All Forum Posts by: Sekelle O.

@Brian Mathews

Thanks for the feedback. I have been working on my site and made a lot of changes, even the name. I just updated my profile with the new link. Please check out the new site and let me know what you think.

Thank you to everyone for the feedback. I have been a busy bee putting it all to good use. Here is what I came up with:

www.webuydcmetrohouses.com

(I hope this does not get deleted because of the link)

The site is still a work in progress. I have to update/rebrand my email addresses and video. Also, I am not sure if this is the domain name I will keep since it so generic and does not make a good company name.

I am really looking forward to hearing what you guys think.

@Donte S.

Congratulations on sending out your first letters and signs. Here's to tons of calls and lots of deals.

There is a definite advantage to having separate phones for the signs and the letters. You will know right away if someone is calling from a letter vs your sign, and can use the appropriate opening script. Also, it will make it easier to track how many calls each is getting, including missed calls where the caller does not leave a message (btw, you can still call them back even if they just hung up w/o a message).

That said, separate numbers are not necessary. It may take a little more work in terms of tracking but if you are keeping good notes on your calls, that won't be a problem.

Hi @Gus Lawson welcome to BP.

A good wholesaler is an expert at marketing for deals. A good contractor is an expert at doing repairs. A good real estate agent is an expert at selling houses. A good real estate investor is an expert at coordinating his team of experts to fill all these functions for him while he focuses on building his business and cashing checks. You don't find the CEO of Best Buy working the cash registers.

Don't get depressed. All you need is a strategy. Every good established wholesaler was a newbie at one point. You just need to find a good wholesaler in the making. Find the person who is just starting out, actively marketing for motivated sellers (direct mail, door knocking, calling craigslist ads, etc.), who knows what they are doing, can talk to sellers and get good deals, a diamond in the rough.

These smart, hard workers are not easy to find but once you find this future gem (and you feel confident they ARE a future gem), offer to partner with them, maybe help fund their marketing (I know this was a major issue for me just starting out) in exchange for first pick of any deals they find. Or you could be a mentor to them on how to spot a good deal, or introduce them around to your investor friends, build a relationship with them. Once they start producing, they will call you first.

Are you trying to buy the house to flip it, rent it out with the same tenants, rent it out with different tenants, or wholesale it? A clear exit strategy would help you decide how best to move forward.

First though, you need to solve the homeowner's problem. You can do this by buying the house for cash at $130k or by buying the house subject to and helping the owner find a lender that will approve his new house loan with the current loan still in his name. This may be easier than you think since the homeowner should be able to prove 24 months of rental income for the property, 75% of which would be considered for the debt to income ratio. (If you decide to go the 'subject to' route, get the contract signed first before you introduce the homeowner to your lender, or the HO may decide he doesn't need you anymore).

If the house is a good candidate to rehab and resell, you may consider buying it outright, buying out the tenants' option, fixing it up and selling it. You could get a hard money loan to cover all those costs, if the numbers work.

If the highest and best use is to keep it as a rental and $1100 is market rent, you can find a lender that lends to investors for rentals (basically a HML with a 12 to 24 month term), buy the house and keep the current tenants. After 12 months, you refi into a regular loan. Again, run the numbers and see if this works. (this seems easiest, I think.)

If $1100 is way below market rent and you want new tenants, then you will have to buy out their option and their lease. This is the least likely option, I think, since buying out the tenants could be expensive and the new rents would have to be significantly higher to make that back up.

If you are trying to wholesale it, you still need to do all the math and work above, then package and price the deal and sell it to an end buyer.

From the wholesaler perspective, it is more valuable to me to have a strong list of buyers with diverse buying criteria that I have verified can perform, than to have a public platform to list my deals and have to verify a new buyer each time. Even if I get a deposit on my assignment contract, if the new buyer backs out, 1) I miss out on collecting my whole fee and 2) I lose credibility with my seller who may or may not give me a second chance wholesaling to a new buyer. Plus, if the seller is on a tight schedule like facing an auction date, having a buyer back out at the last minute can mean death to the deal. And even if the seller continues to work with me, now I have to start over with a new buyer and run the same risk again.

I agree with @Ann Bellamy . Call Craigslist ads and bandit signs, network at REIA meetings. I have heard of buyers offering to supply Proof of Funds letters to wholesalers (to use when submitting offers to sellers) to help them get the offers accepted. Providing that kind of value to a wholesaler will help build that relationship and move you to the top of the "Who to call when I get a deal" list.

It may help to avoid the nickel and dime mentality and instead focus on the big picture. Suppose you had strong armed that listing agent into accepting the reduced commission. How would that agent feel? The next time that agent has a HUD listing coming down the pipeline, would he call you first?

Now what if instead you had told the listing agent that since you never use a buyer's agent, any house he sells you, he would get to keep the entire commission, plus you would use him as your listing agent when you sell the house. Now who is he going to call first when he has new HUD listings in the pipeline?

The big picture is saving $625 on one deal could cost you $000s in future profits. The real estate business is not about property, it is about people, building relationships and getting paid for solving problems.

"In business you get what you want by giving other people what they want." Alice Foote MacDougall (1867-1945), U.S. businesswoman

That you find this so confusing should be considered a blessing. May you never find yourself in a financial situation where this behavior begins to make sense.