All Forum Posts by: Mason V.

I have a potential seller for a 4bd 3ba home that is currently being rented. As it stands my numbers come out to be:

299,200 FMV
179,000 60% FMV

333,000 ARV
233,000 70%
200,000 60%
293,500 (subtract 40k from ARV for suspected rehab costs as stated in http://www.biggerpockets.com/articles/863-the-basics-of-wholesaling-for-beginners)

Assuming he is willing to sell, this seems like a potential good deal for me. Should I proceed and if so how?

This will be my very first lead so even if it falls through, at least ill have learned something.

Good to know. Thank you. Back to the drawing board!

I found a FSBO 2/1.5 1400 sqft in the neighborhood where I live in Portland Oregon. According to the flyer they want $134,000, it is within walking distance of an elementary school and it is on a low-moderately trafficked street during rush hour. The flyer also says it has a new roof, remodeled kitchen, large shed, newer appliances and freshly painted interior.

I found the 2010 purchase price and it was $199,000. My comps, found on zillow, range from $150,000-$227,000. The cheapest property had 200sqft less but same bed/bath. The most expensive had 2 baths and 150sqft extra. All properties were less than a mile away. The overall average price per sqft came out to be $138.25 and multiplied to the homes sqft I came to a price of $198,000. Since records show it was bought for $199,000 I set the base price to $200,000. From there I added the price of a new roof, the shed’s sqft and paint for a total price set at $216,000 (improvements+$2,000 profit for them). I did not factor in the remodeled kitchen since I could not find reasonable number online. The lowest I saw was $20,000. From the pictures they have, I can’t imagine it costing more than $10,000, but, being a noob, I really don’t know.

After that I set the price to $220,000k for my minimum bid. $4,000, assuming the government will take 30% as they do with earned income, would give me about $200 more than I need to live per month for 2 months. If need be I could go down to $2,000 but no lower.

Using biggerpockets for set costs
http://www.biggerpockets.com/renewsblog/2010/03/17/calculating-fixed-costs-flip-rehab-wholesale-real-estate-deal/
Purchase and selling $220,000+$17,000=$237,000

Rehab? from the picture, none if buyer wants to rent it out.

If they want to sell it? I don’t think it would work. Just seems way to expensive for my stingy butt. however, from looking at the pictures, new windows, better paint, some electrical such as better ceiling lights, better tile floors and possibly a new carpet. Using homewyse.com, don’t know this site’s reliability but it give me an idea, I would say

$8,300 total in upgrades.

$245,300 total. I have no idea how the rehabber would determine what it would sell for. However, at $245k I don’t think it would be worth investigating. Most of the similar homes in the area seem to have sold at the $180-$200 range.

Today I spent 4 hours walking a set path in my neighborhood looking for vacant or depressed houses. After that I went to a couple title companies to see if they could provide me with the same info that list source does. They said they could not. Finally I went and talked with the county government to learn who owned the few houses I found during my walk.

This is my very first “work” week. Prior to this I had taken a couple months of education only. Hope this give you an idea and good luck.

lol, true. But the doesn't mean I cant try to motivate them or get them to lower their prices. Even just one success can be a learning experience.

I have been given access to a list of properties that have been on the MLS for over a year. How best can I utilize this information?

OK, I’ve got some questions. When using real estate terms (investor, buyer, wholesaler, rehabber, ECT), is there any particular instance when one is better than another?

@Mike Hurney Beyond purchasing the house, how would I add a WIIFM in the first paragraph?

@Dev Horn Should I make it clear that cash offers are made below retail price?

Here is the updated letter that is about 100 words shorter.

I am an investor interested in purchasing your property, as it currently stands, located at (property street city state and zip). I live in Milwaukie Oregon and am currently working on projects in the neighborhood. This is how I learned of your property.

Please call me at (541) 993-xxxx and we can discuss how I can get your property sold within a month, hassle free and at a fair price. As an investor, there are no real estate commissions and all extra fees associated with the property sale will be paid by me. Finally, all offers are made in cash to ensure your valuable time is not wasted with a buyer who may not be able to obtain a mortgage.

All calls are completely confidential and there is no obligation whatsoever. Even if you are not interested in selling at this time, you should keep this letter for future reference. Things in life do have a tendency to change unexpectedly. Thank you for your time and consideration, I look forward to speaking with you.

I am preparing to do my first absentee owner direct mail campaign and this is the letter i have come up with.

(Subject’s name)
Street
City, state zip

Dear (subject),
I am writing you, because I am interested in purchasing your property located at (property street city state and zip). I live nearby in Milwaukie Oregon and wholesale properties in the Portland metro area. I am currently looking for homes in the neighborhood and this is how I learned of your property.

Please call me at (541) 993-xxxx, so I can tell you how I can get your property sold within a month, with no hassles and more importantly, at a fair price. As wholesaler, I help cash buyers purchase the house directly from you. This eliminates all real estate commissions or extra fees coming out of your price. The payment I receive and all costs associated with the closing come from the buyer. Finally, all offers are made in cash. This is so you never have to worry about delays resulting from a buyer trying to qualify for a mortgage and wasting your valuable time.

I’ll be glad to personally tell you more about how I how we can work together. All calls are completely confidential and there is no obligation whatsoever. Even if you are not interested in selling at this time, call (541) 993-xxxx, so I can help you with determining the value of your property. You should also keep this letter for future reference, since things in life have a tendency to change unexpectedly. Thank you for your time and consideration and I look forward to speaking with you.

Sincerely,

Mason Valenzuela
(541) 993 xxxx

P.S. If you are more comfortable with email, my address is (email address)@gmail.com

I would like to be notified if there is another meetup. I wont be able to drive up for this one though. Have fun everyone!

Within the next week I would like to begin mailing letters out to real estate professionals. Some of my targets will be the top selling realtors, mortgage lenders, bankers, hard money lenders and real estate lawyers. The goal of these letters is to persuade them to get me in contact with their clients that are known to be cash buyers. What I need help with is knowing how I should be introducing myself.

Should I state that I’m a noob?

What about being a wholesaler or just another investor?

Should I tell them what their client can expect to receive with my offers such as pictures of specific property features, square footage and suggested repairs?

Should I state that repairs are speculative and that I have not yet gained any rehab experience?

Besides those listed, are there any other professionals I should consider?