All Forum Posts by: Account Closed

@Jaysen Medhurst I am starting to Direct Mail and have also been driving for dollars. I agree with you. Good deals wont be on the MLS.

How is anyone making money offering full price on listings? I'm in the Houston area.

A few weeks ago I was looking at a home that was listed at $125k. It needed a lot of work. It had been vacant for a while. The flooring throughout needed to be replace, the kitchen looked like it had been gutted and the entire house need to be repainted. My contractor estimated rehab cost at about $15-$20K. The ARV was about $145-$150k. The house sold for $125k (asking price). I just don't see any margin for profit in that scenario.

This weekend I went to see another property also listed for $125k. This one was being lived in but also needed a ton of work to include flooring throughout, painting entire home, new A/C unit and a new back fence. Kitchen was also gutted (yes, someone was living in it). The ARV was also about $150k. Again, with repairs I'm just not seeing any room for profit but my agent says in the Houston market investors are paying full price and sometimes more. Both areas would rent for about $1400-$1600. So what am I missing?

Am I missing an opportunity to at least get them under contract and wholesale them? I know that would cut out my agent so should I not use her in this scenario where I may do a wholesale deal?

@Benjamin Kopf I am also new to wholesaling and committed to be fair, honest and close to accurate in my estimations. I don't know if it's unfair if the investor pays double for the end deal. In my opinion if you find a deal and put it under contract, another wholesaler thinks it would still be a good deal for him and his buyer and proceeds to sell to his end buyer (investor) I think it's a win, win, win for all. The end buyer must still think it's a good deal or he would just walk away. I feel that as a wholesaler its my job to find the deals and do the leg work that a investor doesn't want to do or doesn't have time to find. It's also my job to be fair and do my best to be accurate on my estimates and my buyer can decide if the deal works for them or not.  

Is it a bad idea to try to wholesale a property that is listed with an agent? If not, what are the steps to take when dealing with an agent? In Texas I believe double closings cannot be done without funding both. Any and all advice is welcomed and appreciated.

@Jorge Rojas Keep us posted if you decide to go with Rebogateway. I'm curious how well it works.

No he didn't. My question was a hypothetical. Just trying to make sense of it all as a new investor. As a newbie I would've thought a good cash flow would be ok even though the ROI was low but I now understand. I'm glad I asked the question and had everyone reply.

@Cody L. wow, 1000 units. I hope to be there some day. I agree with you on the "smart debt".

@Mike Hanneman thanks for your input. I agree with you, if you don't understand leverage you shouldn't invest. I understand it, it's just that I've been a follower of Dave Ramsey since 2005. If you're familiar with him he says "no such thing as good debt". That's how I've run my business before. I now do see the power of leverage in investments. If done correctly and carefully it's a win win.

@Andrew Taylor thanks for your input and good luck to you. I see you're from Magnolia. Not to far from me and really nice country area. I love taking drives out through there.

To everyone else I also want to thank you all @Brent Coombs @Justin Fox @Bhekizwe M. @Bryan O. . After listening to Dave Ramsey for so many years my family is debt free, so buying an investment and paying cash seems like a better deal right now. Still trying to understand the power of leverage. I get it but still trying to make sense of it.  I guess tying up $150k on an investment that isn't liquid is a risk in and of itself. Although you're cash flowing $770 a month it would take almost 16 yrs to recover your investment.