All Forum Posts by: Keith Saunders

@Taf Reid if you read my posts you will see I am using sold comps and not the Geico Estimated value as the ARV.

@James C. Makes sense, thanks for the advise.

@Jordan Abromovitz I agree $2000/mo seems like a lot, and the market is not huge but not everyone can get financing or wants to own a house but they have a good job with a good income. And would like to live in a 4 bedroom home instead of a 4 bedroom apt. In addition as you know Bethel Park is a nice area with a great school district. The option to lease would be another exit strategy. Or even a temporary home for professionals relocating to Pittsburgh who have a family. That's the lense I was looking at it through.

@Mark Gallagher Thanks and I will contact you shortly.

@Brent Coombs Thanks for the clarification on James C post. I thought $210K asis was way high for this property. The way I try to approach my numbers is I would rather be high on my repair numbers than low. I don't want to get a rep as a bad wholesaler because my repair numbers are a joke. Here was my math $250K ARV - 30% = $175K - $45K Repairs - $10K Assignment Fee =$120K Max purchase price.

@Account Closed Wise advice thank you.

@James C. Thanks for the reply. The ARV of $250k is backed by 3 properties within the same neighborhood sold in past 4 months. So I'm confident the ARV is good. Are you suggesting I sell the property asis for $210k to an OO?

The thing I'm concerned about dealing with an OO is the Bank inspection. I know the inspector is going to flag the electrical box and the bank will not allow the sale without it being fixed. And the family is in a hurry to sell and does not want to spend any money on the property. Or am I missing a way around all that?

I agree with you on the buyers list. Mine used to be pretty solid then I moved to Florida 3 years ago and just moved back to Pittsburgh a few months ago. So i'm rebuilding my list but, it takes time.

@Anthony Dooley I would love to do the rehab but I don't have the funds to purchase or fix the property myself. I've been looking to move from wholesaling to fix and flip and even buy and hold but I don't know how to acquire the funds I would need. I know there is hard money & private money out there but, which one to choose, how do I submit to them, How much down payment will they want, how much can I get, is it a good deal, etc. it's a bit overwhelming.

@James C. The issue I have is the limited time I have available as this is a probate property. I've done contract assignments with end buyers before and they are a major pain in the butt and take longer than the standard 30 day contracts I sign with the home owner. I know it doesn't fit the requirements for a fix and flip contract assignment the purchase price is just too high. Can you explain why this was not a good deal for assignment of contract for a buy and hold rental property? I have always sold all my properties to fix and flippers but this is the first time I've tried to make a deal specifically for buy and hold investors.

Hello All,

I have a property I'm thinking about putting under contract at $145,000 so I can wholesale it for $155,000. The numbers don't work for a fix and flip but might work for a fix and hold. Here are the numbers.

Split level, 4 bed, 2.5 Bath, 1920 sqft, build 1967, huge 2 car garage (28'x28') 1 wood burning fireplace, in great neighborhood, market temp for Bethel Park, PA is very hot. My ARV estimate is $250,000, Geico estimated ARV at $286,500

$145,000 - Purchase price 

$10,000 - Wholesale fee AKA (my profit)

$155,000 - Sale Price to a buy and hold Investor

$250,000 - Comparables

$2,000/mo - Estimated Rent (avg rent for 4 bed 2.5 bath homes are $1800 -$1900 unrenovated)

$352.23/mo - Property Taxes

$83.56/mo - Homeowners Insurance Quote Values house at $286500 ARV - Geico quoted me a price of $2929/yr - I thought that was excessively HIGH so I used a calculation I found to estimate home owners insurance ($286,500 (Geico estimated ARV) divided by 1000 times $3.50)

$ 0.00 - All Utilities paid by Renter and responsible for cutting grass & snow removal, No HOA

$100/mo - Vacancy

$100/mo - CapEx

$755.27/mo - Mortgage Payment 30yr fixed @ 4.17%

$1491.06 - Total Monthly expenses

$6107.28 - Total Annual Cash Flow

$31,000 - 20% down payment

$5,500 - Estimated Closing costs

$45,000 - Repair Costs (Kitchen including new stainless appliances and granite counter tops cabinets and floor, 2.5 bathrooms full remodel, refinish hardwood floors, roof (30yr asphalt dimensional shingles , new windows, Paint inside and out, new Electrical Service Box, Flooring in kitchen, bathrooms, family room in basement. new High Efficiency HVAC, Light Landscaping.

Cash on Cash Return 7.49%

So what do you think? a good deal or not?

Would you buy this property?

Rick,

Every market is different as I'm sure you will agree? For my market I have found sending letters to surviving spouses living in the properties I want to buy get me a lot of nasty phone calls from the family. I see my job as providing a service that is wanted and needed at a very difficult and emotional time. I do my best to NOT add additional stress or pain to an already emotional and stressful time. 

All I know is I don't get any nasty phone calls from the decedents spouse or family since I stopped sending letters to widows and widowers with the same address as the deceased. 

In short upsetting 15 families just to get that 1 deal is NOT what I call good business. This is my belief, and it would seem yours differs from mine quite a bit, and that's fine.

I would submit, you are just as guilt as I am of imposing your belief system on others as I am.

Regards,

Keith Saunders

Eric,

It really depends on what the actual circumstances are.

This is why you need to do your research before sending letters. If the address is the same it can be for 1 of 4 reasons.

1. the spouse of the decedent is still living in the house (DO NOT send a letter)

2. the decedent was living with a friend or relative and does not own the home DO NOT send a letter)

3. Parent is the deceased, child living in home named as administrator of the estate ( Send a letter)

4. Administrator of the estate wants all information to be sent to the decedents address to make it easier to manage all the correspondence for the estate (Send a letter)

With all of these you need to do your research to find out all the answers to these questions. I have been doing this for years so it only takes me about 30-45 seconds on average to determine if I should send a letter or not.

Regards,

Keith Saunders

Chad,

I've found Yellow Letters work great in this situation. I actually closed my first deal using a yellow letter. Very effective an cheap. Good luck

Regards,

Keith Saunders

Eric,

Before you send out 100 letters to the latest probate leads, let me tell you what I do.

Determine if there is a property associated with the  estate.

Make sure the decedents spouse is NOT still living in the house.

Verify no recent mortgages, back taxes, leans, etc against.

Check to see if the property is listed on the MLS.

These are the basic steps I take to make sure I am mailing to a motivated seller with a property. I do a lot more to verify my info but, this will keep you from sending 95 letters to people who either don't have a property to sell, are the widow or widower of the deceased, have a property that is upside down and has no equity or the property has already been listed by an agent. I like to deal with properties with 100% equity if I can. It make the negotiations and sale so much easier.

Then when you have your list together send out your probate letters every 30 days until they call you or the house is sold.

Those are the basics

Regards,

Keith Saunders