All Forum Posts by: Account Closed

@Michael Quarles Are you saying you're prescribed or recommended sequence of mailings to a high equity list would be;

1: yellow letter

2: zip letter

3. colored pc

4. text pc

5: ??

@Nancy Eardley You're most welcome! 

@Jonathan Wheeler Why would this be a good deal? Definitely not a good deal for a fix and flip based on the numbers provided. I have wholesaled rentals to  fix n flip investors, but the leases were month 2 month so after close, the investor gave the tenants 30 days notice. Regardless, there is not enough profit in this deal as stated for a fix n flip. As far as being good for a buy n hold, my instinct says its not a good deal. What is the lease term, what is the rent the tenant is paying, and what is the going rent for similar properties in the area? Those are needed to know if this makes a good buy n hold. Of course, you should also know what your buyers are looking for wrt a buy n hold (ie. cash flow per door, cap rate, etc).

@Nancy Eardley I have had Realtor's bring me cash buyers on wholesale deals I had. The Realtor added their commission to my price and presented it to their cash buyer. I have found cash buyers several times this way.. You can also refer leads you get to a Realtor when the there is not enough equity, or the lead does not want to sell at a discount and has time to list it (ie. not pressed to close fast for cash). You can use a Realtor on REO's, short sales, etc.

@Nathan Paisley Wow! Thanks so much Nathan. I appreciate this post more than you know my friend!

@Daniella Ortiz  How many properties has this investor fix n flipped himself? What role did he play in those deals? This person doesn't want to find the deals, doesn't want to fund the deals, doesn't do the rehab himself? What does he do, and how long has he been doing it? To me, it kind of sounds like he's a newbie himself.. In which case, you're all learning together and not from a mentor, but from the school of hard knocks. I'm not knocking that.. just saying..

When you say the property value is $90K, does that mean as-is or after repaired value? If the latter, then how can you make any money on the deal in this scenario?

Thanks @Ryan Goldfarb for your input. Much appreciated!

@Angelo Mart  I have found that the 65% or 70% formula needs to be adjusted based on price range of property, among other things. Do you know what that formula is made up of? It accounts for closing costs (2%), agent costs (6%), holding & finance costs (~5%) plus investor profit. Now those numbers can fluctuate since some agents will go with 4%, finance costs may be less if you put more cash in, etc. On higher priced homes, investors will take a lower % of profit on the total deal since the total profit is so much. So the formula may be 75-80% on a property such as yours.. It depends. But, I think from the sounds of it, the $400K is doable. But note.. With a higher priced home.. The usually move slower and have longer days on market.. That means longer holding and finance costs. There are fewer buyers, both investors and end buyers, at that price range. Personally, I would not want to lock such a deal up unless I had a buyer already in the wings for this type of property. One thing you might consider is to put an option to purchase contract on the property between you and the owner. You could do it at the $400K mark. Put down a small earnest ($10) and about 2-3 week timeframe. This gives you the right to market that option and find a buyer at the option price,yet it leaves open for the seller to find someone themselves as well. If you find a buyer, great! You then formalize the deal with a standard purchase contract then assign or double escrow to the end buyer. That's what i would do.

@Lawrence Brooke I've had similar experience and believe me when these times happen it's tough to overcome.. But overcome you must if you expect to succeed. Wholesaling is not for the timid or weak. It will try and test you. 

As you said, while you may have good sales skills, you can improve. I've been wholesaling for 2yrs and still occasionally lose a deal due to a stupid mistake in how I handled the first call, call back, etc. Also, how fast you respond to the lead, in a very competitive market, can make all the difference. I've won and lost deals with-in 1/2 an hour between me and another wholesaler.

I believe Florida is very competitive with respect to wholesaling.. very much like it is here in Phx. You noted you're using a 70% less repair rule and how you think that's too low.. Well, it's quite possible that rule puts you out of competition in your market. Here in Phx it is so competitive and inventories so low that it's *very* rare to find a deal I can get under contract with that amount of profit. It depends on the deal (price range, location and condition of the ppty) but I would say between 75% to 78% is the norm here. You should talk to your buyers and ask them how much profit they need on a deal. Some will not give you a % but a dollar amount like to *net* $15K to $20K min. Thus, you really need to throttle your % formula to make sure they do.. realizing the components of the rule itself (ie. agent fees, closing costs, holding costs, finance costs, and net profit). When it's very competitive, as I believe it is in Florida, you may need to tune and adjust your calcs accordingly. 

You didn't note what list you mailed to.. (so I assume absentee owners lists). In this market cycle, and depending on where you live (for sure in Phx), foreclosures and REO's, short sales and other distressed MLS listed properties have for the most part dried up. Absentee owners lists are the new low hanging fruit and thus the most promoted so most investors and wholesalers go after it to find deals. So, you're competing with a lot of other investors and wholesalers with such a list. This has a tenancy to drive prices up above where you need to buy.. That's what I am finding.

Stick with it, even in a competitive market you can still land deals. Takes persistence, and you may have to spend more that you originally thought.