All Forum Posts by: Carl Schmitt

Wayne, I think I disagree. Not as to whether or not cold calling works, but about how many calls you were making to get a yes. Standard direct mail only gets a 2% response rate on average with some of the guys that are really good getting up to 10%. Even if you're the best, that would mean 1 out of those 10 would actually respond. It sounds like most people talk to 15-20 people before actually getting a deal. Personally, I like the idea of cold calling vs mailing. If you don't talk to the person, you certainly can't buy their house. The actual contact rate would be much higher with calling vs mailing. More contacts= more opportunities. Just my opinion. As for the scripts, ill leave that to the pro's. search for Micheal Quarles. He seems to be the expert on direct marketing. If someone could tag him, I can't seem to get it to work.

That makes sense Bill. I'd imagine, just like an investor diversifies to limit risk, banks do the same thing with their investments(the borrowers). Is that the point when people will go to blanket loans covering multiple properties in one loan? Or is it better to start trading up so rather than having 10 4 families, you get 1 40 unit. Then youd only have 1 loan vs 10. Thoughts?

Thanks a lot Jon! And there is no limit on the number of commercial loans you can have?

That's great to hear Jon. It was one of those "if it seems too good to be true, it probably is" feelings. I guess it's not too good to be true, though. If I understand what you said, there is no limit on commercial mortgages? The only downfall is the shorter term, it sounds like. 1-4 units is considered residential so is it possible to get a commercial loan for a residential property or is it better to stick to properties over 5 units if you want to go commercial?

Jon,
I have a question about the 10% cash on cash you were talking about. Are you basing that on paying all cash or based on financing? If I understand correctly, cash on cash is net profit divided by your own cash in the deal. At least in my area, you can buy a 4 family with gross rents of 2600 for roughly 100k. So yearly NOI would be $15,600. Paying cash, and adding 3% for closing costs, you'd be all in at 103k. cash on cash would be 15%. If financing with 25% down and the same 3% for closing costs, you're cash in the deal would be 28k. NOI would be lowered by 6708 down to 8892(20 years at 6.5%). Divide that by the 28k of your own cash in the deal = 32% cash on cash. Using financing, you'd run into the mortgage limit long before your reached the 25k a month goal. From that point you'd have to go into private funds with higher interest, which would drive that number down. So my question is, do CoC returns vary that greatly depending on area, or am i missing something?

I was just looking on the city's website at the tax sale auction details. I read through the rules and one that I thought was odd was this... They require any buyer to live in the property for the next 3 years. They will make an exception if you rehab and resell, but the 3 year minimum is then transferred to the end buyer. Has anyone heard of this before? If you're flipping, It seems like it would limit your end buyer pool by having that restriction. This is in Massachusetts, if that makes any difference.

Welcome Jay,
You've been reading for 4 years so we don't have to tell you how good the site is. I used to live in Manassas. Great town, expensive real estate...

Is $70k the asking price or do you have it under contract for 70? There was a thread not too long ago about what percentage off of asking price REOs are going for. It obviously changes by market but the general number was about 77% of asking. If $70k is the list price, you could potentially get the property in the mid 50's.

If you are using private money to pay for 100% of the purchase and the repairs, what would be the benefit to a cash out refi? Seems like it would make more sense to do a rate and term refi because it would be cheaper than private money. I've heard banks are much more flexible on rate and term than on a cash out. Then your cash flow is better during the lease, and you have a good bit of equity when it sells.

Great job! I agree with Sean, you should be bragging. How long does the average person have to work to make $800k? Average income where I live is 40k a year. That's 20 years. You did it in 22 months. Congrats!