All Forum Posts by: Chris Feltus

@Brandon Turner Also known as advertising a "phantom house". Unethical and a terrible way to begin a business relationship. Not to mention the majority of people who contact you will be tire kickers. If you are going to resort to this you better be prepared to triple check your "buyers" proof of funds.

@Onan Dumas If you want to be an "active" agent here in the Dallas - Fort Worth area expect to pay $2,500 or more annually. This includes monthly brokerage sponsorship, annual membership dues, quarterly dues, MLS dues etc.

One of the first things you should inquire about is their situation, this will clue you in as to what is going on with the property. For instance they will often state they have power of attorney for a loved one or they are an executor of an estate. They don't necessarily have to be the owner to convey the property.

Don't get to paralyzed trying to be decisive. There are ALWAYS deals out there to be found, regardless of what is going on with MoS, you just need to know where to look and how to find them. Some of the most successful investors I know have made a killing in both up and down markets.

One key factor comes to mind which is MoS(month of supply), that is all things being even how long until the current housing inventory dissipates? Here in Texas a 6 month supply is considered "equilibrium" that is a neutral market.

Buyers Market: If the MoS is very high there is a glut of inventory and thus deflates prices for instance foreclosures.

Sellers Market: If the MoS is very low housing inventory is down. We are seeing this right now in many metropolitan areas with MLS properties getting bid up outside of profit margins for investors.

This is a bit simplified of course but hopefully that helps.

Edit: Another tool I like to use is historical appraisal data for housing. You can use Zillow or your local tax assessor / central appraisal district for this information (typically it will go back 5 years or more). In some neighborhoods you can really see the impact of the financial crisis, where a home in 2007 that was once worth 115k is now assessed for 80k.

@Roc P. Stop what you're doing and read this thread http://www.biggerpockets.com/forums/311/topics/98459-using-bandit-signs

I highly suggest you reconsider using bandit signs as a marketing tool. There are PLENTY of other legal avenues for finding properties. Besides you will get a bunch of tire kickers off bandit signs that will waste your time. Wouldnt your rather have leads that are motivated, with equity and targeted. You can do so by driving for dollars. I wrote an indepth blog post on the BP blog that details the process from step A to Z. Using the method I outlined in the post, some campaigns I have response rates over 70%. Give it a try. It doesn't cost you anything but time and gas money, and its legal.

http://www.biggerpockets.com/renewsblog/2013/05/10/driving-for-dollars-tracking-owners/

@Allen Ayres First of all, I very rarely make offers over the phone especially if you have not yet met the seller on an appointment. Secondly I have already made an indepth reply on determining ARV in another thread. It addresses some of the issues you are concerned with, such as what to do when the comps are weak, take a look.

For the cash "as is" sales, since these are listed on the MLS, try and get a better number under contract. This will help move the property quickly.

http://www.biggerpockets.com/forums/93/topics/98607

@Billy Gardner I wrote an indepth reply to this in a previous thread from the other day. I will go ahead and copy and paste it here as well.

It's not that simple. When selecting comparables, think about the word carefully, comparable. Its in the word itself yet so many seem to forget this at times. You are trying to identify comparable properties, comparing apples to apples, or like to like. This is just one component, in addition to that you will need to be able to estimate a conservative ERC (estimated repair cost) as well. Both of these factors must be correct for you to successfully market the property. You want to pull comps like an appraiser would.

1. Try and stay in the subject properties subdivision. If there is not enough activity in the subject properties subdivision you can go out in a radius or other subdivisions across local roads. Try and pick similar subdivisions with the same housing inventory/ amenities etc. How far your radius will go out will depend on where you live. Here in Texas, in the suburbs you can typically go out .5 - 1 mile and be pretty safe with your comps. However, using that same radius in the inner city of Philadelphia will not work, prices can very wildly from one block or street to another.

2. Don't go across major roads if possible.

3. Make sure to compare properties with similar square footage (the max I typically go is + or - 20%)

4. Make sure to DRIVE your comps. Don't try and be a desktop appraiser. Besides making sure your comps are accurate it will help you become an expert on housing inventory in your area.

5. Beds baths and garages. For instance if your subject property is a 3/2.5/2 (3 bedroom, 2 and a half bath, 2 car garage) then don't select a 2/1 as a comp. These are not comparable. With larger homes its typically acceptable to have some variance with the bedrooms. A 3/2/2 and a 4/2/2 can often be similar; however, the difference between a 3/2/2 and a 2/1 is night and day.

6. Sometimes the comps in the area are so weak you won't be able to find much of anything. In such cases I typically make a very conservative offer, typically 55-60% of what the properties tax assessed value is. Tax assessed value, at least here in Texas, tends to be conservative and lower than market value.

7. Pick a similar house style as your subject property. If your subject property tutor style dont pick ranch style homes as your comps. Similarly if the exterior is brick on your subject property, don't select wooden frame houses either.

8. Go back 6 months for most recent comps. Time is a factor when selecting comps. Sometimes when the comps are less than ideal you can go back 8-9 months. But make sure to think, how has the market changed since then? Has it improved, or worsened? And try to apply that to your evaluations.

9. Year built, try and stay within +/- 10 years of the subject property or better when pulling comps.

This was mainly focused on ARV, recall both ARV and ERC must be accurate to get a deal.

Estimating the ARV is more like 8th grade science. You remember the scientific method? We are trying to make an EDUCATED HYPOTHESIS as to what the property is worth its not an exact science. Hope this helped, this sort of turned into a blog post.

Here are some additional great resources:

Danny Johnson Guide to Estimating ARV

BP Book on Estimating Repair Costs by J Scott

J Scott's Estimating ARV Primer

@James Swan There is no secret pill, its all about being consistent and persistence and following up after you submit offers. Generate a list and mail the same leads every 2-3 months. At the end of the year, pull a new list. I generally look for deed dates 15+ years back as a rough approximation of equity. Ultimately, you are looking for motivation.

That being said, if you are in need some ideas there are several categories for you to explore further:

• Absentee owners
• Code Violations
• Probate
• Vacant properties
• Driving for dollars. If you are interested in this I wrote a 2 part series for the BP blog here: http://www.biggerpockets.com/renewsblog/2013/05/03/driving-for-dollars-bible-part-1/

@Keith Murphy Let me try and provide you with a brief 10,000 ft view.

1. Begin actively marketing. If you have no leads, you have no deals. Decide on the criteria you will use to mail, such as ARV (after repair value / or what the house is worth) %equity (you will need likely at least 50% equity to wholesale), and the areas you want to mail to. You can purchase lists from list source. You can mail owner occupied homes, absentee owners and probates are pretty common suggestions here.
2. Field Calls and set appointments
3. Make an offer on the property. You need to structure this in such a way that the seller benefits, your end investor gets a deal and you make some money for finding the property. To do this you will need to learn how to estimate ARV and ERC (estimated repair costs)
4. Hopefully offer is now accepted, if not start the follow up process.
5. Get it under contract. Here in Texas use the TREC 1-4 single family resale found here http://www.trec.state.tx.us/pdf/contracts/20-10.pdf
6. Deposit contract with title company. Always make two copies of the contract one for the seller to keep for their records. At the title company make a copy of the original contract for yourself, you can give this to the end buyer when you assign later. Here in DFW I recommend Adobe Title.
7. Market the property
8. Find an end buyer
9. Assign the contract. You will need an assignment of contract form. Its a brief one page form there are a few examples on the BP file place.
10. Close

For the record, I never worry too much about finding a buyer. I focus on getting a deal under contract first. Finding an end buyer is the easiest part of the process. But if you insist check the sticky at the top of the page http://www.biggerpockets.com/forums/93/topics/54108-buyer-s-list-how-to-

Hope that helps