All Forum Posts by: Greg S.

Quick update since I don't have much to report. I didn't receive any calls from my last batch of mailings aside from the one I detailed in the last post. Hopefully I'll have more luck this week.

For this week, I'm sending a second mailing to people I originally sent a letter to at the end of last year. I only have about 40 data entries in all, so it's a pretty small batch. I didn't get a chance to gather new probate data last week since I wasn't feeling well, but that's a definite for this week.

I did complete my other two goals for the week, which were to print the repeat mailings and post ads to Craigslist. In addition, I also got a book from the library on investing in NJ tax liens. It's kind of boring, but has some good information. I don't think I'm up for tax lien investing at the current time, however.

Goals for this week:
Gather more probate data
Build up my buyers list
Finish the tax liens book

Well, it's been a while since my last post. I had decided I didn't want to send out mailings close to the holidays, since I'm dealing with recent probate listings. Afterwards, I had a vacation planned starting on 1/13, so I used that as an excuse to procrastinate further. I also had some trouble with my printer and ended up buying a new one, which wouldn't take the yellow letter paper I had on hand, so I had paper of a heavier weight, etc.

At this point I'm back on track. I mailed out 72 new probate mailings on Friday, and can now say I've received my first angry call. It came this morning around 11:00. When I answered, the caller asked how I had received his information. I could tell right away it wasn't going to be a good call. He asked if I normally sent out mailings without my surname attached, which I replied yes, at which point he started going off about how he was a federal investigator and would be looking into the matter. I let him know it wasn't necessary and would be a waste of his time, and offered to take him off the list. He did give me his name, so he won't be receiving future mailings from me. At the end of the call, it had me doubting whether I was really cut out for this, but I've decided I just need to develop a thicker skin. If this were easy, everyone would do it.

I will admit that he had a valid point. My letters are signed with just my first name. The main reason is that I am a public school teacher, and I mail to the town where my students live. Considering how emotional people can be during the probate process, I'd rather not have my full name included in the mailing. I was thinking of modifying my letter and signing it as "Greg Barry," which is my middle name.

I also set up a webpage today. I used the free page offered by Danny at www.flippingjunkie.com (Thanks, Danny!). I figured that web hosting is so cheap that it was stupid not to set one up. Afterall, I need to commit to this business if I hope to be successful. My hosting is through ipage.com, and was about $80 for two years of service.

One thing that I've been trying to do is record my phone calls when I receive them. That way, I can go back and listen them and figure out how I SHOULD have handled a response. Hopefully it will make me better prepared for next time. I can say this...from my recordings I don't sound very trustworty or confident. I trip over my words, throw in a lot of "Ummms", and generally sound like I have no idea what I'm doing. I guess that will be something that comes with time.

My goals for this week:
Gather more probate data
Print a batch of repeat mailings from previous data
Post "We Buy Houses" ads to Craigslist

Hi Darieal,
The reason I got my LLC was really for peace of mind. My wife and I are very cautious, so we want to make sure we have our bases covered in terms of liability. I've shifted my strategy a bit and am planning on wholesaling instead of birddogging. If it's a good deal, it seems like that is the the option that minimizes my risk and maximizes my profits.

My biggest fear, however, is finding a deal, locking it up under contract, and not being able to find a buyer. I have an escape clause in the contract, but it's a contract I downloaded online so I'm not sure how reliable it is. One of the first things I am going to do once I complete a deal is have my contracts reviewed by a lawyer.

I figure as long as I can get a property at the right price, selling it should not be an issue. This is just another one of those things I'm scared about that can get in the way of being successful with real estate.

My bad, I meant to say sellers. I'd edit it if I knew how!

To give a quick synopsis on the above deal...

I received a call from one of my probate mailings from an executor who inherited a house from his mother. He seemed at least partially motivated since I mentioned we would have to buy at 65% minus repairs, and threw out a ballpark of $40,000 assuming an $80,000 sale price. He asked me to come take a look at it anyway. It was tough to comp out since it was in an adult community and values were all over the place. I ended up calling up a local investor hoping to get some help, and he set me up with a buyer who was interested.

The buyer arranged a teleconference inspection, where basically I walked through the house taking pictures and he told me specific things to look for. I then sent him the pictures so he could come up with an offer. The numbers he came up with were a $20,000 offer price, $15,000 in rehab, and a $65,000 sale price. The sale price was probably a bit low, but I understand he was probably just being conservative and leaving some room for negotiations.

In the end, the buyers rejected our offer and said they felt they could get much more. I guess they weren't as motivated as I had thought. Regardless, I feel I learned a lot in the process, and at least I can say I have made my first offer on a property. Next time, I will be sure to put more time into identifying their motivation.

Hello all, quick question...

It seems that the standard for purchasing investment houses for rehab is to use the rule 65% of ARV, minus repair costs.

Using this formula, about what percent profit is built into the deal? I understand that it will be different for each deal, so I am just looking for an average estimate to give myself an idea of how much money there is to be made.

Thanks!
Greg

I have my first real, legitimate lead.

I sent a batch of probate mailings out on Tuesday. I received a call today from an executor with a home in a nearby retirement community. I was upfront about my intentions, saying that I would not be able to compete with traditional buyers that buy from the MLS. He said he understood my price would be low, but asked me to come see it and make an offer anyway. His brother let me into the house tonight, and I plan on giving him a call tomorrow with an offer.

I wanted to take the extra day to fine tune my numbers, since I'm having a hard time comping it out. The retirement community has a lot of houses for sale, so there is a lot of competition for any rehabbers. My realtor ran a market analysis on the property, and recently sold comps are all over the place. Some as low as the $60's and some as high as the $130's. Pretty much all of the houses in the development are 2/1, with a handful of 2/2's. All are right around 1000 sqft with similar lot sizes. My best estimate is around $80,000 ARV, but I'm very hesitant to move forward.

At this point, I think my strategy will be to explain that houses in retirement communities can be difficult to sell, and we'd have to find an cash investor willing to take the risk and front us the money. I'll use this to justify an escape clause in the contract and try to tie up the property for 30 days. I don't plan on rehabbing the property myself, but I doubt he would have a problem with my assigning the contract as long as it's at the price we agreed upon. I will probably offer in the low $40's and hope to settle around $45,000.

Any thoughts?

I completed two of my three objectives for the past week. I gathered more probate listings from nearby towns for this week's mailings. Hopefully I'll be able to put them together to get mailed out on Tuesday or Wednesday.

I sent about 25 letters out last week but didn't get much of a response. I had 1 call from a realtor who had the property listed. I was hoping for more calls, but it was a small sample size. Hopefully I'll have more luck with my next batch of mailings.

I did not finish "Secrets of a Power Negotiator" but will definitely do that this week, since I'm out of renewals and I need to return it to the library. I only have a few pages left.

I did manage to complete a few other tasks this week, one of which was to attend a number of open houses earlier today. I need to put some more time into learning my market. While out, I found a house with fire damage and made note of the address. May as well send them a letter.

Another event from this week...the realtor that I work with gave me a call about a property that just hit the market at midnight the night before. It was a hoarder house that needs a complete gutting, but was listed at $104,000 and has an ARV around $199,000. I forwarded it out to my list even though I didn't expect much since it was already on the MLS. The property is in Lacey township if anyone on here wants additional information.

This week's objectives...
1.) Finish my book
2.) Send out the next batch of mailings
3.) Compile more probate data
4.) See more open houses

Thanks Brian, those are some great tips.

I ended up going to the Surrogate's office last Tuesday and gathering about 35 probate listings. I was there for about an hour and a half, but should be able to work faster next time now that I'm more familiar with what to look for. After sorting through the data and removing the ones that didn't have property, I ended up with 18 listings.

I will be sending a batch of letters out to the executors tomorrow. They will be yellow letters with handwritten envelopes.

I think I'm going to focus on a few different areas with probates. I plan to go to the Surrogate's once a week, cycling through data in four different towns around my area. The data I gathered last week were the October listings for a nearby town. I'll gather October listings for other towns over the next three weeks, and on the 4th week I'll start gathering November listings.

Other things I did this week...
1.) Downloaded some wholesaling contracts.
2.) Revised my "script" I use when people call me to better emphasize how I can help them.
3.) Checked Craigslist to add people to my buyer's list.

This week's objectives:
1.) Mail letters to probate executors.
2.) Gather more probate listings
3.) Finish reading "Secrets of a Power Negotiator" which I've been working on for a while now.