All Forum Posts by: Brian Wall

Here is an alternative use for the $750 (probably less).

Get a list of recently sold properties (last year is fine) where there is no underlying mortgage. This should be relatively inexpensive to get.

This means that the buyer purchased the property with cash.

Contact those "homeowners" either by direct mail, or look up their phone number.

That is one way you can find both private lenders, and/or prospective buyers for your properties.

Brian

I have had the same experience as Bryan (above). In my backyard, Norwalk, I know all the inspectors (only 5 of them) on a first name basis.

The only deals we have done in Norwalk have had violations and most even as far as been tagged as "substandard". Those ones that are bank owned, the banks want to dump, but even better are those that are substandard that are NOT bank owned. We just picked up one deal that needs about $50k in repairs (major), but we picked it up for nearly 50% of ARV. It was being sold by a trust, and the substandard "scared them".

Brian

Jake,
I know of a company that purchases at the courthouse steps here in Los Angeles County (not sure if they do OC yet). But, they offer what you describe, but it is not cheap.

Basically, they have partnered with a HML that, once you are prequalified, will go out and buy a property for you, based on your specifications (3 br, area, etc). Then, once they purchase the property, you pay the lender the required down (based on your prequalification, which takes into consideration your experience, FICO does not usually play a big part).

Typically, they will loan 80% of purchase price at auction, which can be 70% of value, so they LTV is well under 70%.

The company that buys at the auction charges something like (again subjective) $10k for the first one or two deals it purchases for you. Then, they claim, if you buy several per month, the price drops dramatically.

This is on top of the 4 pts and 14% that the HML charges. This HML is very savvy when it comes to real estate investing, he saw a need, and filled it. He is also spreading his risk. He knows that probably for every so many deals he does, he gets a dud, but as long as he is successful more times that not, he will come out ahead.

The auction purchasing company told me in the last year his business has over doubled.

We are strongly considering this, as it would provide us the opportunity to pick up 3-5 properties per month, rather than the 1-2 now.

Brian

Well, here is a totally different perspective.

As others have said you have to identify your goals. If I had $100k to invest, I would start an automated marketing machine. I am starting this on a smaller scale now, but am planning to scale up. For about $2k a month, you should be able to get deals rolling in.

When you find deals, you can then either JV or wholesale the deal to another investor.

There are several different target audiences to mail to, absentee owners, burned out landlords, etc. The key is to do it on a consistent basis.

If you spent $2k a month mailing to about 3000 people (targeted audience) for 1 year, you will spend $24,000. You should be able to get at least 2 deals where you make $18k each, that should not be difficult targeting the right audience, in your area. Your return on investment would be 50%.

This should not take that much of your time, if you set it up like I recommend, then you only talk to motivated sellers.

Here is how I recommend setting it up:
1) Automate the hand addressing of letters. If you google "hand address letters" you can find several companies that will hand address letters for you. Typically, they charge about $.25 for the service, on top of the postage & printing costs. They make it easy, just email them a word doc for the letter and spreadsheet for the list. They will take cae of the rest.

2) set up a call center. This can be done pretty cheap. I am using one now that I pay $25 a month, plus $0.80 a minute. You just provide the call center with a list of questions, then once they get a call, they collect the info.

3) when you get a message from the call center, call the person back and get more details, the key piece of info being, when do they NEED to sell, if they reply they don't NEED to sell, then they are not motivated.

Doing it this way, you should only be spending a few hours a week.

I would focus on your local area, that way when someone calls, you already are somewhat familiar with the area.

The key is consistency. You must commit for several months. You cannot just try one mailing, saying, "oh, I did not get any call backs, I guess it didn't work".

For further details I would recommend reading articles in the BP articles and blog area. You can find more info there are target audiences and sample letters, etc.

Just my two cents,

Brian

Mike,
If Wills guy won't do it, I can get my guys.

My guys focus on doing flips in Norwalk, and surrounding areas.

We are currently working on 2 deals (kitchens are not done yet, though), and have 1 completed project where you can come see, to see the quality of work.

I also have some videos up on youtube that you can see, send me an email and I will send you the link.

BTW, if you are looking to do flips, we are always looking to work with investors that want to buy the property, and we will rehab it and resell it for you.

Brian

Welcome Julie!

I am not sure that anyone can completely automate a wholesale business. Since it requires very little or no cash, it has a low barrier to entry, so by training someone you are basically training your future competition. That is assuming you hire 1 (or 2) people to do everything.

I too am working towards complete automation, however, I am segmenting my business by setting up processes for the different functions.

For example, I have hired a virtual assistant (from a site called odesk.com) to pull probate prospects from the court website, and look up to see if they own any property. If so, they add to a spreadsheet (in google docs, where it is shared). I have also hired a company that does hand addressing, and on a daily basis they check the shared spreadsheet, and send out the letter I gave them when I hired them. (cost is about $0.80 a piece including first class postage). On the letter the number that I tell people to call me at is a "ring everywhere" number, and it rings not only on my cell phone, but also at a call center, that is staffed 24x7. I only use this number for marketing pieces so I usually will let the call center answer it. When people call the call center is instructed to ask a few questions, then they send me an email, with some details. I then call the people back, when I am ready, and am prepared to answer questions about their property.

That is just one source of motivated sellers, you could set this up this same process for several different sources.

The last piece is the part I think you will have a very hard time trying to outsource. You really shouldn't though. This is where you will need to get the property under contract.

Hope this helps.

Brian

Emily, you should be able to get those inquiries removed. You can write a letter to each credit bureau and state that did not authorize that inquiry, and it needs to be removed. (Google remove inquiry from credit report, you should be able to find a good example letter).

Do not pay a service to do it for you! It is something you can do yourself. You are not in a hurry, but better to get it done now.

But you should start building your credit now, while you are young, that will provide you a good base throughout your life, especially as you progress in your real estate ventures.

Good Luck,
Brian

You should really start looking at building your business credit. If you personally guarantee the business credit (credit card, LOC, etc), it will show up on your businesses credit report, but not on your personal, so only the inquiry, and as mentioned, it is only temporary, and sometimes you can get an inquiry removed just by asking.

A good rule of thumb is that you should be able to get as much business credit, as you have personal credit. Example, if you have $50,000 available credit, personally, you should be able to get $50k in business credit.

Of course, what everyone else said applies to, especially the 30% debt usage ratio.

Brian

Daniel,
How is your credit? If you don't have much of a credit history to speak of, I would start working on that now.

Perhaps adding your name onto your parents CC, having then cosign for you, etc.

It is very important in this business to have excellent credit.

Sure, there are things you can do, if your credit is "shot", like birddogging & such, but I can tell you it makes thing much easier if you have excellent credit.

Brian