Flip This Wholesaler

Luckily, today I was able to focus all of my efforts back into finding deals. I got a phone call this morning from one of the realtors I spoke with last week. Her client wanted to know why I wasn't interested in buying his homes. I explained to her again that there wasn't enough equity, and that also I am staying away from the area the houses are in (all brand new construction, tons of homes for sale mostly investor owned). I again told her to keep me in mind if she comes across anything that fits my criteria.

I received an email today from a guy who has an investor friend who is in big trouble. He has 5 properties for sale (most of them were bought recently) ranging from 300k-700k. The two most expensive ones are both sitting empty. They all have negative cashflow. He is starting to get behind on some of his payments and is desperate to sell. He is willing to sell any of them sub2. There isn't enough equity in any of them to do anything with. Funny thing is (or maybe not funny), if I would have come across these properties a few years ago, I probably would have signed some of them up and then ended up in the same position as this guy. I got very lucky on the sub2 I did, and would never attempt to buy and hold again until I have a whole lot of cash reserves (everyone told me this before, but it never really made sense until I had tenants that took off for Alaska in the middle of the night leaving the place trashed). Luckily for me I bought the house right before the market started going crazy, and in 2 years it appreciated about 100k. Even after screwing the rehab up, I ended up walking away with a nice chunk of change.

Anyway, I sent out some more postcards today. I've only received a few calls from the ones I sent out last week, which is kind of disappointing, but that's the way it goes I guess. I also followed up with some old leads via email. This is one area that I am really trying to improve on. Especially with houses staying on the market so much longer now, I think it is really important to follow up every few weeks or so.

I am meeting with an investor later on this week to talk about bird-dogging for him. He and a group of friends are looking to buy properties now that the market has slowed. I want to get a little more info. from him about what exactly he is looking for. I've known him for some time and we both have a mutual respect for one another, so I think it could work out well. I have more time than I do money, and he has more money than he does time. We'll see.

I'm going to look through some listings tonight and go make some offers tomorrow. Hopefully something will stick. I'll be living in a cardboard box soon if not. Just kidding.

The house that I went to look at on Saturday needed a whole lot more work than I expected. The kitchen and bath both needed to be completely replaced, it needed a new lawn + landscaping, new fixtures, flooring, etc. etc. No way the numbers would work with the added repairs.

I got two calls yesterday from the postcards I sent out last week. One guy told me his house just appraised for $ 179,900, and he would "let it go" for $178k. I am not making this up. When I explained to him that I am an investor and buy properties at a discount, he got really mad and told me to immediately remove his name from my mailing list. I think I might send him a few more postcards just to get under his skin. The other call came from a guy who is moving in with his elderly Mother to take care of her. He just bought her house from her (not sure why), and wants to sell his house. He was willing to sell for what he owes (I don't have the numbers in front of me right now), but there wasn't enough equity to do anything with. I think it was around 80% of FMV that he owed.

I have been dealing with some issues (not real estate related) the last few days that have pretty much taken up all of my time and energy. I haven't had any time to do any marketing or follow-ups from last week. It looks like I am also going to have to get another part-time job bartending (which I am really, really dreading), in order to stay on top of my bills. I really thought I would be able to generate some quick cash with another flip (which I am still going to try to do), but if that doesn't happen, I am going to start drowning in bills. I have put myself in this position, so I am not going to sit around and feel sorry for myself, I just wish I would have taken action sooner. Another lesson learned the hard way.

So, I'm going to try really hard to re-group and get back into the swing of things tomorrow. I have many lines in the water right now, so hopefully something will turn up.

I had a very busy day today. My intentions were to go look at the three properties that I picked out last night and make offers on all of them. As soon as I got up, I got a call from a realtor who had a client that received a postcard from me. He bought two pre-construction homes less than a year ago, and was trying to get rid of them. Neither one had enough equity to do anything with. I had a nice talk with the realtor and told her a little about what I am looking for. She said she would keep my info. in case she comes across anything I might be interested in.

A bit later I received an email from a seller trying to unload a condo he bought last year, fixed up, and now can't sell. ARV is around 280k, his mortgage balance is 199k. The unit has been completely redone. He said he would take 235k. I thought it might be worth pursuing if I could get him to sell for what he owes- maybe a subject to. Then I found out that the HOA fees are $565/month. Holy cow.

I got another call from a guy who bought a property 2 months ago with the intentions of rehabbing, then selling retail. He bought the property for 135k, getting financing from an HML. His payments are $1800/ a month w/ a 1 year balloon. He installed central heat/air, did some minor cosmetics, then ran out of money. The ARV is around 200k. The house still needs flooring throughout (it has terrazo floors), and updating in the bathroom. The house is in an area I am not familiar with, so I am going to meet him there tomorrow morning to check out the house and the neighborhood. I spoke to him several times today- originally he was asking 145k, but then said he would take less and is willing to negotiate. I called the investor I flipped my last property to, as well as another investor I met while I was trying to find a buyer. The investor I flipped my last property to told me to call him after I take a look at the house and see what condition it's in. The other investor told me it was probably too tight, but he would ask around. He is mainly wholesaling right now, and is doing very well. I asked him if he would like to get together next week for lunch to brainstorm, and he agreed. I have recently decided that I need to surround myself with like-minded people who are out there making things happen.

This last week, I have really pushed myself to step out of my comfort zone. It is not easy to venture into unknown territory, but once you do, it really feels good.

Tomorrow I have someone coming to look @ my townhome that I rehabbed and am living in . Sure would be nice to sell this place before the end of the year.

Went to view the property I saw on Craigslist today @ 10am. Waited 20 minutes in the driveway for the realtor to show up (being late is a huge pet peeve of mine). Everything looked ok, except updating in the bathrooms is needed. House has been on the market for 5 months, vacant for 3. I put in an offer this afternoon for $160,250.

I have had my eye on a townhome for sale near where I live that has been vacant and listed since June. The owner bought another, bigger townhome in the same neighborhood and is now paying two mortgages. The listing says the seller is extremely motivated, make an offer. So, I did. List price is 160k, ARV 175k. My offer was $121k. My realtor called the listing agent and told her he had an investor interested and told her the price I was offering. My realtor said the listing agent laughed at him. She said the owner would maybe take 10k less than the list price, but only if we could close in one week. What a bargain.

I can sense that my realtor is already getting annoyed with me, and think that down the road I will just go directly to the listing agents and make my offers to them. I used to be intimidated by making low offers to agents, but now I don't really care.

This evening I got the first call from the postcards I have been sending out. The sellers moved out of town in March and have had the home for sale since then. I had a rental/lease option/rehab disaster in the same neighborhood, so I know it well. I had a long talk w/ the seller about different options (subject to, cash offer, lease option). I asked her what was the lowest amount she would take in cash if I could close tomorrow . She said 215k, but I think she will go lower. Mortgage balance is 180k. ARV 260. She is going to call me back tomorrow.

I'm going to sift through some listings tonight and pick 3 to go look at and make offers on tomorrow. I also sent out about 45 more postcards today (the postcards I'm sending out are targeted to motivated sellers that I find on Craigslist, the newspaper, FSBO websites, and listings that my realtor sends to me).

I am amazed at how many people (realtors and sellers) still do not realize that the market has changed drastically in the last 6 months. Some realtors are still using appraisals and comps from the beginning of the year to assess value. Maybe they know better but just think I'm stupid.

The offer that I put in last week on my realtor's listing countered @ 200k. The house was listed for 229k, worth around 260k. My offer was 177k. I think my realtor wasn't too happy that I didn't take it @ 200k. I again explained to him that my MAX purchase price is 70% of value minus repairs. I will keep my eye on it and put in another offer in a month or so if it hasn't sold.

Yesterday I went to look @ a townhome that I saw listed on Craigslist. The owners have relocated to Atlanta (actually they've been there since June), and the house has been vacant all the while. It needs updating throughout, paint, and carpet. Listed @ 124k, ARV 130k. My offer was $80,225. I haven't yet heard back.

I also sent out a bunch more postcards yesterday and today. I have about 100 out there that I've recently sent (within the last week), so I expect my phone to start ringing in the next day or so. Hopefully.

Today I checked out another home I saw listed on Craigslist. It's been vacant for about 3 months. ARV 240-245. Asking price 230k obo. Owners have moved into another property and are motivated. I have an appointment to see it tomorrow @ 10am. Going to offer 163k.

Still no luck selling the townhouse I'm living in. Haven't had any showings in 2 weeks or so. Hopefully it will sell by the end of the year. With the market the way it is though, who knows.

The meeting with my realtor went very well. I explained to him in more detail what my plans are, what sort of offers I'm going to be making (70% ARV max), and what I need him for (to fax my offers). He seems very eager to work with me, and seems to have a pretty good grasp of what I'm trying to accomplish. Hopefully he will still be as eager after I start making offers that get rejected.

I put in an offer on one of his houses yesterday, but still haven't heard back.

Tomorrow I'm going to send out a bunch more postcards, and do some follow up to leads that I spoke to last month.

Well, I picked up my 2k check from my first flip this last Friday. I still can't believe how easy the whole process was from beginning to end. I guess after doing a nightmare rehab, anything seems easy. Also, I think the fact that the guy I flipped the contract to was an experienced investor helped out tremendously. The closing took place at the title company he uses. They are investor friendly, and everything went smoothly. I will be using them for my next deal.

I am meeting for lunch with my realtor tomorrow. I want to go into more detail with him about what my investing strategy is. I am also putting in an offer on one of his listings. I actually met him about a month ago while I was looking at this particular property. He called me today letting me know the seller had just reduced the price again and is very motivated. The list price now is 229k OBO. Comps around 260k. Doesn't need any repairs. Going to offer 177k.

I have been getting a great response from the postcards I have been sending out. They are the same cards I have been sending out for the last few years, but I have never had such a good response. I'm sure it has to do with the slow market here. Most of the calls are from people still living in la-la land thinking they are going to get the price they were asking 6 months ago.

My goal is to have another house under contract to flip by this time next month. It would also be nice to get a contract on the townhouse I'm living in that I rehabbed, but I'm not holding my breath

A few weeks ago, I got a property under contract from a seller in pre-foreclosure. I am not in the position right now to hold anything, so I ended up assigning the contract to another investor for 2k. The closing is set for next Friday. I have a few deals under my belt, but this will be my first flip, and I have to say it is (if it closes), the easiest money I have made thus far. It's not a lot of money, I know, but when I look at the amount of time I have invested in this deal (maybe 10 hours at most), and compare it to the 2 rehabs I have done and the stress level and time involved, this flip seems like a piece of cake. In the process of looking for a buyer for this property, I made some very good contacts, and in a short period of time (about a week), have developed a very good buyers list. I have no doubts whatsoever that if I can get deals under contract at around 70% FMV, I will have cash buyers ready and waiting. Before doing this deal, I was very concerned with the market being the way it is (very slow, lots of inventory), that there would be a shortage of investors willing to buy. I now know that is not the case. I also have been attending a weekly investors meeting and see that there are many experienced investors who are actively looking for properties. I have made some very good contacts at these meetings as well, and have learned alot from the investors who attend- many who have been investing for 20+ years. From attending these meetings, and getting out and talking to other investors, it is becoming more and more apparent to me how important networking is in this business.

I also have recently met a realtor (I went to look at one of his listings), who I get along with very well (most agents usually annoy me for one reason or another) who has been sending me listings of properties that may have motivated sellers (I asked him to do a search for the word "motivated" in the remarks section). So, I have a ton of listings that I have been sifting through over the last week.

A few days ago I was reading through the articles on Flippinghomes.com, and happened to stumble across Steve Cook's article entitled "An offer a Day Keeps the Bill Collectors Away." (If you haven't read it yet, you should). I know I have read it many times before, but for some reason this time it really made sense to me. I printed it out and have read it over and over again. It seems so simple, but when I think about how long I have been working at this, and then think about how many offers I have made- it makes complete sense why I have only done a handful of deals. I have spent hours and hours and hours and hours researching properties, getting comps, sending postcards, putting signs up, etc. etc. but how many offers have I made? Not many. It's really quite embarassing . One of the investors I spoke with while I was trying to find a buyer told me that he makes about 100 offers A WEEK. Needless to say, he is doing fantastically and making a whole boat-load of money. It seems so simple when you think about it- you have to make lots of offers to make lots of money. Why have I not been doing this all along?

So, here I am, with a realtor who is willing to work with me, a list of properties for sale that have motivated sellers, and a great buyers list. All I have left to do is start making offers. My goal is to make an offer a day from this day forward. I have all my ducks in a row- a pre-approval letter, investor friendly title company, buyers list, realtor, earnest money, hard money lender. There is no reason whatsoever for me to not succeed.

This morning I went through the listings my realtor sent me and picked one in an area I am pretty familiar with. It is listed for $227,900. It says "owners are extremely motivated-make an offer." It is in a cookie-cutter neighborhood, so the comps were pretty easy to get. ARV is between 245-250 (conservatively). I just put a call in to my realtor to look at it tomorrow, and I will make an offer on it tomorrow. I don't really even care if my offer gets accepted, I just want to start making offers and moving forward in a constructive manner. I have a very bad habit of starting things and not finishing them, which is why I wanted to start this blog and tell everyone what I am doing. I think it will keep me motivated. I will update daily. Hopefully other people can learn something from my endeavors as well .