All Forum Posts by: Luke Teson

@Aron DeVoe I used one where I am saying, "Hello, hello?  I can't hear you, I think I have a bad connection I am going to call you back"  Then whenever you are off the other call it will automatically call them back.

We are starting to implement cold calling to expired listings both residential and commercial and was wondering if anyone has a script, or even an opening that they have used that works for this data source.  I was thinking something along the lines of calling and mentioning that we are interested in purchasing the property and that we see it didn't sell last time when it was listed and ask why they think it did not sell.  From there we can see if it would be better for an investment deal or to re-list the property if the seller thinks it was fault of the agent ie. did not hold open houses, bad with communication etc.

Any suggestions?  Thanks in advance.

@Ken Martin well that's what we pay. Have you reached out to any list brokers yet? We have found some good ones here on BP that can help you get a quality list, you only pay for what you order and can cross reference the data with other motivations which has helped us increase our ROI.

@Ken Martin  I would recommend getting Costar if you plan on continuing to be in the multifamily space.  Their data to me is unparalleled, each property coming with a detailed synopsis including but not limited to the owners name, and phone number that is surprisingly accurate.  It does cost around $400 a month and it is a 12 month contract, so again you need to be committed.

I have a seller that's willing to strike a deal with us; however, I am trying to structure it so that it will be a win-win, any and all advice would be appreciated.

The property is in great condition, worth around 140k, and currently is leased at $750 a month.  The resident is a friend of the owner, and the  owner has leased to them around $400 under market value for rent ($1150-1200).  The owner has turned down my offer of 91k, and is only willing to accept 100k for the property, which I think in it's current condition, 100k is doable.  There are hedge funds buying in this area that will buy properties close to retail, and other investors that will buy based off of the 1% rule, since it is in a great area with good desired schools.  So I am confident that we would be able to wholesale it, even if only for a nominal fee; the only issue is that the lease maturity date is for July of next year.  

This is what is holding me back from buying it as a rental, because my PML payment would be 600/month+ on a 100k note, adding in insurance and taxes, it would be cash neutral at best, more likely to have negative cash flow.  

My options that I have seen so far are as follows:

1. Lock it up at 100k, and market it, try to sell it without needing to do multiple inspections as the owner has mentioned that they do not want to do that to their friend.  I am shy on this one, because of the owner being pretty savvy and not sure how he would feel about me wholesaling it/meeting over there multiple times.

2.  Buy it as a rental, be cash neutral or negative for the next 9 months, opening myself up to have to put money into it for maintenance and cap ex items that could come about, to then re-rent it in August of next year and finally have a performing asset.  What I am also contending with here is the refinance would take longer, because I am assuming my banker would want to see it leased for closer to market, not sure though if that plays a factor?  

3.  Try to structure some sort of purchase agreement that states that we will buy the property next July (I would really like to lock this up now if at all possible), but who knows what the market may be like 8 months from now, and what would be a rebuttal back if the owner states that they would just rather wait closer until the time and get something in writing then?  

4.  Would seller financing work here?

I know that is quite a bit, but if anyone has gotten through this and has some advice please share.  

@Ryan Janssen  I agree with @Braden Smith in regards to 70 mailers not really being enough to create KPI's or understand your response rate.  In the past we have gotten 0.5-2% response rate.  With this formula, you would need to send out 100 or so mailers just to get one call.  

How many times have you mailed them?  I would recommend a drip campaign where you start maybe with a postcard, then send a professional letter-head mailer, then maybe a personalized hand-written letter.  Different people and personality types will respond to different types of mail, so we like to switch it up for best results. 

Probate is a tough one for me to justify cold calling, to piggyback on what Braden said, it can come off the wrong way; however, with this being said, we do normally call/text all of our other leads that we are unable to get a response from via mail.

My advice would be to mix up the mail, and keep sending up to ten times to get responses.  Do not give up after just one mailing, be consistent.

@Tyson R. First off where at in Missouri are you purchasing? We use the BRRRR model, and have good relationships with some local banks here in Saint Louis, I would be willing to connect you with them.

Most banks are going to do a 65%-80% LTV, make sure that it is a loan to value (appraised) not loan to cost, which means that you will recoup 75% or so of the money you have into the deal. Always look for loan to value refinance approaches.

In regards to the timeline needed to refinance this is very heavily bank dependent. We work with some banks that require a 12 month seasoning period, meaning that the property has been rented and performing for the last 12 months. We do have banks that do not have a seasoning period, and will loan up to 80% LTV. This is astounding. Essentially as soon as it is rented and performing (after your rehab and is rented out) then you are able to start the refinance process.

Some banks also have a minimum that you can refinance on a commercial loan (this is what we use a commercial loan on a residential property) and may need to group several properties together to reach their threshold, sometimes $250k.

Let me know where the deal is at, and I will try to get you a contact.

@Joe Mazur we have worked with people in the same capacity as you are inquiring about here.  We use "private money" to fund our deals and pay 6-12% depending on the deal and the amount of the loan.  You as the lender would have what we call the core 3:

1.  Deed of Trust in your name - this is similar to a bank when they lend, it states that you must be paid off at sale of property.

2.  Promissory Note - We personally guarantee the loan in our names, and sometimes collateralize other property we own.

3.  Added to the Hazard Insurance Policy - this way if the property does burn down or something similar, we cannot take the insurance check and run.  

With these core 3 you are in a great position, mostly because we normally have a 30-65% equity position in the property.   Meaning that if the property is worth 100k, we would only ask for a loan of 50-70k depending on what we have it under contract for.  

If you are having trouble sourcing deals, this is a great avenue to have your money work for you and we believe is a solid hedge due to the fact it is a tangible investment, you can literally drive by and see where your money is parked.  

If you have any other questions, please feel free to reach out to me.

We invest here in Saint Louis, and have really enjoyed the market as a whole.  Firstly, the midwest is great for positive cashflow, as most of our properties we purchase for under 75k, and most are rented out near 1k a month.  Some of my deals meet the 2% rule, where the rent/purchase price + repairs = 2%.  For example, we bought a house for 36k, put 9k into it, and are renting it for $945 a month. 

There is growth happening all over the place here and jobs have been steadily rising, increasing the demand and shortening the supply.  This is great for us as landlords.

Anyone looking to invest in and or partner on deals in Saint Louis, should reach out to me.

We are entertaining the idea of opening up a debt fund, and creating an offering for capital partners. My partner has experience as a tax credit syndication attorney, and we both have a lot of experience with underwriting deals.  For those of you who lend, what would give you an appetite to invest in a fund that primarily would be to acquire single family and small multifamily?