All Forum Posts by: Daniel Moore

As mentioned once or twice already, it really depends on the value you place on your own time. It could probably be hired out for little to nothing and would be done with minimal to no supervision.

The time saved could be used for High income producing activity producing big paychecks, or even better spent with friends and family.

You might could save 75-100$ doing it yourself, or you could use your time saved to hunt down more property, which in return could yield you thousands.

Doing it yourself would probably be a net negative for you if you look at opportunity costs.

Absentee owners isn't directly vacant properties, although mailing absentee owners works well.

Absentee owners are mostly landlords, not vacant. To find vacant properties is a combination of running USPS data for vacant and then tracking down the forwarding addresses. Vacant house lists work well.

You are saying the CMA is 80-90, and it is listed for 74k?

If those are the right numbers you are looking pretty thin for profit, especially if it needs even a light fix up.

Assuming ARV was 90k, and you got in at 78% ( a little high) and assumed 6k in general clean up, differed ,maintenance, and paint, your max offer would be around 64k.

Vacant properties = [AD LINK REMOVED]

Building buyers = find good deals

When initially wholesaling tho, and you have a small buyers list there are multiple solutions for offfing a quality deal. You can sell on craigslist (my buyers list is over 8k emails and i still post on craigslist), go to local reias to promote your deal, or call up all your local hard money lenders - let them know about your deal and they will generally put you in contact with one of their buyers becasue they get the loan.

@KJ D'Costa most often your best deals will be pocket listings from brokers or off market properties you source on your own.

@Ilya V. thank you, but don't let me dissuade you from due diligence. just understand that if you are entering into a transaction like that without the team and experience, expect a steep and costly learning curve.

Didn't read everything, but a few things to look into. 

Cooling system - is it a chilled water system? 2 pipe or four pipe? Air cooled or water cooled condenser? Split systems? Age? If it is a CHWS and not being maintained replacement costs can be huge, especially if underground piping is decaying, it would me cost effective to replace with DX Splits.

Heating - they mentioned boiler and hot water heater replaced in the last 10 years. If it has boiler and CHW definitely find out if it is 2 or 4 pipe. 

Utilities and RUBS - I gathered from a comment or two it was all bills paid. Is that typical for your demographic? Check to see if utilities are individually metered like the electric and water. If not is there currently a RUBS system in place?

81% Occupancy - Is this physical occupancy or economic occupancy? Just becasue 81% of the doors are full doesn't mean 81% of the doors are paying. Why are the remaining doors down? Differed maintenace? Poor management? Lack of bodies (detroit has suffered publicly)?

Anticipate a guestimate of 3000-4000k per door to get a base rehab done in that demographic, and would not include roof, mechanical, structural, exterior. While there may or may not be a deal there, if you are just getting started you will have a huge learning curve to get through. If you're fond of having time and money coming into your account and not flooding out, you may want to reconsider. If you'are up to a big challenge and don't give up in a fight, as long as detroits economy can support this property, after you stabilize the asset you might have an upside

my .02

As a well rounded investor wholesaling is one of many viable exit strategies that can be very profitable. I promote "we buy houses" because we do. There are times where a property just makes better sense being assigned or doubled, and no i don't approach the seller and say "i will not be buying your house, i will sell this contract to somebody else who will"... Why wouldn't i say that? Because it will cause massive confusion and shut down the process most of the time. So what do i do to disclose this process without causing confusion? Kind of depends on the deal. If it is a rock solid no brainer i will say nothing, require no option, and pay a hefty EMD. When a deal is a deal i don't sit on it i act, and no i wouldn't disclose that i might assign because i know that one of two things will happen. I will either assign it and make my profit, or i will buy it myself because i am very comfortable with the price negotiated. If the property is marginal and a "so-so" I will require an inspection and option period. I explain to the seller that during this time i will need my capital partners to review the home to determine if it is a property they will loan on. If during my option i can't find a lender that is willing to fund this property then i will have to back out. If the seller doesn't like the option i tell them i will guarantee a closing at a lower price without an option, but at the price they are asking it is borderline and therefore i need to secure funding from an outside investor.

I mean if saying "i buy houses" throws your moral compass that far out of whack don't say it. But ultimately as an "investor" our job is to solve problems - and if you go into real estate finding ways to do that ethically then you will make it. 

Just my .02 cents - I wholesale several properties a month, as well as other acquisition and disposition strategies.

@Cynthia Vaughn just make sure the mentor you pick, is living the lifestyle that you want, both financially, family, and socially. It's difficult for someone to tell you how to do something they are not doing themselves.

@Jason Bridges 

 Amortization - the tenant paying down your principal balance monthly for you "equity growth"

Depreciation - you can use an IRS depreciation schedule to write of the "loss" of the assets value against your gains. This is also called Phantom loss because it didn't truly occur.

Appreciation - the typical rise in value of the home over time - avg 4%

inflation - re is a great hedge against inflation, especially leveraged re. buy a house for 100k, and inflation goes wild, the house cost goes with it, therefore hedging the inflation. Leveraged purchases are even better becasue you can hedge more than just "your dollar". The bank loaned ya good money, and if inflation takes a run, you still only owe the bank what was loaned, but you are essentially returning a  bad dollar.

@Cynthia Vaughn - I liked RD, but their education wasn't as strong as what i would say you could get in the local marketplace for a fraction of the cost. I like Lifeonaire, they have strong education at a low cost. I personally like the "seminar" style education, it engages me better and i learn faster. Some of the best things i think i could recommend is find a local mentor already in the business willing to work with you, either in a REIA or elsewhere, and learn from them. Much cheaper, and probably a better education.