All Forum Posts by: Melissa McRay Johnson

Hi @Greggory Scott

I would also recommend self educating as much as possible. Here is a link to a Forbes article I wrote about getting started:  https://www.forbes.com/sites/f...

Finding a mentor is also super helpful. I believe there is a link in the above article to how to do that as well. 

Surrounding yourself with like minded people who will support you in this journey is key, especially given your age. I think it's awesome you're so young starting out in REI. It's a great vehicle to get you to financial freedom!

Hope this helps!

Congratulations! I second everything that @Dan Beaulieu mentioned. Additionally I always provide the numbers on my deals when presenting them to my private money lenders. So that includes property info (address, bedrooms, bathrooms, etc), purchase price, repair estimate, ARV, and estimated time to complete the project so they can estimate their return.

I've started with private money lenders anywhere from 10-12%, then renegotiated that after building the relationship over time and proving they will get a return. I'm now down to 8% with a 1 point origination fee for most of my lenders.

Hope this is helpful!

Hi Jenny!

I would follow up with a letter or postcard as previously suggested. You may also want to try having some door hangers made up and putting them on the doors of houses that look really bad. Door knocking can be effective if you feel safe doing so as well. You may also try finding the owners or relatives on social media and sending them a DM. 

The key is in the follow up for people who say they don't want to sell. Creating a solid follow up system ensures that you are front of mind if and when they decide to sell. The more you can talk with them and build rapport, the more likely they are to respond to you. Listen more than you talk when you get them on the line and try to uncover the real motivation then provide solutions for them. Maybe they are dealing with problem tenants or facing financial hardship. Tailor your solution to their specific problem and let them know you're there to help.

Also be careful with title companies. Some are not investor friendly and do not do assignments of contract. Key Title is an investor friendly title company we've worked with in the past. 

Hope this helps!

@Hilary Stalder I usually have my guy take a look at it before I purchase. It works out perfectly because I know what my cost will be up front if I'm going to rehab, and if I decide to wholesale it I can share my estimate when the deal gets sent out. I disclose if a house needs foundation work when we wholesale, and I've found that the end buyer appreciates having that estimate when they are doing their due diligence :) 

I would highly recommend finding a mentor in your area. A good mentor is someone who has many years experience in the business and is willing to take the time to guide you, not tell you step by step what to do. The important thing to remember here is that a good mentor will expect you to execute and really use the guidance they provide. It's a total waste of their time (and really yours too) if you can't show that you are willing to do what it takes to succeed. I would say self education and making sure that you have thought through issues you would bring up, instead of just asking a lot of questions without first trying to figure out the answer yourself are important. We worked this way with our mentor the first couple of years we were in business. We did a lot of the leg work on our own, and the mentor was there to guide us and provide advice on situations that we weren't sure how to handle. In return, we split the profits of our deals with him and he provided the funding. So everyone won. He made money on our deals and we got private money as well as the benefit of learning from someone experienced in the business. I hope this helps, best of luck!

I've done a lot of foundation houses over the years and have not had any issues on the resale. They key to making this work is:

1. Use someone who is licensed and will provide a transferable warranty and job specs.

2. Get a certified engineers report upon job completion

3. Make sure a static test and camera test (if static test fails) are done to test for any plumbing breaks. Use a licensed plumber to make any repairs and make sure to get documentation and warranty info for that work.

3. Disclose the repair on the sellers disclosure and make sure that your Realtor attaches ALL of the documentation for the warranty and engineers report to the listing.

I think as long as people are aware of the situation and know that it's covered under a warranty they feel more comfortable. 

That said, after doing several of these last year I am taking a break and moving these as wholesale deals instead of rehabbing them :) I just don't have time right now for the headaches of all that!

I found our Realtor (who now lists all of our properties) when she represented a buyer for a house that I was selling with a different Realtor. The deal was falling apart at the last hour and my Realtor wasn't doing a single thing to salvage it. The buyer's agent stepped in, figured out what needed to be done and made it all happen, which was mutually beneficial. I was very impressed with her negotiating skills and "take charge" attitude and we ended up meeting for lunch afterward. So while I ended up having to give up a little to make the deal close, I ended up winning in the end because she has moved a lot of properties for me since then! Maybe there is someone you've encountered that impressed you-even if they aren't on your team at the moment that doesn't mean they can't be! GOOD Realtors are always looking for steady business.

There was a time a few years ago when the market was really good for selling notes; however, we have found that is not the case anymore. We used to sell notes to a notebuyer at around 90% of their value (sometimes a little more), but you won't get anywhere even close to that right now. I agree with Bryan it's about 60-80%, although where we are I haven't heard it get as high as 80%. If you can hold the note, you'd probably be better off collecting the interest. If you are looking to do owner financing and holding the note, you may consider a lower down payment with a higher interest rate for a longer period of time. That is how we are doing our owner finance "keepers".