All Forum Posts by: Andrew Michael

Hey BP,

Its been a while but I assure you I have been working hard out here.  Anyway I wanted to say thank you to everyone in the BP community for the encouragement, expertise, and guidance along the way.  Here is a brief update and recap.

The first thing I did was find a local investor friendly agent who has been a tremendous help.  I cannot tell you how valuable my time with her has been.  I estimate we visited or looked into 50-60 properties before I finally found one that fit our criteria.  Though all of these visits seemed to be a waste of time, I quickly realized how much I was learning and this allowed me to fine tune my criteria and better identify potential investments.  Thus far, I have developed a hand full of strategies but both my flip and my multi unit came as a result of driving for dollars.  Here are two more strategies I have received tons of calls from 1) Put your business card in every real estate related book at book stores, home depot, lowes etc.  2) Tell every postman or postwoman, UPS Driver, Fed-Ex Driver what you do and give them your business card.  They have a mental roll-a-dex of vacant properties and will probably rattle off a few on the spot.  Moving on.    

The Flip was a mid-level rehab for a SFH in a very desirable location. We finished the basement (adding more livable space and adding another full bath), added a deck, upgraded the kitchen, upgraded main bathroom, knocked down a few walls to open up the kitchen\ living room combo, added new light fixtures, knobs, switches, new paint, and I took care of the landscaping.

Flip Deal Structure:  Since I had no house flipping experience here is what I offered and brought to the table to my partner (that same agent).  I found the deal and negotiated our purchase price with the absentee owner, offered to split profits 50/50 if they financed both the purchase and rehab costs, I offered to do all manual labor (landscaping, minor hauling of existing furniture, shoveling snow, DIY repairs, cleaning house before showings, etc).  They accepted.  And we were off!

Meanwhile, I continued to look for my next acquisition.  I found a turn-key duplex that was vacant and up for sale.  The previous owner was an elderly man selling off his portfolio and you could tell he took great pride in his properties.  This duplex was by far the nicest one I have been in thus far.  After several rounds of back and forth, we agreed on a price and signed the contract.  

Same Day Double Closing:  I WOULD NOT recommend this strategy to a new investor.  It was perhaps the most stressful week of my life, none the less I just said "lets do it baby I will get it done" (Grant Cardone Voice).  So my first closing of the day was the flip in which I used to proceeds of that deal to then be wired to the title company of my second closing to fund the purchase of the duplex.  There was a lot of timing issues involved and lots of praying that the wires would go through etc.  All in all it did work out but like I said, probably not the best idea for a beginner.

Quick numbers:

Flip:

Purchase - 230k

Rehab - 37k

Sold - 356k

Duplex:

Purchase - 145k

Combined Rent - 1,875

I don't know if either of these are "home runs" but I think they are pretty solid deals.  The experience gained was immeasurable and a huge boost of confidence.  I can say without question I have never worked this hard.  I spent countless hours working before and after my 9-5 job, devoted weekends to driving for dollars, spent hours and hours on real estate education but every second has been worth it.  

Anyway my hope is that this will encourage others to keep on working even when your not quite sure what your doing.  Just commit to the process, work hard, and it has a funny way of all working out.  

Thanks again to all, this was surely a BP team effort!

- Andrew

@Michael G.

I appreciate the information.  Sorry for the delayed response I did not see this post until now.  I have started the process with TLO already so they will be coming out and inspecting soon.  Have to go buy a cabinet haha.  I understand their concern and am thankful for their precautions when it comes to peoples personal information.

So I hear what your saying about the absentee mindset.  Fortunately for me, the majority of the owners I am finding have inherited the property and never got around to selling so they are a bit easier to deal with then what you described above.  Think it just happens to be my market and the fact that a lot of people moved to the area years ago to retire.  I'm catching that wave of a deceased partner or parents that left the property to family.

Anyway keep hustling and again I thank you for the most helpful information.  

Best,

Andrew  

@Rita Temple  How did this work out for you?  I am sitting on about 20 vacant house leads and cant seem to find a working number.  Every time I get a number it is disconnected or out of service.  I need a quick way to pursue these leads other than wait for my mailers to get to them.  

@Michael G. Do you have a recommendation for a subscription based company with a low minimum or will it always be pay per use?  Also, just to be clear I am really only interested in their current cell phone numbers.  Do the sites you listed above generally have that information?  I am afraid to sign up and then not get the one piece of information I need.  

Thank you both in advance for your help.

@DeMarris Manns  Hey did you ever find a good company for a reasonable subscription?  I am dealing with this same issue.  I am finding great leads when driving for dollars and the neighbors are usually helpful however I seem to always be a step behind when getting the owners most recent numbers.  I'm finding it rare to get someone with a land line much anymore.  Thanks

@Nicole A. Thanks so much for the tip.  Unfortunately I paid the whole year upfront for the discount so I will have to revisit this at the end of my agreement.  Figures lol as I just had 500 door hangers, 1000 business cards, etc made with that address on it.  I love it!

@J Scott Yes, much better all encompassing term.  PS your book is sitting on my shelf up next for me to read as soon as I finish 10x rule, looking forward to it.  Thanks      

ARV - (Rehab Costs + Holding Costs + Desired Profit) = Right Price

@Clayton P.  Thanks so much for this tip, this is great. Would you mind elaborating on your post a little more?  I have a list of local banks that I am planning on calling to set up meetings like you said.  As of now, my plan was to create a little packet to give them that would include: Who I am and what I am doing, my criteria/ types of properties I am looking for, and examples of past flips and rental units that I have purchased.   These would include pictures, P&L excel sheets, and so on.  

In your experience, who is the best person to ask for or speak with?  What have you found to be the best way to partner with the bank?  Also you said that they presented their side.  Can you go into more detail?  What kind of things did the banks say or ask of you the buyer?  Finally it sounds like you all were able to reach some common terms.  How do you think a typical deal will play out in this type of scenario?

Thanks so much

@Andrew Bertram  I still consider myself pretty new to the game however after about two years or so here are my suggestions.  

I would highly recommend teaming up with someone more experienced especially on your first deal.  I found an investor friendly agent who has been a tremendous help.  Starting out, I really didn't even know what I was looking for and thought I was finding good deals however they were far from it.  In my opinion, it takes about 100 houses or so in any given market before you really start to grasp what it is your looking for and what is an ok deal vs good deal vs home run.  So keep viewing houses, driving for dollars, etc and over time you will narrow down your criteria and be able to focus on potentials more quickly.  

Below is the script I used for my last campaign.  I got about an 18-20% response rate (not including the non deliverables) which I thought was pretty good.  I payed someone from work and had her hand write about 300 letters.  Also, if you will be fielding all calls by yourself like I am, I would suggest staggering out the letters so you don't get 50 calls in a day.  Another thing I did was send them out according to location with the goal to get most of my calls on Saturday.  Since we are on the east coast, send the west coast addressed out early in the week and the closer addresses later in the week.  This made it so most of my letters were delivered on Thursdays and Fridays thus my calls came in on Saturdays which was my day off.     

Lastly below the mail letter script is the script I followed once I had them on the phone.  Most of it is a paraphrase of various podcasts and posts from BP.  Not the best guide ever but something I find helpful.  Again you will need to adjust for your personal preferences and base it on the flow of the conversation.  

Hope this all helps

Hi (Owners first name),

My name is Andrew Michael and I am interested in buying your house at (Insert Property Address).  Please call me at 301-xxx-xxxx or email me at [email protected]  I am able to make you a cash offer and have the ability to close in less than 30 days.  I look forward to speaking with you.

Kindest Regards,

Andrew

301-xxx-xxxx

[email protected]

Date:______

Name:____________________

Phone:____________________

Email:____________________

Address:____________________

City:____________________

State:________

Zip:________

Reason for sale:___________________________________________

Agent Y/N:________

Prop Type:________

Year Built:________

Approx Sq ft:________

# Bedrooms:________

# Bathrooms:________

Cond 1-10:________

Major Issues:___________________________________________

Major Repairs:___________________________________________

Value of Home:___________________________________________

Equity/ Owed:___________________________________________

Tell me again, why are you selling?

What is the least amount you are willing to take for the home?(Repeat offer amount slowly)

Are you able to do better than that for me?(Remain quiet until they lower the price again)

(Tell them what you can offer:Cash, sell the home quickly, quick closings)

Knowing I am a cash buyer and can settle quickly, what’s the best price you can give me?

(Use the bottom number that THEY have given you and create a purchase price range. Subtract 25% from their offer to get to your range bottom.)Right now I am thinking in the _____ to_____ dollar range depending on the walk through.Not too far apart on price, when is a good time to meet?

Range offer amount:________________

Walk through date:________________

Walk through time:________________

Day before walk through confirmation:________________

Formula: ( ARVx70%)-Rehab/Closing= Offer Price

@Nicole A. Any luck with finding an alternate for us Marylanders?  I did see some virtual sites/services offering physical addresses however by the time you pay the forwarding fees and sign up costs your pretty much back to UPS prices.  At that point I'd prefer to my 24 hour UPS mailbox access anyway.  

Thanks