All Forum Posts by: Michael Morrongiello

Richard

Wholesaling or acting as a "bird dog" finder or properties (good opportunities) is low risk as you are really not executing yourself on the closing but flipping the deal to another more deep pocketed investor. You make a nice clean fee for that type of service. 

WHY the margins are bigger in CA versus other areas is because the Prices are HIGHER and the competition for deals is fierce and the Buyers who do not have a knack for finding good opportunities are ALWAYS in demand.

EG. You might find a good deal on a $40K house in Dayton, OH that fixed up and renovated might be worth an ARV of $80K retail ...it may take $20K to fix up that house. You could say WHOLESALE it for a $5,000 wholesale fee.

However if you find a $400,000 house in Alameda, CA (located in the SF Bay area), that might need $80,000 in renovations, that Home might have an ARV of $700K to $800K - it would be far easier to earn a wholesale fee of perhaps as much as $30,000 to $40,000 to WHOLESALE this home to an investor or even a potential user.

So the "Spread or Margin" of $30K to $40K is far greater than $4K 

Richard

Actually the Margins / Spreads are far STRONGER in California than in most other states so don't be fooled by "expensive" meaning this is little opportunity. Sure it may tougher to buy and hold property in the Golden State and make them cash flow UNTIL you learn some advanced techniques BUT If you can master MARKETING and Attracting good quality prospects to come your way there are wonderful Wholesale opportunities where you can work with other seasoned investors and learn as you earn. 

Victoria - there are many lender who will provide you with some sort of POF - proof of funds letter or statement showing you have financial backing and capability. Submitting such POF evidence with your offer carries with it powerful psychological comfort letter with most sellers.

Aaron - I agree with most of the other posts here. The deal is a GOOD deal for the seller IF they 

can get their FULL VA entitlement back that allows them to buy a CA home. However there is LITTLE equity and cash flow that you are picking up with the current lease / tenant situation.

Here is a TWIST of an idea. Bring in an investor to pay off their VA loan so they now have their full entitlement back. In return the investor will have a FREE & CLEAR rental house which they can then refinanced later down the road to get back a good portion of their cash outlay. Now CONCURRENTLY for paying ALL cash and paying off the VA loan the couple will give the investor an OPTION to buy a 50% interest in the CA house they are BUYING with their restored VA entitlement. Now the investor has upside potential on BOTH houses.

@michaelmorrongiello

Duke - I agree with some others here. Get GOOD at FINDING opportunities (potential deals) and the money any other valuable contacts (funders, potential JV partners, etc.) will follow. WHOLESALE a few deals to get an understanding of how to Market and FIND motivated sellers, negotiate with them, do the paperwork, market to a take out BUYER, run thru the escrow process, and get paid. Then Rinse and Repeat. Also continue to INVEST in your education - that is never ending.

Gina 

The SF Bay are market is OVER Heated right now and in my observation / opinion ripe for a correction just over the Horizon.  VC funding has slowed to a trickle, Many internet stocks are plumeting in value (Look at Linkedin, Yelp, FitBit, Twitter, Groupon, etc.)  and does not bode welll for the Tech Industry which is a MAJOR driver of values in the SF Bay area. You've bought your current TWO units and have rode the appreciation wave up to where you have  NOW ($500K) a nice equity gain, etc.) ....however IF this market corrects and depending on how severe the downturn is some of that equity will evaporate.  

You can clearly RENT out both units and based upon CURRENT rents make a little cash flow but if the market turns your rents may abate along with your equity.  

Another option is to SELL now before the market corrects in a MAJOR wave. If you have lived in the unit for 2 out of the five years (and married even better) you may have the ability to avoid a large taxable gain on the sale - thus getting LIQUID and ready to bargain hunt WHEN not IF the Downturn happens.  The Big question in my mind is will this be another big "R" as in Recession or a Big "D" 

Essentially by becoming liquid, renting for a while, being patient and buying on the Market DIP you are able to again RIDE the wave up when the market rebounds which it will in the SF Bay area again in the next UP cycle. 

Michael Morrongiello

Program Director for BAWB - the Bay Area Wealth Builders Association

Long time investor in Real Estate properties and Real Estate secured "paper" buying for our own portfolio. Will purchase Mortgages, Trust Deeds, and Contracts in any state including Lender Originated and Seller Financed loans.

Bill

Let me know what you find out.... that would be great 

Warmly,

Michael Morrongiello

Vacant Properties Software Programs ?

There is a software program; Find Motivated Sellers Now offered by Kent Clothier & Chris Richter and his group and now what appears to be a competing product from Cameron Dunlap called; Vacant House Data Feed.

Anyone have an experiences with either of these software programs and how have those experiences been?

* Ease of use

* Interface

* Ability to customize your own letters / postcards, etc. 

* Returned or undelivered mail?

Thanks for the Feedback from the BP community! 

Michael M.