a t or dot an i. Colorado has a lot of rules, as you know. Maybe you're right--it's probably a coach I'm actually looking for, someone who can say "to start, this is EXACTLY what you need to do" and then set a deadline for following that blueprint. It's hard not to be stuck when there's so much conflicting information. 

    I do know some local realtors and a local investor that I'm hoping to do some business with in the near future. I'll talk to her a bit more. I'll attend some more meetups when I can, and maybe something will come out of that. If anything I think the divorce has motivated me to get SOMETHING to work. So if this wasn't the right place, sorry, but I had to put it out there.

    0Reply
  • Jean BolgerPro Member
    Aurora, CO 路 Member since 2012 路 2k+ posts 路 1k+ votes
    9y

    The BP community is really as much use as a "mentor" in a lot of ways. You've got access to all kinds of info, past experiences (good and bad) and opinions just by reading and listening. Don't be shy about posting specific questions to the forums. If you include Denver as a keyword you'll get plenty of local advice.


    Try to make it to the informal BP meetup once a month. There are several more organized investor groups as well. You may find one particular person that you connect with or you may find that you are developing a network of people you can get advice from. 

    To expand on the catch-22: a LOT of people say they want to do more in real estate. I'm not questioning your drive or your sincerity; you're already doing it, which is more than 95% of the people who are "interested".  But look at it from the other guy's perspective. Most people like to give advice, and they like to help other people out. But nobody likes giving advice to people who don't do anything with it. The only way someone knows if you are a doer rather than a wanter is that you are actually doing.

    My advice? come up with a specific plan, like "I'm going to start wholesaling by sending out X number of direct mail letters every month for 6 months, targeting X type of real estate issue". Post it here, and you'll get advice. Maybe someone will tell you that's way too few (or too many) maybe someone will tell you that target audience is a waste of time, try this one. But you'll be giving people a solid way to offer you help rather than an abstract.

    And don't worry, it's harder to end up in jail than you may think! :)

    3Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    @Jean Bolger Thank you for the advice. I'll certainly work on going to the BP meetups. I do understand the hesitation with the people who are doing it not wanting to work with the people who are "interested." For those people though, I think there are a lot of caveats that hold them back. I know that's the case with me. I am going to just hit it with what I've got. 

    To take your advice, my plan, while I'm sure it's going to take at least 6 months to get a deal at this rate in this market, is to mail out at least 100 pieces a month in my county to people who still owe taxes from last year's tax sale list (until this year's becomes available). I'm only going to be searching for SFRs in the county records. I was thinking of only hitting up people who also have prior year liens, but I'm not sure there are enough. I'd be using all the free information I can find to build this list, including whitepages.com for basic skip tracing (to see if the owner address in county records is still valid or find out if they've moved). I think I have what I need.

    The reason I'm only doing 100 is I'll be hand-writing and mailing these myself. I'd like to make handwritten template and just write the addresses in after printing off a bunch of copies. My question to you guys is, do you think yellow letters and red ink still work better than just writing with black ink pen on ruled notebook paper? I just have the feeling people have been programmed to automatically ignore these. I know I have, but hey, I'm an investor. Either way I'm planning on hitting up OfficeMax this weekend.

    One more question--would it be better to call these leads? Is it a violation of the DNC registry? I think I have found some good openers here on BP, but that particular concern always bothers me. I have yet to hear a definitive answer. 

    Good to know I probably won't be going to jail for just trying to do some deals. :-)

    Please let me know if this is reasonable, and believe me, if I had the means, I would send out 5,000 direct mailings a month. If you're one of those investors, just know I'm coming for you! Hey, abundance mindset, right?

    Thanks all for the info.

    0Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    Oh yeah, I'll be using Podio to keep track of all my leads, outbound or inbound. If I get a response from the letters, I'll consider those warm, inbound leads. Also, if I find houses in an area where it doesn't look like many sales have been done, is that a red flag? I'm looking at you, Green Valley Ranch. Apologies if you live there. I know someone who used to rent up there, and they had a nicer house than I had. Neighborhood always seemed fine to me. But lack of sales is disturbing from a wholesaling perspective.

    0Reply
  • Luke Miller
    Investor 路 Front Royal, VA 路 Member since 2013 路 586 posts 路 418 votes
    9y

    @Steve Ramer it's highly unlikely you're going to get a decent lead out of 100 letters, i would put money on you not even getting a response. Not to burst your bubble, but at the last BP meetup there were three guys who had sent over 1,000 combined and none of them had a single response. The direct mail marketing game is seriously saturated right now.

    If your end goal is to flip houses, stop worrying about finding leads, talk to wholesalers and find a good deal that way. If you don't have money, find partners or use a hard money loan. It's best to only do one new thing at a time. After a couple flips, start focusing on mailings if it makes sense. 

    The more experience I get the more I realize that it isn't that people are smarter or luckier than me, they just work harder and are more consistent with what they do. Good luck.

    3Reply
  • James Green
    Wholesaler 路 Waldorf, MD 路 Member since 2015 路 459 posts 路 245 votes
    9y

    "..I've talked to potential leads before, but I've never been great with inbound marketing, and I'm super-nervous about calling sellers (or their representatives) from sites like Zillow, or even county tax sale or foreclosure lists. I'm aware that I need to just get over this, but I haven't been able to figure how to do that..." @Steve Ramer the only way to "get over this" is to do it! The easiest way I found was to have a script, and just do the script verbatim over the phone with live people. They don't know that you or nervous nor don't know what you are doing! Once you've done it several times, been hung up on, cussed out, etc, ..it becomes second nature. I'm quiet & introverted by nature. I especially hated to talk to people over the phone that were complete strangers.
     

    2Reply
  • Shawn AckermanPro Member
    Real Estate Entrepreneur 路 Mid West, East Coast 路 Member since 2015 路 3k+ posts 路 1k+ votes
    9y

    @Steve Ramer I'm sure there are solid people in your market who can help you on your way.  In the meantime soak up as much free information that you can find.  All of the things you will learn from the "mentor" is accessible.  You just have to find the time to find it.

    0Reply
  • Wesley Jeanette
    Real Estate Agent 路 Littleton, CO 路 Member since 2017 路 44 posts 路 12 votes
    9y

    I am very new to all of this too and I may be completely wrong on this so someone please chime in if that is the case. I think everyone starting out gets hung up on getting a killer deal and then never does anything cause they can't find one. 

    Your end goal is flipping and you want to learn, I think just doing is the best way. Find yourself something where the numbers kind of work from a wholesaler. Something that is going to be a smaller project, even something that after running all of the numbers you only make a few grand. Then start the project, and heck no one wants to lose money but if it ends up costing you a few grand when it's all done I would consider that a worth while investment in education and yourself. You will have learned an insane amount through the process, have your first flip under your belt, and know all of the things you have to do the next time. It will also provide you with a ton of concrete questions to ask on the forums and give you a lot of lessons/knowledge you can share with other members.

    Again, my investing experience is limited as I am very new to all of this and I don't have any actual experience in flipping.

    0Reply
  • Bill S.Pro Member
    Moderator
    Rental Property Investor 路 Denver, CO 路 Member since 2013 路 4k+ posts 路 2k+ votes
    9y

    @Steve Ramer now you have a plan. That is awesome. You have already gotten some great guidance here. @Luke Miller and @James Green gave you some great advise.

    You asked a number of questions about direct mail and marketing. I do that so I can offer my 2 cents. The more personal the touch the better chance you will get a deal. Calling over direct mail day in and day out wins and knocking on the doors is even better. I don't know about the do not call list but I have had people tell me they don't worry about that because they are not trying to sell something or offering a service. You want to buy something from them so the DNC list does not apply. Make your own determination. You can search the forums or blogs and see if it's been addressed. If it has not then you should ask that questions specifically here on the forums.

    Your list will be small, based on your criteria. Marketing is a numbers game and your list is small. You might get a deal on the first 100 but it might take you 5 years to get a deal. Do you have that kind of patience and fortitude? In my experience it takes between 5,000 and 10,000 pieces of direct mail to get a deal in our market. This is not to discourage you but to create realistic expectations. The key is to start. Sure your first list is small but next week it can be larger. Set a goal, have reasonable expectations and go for it.

    I really like your target list. Multiple years of tax delinquencies is great. You will likely have a better close rate per mailer than say someone who mails absentee owners with 100% equity. For success you need to 10x your efforts (do all of the metro counties). If you plan to go the handwritten route get a color invitation size envelope and then hand writing the addresses results in the best open rate. The card should be simple and have one call to action which is repeated. Vary your mailer each month. Mail each property every month until they sell or contact you.

    Finally, fortune is in the follow up. Follow up on each contact on a regular schedule of at least 1x per month until they sell or tell you to get lost.

    Don't be opposed to hiring help. The key is to hire out as much as you can. Long term there is no way you can be consistent unless you hire it out. Consistency is the name of the game after the numbers are meet.

    Now it's on you to take action. You should have your list for at least one county, and called, door knocked or sent some mail by this time next week. Remember if you don't send direct mail you don't get any direct mail leads. If you don't make any calls you don't get any leads and if you don't knock on any doors you don't have any leads. Starting out is very challenging and the key is you must focus your actions on items that bring you properties. 

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant 路 Summerlin, NV 路 Member since 2014 路 45k+ posts 路 66k+ votes
    9y

    well I am going to offer some other type of advice

    your one of a million who want to make big money flipping houses.. hard to do very few do it well and its competitive as hell

    I would in your situation spend the 1k and get a real estate license and hire on with a top producer and get PAID to learn.. in a hot Denver market with high price points you can stumble to 50 to 100k a year... and you work weekends .

    that will give you a foundation and you will make far better contacts than at meet ups.. .meet ups that I have gone to at least in my perspective are a total waste of time.

    you have the experienced guys just looking to take advantage of guys like you.. hey bring me a deal and I will pay you a few grand... there is no future in that..

    and if you have no money no experience you need to get both..

    so that's one way to get into the industry and become a professional.. you spend all this money on direct mail and such with no results.. if you do that and get one listing you have money in the bank...

    Podcast Guest on Show #222
    JLH Capital Partners51 Review
    WebsiteView Page
    6Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    @Bill S. Thank you. Adding this to my Podio task list. I have the kids this weekend but will get cranking when they're occupied. I might just call these people after work Monday.

    @Luke Miller I agree that 100 is small in this market. That's why I felt it necessary to have a laser-targeted list. I don't want it to take 5 years, but if I'm consistent in the follow-ups maybe it won't. Also I've been looking for smallish wholesale deals from other wholesalers, but they're all well over 80% after repair costs, and considering my obligation to child support an maintenance, I think my inexperience is a massive disadvantage and risk, both for finding hard money or getting a funding partner. People who have been doing this for years can deploy $200K here and $200K there (or all cash if they do fewer deals) and it's a drop in the bucket, so no biggie if they make a mistake. In terms of absolute dollars, some of the deals sound great. But we need those funding partners, since HM won't loan on an 80-82% ARV deal. Yes, ultimately I think flipping is what's I want to do because it's the most fun and challenging. Should I solicit a funding partner on BP for one of these deals?

    @James Green you're right. Of course you're right. I just have to psych myself up to talk to these people. I did the same when from being cash buyers, but they already seemed onboard with everything. I'll do it. Just need to have the puke bucket handy. 馃槤

    To everyone else, thanks for the advise. BuggerPockets is great, and I've got some solid info. Time to put it into action. Oh, and let me know if you want to be a funding partner on deals in Aurora that I can tend to daily. There, I said it. 馃榾

    0Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    Just following up, holding myself accountable in this thread. I've combed through county records this week, which was extremely tedious, but came up with just at 100 so far (approximately one out of every 7 or 8 I looked at has potential). The basic skip tracing was a nightmare. I'm not 100% certain on all of them, but I think the majority are close. I don't envy people who do that for a living.

    I found a message I liked online and printed it up on card stock (four to a page), with owner name and property address. I bought I cutter from Wal Mart, but oddly it was lacking blades. I'll exchange that today. After I cut them up, I'll write the owner addresses on the envelopes, probably while watching a movie. When done with that I'll stuff them. Will probably have to do the post office tomorrow since it will most likely be closed by the time I finish tonight. Maybe Wal Mart has stamps?

    Anyway I'll comb through more records and repeat these steps next week. Maybe I will get faster too. Who knows?

    One more question- should I maybe put my website on the backs of these cards?

    0Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    I'm exhausted, but I finished writing all the addresses and stuffing the envelopes now. Hopefully good to go for tomorrow. Guess I should get a PO Box though, so I'll know if there's any returned mail.

    0Reply
  • Ethan Summers
    Austin, TX 路 Member since 2015 路 223 posts 路 185 votes
    9y

    @Steve Ramer a po box is highly suggested I have piles of returned mail from when i was sending out consistent mail campaigns you may want to create some type of system for re skiptracing your returned letters and locating those sellers these are the low competition deals because chances are you arent the only investor who is getting returned mail from that particular seller so you want to ensure you get in contact because the rest will quit trying!!

    1Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    Thanks @Ethan Summers. I did take your advice and get a PO Box. I just wrote the PO Box # and City/State/Zip on the return address.

    Also, thanks @Bill S., @Luke Miller, @James Green, @Jean Bolger, and everyone else. One thing I've noticed is that doing this solo is definitely unsustainable, particularly if I want to keep a consistent lead flow. I spent all my free time (and then some) this week tracking everything, writing on envelopes, printing cards up, and stuffing. I still only managed just under 100. 

    Pro tip: I did find at least one more thing I can automate and still keep it in my handwriting--I took a photo of my handwritten return address on an envelope, imported it to GIMP (like Photoshop), then removed all the background with the fuzzy select tool. That ONLY left my handwriting against a transparent background. I then made a template of that with the greeting card envelope in OpenOffice Writer (think MS Word). So next time I'll just run the envelopes through my printer for the return addresses.

    Now I just need to rinse and repeat next week, for the next just under 100 addresses. I want to touch the contacts at least once a month, so that only leaves about 400 leads for me to work with at a time. At least as my list gets pruned through deals or dead leads, I can add some new ones. Is that the right process for manual marketing?

    @Bill S.

    0Reply
  • Robert Hetsler
    Qualified Intermediary for 1031 Exchange" 路 Jacksonville, FL 路 Member since 2015 路 239 posts 路 84 votes
    9y
    Steve Ramer I was a divorce mediator after law school for more than a decade and am in the middle of one currently. I am also an avid real estate investor with significant experience having worked as a real estate closing agent, a CPA For my own portfolio of more than 30 commercial properties. I am also a financial advisor who does not practice but your situation is uniquely similar to all of my background. I would be more than happy to talk through somethings with you and if there is a way to generate income great but that my motivation is to see if I can offer some guidance or assistance with no expectation of payment. Let me know if you want to talk.
    0Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    @Robert Hetsler Than you for the offer. I'm sorry to hear about your divorce situation. I'll connect with you on BP. While not exactly the same experience, it definitely sounds like you have a unique perspective on this type of situation. Guidance would be great (even to help understand the commercial investing universe--@Jean Bolger also does some commercial investing), but let's definitely find a way to generate some income together!

    0Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    I added several more items to my list over the last few days, even with the kids around. We still managed to have a good time--took Loveland Pass into Keystone for some pedal boating. Beautiful scenic route, if not a little scary with no guard rails at nearly 12,000 feet. I've got a few more written out that I'll be mailing tomorrow morning.

    0Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    I guess I'm pretty much doing this for myself now, as a very public journal. Anyway, yesterday I mailed out another nearly 100 cards in envelopes I had written on. It's definitely time consuming and tiring to do this by hand, but I hear the payoff in the end is worth it, so I'm going to keep trucking. Only 200ish tax delinquents on my list so far, but that list is still growing.

    0Reply
  • Steve Ramer
    OP
    Investor 路 Aurora, CO 路 Member since 2015 路 21 posts 路 4 votes
    9y

    This week has gone a little slower. Partially because it was a crazy weekend, and partially because I might be acquiring a 4-plex in Kansas City with owner financing where I already have a couple of houses. The numbers look good, but the property needs work. I'm still not completely through the county list of tax delinquent properties, but I'm definitely NOT STOPPING. Just temporarily slowed down. Once I have them all, I might move on to another county to continue to add to my list. Debating whether or not to mail out to just the few I've added this week, or save them for next week when I'll have a lot more. I'll probably wait. I still have the around 200 that I've mailed once this month.

    0Reply
  • Lane Kawaoka
    Rental Property Investor 路 Honolulu, HAWAII (HI) 路 Member since 2011 路 4k+ posts 路 2k+ votes
    9y
    Steve Ramer if you are dealing with sfh. You may want to just network with other investors. But a bunch of them. A mentor helps expedite things.
    0Reply
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