All Forum Posts by: Doug Pretorius

Although there may occasionally be deals to be had buying from retiring fellow investors my experience has echoed yours. Active investors aren't motivated sellers. If you want to buy from landlords you need to find the accidental ones, the ones who don't want to be landlords at all but got stuck with a house they couldn't sell and had to rent.

All deals begin and end with finding motivated sellers. FSBOs and expireds are my top sources. I exclusively purchase move-in ready houses that I can resell on terms and make a spread on both the price and the cash flow.

@Stevo Sun Banks are only one source of financing. I haven't had a mortgage with a bank in at least 15 years. I get all of my financing from the sellers and they don't put any limits on how many mortgages you can have or care about your DCR.

@Mark Barbee This is probably not the best time for flips. You need to get a substantially lower price and rehab them fast and then be prepared to sit on them for awhile.

However flips are only one tiny niche. Right now is one of the greatest times in history to take over low rates sub2 for long-term holds or very nice spreads if selling on a wrap or lease option. It's also a good time to pick up long-term holds with bank financing. Get the price low enough so that it works even with the higher interest rates. If rates drop later you can always refinance.

@Jon LaBorde Debt relief is the #1 benefit for the seller in a sub2 deal. Depending on the situation and how much equity they have you may need to pay them moving money or even cash out some of their equity. But typically the seller can't afford or just doesn't want the house anymore and they're ready to walk way but they don't want their credit ruined by a foreclosure. So the investor steps in and takes over responsibility for the house.

If the seller has a lot of equity that they don't want to walk from you can also combine a sub2 with seller financing. Give the seller a 2nd mortgage for their equity and pay them out over time or when you refi.

@Jon LaBorde An estimate like that is going to be useless for you because it depends on so many factors. Your location, your list, your approach, market conditions, time of year etc.

The only thing I can tell you with 100% certainty is you'll need to SMS a lot more people than you will need to cold call.

Sure. Sellers are your best source of zero down financing. There's no qualifying and there's no limit to how many properties you can buy.

Stop thinking in terms of going to a lender to get the money to pay a seller. And starting thinking in terms of how to get in front of motivated sellers who want to GIVE their properties to you.

@Dave Overall All the time, direct from sellers, very profitable.

You have to get up to get down.

Don't do that! Putting anything into a mailbox without being a U.S. Postal Service delivery personnel is illegal under federal law:

https://about.usps.com/news/st....

If you want to leave something attach it to the door.

@Mike Schorah You have to consider who's telling you to do it and why. Guru's target newbie wannabe investors. Newbies are very enthusiastic and want to take action but guru's also know that 99% of their students are never going to pull the trigger and close a deal. Probably 95% won't ever even work up the courage to talk to a potential seller. But they need to feel like they're doing something (busy work) so the guru's give them something to do. Driving around taking notes on dilapidated shacks probably feels like you're accomplishing something. And as you've noted if you do actually make it as far as talking to the owners there's a chance you'll find a deal, so it's not necessarily a waste of time, just not the best use of your time.