All Forum Posts by: Bill Florence

Well, I educated myself on the business of REI for the price of a many lunches and cups of coffee (networking costs ;) , gas money, couple of RE attorney hours (contract education), countless books and periodicals, REI club membership dues and lot's and lot's of time. I spent many months learning (this was part of the plan) and developing a business plan for my risk level before I spent a dime on IRE. So my approach was to approach this like building life long business requiring a lot of sweat equity. It's marathon, not a sprint ;)

While there are lots of good deals out there labeled as "wholesale" offered by FSBO's, wholesalers, investors, agents, brokers, institutions and the like, there are also many deals out there labeled as "wholesale" but priced at retail. I am frequently reminded of this in the wholesale property notifications I receive. For example, I was recently sent a few deals and each one was priced high full retail but marketed as "low wholesale", and they all needed substantial work. They would have been loosing propositions for flip and they would not even positive cash flow per my terms. Sometimes "discount" overpricing is deliberate and sometimes an oversight. I see this a lot especially in hot markets.

The problem is newer or less knowledgeable investors will sometimes purchase these at face value believing they are getting a good deal. Over the years I have looked at countless listed properties where the flip investors went broke and had to walk away from rehab and/or sell at a loss. So the reminder here is do not take anything at face value, due your homework and run lots of comps. Know price trends in your macro and micro markets and if you need assistance, ask a realtor to run detailed comps. In addition to the usual property appraisal items, be sure to look at actives, solds and under contract comps. Just looking at active or sold does not give the whole market picture. 

Well if you offer the worst thing that can happen is the seller says "no". 

Sometimes they say "cash only" because the property is not able to be financed by conventional financing, just won't qualify for whatever reason.

Hey David

Welcome to the biz

I use a 4"x6" card with name, address but I do not send out enough to bother with bulk postage. However I see others using 5.5" x 8.5" cards but also at bulk postage rates. Also consider door hangers. You might be able to get those delivered for about the same cost as snail mail, just a suggestion.

If you find anything to wholesale in the Denver area please let me know

Welcome Derek !  

Well for example, if you are financing this at 80%LTV 4.5% 30yr, the mort/tax/insur costs will be around $5000 per month and the landlord should also put a % away for vacancies, repairs, reserves and make money...

Hey Christine,

Well in my opinion, you could get it under contract and have it professionally inspected. Then you would have a much better idea whats going on. Consider finding a good real estate agent to work for you, specific to that area who gets paid at closing by the seller. Ask the agent what avenues you have to back out of the deal if the inspection has hidden surprises. Also, some REO's can be negotiated lower especially for properties that are sitting for 30+ days. Good luck.

Hey Joshua,

I handle this in phases before the inspection objection date of the contract (specific to my locale). I have some rehab experience so I personally do a preliminary inspection to make sure I want to go to step 2 and pay an inspector or walk away from the deal. Next I hire an inspector (I trust) come in and inspect. Lastly I discuss the inspection report with my contractors or trades or price out the work myself and create a plan of action with timelines. It is a lot to do in a short time but it has saved me from big mistakes and there is nothing better than having the rehab plan and resources ready to go on closing day.

In my experience/opinion, my tenants only care about the bottom line - how much will cost them per month everything included. However the more efficient appliances could add value when selling the units and they could possibly cost less to maintain.

Hey Kat,

Based on my experience, be physically close to your investment(s) and in an area you know very well and are comfortable in especially if you are starting out.