All Forum Posts by: Dustin Erlewine

I live in a county where the section 8 rate for a 3 bedroom is $1178. For most of the county this rings true for what you could get for normal rent. However, in some of the outer parts of the county this would be about $200-$300 more than what I could normally get. If I can get the section 8 rate it would be highly benefical for me to BRRR these properties because they are in a Opportunity Zone which would allow me to escape capital gains if I hold them for 10 years. What am I missing something?

I am looking to meet with my account and figure out how I can avoid Uncle Sam's wrath. I want a LLCs for my rentals, however should my flipping business be a separate LLC or the same? I market to houses with my business name which I have registered, and I'd like to have an LLC for it. However, I don't know how that would benefit me. I'm trying to figure out where the lines are for my flipping business and rentals. Some of the expenses would be part of the rehab for the rental, where marketing wouldn't be. Any guidance?

At the beginning of the year I finally decide to do what I should of done 12 years ago and start building a portfolio.  I’ve been very hard at it and spent more time and marketing capital than I’d like to admit.   I’ve analyzed many deals throughout the years, so I have a good idea of what is and isn’t a deal.  I had my license in 2009-2010 where you couldn’t swing a dead cat without hitting killer deals. However, the three deals I’ll bleed my soul out to find have turned into some very sour grapes and didn’t close.  Inspections found costly repairs that put me out of budget (septic and foundation issues) cancelled two of them. I felt highly confident in my current deal knowing it was currently rented and easily cash flow $400 a month.  The inspection came in with issues, but I expected it.  I close next week, sigh of relief…finally.  Until, I got a call from the Realtor/PM three days ago.   The heavy rains over the last week has caused a water problem and damage in the basement.  The seller doesn’t want to move on his price and said he’d let me out with my EDM back. I’m guessing he’s had this issue before, and figured bad timing got him.  I’m going to take him up on it, eat the appraisal and title work and move on.  

I’m getting mentally exhausted and when I listen to the podcast I often find myself resentful of how others are finding deals in this market. And I don’t like it. I find myself stretching to make deals work, but the numbers don’t lie.  The cold calling, mailing letters, and constant hours away from family without any progress is tough.  I’ll continue to grind. There’s gotta be a soft ball carpet and paint lurking out there somewhere. 

Go for it. 

Some school districts (or jealous people in them) might report you to admin if you start posting a lot of FB posts about selling houses or houses sold.  There's been a couple teachers I know that have been questioned about it and asked if they was posting and talking to clients on school hours.  Just make sure you keep them separate, and I would let your principal know what your planning to do and that you won't do it on school time.  This way if it does come up, the principal isn't blind sided and can quickly squash any haters.  

I am considering getting my RE license.  I had my license for a short stint in 2008-2009.  I have been direct mail marketing to absent home owners and high equity home owners that I found on listsource. I am looking to purchase these homes for flips and rentals.  The response rate was 10%.  I had quite a few leads that just wanted me to list there house.  So I called a family friend as asked if he was interested in hooking up one of my leads.  During the conversation he explained that its illegal for RE agents to market this way and would have to send mailers to everyone on that street.  He explained it opens the chance of a law suit and losing your license.  I was surprised and this didn't make sense to me.  Well during a conversation with a different realtor in the same area I was told the exact same thing.  Which leads me to believe either they are correct or there's someone spreading bad information on this.   I was considering getting my RE license sense I am coming across so much free chicken with the listings.  However, I don't want to waste my time if I can't market the way I am now.  What is the right answer?  I am in Missouri.  

After many years sitting there sidelines from analysis paralysis the last December I finally decided to start buying. I set a goal to get 5 BRRRs this year and next year double it. I just went under contract with my first deal I found on the MLS. However, that deal is a rare breed. So I started my deal searching by doing driving for dollars, list source, and building a direct mailing list. I feel I'm doing this wrong, I spent a considerable amount of time searching, researching, and building my personalized letters. I also spent considerably more cash than I thought to compile my data and get it shipped. My method I used is the following.

1. Drive for dollars, mark houses with my OnX maps. Sometimes I mark  neighborhoods without driving them buy using trulia to find my target price range properties.  
2. Transfer the data from OnX maps (landowner name and tax address) into Excel. 
3. Use Whitepages to confirm the address, and get a phone number. Use list source for other data.  
4. Print a letter and stick it in a envelope and ship it to the address. I’m considering post cards and yellow letters. I’m also using list source for extra data, but I’m not finding it extremely useful on some of their features. 
5. I started a website for some of those leads to check out.  
6. Impatiently wait for leads, and consider how much time, effort, and cash I’ve put into just sending about 300 letters.  I do have numbers of about 250 people to cold call.  

I think it cost me about 30-40 hours of work and about $700 bucks. Including webpage, whitepages, research, list source, driving, paper, envelopes, and stamps. 

I think I’m doing it wrong.  The positive is I've got a solid list built. However, the law of averages tell me that 300-600 letters a month isn’t going to feed me 8-12 deals a year.  I feel I’m being proactive to the masses, when I want to be passively proactive to the hot lead.  Do I need to focus my time and energy on online sources?   

@Kunal Lakhwani

I agree with others. The entry needs plugged and inspected.

Being an outdoorsman myself, trapped my fair share of raccoons, and had a pet raccoon. If it was me I’d get a box trap for $30 and some wire mesh for $30 and have it fixed in an hour. Being a long distance issue, I’d just call around and find a animal control person or a local handy man to handle it.

I got my RE license in 2009 in Missouri to work as a agent, by mid 2010 I was done working as a agent and accepted a W2 job.  When I started as an agent it was near impossible for me to obtain a loan without a track record of income. I had two stellar deals fall in my lap and I wasn't educated enough with alternative financing to put it together. The cost of getting the license, paying the desk fee, board fees, etc. wasn't cheap for a guy living off commission. Getting a RE license isn't a magic wand of knowledge.  The 38 yo me would tell the 27 yo me to find a mentor, read more books, and ask more questions.  Those two deals with the help from a mentor would of well funded my start. Find a mentor.