All Forum Posts by: Jonathan C.

You're going to get taxes taken on the profit regardless of how long you own it.

The cut off from short term to long term capital gains (which is probably what you're really asking) is 1 year.

As Ned said, it depends on the demand for commercial space in your area.  It also depends on the price you're paying.

We have multi-family buildings in Binghamton NY with commercial space on the 1st floor, and when one commercial space went vacant it took about a year and a half to get a tenant because there just isn't much demand for that type of space in that area.

Thanks all.  Very good stuff- especially the strategy about pitching the opportunity to purchase houses in the letter as a means to initiate contact and having the individual be an active participant in the project.

I'm looking to send letters to people who I've found through public records who I know have loaned money on real estate in the past.  I've researched this on BP, but can't seem to find a good, definitive answer.

The letters would basically say: I'm an experienced investor, I'm looking for private lenders, if you're interested, give me a call.

The thing I'm worried about is that this could be considered a security.  I would NOT be pooling money- I would give individual notes and deeds of trust on each property so that the lender has security.  I was told by a securities lawyer today that this would make it NOT a security, but he wanted $5,000 for an opinion letter to officially state this, which I'd rather not have to pay for a couple hundred letters.

Does anyone have any real world experience with this?  Has anyone actually paid a lawyer to really review this and provide definitive answer?  I'm hoping we can leverage the $2500-$10,000 someone else may have paid to have this formally reviewed.

Thanks for any information.  Jon

@Eric F. I print the yellow letters and 'professional letters' and envelopes in house.  The postcards are outsourced to a local print shop- all american printing.

@Jay Hinrichs it may or may not be typical- would definitely be interested in other real world results from high volume wholesalers just to see what other people are getting for it.

In terms of risk and what you get for it, important to point out also get leads on rental properties. For example, in 2013 I bought 3 townhouses in northern VA as a package deal on owner financing. This is where being an investor vs agent comes in handy- as you get all the benefits of owning the real estate, but by all means if anyone can call only 5 FSBOs a week and make $400k a year, they should go for it :)

@Patrick Britton found if they're motivated they leave messages, if not, they hang up, so didn't see a benefit to getting the calls.  Also, would be a pain to have to take the calls as they come in.

@Ryan Billingsley been doing direct mail since 2010.  

2010- 23,481 

2011-12,400  (wasn't sure I was getting enough return to justify high volume mailing)

2012- 6,000 (wasn't sure I was getting enough return to justify high volume mailing)

2013- 35,000 (decided I was getting enough to justify high volume mailing)

2014- 70,000

2015- prob 100,000

You're getting a great return- do you have further info you can post?  What kind of mail piece you send?  What list/lists you send to?  Who fields calls (voicemail, you, answering service)?  What's your response rate been?

@Eric M. thanks man.  

Would definitely like to go solo soon.  I've built a buyers list the traditional way- getting tons of Realtor email addresses from MRIS, calling 'we buy houses' signs, networking at REIAs.  I've found though for some reason that through my efforts the prices I can get for houses I'm wholesaling are way less than what I get through my partner/friend's buyers list.

Any thoughts on that at all?

In terms of way to increase the spread, I'm going to be a little more on top of my leads this year.  There were times I didn't follow-up on messages I received as aggressively as I need to. I'm also going to start putting call in leads in an email rotation every month or two, but I've found people hesitant to give email addresses.  So any ideas/scripting on how to ask people who call you for email addresses would be helpful as well.

Right now basically I've just thrown more money at it every year because I will, about once a year, get that wholesale deal I can renovate and sell and make 60-100k, which covers the year worth of marketing cost (just didnt get it last year- pushed to early this year due to contractor problems).

@Joseph Ball yeah timing is everything on this.  

If you have a way to make sure your mail pieces are more likely to hit when someone is really thinking about selling, please let me know.  

All that I've found so far is that you're more likely to be at 'right place at right time' by sending out 50,000 mail pieces a year than 5,000, and 5,000 more likely than 500, etc.

Also is you send out a lot of mail would love to see what kind of response rates and profit you get from your efforts.  Would love to learn from others.  I'm certainly no expert.

@Account Closed I think for this year I'll probably up it to about $100K and see if the profit and return on spend stays at same ratios I experienced last year.  If there's always a 30%+ return on spend there really isn't any reason I can think of not to keep upping the marketing spend it as long as the return stays in a similar ballpark.

Here are my results after about $67K worth of direct mail cost in 2014.  It would be awesome is we could have everyone who has sent more than, say, 5,000 mail pieces, to post their REAL WORLD results as well.  

Collectively, it would be cool to see what if any patterns emerge in terms of mail pieces that have done best, what the response rates have been, the overall profit and return people have made from their direct mail efforts, etc.

This should hopefully answer a lot of newbie questions on potential response rates, how much profit they might expect from their marketing efforts, and the sheer volume of mail required to generate ANY deals at all.

The majority of lists I mail to (approx 80%) are high equity (40% or more equity) in zip codes close to me in DC metro area- all lists purchased on listsource.

All my mail pieces go to a simple, personal sounding voicemail.  I've found, after 2 years now of sending 40,000 plus mail pieces each year, that the people who hang up and don't leave messages are virtually never motivated sellers.  If they're motivated, they leave a message.  It's for this reason I don't pay for a call answering service to receive the messages.

OVERALL NUMBERS:

Spend: $67,000

Total Profit: $106,000 (not counting one I renovated and will be selling early this year)

Net Profit: $39,000

Return on Spend: 58.2% (pretty sweet)

*Note- this profit calculation does not include the cost of my time required to get this profit, which was quite significant.  This includes the initial phone call, driving out and meeting the owner at their house, follow-up until I have signed contract back, and the BS associated with title problems, seller's getting cold feet and trying to back out of contracts, and all the other stuff that comes up from contract signing to actually settling on the house.

BEST PERFORMING MAIL PIECE:

Handwritten letter on yellow lined paper with handwritten invitation (A6) sized envelope in random colors (pink, light blue, yellow, etc)

I have graphics on BOTH the letter and the envelope- things like dollar signs, stars, arrows, houses, etc- whatever random stuff I could think of to make the letter more eye catching and 'WTF' eliciting when opened by the homeowner, so they would actually read it.

SECOND BEST PERFORMING MAIL PIECE:

5.5 x 11 inch yellow post card (big post card) with somewhat handwritten looking font.  Includes various graphics (similar to the yellow letter)- i.e. star, house, arrows, etc.

MAIN THOUGHT AFTER THIS PAST YEAR:

Hypothetically discussing what might and might not work when it comes to direct mail is only worthwhile to the extent it provides new ideas for things to test in the real world. Beyond that, trying to imagine what will or will not do well is pointless.  

Only way to know what will or will not work is to pick ONE variable and split test it by sending each half of mail pieces exactly the same, to same list, with the exception of the one variable you are trying to test.