Momentum in New Mexico

[David Torres]

I just wanted to give a huge thank you to all of the BP contributors for their help in my success. I am lurker that does not post very much. I wanted to share how BP has contributed to my success.

My story begins in 2007, when we bought our first home in Lubbock, TX. The previous tenants were a couple of college guys that trashed the interior. We purchased the home for about $90k, bought $8k in materials (and a lot more sweat equity in to it), and sold it for $113K. During this time, I was working full time, and my wife was attending law school full time. It was hectic, but I learned a tremendous amount about what goes in to rehabbing a home.

Fast forward 6 years, we moved to Rio Rancho, NM (near Albuquerque), my wife and I were both employed in great W2 jobs and we had saved up some extra money. I have always been interested in real estate, and I have an Uncle that owns about 15 SFRs. I contacted him and asked if he would be willing to talk to me about his business. He was more than happy to share his experience. I flew up to Utah to specifically talk about real estate with him. He shared a ton of wisdom with me and has become a mentor that I rely on. I came home and I started looking for homes on the MLS, but was still having trouble finding anything.

What happened next changed my life. I was lurking on BP and noticed some one had referred a Realtor from my area in a thread. The Realtor was also an investor, so he understood what a good deal looks like. He has been extremely patient and helpful. Since our initial meeting 10 months ago, I have closed 4 houses with him.

Two are rentals, both are cash flowing about $200 per month with stable tenants.

Two are flips. I have finished one and sold it (with a nice profit). The other is undergoing rehab currently and should be done within the next 2 weeks.

Thanks again to the BP community, I can say that I could have done it with out all of your help, but it would have been substantially more painful and expensive. Please keep posting your experiences, you just never know whose life you might change for the better!

[James Bruce]

Hi David,  Thanks for sharing your experience.  I'm just trying to get started in real estate investing and I'm also in the Albuquerque area.  I've decided that my long term strategy is going to be buy and hold properties and I've been thinking I would start trying to wholesale to generate capital for the purchase of hopefully inexpensive/high equity rental properties.  My overall goal is to get enough passive cash flow coming in that I can be financially independent and get out of the rat race.

How have you found wholesaling in Albuquerque? I currently have one property, my old home, that I rent out. It cash flows about $200/mo. I bought it off the MLS for what I thought was a deal at the time. $87,000 across the street from the zoo. I put $25,000 into it and did all the work myself. I didn't do much reading about REI before I bought that house though, it was just going to be my house. I have since learned that I overpaid for that house because even though it cash flows now, if I refi to get some capital out of it, it'll stop and become a liability.

I just have a few questions for you about my strategy.  I've heard wholesaling is not something the inexperienced should do because it's difficult to spot the good deals from the bad.  What are the rules you have set in place to make sure that you don't overpay for a property?  What kind of marketing do you use to get your results? What software do you use to do you books and how would you recommend setting it up?  What resources do you use to comp properties to decide if you should buy or not?   How much do you typically make on a wholesale deal?  It looks like your typical profit from a fix and flip is about 15k, do you think it's worth it or is it easier to just wholesale? 

Finally do you have any other advice that may help me succeed? 

Wow that's a long list of questions, I'll feel very fortunate if you answer just a few of them.  Thank you for posting and best of luck with your future real estate deals.