All Forum Posts by: Account Closed

There are different types. One from your bank showing you have that much money available is a lot different than a private lender saying you qualify for the amount on that property, and then that proof of funds letter is a lot different if it says you qualify for a loan of the amount on that property, subject to an appraisal. 

I will say that they're really easy to obtain, however. I'm 17, and since I don't have credit, I only am getting the POF letters on the latter. Yet to have an agent complain about the last clause, though.

This should depend deal to deal. Pretend that it's you who's actually going to buy this deal when you're wholesaling. Would you take only a 10-15% return on your investment on a property that hardly needs any work done to it? Yeah! Would you take the same return on a property that needs a new roof, floors, drywall, foundation issues, etc. Probably not. 

You also have to play your ARV really safe. There's only one place where you shouldn't be optimistic, and that's when evaluating repairs and resell values. You should actually be negative, take the average of your comps and go with a lower number, assume the repairs are more than you think, and this will enable you to apply these formulas properly and make your end buyers money.

Here's my company's formula for deals: 

Properties that need no/light cosmetic work: 75% arv - repairs - your fee. This enables a higher price to the seller, enables an easy return for the investor. They can come in, clean it up, or just repaint a little bit, and sell it for a ~25% roi before closing costs. About 15-20% after. That is if they're going to sell it, of course. They could buy it at that price, refi 80% out of it and basically pick up a free cash-flowing rental. Sure, it's entirely possible to get the deal for less to make more money, but you'll lose deals doing this just for trying to take a little more equity and putting it in your pocket. 

Example of the one above: $100,000 ARV home that needs $2000 in cleaning up. I would say offer $70,000, try to make $3000 on the deal, $2000 in repairs, sell it for $75,000 to the buyer. They'll put $2000 in, pay $73,000 for the house, sell it for $100,000. They'll make $27,000, and then pay ~$8,000 in closing costs. 19% ROI for hardly any work, but a little time, assuming they're cash.

For a medium-high work job, I'd go for 70% arv - repairs - your fee. 

$100k arv house that needs $20k in work, I would offer $45,000. I would wholesale it for $48,000-$50,000, the investor comes in with $70,000 and will sell it for $92,000 after closing costs, or about a 31% roi. 

I will say though, if you pick up a property on a REALLY good deal, lets say $100k arv, $10k in work, but you have it for $35,000, I wouldn't try to squeeze all of the equity for yourself. I would say you should go up to a 50% roi for an investor. To find this, so you can reasonably assign your huge deals (of course, I would recommend double closing if you do want to squeeze the equity for yourself. Then they won't see that you're making more money than them on the deal, but I think the investor deserves to earn more, personally.)

x = Purchase Price

y = Your Assignment Fee

z = Investor profits = ARV - x - repairs -.08(ARV) - y

z = 1.5[x - repairs - .08(ARV) - y] for a 50% ROI

This formula will enable you to give large returns to your investors for home-runs while reasonably capping it at 50%, for a larger assignment fee. For example, 

$100,000 ARV $12,000 repairs $35,000 purchase price $8,000 closing costs:

At that, with a $0 assignment fee they would make a 82% roi. Well, now that you have the roi for a $0 assignment fee, you can subtract 50% from 82% to get 32%, which you can then multiply by .5 (because you want it to be a 50% roi for them) for their initial investment for your fee. $55,000 x .32 x .5 = ~$9,000

You can check this by taking what they spent vs what they will sell the house for. This means you'll make $9,000, they'll make a 50% roi on their money. I only offered this solution because some investors will care how much money you're making, for whatever reason.

Hey, hit me up! I use Pipedrive and can help you out. I have multiple pipelines that I use for off-market deals, on-market, and ones that I lost contact/aren't interested!

While it's true a bank will not allow you to assign any of their contracts, you can still double close. This is where you buy the property and then sell it for a higher price. In some states, like Indiana for example, the interest in the property you receive from the purchase agreement is enough to form a secondary purchase agreement with an end-buyer, and the title company is actually able to run the funds from the b to c part of the transaction through the a to b.

Be careful, though. If you don't follow through with your purchase agreement and can't find an end buyer... you're expected to follow through and honor the contract. They can sue you for damages, and a plethora of other things I probably don't know. So I wouldn't touch a bank-owned property with a 1 mile stick UNLESS you KNOW it's a steal-of-a-deal. 

Not a legal professional, just trying to help!

What's important to me is ORGANIZATION. I'm not going to lie, I had a virtual assistant set up my Pipedrive account, but it's everything to our business. We call a lead through our dialer, a contact is already created for them on pipedrive. This account has their address, name, recording of the call (in my state it's legal to do that, I don't know about TN), the quality of the call determined by a 0-5 star rating at the end, as well as any notes that me or one of my callers took on the call. It shows which stage the deal is in (contact made, follow-up, inspection scheduled, under contract, and deal being marketed) and I have another pipeline that if a deal falls through or the seller isn't interested/lost contact they are added to it and it has it's own stages. It can remind me which ones to call today, tomorrow, or which ones to send a postcard to, etc. 

Now, all a CRM is for it to help you organize. If you can do it better/easier with a pen and paper... go right ahead. That's what I did, but whenever you have people calling for you or you have too many leads for that then I would say a CRM tool is essential. 

Good luck! I have not experimented with any except Pipedrive, but I personally recommend it. If you look into it and want to use it, I can help you with it and give you a referral code for a % off!

The only way to succeed in wholesaling is to be the BEST in your market. 

Cold calling and d4d is the cheapest way to start out, but to say you have to GRIND to get a deal is an understatement. I'm 3 months in with 11,520 phone calls clocked and 2,911 conversations. 

First and foremost, you have to understand how to find a deal. If the numbers don't work and you mistake them and think that they do, any buyer would recognize it and you would never even be able to sell it. 

Second, you are an outlet for people. People are selling to you for a reason. You have to find this reason, but if you set up your marketing correctly (having multiple avenues where people see you/your company and know where to go when problems arise with trust in you) they will often come to you as well. This could be a website, some social media pages, signs, anything. 

Third and last, stay on top of your game. Even if you get 1 deal a plethora of unfortunate things could happen and cause it to fall through. No matter what, you need to persist and keep going at it either everyday or a lot throughout the week consistently or you will fail. 

Just a random tip that I notice all of my friends and acquaintances do trying to wholesale, you will find yourself doing SO many useless things and blowing your money. You may do this because it makes you feel like you're accomplishing something and working closer to a deal. You may not realize that you are, so if you ask yourself this question every time you're doing something then you'll be able to cut the crap and do what needs done and the only thing that will bring you deals: having conversations with motivated sellers with the knowledge and confidence to obtain a deal. 

Don't lose faith, don't stop mining when you're only 3 feet away from gold!
I started mid-to-late last month and here it shows I make about 174 calls a day, I try to go from 3-7 but on friday and saturday 3-8

I don't do sms blasting... yet, and I don't do anything with mailers also yet. I have door hangers I got from ballpoint marketing that are actually pretty good conversion wise as they look pretty and hand-written, I just put them on properties that need a decent amount but not too much TLC. I set up a website and am working with a marketing agency that is working on my seo/sem while I'm running FB ads as well with $10/day set for 2 different ads.

I'll tell you this, I've been at it for about 1.5 months I think and I've gotten 1 deal under contract (working on getting it assigned now), and 2 leads that might turn into contracts and a few that I'm waiting to get back to.

Right now, I'm focusing on brand awareness via legally planted signs and my current main project is designing the most efficient system to follow-up with people on a quarterly basis for my small-scale business looking to get 2/3 deals a month.

But it seems like you're getting the wrong idea here, there is a reason that some wholesalers thrive and it's because they become essential. By that, I mean they become an outlet for the people who NEED to sell their home fast. People who NEED some sort of creative solution to their problem that might not be as simple as "selling it for 40%." From what I've learned, many more deals are to come the longer you're in on the game.

I know I probably seem like I'm talking a little ahead of myself, but it only makes sense that people who are active for longer durations with aggressive marketing will be able to perform better as wholesalers. Why do I think that? Well, if you're about to lose your home to a tax sale, are you going to think about the random "We Buy Houses" sign on the side of the road or the professional looking company/gentleman that has been consistently asking you if you want to sell your home? If they have seen your brand by other means, then that's another reason for them to think about you specifically.


I know this picture shows 0 leads but that's because of the way I have my tags set up after I get off of the phone with people.

I have spent ~$200 (Batchdialer + Propstream) + 8000 leads skip traced, so ~$960 (I need to upgrade to list automater from here on as it would actually save me money given the amount of leads that I skip trace.) I paid $850 for contracts + an attorney consultation (these guys are worth their weight in gold!), I spend $20 a day on FB ads so I've probably spent around $300, I spent $50 making my site with bluehost for the year, $750 working with the seo/sem team, and $650 on signs. All in all, I've spent around $3700 so far. However, this produced 1 deal so far and I think that it will be at least 150% of my total expenses so far, while majority of them have been large one-time expenses. My current monthly spending is ~$625/skip tracing (about to go down), $200 for batchdialer and propstream, and $300 for fb ads. Is it a lot? Yes, $13,500 a year, which is slightly more than ONE really good wholesale fee. Just keep putting in the work! 

Hey everyone, I appreciate all the responses. I had a misunderstanding to the problem as my experience with divorce was practically none, essentially the court was trying to split everything they had, and the judge took the ZESTIMATE + the rental income for the house and that's what she assessed it as. The property is livable but clearly needs repairs, and she didn't account for expenses from the income either. Just slapped the monthly rent times 12 on top of it. He got the 2 over assessed properties, she received cash, but since the 2 properties are "equal" in what the court assesses the value at to the amount of money she received, it is technically fair.

Now, I was going to try to do a sub-to deal after I cleared my understanding of it and wanted to pay him a good % of his equity on-top however he said that this situation will only be for a couple months and he wants to be a landlord again whenever it is over. Dead deal, but definitely a good learning experience!

Originally posted by @Michael Ablan:

@Account Closed - I think you're confusing assessment and appraisal

A property's assessment has nothing to do with its current appraised value

No, it is assessed for that value. This is going off of county records, as well. He even agrees that it is way too over assessed and believes it is because it has generated income in the last few years. 

So, I've got a seller who has had an ongoing divorce for ~5 years. He has 2 properties that he used to rent out a couple years ago, but quit as the additional income would relinquish his benefits for his children.

The thing is, the sale of these houses would have the same impact. They are adjourning properties, one is way, way over assessed. I'm telling you as a local that the property is worth no more than 75,000 in it's current condition yet it is being assessed for ~$100,000 due to it generating rental income in the last 3 years. Whenever he sells the house, he has been told by legal professionals that he will lose the difference of the assessed value from the sale price. So if it's at $100,000, and he accepts an offer at $60,000, he would be out on $40,000 in support.

He is currently eating the fact that he has to upkeep the property while at the same time pay for the property taxes. He has outstanding mortgages on both properties, so I thought about structuring a sub-to deal as I thought that the mortgage being paid would show as income that he doesn't have, while at the same time he's not the one actually making the payment so that he can receive the benefits, but that won't work as it would show that he isn't actually making the payment, but rather somebody else is.

I really want to allow for this person to benefit from this transaction, but I am struggling to find a method where he could. Maybe something with a trust? I don't know. I want to help him get out of this bizarre situation and the idea of "I can't" is really mentally straining to me. I want to solve it so bad I don't care if I even get income from it. Can anybody brainstorm with me on this one?