All Forum Posts by: Melissa McRay Johnson

Great post and absolutely true! Flipping and wholesaling are great ways to generate cash, but ultimately it's just a buy and sell business. Real wealth and freedom comes from investing in properties that produce passive income. I've found that having a diverse portfolio, which includes: rehabbing, wholesaling, owning rentals and creating owner finance notes allows me to have enough income for the day to day right now and the passive income is viewed as my retirement plan and legacy building for my children.

Thanks for the post!

Hi @Alan Casilla!

I'm an investor here in San Antonio. I've been investing in this market for the last 17 years and although there's been some minor bumps overall the market here is pretty consistent. Currently I feel like we are a little overrun with investors, which is making it a little tougher to get deals, but not impossible. Growth has been steady and there are more companies moving to this area and creating jobs. In general, housing prices are affordable. There's been a lot of focus lately on revitalizing a lot of the older neighborhoods that have caused price increases, but overall appreciation is good--just remember to NEVER bank on appreciation as your only buying criteria. It's not a safe way to make investments. 

Hope this helps!

@Richard Arden Glad to help!

I've heard good things about Lead Sherpa. Also if you are using Call Rail you can person to person text through there which allows tracking of the conversation as well. From my understanding it's the unsolicited mass text blasts, RVM, and dialers that are under scrutiny. 

Sure!

So again, a week MINIMUM to close. This is why I suggest starting to find a buyer within the first 24 hours. Time is critical here. I usually schedule my closings 30 days out. You can always close sooner if everything comes back clean on the title and all parties are ready to close. If you wait until 3 days before closing the end buyer may not have enough time to get funds in place, especially if they are working with hard money or getting a traditional bank loan. But yes, if you are getting close to closing and the end buyer isn't ready or you haven't found a buyer, I would talk to the seller and get an extension with them. I've found that if we don't have any action on a property we are marketing within the first 48 hours then it's probably overpriced. If you do need to extend have a timeframe to give the seller so you're communicating clearly. This is really important when dealing with a seller who lives in the home. They would have made plans to move out, may need the funds to close on their new house, etc. that could be a huge problem for them if closing is delayed.

Any liens or taxes owed have to be released in order for the title company to issue clear title. Typically liens and taxes are paid out of the proceeds of the sale at closing. So for example if you have a house under contract for 50k and they don't owe anything on their mortgage but have an outstanding lien of 15k, the 15k lien amount gets deducted from the 50k at the closing table. The title company then disperses the funds to the vendor to clear out the lien and a release is filed. If a seller refuses to pay any outstanding liens it could adjust your offer, which could affect the sales price to the end buyer as well. People almost always want to buy a property with clear title and liens cloud the title, making it unsellable normally. Again, this is why I really urge you to get the original contract to the title company ASAP so that you can be aware of anything like that and work it out before it becomes a problem. We always let the seller know that the amount they are getting at closing is the sales price MINUS any liens, taxes, etc. that is owed. 

As far as meeting in person, it really depends on you and the title company you are working with. Since you're doing assignments you do wouldn't have to sign anything. I usually send someone on my team for the purpose of getting a testimonial and we give them a "thank you" gift. Creating a good relationship with the seller leads to referrals down the road. For many years I went to closings until I realized it was a waste of time for me. Now if I'm actually closing (like for my flips) I do everything remotely and I have a notary that works in my office to notarize the docs. When you have a good relationship with your title company they are more accommodating. I also think that right now a lot of title companies are doing remote closings anyway depending on where you're at in the country.

People often ask what they should look for in a mentor. I have found that experience is often one of the best teachers, and a good mentor can help you learn from both their successes and their failures. 

Here are some things to look for: 

• years of experience in the real estate industry is an important factor, as you want to learn from someone who has been through market changes and changes in the laws, and is adept at pivoting within their business when necessary.
• consider if you are able to connect with the person you are seeking a mentorship with. Being able to work together and communicate easily are key. A good mentor is someone who can help you identify your strengths and work with you on your weaknesses.

What should you not do when seeking a mentor? Don't contact someone you don't know and ask to "take them to coffee and pick their brain." As much as people think this is a good move, a real estate professional who knows what their time is worth often won't be able to spend their valuable time with someone they don't know for no clear purpose, no matter how well-intentioned they are. Instead, take some time to cultivate a relationship. See if there is anything that you can do that could be valuable to them, such as small tasks or business errands. If you're a marketing whiz, offer some insight or tips that could be helpful to their firm. Assess what you can bring to the table in the relationship and use it as leverage.

A mentor relationship shouldn't be one-sided. Remember, you are seeking them out for their valuable knowledge, so do your best to make sure the relationship is mutually beneficial. Don't expect your mentor to give you all of the answers. A good mentor is there to be a guide, and to help where it's needed. Make sure that you are continuing to self-educate and bringing ideas and possible solutions to anything that you need help with. When we were working with our mentor on our growing business, for example, we made sure we had found out as much as possible about the situation we were facing before approaching him with questions. This forced us to think through the problem ourselves and not just ask for someone to give us the answer.

Check your local REIA's, online groups, meetup group leaders, and LinkedIn. You can also do a Facebook post looking for individuals who are high level investors willing to mentor.

We are currently using the Propelio drive for dollars app. It's not expensive and you can track and geo tag the properties. You can also have multiple users I believe and I think there's some basic info you can see on each house. You can also export the list into CSV files to upload if you're doing mailings.

Hope this helps!

Hi @Elan Adler!

I'm going to preface with this: IMPORTANT!!!! Take the time NOW to find an investor friendly title company that is willing to close assignment deals (some title companies won't). You can check with some of the local REIA groups for good title companies and closers. Make sure to let them know ahead of time you're going to be wholesaling and assigning your equitable interest in the deals you bring them. Also ask if there is a cap on assignment fees. Some title companies will close assignments, but have a limit on the fees they will pay out. Also I don't know of a single title company that can close a transaction the same day if you're getting a title policy. It's just not enough time. The fastest I've seen is a week to close and that was years ago. You're going to need probably 3-4 weeks realistically.

I'm in Texas, but this is generally how it should go:

1.You sign a contract with the seller to buy their house. Make sure you put your entity name and/or assigns as the buyer on the contract. 

2.Go ahead at that point and receipt that contract with the title company immediately. You want to get this process started right away because many times there will be title issues that will need to be cleared up that could take time. Ordering payoffs and HOA docs also require time to process. Sellers aren't always aware of liens or back taxes owed. They don't always know their loan balance. You want to get ahead of any problems and be proactive in getting those issues cleared up prior to closing. You don't want any surprises at the closing table that could cause your seller or end buyer to walk at the last minute.

3. Market the property within 24 hours of getting it under contract. We put a two week funding approval clause in our contracts that allows some time to market the deal, as well as give us time to renegotiate if there's a lien or title problem that was not disclosed to us from the seller. *Note: we believe in being transparent when we are planning to assign a contract and always make sure the seller understands what we are doing, but not all investors do this. Decide which type of person you want to be :)

4. Once you have an end buyer, you'll do an "assignment of contract" contract which goes to the title company as well. It shows the original seller and the new end buyer with the sales price your end buyer is paying. The buyer will wire earnest money to the title company (whatever was negotiated on the contract). Prior to closing the buyer will wire the purchase funds to the title company to be held in escrow. You are collecting the difference between the original contract sales price and the end buyer's contract sales price as your assignment fee, but ONLY after the deal is closed.

5. I would highly recommend keeping up with all steps of the transaction as it moves forward so you know if there are any delays or problems. I would suggest not just dumping it all on the title company and expecting them to handle everything with no communication from you. They get buried with files and if you're not staying on top of things it can cause delays. Plus you want to maintain a good relationship with the seller and end buyer in case things fall apart on either end. The title company will let you know when title is clear and you're ready to close. 

6. Once closing is complete, the title company will disperse the funds and you will receive your assignment fee. It should appear as a line item on the HUD. Then you can decide if you want it in check form or have it wired to your account.

I hope this was helpful!

I agree with what @Brandon Vukelich says. Knowing your market is critical, as well as knowing your buyers. Some are willing to pay more for certain properties or locations. Also make sure to track your profits on wholesale deals. Over time you will see what your average is and can make offers using that as a baseline. We know from experience that our average wholesale deal will net us 12-15k. Obviously some are a lot more, and some are less. But we use that as a starting point. We also make sure there is room left for the end buyer to make money as well. This ensures our deals will always move quickly because our buyers know we aren't overpricing our properties. 

Hope this helps!

Hi @Stephanie R.

What sort of information are you looking for exactly? Are you looking for step by step "how to" get started from square one or specific help on building systems and processes? There are a LOT of steps to building a company no matter what industry you're in. I do business and life coaching for female entrepreneurs in REI as well as other industries, and one of the first things I ask is what your end goal is. Is it specifically revenue based? Is it working 3 days a week? Is it accumulating for legacy? I would think that through first, then you build your company around that. You want a company that allows you to have the lifestyle YOU desire and that looks a little different for everyone. That could mean different exit strategies and different plans for scaling and growth.

As far as software goes I like using PropStream and BeastMode (CRM) for lead management. Quickbooks online for bookkeeping. Call Rail for phone tracking. 

Hope this helps!