All Forum Posts by: Benjamin Barredo

@Steven Leigh I love the video you linked to but it's about comps not repair. 

@Matthew Wright Sucks you lost the deal, bro but since you didn't have the signature I wouldn't get too upset about it, however, as far as the attorney is concerned, @Jessica Zolotorofe gives some really great information and, if you're feeling vindictive or even like justice is absent in this situation, I'd report that lawyer if I were you. And I'd do it with a smile. 

Hey guys. I am going to meet a seller tomorrow who has a 3 unit (2/1, 1/1, 1/1) property that wants $140k. She's motivated because even though I actually tried to brush her off to another wholesaler because she's just outside my farm area, she keeps calling and emailing me as if the sell is urgent. 

Based on local rentals (most places in this area rent by the week because a lot of the population lives here seasonally) this place could rent as follows:

$1800/month or $21,600/year. Still, could be more if it were turned into a nightly tourist rental (like an AirBnB) or rented by the week like a lot of places do in this area. 

Anyway, my question is this, do you think $120 is too low? 

The owner thinks the property is worth $250,000 but based on comps it's more like $225,000 to be conservative. 

225k x .70 - 20k - 10k = 127.5 

Or is it too high? Last house I got under contract was for too much money and I had no wiggle room to negotiate with buyers. If I knew then how much less than the buyers were going to offer compared to what the sellers wanted I wouldn't have even taken the contract. 

So, where should I be on this before I meet her? 

@John Thedford I am definitely going to use my first residence as a rental but obviously after just making my first mortgage payment, I'm not there yet. I should, however, be getting back a big tax return that should be enough to either partner with someone on a multifamily or have the down payment for a small single family. I think I got my wife almost bought into the idea. I asked her, would you rather have $4-$5 grand in 2 months or $10+ grand in 6 months to a year. She didn't answer but I saw the wheels turning. For $4 grand I could've bought the 2/1 I was trying to flip and cover a construction loan to do the repairs and refinance in 6 months with a minimum of $10 grand pulled back out of it. I definitely agree on the guru junk. I have had quite of few promises, paid for a few "secrets" and learned that it's the same advice I read on forums or things I've figured out on my own. I have the kind of personality that wants to see progress quickly but I have to keep reminding myself this is a long game.

@William Hochstedler Great advice. I know it's just around the corner. For one, I'm not dropping thousands of marketing letters a month so I'm not going to see the action of a few calls a week. I'm sending maybe a few hundred a month. That include my D4$. My new thing is researching expired MLS deals and seeing if they belong to a mom and pop. If so, I'm sending them letters too. I haven't even done my second round of mailers yet so I don't know why I get so frustrated. I'm still in the beginning stages being in just my third month. But yes, I know it's there. I'll definitely let all of you know when I get there too. Thanks.

@Account Closed I know you're right. The problem is I don't have the capital for actually purchasing the deals myself. The proof of funds is a "shady" thing that after posting that I looked into and it's basically a fake proof of funds to get a deal. I had to do a little research into how it worked. There are websites that will provide the proof of funds but if the "wholesale" falls through then they take the deal and I lose it (they give the proof of funds based on the deal). It's garbage.

I am only wholesaling to get to the point where I can buy the deals legitimately and flip them, rehab and flip them, rehab and rent them, etc. I just need to come up with that initial bank roll to get a small SFR at 50% of market and then refi so I can get more. And more and more and more.

But yes, I completely agree with you. I am finding that Wholesaling is more of a job than I want it to be. I know that my first deal is just around the corner and I'm not going to give up on it but I at least know that this niche is not something I plan to do for the long term. It's a means to an end. Hell, in June I'll likely be able to get a HELOC on my new house and use that to enter the buy and hold (BRRRR niche) and then I'll be off to early retirement.

Well, I can get proof of funds. Really, I feel like I'm at a stand still until I build my buyers list. My list of 12 buyers turned into a list of duds. I know that Davanna deal I had wasn't marvelous but damn it, it was a decent deal and any investor that had some experience could've made a decent penny on it or at least got a very cheap rental property at 60% of market (after repairs). But not a one of them moved on it. I feel like if I had at least 20 more buyers I would've sold it. Maybe not, but still, I need more buyers. I'm going to drop bandit signs all over town this weekend. I'll make them out of poster board and magic marker if I have to but I'm putting them up.

Sorry, went off on a tangit. Anyway, I can get proof of funds but I need more information from buyers (back to the bigger list). It seems like none of them want to be specific about what they're looking for but also no deal I throw at them seems to "fit" their "open" criteria.

Sorry again. Off topic.

I can get proof of funds but I won't make a move like that until I know I have serious investors with cash to buy. I don't want to get stuck with having to buy one of them. Still, I'm starting to lose my motivation with wholesaling. It's very frustrating and turning into a full time job that's costing me more than it's paying me. I really just want to come up with the money to buy my first rental investment so I can start BRRRR my way to early retirement.

Can you simply make an offer to the bank on an REO as a Wholesaler that is planning to flip the contract?

If you do, what contracts are used with the bank? Do they sign my Purchase and Sale agreement with all of my "out-clauses" or do they write their own? I am getting a lot of deals sent to me through an realtor friend's automatic emails and would like to try to make an offer on the bank owned REO's. Problem is I don't have the money to buy it if I end up not selling it.

@John Thedford That was beautiful....seriously well said. Very motivating to read. 

I have always read that CapEx is a percentage but I like how you do it. Much more tangible than guessing at a percentage which may or may not be true to the property and could get someone into real trouble if they are way off.

Yes, I'm putting back money but also keeping faith that I will come across a deal (whether owner financing, JV, or Sub2) that will allow me to gain a property with little money down.

Thanks for your words. I will get there. I know it. I have my days when I'm overwhelmed, too much information to take in or too many no's in one day. But I know that everyday I don't give up is another day closer to becoming wealthy and free. 

@Pratik P.

After getting into the wholesaling game here in Knoxville, TN, I'm learning that we have a TON of wholesalers in this one small city. Competition is fierce and I need to find an edge or else I'm up the creek without a paddle. 

I'm about to mail 375 more letters this month using the same mail-merged letters with handwritten envelopes. It's round 2. A deal is close. I can smell the money. 

@John Thedford in the original post you said you "self insured on this one". What does that mean? How does one "self insure" a house with a mortgage? 

What is your formula for estimating CapEx and maintenance?

Also, I know your philosophy and I agree. It is the only way to make real, passive income that will make me financially free. However, for someone that is too anxious to wait until they've saved up enough to make a down payment and while networking to build relationships and try to find that partner to work with, what other advice do you have for them when they want to get their first buy and hold now? 

I am attempting to do assignment contracts only as a way to raise some quick money so that I can get my first rental. It is turning out to be more work than I would like to do and I am also finding that I might be too honest of a person to be successful at this game. So what else could I do? 

Thanks for the post. I really can't wait until I have the leverage to just buy deals up when I find them. I want to be financially free within the next four years or before I am 40.