All Forum Posts by: Van Blackman

@Victor Cornell

Hello sir!

First off, congrats on joining BP. I think you'll find a lot of valuable information and insight here on the site!

Second, regarding your inquiry on best ways to market, here is what has helped me MOST in my pursuit of off-market deals in Chicago - if applied, these strategies will work anywhere:

1. Social Media/Online Presence - Go to Facebook and LinkedIn, even Instagram. Try to connect with as many people in the real estate industry in your area as possible. This means realtors, attorneys, lenders, investors, contractors, property managers, leasing agents, city officials, you name it. If you're the type of person who uses social media to post about your personal life, maybe consider creating a separate business-oriented profile strictly for real estate purposes. Now that you have your profile ready, and you've started to accrue some "friends", post 1-2x per day regarding who you are, what you do, and how you can help. The goal is to get all of your contacts to associate you with one thing: buying and selling real estate. With me, I'm just looking to buy, so of course, I cater more towards that. In a couple weeks time, you should start to get leads through your online social media channels, all the while getting your name and brand awareness out there to the rest of the world.

2. Just like with social media, you'll need to go out and meet people in person and do the same thing. Go to meet ups, shake hands, and get to know the players in your market. 2-3x per week is fine. Be sure to follow up with everyone you meet via email, and of course, find them on social media. Now you're meeting people in person, and they're seeing all of your content online through your social media presence. 

3. Letter campaigns are great.

4. Door-knocking is greater.

You don't necessarily need a list of homes to send letters to, or even door knock on. Simply drive some neighborhoods where you live and make a note of the seemingly vacant properties. Knock on the door. Knock on the neighbor's door. Talk to people walking the sidewalks. Nobody knows the neighborhood like the guy who walks it every morning. 

5. Get your broker's license. Trust me. This will give you MLS access, credibility, and it will ultimately help you determine ARV's in much more accuracy than Zillow or any other site. Not to mention, you'll be coming in contact with many more brokers who come across deals than if you weren't licensed.

In closing: get your name out there, tell people what you do, and talk to everyone. Don't be discouraged if you don't buy houses immediately. These things take time.

If you know any decent wholesalers or lead sources in Chicago, let me know! We're buying 200 homes per month, and I need more out here. We buy in ATL as well!

Hope this helps.

Hello @Padric Lynch!

This has happened to me before, don't worry! I'm sure it's pretty common. 

You have a couple options:

1. Call your competitor and tell him/her that you noticed what they were doing. Be sure to be calm and professional. If you call them with an aggressive or defensive tone of voice, the likelihood that the activity will continue, or even increase, is strong. Fight the urge to retaliate. Don't turn this into a war. Call your colleague (you are in the same business after all), have a civil conversation between two professionals in the same field, have a laugh, and move on. There are plenty of corners in North Carolina, I'm sure.

2. Don't compete (with signs). STOP putting them out. It's amazing: my company has recently made the move to start eliminating sign-throwing nationwide, and we're having the same success, if not more, than before. Let's face it, bandit signs are not professional, and in most areas, they're not even legal. Have you ever called on any of your competitors' signs? The lack of competence on the other end of the phone 99% of the time is astounding, that's if you EVEN get an answer. Who takes the time to purchase & throw signs, and doesn't answer their phone by the way?

It's not my place to tell you to throw, or not throw signs. I've actually done a lot of that in the past, and achieved much success. However, there are many other ways to find and buy homes. Whatever you do, stay professional!

Hope this helped.

@Caleb Anderson

Very excited for you sir! There's nothing like your first deal!

However, please do yourself a favor and re-work your numbers, and then triple check them.

The first concern I saw was your $3,500 in repairs. Is that for flooring, paint, and landscape? That seems very low to me.

Secondly, if the home is only worth $160,000, and you're buying it for $140,000 after closing costs, holding costs, repair costs, etc, you're going to be pretty close to the $160,000, all-in. I wouldn't necessarily classify that as a "deal". And that's even if you get it at $140k. The seller might negotiate you further up after your initial offer is made.

Lastly, even if your broker is right in their $1350 per month figure, that seems low for a home worth $160,000.

I know you're anxious to get your first deal, but sometimes patience is the best practice. I'm sure you can find a solid home that only needs minimal repairs where you can capture a LOT more equity and achieve at least the 1% rule or higher. 

Then again, I'm not in Locust Grove, GA, so you'll have to trust yourself on this one. But you're asking for opinions, and I figured I'd share mine.

Hope this helped!

Good luck!

@Shachar Hess

Hello sir!

Looks like you've got a lot of solid advice here.

Are you planning on staying in Tel Aviv? Or are you considering moving to the location in which you plan on flipping?

I would certainly recommend the latter of those two scenarios if possible, though it won't necessarily be a requirement.

I definitely agree with @Ibn Abney that you'll want to be in some of the markets with a higher population count, particularly where you have an influx of people and business continuing to move there. If the taxes are low, and the laws favor business and investors, even better. We're currently buying all over the state of Texas (and we have been for the last decade) which I believe would fit the majority of the criteria that I mentioned above. However, we're also buying all over California, Florida, Tennessee, Georgia, North Carolina, and more recently Illinois (Chicago).

It is in my opinion that if the population is high enough, and the economy is strong enough, you can do well in any market you choose.

The questions you really need to ask yourself are: Where do you want to live? Who do you know that can help you? etc.

If you plan on staying in Israel, I also agree that you should potentially partner up with someone else that's physically in the market you want to do deals in, and slowly build from there. It's going to be very difficult working remotely from so far away with little to no market knowledge and/or contacts that you've personally accrued and met with.

Hope that helps.

@Account Closed

Hello sir!

Flipping is definitely not dead, my friend. However, as others have mentioned before me, it has gotten increasingly more competitive due to the growing number of investors looking to get into the marketplace, AND an increase in the demand for quality projects.

My company is currently purchasing roughly 200 flips and rentals per month in 15 or so markets that span the US. And although our numbers are up, it still takes an excessive amount of work to find these opportunities on a consistent basis.

Anytime I'm in a rut in my quest for deals, I always remember that thing my parents told me, that so many other kids heard from their parents growing up too: "It's not what you know, it's who you know."

Looking back on my career, the majority of the homes that I purchased on behalf of my organization were not off the local MLS, or even from letters. Most of the leads that I ultimately purchased came from PEOPLE like you and me. I've bought from hard money lenders, real estate brokers, probate attorneys, divorce attorneys, neighbors, friends, family (thanks Uncle Greg), you name it. The point is: the best thing you can do is get out there, tell EVERYBODY what you do, and how you can help them.

All of the sudden the leads will start pouring in. Your next problem will be finding the time to examine all your leads to discover which ones are worth pursuing or not. 

Go to your local REIA group. Get your real estate license and start cold calling brokers. Call every local contractor you can find and introduce yourself. Hand your business card to everyone at the gas station next time you stop to fill up. ETC.

It's not easy, but it is simple.

Lastly, don't get discouraged if you don't buy a deal in your first week of searching. We only bought 2 homes in our first 6 months in Chicago, and now we're consistently buying 4-6 per month another 6 months later.

It takes TIME.

Enjoy the pursuit! The chase is all the fun!

@Derrick Lubomski

How are you sir?

With questions like these, I have to constantly remind myself when considering making additions to a property: "refer to the comps."

Refer to the comps, my friend. 

Does having a garage increase your property value? If so, by how much? 

Does having a garage increase your rental income? If so, by how much?

Do those increases in value and rent justify the cost of building the garage over a period of time? 

You almost have to look at it as an investment within an investment. If the garage pays itself back in 5 years, and everything is gravy after that, I'd say absolutely do it.

Also, I'm in Chicago where having a garage during the winter season has great value. I would imagine in PA it would be similar, no?

Look into the comps, and do the math. Does it make sense or not?

Hope that helps!

@Latia Rowland

Hello!!

Thank you for posting.

I've been seeing a lot of trending posts on wholesalers lately, and it's always been the age-old question, "are wholesalers good or bad?"

The simple answer is: just like anything, there are people who are good at their job, and there are people who are bad at their job. There are good basketball players and bad basketball players. There are good attorneys and there are bad attorneys. There are good educators and there are bad educators, etc. And wholesaling is just like everything else: there are good wholesalers, and there are bad wholesalers.

With wholesaling, and any other profession, in my opinion, you'll need a couple things to stand out:

Number 1 - you'll need to be competent. You are correct in your assessment above regarding rehab estimates and determining ARV. If you tell me there's $15,000 needed in repairs for a 500,000 property, you'll never hear from me again.

Number 2 - you'll need to be ethical. Never lie. Disclose, disclose, disclose. If you don't have the money to buy the home yourself (most wholesalers won't), then don't tell the owner your the buyer. Tell them you're a wholesaler who sources properties to investors that give you a fee for your services. You'll also need to disclose to your buyer all the terms of your original contract you're assigning, which means they'll know how much you're making on any given deal. Also could be a touchy subject, but if handled correctly, should be no big deal. 

Number 3 - kind of a piggy-back off Number 1, but also a no-brainer. DO NOT wholesale deals in California if you're a wholesaler in Illinois. How can you really be expected to be taken seriously? Know your market, and stay out of areas you do not live in. C'mon guys...

Here's my ADVICE: get your real estate license and learn the MLS. Not only is that the BEST way to pull accurate comparables for your subject property, it will also be a valuable source to meet and learn from other brokers. Experienced brokers can show you the ropes of the business, and some can even bring you deals that they don't want, or don't have a buyer for. Extremely valuable. Also, join a couple local meetups in your area and be-friend investors and contractors. DO NOT be-friend other wholesalers unless they are at the level you want to be operating at. The goal here is to learn rehab estimates directly from investors who are currently doing construction, and/or doing the same with their contractors. If you learn rehab numbers from another wholesaler, or even from a book, it's going to be difficulty to apply that to an actual scenario and have accurate numbers for your buyers.

In summary: know your numbers, provide real value, and be ethical. Being GOOD is really that simple. 

Hope that helps!

@David Hines

How are you sir?

I saw that thread from yesterday you referred to up there. Brutal! Honestly, though, those types of posts are exactly what BP is for: information, education, and from time to time, debate.

I do agree with you regarding your assessment of wholesalers, as a whole. It is true that most of the wholesalers that I receive leads from are "wholesalers" just marking up other wholesalers fees on the same property and redistributing them - meaning they don't even have the deal under contract, yet they're advertising it as if they do. It's rare that they are educated on rehab costs and selecting accurate comparables, and even more rare to be licensed brokers.

I've seen the guys who give you the home with the $500,000 ARV that they're selling for $390,000 but it only needs $15,000 in work (that should hardly cover paint).

Then there are the ones that live in Alabama, yet they're sending you homes in Chicago. You know the ones that have never been to Chicago? Yet they're trying to sell me on a home that they "know" is a deal. Again, most likely found from another wholesaler and then marked up and redistributed.

The list goes on.

However, I have had great business relationships with individuals that provided immense value because they brought actual deals to the table. 

Believe it or not, if you ask any major player out there who's actually flipping properties, most of them will tell you their #1 issue is not raising money, or managing rehabs, or even re-selling the homes after repairs. The biggest issue is keeping their pipeline full of homes that will get them good returns on their money. They'll also tell you that not every deal needs to be a "home run". A couple base hits here and there, and the occasional home run is more than fine.

So, if any investor does find a great bird-dog, agent/broker, probate attorney, or wholesaler that can provide actual deals, I think that adds tremendous value. Ethics, knowledge, and competency are the only 3 requirements. I don't care who the deal comes from at that point. A deal is a deal - so long as those three requirements are met, of course.

So:

My OPINION - lead sources are super valuable. The good ones, at least.

My EXPERIENCE - most lead sources aren't reliable. The deals aren't steep enough to make an investor profit. Rehabbers have to dig through 100 pieces of trash to find the handful of diamonds in the rough.

I guess it really comes down to personality. If you can find a good wholesaler, who has the property under contract, who is knowledgable about the market, who's rehab numbers are reasonable, and who's ethical in their dealings, you've got a keeper.

However, just like sorting through 100 leads to find the 5 good ones, you'll need to sort through 100 lead sources to find the 5 good ones as well.

Good luck, sir.

@Chris Turner

Disclose, brother!

If you're assigning contracts to anyone, they should be made aware of your purchase price the moment they sign the assignment. Not necessarily by you, but by the contracts themselves.

When we purchase assignments from wholesalers, we ask for the assignment page - that usually discloses the assignment fee - and the contract that the wholesaler has with the current owner. We do this not to uncover the original purchase price, but to discover what exactly is being assigned to us.

Think about it: if there are stipulations in your contract that aren't disclosed in the assignment, how do I know what I'm agreeing to?

Aside from that, it's just good business practice to disclose as much as you can to all parties. Plenty of homeowners are okay with you making money on an assignment if you can actually get them a quick, smooth close. Everyone's situation is different, and sometime owners value convenience and time over money. 

Lastly, it's better that your buyer know the assignment fee 15 DAYS prior to closing rather than 15 MINUTES prior to closing. You never want to put yourself in a pinch on close day.

If you're wholesaling correctly, buyers should not care about your fee because they should feel good about getting a solid deal that they put zero effort into finding. I know first hand how tough it is to find a great, off-market deal. Your $10k assignment fee could come as a result of the last 3 months of work. That's only a little over $3k per month for all your work!

Frankly, if your buyers aren't comfortable with you making money for all the effort it took to find the deal, then don't send them deals. However, a relationship in which there is full disclosure is the best relationship. If you can provide good deals with ethics and manage to make some money yourself, you'll be around a very long time because good wholesalers, despite some of the other opinions above, create tremendous value for investors if it's done right.

@Account Closed

Keep up the good work, sir!