What to do with my Driving for Dollars List

Question

I have a detailed spreadsheet of about 110 properties in the San Gabriel Valley (Southern California) that I've built up over the past couple of years- unkempt homes I've noticed while driving (mostly in Alhambra, Pasadena, South Pasadena, San Marino, San Gabriel). I've done research on all of them, using a title company, the property tax portal, and other resources. And I've done some more in depth research on the more promising ones (owners, deaths, divorces, and other distressed situations). Several are tax defaulted. Many have foreclosures in their history. Many were last sold in the 70s or 80s, indicating older owners who may not be able to keep up the property. A good number are absentee owners.

I know the more conventional approach is to send out mass mailers and then only spend time researching the ones who get back to you. But, I don't plan to do this. I'm willing to knock on doors and try to establish a good rapport, leave a good impression, etc, and do what I can to get the property under contract.

I don't have experience wholesaling, nor do I have the cash or HML/PML line-up to purchase any of these homes myself. So, I am considering calling a cash buyer I met at a meetup, and seeing if we can arrange some kind of setup whereby he and I both benefit. Before I do that, however, I figured I ought to seek some BP counsel. Any suggestions on how we might want to approach this? I.e. should I offer to partner with him on reaching out to each owner in a way where he shows me the ropes and then I get a cut of his profit if he ends up buying and selling one (or more) of the properties? Or is it better to work out something where I get a bird dog (finder's) fee? Or???

Thanks in advance for your input!

Account Closed · Answer

"Past couple of years" Lol -  Sounds like you're enjoying yourself too much driving around looking at houses. ;-).

The best thing for you to do is to get the houses under contract. That is going to be the most profitable thing for you to do by far.

If you give the information, location & address to people you don't know, don't expect to get anything in return. Some people will be honest with you, most will not. They will simply take the deal and forget about you. How do you think I learned that one?  Also, since you have not made contact with the owners, you don't know if you actually have anything of value. No investor wants to have their time wasted chasing flying unicorns that fart rainbows.

I would absolutely make contact with the owners first, see if there is any interest in selling and if there is, you have something golden and we can talk. And even then, get anything in writing before you team up with anyone.

Walter Roby jr · Answer

Congrats on the prospecting but now its time to take action.

Figure out the numbers needed for the deals to make sense, start knocking on doors, get to know the sellers and their situations, make offers that make sense to move forward for investors. Once you have the price, terms, sellers name, buyers name, close of escrow date (30 days), and description of the property in writing signed (under contract), then you can focus on the other half of the equation.

Michael Guzik · Answer

@Jonathan Vince Great job on wanting to take action and seeking counsel my friend! I'm afraid if you have been doing this for the past couple of years it may be too late. Why are you just now thinking about doing something? In real estate especially wholesaling time is EVERYTHING. I'm sure many of those deals are already taken, or bought from other wholesalers/investors who have been calling, mailing or knocking on the owners doors while you have just been sitting on their information. Ask me how I know lol. However don't feel too bad because I'm sure there are still some golden nuggets in there. I would definitely go and try and make contact with the owners first, this will ensure you have a deal. You don't want to bring an investor or wholesaler a bunch of duds and look stupid. Take the time and effort to contact the owner and get the lead and then go talk to your friend. This will show them that you are serious and will more than likely end with them helping you out the entire way. Don't waste anymore time my friend you need to get to it and reach out to them before someone snatches them up from you! Good luck!

Jonathan Vince · Answer

Who wants to know? ;)

j/k . . . no, it is not near that area

Sanjeev Advani · Answer

@Jonathan Vince is the property you are speaking of near white lane and wilson road in Bakersfield?

Jonathan Vince · Answer

@Michael Guzik Yes! That's what I want to hear. Thank you for getting to the heart of the matter . . . and for the scripts ;)

Next week I'll be starting escrow on a vacant home in Bakersfield that I'll rehab and either sell or keep as a rental. What worked for me there was getting the owner's name and number from the neighbors, and then calling her and arranging to meet at the property along with a contractor and local realtor. After prying off the plywood and doing a walkthrough (and also having previously done due diligence and looking at comps), I made her an offer right there on the property. That was back in April. She wasn't ready, and kept kicking the can down the road in the months that followed. I had never before made an in-person offer on a home, and although I would definitely do some things differently, it was a great confidence builder. And now, four months later, after much gentle prodding, she has finally agreed to my offer.

In that case, I drew a lot of confidence from the fact that someone (me) was ALREADY in a position to buy the property. To me the most daunting thing about wholesaling seemed to be this idea that I'd have to get the seller all worked up and ready to sell before even having a buyer lined up. I appreciate the way you explained things because it helps me see that "first contact" is more like a first date than a marriage proposal.

Michael Guzik · Answer

@Jonathan Vince I understand your point my friend and can see your concern, but being honest those are excuses to not take action. You have to have balls to do wholesaling man, you really do lol. You don't need all this fancy shmancy sh$t. What you need for a good deal is #1 a motivated seller #2 a home at a discounted price. And that's all there is to it. Dress nice, practice talking if you aren't an extrovert or aren't good with social skills. Just go straight up to their door and knock on it. Say "Hi I have been driving by 123 Mainstreet the past few months and am considering buying a home in the area and am wondering if by any chance you had ever considered selling?" DO NOT FOCUS THE CONVERSATION ON THE PROPERTY. FIND THE PROBLEM, talk to them, get to know them and ask lots of questions. See what their motivation is. Now if they ask you about all of the things you are worried about just simply say, "I haven't gotten that far or done much research, I just finally decided to stop by and introduce myself and see if we could possibly work together on something." Or say that yes you have a partner who handles all the legal work and contracts etc.

Now sometimes the land lord or owner will not live on that property. If you didn't already know search the property address under your county's appraisal district website under property search and the name and address of the owner will pop up. If they don't live at the address you wrote down, go drive to the home they reside in and use the same script. Yes you will be denied, yes people will get mad, and yes it can be awkward and freaking sucks and is uncomfortable. I'm not going to sugar coat it for you, however that is why you need to do it. No one wants to do it, and if you bring a deal by doing that to another investor they will respect you immediately.  Now let's say you had a conversation and you found someone that is willing to sell, I forgot to mention this but before you leave you need to have two pieces of information, #1 Why they are selling/What is their motivation #2 How much are they wanting/What's their range/ballpark. Knowing these two things you can now do your research on the property or bring the lead to your friend. I hope this helps my friend!

Jonathan Vince · Answer

I appreciate everyone's answers! It's more like 1.5 years that I've been adding to this list (I rounded up), but, yes, more urgency makes sense. I guess what I'm seeking advice on is what exactly all those steps should look like in practice, and in what order they should go. For example, making contact with the owners-- I'm not afraid to knock on doors, but I also don't want to do so being inadequately prepared. Don't I need to have some potential buyers lined up in advance? Contracts ready to go? etc. And for me, another part of being prepared includes me genuinely having the potential seller's best interests in mind, and knowing how to communicate that to them, as well as being well-versed enough to show them just how the transaction might benefit them. Also, doesn't figuring out the numbers require that I first obtain a decent estimate of repair costs? . . . so, for all of the above "preparations", I feel like I would need to hang out with and get to know actual wholesalers and cash buyers. And in order for them to be willing to help me, I imagine they deserve some incentive too. That's why I mentioned reaching out to that cash buyer I met. He seemed honest and trustworthy. I know first impressions can be false, but they're still better than no impression. IF that's a good idea, then please advise on what a "fair" arrangement might look like. And please do share any other approaches that I might not have considered. Thanks again!

Ezichi Oha · Answer

Hi @Jonathan Vince, your can give it to the investor and let the person know you want a finders fee if he or she buys the house. You can also sell the list. You can give the list to a wholesaler who will skip trace the owners do the leg walk and pay you afterwards.

There is a bird dog that sends me lists. If i buy any house i pay finders fee to him. I am happy to work your list with you. Feel free to reach out.

What to do with my Driving for Dollars List

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