All Forum Posts by: Gus Muller

@Michael Ealy that is great advise! My hard money lender made a similar suggestion. He thought wholesale first, MLS second, and if I can't get what I want for the quick money, third option would be fix/flip/sell.

I currently do not have another project in the pipeline, but I am working on that daily. I am launching a new company in April to get off market properties directly from sellers. Professional marketing/socail media campaign and website from a heavy hitter here in Minneapolis. No more playing around on the MLS or public retail sector. It is too crowded and expensive.

Big things coming!

@Gus Kazek so you are suggesting flip and resell, and take the profits and put that down on a multifamily? I assume using a 1031 exchange? I don't want to tie up all of my cash into a multifamliy building, but could see tying up the profits!

Greetings community! I am a real estate broker, licensed building contractor, and I have done 10 fix and flips, with #11 set to close March 15th!

I am paying 190K (my own cash). 3 bedroom, 1 bathroom, 1 car garage rambler in hot area of Minneapolis. I've run the comps and ARV is $310K+ if I choose to fix and flip. Should run under $50K to renovate. Original owner, good bones, finished basement.

I know the fix and flip will most likely net me much more in the long run, however I am also pretty confident I could clean it up and wholesale or toss it directly on the MLS for $215K-$220K and could pocket $25K-$30K quickly with little to no effort.

I don't think the rental numbers make much sense on this one, and I don't have any rentals. I think I'd need to pay less in the future to make the cash flow possible.

So, do I take the fast money and pump that into finding more leads? Or, do I tie my cash (AND TIME RUNNING THE SHOW) up and flip this one for the larger profit (in about 3-4 months). I know that with the house free and clear after I close that I can borrow against it cheaply, but having $190K cash out there will inhibit my ability to close on other properties.

@McKinley Crowley is a 6 mailer campaign one that is spread out over a certain timeline? Every two weeks? Or is this 6 types or mailers? I agree with the letters since the list will be more qualified (I think!). Excuse my ignorance!

@Ehsan Rishat we certainly have the working capital to fund a larger campaign, and I will look into this for our launch in April! Thanks for the kind words and support!

@Tim Swierczek agreed that wholesalers generally blanket an area. Cast a big net and see what comes up. I'm going to try and toss a few lines down for the properties that I think have the most potential. Tons more work, but why not give it a shot!

My overall goal is to funnel leads into three tiers. First tier will be fix and flip with my own cash (those with the most potential). I am finding it harder to compete through traditional means (MLS) and the deals are not as good as they once were. Second tier will be fix and flip with hard money lender that I have been pre-qualified through OR wholesale to another investor for a quick profit. Third tier will be homes that belong on the public market, which I will then list through the brokerage.

We plan on launching this new venture mid April with a new website and professional marketing campaign by a heavy hitter here in Minneapolis. Big things coming!

@Kyle Shankin I will check out Episode 309! A cost analysis would be beneficial for sure. At this point, I am mainly trying to further understand who the owners are, who is in the game, etc. There are a lot of the same owners, and cross referencing their addresses shows me they are investors in big houses that bought when the market was down. These people most likely will not want to sell at a discount. But, I'll send them letters anyways so that they know who I am!

I could just blanket the neighborhood, but going through each lead before sending the letters is part of my "learning curve". I spent almost two years researching fix and flips in my area, visiting the homes before and after the work, following all of the data. I calculated the average purchase price per/sqft at the time for the rehabbers, average time it took to purchase, hold, and close on the property, cross referenced the city permits to get an idea of the costs, etc. I had a ridiculous spreadsheet going. But, it ensured success that when I did take my first leap and plopped down $80K cash with everything for me personally on the line.

I am not going to need to go that crazy this time as I now have a decade of experience in real estate investing. But this lead stream is new, so the more I understand, the better!

My plan is to send out about 40 nice letters to my most qualified leads and see how the response it. It took me about 2 hours yesterday to comb through about 150 leads. That is a lot of time, but I feel the knowledge was worth it. I most likely will not do this every time. I will post updates once the letters go out this weekend!

Hi everyone! I am licensed broker, licensed contractor, and fix+flipper with 10 properties bought and sold for profit, with #11 closing March 15th. I am new to bigger pockets! 

I am starting a wholesale business and am just scratching the surface of direct mail in the form of letters. I am using REIPro to get my initial leads in my targeted area of Minneapolis, and my target is owners that don't live in the property. I then comb through these leads looking at how long the person has lived there, what they paid for the property, mortgage balances, etc to make this list even smaller. Out of the 300 original leads, I have used my research to narrow down my mailing list to about 60 candidates that might actually consider selling, and deals that have some potential.

My question is, am I doing this right???!!! I know I could just direct mail everyone, but I feel like this would be a waste and tough to track the leads. Any advise or links to other blogs/videos is greatly appreciated!!!

Investment Info:

Single-family residence fix & flip investment in Fridley.

Purchase price: $80,000
Cash invested: $47,000
Sale price: $163,000

Flip #2 in Fridley, MN in 2011

What made you interested in investing in this type of deal?

Again, it was cheap enough to take on with the cash funds that I had available at the time. Exterior was nice, newer windows, and a massive 6 car garage that was bigger than the house!

How did you find this deal and how did you negotiate it?

Through the MLS system I was a licensed real estate agent and negotiated my own deal.

How did you finance this deal?

100% of my own cash. I had made a good profit on my first flip and had enough funds.

How did you add value to the deal?

Complete remodel and added a 3/4 bathroom in the basement.

What was the outcome?

Pretty good. Made about $30K not a huge profit, but the house was done very fast. It did sit on market as it was winter in MN and the area was just OK.

Lessons learned? Challenges?

The house had mold in the basement, which I had professionally remediated with demo for only $2,000. They also provided testing and paperwork for the new buyer. Was less than I expected. I also learned the importance of location/school districts. Although this house was in Fridley MN, it was on the border of a less desirable area of Columbia Heights, and also within the Columbia Heights school district. The massive garage bailed me out with a buyer that had Harleys and a Corvette!!!

Investment Info:

Single-family residence fix & flip investment in Fridley.

Purchase price: $80,000
Cash invested: $47,000
Sale price: $163,000

Flip #2

What made you interested in investing in this type of deal?

Again, it was cheap enough to take on with the cash funds that I had available at the time. Exterior was nice, newer windows, and a massive 6 car garage that was bigger than the house!

How did you find this deal and how did you negotiate it?

Through the MLS system I was a licensed real estate agent and negotiated my own deal.

How did you finance this deal?

100% of my own cash. I had made a good profit on my first flip and had enough funds.

How did you add value to the deal?

Complete remodel and added a 3/4 bathroom in the basement.

What was the outcome?

Pretty good. Made about $30K not a huge profit, but the house was done very fast. It did sit on market as it was winter in MN and the area was just OK.

Lessons learned? Challenges?

The house had mold in the basement, which I had professionally remediated with demo for only $2,000. They also provided testing and paperwork for the new buyer. Was less than I expected. I also learned the importance of location/school districts. Although this house was in Fridley MN, it was on the border of a less desirable area of Columbia Heights, and also within the Columbia Heights school district. The massive garage bailed me out with a buyer that had Harleys and a Corvette!!!