The Campaign

For a few months I had been listening to various podcasts about how to invest in real estate, and soaking it up like a sponge.  I was getting an education.  It was inspiring--so many ideas, so many possibilities.  But it was entirely academic.  I was learning the lingo, but didn't really understand how it all really worked.  One message from the education came through clearly though: take action...I needed to take the first real step.

I started by buying an absentee owner list from MelissaData.  It didn't cost much--it was only about 300 addresses--but it was something concrete.  Then I bought envelopes and lots of stamps.  I grabbed a sample letter from the web and tweaked it a bit.  For that first batch, I signed each letter, and my wife hand addressed and stamped them.  On my way to work the next morning I dropped them off at the post office.  That was my first step.

Over the next week I got a few calls.  No motivated sellers (though I wasn't sure about that at the time).  I was fine with that--I had heard that something like 85% of deals respond after the 5th mailing.  I looked it up, and it's actually 81%.  I was determined that it would just become part of my routine and I wouldn't sweat the response rate.

After a month or so of mailing, I was contacted by a house flipper that owned a rental I mailed to.  I liked him--he seemed very honest and called to reach out and see what I was doing.  He'd been flipping for years and was interested in meeting up at some point over coffee.

Before that happened, I had a bite on a potential deal.  It sounded good, and had a very motivated seller.  The guy was moving away in a month and needed to unload the house.  He had been rehabbing it for months and it still had a lot of work that needed done, but it sounded like a good deal.  He really sold it to me, convinced that if I bought it and finished it that I would easily make $50K.  The problem was, I couldn't fund it.  I had a lot of cash, but not enough for that deal.  I scrambled to find a hard money lender, and also reached out to that house flipper I had just talked to to see if he could help.  He saved my ass.

He agreed to meet me at the house, and he took a closer look.  Then we went to his office and he ran a deal analysis, and thought the numbers looked pretty good too.  I was psyched!  He could solve my funding issue and we would split the deal.  I'd learn from a pro in the process and still earn a great payday.  He had us under contract that same day.

I was in a fine mood for the few days up until the contractors looked at it and estimated the work at double what we'd figured.  The contract was cancelled.  The good news is that it technically I met my first quarter goal, which was to get a house under contract.

I had started mailing in January.  I got the call for my first deal on April 18th.  The owner wanted to get out of the rental with relatives living there.  He knew it wasn't in great shape and was already rehabbing another house to sell.  He didn't have the money and time to fix up this house for sale, so he called me in hopes that I'd buy it as FSBO for a good enough amount.  I took a long look at it, made some estimates of work, calculated the return I wanted, and made an offer.

Next time I'll tell about how I found my mentor, and how he helped me survive my first flip.