All Forum Posts by: Wendell De Guzman

Michael Bridges, don't put down that money in a real estate deal. Instead, learn about real estate marketing and spend money in it. By doing so you will be able to attract deals - a lot of which you can acquire/control with "no money down".

Read the posts here on marketing.

Nick Aalerud, inspiring story. Thanks for this!
We have the same attitude.
I lost money with my first apartment building - 36 units. I bought it cheap but I managed to lose money. I did not give up and instead bought another building - 133 units but this time, I did things right.

The bottomlines...
You only lose when you quit.
You win when you continue learning and working.
Thanks again!

@Paul Zajic, I am based in Downers Grove.

Before I spend good money in search engine optimization and social media optimization, I would like to know what are you guys' experience with...
1. SEO and SMO in general
2. The company: Skyndersoft.com specifically

Thanks in advance for your feedback.

Ezinwanne Hawkins, I got a deal similar to yours.
The owner bought the property for $12K...thinking he could rehab and resell it. Months came and he became too busy to rehab it. And of course he couldn't sell it.

The garage collapsed (termites) and the owner got a BIG code violations fine from the city.

He was desperate to get rid of it. He called me and he told me he would give the house to me for $1. I did not negotiate (hahaha).

One of my guys put a bandit sign on the front yard and on the window. The next day we sold it for $3,000. The seller is happy and now have peace of mind.

Our buyer renovated it and did not have to pay the city. She is now renting the house for $700/month.

It was a win-win-win.

I agree with you Dev Horn, these deals do exist.

I agree with Jon Holdman. It's better to be conservative with your analysis than be sorry in the end. I ended up losing money on rentals (in good condition) in nice areas. I wished I was more conservative with my analysis when I was younger. I could have less white/gray hair by now.

Remember: no deal is better than a bad one.

The deal you presented is a mediocre one at best. There are better deals out there.

Michael Sherwood, on your question...why would anyone pay cash for it, the reason is there's a lot of cheap money floating around nowadays. With a cap rate of 10.74%, that's the return on investment they get from an all-cash deal. That's better than the measly 1% a certificate of deposit is giving investors.

I agree that the numbers are not that exciting.

Tom Goans raised several good points.
1. Keep it simple
2. Look into the area or location also. I bought a 36-unit apartment in a bad area but the numbers are stellar (cap rate of 15%, infinity ROI - got it for $1 down and I took over the loan...which is only $565K for a property appraised for $1M). It turned out to be my worst investment ever.

Remon Rasho I use Zoho as a way to track my offers, who I talked with, etc. It's inexpensive. You can google "CRM" or "Customer Relations Management software" to research on what system to use.

The key to succeeding in real estate investing is making a lot of offers. To do this, you need:
1. Source of deals - the MLS can be one of them (get an "investor-friendly agent to work with you); vacant homes owned by out-of-state landlords is another good source
2. A way to evaluate what the properties are worth (MLS, Zillow, Trulia)
3. A quick way to evaluate the amount of repairs
4. Source of buyers - below are some ideas for you:
a. Google "we buy houses [your city]"
b. local REI group (in Chicago we have the Chicago Creative Investors Association)
c. Meetup groups
d. LinkedIn
e. Call on "We buy houses" bandit signs

Make it a point to make 1 offer a day and you will be closing 1 deal a month (if not more).

"My Freddie loan (serviced by Ocwen) is ~$380K @ ~7+%. House now worth ~ $250-270K. Is THIS possible:
1. Determine what a sheriff's sale on this house could LIKELY fetch
2. offer to stay if my principle is is reduced to $50K over that figure. $50K MORE than they'd get if I left, right? Too crazy? "

Frank Beans, both are possible.
1. To determine how much your house will fetch in a sheriff sale, you can get a real estate agent to research how much are the shortsales that have closed recently in a half-mile radius of where your house is - provided that these houses are comparable to your house.

2. Principal reduction can be done (but there's no guarantee). You have to build a strong case for it. You can submit proof of market value and show them why it's in their best interest to lower your principal amount. You need to submit proof of hardship and other documentations needed in doing a loan mod. You do not need to hire a loan mod company, by the way. You can do loan mod on your own.

Yes...that's the 1% rule. it works for houses under $150K. Example: a house worth $100K can be rented for $1K/month.

For your case, I suggest you do not buy-fix-flip. It's too risky. I love wholesaling because it's no risk when you structure it properly. Going into rentals might work for you but instead of renting your house, why not buy a cheaper house instead and rent that (say a $100K house that you might rent for $1K/month). By doing so, your cashflow might be bigger.

Of course, before you decide to become a landlord, study how to do it right first.