Feel like giving up!
Memphis, TN · Member since 2016 · 16 posts · 4 votes
Feel like giving up!
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Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
10yAs you are in Memphis I am stunned you can't find a deal in a year. There is something fundamentally wrong somewhere in your approach OR your expectations/criteria are unrealistic. I lived in Memphis for a year from overseas and flipped over 150 homes. Deals are everywhere. Everybody goes on about how tight and competitive Memphis is but there are deals everywhere. There is such a large percentage of unsophisticated owners and poor money management that finding a distressed seller is usually as hard as spending 5 minutes at IHOP or a liquor store.
I'm happy to help yo if I can, (NO CHARGE), but I need to know first what exactly are you looking for criteria wise? Stop wasting money on direct mail and let's get you into a deal so you feel like you are getting somewhere.
Feel free to PM or email me if you don't want to talk here in the forum!
40 Replies
- Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes10y
Without any data from your profile, I can only assume you're trying to use the wholesaling strategy. You then are attempt to acquire leads with "direct mail" and "driving for dollars".
Direct Mail is a low return marketing channel, and the very best you can expect (even Kohl's, Vons, any local real estate broker) is a 1-3 percent return rate. Not a closed deal, just the simplest "Please tell me more".
Driving for Dollars is a low return also due to even finding a prospect, they may not be home at the time of your discovery and then need to return or call (if the phone number is available).
I don't like wholesaling for other reasons, but pouring this much time, effort and money would discourage me too. If you have funds, I would recommend per-forclosures where you know there will be some solution taken within 120 days of the first NOD
- Investor · Orlando, FL · Member since 2016 · 1k+ posts · 780 votes10y
My advice to new investors is to start wholesaling properties. This does not require much of any marketing money to start and to get deals closed.
First pick a neighborhood that you are either in or close to. Driver around all the streets and look for vacant houses. (Not by using Google maps because they can easily be outdated pictures) There should be some.
Then look in the county assessors website to find the owners. it should give their name and mailing address. Send them a letter (not yellow letter because they are getting dozens of them) telling them you found their house to be apparently vacant. But if it is obviously abandoned, say so in the letter. Tell them you will pay them cash for a quick close. Write it up as a personal letter.
When you do all that, then contact a local RE Agent to give you a list of all the houses in that neighborhood that have sold in the last 5 years with all cash. That typically is investors. Then again go to the assessors website and find their name and mailing address. Also do a name search on the assessors website to see how many other properties they own. If they own several they are obviously investors.
Once you get a response from the seller of the vacant house, negotiate a deal to buy it for all cash and get it under contract. Then immediately contact all the cash buyers you just found that buy properties in that neighborhood and tell them about the house and would they be interested in buying it. If you negotiate a good enough deal that pays you then complete the transaction with the investor to buy the house you have under contract.
Once you have done all that with that neighborhood, go to the next one and 'rinse and repeat.' This will give you the experience needed to go into other properties.
I hope this helps.
Steve Anderson
- Memphis, TN · Member since 2016 · 16 posts · 4 votes10y
@Account Closed: Thanks for your feedback! I am wholesaling. I've tried yellow letters at one point, but I moved to non yellow letters because of the reason you mentioned. I'm basically currently doing what you're suggesting (driving for dollars, non yellow letters, etc.). What I'm not doing is contacting a RE agent for the list.
Do you mind sharing with me how I can get a RE agent to compose this list? Do they typically do this for a fee? Do they gain somehow from me doing this? Thanks for your response!
- Memphis, TN · Member since 2016 · 16 posts · 4 votes10y
@Jeff B.: Yes, I'm wholesaling. I don't have the funds to personally purchase a pre-foreclosure. I have been looking into pre-NOD's in the Memphis area, but having difficulty finding a reliable source for pre-NOD leads. Thank you SO much for your suggestions. I'll likely give it another few months before I officially thrown in the towel.
- Rental Property Investor · Laguna Niguel, CA · Member since 2015 · 142 posts · 98 votes10yAmanda Moore what type of lists have you been using? And how many mailers per month? I'm assuming your hitting the same people multiple times.
- Developer and Investor · Star, ID · Member since 2016 · 23 posts · 24 votes10y
Amanda,
I admire your tenacity to keep doing what you have for a year. To be frank, I think what you are missing is the fact that the strategy you are trying is an extremely low probability pursuit in today's market. I don't doubt that you are doing it well and working hard at it. The idea that a vacant house has enough equity in it for you (or in your case an investor) to purchase it, paying off the mortgage/mortgages and any an all liens and still have sufficient equity in it makes no sense. Real estate is a large, functioning market and if the property was worth more than the debt/encumbrances against it the owner would have sold it 99.9% of the time.
The property is vacant and dilapidated because the owner is so far underwater that it no longer makes sense to maintain in the vast majority of situations. When I hear people give advice to do what you are doing I wonder when was the last time they did this successfully? I seriously doubt it was in the last decade.
In my opinion, the bottom line is that you would like to hear that there is something else you can do to make this work, as if there is a secret that you are missing. Unfortunately the secret is that what you are doing doesn't work, not because you aren't doing it well but because it is a fundamentally flawed approach.
That being said, I wish much success and hope you can translate your hard work, ambition, and enthusiasm into financial success. I just hate to see all that energy put into such a low probability strategy.
- Rental Property Investor · Chicago, IL · Member since 2014 · 132 posts · 74 votes10y
@Amanda Moore I'm not a wholesaler, however lead capture and follow up are pretty universal concepts.. so my question/suggestion to you would be this: I am assuming you are at least receiving some amount of phone calls from your marketing which tells you that you have at least some level of an interest to sell from property owners. Though you haven't been able to close on one yet, have you been following up with the leads after your initial conversations? For example, someone calls in and you chat with them to find that they may not be interested in selling right then at your price for whatever reason, however over the next several months their motivation may change so a follow-up system should most certainly be in place to touch base with them again and again.
On top of that, be sure you are finding 'why' they called in the first place because your main goal should be to solve their problem before all else as this will inevitably lead to closing deals.
- Memphis, TN · Member since 2016 · 16 posts · 4 votes10y
@David Hodge: Thanks for replying! I've been doing absentee homeowners lists. I've also developed a list for spouses and/or inheriting parties of a homeowner who recently passed.
I'm currently building a process of partnering with assisted living communities and nursing homes to join on their marketing campaign. We would be marketing to those who are in transition of leaving their home and moving into an assisted living community and needing to sell their home.
Don't get me wrong, I actually get more than 1% return on my mailers... but never a bite. I've read every book on people skills, closing the deal, making the connection, etc. Still nothing. This is kind of my last extension of hope here... seeing if anyone can give me some insight!
- Memphis, TN · Member since 2016 · 16 posts · 4 votes10y
@Jeremy Shellman: I appreciate your candidness. So your bottom line suggestion is to find another route into the real estate industry or concept another strategy?
- Investor · Los Angeles, CA · Member since 2012 · 1k+ posts · 500 votes10y
Don't leave before the miracle happens! Dry runs happen, if they want to sell but want to sell at market price, I'd be forming a relationship with a realtor to pass them off too.
- Memphis, TN · Member since 2016 · 16 posts · 4 votes10y
@Joe Cantanzriti: Hi Joe and thanks for your input! I didn't start following up on inquiries until about 7 or 8 months ago. I didn't realize until a few months in of doing this that following up would be a good idea (duh, right?). For those I didn't hear back from, I follow up every 45 days. From those I do hear back from, I follow up in 30 days.
I do have a check list of questions I make sure I cover on phone calls. Here's how I ask they why questions... "[previously asked details of the house] Wow, your house sounds amazing! May I ask why you're interesting in selling?"
I can't recall receiving a call of someone who just want to get info about the company.
- Memphis, TN · Member since 2016 · 16 posts · 4 votes10y
Originally posted by @Jeff B.:
ANY title company can provide (frequently for free) a monthly list of NODs and NTS.
I ask for an electronic email distribution and that could be fed into Excel
Cool! Calling my title company right now!
- Memphis, TN · Member since 2016 · 16 posts · 4 votes10y
Originally posted by @Jeff B.:
ANY title company can provide (frequently for free) a monthly list of NODs and NTS.
I ask for an electronic email distribution and that could be fed into Excel
Soooo... I just called my title company and asked how would I go about receiving a pre-NOD list. They've never heard of that term. When I explained what it was... they said there were not in the loop on that info.
This concerns me. Anyone have suggestions of a solid title company in Memphis, TN?
- Developer and Investor · Star, ID · Member since 2016 · 23 posts · 24 votes10y
Amanda,
Yes, I think that individual's like yourself who are tenacious, self driven, and hard working should open their mind to all the opportunities (not just real estate) that exist where their drive can result in rewarding and profitable work.
My entire career, nearly 25 years, has been in contracting, development, and RE investing. I've done ok and am living a good life. I've done ground up development and building, redevelopment, fix/flip, private lending, non performing note workouts, buy/hold rentals, raw land speculating, and probably more if I really thought about all the deals I've done. I say all that not to brag as it's nothing to be particularly proud of it's just 25 years of trying make stuff happen. I say it to provide the proper context for this statement: with all of that as background and having plenty of capital to deploy I find it hard to find suitable deals.
If you are sure you want to put your hard work, drive, etc. into real estate my advise would be to become an agent with the goal of not simply brokering transactions but ultimately using your license for your own benefit as a principal. A partner of mine was a school teacher and hated it. He quit, got a real estate license and started helping buyers and sellers. He ultimately ended up able to do his own developments and now only rarely (mostly for friends and family) brokers real estate that he is not a principal in. He's made millions...and by the way he finds it very hard to find suitable deals in this environment too.
Again, I wish you much success in whatever you chose to invest your time/energy/talent in.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes10y
I'm not sure if I have much in the way of suggestions if you want to continue wholesaling, but I will make an observation: at $850/mo for one year, you have spent over $10 grand without any results. You probably could have used that money to put 20% down on something in your area and either turned it into a successful rental or flipped it for some cash. Something to consider between now and 12 months from now.
Skyline Properties - Investor · Orlando, FL · Member since 2016 · 1k+ posts · 780 votes10y
Amanda, if you are not an agent that has access to the MLS you will need to find a friend, relative etc that does and get them to give you the list. If you don't then you need to find an agent that is investor friendly.
- Rental Property Investor · Chicago, IL · Member since 2014 · 132 posts · 74 votes10y
@Amanda Moore Have you thought about getting your real estate license? I know this an epic debate for investors but my personal opinion leans towards having a license especially if you in the wholesale business.... puts a layer of disclosure on top of course but allows you to give the property owners some options.
1) "I have investors who are looking for properties like yours that can pay cash and close quickly to solve your problem Mr Seller"
or
2) "Just need to sell but don't have an urgent time constraint you say? Have you considered listing on the MLS? Doesn't cost you anything unless it sells and that way I can help you get your net price that you were hoping for that wouldn't work for my investors."
Providing options adds value.
- Memphis, TN · Member since 2016 · 16 posts · 4 votes10y
Ha! This is hilariously frustrating! When I first started, I wondered about getting my real estate license. I spoke with 3 different real estate agents and 2 different investors about it. This is a composite of all of their conversations:
Since you're wholesaling with the intention to move to the buy and hold method, it wouldn't benefit you to work as an agent. I was told that working as an agent would cost me more than it would make me in the beginning (likely first 2 years). Being that wholesaling is costing me more than it's making me... that would have been a viable option.
Since I'm looking to make buy and hold my main objective, being a RE agent means tons of overhead. It's not likely you'll turn enough profit in the first few years to be able to live AND invest.
I'm not one of those people who constantly needs a cheerleader or encouragement... but I'm starting to think that this was a mistake. I know there are successful wholesalers out there... I've reached out to them... They've shared... I'm doing... and nothing.
- Memphis, TN · Member since 2016 · 16 posts · 4 votes10y
Originally posted by @JD Martin:
I'm not sure if I have much in the way of suggestions if you want to continue wholesaling, but I will make an observation: at $850/mo for one year, you have spent over $10 grand without any results. You probably could have used that money to put 20% down on something in your area and either turned it into a successful rental or flipped it for some cash. Something to consider between now and 12 months from now.
Awesome observation @JD Martin, but it will take me years to save up enough money to buy a house (even at 20% down) and then save up enough to fix it up.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes10y
Originally posted by @Amanda Moore:
Originally posted by @JD Martin:
I'm not sure if I have much in the way of suggestions if you want to continue wholesaling, but I will make an observation: at $850/mo for one year, you have spent over $10 grand without any results. You probably could have used that money to put 20% down on something in your area and either turned it into a successful rental or flipped it for some cash. Something to consider between now and 12 months from now.
Awesome observation @JD Martin, but it will take me years to save up enough money to buy a house (even at 20% down) and then save up enough to fix it up.
The first one is always the hardest. I'm not familiar with the Memphis market, but a friend of mine is from there and he says there are a lot of sub-100k homes to be had. Don't know how old you are, but you got to start somewhere :)
Skyline Properties - Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes10y
Originally posted by @Amanda Moore:
Originally posted by @Jeff B.:
ANY title company can provide (frequently for free) a monthly list of NODs and NTS.
I ask for an electronic email distribution and that could be fed into Excel
Soooo... I just called my title company and asked how would I go about receiving a pre-NOD list. They've never heard of that term. When I explained what it was... they said there were not in the loop on that info.
Problem is the PRE-nod - - just ask for the NOD + NTS list. PRE-xxx will be held by the entity ABOUT to foreclose and that is "private company data'.
- Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes10y
Originally posted by @Joe Cantanzriti:
@Amanda Moore Have you thought about getting your real estate license?...
some options.
1) "I have investors who are looking for properties like yours that can pay cash and close quickly to solve your problem Mr Seller"
or
2) "Just need to sell but don't have an urgent time constraint you say? Have you considered listing on the MLS? Doesn't cost you anything unless it sells and that way I can help you get your net price that you were hoping for that wouldn't work for my investors."
OUCH - - IMO this generates an immediate conflict of interest
As previously noted, an RE license is hotly debated on BP. In some states, wholesaling --by law-- is illegal so you have to jump that hurtle before you toss money into the arena. Paying for and becoming an agent of some broker JUST to get access to MLS - - (i'll be kind here - - ) is expensive.
Don't bother UNLESS you want to be a part time RE Agent and perform open houses
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