Flip This Wholesaler

Good one Steph, I just don't look at any news that isn't good news (don't look at much as you can imagine) and I usually stay to busy buying houses to worry about it LOL.

I decide to drop in on their "party". What a bunch of nitwits. Your comment was up. Well done.

Hey guys,

What a downer, huh?

I don't watch the news or tv, either. Too depressing.

Steph

P.S.
On a lighter note, my blog got a ton of traffic tody. Hehe

You are so right in calling many of these folks "SHEEPLE"....perfect name for these fools. Your comments are soooo right on.

I don't even know why I wasted my energy, honestly.

If I listened to all of the nay sayers along the way, I'd still be back at the bar slinging drinks for a bunch of alcoholics and drug addicts. Or worse, in a cubicle somewhere. :)

Let it be... :)

This is exactly why I stopped reading those blogs. Unfortunately people who only view the bad side, the down side or the negative side will always be with us.

And because you decide to find the silver lining in all this mess, they ridicule you.

Karma's a bitch.

gotta admit steph, i don't quite understand.

is a savvy cash-flow investor paying over "market" because you can grind the REO dept down further than he could?

why are savvy landlord types letting you "flip" properties to them in a declining market?

is there some element of risk that's being removed? some "value add" that you do, or is it just going through the reo listings and finding something that could meet their criteria?

is that really enough of a value add to make up for your expenses and the transaction costs?

thanks fo the site, and any insight you can share.

fuBarrio

FuBarrio,

They are not paying over market- they are paying 40-45% BELOW market. I am selling to them at around 55-60 cents on the dollar. I think that's what you are missing.

The deal I have that is closing next week is a 3/1 block home 1360 sf that is worth somewhere around $130,000. My buyer is buying it from me for $66,000 (I have it under contract for $58,000, so will make 8k on this). It needs less than 10k in repair, and he will prob get around $900-$950/month rent for it. This will be the 3rd property he has bought from me in 3 months, and he wants to buy 1/month for the rest of the year.

The "value added" is the property itself which he is buying on the cheap.

Even if the market does continue to go down, which I'm pretty sure it will, this particular buyer is in it for the long haul anyway, and, buying at 40% under market value gives him a pretty nice cushion.

Hope that makes sense.

Steph

Thanks, Clifford.

I figure there are 2 sides to every coin. Take your pick.

I choose to follow and take advice from those who are making a killing in this "horrible" market. I don't listen to the rest of them.

Steph

I was the object of bashing over on the LA Times blog recently, too. Some guy took something I said out of context, quoted it in the comments, and posted my link. But, like you, I actually benefitted by way of lots of traffic!

I was going to tell you not to sweat it...but, it looks like several others have beaten me to it! As you already know, blogging requires thick skin and self-assuredness in your path. You're doing great! Don't let the a$$holes win!!! I'll take an $8K payday anyday! Do you think they've ever had one of those? I seriously doubt it.

Thanks, Trisha.

This kind of stuff is small potatoes to me. I've got thick skin, and then some...

Kind of amusing, actually. :)

I'm off to bed.

Interesting.

I've been reading the "Doom and Gloomers" over at the HBB since 2005.   They've predicted most of what's happened so far, especially in the "Bubble Areas"

Maybe you've discovered some niche where you can continue to resale property at a profit.   If you've made a killing so far, more power to you!

This is what's bugging me, however.

Going forward, will you be posting your failures as well as your successes?

In other words, if the HBB is wrong and you're right, I have no doubt that the HBB will continue on; with plenty of hand-wringing over how they could have suddenly been so wrong after having been so prescient for so long.

And, I have no doubt you will tell everyone that you won't be posting anymore if you've decided to retire to some exotic locale.

But, if your blog goes silent, will you say anything if it's because you're bankrupt?

That would be an extremely valuable indicator of which group of people are ultimately "right" about this whole thing.

Hi Lavi,

I haven't discovered a niche at all- wholesaling is nothing new- buy low, sell low.

I learned most of what I know from Steve Cook over at flippinghomes.com. He's been wholesaling for over 10 years now in the Baltimore market. I was talking with him the other day, and asked how his market right now compares to what it was like 10 years ago when he got started. He told me it's almost come full circle. He's had success in up markets and down markets, because he is always contracting proerties at a SUBSTANTIAL discount. There will always be investors willing to buy properties at 50 and 60 cents on the dollar- find the deals and the money will come. When I started wholesaling, I didn't believe this to be true, either, but I saw the success that others were having doing this, so I jumped in. Everyone was telling me that I was crazy to get in when the market was starting to tank. And then, I got my first property under contract, and had it sold in a few days. I haven't looked back since.

To give you a better example, there is a wholesaler in the Detroit market named Bob Norton. I had the chance to meet him at a seminar last year, and am also involved in a mastermind group that he is a part of. This guy is making 6 figures A MONTH wholesaling houses in Detroit, which is supposedly one of the worst (if not THE worst) markets in the country. While everyone else was running away, he took advantage of the market, and is making a killing selling DIRT CHEAP houses to investors in California. I don't know the exact numbers he is buying/selling at right now, but I think he's buying properties in the teens, and selling in the 20's and 30's,and they are renting out for around $600/month (again, my numbers might be a little off, but you get the picture, I hope). He has more business than he can handle. My point here, is, even if values continue to tank here in Tampa (which, I hope they do), there will still be investors willing to buy. If properties start selling in the 30's and 40's here, can you imagine the feeding frenzy of landlords buying properties up at those prices? And, if they are getting several hundred dollars a month positive cash flow, AND buying at 40-50% of market value, where is the risk?


As far as posting my failures.....apparently you haven't read the archives of my blog. I had a tough, tough year last year. I jumped in full time WAY too soon, and suffered the consequences. I had to borrow money from family (which I paid back), almost had my phone shut off, almost got evicted, etc etc, and I posted ALL OF IT. As embarrasing as it was, I posted the good, the bad, and the ugly. I even swallowed my pride and went and got a dreaded 9-5 job, which I posted about. I only lasted 8 days, btw. I decided I'd rather be on the streets than wasting 40 hours of my life every week working for someone else. No thanks.

So, to answer your question, yes, I will continue to post, no matter what, although I have no doubt that I will be posting about my successes. I have busted my ass for the last year, and am now starting to reap the rewards of my efforts. No one can stop me.

Steph

Also, wanted to add...

I have not made "a killing" so far. I'm just now starting to get deals on a consistent basis, after making it through a very big learning curve.

I've got a lot of work to do before I retire to CR. :)

That's what I love about you Steph, your honesty and your vulnerability.

Continue to follow your dream and do what you want to do with your life... not your cubicle. Oh, and make sure you clock out today when you leave...

oh that's right, YOUR UNEMPLOYABLE!!!!

Those guys that come over here from that site just don't get it, do they? You know, I can't even imagine having to walk around feeling like that.
I think it would do them some good to think about it in different terms. There are certain things that will ALWAYS be in demand. A few I can think of off the top of my head, food, housing and diapers.
There you go, there will always be a need for housing and diapers. Some will be looking to buy, some will be looking to get rid of...

Holy shit Jason that was funny!!!! Thanks for making me laugh, I need it!

This blog is awesome. I have been a RE investor for 18 years and I can say most people could not do what you have done. Most people would have long since quit. Yes, there is a pretty severe bubble but the deals you are doing do not sound dramatically overpriced - just looking at it on a GRM basis.

You write well, too.

This blog is awesome. I have been a RE investor for 18 years and I can say most people could not do what you have done. Most people would have long since quit. Yes, there is a pretty severe bubble but the deals you are doing do not sound dramatically overpriced - just looking at it on a GRM basis.

You write well, too.

Hi, Steph. I found your blog through your posts on Trisha's.

I live in San Diego, where prices shot up to crazy heights. But unfortunately, I do not see bargains for anything except aging condos and dumps in bad neighborhoods. Even a dump goes for a half-million if it's in a decent neighborhood here.

I'm not looking to flip; I just want something to live in. But I don't want to worry about special assessments on a condo (that's probably smaller than my apt) or living with bars on the windows. Any advice for finding deals in an overpriced market?

Hi Anonymous,

I would get on the mls and go after REOs. If you don't have your license, have a reltor send you some listings. Then, pick the ones you like, and start making offers that work for you. The longer they sit on the market, the more motivated the bank gets, so look for the ones that have been on the market for awhile (a realtor can add DOM as part of the search criteria).


Good luck,
Steph