Spring Hill, FL · Member since 2013 · 28 posts · 0 votes
Moving!! Well- not really packing up a truck with my stuff, just thinking of wholesaling in other areas in my state. I have a buyers list that is non-responsive-wait before you think "are your deals-really deals" 30-40k profit on everything I send, some even more 60k profit!. I use the 70% rule , subtract rehab costs etc... These are good deals. The buyers That do respond are low balling to the point that my realtor laughs at me all the time!! I am not making much money, and this needs to change in 2014. So I am looking to move into better markets here in Florida. Problem is-I NEED A PLAN OF ACTION TO GET THIS GOING QUICK! ANY HELP YOU ALL CAN PROVIDE WOULD BE AWESOME!
Do you know there are no good buyers in your area? I find that hard to believe. Is nothing being rehabbed? Are there no landlords? How did you build your list?
If you market is in the dumps it is harder to find buyers but easier to find deals. When a market is hot it is hard to find deals but easy to find buyers.
It could be your numbers while intended to meet the 70% rule, don't really. Many new wholesalers send out deals and think they are good deals when they are not. I know because I read their posts here regularly.
Also it could be that your market is slow, so 70% doesn't work and you need to be at 65% or even lower. In my market the numbers have been skewed and way off what traditionally works, but that doesn't mean there aren't a lot of people making money here.
Do you know there are no good buyers in your area? I find that hard to believe. Is nothing being rehabbed? Are there no landlords? How did you build your list?
If you market is in the dumps it is harder to find buyers but easier to find deals. When a market is hot it is hard to find deals but easy to find buyers.
It could be your numbers while intended to meet the 70% rule, don't really. Many new wholesalers send out deals and think they are good deals when they are not. I know because I read their posts here regularly.
Also it could be that your market is slow, so 70% doesn't work and you need to be at 65% or even lower. In my market the numbers have been skewed and way off what traditionally works, but that doesn't mean there aren't a lot of people making money here.
Like the others, I'd inquire into the "buyers" list.
If it's really a list of buyers, then they're buying just not from you (meaning your deals are bad)
If it's just a list of people that you got from a Craigslist post, for example, then they're really not "buyers", they're most likely unqualified leads where 1/100 will ever buy anything. In that case your list is the problem.
Think about it, there's a huge difference between a buyers list made up of people you know from REIA meetings and some random guy that signed a form to get a free report online.
I can guarantee you that there's RE investors in your town. You just haven't found them, or they're not interested in newbie wholesale deals.
I agree with the others you need to refine your list.
Go to 3 different REIA club meetings speak to fellow wholesalers ask what they are getting properties at. They have buyers lists if you have a deal that fits see if they will work it with you.
Ask the rehabbers where are they looking what do they want to pay. How many can they do at once. Get experienced ones criteria and newbies who tend to pay more. If the property fits their criteria and they don't take find out why.
What are the ARVs of the deals that you believe will generate $30-40K in profit? Are they $100K ARV deals? Or $500K ARV deals? That will partially determine whether the numbers are good or not.
Also, how are you generating your rehab estimates? Are you creating a detailed scope of work and getting contractor bids? Are you asking your buyers what they are estimating in rehab work and comparing to your numbers? Are they in-line with each other?
Are you asking your buyers what ARV they are estimating and comparing that with your ARVs? Are they in-line with each other?
The key is to get feedback from your buyers to determine if the problem is with them or with your deals...
Another vote here for reevaluating your buyers list. Have you done any wholesale deals to date? If so, reach out to those buyers specifically. They've done business with you once, and as @J Scott suggested, may have some valuable feedback for you.
I'm in a market hit just as bad as Florida(Phoenix), and it's actually opposite here. There are too many investors and not enough quality wholesalers or leads.
The median home value in Spring Hill, Florida is not even $100,000. The area is garbage and super boring...there is no development there! No commerce. Get out of there while you can and try a new strategy.
Dan Miller, Thank You, Thank You, Thank You! Exactly what I have come to the conclusion of. THIS MARKET SUCKS..... OK How do I fast track it to say Orlando areas, Jacksonville? These are HOT ..... To the others, Thanks for your input and constructive criticism, there JUST IS NOT ENOUGH GOOD CASH BUYERS BUYING IN MY HOME TOWN--time to move!
I agree with @Daniel Miller about Spring Hill. I recently moved here about 4 months ago and the market seems to be slow (older families and not many attractions). There are plenty of houses I see that are foreclosed for well under market value. You could invest in these homes for your personal benefit (retirement community) but I would not be excited about using them for real estate investing. Possibly keep a few around but look in other markets as well.
@FRANK DARIENZO - here's a crazy idea, instead of packing up and moving how about shifting your strategy to buying and holding with investors? I have NO knowledge of your market but if you have access to properties with lots of equity and the market fundamentals check out then it could be a really good option and you could do less deals to make your money while building long-term wealth by keeping a slice of the pie for yourself.
@Joe Fairless I REALLY have to second Joe. If you have decent properties in the 30k-50k range, and rents are $800 and up, I would put the money in putting in a new roof, updating the plumbing, and putting on some paint, and have a nice cash flowing property you can own free and clear in 5-6 years. Just saying, buy and hold is great for long term wealth and leverage. I am biased, since thats my strategy.
If your deals are as good as you say, why give them to somebody else, why not do the deal yourself? Keep the $40k profit in you pocket.
One way to see who the serious buyers are is look at the courthouse records, often times online. Who are the buyers in 2013 who bought property in your area and paid cash? Those are your buyer's list, not some maybe talkers who haven't bought anything.
Also you don't need a buyer's list of 100 supposed buyers. You need 3 or 4 buyers who are the real deal.
Hey All, Good posts. I have a issue with buy and hold-NO CAPITAL!
I have a property right now ARV 150K Bank is asking 114k. It needs an Appliance pcg , New carpet, Thats all. Best offer one of my Buyers came up with is 80k! To me 110k offer 7k into it, stage it, list it at 145k-make about 20k-25k no brainer to me. Am I wrong?
Your example of a $150k house for $114k is just not good enough, assuming your numbers are correct.
First of all I would not go higher than 65% MINUS repairs, that would be $90k. But even that is at the uppermost limits. The $80k offer seems pretty reasonable to me, that's 58%.
We're buying stuff at much lower prices. The last few properties we bought were at 36%, 33%, 34%, 53%, 12%, 53%. If you can produce deals like that then you should have no problem selling/wholesaling them.
I am not sure I understand your problem. You are NOT making enough money per deal or you are NOT making enough deals. If the problem is you are not making enough deals, the problem could be Spring Hill. It is a pretty small market.
What is holding you there? Do you have a job that can't be duplicated in Tampa or Orlando? Opportunity is abundant in Orlando. Competition is also abundant. There can't be many wholesalers in Spring Hill. Are you sure you are working hard and smart?
The Central Florida Realty Investor's Club meets on the first Wednesday of every month. Maybe you should attend a meeting and see what you learn. Here is an interview with their president.
2014 is going to be an exciting year. If I googled " How to sale my house in Spring Hill", would your website show up? If my dad died in Spring Hill. would I get a sympathy card from you? If I had $100,000 in the bank and I was trying to find a way to invest it, would I find your blog about "Opportunities in Spring Hill" ? If my house was forsalebyowner, would I get a call from you? If I was being foreclosed on in Spring Hill, would I get a call from you? If my property was being sold for taxes, would you be at the tax deed auction with a pocketful of cash that you borrowed from the guy that read your blogpost about "Investing Opportunities in Spring Hill"?
When you are sure you are doing everything right in Spring Hill and you are not doing enough business, maybe a different geography will make a difference.
Hey All, Good posts. I have a issue with buy and hold-NO CAPITAL! I have a property right now ARVg 150K Bank is asking 114k. It needs an Appliance pcg , New carpet, Thats all. Best offer one of my Buyers came up with is 80k! To me 110k offer 7k into it, stage it, list it at 145k-make about 20k-25k no brainer to me. Am I wrong?
Frank; you can make money in almost any market. But you stated your deals all meet the 70% rule. This deal you mention does not come close to the 70% rule assuming your ARV is correct. This deal would need to sell for $98k to meet the 70% rule.
A few people have asked how you are coming up with your ARV. If that is accurate the 70% doesn't matter.
You also mentioned a Realtor. Are you finding these deals on MLS? If your trying to wholesale deals off MLS then changing your market area is not going to go anything. I think you are looking for confirmation moving will solve everything. I don't think moving will change anything until your methods are changed.
Ron, Mark good points. I need to regroup and get focused on 2-3 marketing niches. The Mls and craigslist is the only way I am finding houses right now. I have ordered Bandit Signs. I just need to find more buyers here in spring hill, and I am thinking of Jacksonville also.
I feel the same as a lot of the others that I question if your deals are really deals.
As Mark said that deal you mentioned was not even close to the 70% rule. My guess is that your ARV is inflated and you are to optimistic on repairs as well. That is common with new Wholesalers. I bet that your buyer on that one figured the ARV to be more like $130K and the repairs at closer to $10K (Assuming that your assessment of what needed to be done is close) and that gives you a MAO of just over $80K.
It seems super unlikely you are presenting any deals that have $60K profit in them. No way you have anything resembling a real buyer if you can't sell that to them. That is an awesome profit for ARVs several times what is sounds like the top of your market would be.
Also if you really did find that grand slam why not do it yourself? That is a pretty huge margin to make lots of mistakes and still come out doing great. If you had a deal with that much profit with an ARV in the low to mid $100s on resale you very well could find people to finance that 100% since the risk is so small. Even if you had to bring 30% of purchase to the table that can't be much more than $10K since you can't be paying much more than maybe $40K to have a shot at that profit margin.
For these MLS "deals" you are finding are you putting in super low offers and getting at least 30%+ under the list price? If not then they are sh*t that anyone could get. Also if there is an abundance of "deals" at list price then your ARVs are WAY off. Nothing on the MLS is a good wholesale deal at list if it has been active for more than maybe 2 days.
Ron, Mark good points. I need to regroup and get focused on 2-3 marketing niches. The Mls and craigslist is the only way I am finding houses right now. I have ordered Bandit Signs. I just need to find more buyers here in spring hill, and I am thinking of Jacksonville also.
I'm glad you're realizing that you need to think about what you were doing wrong and improve, but simply heading for Jacksonville isn't the magic bullet - if you can't find good deals and buyers on your home turf, what makes you think you can find them elsewhere?
Imo, if you really did get those leads, just become a RE agent and list them. Stop wasting your time with wholesaling if you're bad at it. Focus on what you're good at which (from your messages) is finding people who want to sell.