Real Estate Investor · Gig Harbor, WA · Member since 2009 · 8 posts · 0 votes
I've been looking into ways of getting into real estate by doing short sales with banks as my first avenue to get started. I guess I would be considered a "bird dog." This would be to get me started. The whole foreclosure market is so competitive it does scare me a little.
So going to the bank with a purchase deal (proving I have the $$ - and using OTM other people's money) is how I'm planning on starting. Is it unrealistic or are there really good deals out there that can be obtained thru the bank? Are they more eager to these types of deals than they were 2 years ago? I've been involved in short sales before with an investor but I really only want to work with the banks instead of the property owners....to make some money to help me expand my goals in real estate.
I'm planning on taking a course that shows me how to put together the "deal" and approach the banks.
Financial Advisor · Tampa Area, FL · Member since 2008 · 956 posts · 214 votes
17y
Originally posted by Bonnie Freed:
I've been looking into ways of getting into real estate by doing short sales with banks as my first avenue to get started. I guess I would be considered a "bird dog." This would be to get me started. The whole foreclosure market is so competitive it does scare me a little.
So going to the bank with a purchase deal (proving I have the $$ - and using OTM other people's money) is how I'm planning on starting. Is it unrealistic or are there really good deals out there that can be obtained thru the bank? Are they more eager to these types of deals than they were 2 years ago? I've been involved in short sales before with an investor but I really only want to work with the banks instead of the property owners....to make some money to help me expand my goals in real estate.
I'm planning on taking a course that shows me how to put together the "deal" and approach the banks.
Thanks for any help or suggestions.
wouldn't that be OPM? :wink:
i suggest NOT putting out $$ to take a course and just read like crazy! this site alone has more knowledge and experience than any course you can pay for!
Real Estate Investor · Gig Harbor, WA · Member since 2009 · 8 posts · 0 votes
17y
Thanks Josh...made a little typo.
The reason I was taking a course is to get the funding locked in for my deals. I can go to the bank with a cash offer. I'll take your advice and research this site, but are there money sources here that would provide the funding that is NOT at hard money prices?
Real Estate Investor · Myrtle creek , OR · Member since 2008 · 343 posts · 13 votes
17y
Woah! (red flag) If a lender is requiring that you take a course to get funding use great caution, especially if they are charging for the course, it sounds like one of the many company's preying on newbies. Jim
Real Estate Investor · Gig Harbor, WA · Member since 2009 · 8 posts · 0 votes
17y
Hi Jim: It wasn't the lender requirement. The course is providing all the "how to" info and they have access to the investor network to fund the deals.
Altus, OK · Member since 2008 · 2k+ posts · 690 votes
17y
Originally posted by Josh Green:
Originally posted by Bonnie Freed:
I've been looking into ways of getting into real estate by doing short sales with banks as my first avenue to get started. I guess I would be considered a "bird dog." This would be to get me started. The whole foreclosure market is so competitive it does scare me a little.
So going to the bank with a purchase deal (proving I have the $$ - and using OTM other people's money) is how I'm planning on starting. Is it unrealistic or are there really good deals out there that can be obtained thru the bank? Are they more eager to these types of deals than they were 2 years ago? I've been involved in short sales before with an investor but I really only want to work with the banks instead of the property owners....to make some money to help me expand my goals in real estate.
I'm planning on taking a course that shows me how to put together the "deal" and approach the banks.
Thanks for any help or suggestions.
wouldn't that be OPM? :wink:
i suggest NOT putting out $$ to take a course and just read like crazy! this site alone has more knowledge and experience than any course you can pay for!
OTM is what the government uses you know Other Taxpayers Money :mrgreen:
Real Estate Investor · Forest Grove, OR · Member since 2009 · 20 posts · 0 votes
17y
Hello Elaine- Have you tried finding any local real estate investor clubs? I would try BiggerPockest RE club list to find the closes one in your area. I to am trying to get my foot in the real estate door. Have you tried investing in subject to properties or even looked at it?
Jacksonville, FL · Member since 2009 · 20 posts · 4 votes
17y
I know courses have worked for me. Sure, you can find all the information here on the forum, but you have to go through thousands of pages of stuff. You also have to be able to see through all the bad information.
If you can find a reputable company or "guru" to learn from, someone with plenty of positive reviews and proven success, you'll be able to get started a lot sooner, and you won't have to repeat other people's mistakes.
You need education for everything. You can't use forums. Could you imagine if you used an attorney or CPA who became an expert from a forum?
You need to at least get a system to study, and even better, attend live training.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
You seem to like Ron Legrand, Nicholas. Have you used his material or taken his courses? If not, did you use someone else's material? How many deals have you done with this material? You make wholesaling sound very easy, but my impression is that its more work than the gurus make it out to be. I know a few people in my area who seem to have some success, but I know a much longer list of folks I've spoken with about what I wanted to buy, had one e-mail with a weak deal, and never heard from them again.
Jacksonville, FL · Member since 2009 · 20 posts · 4 votes
17y
I have attended his trainings and listened to his materials. And you're right. The gurus and what I just put up there do make it sound a lot easier than it is. It would take too long for me to type out every little step. That's what the CDs and boot camps are for.
I've noticed that people often complain (and I'm not saying you're complaining) that the gurus give them just enough information to get people excited, but not enough information to do anything. And this is true, but not for the reasons people think.
When I hear Ron speak, he gives all the information he can possibly cram into an hour and a half webinar or tele-seminar or lecture. But it's a couple days or hours of CDs worth of training to get all the details.
I just look at it this way. You have to pay for your education one way or another. You'll pay for it many times over by not getting it.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
I don't think I see an answer to my question:
How many deals have you done using the material you've learned in these trainings?
More generally, how many wholesale deals have you done and how much total time and money did you invest to get those deals done? Its a serious question on my part, and I've asked others this before. One member said "I made $5000 and it only took one hour." That sounds like $5000 an hour, which is a dang good payday form anybody but the CEO of a bankrupt bank. But, it turned out he'd spent a bunch more time on deals that never went anywhere. So, the real net was more like $50 an hour. Still quite good, but a long ways from $5000/hour.
Similar on the money. Wholesaling is often pitched as something you can do if you have nothing. But the reality seems to be you need some cash. For marketing, mailing lists, driving around, office supplies, computer, fax machine, etc. Certainly not the amount of cash to do a fix and flip, but seems like newbies come to the sad conclusion that after they've maxed out their credit cards on home study courses and boot camps they need to scrape up some more cash to actually do business.
Jacksonville, FL · Member since 2009 · 20 posts · 4 votes
17y
Sorry...I missed that part of your first question. I started listening to his materials last June. Since then, I started mailing out letters (about 200 per month). I usually get about a 10% response, sometimes up to 30%. Sellers call into my answering service and they ask them the questions I need to prescreen them. Out of the 20 callers I get per month, I usually call 3 to 5 of them back. The rest aren't what I consider motivated sellers.
I make offers on those, and I get hung up on by most. But I probably get one deal out of every 10 offers I make. So I get one deal about every 2 months.
Now I send letters out to absentee homeowners, not necessarily houses that need to be rehabbed. And if the person who calls me has a junker, I look at wholesaling it. If they have a pretty house, I look at getting the deed.
Pretty house deals come to me way more than ugly house deals. I've only had 2 wholesale deals. My first one I made some mistakes and only walked away with about $3500. The second one netted me a little over $12K.
I haven't tried calculating how many hours I put in. I've got a company automatically sending the letters out for me every month. I'm thinking about having them send out more, but I'm content with what I'm getting now.
The answering service takes the calls and sends me an e-mail for each lead. I look at the numbers, and if it looks good, I call them. For wholesale deals, I ask them what all is wrong with the house, estimate repairs and ask what they'll take for it. If it's low enough, I go out to meet them at the house to sign the purchase/sale agreement. As long as everything was the same as what they told me, I go ahead and give them a small deposit ($10) and sign the agreement. I get the title checked.
Then I place an ad on craigslist for an investment property that will net me around $10K. I never get greedy. Just leave plenty of room for the investor to make money when they rehab it. They call into my voicemail with info on the house. They take a look at it and call me if they want it.
I have my attorney handle the closing part of it. He basically assigns my contract to buy to the investor, and I get the check for the difference.
The whole process takes around 2-3 weeks, but I personally only do about 3-4 hours of work for each deal, including the time it takes to go through all the bad leads and call and make the offers.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
Yes, thanks very much. That seems like a pretty good response rate. Do you keep mailing the same people? If so, do you get more responses after a few mailings to the same person? Anyway, thanks, good information.
Real Estate Investor · Amarillo, TX · Member since 2008 · 173 posts · 15 votes
17y
Nicholas,
That was a great response, however, why does someone need to go to a bootcamp to learn the material that you just spelled out in a few paragraphs? Everything that you have just mentioned can be learned right here on the forum; the amount of time it takes depends on your motivation. I have learned 90% of my knowledge either from the people that post here or the personal relationships with the people I have met as a result of this forum.
I just don't really think the bootcamp stuff is necessary; you've been sending out 200 cards every month, averaging one deal every two months? That don't sound very tenacious. Also, what about all those people who have called but receive no reply? Showing people the courtesy and respect by calling them back is where most of my business has originated.
I'm not harping on you or what you have done, to each their own .The real estate learning curve has a definitive price, mine was $80 for the few books that I have purchased. But I have paid a priceless amount with my blood, sweat, and tears in this game.
Elaine,
What is your exit strategy, ie, wholesale, rehab, rental? Also, what is the price of the funds available by the investor network you are referencing?
Jacksonville, FL · Member since 2009 · 20 posts · 4 votes
17y
Jon,
No, I do not mail to the same people again...well, at least I don't think I do. I mail to whatever list is given to me when I purchase the list. I don't check to see if it has any of the same names on it. If my repsonse rate started to drop, I would look into that. Until then, I'm not going to fix what's not broken.
Yeah, it's a response rate that unheard of in direct mail. A typical good direct mail response rate is around 3%. Using the hand-written yellow letters in hand-addressed, live stamp envelopes gets me anywhere from 10% to 30%.
Charles,
I agree with you that the boot camp is not necessary. You can find out everything you need for free, but you run the risk of getting some bad information and finding out that it doesn't work the hard way. For example, I say send out yellow letters. Someone else might say to send out postcards because they're cheaper. But I know they won't get the same response rate. If you saw the thread about sending out postcards first, then you'd find out the hard way you're not going to get the response you want.
I can attend a 4- or 5-day boot camp learning a system, or I can spend 90 days trying to figure it out myself. How much income have I lost in that 90 days? I'd say more than 5K.
It's just my opinion. If a person doesn't have the 5k to put down, but they have time, then by all means, they should try to learn it on their own.
You're right about the people who deserve a reply. I never really thought about it that way. But I am about to attend a class on selling leads in April. Basically, I'll have someone call back all the leads I consider suspects and get the rest of their information that my answering service doesn't get.
There are tons of local companies that would pay for their information. What companies can you think of that would want information on someone looking to sell their house? Agents, movers, painters, title companies, etc. And you can sell the same lead to multiple companies. I can see the income from selling these leads dwarf the real estate income. Now my suspect leads aren't wasted. And I still keep the good ones for myself.
Real Estate Investor · Gig Harbor, WA · Member since 2009 · 8 posts · 0 votes
17y
Elaine,
What is your exit strategy, ie, wholesale, rehab, rental? Also, what is the price of the funds available by the investor network you are referencing?
There are several exit strategies and you have already named some. It's my choice - the training is there for each type of exit strategy. The funds are 3-4%. I'm looking into private funding as well.
San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
17y
Hi Elaine,
The best way to start out is definitely bird dog (aka find deals) for other investors. Find out who the key players are in your area usually through the local real estate clubs or even here on BP ;)
Once you connect with some key players, find out their investing criteria - what they are looking for and which neighborhoods they like to buy. Then, go out and start looking. If you find something that matches their criteria, then you've found an opportunity. Once you find the opportunity, then it's time to bring in your investor (buyer). You'll probably have to work out some kind of arrangement with your buyer in the beginning. Don't worry about how much more $ the investor makes - education is priceless.
If you can learn to spot opportunities, you will do very well in this business. Learning by doing will give you the education you need for future deals.
Real Estate Consultant · St Petersburg, FL · Member since 2008 · 50 posts · 2 votes
17y
I am more concerned with what you are going to do with the property AFTER you purchase it with OPM. Finding good deals in this market is relatively easy. Have you located people who will be your buyers, either investors or end users? Do your buyers have the money to close and get you through the deal?
I am a bird dogger, and I am reversing my strategy: I now find people with REAL MONEY who are actually buying instead of just saying they will buy. Then I find the houses to fit their parameters. Our Florida market is one of the hardest hit markets in the country; maybe yours isn't as slow. But it is a lot easier for us to find great deals, especially REOs, than it is for us to find someone to flip it too. I am concerned about the second part of your deals --- finding a real buyer and getting yourself through the deal.
Real Estate Investor · Amarillo, TX · Member since 2008 · 173 posts · 15 votes
17y
Originally posted by Elaine Freed:
There are several exit strategies and you have already named some. It's my choice - the training is there for each type of exit strategy. The funds are 3-4%. I'm looking into private funding as well.
One last question for this arrangement, how much is the training.
Rachel, IMO if you go through all that to FIND a deal for an investor you might as well SELL that deal rather than just give over the information. Their is a big difference between making 2K and 5K as long as the risk element is under control.
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
THIS IS A KEY POINT! When you go to a guru for your information, you are only going to hear one side of the story - their side. Their side, almost without exception, is the fantasyland side of the business. In other words, they give you the upbeat, rah rah sis boom bah, side of the business without any of the real world negatives. After all, the guru's objective isn't to make you successful in the business, their objective is to get you to buy the next level of their training - which is of course more expensive than the level you're currently at.
On BiggerPockets, you will get both sides of the story. If someone says that they're getting a 10% to 30% response rate on their mailings, someone is likely to point out that that person has only been in business a few months and this response rate is not sustainable long term (and probably not even short term). Furthermore, someone might even point out that marketing experts will tell you that you MUST make repeat mailings to the same people to maximize your response rate.
Finally, I'm always mindful of guru claims. I know of one guru that says 'the less I do, the more I make' - WHICH IS RIDICULOUS! Try doing nothing and see how much money rolls in!!! LOL!
Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
17y
"Yeah, it's a response rate that unheard of in direct mail. A typical good direct mail response rate is around 3%. Using the hand-written yellow letters in hand-addressed, live stamp envelopes gets me anywhere from 10% to 30%."
So they are on yellow paper? You do not write these, how much does it cost for your letter to be hand written and do you use a service or do you hire someone local? What is a live stamp? Sorry I have never doen direct mail.
Jacksonville, FL · Member since 2009 · 20 posts · 4 votes
17y
Good point, MikeOH. I'm just saying what has worked for me. Ron told me that the deals are never going to work ideally. There are always going to be hiccups, and it might take you twice, three times, 10 times the work...you'll make mistakes, but as long as you follow the system, you won't be at risk any large dollars, and you'll always come out ahead in the end. And I have yet to see any evidence to disprove that.
What he means by the less I do, the more I make is work smarter, not harder. Have someone take calls for you. Have someone send letters for you. Have someone handle closings for you. This leaves you more time to make offers. So you make more.
Jeffrey,
Yes, yellow paper, lined paper, like from a legal pad. And it's written in red ink. There are a lot of companies that will do this for you. Just search for yellow letters in Google. I pay $1.39 per letter, and I provide the mailing list. The cost includes postage.
A live stamp just means that it needs to have an actual stamp on it. Not an indicia or something that would indicate that it was from a bulk mailing. It needs to look like you wrote it out, you addressed it by hand (not a label or anything), and you stuck a stamp to it. The only label you can get away with is a return address label, because people use those all the time. I actually had VistaPrint do my return labels for me. They're really cheap.
Real Estate Investor · Amarillo, TX · Member since 2008 · 173 posts · 15 votes
17y
Originally posted by Nicholas Kouvatsos:
Good point, MikeOH. I'm just saying what has worked for me. Ron told me that the deals are never going to work ideally. There are always going to be hiccups, and it might take you twice, three times, 10 times the work...you'll make mistakes, but as long as you follow the system, you won't be at risk any large dollars, and you'll always come out ahead in the end. And I have yet to see any evidence to disprove that.
Nicholas,
I have to jump in and rock the boat a little. You only have had two wholesale flips since you started, correct? Back in June of the summer of 79'. lol. Sorry, that was uncalled for :wink:
You don't have enough data to disprove any method or any amount of risk. Come back after 15-20 of these flips and see if the method is solid.
Also, Is the letter mailings the only marketing that you currently employ? I really find it hard to believe that you are working smarter not harder by just concentrating on deal finding if this is the only method currently being used, if not, sorry for bringing it up.
I am still curious about the price of training? Anyone?
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
Nicholas, previously you said you have done two wholesale deals. But you also say you wholesale junkers and try to get the deed for pretty houses. What do you do with these pretty houses after you get the deed? How many of those deals have you done?