All Forum Posts by: James Heller

Hi BP -- I've gotten a lot of questions recently on wholesale best practices and strategies, and I put together a video to cover as much as I can

I'd be happy to have your feedback on how your team operates, or if you are starting out I hope that my experience is helpful for you

I'll run you through the details of my very first deal, and cover

1. Tools

2. Time + Money invested

3. Acquisition

4. Disposition

5. Lessons Learned

Ping me if you are interested and I'll share the link. Thanks!

James

Hi Angelina — I have a slightly different view. I wouldn’t be intimidated by the marketing costs, and full time or part time discussion. It takes work, and it can take a lot of time up front. A budget can help expedite that piece. 

I had a full time 9-5 when I started out and still do today. I worked hard to squeeze in around 10 hours per week of driving for dollars at night and calls during the day. It took me around 5 months for my first deal and I considered quitting several times. I will say I invested in a few tools that amounted to around $1000 over that period. This breaks down to propstream for data (just pay once and pull a bunch of data), batchskiptracing for contact info, and Mojo for a dialer. I would say the last one is most necessary, the others are nice to have. 

I closed my first deal for $45,000. Considering the time and money I had put in, this amounted to around $110/hr. I’m planning to put together a short video on this deal and the “bare minimum” tools to get a deal done. I’ll ping you when I put it up

James

Hi Del — Great question. It can be hard to know if you’re looking at a real deal or not. It sounds like you understand basic comping, here are a few other techniques. 

- What is the standard Cap rate and “investor” cap rate in your area? In Denver, most folks are happy with 5%, but I know most investors are looking for 6.5%. If you know the current rents, or can project what they will be after renovation, you can work backwards to figure out what it’s worth. 
- (Annual rental income)*.8(for expenses)/Cap Rate = Rough purchase price

- What are other homes selling for on the MLS? Sometimes you can't find a perfect comp that is renovated and all of that, but if every house is selling at $400k or more, you can be fairly confident your $300k deal will sell fast.

- Look in other neighborhoods of similar “atmosphere”. This doesn’t always mean the closest neighborhood

At the end of the day, if you have a property where there a few comps and few others on the market, it can be an indicator that demand is outweighing supply and you are in a great spot to make a deal 👍

Hi William — I certainly don’t. It would take far too much time, and to be honest most sellers are going to have 10+ conversations with you before they are actually ready to sell. That being said, knowing the area is important and having a rough idea if you’re looking at a potential deal or not is a good skill to have. 

Follow the four pillars — Condition, Motivation, Timeline and price. the first three will tell you that you have a strong potential lead, and then you can begin digging into the numbers. 

Hi Shawn — Speaking in wholesaling specifically, you can definitely get the ball rolling with $0. A few examples

- Source data from driving for dollars  

- Skiptrace using a free service like truepeoplesearch 

- Start calling

- Find a deal, use publicly available purchase agreements

This is how I started as well. Having gone through this, I can tell you there are a few tools that will add “rocket fuel” to your wholesaling machine.  

- A dialer like Mojo. $97/mo and you will make 10x the number of calls and save yourself from “dialer’s thumb”

- Depending on how many calls you’re making per day, you may find that you can’t drive for dollars fast enough. In this case, you may need to pull data from propstream ($99/mo) and skiptrace using something like batchskip ($0.15/property).

It’s hard to see the return on investment before you’ve made your first deal. I can tell you from experience, you want to get to that first deal as quickly as possible to keep your motivation high. My first took around 5 months, ~$800 up front and ended up paying out $45,000. Not bad! You’ve got this

Hi @Michael Kussin — That’s some great initiative. Having someone who wants to sell can be great, having someone who wants to sell at a reasonable price AND is ready to go is fantastic. We’ve done a number of wholesale deals around the Denver metro area, and I am also in search of a new project. Happy to dig into the details with you

Hi Will — Like many, I also started out with truepeoplesearch.com to keep my up front costs as low as possible. When I considered using a bulk skiptracer and spending money to do so, the idea seemed completely crazy. 

I now use Batchskip for everything at around $0.15/lead (if you use code TTP). Zero regrets and here’s why — I have found the data to be incredibly reliable. It saves you a ton of time. The system is robust and processes everything in a few seconds. 

When you’re talking about landing a deal for a flip or a wholesale where you might net $50k+, the up front costs become less concerning. Our average deal size is $42.5k and that costs us around $400 in skiptracing to close on. Let me know your thoughts as well!

Hi Brian -- I'm trying to understand your question. From the sound of it, you need a new data set to work on correct? Propstream is a tool, there are other like it but they all pull the same data.

What type of properties have you been working on so far? Have you considered expanding your area of focus? One recommendation that we've seen success with is driving for dollars (virtually), which is a unique list that only you can create! There are limitless options with this method, however the cost per property can be higher (since somebody needs to do this manually. Or write an algorithm that will do this -- I would be a customer!)

I've recently dug up a fantastic 6-unit multi family property in a great part of Longmont (Boulder County, Colorado). In terms of properties I generally source, this one really looks fantastic (relatively well-updated, townhome style units). The one problem being -- meth contamination in one of the units.

Based on our inspections, this unit will most likely need to be a full gut. Does anyone have experience dealing with meth remediation? How costly and time consuming have you found this to be?

For the right person with the right experience, this will be a huge opportunity to earn some sweat equity. The property is now under contract at a $200k+ discount, I would be happy to work with somebody who can help make this happen. Thanks!