All Forum Posts by: Ryan Webber

I also do a TON of marketing and networking. Get involved with your local REI club and start networking with some wholesalers. If all you are looking for is some rentals, doing marketing yourself might not give you a good return on your investment. I would use other wholesalers marketing budgets and networks to your advantage.

I would also recommend that you pick apart the newspaper and cheapy classifieds. I found my first deal in the local Thrifty Nickel Classifieds.

Do you need a personal mentor for a couple months? Hawaii is calling me. :D

Realize that just making low ball offers on listed property will require you to make a TON of offers to find the motivated seller. I would recommend finding a newbie realtor that is hungry (literally) and have them make 50 offers a week with Letters Of Intent. A LOI is a one page summary of your offer. It states that if the seller is open to the terms then you will move foward with a contract. Some residential realtors don't like them, but they are very common in commercial deals. They can save a tremendous amount of time in a situation like this.

I would also start looking for your financing now. Getting preapproved or developing hard money relationships is always a good thing to do before you're in a time crunch.

Wholesaling is what you described, and when you do get a property under contract, your asking price will determine how long it will take to sell. The cheaper you offer it for, the faster it will sell. If you ask FMV, you will be holding it for a while and will need to probably use a realtor to sell it. If you sell it at a discount, 80-90% of FMV, you will be cutting down the sell time drastically and can probably sell it yourself. If you get a good enough deal on it and could even make a decent profit selling it at 70-75% of FMV, then you could probably sell it before you even close on your contract.

Alex, you seem to have a very good head on your shoulders and that will help in whatever you do. Just remember that being successful in business will take time and diligence. I like that you have a good perspective on the long haul. Keeping your commitment through the years will make the difference.

Well BSM, I personally started investing with about $4,000 from my tax return. I partnered up with my best friend and he matched my $4,000, and we started rehabbing houses. He also had quite a bit of construction experience (a tremendous asset in this business) and was also able to carry some of the construction costs, which helped a lot.

Yeah I was one of them viewing it, so I'll jump in now.

Once you have a second contract signed with the buyer on a double close or have an assignment of contract signed with the buyer on an assignment, then, yes, most oftenly all you do is wait for closing. Now issues can come up, and that's when you need to jump to the plate. Things like title issues, cold feet from the seller or buyer, financing issues with your buyer, the buyer wanting to look at the property again, the buyer or seller wanting to renegotiate, etc.

In reference to your question about your own closing attorney, in Texas atleast, no one needs a closing attorney. It is all handled through a title company with a single title agent.

And who chooses the title company? I would highly recommend that you do. Search out and find an investor friendly title agent/company and take all your closings there. The actual federal RESPA laws that govern closing procedures actually state that the buyer is entitled to pick whatever title company they want since they will be living under the title insurance, but most people don't even know that or care. There isn't even any case law backing it up, so I don't even know why I waste my time talking about it. I don't give my buyers or sellers an option on title company. I have a wonderful title agent that will work wonders for me so I always take my closings to her. In the past when I have taken them somewhere else for one reason or another (seller/buyer has a relationship somewhere else) I have always regretted it. Working with one agent promotes a good business relationship. I can call my title agent, get a title insurance policy, and close all on the same day. I love it.

Your begging for direction and yet being picky about what direction you will receive? lol

Here's the best long haul advice I can give you, and I consider myself fairly experienced in real estate investments:

Experience tops book knowledge. Just do it, and always remember to buy low and sell high. :lol:

Sorry I had to do it. I started investing four years ago when I was 22, so I feel comfortable picking on you.

First, I would recommend for you to take your state's real estate law of contracts class for real estate agents. I took it when I started investing, and it helped tremendously in my understanding of not only standard real estate contracts, but the process and laws behind the contracts. I also took several other real estate classes, but I didn't get near the practical information as I did from the law of contracts class.

I have no recommendations on rehab (fix up and resell) strategies for books/courses/websites except to look through the forum for ideas and insights. I learned how to rehab through blood, sweat, tears, and money.

Keep in mind that most classes, books, or seminars aren't going to give you what you are looking for. Only experience will give you the knowledge and confidence you will need to be successful in this or any other business. Now education can help you avoid some of the pitfalls on the way, but its going to be long rough ride either way you go.

General recommendations of books, I would say Robert Kiyosaki's Rich Dad Poor Dad, and if you truly have what it takes, read Og Mandido's The Greatest Salesman In The World. If you can read that book, you can accomplish anything you set your mind to.

Keep in mind that your first deal will be the ABSOLUTE hardest deal you will ever do. Getting over the hump of your first deal, whether you make money on it or not, is an accomplishment in itself. So remember when you can't go to sleep because you can't stop thinking about the numbers on that first deal, just push through and trust your numbers. Good numbers to start out with are to buy at 70% of After Repaired Value (ARV) minus estimated repairs on the property. That percentage may shift up or down depending on how strong your market is, the area you're buying in, competition in your market, and some other factors, but it's a good place to start out at.

I would recommend running an estimated income/expense statement on whatever property you are looking at. Keep in mind normal newbie mistakes are figuring too low on repairs, figuring repairs to be done too quickly, figuring too high of an ARV, and figuring too quick of a sale time. Don't forget to factor unexpected repair costs, closing/financing costs when buying, closing costs when selling, PITI (Principal, Interest, Taxes, and Insurance) payments while you are fixing up and selling, and realtor and/or advertizing fees to sell it.

And now I'll give you by far the NUMBER 1 newbie mistake in real estate investing. . .

. . . buying a property too high and TRYING to sell for even higher.

So, Alex, to summarize my input:

Experience tops book knowledge. Just do it, and always remember to buy low and sell high. :wink:

P.S. Success and youth has a tendency to breed arrogance. Watch out for that one, it's just makes the road harder. Trust me. Humility is the best way to go.

I look foward to seeing you on the forums, Alex.

The beauty of the mls access is that you can pull your own comps or CMA rather than calling a realtor. I find very few of my deals through the mls (about 5%), but my research using the mls directly benefits me EVERY time I make an offer. I can personally determine an accurate ARV for any property I am looking at directly from sales comps that I research. I like being the one determining comps and not a realtor. In my experience, most realtors seem to overestimate ARV more so than not.

Well Noobdog, its good to see your excitement. Enthusiasism is important to this business.

I do have a couple questions/comments on your strategy.

First, why in a different state? Long distance property can be a nightmare. It limits your exit strategies (you didn't go into your exit strategies?), and hampers project and property management.

Why only 10-20 per month? If you are utilizing the MLS or some other public listing site, then you will need to make quite a few more offers than that to get a good bite. Maybe 20-30 per week minimum, and I would recommend more like 50 a week. You will probably be going through 100 or more houses to find a deal so you will want to factor the amount of offers off of that.

Why 20-30% below asking? Listing price and actual value can be two very different things, especially on fixer-uppers. Most realtors will mistakenly list a property that needs work very closely with what its comps are. So taking your factors off of list price could be dangerous. What if the property needs 20% of the list price in repairs? Most realtors also put in a 5% pad for negotiating room, and then after factoring 12-15% in holding costs, closing costs, and realtor/advertizing fees to resell, you are sitting at almost 80% of list price already. That doesn't include your profit and any necessary repairs/updates to resell.

In most markets 70% of After Reparied Value (not necessarily list price) minus repairs is the place you want to be on offers. That gives you roughly 12-18% for profit after repairs are done (depending on sell time, financing costs, unexpected repairs, and other issues). Now market variables and strength of competition can push that percentage up or down, but to make offers of this nature in a different state I would be overly conservative with my offer price. Maybe you could pull general comps in that zipcode and factor a price per square foot ARV to factor your offers off of rather than off of list price. This would be a safer estimation than list price. I would then be looking around the 65-70% or less of that ARV to make my offers. Also a 5K buffer for repairs/updates means ONLY paint and carpet pretty much on a 1500 square foot house, which for any house that is over about 10 years old is not a reasonable budget at all.

Noobdog, I like your enthusiasism and your idea, but I think refining it a bit could prove to be more profitable for you.

You might want to look through some of the different posts and explore the many options to begin your real estate investment career.

Welcome to the forum, TL003. Are you a new investor?

Wow, noobdog those are some great questions.

First, you are right. Wholesaling is absolutely a numbers game. A wholesaler will make a lot of offers, but that's true for ANY investor who is serious about buying good deals.

I remember reading somewhere in Robert Kiyosaki's material that you will look at 100 possible deals to buy 1, and I completely agree. I prescreen 90%+ of my possibles and find out before I make an offer that they are not deals, and I still only have about 1 out of 10 offers accepted. That's about 1 in a 100. :D

Now in reference to whether I am targeting specific houses or not, I would say I do both. I am in the business of finding one of two things. Either a motivated seller and/or a distressed property. I target any and every property that I believe has one or both of these. All of my marketing/searching/researching is focused around finding either a motivated seller and/or a distressed property.

If I see an abandoned/vacant house, I get very specific with finding that owner and making an offer. Every month, I target specifically every foreclosure that might possibly be a deal and focus on contacting the owner by phone, mail, and/or a door knock.

Now on the other side, most of my marketing/advertizing is geared to generate general calls from either motivated sellers and/or distressed property owners, but obviously I'm not targeting a specific house. I'm just generating leads.

In reference to techniques for a buyers list. Here's a couple ideas I posted on building your investor buyer network:
http://forums.biggerpockets.com/viewtopic.php?p=16107&highlight=#16107