All Forum Posts by: Lucas Machado

@Erick Gomez Few problems with that keyword list.

First, Google takes substantial liberties when interpreting your keywords if you don't use modifiers.  I recently tweaked my adwords campaign to increase bidding on keyword "+sell house fast".  Google began filtering search terms akin to "sell my house" into the "+sell house fast" keyword.  I wanted to pay more for FAST search terms than search terms that don't use FAST, but Google just moved search terms to my highest bidding keyword even without the FAST term I included.  I added the +symbol to fast, taking away Google's discretion to do that.  Based on your list, I don't see any "+" symbols.  Those are important for control.

I also only use "buy" accompanied with +my.  I had a low conversion rate and I believe that is because people who type in buy want to buy.  People who type in sell want to sell.  Dollar for dollar, conversion wasn't strong enough on "buy".

I use a lot of negative keywords.  Almost 2,000 negative keywords, primarily excluding geographies, but also other real estate terms like trulia, realtor.

Lead type oriented keywords such as "foreclosure" and "eviction" and "probate" did not work.  First, my site had a terrible quality score for those.  Which makes sense, we are home buyers not foreclosure, eviction, or probate specialists.  Additionally, although there is some cross-over, people who type in "foreclosure" etc. may not be looking to sell their house.  If a great site has only an 8-12% conversion rate, and you're sending people to your site that may not even be selling, your conversion rate will be disastrous I imagine.  If a person types in "sell my house" they are much more likely to be intending to sell.

I'm not a "huge fan" of adding in keyword cities/geographies.  I think that would make sense if you were only working in a specific few cities and needed to be narrow.  We work across three counties as such over 100 cities, so having an unruly number of keywords was unmanageable.  Additionally, if you geotarget, you shouldn't be required to do this because your ads should target "people in and searching about" the area.

Also, you have far more keywords than necessary.  Unless your using +, you shouldn't need the same exact search term for "house/home" "fast/quick".  You are diluting your data.  I've also had issues with Google being finicky with quality score when I had too many search terms without impressions.

@Yoni R. We've sold two of our recent fix-and-flips in the Miami area this month.  We immediately had offers above list, less than 24 hours.  In assessing the offers, we were looking at cash/financing, proof of funds, inspection/financing/appraisal contingencies, as well offer prices.  In both deals, we didn't accept the highest offer.  In one case, an above list offer ($5,000 less than competing offers) that had no appraisal contingency we accepted, and in the other, an all cash no contingency offer at list price which was less than the conventional offers.  

Things are hopping in South Florida. Properties are consistently selling over list. It's not helpful for securing deals on the MLS, but it does help to sell them fast.

To be honest, I won't even submit offers on MLS properties within the first 4 weeks - and only properties that require substantial rehab. You're just competing with drunk buyers, unethical wholesalers who can't close, and individuals who won't be able to close. The opportunity is to sweep in once the first wave back-out and save the day.

@Jessica A. Smith Spending $35,000 in repair costs for a property with end value of $90,000 doesn't make much sense unless your buying it at a very low price.  The math doesn't add up.  I typically spend $35,000 on repairs for properties with end values of 2-3x $90,000.  The rehab cost is the rehab cost, though - you can't necessarily change what needs to be done to reach your sale price.  Of course, if it's a rental you shouldn't be expending the same amount as if the property is being sold to an end user.  I would also note paying $90,000 for $700 rent doesn't sound appealing - I wouldn't expect investors to jump at that.  Rent closer to $900-$1,000 should draw more interest, but even there, it isn't slam dunk for the investor.

@Jessica A. Smith $35,000 into a deal selling for $90,000 is tight, once you account for holding costs, financing, taxes, insurance, etc. $30-35k level we're talking over 3 from your closing buying to your closing selling it if everything goes perfectly.  Strikes me as dangerous, as a hard-money lender myself I would pass on this deal.  My recourse is foreclosure should you not perform, and I wouldn't want this property.

I ran the numbers assuming typical hard-money rates and not much of a down payment, if you had it at $30,000 contract you're only making around $13,000 with 18% ROI. The 18% ROI isn't bad, but at this price point if anything moderately goes wrong you may break even (this is assuming a $30,000 contract). I wouldn't do the deal unless it was around $20-22.5k.

@Lakeith Brown Congratulations on getting started.  What's your plan for finding the deals and funding them?  Perhaps a few more specifics can go along way towards some tips/recommendations.

@Marquis Ephraim At the end of the day, a great deal sells itself. If you're cash strapped, my best mailing campaign has always been white letters to probate leads with hand-writing the mailing address on the envelope. Of course, having a list of cash buyers is very helpful. You can find plenty on BiggerPockets or at your local REIA.

@Ceary Williams Some of the critical aspects of direct-mail marketing is having: (1) a script when they call; (2) a follow-up system; (3) a system to take voicemail / record the number if you're unavailable at the initial call.  I would have those planned before spending funds on direct-mail.

You can also save a few dollars by checking MLS to see if the property is listed before mailing.

@Raphael Vargas This topic has already been covered in detail by @Brandon Turner http://get.biggerpockets.com/nomoneydown/

In any case, connect with a hard-money lender of equity partner and close your deals.

This is one of my preferred strategies, particularly if the property is over an hour away and it would be logistically difficult to manage the rehab. It's all about control and negotiation. If you're unwilling to close, you are at the whim of your cash buyer offers and must make a decision in a short period of time. Stressful. Once you close and list on the MLS (or even just close without listing), you have time, options, and more offers to choose from.

I also consider it a little ironic that you say "the worst" downside of wholesaling is you are "depending on the seller's word" when its in fact the precise opposite from what normally happens and it's the seller who depends on the wholesaler and the seller's trust is misplaced. 

$1,700 is relatively meaningless.  I understand you're starting out and it feels like a lot right now - but it is nothing compared to headaches accompanying a bad deal. To be honest, in deals where I am not 100% certain of closing at the conclusion of inspection, I tell the seller I'm still evaluating, would like to go forward, and if it doesn't work out you can keep my EMD as compensation for time lost.

Generally, foreclosures are difficult deals - particularly with an investor's attempt to wholesale.  Depending the remaining debt, a non-foreclosure sale is often impossible without a short sale.  Banks also have additional requirements regular home sellers do not, such as disclosure of agreements or perhaps holding periods that rule out wholesaling.

As to expired listings, I would only target expired listings in poor shape.  Many expired listings are in great shape and the seller has no motive to sell at an investor's price.

Probate/tax liens are good lead sources; some of our best ones definitely.