All Forum Posts by: Michael R.

I will add that these sellers I'm talking about have yet to list their homes, but are strongly considering doing so in the near future.

Hello All,

I'm in month two of a 6 month direct mail campaign in my area and the calls have been rolling in.  Home values are all across the board, and it seems like a waste not to monetize the expensive listings that could be lucrative to a listing agent.  This is yet another moment where I wish I had my license or owned a brokerage.  

Have any of you partnered with a listing agent to connect them with sellers of high-priced homes that roll in and, if so, how did you structure that partnership?  Since agents hang their license with a brokerage, unless they also own that brokerage is it even possible to cut the bird dog in on the deal based on fiduciary agreements with the brokerage?

Am I looking at this from the wrong angle in some way?

Any advice would be greatly appreciated.

Michael J. Rigoni

I'm interested to see what you have in IL.  Please send to [email protected]

Absolutely agree with everything stated above. 

I'll try and supplement @Rick Stein's thoughts since what he stated is important, but many of us have a hard time accepting it without some perspective:

When going into a vacancy/tenant screening situation its easy to get anxious about the dollars going out day by day.  Perhaps walk into it with this perspective:  "There may be an outstanding tenant right around the corner who will live in my unit for years, I'm simply paying for the vacancy time in advance.  They haven't started look yet, but they will find my unit, and dial my number."  

Believe it, accept it, and proceed.  That way you take a less emotional stance and look at applicants objectively.  Throttle applicants with minor price adjustments, stick to your criteria, and have patience. 

Two key moments in RE where emotion can cause you to feel pain in the future, when you buy, and when you place a tenant.  Find ways to take an unemotional stance on both and you greatly improve the likelihood that you'll have peace of mind.  Do the opposite, and you'll likely experience an emotional roller coaster.

I called the best eviction attorney in my county and asked for the lease he prefers to defend in county court along with a 5 day notice. He gladly provided both for free along with advice on how to serve the notice and, should i find myself in an eviction situation he'll be the first person I call to represent me. That's one option.

@Farakh Zaman you essentially answered your own question with "i know you can get a loan on the equity". You pay all cash for the property, say for example $100k (this can be cash you already have, can borrow from a family member, etc.), and your rehab costs are $20k producing an after repair value of $150k. Place a tenant in there and you're off to the races. You've just taken your initial cash to purchase (equity), and added value by rehabbing (additional equity), and then you can do a cash out refi loan of up to 75% of that value (a check for $112k and change back to you). This is commonly known as the BRRRR method (buy, rehab, rent, refinance, repeat).

Now onto your initial question, should you give up?  Absolutely not, especially not after just 7 months of searching.  This business is a long-term daily grind of putting in a tremendous amount of effort, especially when you're first starting out.  Broaden your target area, start a direct mail campaign, find wholesalers, go to that unoccupied extra mile somehow or another knowing that there is always a deal to be had.  Press on!

@Austin Fruechting thank you for sharing! 

I love to see how other people describe their perfect life and hammer down to what truly brings them happiness.  All too often, I think, most people assume that a happy life requires fancy cars/houses and a six figure income, and instead of it acting as motivation it cripples them from taking action.  BP is rich with so much information about how to build your network, or find lenders, or analyze deals, but it's rare to see blogs or discussions that task the new investor to sit down and figure out their "Big WHY" so I thank you for detailing yours.  

You said it in a previous comment, something to the tune of, once you figured out how you wanted your life to look (the destination) it became easier to stay motivated and set real goals (the map).  

Great stuff!  

Huge congrats to both of you on this milestone!

I'd love to hear about your "Big WHY" list of items that led you to your actual freedom number.  What are the things you both agreed were associated with your highest level of happiness,  and the associated spend that added up to around 7-8k in necessary cash flow?

Hello All,

I purchased an SFR last August from one of my coworkers using seller financing with the original intention of flipping it. This was his mom's home which was owned in a trust, and they decided to use a land contract as the vehicle by which I will pay him back. The terms are: 5 year balloon, 20 year amortization, at 6% with 10% down.

After a month or so I decided that I'd much rather keep the home since it's in a very desirable area and would rent for a good bit of money.  I purchased the home for $78k and put about $5k into it in paint, appliances, and repairs before renting it out last month for $1425.  Now that I have some tenants in there and 6 months had passed, it was time to look into refinancing.

One of the guys in my local REIA owns a mortgage company and started the ball rolling on the refi. It never occurred to me that the land contract would cause any hang-ups in the refi process and we made it all the way to a week out from closing before it came up. The home appraised for $180k and i was attempting to open a new loan at $105K, take some cash out, and roll it into the next project while sustaining a desirable amount of cash flow and not over leveraging the property.

Well, needless to say, we're at a standstill since there's a 12 month seasoning period for land contracts at which point i can only take out a small amount of money (my very minimal rehab costs if I'm not mistaken?).

Does anyone have some advice on how I might be able to restructure the deal with the seller to navigate around this situation?  Scrap the land contract and use something else?  If i wait the 12 months and rates go to 5%+ does it still make sense to do the refi with closing costs and everything else?  

Thanks

@Daniel Saunders well hopefully some of those guys come across this post and step up their wholesaling game in CT.  Looks like opportunity needing to be capitalized on by someone. 

We have a few wholesalers around Chicago that have deployed nearly 100k in capital to their direct mail campaign's which bought them at least a few months of deal flow, but most of it is in and around the city.  If they found buyers for just the deals they've sent me I'd imagine they more than covered their original expense.  That being said, wholesalers at that level are definitely mythical creatures who tend to find you, not the other way around.

Stay active here on BP and set up some keyword alerts for "wholesale CT", "wholesaler Connecticut", etc...  Meanwhile, decide whether or not you have the time and resources to do 6 rounds of mailers and field the calls that roll in throughout the day.  Knowing full well that a small percentage of people will call, and an even smaller percentage will have something that meets your criteria.