All Forum Posts by: Greg S.

@Jennifer Katherine De Loughy

Thank you, Jennifer! Do you still invest in the area?

Hi George, thanks for the reply! Are you investing or mainly doing contracting work?

Hello, all. I'm finally ready to dive in to real estate investing and am getting started in the Ocean County and Atlantic County areas. Is anyone from that area on this forum? If so, I'd love to network with you. I've joined SJREIA and have some yellow letters going out this week.

I've lost some motivation over the past few weeks, and need to get back in the right mindset. I have to remember that marketing is a numbers game, and if I send enough letters, I'll eventually be successful. The only way I fail is if I quit.

I think part of the reason I'm starting to doubt myself is because I haven't been setting small goals like I did at the start of the year. I've been going through the motions of mailing the letters and talking to sellers, but I haven't felt like I've made any progress since I haven't set benchmarks for myself. I need to keep moving forward even if it still takes a while to find success.

This week marks the first "second mailing" that I'm sending. I originally mailed this batch across 4 weeks (about 50 per week) in January. I condensed it into one group and will be mailing all of the leads this week. My response rates dropped really low last month (averaged 6.5% vs many 10+% from the end of January). I had been experimenting with different ink and some decorative stamps. I'm going to go back to what I started with and see if the response rates increase again. Hopefully I learned a few things not to do.

I've also been working on finding cash buyers in my area. One idea I had was to search the tax records for owners including the term "Investors" or "Holdings." I've been looking through the results, and when I see an LLC or company that owns a number of properties, I note the address. I will be sending these folks a letter to see if they're interested in acquiring more properties. My main goal right now is to find a rehab for myself, but in case an opportunity presents itself, having a buyers list definitely doesn't hurt.

Goals for this week:
Record at least 1 call so I can critique myself on the phone.
Send letters to the investors I found in the tax records.
Make follow up calls

Brian Gibbons,
I'm not sure how I feel about lease options. I understand the basic concept, but right now it's not something I'm interested in pursuing myself. I'd rather just birddog the lead and collect what I can on it.

Troy Fisher,
Thanks for the encouragement. I've read a few things about people averaging a deal per 20 calls. However, they probably filter their leads a lot more, where right now I'm just catching every single person who calls. The vast majority of people I speak to want full market value, and the few who haven't were upside down. I could certainly cut down on the number of people I speak to by creating a long voicemail to filter the tire kickers, but right now I figure I can use the practice in talking to sellers.
I'm not getting a 15% response rate. Although some of my individual batches of letters have been above that rate, my overall average is around 10%. I've mailed over 1000 contacts at this point, but of course it's a numbers game and I'll just have to mail another 1000.
So far I haven't done any follow up mailings. All 1000 have been the first contact. I'm starting my second cycle this week, and plan on hitting them once a month after that.
My buyer's list is okay, but not great. That being said, I'm fairly confident I could move a deal if I found one. Right now I'm looking mainly for a rehab project for myself.

Steve,
In NJ, only 1 party needs to be aware of the recording. Thanks for looking out, though. I'd also be sure to mute out all information that identifies the seller.

Greg

I've made a bit of progress since my last post. First off, I ended up getting in touch with a local investor who specializes in lease options and short sales. Those are not strategies that I'm interested in, so I'm passing my no equity leads on to him. He contacted the seller I wrote about previously (the one who owes what the home is worth and has it rented for $1300, but is sick of dealing with it and is about to let it go to foreclosure). The specialist I spoke with is working on getting that deal as a lease option, while simultaneously negotiating with the bank on a short sale. If it pans out, he'll pay me 10% of his profits. I'm keeping my fingers crossed.

Since my last post, I've dropped about 550 letters. My response rate has gone way down this month. I was getting insane numbers for a few weeks (averaging about 18%), but all the sudden it dropped down to 7%. Still can't complain, I guess. I did do a few things differently to test out some other mailing options (switched to blue ink, used a less generic stamp, etc). I'm not sure that this was the reason that my calls dropped off, but I am going to go back to my first mailings (black ink on envelope, red on letter, US Flag stamp) to see if the response rate jumps back up.

I'm currently at a grand total of 96 calls, and it looks like I will reach my goal of 100 calls before the month is up. I'm glad I'll hit that number, but to be honest I'm also getting a bit frustrated with all of the time and money I'm pouring into advertising and not getting any results. I have to keep reminding myself that in this business, staying focused and committed is what separates the successful people from the unsuccessful.

I have been seeing "motivation" from the callers here and there, although they mostly have to do with properties in flood zones. NJ adopted the new FEMA flood maps ahead of schedule to assist with people looking for guidance in repairing their storm damaged homes. Long story short, there are a lot of rumors going around about what (and what not to) expect. They are saying a lot of homes will need to be raised on pylons to meet new height requirements. Homes that aren't raised will be subject to flood insurance with premiums as high as $30,000 per year. Raising the home 2 feet above the height requirement will still result in flood insurance to the tune of $3,500 per year. This would obviously have a very severe impact on the local market, and with all of the ambiguity around what's coming, I don't feel comfortable taking on a property in a flood zone at this point.

I also feel like I'm stuck in a bit of a rut right now, since I've plateau'd with my growth. I want to keep moving forward, and plan to start recording my calls and uploading them so I can get some feedback from more experienced members.

Thanks Mike Neubauer. Unfortunately there are no REI groups in my area. Last year I joined the closest one (about an hour and a half away), but didn't meet anyone who worked my area so I let my membership lapse. Instead, I will try marketing on Craigslist to see if I can find short sale investors around here.

The seller who is doing the Deed-In-Lieu said he had tried a few different short sales, but the bank kept rejecting the offers and eventually he just decided to do a DIL to put an end to everything.

Also, the seller who I am talking about assuming the mortgage for isn't upside down like the rest of them. He owes about what the home is worth. It's currently rented for $1300...He couldn't remember what his payment was per month, so I'm not sure if a lease-option is possible, but I have a contact I can refer it to and let him sort it out. The seller said he's only 2 months behind so it seems like it might be workable.

I had a another 6 calls today. I'm up over 50, and want to make it to 100 before the month is up. I dropped about 115 letters in the mail today, and am hoping to put together another batch before the week is up.

I've been fielding a lot of calls in the past few days. I've spoken to a few people now who are very motivated, but way upside down. The one home (mentioned previously) has renters in it and the owner is open to someone assuming the mortgage, so I'm going to see if I can pass the lead onto an investor to lease option. The others have vacant homes and haven't been paying the mortgage for years or are about to do a deed-in-lieu.

Is there anything I should be doing with these leads? For the ones that seem to be in good shape, I've been referring them to a realtor to attempt a short sale. I figure I'd be wasting their time sending them run down homes. I guess these owners are past the point of no return, and the properties will eventually turn up again as REO's or sold on the courthouse steps

I don't mean to hijack Taylor's thread here, but I believe I'm still on topic...does the 70% rule assume you are financing traditionally or with hard money?