All Forum Posts by: Mark Sewell

Kalim, well yes.  That's how it all came to be.  Flippers would do their own lead gen....

I do marketing. Steve does marketing. I get a few leads, and Steve also gets a few. But for whatever reason, I get 3 deals and Steve doesn't get any of his to close. So realizing I cannot possibly take all three projects down at the same time, I decide to hand off one to Steve - and maybe one is more in his area, or more his profile, more his type of flip/rental or whatever. Steve's glad to slip me a few dead presidents. I go do my deal, he goes off and does his. The third one goes to some other REI buddy in our herd.... or maybe I wholetail that one.

In short - dealflow doesn't happen in a nice linear rate.  They come in bursts.  This month I got more than I can do, next month I got nothing.

As long as the contracts happen, it's all good.  Sellers get their property sold as agreed... it's all bueno.

But see this works because Steve is a real buyer, and I am a real buyer.  We know market values, we know renovation costs, and we know them because (shocker) we've actually done a flip/renovation project ourselves.

I got nothing against somebody assigning a deal here and there, to make sure that deals get closed and sellers get taken care of.

But's now how it is portrayed to so many...

It is this concept of wholesaling as a path to start out - a way to build capital, by hustling and grinding and putting in the work - it's just not realistic.  You can do that but ONLY if you got a little capital (not even that much in some areas) and ONLY if you really know your numbers.  Or if you partner with some real buyers that are willing to help you along..  

It is actually easier, in my view, to get some financing and learn marketing and just go buy some houses (and just that is hard enough).  Take your lumps, learn from it and keep going.  You gain a lot of confidence and credibility this way, you get the social proof... which makes you so much more believable when talking to sellers.

I don't know... there are dozens of buyers within of 10 miles of where you sit right now.  Partner up with them.  They need deals, you need marketing capital.  Work something out.

It is possible, but not in major MSA cities... smaller cities or bigger towns... working class areas next to mills and plants etc.

 

"no different than a souvenir shop in a Mexican tourist town."

I love this.  And I plan to plagiarize this with impunity.  Good one Adam.

Lack of supply is at least part of the story - you had it right there in your ECON 101 comment.  

Maybe some of it is seasonal, the last several summers have been red-hot.  And people are moving here in droves.  Partly for jobs, partly because they can stretch their buying dollar so much further.  Not sure what impact this virus is having, but it is tempting to think there has to be some effect, right?

Here is my would-be approach -- get them to go with you and visit the property. I did this one, and it was the only deal I have ever assigned. He and I together crafted the offer. I charged him almost nothing but it was way better than nothing and the seller got her house unloaded, and my buddy got his first BRRRR deal. Win-win-win. The way it is supposed to be.

OK that way is super rare and really hard to do like that, to bring your buyer along with you, but he and I get on well and he was keen to get going and this house was freaking perfect for him - for anybody around here, really.  But that is the best way.

The next best way is to call them and ask them to coach you.  Hey Justin, I need to consult with you for 5 minutes on a deal.  I am making an offer on this great lead I am working.  I think we got some equity here, but I'd like to get your opinion.  You won't have to ask, they will tell you where they think you need to be on your offer.  And some will ask you to follow up if you get it under contract.

Make sure you are getting photos.

I JUST REFUSE to put offers on stuff and contact them up if I cannot back it up and complete the buy.  

Again I think for that rule, we are talking about qualified loans, eg., FHA fanny/freddy that stuff, which is government backed. Don't think that rule exists for conventional loans and I am 99% sure nobody cares on non-QM (if not somebody please correct me).

DTI ratio is a non-factor if you use a non-QM loan product. Costs a bit more but I've seen people with strong credit get 5.75% here in the last week or so.

Your challenge on this is getting a loan that small.  

The money you could manage to get out of it, if you could, would be about the same as a nice big fast AMEX card line - which BTW is not a bad thing to have in your back pocket in case that AC unit goes out or whatever (emergency fund).  And if you don't use it you aren't paying for it.

To me I think you are in a great position on that first home, and I would hold steady for now.  That crazy appreciation is likely to continue.  Maybe when it hits $100k, go for a refi and see about getting some cash out.

The wholesaler that everybody hates is the guy that does assignments with intention.  Nothing wrong in that, but it is hard and that should not be the goal.  Go out there with the ability, capability, mindset, and intention that you are buying that house.  Actually, plan to buy them.  Get the money.  Have plan B options, like your friendly neighborhood hard money guy.  Be ready and do it.  

Actually become a whole-tailer.  Buy them, clean out the garbage and funky smells, do something with the front lawn and list it at a fair price.  And you still go fast. You'll make more money, and you'll get more deals done.  

I believe this is actually easier than trying to make the stars and planets line up, like doing wholesale deals that have a very short window of opportunity.  So what if you don't actually sell that whole-tail?  Then finish the renovation and flip it full retail or convert it to a rental... plans B & C are still out there.

Then, here and there when things DO line up, go ahead and assign one to a buddy.  No harm in that.  Just as long as the house gets bought.

AND (this is the cool part) by virtue of the fact that you ARE actually buying houses, you get a level of credibility that the rest of those morons don't get.  You have an endless ready made stream of FREE online media content to blast out and show the masses that you aren't just some goon hanging bandit signs.  For SEO purposes there is honestly nothing better.  Testimonials and house renovations... 

Dammit, I need to be my own guru.  Maybe I'm doing this wrong.

@vinh tran

Not sure if we are allowed to post links here but go check out a site called rich blocks poor blocks (.com) and you will see a cool color-coded interative map.  Data is about 3 years old, sure, so take it with a grain, but you'll see where the pockets of expensive/inexpensive are located.

It is long distance investing, but not quite that long.  

You can get down there periodically, to meet with contractors, property managers, realtors, and the rest of your investing tribe, and you could MAYBE even get your own eyeballs on a property now and again before pulling the trigger (doubtful), but you wouldn't able to run over to check on that squeaky back screen door that keeps acting up - let alone screen tenants or do any of the actual management in person.  

The good thing is that you are close enough here that you can still manage to network in nearby cities if you really make that a priority.  That's the trick, I think - meeting other people doing what you want to do, in your chosen market, and getting referrals from them.