All Forum Posts by: Derek Guyer

I'd have to agree with foreclosureboy about how tough it can be, but don't agree that it's a waste of time. I've made some very valuable contacts and deals with preforeclosures and believe you have to keep the persons feelings in mind when dealing with them.

I've never knocked on doors or made calls. If I was losing my home, I wouldn't want someone stopping by my home to talk to me about it, nor would I want them calling me to discuss it. It's deeply personal and even though it's all on public record, I can only imagine feeling ashamed in this position.

I have always sent letters and while I'm not focused on pre-foreclosures as much as I used to be, I still think a good letter can get you calls. Take time to think through what you would respond to and write a letter that matches what you're willing to do and what you think they'll want to hear. If it doesn't work the first time out, revise.

Using someone else's letter won't be personal, nor will it be effective in my humble opinion. People in this position don't want a letter that sounds like SPAM. They want help, whether they'll admit it or not. Make them want to read your letter and want your services.

I hope that helps!

Kevin, welcome to biggerpockets! It's great to hear you're reading and researching. I love coming on here and doing that myself and appreciate the knowledge and help on here. I look forward to seeing you around.

Again, welcome to biggerpockets!

Welcome to the biggerpockets! I agree that people need to allow experts to do their jobs. I know it's cheaper on the front side to do it yourself, usually, but the lack of experience and mistakes that could be made in trying to do it yourself are unbelievable scary and can cost you so much more in the long run.

Again, welcome to the community. I hope we see you around.

That's one of the things I really like about this forum. This is very much a community and I enjoy learning and helping on here. There are so many people with amazing amounts of knowledge and I don't want to be foolish enough to think I've got it all down. I want what they have...not their money or their property, but their wisdom.

By exit strategies, I mean having enough equity to be able to drop the price significantly to move it in case of an emergency or as you said, offering a lease option or taking less in rents to at least break even so that you don't come out of pocket. I can't stress this enough. The more exit strategies you have, the less stress you'll have to deal with and the easier it will be to move from deal to deal.

I don't know of a general rule of thumb in how much you should leverage. I feel strange that I, of all people on here, said something about it because I try to use leverage to my advantage as often as possible. I would just say to ensure you have plenty of equity for a quick sale or for pulling cash out for an emergency or whatever. You just want options when the crap hits the fan and if you're over leveraged, your options will be limited.

As for what you do next, that's completely up to you. I was asking about your next deal to see if it fit in with what you were trying to do and how much you'd have out.

It sounds like you need to decide the direction you want to go in before you take very many more steps. It's not that you can't do rentals and rehabs at the same time, but I think it's a good idea to have a plan together about how you're going to attack each deal and spring from one deal to the next before you get there. If you have goals, you're likely to have better success and more progress.

As for the group deals, I would stay out of them unless you really know them well or have things drawn up in a way where you're as safe as possible. You may even want to consult with an attorney about it before you get in very far. I've seen and heard about too many deals where people get screwed, all while thinking they're in a sweet spot. Nothing will turn you off from real estate more than the dishonesty that's out there.

Welcome to biggerpockets. I'm sure you'll be a great asset to everyone with all of your knowledge and experience. We look forward to seeing you around.

Again, welcome to the community!

If you're not happy with the property, it makes sense to me to go ahead and sell if you can make enough on it to help you do what you wanted to do on the second property. If not, you may as well hang on to it for cash flow for a little while.

As for the equity line, I don't think it's necessarily a bad idea to use it, as long as you're not leveraging too much. Make sure you have several exit strategies in mind.

Do you have any other deals in mind?

That's great news! I'm glad to hear you've found someone you can depend on to help you. If he's as good as you say (and I'm not saying he isn't), it may even be worth your time to give him a little bonus for taking care of you at such a good price. When you've got someone who is good and honest, hang on to 'em.

Glad to hear of the success so far. Keep us updated.

I would suggest a couple of things, Redstar. First I would start by making sure the handymans bids are in writing and that you have a written contract with him that is very clear. Don't let youself get jacked up. I've seen this happen repeatedly.

Second, make sure you're not just covering up problems and that you're actually fixing them. The last thing you want to is cover them up and to have to spend twice as much because you didn't do it right the first time. I agree with noobdog1. Don't do too much and let a tenant trash it, but do it right so that it doesn't get worse.

Third, if you can pull out a mortgage against it after the work is done and the property still produce positive cash flow. If it will and you can pull out some cash against it, take out enough to cover what you have in and do your next deal once you've got the first property rented and set.

I hope that's helpful. Let us know how it pans out.

Welcome to the biggerpockets! Glad to have you on here!

-Derek