All Forum Posts by: Silvio L.

I'll be there, thanks. 

Thanks everyone for the advice and useful information. It seems that this is not a short sale at all. I suppose I got stuck on the "short sale" idea because it seemed to me that for the deal to make sense we'd be offering less than what's owed on the loan. The mortgage balance I have is from January so I imagine the balance today is a bit higher, but I need to complete some more due diligence to find out what the current exact UPB is. I estimate it will be around 151k. I supposed 120k is really low, so that probably wasn't realistic. But even if I locked it up at 140k, which would make sense to me, it will likely still be below the UPB. That's why I was thinking short sale.

I wish the seller had called me in January when the UPB was 121k!

@Elizabeth Colegrove  Thank you very much for all of the detailed information, I appreciate it!

Hi Everyone,

I wanted to throw out a situation I'm dealing with now and get some input on how I should proceed. I recently went to see a property in my neighborhood that I am sure is a great deal. ARV = 333k and the property needs about 75k in repairs. The owner is very motivated to sell BUT it's going to wind up being a short sale deal. Here are some details:

The property belongs to an estate and the daughter of the deceased is the administratrix. After her mother passed the family was unable to pay the mortgage and they tried selling the property but were unsuccessful. Since then the family has moved and the property was left vacant. She is very much willing to do a short sale.  

When I met with her she gave me the following documents:  mortgage statement from January of this year (the most current one she had). The administrator certificate proving she is the administratrix, a discharge notice for a junior lien. 

mortgage statement says:

unpaid principal balance: 121k

unpaid advance: 3k

escrow balance: 15k

I checked the public records and confirmed that there are no other liens and that a pis pendens was filed In April of this year. 

I want to lock this property up and get a short sale approved somewhere close to 120k. Problem is I've never worked a short sale deal. I have no idea what needs to happen but I need to learn quick. Here's what I'm thinking so far: 

Get the property under contract with seller for 120k. 

Have seller sign an "authorization to release loan information" 

Get my title company to go to work on figuring out exactly what's owed... 

Then I get stuck. Am I then supposed to call a realtor? I know the banks send an agent to do the BPO, and a big part of negotiating the short sale is convincing the BPO agent that the property needs a ton of work and should be discounted. So should I start looking for an agent to help with his? I do know one agent I can call but I should probably get it under contract first, right? 

Any / all suggestions would be appreciated. 

Thanks! 

What a great first full time year, congrats!! It seems like you have some sound knowledge on how to structure different deals. I'm impressed with the creativity and flexibility in your approach to each property you described. Keep it up!

@Ben G.  Sounds like you've had a great first year. Congrats! Agree with everything you said. 

@Cass R. Smith   It's awesome that you have just jumped in and already have a deal lined up. Nice work! 

@Brian Lee  He was the real estate agent that helped me buy my first property. I got to know him and found out he was also a real estate investor. When I decided to finally start wholesaling, I gave him a call and he took me under his wing. It's all about networking and asking questions. 

@Hardley Dupont Like many others who start wholesaling, I do plan to branch out into other areas of real estate. I am definitely looking to continue with buy and holds for long term passive income, and I do want to try my hand at house flipping.  But what I truly would love to do, what I have a strong interest in, is buying mortgage notes. Something about the idea of "being the bank" is very attractive to me. But that's a whole other ball game so it'll take some time before I delve into that.

@Doug McLeod Point taken about hobby-income vs tax-income, but the phrasing of your point:

"You can call 2 deals in one year a hobby" 

Didn't do a great job of making that distinction. Perhaps with better wording the misunderstanding would have been avoided. Admittedly, I am not so knowledgeable in the tax arena so the term "hobby" did not strike me as a tax related term. 

I've learned something from you today - That hobby income exists! Something I did not know, so thank you for that information as I will now look into it a bit more.

I still maintain that I AM a real estate investor though, so to each his own on that one! :)

@Patrick Britton Thanks for the encouraging words! 

In terms of my weak areas my strategy revolves mostly around consistency. There are plenty of things I need to improve on but I think the key is to find time to work on all those things so they gradually but simultaneously improve over time. Otherwise I might find I'm really good in 1 area but severely lacking in another. Time management is an issue in and of itself so I'm working on that also. 

Deal #1 we got under contract for 61k and wholesaled for 75k, if I recall correctly. I posted some of the details about that deal about a year ago. 

Deal #2 was a 3 fam in a "hot" area in northern NJ right now. This one was easy in the sense that the seller's asking price was right where we wanted to be from a wholesale perspective. No negotiation necessary. We got it under contract for $100k and found a buyer the next day at $118k. Of course it wasn't all that simple but it worked out in the end so I'm grateful for that.

@Doug McLeod Seems we've gotten off on the wrong foot. In my experience, starting a thought with the words "no disrespect" usually doesn't bode well. But in any case, perhaps you were trying to offer constructive feedback and positive advise with a look to the future of my business, which I do appreciate. However, the wording of your post didn't strike me as being positive. Perhaps you misinterpreted my post as gloating so you took it upon yourself to "bring me down to earth", but it seems to me discussing future tax implications was well beyond the scope of the topic I created. Furthermore, I believe anyone that has worked as hard I have would take offense to your "hobby" comment, whether they are from New Jersey or not. But I appreciate your feedback nonetheless! 

@Shaun Reilly, Thanks! I appreciate it.

@Doug McLeod, I actually own a duplex I bought in 2011, and purchased it with some of my own money I saved up. I've invested around $5,000 in marketing for my wholesale business. As far as I'm concerned I AM an investor. So no disrespect, but you don't know what you're talking about.

A hobby? I doubt that anyone spending as much time, effort, and money doing what I'm doing would call it a hobby. Do me a favor and save your pedantic comments for someone else, I'm not interested. Thanks! 

Like many, I started wholesaling as a first step towards real estate investing. I've been on BP since 2011 and in 2013 I finally decided to give it a try. I kept track of my progress here on BP early on, but I haven't posted anything for a while. Now - a little over a year later -I want to discuss how it's been going. 

To summarize my first year, I would say it was slightly above average. Let's talk cash first. I closed 2 deals - rather - WE closed 2 deals (my mentor/partner, my girlfriend/partner, and I). First deal netted us $14,000 and the second $18,000 for a total of $32,000. We split 50/50 with our mentor, so we made $16,000. Not too bad for our first year. Funny thing is we've been marketing all over northern NJ and the 2 deals we closed were within 2 miles of each other. I'll discuss the deals individually in a separate post. 

We also missed out on a couple of deals. 3 to be exact. I remember them well because I replay the scenarios over in my head to dissect exactly why they fell apart. One deal that still hurts is one that we actually did all by ourselves. We found the deal and a buyer, negotiated the price, and squeezed a $5k profit in for ourselves. The buyer didn't even want to do any inspections and was ready to close in a week!  We had the contract all signed and 2 days later received a letter from sellers attorney reneging the deal. Anyway, maybe I'll go into detail about each collapsed deal in a different post. 

What we've done right: automating systems wherever possible, invested heavily in marketing, improved negotiation tactics, improved deal analysis and running comps, taking internet marketing and SEO seriously, finding unique buyers, and developing a good "instinct" for what is a deal and what is not. 

What we can improve: networking, being more active in REI clubs, being more active on BP and other sites, negotiating still needs work, better system for organizing leads, expand marketing and get more creative.

Goals for 2014/2015: Double revenue, complete deals without mentor assistance, expand marketing, target different types of motivated sellers, grow our name and reputation in the RE community, and do more deals! 

In May 2014 we formed our LLC. It was so easy! After we did it I definitely felt silly for not having done it much earlier.

And as a matter of fact, as of today I am dropping 8 hours a week from my full time job, working 32 instead of 40. Those 8 hours are being dedicated to growing our business.

I have so much more to share about the experiences I've had starting out in real estate investing, I've learned so much this past year. For now I'll stop here, and end by saying that I've listened to a lot of podcasts & read a lot of books, but there is some serious "untold" stuff in wholesaling that no one is teaching, and it can only be learned thru experience.