All Forum Posts by: John K.

Investment Info:

Single-family residence buy & hold investment in Longview.

Purchase price: $137,000
Cash invested: $5,500
Sale price: $169,995

This deal is set up as a wrap.
Negotiated a 10 yr note @ 5.5% with $5500 Down.
Moved buyer in 2 weeks later @ 8.99%, 12K Down for 12 Years.

Buy Numbers:
$1527 monthly, including insurance
Total Payments: $183,254.

Sold Numbers:
$2251 Monthly, including T&I
Total Payments: $324,187.

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

Good location
Buyer all but ready to move into it.

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

Script trigger
Always focused on owner financing. Seller tried to use brokers, but after 2 attempts gave up.

How did you finance this deal?

Owner carry

How did you add value to the deal?

Cleaned up and repaired A/C Unit

What was the outcome?

Sold to buyer on a note carry

Lessons learned? Challenges?

none

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

no

I try to get the negotiations going, on the phone. 

I speak to 150-200 people per week, I do not physically have the time to make appointments.

I explain to them that I am very comfortable making a solid offer without seeing the home, provided they are honest with my questions. 

If the number I give them over the phone is acceptable, I then make the appointment. I do not come off that number, if at all, if they answered honestly. 

I would suggest starting with the trade that you feel you already have the most knowledge on, and expand on that. This way you go into with a bit of confidence and won't get frustrated too easily with those trades that you don't have any or little knowledge on. 

I would recommend finding those trade professionals on YouTube and watch their videos. Everyone is doing it now. It's a great way to get a hands on lesson, from professionals. 

Maybe a long shot, but try to open an account on Trulia. Since Zillow purchased Trulia, the listings are shared between both sites. Not sure if they cross check each other's user database. 

So it's been a minute (2 years), since I really went on a Driving for Dollars run. Made that decision this morning and since it was going to be reasonably nice today in DFW, no time better than the present. 

Started by run around 9:30am or so, finished by 1pm including stopping for a bite of lunch. 

Results:

112 potential targets

Price ranges: 125-350K

This is why, even though my operations are heavily automated, this is hands down one of my favorite ways to find potential deals. 

Not too bad for 3 hours of work, if you want to call it that. 

@Daniel Lozowy

It would tell me that they are most likely self-managing and are at the point of burning out. 

Here is what I look for to determine a potential target.

How many cars in the parking lots, at 7am and 7pm? Match that to the number of units. Is it reasonably close?

How many of those cars appear to be working?

Is there a bus stop nearby that could skew the car number?

Call the office. Do they answer at 8am, as well as 5pm? Did they answer or call back from a message? If message, do it again the next day to determine if it's a pattern or not. 

Schedule a showing, as a perspective tenant. What's the "move in" ready unit look like? Does it a resemble a unit thrown together in desperation, or does it look nice for the rents asked?

This in addition to the obvious stuff, will probably get you the answer you need. 

It's difficult to tell you how much to offer, because there is much more data needed.

How much for repairs?

ARV?

How motivated is the seller?

Cash or Loan?

What amount of money, are you willing to lose the deal over? 

With that being said, here is what I see on this deal.

Offering 110K on a 120K ask, for a property that has been on the market for a year, has probably already been offered. It seems that this seller is dug in. The fact that the price has not moved, suggests that the seller needs this amount.

It is time to do some research and see if you can find a pain point. It just could be a situation that 120K is the amount they need to take care of "X" problem. 

I would feel out the agent and see if there is an opportunity to get the seller to carry some or all of it, for an "X" amount of time. If the seller is not cash motivated, this approach should intrigue them. They would get substantially more than the 120K, they would just have to wait "X" years. 

I think, as most people have advise, it's probably not going to amount too much, if anything.

However, when I am faced with these "experts", I never let an opportunity pass to give it back to them, just a bit.

Me:  I will give you 200% over current market value, regardless of condition.

Them: {Insert Expert response here}

Me: yes, are you ready to do the deal?

Them: Sure

Me: Great. I need a 40 year mortgage, with 15% interest, payments deferred for 30 years and I will put $100 down. Deal? I can have a contract over to you in less than 15 minutes, can close this within a week. I will just need your email address.

Them: Usually Hang Up or produce language that I sincerely hope they don't kiss their mother's with that same mouth. 

Never miss an opportunity to laugh and smile, is my motto. 

@Dave G.

I don't know if there is a clear cut answer for that.

I would think that most wholesalers would prefer cash buyers, just for the speed aspect of things. However, I have accepted a contract in the past, with financing, albeit with a client that I had done several deals with prior. 

I think it would come down to the terms the HML was looking at, regarding the approval or denial of financing. If there are going to be a lot of outs in their decision making, it would be much harder to accept that contract. If they need 3-4 weeks to come to a decision and fund, for myself, that would be very difficult to accept.

I think there is probably a scenario for every situation, where a wholesaler would accept a contract, regardless of terms or days to close. With that being said, just ask and be upfront with them. 

Best of Luck