All Forum Posts by: Jose Jacob

 Hello Konnea

Social media is bombarded with so called GURU's who want to sell their courses and make some money. REI is not that easy to make ton of money. It is a slow process not a quick buck game. With your questions, I can see that you are all over the place with lot of outside info in your mind. REI has so many branches(strategies). It is hard to answer all of your question at once. Let me answer some of it.

If you have no money, your choice of finding a seller who are trying to retire or want to hold a seller financing and negotiate a good deal and rent the house out and keep the difference between the mortgage and rent.  Don't forget to calculate all the other expenses like, insurance, repair escrow, vacancy etc. 

You listed your options :

Wholesaling :  This is doable if you know how to it.  The key factor here is to find OFF market deals with a pretty good margin like 40-50 cents on a dollar. If you can't find OFF market properties with deep discount, this method will not work and lot of wholesalers fail due to this reason

Joint Venture: This method is good for you if you can find good deals which has good margin for both of you (the other investor and you). JV is that you find a property and partnering with an other investor who has money to do the deal. There are several JVs who would love to work with you including me.

Private Money Lenders : Not a choice for you due to the lack of your own capital. They only give you 70-80% of LTV and you have to find your own capital to close and renovate, if you choose to fix&Flip and most of them need you to have some experience in the field.

Subject to:  A great way to accumulate rental properties if you can convince the home owner.  If you can target foreclosure houses or absentee or tired  landlords this is an excellent method.

Seller Financed :  This will also work in LTR strategies. Find how owners with 100% equity. 

Your question about "why would a seller wholesale a property if they could go through a Realtor to get market value" The answer is Seller wholesale a property if the house is in destress like, the house is in foreclosure, estate sale, probate or houses that need full renovation. A regular buyer through a Realtor may not buy those houses due to extensive repairs. 

JV is not similar to private money lending and wholesaling. Those are three strategies of REI. Explanation is in my answers above.

Hope you got a idea about different strategies of Real Estate Investing.  Let me know if you have anymore questions.  I am glad to help

 Veronica,

Two main things you need to focus to wholesaling : 1. Find OFF Market deals. 2. Have a list of CASH buyers in your area.  Wholesaling is based on good pricing.  If you get a property with 40-50 cents on a dollar, you will be successful.  

Good luck

Renee,

Rent Vs Flip. You build your long term wealth by buying doors to rent.  You make $$$ as short term by flipping houses.  Fix & Flip has too many components in it. You need to know the market value very well when you buy and After Repair Value to make good margin on a flip which comes with lot of experience. Ask yourself, are you a hassler ?, Do you have enough capital to buy house ALL CASH ? (There are private money lenders for 80/20)  Do you have a team of contractors ?  Do you knowhow to price a house when you buy? Do you know most of the prices of the materials ?  Do you know how to find OFF Market properties to buy to flip ?  You have an YES to all these questions, you can fix and flip.  Otherwise buying doors will be a better option for you. 

My best advise will be to reduce the price and move on. As someone said earlier you make money when u buy the property. Be more conservative when you calculate the ARV next time. Also consider deducting 10% from the ARV if you are planning to list the property during off season like Nov, Dec and Jan

Its not only where you are. Its all over the country. I get the same. Their ARV is way higher than mine. Doesn't make any sense. These so called wholesalers are putting some new investors out of business. Very sad,

Wholesaling is one of the many parts of REI. Most of the wholesalers fail in it due to pricing. Pricing is extremely important in wholesaling, other facts comes after. You are selling a wholesale deal to a retail investor. Both of you have to make enough money to make it work. For that purpose, as Jerryll Noorden mentioned, you need to find OFF Market deal with discounted price. Make sure you know what will be the ARV of the deal you planning to wholesale. Another big mistake wholesales make is to put too much margin on a deal for them. Wholesalers who want to make 25-30% margin in one deal will not survive in the market unless they get a deeper discounted deal. 7-10% will be ideal. Try to make close 10 deals with 10% margin rather than 3 with 30%. It will be very hard.

Most of the investors face the same problem due to lack of inventory. Now it becomes the numbers game. I am also trying different ways to find properties like D4$$, MLS, whole sales, off-market, online auctions, court steps etc. We will continue to face this issue as long as the inventory is tight. I am not sure Out of State fix and flip is a solution. If you planning to do it, make sure you study the market very well. I hear that some town has plenty of inventory and some dont.

Fix and Flipping is a lucrative part of REI. This one of the form, like STR, LTR, MTR, Multi-Family being others. Each form has its own merits and demerits. But make sure that you invest in LTRs with the some of the money that you are profiting from fix & Flip. It has been a challenge for every one in fix & Flipping to find good properties for the last two years including me. Driving for Dollars is one of the best way to find good off market properties. MLS should be your last resort. Some wholesalers are reasonable. Always look for off market properties.

I am not sure about rate coming below 6% but somewhere between 6.5 to 7.5%.  Still good for the market to shift. Low inventory in some parts of the country will keep the price steady.  Low inventory will still be a problem during Q1 2024.  

 Neither the model is STUPID nor I am loosing money.  You are a contractor and you may not LIKE the model which doesn't mean that the model is STUPID.  First of all, try to respect others. You are mad cuz you didn't like it. It is STUPID for someone to think that I wud use an unlicensed contractor to put my half a million dollar projects in jeopardy. This is New York not Arizona,  we pay top dollars for houses.