OK I got my first phone call. (Well this is the second) but this one seems really serious. Would it be ok if I asked a few of you to walk me through my first call experience? I will tell you exactly what is happening and can you all advice what I should do? I know my education and I think I now what to do, but I would rather not make any mistakes. Also other newbies could really benefit from this if it is layed out as detailed as possible. So: I just got a call from a seller. I was completely unprepared. I just send the mailers out yesterday. So I didn't go over the script. I am not sure if he is very motivated. He wants to sell, but he started saying that he wouldn't go below 500K and if you put 100K into it you could easily resell it for about 1.2M Those are really scary numbers. So what I am going to do now is do my due diligence, do a driveby, and calculate the numbers. He said he will be on a business trip and he can not deal with this too much till in March. (not sure if it is a motivated seller). He did mention the house is not as updated as the others in the neighbourhood. Other than my research now. WHat do you all advise I do? I told him I will prepare an offer within a few days and I will email him the offer. PLEASE can ANYONE recommend an attorney? I don't care where in CT, I just really need an investor friendly one.

My loyal subjects, Thank you (I am so kidding). So let me address it all. I am not going to get played. I am WAY too ... how you say... dubious? .... of anything and anyone especially while on new terrain. Imagine a stubborn old man, that thinks he knows everything there is to know about everything. Probably because the wife is submissive and has no opinion of her own. Sounds SO bad, but that is what I could tell. The house is worth around 650. A few houses down there is an other house worked on. With a sign "for sale by owner". I call them up, .. that house has new electrical, new wiring, new windows new roof... "new everything" [in NY accent]. He sells it for 730K Now the home owner tells me dump about 100K in and sell it for over a million. It is obvious he didn't do any research. He thinks it is that much because he thinks memories are worth money. The heartaches getting the house probably to him makes the house a gem. But my lovelies, I don't care. I do not NEED the deal. I will use this as practice. Just going through the motions and becoming tough with my negotiation skills as well as analysis skills. To answer you (someone asked this). WHy not put 100K himself. Well to their defence... not everyone has 100K to invest. So... I got 2 more phone calls... one just wanted to see how much I would offer. Silly bugger ! the other... well...so I just came back from the second house.. When we spoke over the phone, he wanted 425K. OK so.. if you see the house... It was bad. Really bad. I almost threw up thinking about my house in florida, 5 bed 3 bath, on a spring fed lake NEW construction lux house... 268K I wouldn't accept that house even if HE paid me 100K for it. And he wants 425K!!! I know this is CT and homes are more expensive.. but how do you even BEGIN making an offer on something like this when he starts at 425K!! But regardless... it feels so weird I am actually working on real estate. My own business :))) Hope I will finally get a rel motivated seller. I will hug him, and kiss him, and will call him George ..

Hi @Jerryll Noorden. Scary and exciting at the same time, right? I would start by looking up the property address at the county assessor's site. See what info they have on the property - who owns it, sales history, assessed value, lot size, house characteristics, etc. Make sure you are dealing with the owner. Never had one suggest a rehab budget and ARV before! Them being out of town AND suggesting and ARV has my hackles up a little bit. Double and triple check who owns it. Then I would drive by, take notes and try and get some comps. Hard to make an offer without seeing inside. First steps I would do. Good luck and please keep us posted!

Jeryll congratulations on the early success! Keep grounded and realize that you may have reached a fluke response rate for your first campaign. I was pulling those types of response rate but that died off to less than 3-5%. Consider using Jerry Puckett when you're ready to scale up. I have some tips for you to build off others mentioned here before: 1. Get your comps and values. Find out if your state shows accurate sales data for free, if not ask an agent to help you and let them know you're building the relationship in the long run and will eventually use them to buy and sell on the MLS with little work on their side. Texas is a non disclosure state so I must use an agent. 2. Get your script ready. Build a rapport if you can, listen to their problems, ask them why they're selling, ask them address, number of rooms, bedrooms, if there's a garage, how many stories, how many sqft (many don't know so tell them you'll figure it out from county assessor/appraisal website), have the county appraisal website up to look up values while you're taking, ask foundation type, ask exterior type, age of house, basement and if it's finished, attic type and if it's finished, central heating and ac or window units/space heaters or whatever is normal in CT, roof condition, any back taxes or mortgage, then start to ask them if there have been any recent updates and how long ago that occurred, ask them what they think is wrong with it and how much they think it would cost to repair, ask them what they think their property would be worth if it were fully fixed up, then let them know you will either come see them or issue a an offer over the phone. Your preference. I no longer do offers over the phone. 3. When engaging the seller in person after knowing your comps, build rapport again try to listen to their story, be personal, and make the conversation about solving THEIR problem and what they need. Make sure to bring a purchase and sale agreement with you and make sure it has you listed as buyer and/assigns or whatever is legal in CT 4. Estimate repairs 5. Use your formula for ARV - your fee - repairs - end buyer investor profit - agent fee if needed = maximum allowable offer. This is more complicated if there is a mortgage or back taxes you need to deal with. Consider also subtracting closing cost so the end buyer can pay their closing cost. 6. Understand where the seller's price point is and why. Why they are motivated, when they need the money, and 7. Sit them down. Tell them what you think repairs need (consumer cost not investor cost) to be to get them fair market value. Tell them honestly that if they list it with an agent after repairs they will get a higher value but repairs will take x amount of time. Tell them that if they try to list with an agent now, they will have to pay a commission and holding costs where as with you they get the flat price after any taxes since you will get them closing costs since you are not an agent and this will likely net them more money. Ask them three questions you know they will answer with a yes. Then, make your 1st offer lower than your max allowable offer and ask them if that sounds good to them. Make sure they know you will close within 30 business days ( or 45 if you want). 8. If success, sign there. If nnot, negotiate. Do not go above your Max allowable offer if you want to be a good wholesaler. 9. If you are unable to negotiate, keep in contact regularly to chat, see how things are going, and ask them if they will reconsider an up to date offer (market dependent). Keep trying, motivated sellers become more motivated. Unmotivated seemed become motivated sometimes. 10. If success, a immediately get your signed contract to title co/lawyer (however your state does title), consider clouding title at the court, advertise your deal on BP, your local Reia, etc. 11. Set up visits for your prospective buyers and require a non refundable deposit for buyers to lock it down. High margin houses should be painful enough only serious buyers will bother you. $2500-5000. Caveat: fully refundable if you cannot close due to title or seller. Visits go best if you can schedule several buyers all at once. Builds competition and scarcity. If you want you can refund their deposit if they back out during their inspection period. It's nice for buyers but shitty for you. I don't recommend it. I'm sure this will start a flame war here but you can even ask @Sam Craven about this and he'll agree with me. I think he's podcast Episode 78. Or63. 12. Give your buyers an inspection period of no greater than 10-15 business days. 13. Got a legit buyer? Close at title co or lawyerbwith simultaneous blind closing. Check. Double check. And triple check your HUD documents before they send them to both parties. They can even close with mobile notary. 14. Set up either wire or transfer for your check! 15. Profit!

@Jerryll Noorden If seller said that to you.. then he or she is very aware of what they have ... not many folks are going to just blurt out that you can buy this for 500k and put in 100k and make 500k... that does not compute... careful your not getting played

Sorry, I meant REA (Real estate agent) y keyboard sucks. Man this is so complicated. "yeah go do wholesaling, easy money no risk no money down." my butt! I also was going to ask what a baller was. Sounded dirty o I didn't :) My turn, what is an LA? :)

Hey @Jay Hinrichs In CT, you can file a signed contract in the land records so it will be on title but I don't really know anyone that does this. @Jerryll Noorden Congrats on taking MASSIVE ACTION! I actually live in Norwalk, right next door to you and grew up in Wilton. We should get together this week. I have some people you can talk to and I can help you out with comps and paperwork and such. @Everyone else. Very few people in our area use direct mail for this type of investing activity. Most homeowners get lots of postcards and mailers from real estate agents trying to list properties, but few get appeals to purchase properties, etc. I am mailing out about 700 mailers a week right now and typically get 10-20 calls a week. Most of them are just curious or upset about the mailers and telling me where I can shove it. Last year I did about 10,000 mailers spread out over 6 months and only got two deals. So this year I am both increasing my geographic area and number of mailers. While I am an agent I don't have time to really by listing properties, so I have also created a team of agents within my office that I can refer listings to for cut. Hopefully this will all help with the success rate.

I've never done it myself but to avoid predatory "wholesalers"stealing your deal from a dishonest or uninformed seller, you can go to the courthouse and place a block on title, typically for free, by showing your signed contract and intent to purchase indicating you are the only one able to purchase this property. This will prevent anyone from pulling title besides you. Your title company or lawyer can help you with this.

Hey @Jerryll Noorden I receive correspondence from a realtor/attorney out of Philly. When I saw your post seeking legal counsel I asked her if she knew any real estate attorneys in CT. She doesn't but does know of one out of NY. Often they work a tri-state area so maybe the NY attorney works CT or knows someone that does. If you want I can have her send you the info of the attorney in NY. It's worth a shot. Just pm me your contact info and I'll have her forward it to you. Kudos, Mary

I meant "baller" as in the slang term for someone who is very very successful at what they do. Someone that started hustling & struggling like everyone else, that is now basically in the pro leagues. Some part of my brain randomly reached back to middle school when a song about someone that was a "baller, a shot-caller" came out on the radio, and then my brain inserted that into my BP post in 2016. :)

I GOT MY FIRST LEAD!!! This thing actually works!! HELP?

Jerryll Noorden

OP

Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes

10y

listsource. Yes absentee And I sent out 126 . I send out 40 every day.

1 Reply

David Marshall

Real Estate Broker · Portland, ME · Member since 2016 · 87 posts · 54 votes

10y

Originally posted by @Jerryll Noorden:

so tell me. How do you amazing experts manage to do comps (if you are not a REA) without worrying some shady investor REA will swoop the deal from underneath you?

Hi Jerryll, here is a method to get comps without a REA and use the info to calculate after repair value for single family homes. First, you need to find the sales data on the assessors webpage for the city or town where the property is located. In some places the county government keeps this info. If you cannot find it, then call the assessor's office and ask how to get it. You want the sales data for the most recent six month period.

Next, you need to search the list for the properties that are most comparable to the prospect.

1. Location - Find comps that are nearby. If you live in a city, then you should look within the neighborhood. If you live in a small town, then you will probably need to look within the whole town for comps. Here are some other things to look for in comps:

2. Square footage - use comps within 500 square feet more or less than the prospect.

3. Beds and baths - use comps that have a similar number of bedrooms and bathrooms. Consider properties that have one more or one fewer of either bedrooms or bathrooms. If you have a 3/2 prospect, then look at properties with 2/2, 4/2, 3/1, and 3/3.

4. Age - use comps that were built around the time as the prospect.

Create a list of 10 properties that have similarities. The more similarities the better. If you are having a hard time finding 10, then you'll need to be a little more flexible and consider properties that are older and newer and also look into nearby neighborhoods.

Then, calculate the cost per square foot for the list of ten. Divide the sales price by the square feet.

Finally, calculate the average cost per square foot. Add the 10 results for the cost per square foot together and divide by 10. This number is an estimate for the after repair value.

For more info, check out the book Flip by Rick Villani and Clay Davis. They recommend this method in the book. Audible has an audio book for it. You can see the figures from the book by going to kellerink.com/flip

Good luck with finding comps.

4 Reply

James Ritter

Glen Cove, NY · Member since 2015 · 110 posts · 18 votes

10y

Sounds like an awesome response rate.

I GOT MY FIRST LEAD!!! This thing actually works!! HELP?

Most Popular Reply

104 Replies