Flip This Wholesaler

Hey Steph,

I want to say congrats on all of your success! And I think that looking like George Washington can only help!!! Sorry bad joke.. But I want to thank you. You did not know that you helped me but I took your advise and put out 25 signs on Saturday on this little gem I picked up for $6k a double, and my phone blew up! It was great. Anyway I'm meeting with a lady tomorrow that wants this and I will make a nice profit!! Its Sizzler Time!!! Sorry nother bad joke... :)

Hey Dustin-

That is great to hear!!

I put out 25 over the weekend, too, but someone took them down right after I put them up. I didn't even get 1 call. :(

Glad to hear that they worked for you. Keep on truckin'...

Steph,

Quick question. What was the listing price on this one that you got for $23.5k? Is this house in a war zone? The area that I am concentrating in has the REO's listed between $55-$75k. What type of discount are you seeing? I've made about 20 offers on these, and the biggest counter I have received is $10k off. I need to get these in the mid to high $30k's to make them work. Thanks for all your advise. It is greatly appreciated.

Hey Steph,
What is next in line for you, are you going to start picking up houses, or rehabbing?

Have a good evening!
Dennis

Anonymous- This one was listed at 25.6k. I had an offer in on it the day it came on the market because I knew it was a good deal. It's not in a war zone, but it's in one of the crappier neighborhoods in Tampa. I have 4 buyers (landlords) who are currently looking for houses in this area, so that's why I made the offer.

I usually will not offer on something if it is 30k or more above the price I need to get it at. For example, if I know I need to buy houses at around 40k to make a nice profit in a certain neighborhood, then I will pull all of the listings in that n'hood that are priced 70k and under and make offers on all of them. The biggest discount I've ever gotten was 30k (property was listed @ 99k and I got it for 69k). I routinely get 15-20k price drops.

Hi Dennis-

I am going to keep wholesaling until I am sitting on a mountain of cash. then i am going to write a book/course on how to go from being a broke bartender to a multi-millionaire in 5 years or less. Then, after traveling the world for a few years, I plan on buying an island somewhere very warm and retiring with my dog Jim. ;)

If your average discount is $15k under list price, and you collect a $5k profit, you're $10k under list price. For something that's listed at $60k, that's $50k to the end buyer. Not substantially different (especially in this lower price range). If people are lined up to buy a deal at $50k, what is happening to the $60k listings?

Not following you, Joe.

All I'm saying is that I usually will not make an offer more than 30k below list price, because it usually gets ignored. I'm going after the really cheap properties right now, so 30k is a pretty big price drop for properties listed at 50k and under.

There are exceptions, of course....if the house has been listed for an eternity, I might offer 10k on a house that is listed for 50k. It just depends on the house, days on market, etc. You will start to get a feel for what will get accepted and what won't after awhile.

Steph

Hey Steph, congrats on the continued success. You have been hitting your stride big time this year. I miss the Flip VIPs group, but I think it just wasn't time yet for me. I used to live in Phoenix, so I'm jealous that you guys are going there.
I am making a lot of offers lately in the Cleveland market. I just could not do much in my own area after years of trying. Maine is just a quirky place with rural population, expensive housing, low paying jobs, no growth, and I don't see that changing at all. And itis extremely difficult to do comps there. So I finally got the courage to invest out of state, and it is going to pay off big time. The REOs are going fast, especially now at the end of the year. I plan on making dozens of offers over the next month and a half, to try and pick up some real bargains.
Tell the others in the group that I miss being part of it, and maybe next year I can rejoin you guys sometime. Keep up the good work, and I hope you keep your car!

Hey Tim-

I am so happy to hear that you are out there making things happen!

We miss you in the group. Like you said, though, maybe it just wasn't the right time. It would be great to have you back.

Let me know if you ever have any questions about the REOs- I'd be happy to help.

Take care,
Steph

I'm just trying to figure how discounted the deals are to get buyers excited. Given, in my part of California listing prices start at $300k for SFRs and go up from there. So if list is $300k, and there's a contract at $280k on it, no one gives a hoot unless that's the exact home you want for yourself to live in. To get investors interested, you would have to give them the deal under $250k. Excited, maybe $225k. So I would start offers around $200k ... $100k off listing. For a $60k home in your area, that would be interested at $50k, excited at $45k, your offer starts at $40k. Which sounds like what you are saying.

Hi Joe,

I think you may be confusing list price with the home's actual value.

The houses that I'm going after are already listed at heavily discounted prices- for example, the one I just got for $23.5k, is probably worth 70-80k.

All of the deals I am getting are well below 50% of today's retail value.

Hope that makes sense,
Steph

Interesting. Yes, list price is often not actual value. But most of the REOs I've seen listed have been listed close to their actual value, maybe 5% to 10% under. So that last deal you had was listed under 50% of actual value.

Yup. Great deals like that come on the market all the time, but they are usually gone in a day or two. I get email notifications sent to my Blackberry, so if something good pops up, I am at the house and have an offer in within a few hours. I'm not the only one doing that, though. I've got quite a bit of competition.

I don't even look at the stuff that's listed at retail. Once the price gets lowered to within 30k of where I want it, then I go after it.

Hi-

You mentioned that you have 12 offers out there. It also sounds like you're doing cash deals. Have you ever considered doing owner financing of those deals?

Also, as far as the ugly houses go, you mentioned that you've found that most people are not interested in these. Are they in war-zones? I'm also in Fl and find that there is more competition in ugly houses (vs pretty houses).

Buyers usually like pretty houses, but a lot of investors, flippers, wholesalers, etc, tend to like the ugly ones because of the perceived value in rehabbing. In my experience, at least.

Augie,

I am wholesaling REOs to cash buyers, so owner financing would not work for me. I want to be in and out of the deal, take my profit and move on to the next deal..

As far as the ugly houses go..pretty much all of the houses I am selling are "ugly". However, most of the investors/landlords who I am selling to want cosmetic rehabs as opposed to full blown gut rehabs. Cosmetic fixers are much easier to sell in this market than gut rehabs- that's what I meant.

Steph

Hey Steph, are you still making the offers in your name or are you making offers in an LLC name?

Steph,
What can I say! you are doing your thing. I am always on your site just to get that extra push.

You are greatly appreciated...Thank you.

Are you assigning you contracts to the end buyer? if so...

I thought you could do that with REOs!

If you are not, are you funding the first close?

Thnx

Jay

Really quick question, Is there a formula that you follow when you are making an offer to the bank?

Like in Wholesaling we say 70%of ARV minus repairs minus fees = offer.

Thanks,
Jimmy

Hi Jimmy,

I am not using any sort of formula.

I know the areas that I am working in really well, and I know exactly what prices my investors want to buy at in these neighborhoods, so I just try to get deals below those price points.

Steph