What am I missing? 9 monthes, 1 deal...

Aurora, CO · Member since 2014 · 26 posts · 4 votes

I've been interested in real estate for over a year. In that time I have read God knows how many books. I have "partnered" with a friend who has hard money connections. I've been going through the pre-foreclosures for multiple local counties and trying to find numbers to contact the owners. The people I contact either don't want to talk about their troubles (classic denial) or have another avenue they are working on.

Every book, website, forum, blog I read, makes everything seem easy. Find a good home at a good price, make an offer, then sell to an investor for a profit. How hard can it be? Except for the part where I talk to someone who wants my help.

I have been financially in trouble for a year. I work 55 - 60 hours a week trying to make ends meet. In my spare (lol) time I have been working the real estate.

Here is my plea. I am motivated. I need help. A coach, a mentor, a partner. I am willing to do all the work. To learn. In return, I will split profits 50/50. I am open to terms. I just need to fill in the blanks. I want to be successful.

Please help. My family is counting on me.

Thank you.

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Joe Bertolino

Investor · El Dorado Hills, CA · Member since 2012 · 1k+ posts · 1k+ votes

11y

The only people that "make it seem easy" are trying to sell you something. The only time RE is easy is when you have a ton of liquid capital. Doing deals without money or experience is hard... which is what you are trying to do.

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Brian Gibbons
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
11y
Originally posted by @Doug P.:

@John Baker I'm surprised no one else brought this up so here goes... please don't take this the wrong way, but real estate investing isn't the solution to your financial problems.
If your working 60 hours a week at any kind of job, your problem isn't income, your problem is spending. You have to get your spending under control before you can even think about taking on any investments. As has been pointed out, real estate takes time or money, and usually both.
Do you eat out? Stop.
Do you have more than 1 car? Sell them.
Do you have more than one phone? Get rid of them.
Do you have cable? Cancel it.
Do you have a big house? Downsize.
Cut out everything besides absolute necessities and get your spending down below your income and keep it there.
If you or your family refuse to be satisfied with the basics while you get things in order. Then it won't matter if you increase your income 100x with a massive real estate business. You'll just find ways to spend it all and be in the same position you're in now.
Sorry if this sounds harsh.
Double vote Doug, eloquently said
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Hattie Dizmond
Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
11y
if you listen to all of the podcasts, you'll hear a combination of reports about how long it took people to just get their first deal. It's generally either really quickly, but it was just plain, dumb luck, or it took a year. I can tell you from personal experience, it isn't easy. I work a 9 to 5 job and put in an extra 4 to 6 hours most days on REI.
When Brian referred to being a one trick poney, he was talking about deal making, not so much what you're targeting. (Although, if you're wholesaling, there is no reason to limit your potential deal pool to just pre-foreclosures. More on that in a minute.) Brian was talking about expanding your deal making toolkit so that you can take down deals yourself using other people's money.
You've already heard Jay and others explain why attacking pre-foreclosures with no money available. Now you're also including probates and abandoned properties. I'm guessing your getting those lists from somewhere. Guess what? Everyone else is getting the same lists. It doesn't sound like you can afford to market for deals, but you are going to have to find a competitive advantage. You're going to have to do something better than, more consistently than, and/or differently that everyone else.
You have a family. Do you have a spouse? Can you split driving for dollars duties with them to double your coverage area?
Wholesaling without a marketing budget is really hard. But, one flip or really good wholesale deal will fund a marketing program long enough for it to start producing its own returns. What Brian was referring to is adding to your deal making toolkit to increase the likelihood that you can do a real deal...not just a wholesale. If you don't know what a subject 2, wrap, lease option, etc is...then you haven't read the right books, and you need to start again with the Ultimate Beginner's Guide right here on BP.
There are better people put there to give you advice about personal finances, but I would suggest you may need to sit down with your family and take a hard look at what is necessary and what is nice to have. You may all have to make some sacrifices in order to create enough margin to have space to give real estate the attention it will require.
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Brian Gibbons
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
11y

@Hattie Dizmond
Nice advice!
Getting started in any business with no money is dumb and will not work.
Get money partners for marketing or business partners or both.
Learn a cash or terms presentation to sellers.
Best of luck.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
11y
@Hattie Dizmond
I think back to the mid 60's when my dad cracked into real estate.. he was frustrated with corporate jobs.. and got his license and worked part time for Boise Cascade selling land in CA. So this is germane to any decade... Well he was like many on BP trying to get started limited time.. We lived in a apartment in Cupertino had a mid 50's VW with no back seats. No silverspoon... Well the company would only hand out 3 to 5 leads a week and you better get your sales on those and of course the top producers got the hot leads. ( think the movie Glenn Garry Glen Ross a must see for most aspiring RE folks) any way my dad save a few dollars and bought a printing press ... said printing press was in our one car garage of our apartment.. guess who ran said printing press after school at 8 years old.
Then guess how those direct mail pieces got to the houses.. Well last thing he could afford was postage.. So me my mom and my brother and occasionally some friends would go to a neighborhood Sat morning at 6 am and walk the streets handing out my dads direct mail piece while my dad was up at the property working.. then that week we would get leads back from those door hangers that went to my dad directly without going through the company.. company did not care were you get the leads.
in 12 months my dad is now top 5 in the State for Boise Cascade and within 3 years is off on his own buying his own ranch's and subdividing them and hiring agents to work for our family...
So it was Dave Ramsey before anyone knew who he was.. And if was a family effort you think an 8 to 10 year old on his weekends wants to be walking around Hayward CA or Oakland CA or San Francisco handing out door hangers.. LOL... but I guess I learned the business from the ground up.
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Arica Savannah
Investor · Dallas, TX · Member since 2014 · 31 posts · 8 votes
11y
Wow! Lots of great advice and food for thought for you here John. I'd like to add first and foremost, never give up on your dream despite what your circumstances say at the moment. With that said, I think what you need most right now is to free up time to invest in RE activities. Let's face it, you gotta take care of home first so try to figure out a way to make ends meet on 40 hours a week. Do whatever it takes to make this happen asap. Then invest every waking hour in the top 3 things that lead to success. If you're wanting to wholesale I would start by focusing on #1: Finding deals. Read everything you can find on BP on how to recognize and find deals. Some of the guys mentioned previously are good places to start. #2: Develop your sales skills. Finding a deal won't help you if you can't convert them. Check out Karl Krentzel on BP. He's got an excellent website and podcasts to help you here. And #3: Take Massive Action Every Single Day! Look for opportunities, talk to homeowners. Make a log with the list of # of properties to analyze each day and # of calls to make. And do it every single day even if all you have is 1 hour.

I hope this helps. Keep the faith. It'll happen.

-Arica
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Hattie Dizmond
Investor · Dallas, TX · Member since 2014 · 2k+ posts · 1k+ votes
11y
@Jay Hinrichs
That's awesome! My sister, who also happens to be my partner, lives in one of our primary farm areas. We use pre-prepared 3 x 5 sticky notes instead of door hangers, which at my house go directly to file 13! As they are walking and riding bikes through the neighborhood, she has my 6-year old nephew run up and place stickies on doors of houses that appear vacant, distressed, etc. He thinks its fun!
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John Baker
OP
Aurora, CO · Member since 2014 · 26 posts · 4 votes
11y
Thank you for your motivational thoughts. Some days I REALLY need them!
I'm not looking for hand holding, its just aggravating to keep reading things like "find a motivated seller." Great. This is where I'm looking for help. You'd think foreclosure would motivate. But they are angry and in denial. Maybe divorce? Same thing.
My question, after refinement, is how does one pick and choose clients and turn them to motivated sellers? What do you say to make them understand you are offering them a solution, not a shark feeding on their misfortune?
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Ben Leybovich
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
11y
Haha - so should I feel bad that I haven't bough a thing since early 2013? I've sold though :)
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Tyson Taylor
Denver, CO · Member since 2014 · 56 posts · 68 votes
11y
@John Baker,
You are in a tough market with many established players that cut their teeth when deals were everywhere. The wholesalers I've talked to are all having a difficult time finding deals, and when they do they're like 80-85%, which makes it (IMO) too risky for a savvy investor.
Denver rents are so high, vacancies are low and home prices are going up. The economy is just booming, unemployment is low, basically, the opposite of the "buy when there's blood in the streets" mantra.
Right now I feel like brokers will do fine, properties are trading at high prices and frequently. Maybe it's the right time to get that broker's license and cut your teeth there?
Also, I'm happy to be proven wrong here- someone bring me a 70-75% wholesale deal in Denver and it would get done before the ink is dry on the contract.
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Anson YoungBusiness Member
Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
11y
Originally posted by @Tyson Taylor:

@John Baker,
You are in a tough market with many established players that cut their teeth when deals were everywhere. The wholesalers I've talked to are all having a difficult time finding deals, and when they do they're like 80-85%, which makes it (IMO) too risky for a savvy investor.
Denver rents are so high, vacancies are low and home prices are going up. The economy is just booming, unemployment is low, basically, the opposite of the "buy when there's blood in the streets" mantra.
Right now I feel like brokers will do fine, properties are trading at high prices and frequently. Maybe it's the right time to get that broker's license and cut your teeth there?
Also, I'm happy to be proven wrong here- someone bring me a 70-75% wholesale deal in Denver and it would get done before the ink is dry on the contract.
They absolutely still exist. Sold a 68% deal 2 weeks ago, and bought several 70% deals lately. But you are right, there are plenty of 80% 'deals' out there, but investors are snatching those up too. I have a ~78% deal I'm working on, investor has too much on his plate and wants out, already has permits waiting on signoff, and many materials bought and on site, lots of work already done (flatwork, structural, hvac, electrical, plumbing). With $43k spread left after fix. I dont think I'll have a problem selling it,
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Tyson Taylor
Denver, CO · Member since 2014 · 56 posts · 68 votes
11y
@Anson Young,
It's always nice to be proven wrong with real data.
@John Baker,
It appears the deals are out there if you know where to look...
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Devin Scott
Investor · Milton, DE · Member since 2015 · 65 posts · 14 votes
11y
My advice would be to keep doing what you are doing, but keep learning at the same time. That way when those deals start to come at you, you will be ready to do many at a time.
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Account Closed
Indianapolis, IN · Member since 2013 · 77 posts · 5 votes
11y
@John Baker
You mentioned you read a book about Abandoned Houses, what was it? I'm interested learning more.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
11y
@Ben Leybovich
bet you wish you had sold that nice little OHIO pig that you have that had the little flood :) At least when you diss little rental houses in the mid west we know you own one or more so your speaking from first hand experience LOL
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Kim Knox
Real Estate Broker · Jacksonville, OR · Member since 2009 · 199 posts · 155 votes
11y
You have to consider that you are already working a (more than) full time job. Your competition is working full time trying to find the deals, many of those have the cash to offer a quick close, and are fluent in answering the tough questions a potential Seller might have. It is a full time job to locate and work profitable flips.
I don't mean to sound negative,, but to me, it sounds like you are not in position to risk. You have a family to support, and you have indicated you are already in financial trouble. Real Estate is high risk, even to a seasoned investor.
Are you a homeowner yourself? If you are not, that should be your first step in real estate. Buying your own home and occupying it 2-5 years, you gain is tax free (I think up to $500K as a married couple). I ask because an owner occupied home gives you the most tax advantage and the least risk (your reducing the rent you pay at the same time you purchase a home).
Tax free real estate profits for owner occupied homes are a great way to increase your income. It is a beautiful gift from the government.
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John HornerPro Member
Flipper/Rehabber · Columbus, OH · Member since 2013 · 1k+ posts · 655 votes
11y
In my opinion, it takes time or money, and money is the efficient route. You said you were struggling financially, which sounds like you are taking the time route aka, spending your own time to research and find deals manually. With money you can create websites, send direct mail, hire a call center to pre-screen in order to ramp up and become more efficient.
I close my first wholesale within 3 months of starting, but I had some money for direct mail, websites and pay per click ads.
I think that without money the best use of your time is networking with others who are doing what you want to be doing. You will learn a ton if they agree to meet with you, but try to bring them some value if possible.
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Chin P.
SILVER SPRING, MD - Maryland · Member since 2015 · 77 posts · 43 votes
11y
Hi John,
Sorry to hear you are having a disappointing experience. I'm new, so can't offer real estate specific advice.
But your karaoke job got me thinking. I'm sure losing what money you get from it would hurt considering the way you describe your financial situation. Is it significant or comparable to say minimum wage? If karaoke is not too much income, maybe hunt for opportunities to replacr those hours with a part time gig related to some area of real estate investment where you are learning a part of the business while earning a bit for your time.
Lots of industries work like that, music, entertainment, etc. Try to find something that allows you to learn and perhaps have a potential to open the door to connections. It's almost like a pre-step to your initial suggestion of work for 50%.
Anyway, maybe it's a crazy suggestion but thought that I'd offer as a potential avenue to make the 15-20 hours you spend on karaoke more real estate relevant while still earning a little.
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Brie SchmidtBusiness Member
Moderator
Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
11y
From when I started planning my first deal (paying off debt, start saving, ect) it took me almost 18 months to buy my first property. It took me about 18 months to but my second.
Don't be discouraged...
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Josh Justiniano
Investor · Thousand Oaks, CA · Member since 2012 · 176 posts · 47 votes
11y
How consistent are you with marketing? Have you expanded your target customers for your service? Sometimes only hitting one type of prospect (NOD's etc..) is not enough, especially if you're in a hot market.
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Andrew Bondarchuk
Investor · Valrico, FL · Member since 2015 · 80 posts · 27 votes
11y
@John Baker,
I am planning on doing pretty much exactly what @Chin P. is suggesting. I work roughly 50 hours a week and I am currently living paycheck to paycheck. I say "currently" because my goals are clear to me - I must do more for my wife and my daughter and I will not give up. I am working on getting my license in Real Estate so I can make some money on the side while gaining some valuable experience and knowledge and some networking opportunities. I hope to transition from my current job to full time Real Estate sales then to full time investing. This will take years I'm sure but I believe I will get out of it whatever I put in so I plan to give it everything.
Good luck!
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John Baker
OP
Aurora, CO · Member since 2014 · 26 posts · 4 votes
11y
All very valuable suggestions. Thank you all. I do have a plan now. First I have a question for @Kim Knox. I am a home owner. About 12 years. Could you explain more about Tax free real estate profits for owner occupied homes?
After speaking with my wife, we are looking to downsize. Sell our house and use profit to pay off bills. Without that debt, we should be able to afford a smaller to same size house. Next regarding karaoke, I make $25 an hour. BUT I don't use it to my advantage (more on that in a minute). And regrettably, the last three weeks I have spent my REI time here, looking for answers that should have been obvious if I only stepped back and thought about it. But I like your voices in my head better!
I have been holding off on business cards. I will commit to handing out 5 a day. I am working NED's, but need to broaden my scope. I have a web site from donedealwebsites and will start posting to Craigslist and directing them there. My wife and I will start driving in separate cars on Sundays, looking for abandoned properties. And I am reading up on probate.
With all this, I hope to at least get some leads, (good or bad) in the next three months.
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Kim Knox
Real Estate Broker · Jacksonville, OR · Member since 2009 · 199 posts · 155 votes
11y
Sure, here are the rules direct from the IRS specific to selling a principal residence. If people are willing to move every 2-5 years, you can really add to your income through real estate if you plan. Many people are not wiling to add to their income this way because........well first, moving is a pain. Many who have kids prefer to stay in the same home.   http://www.irs.gov/uac/IRS-Issues-Home-Sale-Exclusion-Rules
Obviously you need to check with your accountant to make sure all is good-to-go.
On non owner occupied investments, you actually have to re-invest your profits into real estate to avoid the taxes (1031 exchange). With principal residences, you could use the money to pay off bills, take a vacation, college tuition, whatever. You are not limited to putting it into real estate, which is a fundamental difference between this particular tax exclusion. It is a tremendous gift from the government. I just hope it doesn't go away.
I am not an accountant, but paying attention to these types of exclusions can sure make a difference to people financially.
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Chris L.
Investor · New York, NY · Member since 2014 · 156 posts · 48 votes
11y
@John Baker I love your determination! If you believe in it, you can do it.
A couple thoughts. Have you considered getting your license and making some money by finding renters for landlords? You can search on Craigslist in all the For Rent ads to meet landlords. A license probably costs $300-$500 and you could get maybe a one-month fee for every person you place. You could also offer property management if you're up for it, it's very hard to find a good PM! If you are very good at it, you will have no trouble finding clients, I'm sure.
Another idea, what if you are a "bird dog" for other investors and get paid on leads you bring? It requires trust, but it's an option.
Do you live in a property where you can Airbnb out part of your living space?
Lastly, it's impossible to tell the reasoning behind your numbers. Are you answering your calls or letting them go to voicemail? Is your market growing or shrinking? What criteria are you using when you choose your leads? What do your marketing pieces look like? Are you emailing the same lists at least 7 times or giving up early? These are all factors.
Additionally, maybe you can tweak your conversations with callers. Are you being too straightforward and coming off as cold (instead of building more rapport)? Are you asking enough questions? Are you able to dig down to find their true motivations? Sometimes callers are afraid to reveal their full situation, I've found. Are you dropping hints throughout the conversation that gets them in the selling mindset (ie "If we work out a price for the property, you won't have to deal with those rats and termites anymore, Mr. Seller")?
If you'd like any advice, feel free to reach out. I'm happy to help!
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Alisha Mingus
wholesaler/aspiring investor and flipper · Sweetwater, TN · Member since 2015 · 32 posts · 7 votes
11y
Napoleon Hills 3 feet short of gold comes to mind when i read this post. That and the struggle of the butterfly. Read the above story or the story attached to this link) http://instructor.mstc.edu/instructor/swallerm/struggle%20-%20butterfly.htm ) and rethink your position sir. Both stories may be stories but time and time again have provided me with the strength to continue. Your only failing if youre not learning. Living near the ocean I have also learned that you dont rely on the wind to change to get you where you are going, you learn to set a better sail and utilize the wind that you do have. I think 9 months and 1 deal are fair and should be proof enough that you can in fact do it. If your results are not what you'd like or expect then adjust your sail. Continue with what you know has worked this far but make small adjustments to see if you pick up any speed. If it starts to slow then adjust the other direction until your goal has been completed. Count your blessings. Think of how many other people are doing what you are doing except they stop 3 feet short of gold. If it were really that easy then everybody would be doing it which would make it a lot harder than it already is. (kind of a oxymoron or a catch 22) I'm nowhere near an experienced investor nor do i have a lot of money to use getting started so these are just inexperienced opinions. I do know that if you think you cant then you wont and vice versa. Good luck.
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Alisha Mingus
wholesaler/aspiring investor and flipper · Sweetwater, TN · Member since 2015 · 32 posts · 7 votes
11y
Originally posted by @John Baker:

All very valuable suggestions. Thank you all. I do have a plan now. First I have a question for @Kim Knox. I am a home owner. About 12 years. Could you explain more about Tax free real estate profits for owner occupied homes?
After speaking with my wife, we are looking to downsize. Sell our house and use profit to pay off bills. Without that debt, we should be able to afford a smaller to same size house. Next regarding karaoke, I make $25 an hour. BUT I don't use it to my advantage (more on that in a minute). And regrettably, the last three weeks I have spent my REI time here, looking for answers that should have been obvious if I only stepped back and thought about it. But I like your voices in my head better!
I have been holding off on business cards. I will commit to handing out 5 a day. I am working NED's, but need to broaden my scope. I have a web site from donedealwebsites and will start posting to Craigslist and directing them there. My wife and I will start driving in separate cars on Sundays, looking for abandoned properties. And I am reading up on probate.
With all this, I hope to at least get some leads, (good or bad) in the next three months.
Just to add another 2 cents here. Im not sure this allowed on the forums and i hopefully will not get booted for passing along this link but it has helped me tremendously! I personally work a full time job, raise 2 kids and still work on real estate investing on the side. I have discovered that a virtual assistant can do amazing things! I pay about 3$ an hour to a gentleman (m2rijo@gmail. com) and he post ads for me and emails over a 100 people a day for me while i work. I have him work an hour or 2 each day every week and it cost me $30. I dont have time to do what he does. I focus on when the leads come in. I set up a free website thru yola and have him email people with my link. On my website there is a form that sellers fill out and submit. I get the emails and follow up with the sellers if i determine they are motivated. I just read that you make $25 per hour. Think about that. For 1 hour of your salary you can have someone sending emails, searching property owners and information creating a spreadsheet of your contacts (buyers and sellers) for 10 hours. 1 less hour of pay gets you 10 more hours of work. If you would like more information about this pm me and i will be more than willing to share my experiences with you. Again, goodluck
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