All Forum Posts by: Duncan Hayes

Here's an easy way to breakdown these payments in 60 seconds. I'll use an example of a property with gross rents of $2,000.

Gross Rent: $2,000 - 10% (management fee) - 5% (vacancy) - 5% (repairs) - 5% (maintenance) - 15% (taxes) - 10% (insurance) - 10% (minimum expected cashflow) = $800 or you could just multiple gross rent by 0.40, I just gave you a full breakdown of monthly expenses. So with a gross rent of $2,000, the most you can pay the seller is $800/mo. This is PURE cashflow for them. Now, this is NOT seller financing. It is simply a promise to pay X amount of dollars until the debt is paid off in full, but can be referred to as terms. Notice no mention of a down payment or interest. For a $200,000 property this would take 250 months. 

Now, if the seller wants interest and a down payment, then you could say something like this:

"Mr./Ms. Seller, I wasn't talking about you financing the property and I was unaware that you were a licensed bank. But, if you want to be the bank I have no problem with that, again, I just wasn't thinking of it that way. If you want to be the bank though, I'd say it's only fair I be treated as a bank customer. Right now, 85% of homes are purchased with 0-3.5% down. VA loans, FDA loans, and FHA Loans. There's even programs for down payment assistance, which make the down payment $0 for the buyer. Is that something you'd be willing to accept? Money is cheap, banks are charging around 3% interest, is that also something you'd be willing to accept? Banks also allow 30 years to repay the debt, with no balloons. Is that something you'd be willing to accept?"

Something powerful my mentor taught me. He said, "there is a difference between terms deals and seller financing deals. The wealth is in knowing the difference." Hope this helps out on the next one. Approach it differently next time, like you're not a buyer but a concerned person in the community just reaching out to see how you can help.

Calling is always best. How many letters do you think people get that they don't open if they don't recognize the sender's name? Do you want to spend X amount on letters that just end up in the drawer with the fast food coupons? 

Calling gets you in touch quicker and an answer quicker. That way you can work the lead or move on if it's not going to be a lead. Speed matters simply because this is a numbers game. 

I don't know about Flipster but I've used Propstream. Wouldn't recommend. I do recommend batchleads

You need a title company to do business. This is an easy step, probably the easiest. Google "title companies in (your market)." From there you make a list of them and call them. Ask if they can handle assignment of contract and ABC transactions. If they say no, move on. When you get a couple that say yes then you've completed that step. 

As far as earnest money, my first deal I wrote in $10 EMD. I didn't even pay it. I never have. Find buyers first and get connected. Learn their criteria. That way, when you're talking to sellers, you'll have an idea of who will buy that contract from you. I always tell my sellers after they've signed a contract that it'll be submitted with EMD within three business days. So now I have three business days to assign to a buyer. Assign it before that time frame is up and the end buyer submits EMD. I have NEVER submitted an EMD from my own pocket in three years.

It sounds to me like being new and hearing things you didn't know about is causing you to over think. These are small things that can be navigated easily. Find truly motivated sellers and the EMD won't matter to them. $10-$100 will work, so if you ABSOLUTELY had to pay EMD out of your pocket, it's a small amount of money. Follow my advice on getting buyers first and learning their criteria, you won't ever have to put up the EMD yourself.

Good luck and welcome to the industry.

Duncan

I always tell anyone that I'm teaching how to wholesale that they need to find buyers FIRST. Buyer's are the clientele. Yes, sellers are important, but we get paid from buyers; not sellers. Finding buyers is simple. You join Facebook groups for real estate investing in your market. So an example, I focus on Houston, TX. I joined groups for Houston investing, Texas investing, then nationwide investing because there are out of state investors in those groups. I then go in, post something along the lines of; "Hi my name is Duncan. I find discounted deals in the Houston area and I'm looking to connect with some new buyers. If you're buying in the Houston area, let's talk!"

Then they'll drop their emails in the comments. Do I just take their emails and add them to a long list of names and emails? No. Once they drop their email, I send them a friend request and I slide into their DM's. From there I talk to them about their criteria. This is important for two reasons: 

1. I want to know what they want to buy. That way, when I'm talking to sellers I have an idea of who would purchase that property before the seller and I ever sign a contract. This helps for quick assignments because you don't want to be sitting on contracts for too long. 

2. It helps eliminate me sending my deals I worked on locking up to other wholesalers who are just gonna add $ onto my asking price and blast their email list of cash buyers. 

My mentor gave me a great question to ask and I'm gonna pass it on to you. "What WON'T you buy?" If they are saying they'll buy basically anything then they probably need to be vetted harder. Any real and experienced buyer will know what they WON'T buy. Someone who's saying they'll buy anything probably is fishing for something to daisy chain. 

Or....

You can come to BiggerPockets and find buyers. I made a post about a small city; Temple, TX, and buyers started messaging me. I didn't even have to work hard to find them. Buyers are everywhere, there's more money out there than inventory. 

Or...

You can pull cash transactions, skip trace those buyers, and contact them and ask if they're looking for more properties to add to their portfolio. 

Or...

You can go to local REIA's (virtual REIA's if you're in a market you don't physically live in or can't drive to readily due to distance) and find cash buyers.

Or...

You can put up a sign saying, "looking for local fix and flippers" and add your phone number on a busy street corner. 

You don't need 4500 buyers to sell a deal. You only need a handful of serious ones to start making money and grow from there. I always advise treating your cash buyers right. Eventually, they will get tired of rehabbing and flipping and they will become private money for you to buy deals with in the future. Cultivate those relationships first. Find deals after you meet them. It'll make your life as a wholesaler easier. 

Best of Luck,

Duncan 

why use a fake POF when you can literally connect with any real Hard Money Lender and get a real POF?

New Western literally bought everything we threw at them in Houston last year. I'd definitely look into connecting with someone there. 

wholesale to build capital. not only that, but you'll learn how to negotiate and get deals at a lower price that you could buy for yourself. that's just how I'd do it though, it's your life, your choice!

Good luck and welcome to the industry.

Investing is taking a chance. Either you want to take that chance or you don't. You can only calculate risk, you cannot eliminate it. 

Oh yeah, Bill Gates came out and stated that the Omicron Variant did a better job at building immunity than the actual vaccine did, so there's that.