All Forum Posts by: David J.

Why on earth would you wholsale a property and net @12k (after holding/closing costs) when you could rehab and net @ 50k.  Seems like either you guys don't have solid numbers or have lost sight of the goals.

i am happy to help. Shoot me a message and I will call you. 

You need your own CPA.  If you are reporting the property correctly right now you should not give him capital gains tax to make up for his future tax burden.a

1.  Your partnership agreement should be the documents that tells you how this should haoppen.

2.  If your partnership agreement is silent, your state's business laws will be the default.

3.  If you are just negotiating an amicable split, anything you agree on goes.  I assume this is what you are doing, so anything goes.

Some issues, quations I see are:

1.  How is the property titled and mortgaged?  Is he refinancing out of both of your names into his?  This must be where the bank fees are coming in.

2. The reson he wants to reduce your proceeds by a capital gains tax rate is because when he refinances the property out of your name his CPA is thinking this is not a taxable event (it is not) and thus his tax basis would stay the same.  He woudl then get the hit for the entire gain when he sells the property because his basis remained the same.  This is wrong.  The way to handle this for tax purposes is buyout is a sale of half the property from him to you.  A good (I mean any decent) CPS should know this.  You pay your own taxes on the half of the property you sell him based on your current basis, and his basis will increase by the amount he pays you so when he sells, the portion youpaid taxes on is already accounted for.  All the fees and stuff are just negotiated into the selling price of your half of the property. 

Get a new CPA.  It will be treated for tax purposes as you both have always owned half the property and you are selling him your half.  Plain and simple. 

@Bahman Ghashghaei 

What would be the cheapest way to send the mail out?

From a cost perspective, post cards are the cheapest (both actual postcard and stamp).

Yellow post cards? Where do you get them?   

We send yellow letters that are typed in a handwitten-looking font.  If you read the very first post in this thread it details where I get them and how much we spend onthe campaign.

How about the wording? Since this is an on-going campaign,  your wording cant be the same each month. Or can it?

6 month campaign.  One letter a month.  6 different lettters (content). 

At the end of the day, yes... there is competition.  The letters are designed to get people to call.  I am sure some work better than others, but I do not think there is a secret formula to success.  The people and knowledge needed to help you to succeed can be found on this site.  I think even more important that getting the phone to ring is being able to convert the leads produced into deals.  It takes some learning, but for exemple, this thread details our first 6 month campaign including 500 letters.  We just finished our second 500 letter campaign and our success was even better.  I attribute this to the failures of the first campaign. 

Closing a property is sales. In our first 2 campaigns, we have had multiple properties in each campaign where I said the wrong thing (or my timing was off) and I knew at that second we lost the deal.  I am sure there are other sending letters to the exect same people and buying houses our from under us.  Our skills have improved in our second campaign and our results are evidence of such improvement.  Hope that helps.

@Jerry Puckett 

I reviewed my emails and confirmed that one Jerry Pucket did provide it to me along other training materials (scripts, podcats, teacking schedule etc.) I found very helpful. 

Yes you can deduct interest on your refi.  You can also pocket the refi tax free.  Yay.

In my line of work we set our emails to go out at 2am so people think we are diligently at our desks plowing through contracts and important client files.  Anything after 2am and they will think you are too tired, and anything before 10pm is slacker territory. 

With that said,  it is crazy to me that people that choose to get emails on their phones have a problem with emails that come in at night.  Anyone sending them assumes you won't read it until the next moring, so turn your phone off and get some sleep.... Or don't.  Thats why the silent option was made.

in my experience I see inflated ARVs and rent projections and underestimated rehab costs on everything the larger wholesalers in the Houston market. Add in the double closing costs you pay (the big boys push them all to the end buyer) and you are playing on pretty thin margins. 

In the areas I invest I watch them buy them right off the mls and see the email come out a couple days after they tie the house up. When I see this I make note and watch for the closed listing to see what they paid for the property. Gives me an idea of their margins on a small level. 

I've been getting emails from NWA and quite a few others and have not been willing to pull the trigger on a single one. That said, someone is buying them and if no one made money on their deals they would eventually go out of business. Maybe the margins are too thin for me, but they must be OK for others. 

There are also a couple NWA reps that frequent this site and add quite a bit of value and knowledge. Just do your own diligence and you'll be fine. Problem I see from afar is finding someone to provide diligence on one of their deals will add cost and make it thinner than it already is. Buying from wholesalers can create a less than equal knowledge balance with the wholesaler in tune with the local market and the out of stater on the wrong side of the information highway. I see the wholesaler win this battle all the time in this market.  

@Michael Slabitcher @Raymond B. The voicemail was set up over a year ago so I had to call and listen to it.  Here is the secret sauce (or not):

"Hi this is David and thanks for calling.  If you would like to sell your property in [CITY], it is really important that you leave a message for me with your name and the property address.  This will give me a chance to look up a couple of records and save us both some time. There is no cost or obligation to find out what I can do for you.  Thanks for calling. We will talk soon.  Leave me a message."

I have no idea where I got the script for the voicemail, but it is personally recorded in an excited tone.  I doubt I came up with it myself.

i will grab it and post it tomorrow, but I can assure you that there are no secret words in it. Prepare to be disappointed. I have found that you just need to build a relationship with the seller and help them solve their problem.