All Forum Posts by: Michael Otranto

@Brian

Thanks for the input. I had bought a mailing list from an internet company and I was not pleased with what I received. I hired a contractor on odesk to build the lost for me. All real estate data is available on the county website here in Raleigh NC. My best source has been bandit signs thus far.

As a new investor I had learned first hand on how a new, freshly painted, newly carpeted, crisp and clean apartment could be completely trashed in under 3 months. I'll never forget the day I had one resident ask me if I could replace his carpet because his carpet was "no good". The carpet was a brand new beige when he moved in and it was now black as a result of accumulated grease stains. He eventually skipped, but I'll never forget the master bedroom. I saw an outline of pure beige carpet where the bed had been surrounded by black greasy stained carpet. The apartment had to be completely renovated after he had left. New carpet, vinyl, paint, heavy cleaning of the stove and fridge; The drain lines had to be snaked due to food and grease being dumped down the drain.

It taught me the lesson that an environment is shaped by it's inhabitant and not the other way around.

There is such a thing as a slum lord that will rent to anyone without screening them and never do necessary maintenance. I'm not quick to use the term slum-lord because there's always another side to the story.

I'm in the middle of a love/hate relationship with Direct Mail. Does any one have tips on this? Do you select of x amount of houses and mail to them every month? If yes, how many months in a row before a new list is designed?

Odesk.com is a phenomenal resource for finding contractors. It has search features for ratings, price per hour, experience and much more. I use it frequently.

I've starting using YouTube to connect with potential sellers and advertise my Rent-To-Own deals.

In Wake County NC all real estate records are available online. The list she is building now is 1000 houses on the lower middle end of town for owners who have "separate" mailing addresses; This means they no longer live at the subject property. I've had higher than normal response rates on this type of list. I'll do the first thousand addresses and then analyze the results to see what to do next. I would never do a mailing of several thousand at a time.

Direct mail can be vary costly and I think the list must be targeted very specifically. The best response rate I have seen from direct mail has been about 2%. Usually when I do mailings I do them in smaller blocks of 500 - 1000. This way I can track the types of calls I'm getting and I can change the message, medium, or market as needed. For example if you don't get an acceptable response rate you can change the actual message on the piece you're sending out. You can change the medium: postcard, yellow letter, etc. Or you can change who you are sending them to: the types of houses, geographic location, length of ownership, tax value, etc. Also, where are you getting the mailing list from? I bought a 5000 name list from an internet company for $400 and it was useless. I now use a virtual assistant to build lists for me via odesk for a fraction of that cost (I'm more than happy t refer her). Believe it or not there are many variables to consider.

I have found bandit signs to be the most cost effective for getting immediate seller leads. Personally I like to use multiple forms of marketing to get the most leads coming in. I don't like putting my eggs in one basket with regard to marketing.

$10,000 is a lot to spend on one marketing medium that has yet to prove itself effective. A few questions I would ask myself is: What is the average profit for a wholesale deal in your area? Are you looking for cash "MAO", or owner financing deals? Do you post ads to craiglist regularly?

I would reccomend wholesaling at least 3 deals before buying your first rental property. The skills that are necessary for wholesaling are highly relevant to buying your first property correctly. The biggest mistake I made when I bought my first "buy-and-hold" rental house was going to the bank for a loan. The first "flip" I did was a subject-to deal and it was beautiful. Had I followed the same strategy when buying my first rental I could have cut my loses a lot sooner!

most times the closing agent (attorney or title company) can provide one. It's a pretty simple document.

The Hard Money Loans I have done were from local investors who did a 5 point origination fee and a 15% APR with a 6 month balloon with 100% financing. It allowed me to borrow the purchase price, closing costs, repair money up front without using any of my own money. At the time properties were selling in the first 30 days so the 6 month balloon wasn't a problem. Some investors today want these types of terms but with a 70% LTV. Meaning the buyer would have to put up 30% of his own money, pay points and a 15% interest rate and may lose their down payment in 6 months. You'd be crazy to touch this type of loan! Private Money is the way to go.