All Forum Posts by: John Hixon

@Arnoldas Serksnys I just completed my first two assignments, here is how it works.

 - I put a house under contract for $50,000

 - Assign to buyer for $70,000

 - At closing buyer brings $70,000.  Closing company gives seller $50,000 and give me $20,000. 

You can find an assignment form on the BP file vault, it is basically just instructions to the closing company on who is buying and selling and at what price.  

Now, when I sign a contract with a seller I put down $3,000 earnest money which is replaced with the new buyers earnest money once I assign the deal.  I also make it known from the very beginning that I will be assigning this deal.  I even have an addendum to the contract that the seller signs which says I will be assigning this contract.  In the little experience I have had so far sellers really don't care as long as they are still getting the agreed upon sales price and the closing is on a certain date.

As far as showing the property goes, I have one serious cash buyer who takes one look at it and buys it.  

The process is really simple. Just make sure you understand the contract and know what dates are in the contract.   If you forget about a date then you are screwed and you will lose your earnest money so keep track of those.

Any other questions, feel free to ask.

@Corey D. Welcome to BP.  DFW is insanely hot right now and very competitive.  I just started wholesaling 3 months ago and have completed 2 deals.  I am mailing out 1,800 letters a month.  If you are interested in doing direct mail let me know and I will hook you up with a great guy to work with that lives in DFW.  

@Lucas Gibson I'm sure its the same in Ohio but in Texas I just do the following:

1. Sign purchase contract with seller for $50,000

2. Find buyer willing to sign an assignment for more then what I agreed to with the seller say $70,000

3. Send contract and assignment to title company

4. Buyer shows up closing with $70,000.  $50,000 goes to seller, $20,000 goes to me.

Its pretty easy.  Just make sure you understand the contract and know what all of the dates are.

Always use a title company, they will make sure everything is done properly. Also it doesn't cost you anything.  Any costs are passed on to the person you assigned the contract to.

@Will Beatty Dallas is such a hot market right now I just take ARV-70%-rehab. I have sold the last two deals using that formula.

ARV: $100,000 X .7 = $70,000 - $20,000 = $50,000. I can sell that deal all day long for $60,000 - $62,000. But, this is a unique market and flippers are running very tight margins.

@Account Closed that sucks.  A lot of sold called wholesalers just saw some late night commercial or went to a 2 day free seminar and now they think they can make fast bucks.  I just did 2 assignments and sold them to a company who turned around and sold them to investors.  I left enough meet on the bone for everyone to make a profit.  The key to being a good wholesaler is make a deal profitable for everyone involved and who will always have business.

@Peter Aziz Its been along time but there was one investor on BP that posted an extensive spreadsheet showing his investments over I think it was 6 or 8 years.   And he showed that over time on a large portfolio the 50% is pretty close.  I think he had somewhere around 100 properties. 

@Anthony Debiasi Jerry is awesome.  It is really nice having a mentor that is on your side.  It is a lot different reading about how to put together a deal on the forums and actually doing the contract  and trying to figure out all of the issues.  Let me know if you having any questions.  Thanks.

@Drew MacDermott Thanks, Jerry Puckett who handles my direct mail gave me a spreadsheet that he uses to estimate costs.  He lives in Texas so the costs are very similar to what I would see.  I just plug in the numbers and it tells me how much it would cost.  Now, these are not exact numbers. I am currently not looking at flipping so my costs to not have to be exact.  Just a ball park figure.  If I estimate $30,000 it might actually cost $28,000 or $32,000.  Not something I am concerned with, my end buyer who I assigned it to needs to worry about that.  

@Ryan Dossey Thanks man.  A lot of my success is due to the awesome call center.  I can't imagine taking all of those calls live.  Your correct, Dallas is a SMOKING HOT market right now and that was a huge issue for me starting out.  I was scared I would just be one in a million investors all trying to do that same thing.   All of these home owners are getting multiple letter and postcards from other investors every month.  But, when they call those guys 99% of the time all they get is an answering machine but when they call me they speak with a real life person and that instantly gives me a ton of credibility and like I said it is game over.  I am looking at expanding into a second market in February and I can't wait to see how much success I have in that market since it is not nearly as competitive as Dallas is. 

@Steve Salvini I know this is hard to hear but you just have to do it.  And, do not try and test the waters.  Just jump in and fully commit to a marketing campaign.  I tried testing the water once and it backfired, didn't get one deal.   I fully committed this time with 1,800 letters a months and I am seeing the benefits.

@William E. Thanks for the reply.  The cost per letter from Jerry changes depending on how many months you commit to upfront.  If you want I can PM you his email and he can talk with you about it.  In regards to the call center let me email you Ryan's contact info.  That also changes depending on what you want.  In regard to how many people I spoke with before my first deal, I spoke with 5 people before getting my first deal.  That lead came off of my first months letters.  I sent out 1,800 letters got a lot of calls from people asking to be removed.  Now, when I say I spoke with 5 people that does not mean that is all I got that month.  I spoke with more people after that first deal, some I am still working on and some turned out to be duds.  As far as a script goes the call center does all of that.  Those people are real pros and they handle everything, so that when I meet with the seller we are both on the same page.  I know what the seller is looking for and the seller knows that I am an investor and I want to buy a house.  If I get a lead from the call center that they do not set up a meeting with and just ask me to follow up with, which does happen.  I do not uses a script I just call and talk to them and see what they are thinking and if I can help them.  The conversation are very easy because the call center already did all of the hard work now my job is easy just call and say hi and 90% of the time the owner just starts talking and all I have to do is listen.  And, they already have a great first impression since they spoke with someone the first time they called.   Just FYI people hate leaving messages.  I tried that my first go around and it was a disaster.  

As far as paying to have someone stuff the letters and doing it yourself.  I am stuffing 1,800 letters a month right now.  I usually do it late at night after working out.  Sit down on the couch and put on some Netflix.  Its not fun but I needed to cut costs when I started so that is what I chose to do.   Now that I am making some money I am thinking about hiring a high school kid to do it.  Maybe pay them $50 a box, I'm sure some kid will be happy with $150 a month.  

I never thought I would be writing this post because I never thought I would actually get my first deal, but here I am.  

I finally made the decision 3 months ago to be fully committed to a direct mail campaign.  I contacted @Jerry Puckett to set up my campaign and @Ryan Dossey to set up my call center.  After looking over my budget I decided to do 1,800 letters per month.  Right off the bat I could tell that 1,800 letters was the right decision, not too many calls that I could not handle while working 40 hours a week at my job but enough calls to get me quality leads.  My first month was basically a bunch of tire kickers and people asking to be removed from my list.  The one good lead I got actually turned into my first deal.  Here are the specs:

Deal #1:

ARV: $210,000 - $220,000

Rebab: $30,000

First offer: $125,000

Agreed upon price: $135,000

Exit strategy: Assignment

My second deal came off of my first mailings for month 2.  This was your typical frustrated landlord.  She hated the rental business, hated the property, contractors, tenants, ect... It was great because like you read about on the boards my letter hit her at the perfect time.  A tenant just moved and she did not want to deal with it anymore and my letter showed up that day.  I was the first person she called and I got the deal.

Deal #2:

ARV: $135,000

Rehab: $25,000 - $30,000

Agreed upon price: $72,000

Exit strategy: Assignment

Just finished up month 3 of mailings and it looks like I am going to get a quality deal out of it.  I should know for certain this week.  

All of you who are thinking why did he assign those deals and not flip them.  Well, I needed to get some cash flow for a couple of deals.  I intend on flipping my next ones if they fit what I am looking for.  If not I will just continue assigning, pretty easy money for not much work.

I wanted to write this post for all of the newbies out there that think they will never get a deal.  I was one of those people who thought I would never get a deal.  And, to be honest if this 6 months of mailings that I committed to did not work out I probably would have given up on my dream of having my own real estate business.  There is no secret or magic bullet it just take time, commitment and hard work.  Ignore the shiny ball syndrome and just get out there and do it. From the profits from my first 2 deals I have more then paid off the money I spent on the mailings and I am already looking at greatly increasing my mailings and expanding into a second market for my next 6 months now that I know it is possible and I can do it.

Now, let me take a moment and thank Jerry Puckett and Ryan Dossey.  For those of you who are new Jerry owns a direct mail company.  He has been a savior to me and because of his help I was able to land these deals.  Not only does Jerry provide an excellent service with his direct mail but he also acts as a mentor/coach to all of us newbies who have no idea of what we are doing.  I probably drove him nuts with all of the questions I asked while putting together that first deal but he answered all of them (in depth).  Having a seasoned veteran on your side is priceless.  Any time I had a question about contracts or dealing with setting up an assignment and buyers he gave me the best advice and knowing you can trust someone in this business and the advice they are giving you is huge.  

For those of you who do not know Ryan Dossey he  owns a call center that is specifically for real estate investors.  This is not a call center where you provide them a script and they read it, these are true professionals and as Ryan puts it ( coffee is for closers) type of people.  There is nothing better then mailing out 1,800 letters and knowing I am not going to get one call from a single angry person or a call in the middle of the night or when I am with my family because the call center handles everything.  They take the calls live, no answering machines and they go to my lead tracker and make all of the adjustments.  I get detailed info on what the person is looking for and either I am told by the call center to follow up with that person or the call center sets up an appointment and I go to the house and meet the owner.  If you want to set yourself apart from the thousands of investors who just let the call go to voicemail and then call back in 24 hours then this is the way to do it.  The reason I love this service is because as investors we are all using the same lists, there are no secret lists. So, if the home owner get 5 letters and she calls 2 or 3 people and they do not answer and then she calls me and is greeted by a professional person who talks to her about her property and what she wants to do and then sets up a time for me to meet with her, then that is it, game over.  I just blew the competition out of the water and it makes for a great first impression when I show up to meet with her.  

Well, that is it those are my first 2 deals and then some thanks to the people who made this possible. Hopefully I will be updating this thread with more deals in the near future.  If anyone that is reading this is new and wants to know more about the deals feel free to ask.

@Randy Miller I started mailing out 1,800 letters per month about 2 months ago and just go my first deal two weeks ago.  On this deal there was actually enough upside that I sold it to another wholesaler and they resold it to an investor.   I could have tried to suck all of the profit out of the deal but I want to build relationships with other investors that way I never have any trouble selling a property.  

I actually got this deal because the first wholesaler that met with the owner was a shady guy who tried to put all of these weasel clauses into the contract and refused to put down any earnest money.  So, when I showed up and put down $3,000 earnest money and no weasel clauses the owner was thrilled.  I just did a simple assignment of contract to the new buyer and that was it I was done.  

But, to get back to your point you are right most wholesaler get one deal and think this is going to be their big payday and leave no room for the buyer.  Then when they cant find a buyer because there is no profit they use some BS clause to get out and then the owner is pissed.