All Forum Posts by: William C.

@Irina Belkofer you are right.  I reread the thread and OP clarified these were "letters" to the owner.   But the actual original post asks questions that imply they are real offers, so I was a bit confused.  I'm all for submitting many offers since few will be accepted.  But just sending arbitrary purchase prices out to sellers for the sake of hitting your goal of 5/day doesn't seem like a viable long term strategy.  

@Jim Macedon you lost me.

You gave 2 supposed "extreme" and we had to chose one. One option, the obvious option is impossible in the near future unless we land on a pile of cash. Option 2, the not so obvious answer is actually possible via the BRRRR method. My point was obv we all want option A, problem is we have limited resources and we need to go down the route of option B, to hopefully one day reach Option A.

Lastly I don’t see people using debt on this site without a limit and with no regard to the risks. It was much more prevalent before the crash in 2008 but investors, at least the investors I talk with, see on this site, and follow are using debt way more responsibly. I see your point that debt can be dangerous, I see more people using it wisely than unwisely.

@Ayo Fayiga you did not include a quote of mine so I have no idea what you are talking about? I like legit wholesalers, and I appreciate what they bring to the market place. I don’t like when sellers get ripped off, and people try to find ways to convey property while keeping the second sale a secret. I didn’t like the analogy to target marking up prices. It’s way off base. At least your analogy includes contracts being sold. There are still umpteen factors we could go through that make these markets different.

The numbers don’t allow to pay the all 10 loan down to zero in 99% if markets in the US.

@Greg Smith in my first post that broke down the 2 options, each home was generating about 125/month or 1500 a year. Yes, these were assumptions, but I see many many investors use $100/door as a minimum. For the benefit of the argument let’s double that. So we are “pulling” $3000 a year in cash flow. It’s impossible to put down those 10 loans to own them free and clear.

The argument was which option is better? The problem I saw in that was the obvious option isn't possible through BRRR.

I also went on to mention I would do exactly what you are suggesting. I just think it's pretty clear option A is either not likely, or near impossible to reach using BRRR, meanwhile Option B is possible, and the reason why BRRR is so attractive.

Wait you are not writing 5 offers a week, but actually 5 a day? Haha. Mind blown. Please elaborate on how that is possible.

@Daniel Pitner 5 offers a week is quite ambitious. I’m curious to know how you are coming up with so many houses you would actually purchase in what I hope is a narrow geographical market. How are you even coming up with reasonable offers? Are you walking inside them? Or are you just kind of throwing offers at the wall and seeing what sticks. It’s not a bad strategy, I’m just trying to understand where you are coming from with the offer amounts.

As long as sellers have enough equity to close the deal, what does it matter how much they have? Also, you can simply ask them what they owe and find out that way. I just don’t want the misconception to be the more equity a seller has, the more willing they are to accept an absurd lowball offer.

Yes it’s unkosher to cut out agents. Not need to go any further there.

Why is there tension? Investors solves problems. Distressed sellers are looking for ways to sell their home without listing with an agent. Sellers LOVE offers. Maybe tension isn’t he the right word. They should be at least willing to talk about where your offer might land short, I just don’t know where you are running into confrontation.

To cut any tension between a seller is going to require building some rapport. Impossible to do this with 5 sellers a week every week. Or maybe by giving them examples and reasons why you arrived at this absurdly low amount for their Home. A place where they have lived their whole lives, raised their children, so on and so fort.

Sure you can market for a home to live in. I’m sure there are a plethora of examples of agents and investors coming across a home they end up buying to live in, while they were marketing for their business. Retail buyers do it as well to try to cut out agents and “save money”. Or if they want to live in a particular neighborhood they will write letters to only those houses until they find one ready to sell. Very common.

@Russell Redford

The best way to quiet a skeptical wife is to succeed.

Your question 1.a is an obvious yes, it's possible to build business and quit a day job, there are thousands if examples but the podcasts would be a good start to hear a few. 1.b is going to depend on way too many variables to even begin to answer. Some have done it in months, others are still struggling decades later to really break free from the W2. For example how much cash do you have to invest, what is your credit profile like, what exactly are you going to be doing. Wholesale, BRRR, fix and flip, but and hold etc etc. So many questions you need to sit down and answer for yourself, and then it's up to you to put the effort in required to make it work. My only advice would be to first replace your income plus a percentage more just in case, and THEN think about leaving your job. Unless you land some dream deal and make a hundred thousand dollars on deal one, it's going to be somewhat of a slow grind at the start. A reliable income will take some time, Unless you are becoming an agent, or wholesaling, which is basically the same thing fundamentally, except gets a bad name because of so many bad players.

Question 2. Work life balance is going to be decided by how you choose to run your business. We could all share our work life balances, but I don’t know how that will help you form yours. Do you answer client calls no matter the day and time, or do you only “work” 9-5? Real estate is a very pliable business, you can do almost anything you want in terms of flexibility of schedule, short of working only during the 3rd or midnight shift. That’s the great thing about it. You decide. You can also delegate to free up even more time. It is all going to depend. I know you probably don’t like hearing that because it’s cliche but it’s the truth. If the kids have a party at school and you are able to attend because you are not tied to a 60 hr/week job sounds like a decent work life balance.

@RJ Dixon Best of luck.

Are you still debating what to do with it when you are done? If I were in your positions, I'd wait until the property is completed, all the renovation dust settles, and see where the local sales market it at before I made any decisions whether or not to BRRRR or flip. The decision might become much clearer, once you know the total cost, the final ARV, etc etc.

Regarding the added square foot and finding out if it was done legally.  I am no lawyer so this is obviously not legal advice, and all citys and states etc will be different, but it has been my experience that "legal" is a relative term.  What would make it illegal? Do you mean were permits pulled?  If so, they would be found on record at the township.  If permits were not pulled, that does not necessarily make the addition illegal per se, they may have just not pulled permits.  Being 'up to code' is another typical concern.  In my experience, retail sales and the use and occupancy certifications that are required by townships and citys at the sale, do not require existing work to be brought up to code, its that any new work done must be done in meeting all codes and regs.  I hope this makes sense.

An easier way to explain it would be I have seen at least 100 homes change possession, and never not once has anyone ever questioned, or confirmed, or made sure of existing renovations, like the addition you mentioned, having been done "legally" so to speak.  Its important they were done right, and are safe, but otherwise probably a no issue.

This is an open and shut case, no matter where you are going to report this 'unethical' behavior.   You've lost the deal, it's probably best to cut your losses and move on and chalk it up to a learning experience rather than waste any more time trying to prove you were wronged.   

For the few in this thread that "agree" with OP that 6% was too much and this agent was ripping the seller off.  It's been said and is true that the law requires commissions be negotiated between the seller and agent, so there is that.  But we have no idea (at least I didn't see it posted in this thread) exactly what the sales price for this home was.  It could have been $40,000.  Is 3% fair now, or would it be OK to charge 6% in that case?  Way too often people outside the industry look at the surface of a deal and assume agents are being greedy and making all this money for doing little work on a deal.  There is a good chance this agent was on a 50/50 split with his broker, lets not forget taxes, and all the other hands in the cookie jar, so for the sake of argument I'll assume the sales price was $100k, the agent might only be taking home around $2500 on the deal.   It'd be nice if OP used hard numbers, but that probably wouldnt support the narrative that the agent was earning too much quite like 6% does.

Lastly, to expand on that point, we have no idea how much work will be involved in getting that deal to closing.  It could be a many months long battle with townships, lenders, ex husbands, you name it, this deal could be an absolute time suck.  Its not likely, but we shouldn't assume it'll be all butterflies and roses either.  Id agree OP identified her as a seller, I still have not seen an explanation of how, but keeping a deal together and getting it to the table is in my opinion where I earn most my money as an agent for a seller, and especially in duel agency.

@Mo Farraj I actually subscribe to the notion that anything on the market for more than 3 days is over priced.  That is not to say "deals" don't ever slip through the cracks, because they do.   I tend to look at the entire marketing history of the property to get the story, they could have started off way too high, and incrementally lowered it to the point they are now, fair market value, but buyers see 600 days on market and assume the worst.  I also tend to think this thought process is more often true when talking about retail sales, or homes that end buyers are looking to buy.  For many reasons, foreclosures, properties that need work, etc. seem to get lost in the cracks a bit more.  

So to answer your question, No, I would never allow the DOM to affect my actual BUYING decisions, but I do look at DOM along with the rest of the marketing history to try and piece together a story and use it to help in the "shopping" and research process.