Hi everyone. I am new to this site, but not new to residential real estate. One facet of real estate I am new to is the investment side from the directing mail marketing, and the we will buy your home cash, quick close, no questions asked type advertising approach.
I am looking to acquire at first some residential properties, preferably single family homes, followed by a duplex or triplex, followed by condo/townhomes. The restrictions for condo/townhomes with the homeowner's and condo associations make it my last choice. Price range would typically not be over $400,000.00
Depending on the property, I will either 1) rehab slightly, rent, then renovate again, 2) rehab and sell, or 3) rent indefinitely.
I have access to MLS, but in the South Florida market, there are no deals that appear on it in the areas that I'm targeting. Especially not for rentals if using the 1% rule and rental comparables around the properties. So MLS is not going to do me any good in this situation.
I then thought of trying to make some connections with wholesalers, which I am still considering, but realize that even though I am probably getting a better price than what would be on MLS, I am still paying more than what I may be able to acquire the property for myself (although it does save me marketing expenses/time etc, which is something I have to consider). Ultimately, I do not know enough about wholesaling and do not know if clear, marketable title, will be passed on to me at closing in these type of deals. The last thing I would want is to acquire a property, that has $50,000.00 in county/city violations, etc.
Since I have strong experience reviewing title reports, I considered potentially buying at an Association (Yes, I know it can be encumbered by 1st mortgage and other higher priority liens) or at the Bank foreclosure sale. The issue with this is that the competition is immense, and there are some big players that buy in these sales and don't mind driving the price up. Due to their economies of scale with having a rehab crew in place, etc.
Fortunately, I am now in a financial position, which affords me the opportunity to attempt to direct mail specific targeted area/homes, out of state heirs, divorces, etc and would like some detailed feedback and commentary about certain specific steps of the process, and not just the general process as whole.
I plan on attempting to send yellow letters, professional letters, postcards, and also follow up letters to owners in my target area, and specific homes that I see when driving around that look like they would be appealing to me.
Now here is where I need the experience and advice from seasoned investors that employ this method of advertising.
1) Once I receive a call from an owner that may be interested, they might say something such as: I got your letter, I want to sell my property as is for cash and a quick close like you advertise. How much are you willing to offer? At this point, I obviously will have them identify the property, but do I then schedule an appointment to access the property and review the condition of the property at that time? Does anyone bring a contractor with them to take a look at the same time, or does this typically scare off the seller? Once I see the condition of the property, obviously there will be no inspection contingencies, so are you just taking a risk that after closing there is no major foundation/electrical/structural issues that would severely bring down the value of the house and significantly increase rehab costs.
2) If the owner lives out of state, let's say inherited the property from parents that just passed away, how do you arrange access to the property?
3) Any other recommendations on what factors are used in order to price your offer in this type of situation, and at what stage do you provide the offer, would be much appreciated. Also, any additional advice or "watch out" for warnings would be greatly appreciated.
