All Forum Posts by: Silvio L.

Hello all,

In June I started a monthly Wholesaling update to track my progress as I moved forward with my real estate investing career. I've been so caught up with my business I haven't had a chance to add an update since, so I figured I'd recap how the past couple of months have gone.

Deals: We actually completed our first deal! Funny enough, this was one of the very first letters we sent out in May when we started our direct mail campaign. It took a while for the seller to come around but he eventually decided enough was enough and decided to call me back and take me up on my 60k offer. The property needed about 70-75k in repairs and had an ARV of 230-240k. I locked the property up at 65k. Initially we had a hard time finding a buyer, even though the numbers looked good on paper. Turns out every buyer has a different price, and what a buyer is willing to pay is largely influenced by what that buyer's goals are. This property was in an up and coming neighborhood of an inner city and most buyers wouldn't touch it. The best offer we got was 65k. I went back to the seller (still can't believe I did this) and negotiated our contract down to 61k just to squeeze out a little bit of profit. Well that buyer wound up refusing the deal, but we did find a buyer who would pay our asking price of 75k!! He knew the area well and was comfortable flipping in that part of town. So we closed on Sept 3rd and we got a nice big fat check for 14k!!! My partner and I split it 50/50 so that's 7k for me. The best part, better than the money, is the feeling of immense confidence knowing that THIS ACTUALLY WORKS.

So now we have reinvested about $400 in marketing. We are revamping our website, putting out more bandit signs, printed a car magnet to put on my gf's dad's van ( he runs a newspaper route), flyers, business cards, contracted with a couple of postal workers to bird dog for us, and purchased a new marketing list for our direct mail campaign.

One thing we are focusing a lot on now is pounding the pavement. Each week we walk the dog or drive around for a couple of hours in a new neighborhood. We pay very close attention to the real estate and look for those abandoned properties that no one knows are abandoned. So far we have had great success and I am currently in negotiations with 3 sellers! Turns out all 3 of these properties are all inherited estates, and the heirs just don't know what to do with them.

We are continuing our education by participating more actively in our local REI club meetings. We found one that we really like and we are regular attendees now. I also listen to RE podcasts while running at the gym and in my car on the way to work.

Our cash buyers list is strong with about 8 serious buyers we know are ready to pounce on deals when we get them. I'm not trying to market to buyers, so I'm happy to have a small handful of reliable investors.

The best part about all this is that I have people's attention, and they want to work for me. After showing some friends and neighbors the pictures of my GF and I holding our first check, everyone wanted to know how they could be a part of this. I told them to go out and find me distressed properties, and I'd pay 1k for every one that turned into a profitable deal. So we now have a small legion of bird dogs out there, lol. Another amazing thing - other wholesalers are calling me with their deals! They don't have buyers and they are willing to split 50/50 if I help them get the deal done. Nothing good so far, but it's only a matter of time.

Our focus going forward is increasing our web presence. We want to be the go-to site online for people in our area looking to sell fast and so we've started contracting with web designers and SEO specialists to get our site to where it needs to be.

Exciting times ahead!!

-Silvio

I recently met up with a best friend from high school and was hanging out with his brother. Turns out his brother is a contract worker for a company hired by banks to board up houses. He showed me property addresses and all the pictures he takes, etc. He's seen A TON of properties.

I'm thinking... this is too good to be true. But then, I've read that it's very difficult to buy REOs in today's market, and just because I know the properties location doesn't mean I can actually get my offer accepted.

I'm mainly trying to wholesale, by the way. A joint venture with a money partner I know is an alternative.

What's a good way to go about leveraging this new contact? What type of information should I ask him for?

Thx BP

Oh, a quick note on the tech side - I use google drive to share photos of properties with my partner/mentor. It's awesome!! a few clicks and all my pics are up and can be easily viewed by anyone I want. This is a great tool for sharing property data with cash buyers also, as you can upload data and reports with figures and estimates, etc. I like to take ALOT of high res pics, so email won't cut it.

Ceasar Blackman - I don't use a script, by now I've memorized the questions that I want to ask. I want the conversation to be exactly that - a conversation. I don't want to come off like I'm interviewing the seller, after all, I am the one expressing interest in their property. I did put together a questionnaire that I use as a template. When I make calls from home I have it open on my computer as reference. One note - I found questions like " If we agree on a price, how quickly would you like to sell" to be useless bc that doesn't necessarily capture the desperation of the seller. Everyone will sell quickly if they get a price they like! So I try to understand more about what kind of problems the sellers are having. If they say , "I have no issues with the property, etc etc." Then I thank them for their time and move on. I also look for key words like "vacant, needs work, problems with tenants, I know my rents are low, it was my father's house," and clues like that. Basically I just ask questions, but in a way that creates dialogue.

Robert Joiner - My buyers list has come from my marketing. Because I am targeting absentee owners with equity, I come across a lot of investors. They have a different way of speaking and are generally more knowledgable about real estate. When I get the sense that I am talking to an investor ( they mention they own or have bought more than 1 property) I ask : "Have you purchased any of your properties cash?" If they say yes, I ask more about what types of properties they buy and then offer if I can contact them if I find something that meets their criteria. I also ask if they are interested in partnering on future deals. The key is - ASK QUESTIONS! It never hurts to ask, and if you don't ask, well, you don't get!

Thank you all for the encouraging replies!

Dev Horn - The list I am using is Absentee Equity owner list. My Letter is a very simply yellow letter. I forget where I got it from, to be honest, but it's very simple and I didn't add anything to it. My gf writes the letters, I think her great handwriting helps!!

Mala S. - I thought the same thing, but I was blown away when I get 5 calls in 1 day after my first batch of letters went out. I won't lie, the letters are getting expensive, but as long as I can afford stamps, notepads and envelopes I will keep writing. Don't be afraid to market!

David Beard - Re: Google voice - I don't take live calls, I give everyone a chance to leave a voicemail, that way I can look them up in my database. I find that when I know a little bit about the property before I call back, it makes me seem more professional and I am taken more seriously.

Re: following up - My only system right now is to put these "real leads" into a separate database to follow up later. i haven't determined a frequency for my follow ups, but I know it won't be weekly or bi-weekly - I don't want to come across as desperate. My thinking is that if my approach and rapport building is good, so that if they do want to sell, I'll be the first person they'll call.

Re: Negotiating - I'm working with my mentor on this. He's been coming with me to see the properties, I do some talking, and afterwards he debriefs me on what I can improve or do differently. I'm also a psychology major so I try to incorporate things I've learned about human nature and patterns of thinking into my negotiating. Plus, I'm a people person, and have the "gift of gab", or so I've been told!

David Schneider - I suck at it! lol, but seriously, I have NO tech background. What I did is I went on fiverr and paid someone 5 bucks for a squeeze page, paid another 5 for keyword research, and another 5 for 2000 PLR articles on real estate. Now I'm reverse engineering the squeeze page (since I already have the "template" I paid for). Once I have it looking the way I want I will begin bidding on the keywords I was given, and with the articles I purchased I've created a nice PDF E-book about different situations a struggling homeowner might face and how to overcome them. It's what I'll offer my targets in exchange for their name, email, and phone number.

Jenkins Ramon - I absolutely have. He's taught me how to estimate repairs and how to accurately assess comps. I know that with out his guidance I would have made stupid offers and possibly been stuck with contracts I wouldn't be able to flip. Though I am proud to say my first offer was spot on! It just happened the seller got an offer for 5k more just a week prior : /

Hi all,
A month ago I started my wholesale business. This is my 30 day progress report:

Deals: 0
Leads: ~65

Marketing - ~550 yellow letters (response rate ~12%!), 25 bandit signs (created but not posted yet), catchy domain name with squeeze page (not toally happy with it so I'm reverse engineering it). Also paid a fiverr for relevant google keyword research. Posts on Craiglist and Ebay classifieds.

Bird Dogging - drive around approx 1-2 hrs per wk writing down addresses of distressed properties in neighborhoods near where I live.

Networking - connected with 3 REI friendly agents, ~4 cash buyer investors, 2 potential equity partners, 3 contractors, and 3 other wholesalers. Most importantly, I began working with Ibrahim S, a BP member/investor in my area whom I consider my mentor.

Tools - Google Voice for call screening, Excel for data and lead ogranization. Kompozer for web page design. Aweber for lead capture. Was using Property Pilot for property owner data but free trial ran out :(

Continued Education: Sean Terry's podcast, Matt Thereau's Podcast. Bigger Pockets blogs and articles, local REI club meetings, and picking Ibrahim's brain.

I've visited 7 houses and made 7 offers. I haven't been afraid to negotiate or make low offers.

While I haven't done a deal yet I've come across a few 'near misses' where the sellers just wouldn't agree to my price.

I'm not the least bit discouraged though. I know I have good systems in place and I never truly believed I'd do my first deal in my first month. Just thought I'd share so other new wholesalers don't feel discouraged. Don't worry - your first deal will come, as will mine!!

Thank you for the feedback and tips. I've contacted an experienced local real estate investor who happens to have been my realtor a few years back. He's been wholesaling for a while and he agreed to go see the property with me. Phew! Now I feel way more comfortable. I'm doing my best with the comps but I have no idea how to calculate things like cost of demo, for example. I'm limited in my knowledge, here. Anyway I see the property tomorrow so hopefully something will come of it. Thanks again for the tips!

@Tim G. - You mentioned offering the agent 3% but I'm a little confused. Where does the 3% come from, my fee? is it 3% of the purchase price, or 3% of my profit? If I do an assignment, won't the seller have to pay the agent's commission? I want to understand this better so I can use agents to grow my business faster.

On a side note - I got another call today from someone who definitely wants to sell his 2 family investment property. My target demographic - Older aged absentee owners with equity, seems to have been a good place to start in my market. I've gotten a lot of calls from folks saying they are planning to retire and move and will want to sell in the near future. I meet with him on Monday to look at the place.

I've already gotten comps on it from my new wholesaling partner (same investor mentioned above) but I'm having a hard time making sense of it all. For example, there are very few houses with the same lot size 40x100. The comps are all 25x100 or something like that. How much extra do I factor for the addition square footage? Also, these comps seem very low and very high. there are a couple at 120k-140k and a couple at 200k-250k. Mind you this is my local market and I know it pretty well. the locations are not terribly dissimilar so I'm guessing some were purchased by investors for a great price and some were bought retail at full price. They all look renovated or in good condition. Hmmm.... tricky tricky first comp analysis. Fun though! I'm enjoying dissecting it all and hopefully I'll figure out what I have to pay to make it a deal!

Thanks again for the help.

Hello BP,
A few days ago I posted that I had sent out my first batch of 50 yellow letters. Well, I've gotten 5 calls! that's 10% response and I'll take that all day long. So today I got my first lead and of course I'm way over my head so I wanted to present some details to hopefully get feedback and see what I should do. Here's how the conversation went:

Me: So what is your situation.
lead: The property is an auto body shop and a lot that fits 10 cars. My father owns the business and the property. My father is 84 and he's tired of running the business. He's owned it 35 years. No mortgage.
Me: What woud you like to have happen?
lead: Well I had just contracted a realtor to list it but when I got your letter I called and canceled with him, I wanted to speak with you first because I don't want to pay commission. I was gonna list for 330-350K
Me: If we could agree a price, how quickly would you be willing to sell?
lead: (chuckles w/ surprise at my directness) TOMORROW!
Me: Ok, let's meet friday blablabla

Ok, so details about the property. First of all, I am not interested in commercial properties whatsoever and I haven't researched ANY info on wholesaling them. That said if there is a deal here I want to take advantage of it. So property is in fact just some old rinky dink auto mechanic shop with a narrow parking lot facing a busy street. Interestingly, the property next to it burned down and the remains were demo'd, it's just an empty lot now. The location is nothing short of excellent. It's in a developing area near a train station, park, waterfront, and sports arenas.

My thoughts (I have no idea what I'm doing): So there is potential in the land but not much in the actual property or business. I'm thinking this would interest a developer who could build a nice multifamily and cash in long term on the location and appreciation. The empty lot next to the property sweetens that more, I think. Does that mean I should offer the value of the land? Would that make it a deal? I have no idea what numbers I should run before talking to this guy and all the research I've done has been with residential properties! I don't think "65% ARV-repairs" applies here and how do I get comps on an auto body repair shop?!?

Any feedback would be greatly appreciated!

-Silvio

Thanks Mike for the reply! Great tip - in fact, I recently downloaded a spreadsheet provided after an RE Webinar that does exactly that! I've started to track the expenses on stamps, envelopes etc. I'm also pretty handy with spreadsheets since my background is in research, so I've made a few marketing analysis tools myself. I'm trying to leverage every skill I have.