4 Month Wholesaling Update
Hello all,
In June I started a monthly Wholesaling update to track my progress as I moved forward with my real estate investing career. I've been so caught up with my business I haven't had a chance to add an update since, so I figured I'd recap how the past couple of months have gone.
Deals: We actually completed our first deal! Funny enough, this was one of the very first letters we sent out in May when we started our direct mail campaign. It took a while for the seller to come around but he eventually decided enough was enough and decided to call me back and take me up on my 60k offer. The property needed about 70-75k in repairs and had an ARV of 230-240k. I locked the property up at 65k. Initially we had a hard time finding a buyer, even though the numbers looked good on paper. Turns out every buyer has a different price, and what a buyer is willing to pay is largely influenced by what that buyer's goals are. This property was in an up and coming neighborhood of an inner city and most buyers wouldn't touch it. The best offer we got was 65k. I went back to the seller (still can't believe I did this) and negotiated our contract down to 61k just to squeeze out a little bit of profit. Well that buyer wound up refusing the deal, but we did find a buyer who would pay our asking price of 75k!! He knew the area well and was comfortable flipping in that part of town. So we closed on Sept 3rd and we got a nice big fat check for 14k!!! My partner and I split it 50/50 so that's 7k for me. The best part, better than the money, is the feeling of immense confidence knowing that THIS ACTUALLY WORKS.
So now we have reinvested about $400 in marketing. We are revamping our website, putting out more bandit signs, printed a car magnet to put on my gf's dad's van ( he runs a newspaper route), flyers, business cards, contracted with a couple of postal workers to bird dog for us, and purchased a new marketing list for our direct mail campaign.
One thing we are focusing a lot on now is pounding the pavement. Each week we walk the dog or drive around for a couple of hours in a new neighborhood. We pay very close attention to the real estate and look for those abandoned properties that no one knows are abandoned. So far we have had great success and I am currently in negotiations with 3 sellers! Turns out all 3 of these properties are all inherited estates, and the heirs just don't know what to do with them.
We are continuing our education by participating more actively in our local REI club meetings. We found one that we really like and we are regular attendees now. I also listen to RE podcasts while running at the gym and in my car on the way to work.
Our cash buyers list is strong with about 8 serious buyers we know are ready to pounce on deals when we get them. I'm not trying to market to buyers, so I'm happy to have a small handful of reliable investors.
The best part about all this is that I have people's attention, and they want to work for me. After showing some friends and neighbors the pictures of my GF and I holding our first check, everyone wanted to know how they could be a part of this. I told them to go out and find me distressed properties, and I'd pay 1k for every one that turned into a profitable deal. So we now have a small legion of bird dogs out there, lol. Another amazing thing - other wholesalers are calling me with their deals! They don't have buyers and they are willing to split 50/50 if I help them get the deal done. Nothing good so far, but it's only a matter of time.
Our focus going forward is increasing our web presence. We want to be the go-to site online for people in our area looking to sell fast and so we've started contracting with web designers and SEO specialists to get our site to where it needs to be.
Exciting times ahead!!
-Silvio