A Beginner's Wholesaling Journey

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A Beginner's Wholesaling Journey

Greg S.
Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes

Hello everyone. I've been a BP member for a few months now, and I've previously been documenting my progress here:

http://www.biggerpockets.com/forums/12/topics/67333-a-newbies-birddogging-journal

I decided to start a new thread for a few reasons. Number one, although I originally planned on bird-dogging, but after really diving in, it seemed foolish to leave so much money on the table. There was one deal I had been working on a month or two back that seemed semi-promising, and I felt like I was doing all of the work I would have to do for Wholesaling, but was only getting paid as a bird-dogger. That deal didn't pan out, but I learned a lot from it.

The second reason is that I have been slacking off a bit lately, and I felt I needed to change my routine to get myself back on track. I am planning to update this thread once a week with progress updates and weekly goals. I also would eventually like to link to some audio files of me talking to sellers (with important information edited out, of course), to get some feedback on how I can improve. I tend to get tripped up on the phone, and need to improve if I really want to be successful with this.

Hopefully, this thread will help lead to some consistency in my marketing and real estate research.

This morning, I mailed out 74 new probate mailings. I pulled the data last week from my county clerk's office, and am hoping that I start receiving calls tomorrow. I plan on going back to the clerk's office on Tuesday or Thursday to gather more leads.

Ideally, I'd like to be sending at least 50 letters per week between new and follow-up mailings. I have about 180 probate entries in my mailing list, and will be sending follow-up letters every 4 to 6 weeks. I estimate pulling an additional 150 per month will suit for now. Gathering the probate data is by far the worst part of the process, but fortunately I work very close to the county clerk's office.

Along with sending the mailings, I need to update my routine to include reading success stories and forum threads on a more regular basis. I tend to do this in bursts, where I read a ton of success stories, get super motivated, put a lot of effort into investing, and then end up slacking off. Reading about other peoples' successes on a weekly basis will help to keep my eye on the prize. Does anyone have any recommended blogs? I used to read Flipping Junkie, and was sorry to see that the site was taken down.

Goals for this week:
Gather 50+ more probate leads
Print the next batch of mailings
Read-up on some success stories
Build my buyer's list

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Account Closed
Real Estate Investor · West Orange, NJ · Member since 2012 · 130 posts · 19 votes
13y

Greg I've also enjoyed reading your journey. All hard work brings a profit and in due time you will reap if you don't give up. Here's a tip about estimating repairs and negotiating with sellers that has helped me in my wholesaling business when meeting with homeowners. If you're meeting with someone they should be motivated. Never go see anyone you haven't qualified over the phone.

1. When you get there remember one thing, in the sellers mind all they know for repair pricing is retail, retail retail. They don't know what a rehabber is going to pay for repairs. So when you formulate your repairs list and you're going down the line you can ask them what they think all this costs? They know if they need a new kitchen, 2 new baths, roof work, plumbing, etc they're looking at a crazy number that in most cases they can't afford. A retail kitchen alone could be over 20k. So you add up everything and tell them a retail price, then come back with the statement "now I can do the work a little cheaper because I have my own team" then they know that from a retail standpoint there house needs $60,000 in work. Doesn't matter if you can do it all for $30,000, they can't. You now shock them into reality. Always estimate repairs higher, remember all they know is retail, so if it would cost them 60k when you're making your offer use 50k. You know in the back of your mind that you could probably get it done as a rehabber for the $30k but you leave yourself room to negotiate.

2. Make sure you mention to the optimistic seller that if they list the house for $150,000 that's not what goes into their pocket. No one in this market pays your asking price, they also are entitled to a sellers concession and you'll pay 6% to a realtor. Add to that they're going to hold the property for another 3-6 months best case scenario, in NJ our taxes aren't cheap, that could be another 3-4,000, plus utilities, ins, etc. so if the buyer of their home asks for a 10% discount, 3% sellers concession and they have to pay a realtor, what % of their asking price do they really end up with 81%. If you deduct their holding costs for the property even if there's no mortgage (probably common with probate) they're probably going to net 79% of their asking price, WOW. So much for that $150,000. Now for the big tip...

3. Also emphasize that in this market, houses are not selling unless they're perfect. Wives want new kitchens and bathrooms, there is so much inventory, the houses sitting on the market for over 150 days are 1. Overpriced or 2. Not updated. Now they know if they don't bring that house to that condition it's not going to sell, when they think about it, it's $75,000 that they don't have. And the best part is if beautiful houses in the neighborhood are selling for $150k then that's your ARV, that's for a perfect house. If theyre really motivated then theyre not delusional trying to get top of the market, theyre probably trying to get closer to $100,000 if they listed it. So their number they hoped to get is $100,000, your ARV is $150,000. Here's how we bring this home, let them know they're only going to net $79,000 off that $100,000 sale. Your offer is based off of 65% of $150,000-$30,000 in repairs or $67,800. Write those 2 numbers next to each other then you say we're only $11,000 away from a deal. This is when you begin to look very good.

So to summarize, it's important that you do all these things and work them into every meeting with the seller. If you're just making offers at 60% of fair market value you might come off as a jerk, but if you do this,i guarantee you when you leave that house, if you don't buy it they will know they're going to have a heck of a time trying to sell it on their own and that's what you want. You want them saying to each other, "do we really want to go through all this for a few bucks more" that my friend is how you justify your offer. God bless you on your journey.

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  • Andrew O.
    Real Estate Investor · San Clemente, CA · Member since 2011 · 209 posts · 47 votes
    13y

    Vikki, I figure his reason for visiting open houses is to keep his finger on the pulse of his market. Knowing how your market prices certain areas/types of houses will help you give an accurate ARV to any buyers. It's possibly a way to keep his mind focused on real estate as well.

    1Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Thanks, everyone, for the comments.

    Unfortunately, I don't have the budget to send out 1000 postcards a month at this point. Even sending out 100 a week puts me near my spending limit.

    I agree with you both about working smarter and not harder. I feel that my current marketing strategy is not producing enough calls to justify the effort, so I need to reevaluate and try to figure out how to get my phone ringing.

    Vikki, just as Andrew O. suggested, I am going to open houses in order to learn the market. I tell all of the realtors I meet what I'm looking to do, and they all offer to help and have been e-mailing me "fixer uppers." Most do not even come close to fitting my criteria, and I don't expect to find a property on the MLS at the discount I'd be looking for. My open house tours are really more about being able to accurately price the ARV of a home when running my calculations, and knowing what kinds of upgrades are necessary.

    0Reply
  • David Tower
    Real Estate Investor · Keller, TX · Member since 2011 · 118 posts · 39 votes
    13y
    Originally posted by Greg Smith:
    Thanks, everyone, for the comments.

    Unfortunately, I don't have the budget to send out 1000 postcards a month at this point. Even sending out 100 a week puts me near my spending limit.

    I agree with you both about working smarter and not harder. I feel that my current marketing strategy is not producing enough calls to justify the effort, so I need to reevaluate and try to figure out how to get my phone ringing.

    Vikki, just as Andrew O. suggested, I am going to open houses in order to learn the market. I tell all of the realtors I meet what I'm looking to do, and they all offer to help and have been e-mailing me "fixer uppers." Most do not even come close to fitting my criteria, and I don't expect to find a property on the MLS at the discount I'd be looking for. My open house tours are really more about being able to accurately price the ARV of a home when running my calculations, and knowing what kinds of upgrades are necessary.

    Sounds like you might need to go grassroots style until you get some deals. If you're marketing on a very tight budget you could:

    1. have your wife (i assume she has MLS) find all the cash transactions in your county for past 90 days. go where all the deals are being done and door knock. Maybe leave a sticky note or flyer and all the houses that look either run down or vacant.

    Walk these neighborhoods and talk to people. There's a guy at my reia who gets all his deals by chatting up all the people in his farm walking his dog. Sounds pretty free to me.

    2. call all the for rent and fsbo ads in the paper and craigslist. Ask if they would like to sell. If not, ask if they know anyone else OR if they might want to buy (for buyers list)

    3. get on all the wholesalers lists in your area. if you can save the day and get their deal sold you could maybe split the profits.

    4. Fax letters to all the relevant attorney's offices or call them. divorce, probate, estate, bankruptcy, etc.

    5. Find a realtor you can work with to make offers on HUD homes. It's pretty simple. The competition is high in many areas, but no one person can get all the deals.

    6. Go to all the pawn shops, title loans, paycheck loan places and train the workers/owners to look for potential deals and offer referral fees.

    that's all i got off the top of my head I'm sure a search on these forums could yield a lot more cheap or free methods.

    5Reply
  • Henry M.
    Specialist · San Antonio, TX · Member since 2012 · 462 posts · 294 votes
    13y

    Absolutely Towers, I agree especially with #1 in your response. You (Greg) have to understand when someone is in probate, tax, foreclosure, etc... predicament, these people are receiving droves and droves of letters, post cards, fliers, cards, and so on.

    When you knock on the door and hand deliver a letter or leave a letter on the door (discreetly) - it may get their attention more than via snail mail.

    If a deal is worth it. Go visit a few times until you hopefully make contact otherwise, you move on.

    This was successful for me and I know it can produce and pay dividends in the long run.

    Considering gas is expensive, hit certain pockets you are aiming for as to not waste time. Talk to neighbors, ask questions, act like you are thinking about moving into the neighborhood and probe... You will get 10x more valuable info than sticking a stamp on a letter and just waiting for a response.

    Sometimes, you have to create opportunity.

    Let us know how it goes.

    Big Henry

    1Reply
  • Luis Ortega
    San Diego, CA · Member since 2012 · 19 posts · 0 votes
    13y

    Hey,
    Thanks for the blogging. It has been great learning experience but nothing better then going through it yourself. It has inspired me to start and stop being a chicken.

    Hope to keep reading your posts and to start my own journey.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    After reading some of the posts in this thread, I came to the conclusion that I need to make better use of my time. With my full-time job, 3-month old baby, and other responsibilities, the time I have available for real estate is very limited. That being said, I need to be making sure that all of this time is put towards things that have the best chance of making me money.

    That being said, all of my actions are going to go towards researching new leads and creating mailings. Visiting open houses, visiting banks, etc are great, but they won't help me if I can't find a deal. I think I have enough of a grasp of the basics that I can put things together if I happen to come across something that is worth pursuing. I would also spend a lot of time making sure that my mailings were perfect, and the text perfectly lined up with the spacing on a yellow letter. In retrospect, that only gets noticed if they open the letter, which is the whole point, anyway. From now on, if it's readable, it gets mailed.

    As for my recent progress, I had a few hiccups this month that slowed me down, but I did manage to send out some mailings. As I mentioned in a previous post, I decided to switch from postcards to yellow letters due to the fact that my postcards weren't getting me any calls. I made up a yellow letter template, and when I went to print them, I noticed that all of the zip codes were dropping the leading zero. I took a look at the mail merge file for my postcards, and noticed that many of the zip codes were also incorrect, although others were fine.

    I'm not sure if that is the reason for not getting any calls on my postcards. I like to think I would have spotted the problem as I was putting on the labels, but it's possible I missed it. Additionally, all of the towns were correct so I'm not sure if having and address of "Brick, NJ 8724" instead of "Brick, NJ 08724" would cause the mail to be undelivered. Regardless, I transitioned to yellow letters but plan on incorporating postcards into the mailing schedule.

    I started out with small batches...30 on 10/15 and 30 more on 10/22. From those letters, I received 6 calls, plus another 2 calls from people who had received a postcard (finally!). I sent out another 60 letters on 11/5, but haven't received any calls yet. The mail service has slowed down around here due to the hurricane, which fortunately for me caused minimal impact on my neighborhood despite being just a few miles from Seaside Heights.

    I'm going to go into detail on the calls I received in my next post since this one is getting a bit long. There are definitely things I need to work on when talking to sellers.

    Goals for this week:
    Mail out 50 yellow letters
    Gather more probate leads from the Surrogate's office

    Goals for this month:
    Mail a minimum of 200 yellow letters, along with sending a second mailing (postcard) to the people I contacted in October.
    Develop a new "script" when talking with sellers
    Obtain a list of out of state owners in the area I would like to purchase a rehab in

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Talking with sellers...

    As I mentioned above, I received a few calls recently. I will start off by saying that I feel I have made a lot of progress when it comes to speaking with sellers. It's still outside of my comfort zone, but I've grown a lot since I first began. One of the best pieces of advice I received (and I forgot where I heard it...sorry!) is this...When you have to call someone, just call them.

    When I first started, I would receive a voicemail from a seller and get very anxious. I would lock myself in a room and try to plan out exactly what I was going to say, and then try to figure out what questions I would be asked. I'd spend 10 to 15 minutes just prepping to make the call. Now, when I have to make a call, I force myself to just dial the number without trying to plan out exactly what is going to happen. It's not that I don't have a basic "script" that I follow (I do), it's just that I want to be able to have a conversation with the seller, not read them a script off a paper.

    Of course, there is still a lot of progress that I need to make. I occassionally trip over my words, especially when I'm asked questions I'm not prepared for. However, my biggest problem is that I tend to disqualify myself as an option for them. On my list of questions to ask, I have all of the typical "How much would it take if I offered you all cash with closing within the week", "...Is that the best you can do?", etc. However, I never even get to that point in the conversation, because I'm quick to convince myself that they're not motivated.

    Before I even ask those questions, I end up saying something along the lines of "Let me be honest with you, if you can afford to list the house and wait for a sale, you'll make a lot more money than I'd be able to offer you." Now, I don't necessarily think that's a bad thing to say to them, since if they're motivated they won't have the option to wait for a sale. However, I find myself saying this MUCH too early, mostly because I'm afraid to ask them the "tough" questions or offend them with a low offer.

    On a positive note, I did make 'ballpark' offers to many of the sellers I spoke with in order to guage their motivation. However, they were shoddy and done without completing the necessary research on the properties. It was a way for me to 'make an offer' without actually having to see the property or attempt to come up with a realistic repair estimate or set of comps. I would make a quick guess about the ARV, multiply it by 65%, and subtract $30k for rehab, which is a number I pulled out of mid-air.

    I need to make a point to visit properties regardless of whether or not they are deals, just in order to get some practice. I want to be comfortable with the process so I don't choke when an actual deal comes along.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Just a quick update. I've been continuing to send out 50 to 60 yellow letters a week to probate estates I've pulled from the county Surrogate's office. I've been averaging about 3 calls a week, which is a big improvement over what I had been receiving from my postcard mailings, but still a disappointing response rate. I should probably change the contents of my letter and see if that increases my number of calls.

    I haven't been successful with any of the people who have contacted me, but I learn something from each new potential seller. I'm still working on getting more comfortable on the phone and asking the right questions. I haven't visited any properties (as I mentioned in the above post) so that's something I still need to focus on.

    0Reply
  • Aaron Smart
    Orlando, FL · Member since 2012 · 22 posts · 1 vote
    13y

    Keep it up, Greg. Believe it or not, for someone who hasn't done anything yet, I find this thread inspiring. I have been following it for a couple months now. Can't wait for you to strike that first deal!

    0Reply
  • David A.
    Involved In Real Estate · Fort Worth, TX · Member since 2012 · 158 posts · 11 votes
    13y

    Great job Greg I am sure your determination will create success. You and I think alike lol. I used to get anxious and try to pan out what I would say during a phone conversation. Now it's second nature you just do it. You are providing help to homeowners and those who need help will be attracted to you. Even though i haven't completed a wholesale deal yet I plan on implementing some of the great strategies I see here on BP.I just wouldn't spend so much time going to open houses. Good Luck

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    This is going to be my year. This is going to be the year when I finally finish talking and reading about making money with real estate, and actual begin making money in real estate.

    I've spent a lot of time recently thinking about my financial situation. Let me start by saying my wife and I are very blessed. We both have stable jobs, very little debt, a nice house, and a great family. We were fortunate enough to be able to travel extensively when we were younger, which is something I'd like to continue in the coming years.

    I currently work as a public school teacher...a profession I switched into after spending 2 years working as a computer engineer (which my degree is in). It was hard to leave the salary of an engineer behind, but I justified it by saying that teaching was better suited to find time to invest in real estate. The plan was that, in time, the smaller salary would be balanced out by income from rentals and house rehabs.

    That was 7 years ago, and to date, my total income from real estate investments is...$0. It's not that I haven't been working towards my goals. For the past 7 years I've been reading as much as I can, and taking (sporadic) actions to be successful in the business.

    At this point, it's do or die. This year is the proof of concept year. I need to show my wife, my family, and most importantly, myself, that I can actually be successful with this. If not, I need to leave teaching and go back to engineering, where I'll be trading my time for money, but a lot more money than I'm currently making.

    I've talked my wife into putting $5000 towards a marketing budget for the year. I will be mailing to probates, out of state owners, and evictions (if I can figure out how to find the data at the county courthouse). I figure that budget should get me about 8000 or 9000 mailings. If I can't put a deal together from $5000 and 8000 mailings, it's time for me to move on.

    I'm happy to say that I've hit the ground running. I will be successful at this. This is going to be my year.

    1Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    My week in review:

    12/31/12 - I filtered through a list of tax records for property owners in my township, narrowing it down to only Out of State Owners with a sale date prior to 2008, and an assessed value under $300k.

    1/1/13 - I printed and compiled 50 yellow letters for out of state owners, which will go in the mail tomorrow. I also identified some quirks in my mail merge that I need to work out.

    1/2/13 - Very light day. I printed about 12 letters that I had messed up envelopes for during my last mailing (November). I only had 8 stamps, so a few will need to wait to be mailed.

    1/3/13 - Mailed the 8 letters I put together yesterday. I also put together a batch of 60 letters for a probate mailing I'll be sending out tomorrow. This is the 2nd mailing I'll be doing for the list.

    1/4/13 - Calls started coing in today from my Jan 2nd mailing. I received 2 calls. The first one came around 2:00 and I called him back about a half hour later (I can't pick up my phone until the school day ends). It was a 2/1, 1500 sqft, damaged with about 2 feet of water from Hurricane Sandy. The property is gutted from 4 feet down and has a new roof with a transferrable warranty. The seller is asking way too much ($200k), but he doesn't live there so there might be some motivation in the coming months.
    The second call was from a woman who left a message saying she wants $500k for a house that's worth about half that. I haven't called her back and figure it's not worth my time to do so.

    1/5/13 - I drove to a nieghborhood that I plan on farming, which is about 20 minutes south of me. There were a mix of houses in the development, ranging from poor to fairly nice. It's definitely not a development I would be interested in living in, but that's probably what I should be looking for if I'm targeting entry-level buyers.
    I also received a few more calls. One was from someone saying the house was sold. Another was someone with a home listed for $280k, which I told him I couldn't come close to. He pressed me for a number, which I resisted on giving him but eventually said $100k. He wasn't interested but said he had my number and would give me a call if anything changed.
    The third was a bit more interesting. It's about 3 blocks from the home I received the call on yesterday. It was also damaged by Sandy, although the seller says it had less than 1 foot of water. It's 3/1, 1700 sqft, 1 block from the bay. They do not plan on making the repairs on the house, and are going to sell it as-is. They already had an offer for $60k, which they turned down. She told me they want to walk away with $100k. I'm having a hard time comping the property since values seem to be all over the place, but I think a conservative estimate is around $130k. I figure the $60k offer from the other investor is probably pretty close to where I'd be, but am going to give her a call tomorrow to schedule a time to see it. I'm going to make a list of needed repairs, and then try my best to come up with a repair estimate (I'll probably need some help with this).

    1/6/13 - I called the seller of the house I mentioned above. She was unable to show it to me today, so I made an appointment to see it at 3:00 on Wednesday. I took a drive so I could look at it, along with the other two properties I received calls on yesterday, since they were all within a minute's drive of one another. The house needs work, especially with the landscaping. The roof seemed to be in decent shape. I also printed and assembled 50 out of state owner and 58 probate mailings. The OOSO will be mailed tomorrow, and the probates will be mailed on Wednesday.

    Goals for next week:
    Meet with the seller and come up with a repair estimate. Make her an offer.
    Gather more probate data
    Assemble another 50 OOSO and 60 probate listings for next week.

    Current response rate from my mailings: around 4%

    0Reply
  • Rick H.
    Lender · Greater LA/Orange County area, CA · Member since 2012 · 3k+ posts · 3k+ votes
    13y

    @Greg Smith - great post! I like your practice of keeping a journal of sorts.

    Have you considered filtering your list even further to appeal to specific triggers? This would help to attract people with problems that they don't want to (or can't) resolve themselves.

    My preference is for prospects to self-select before they ever call me. Yes, I'm lazy and no, I don't want to talk to people who aren't motivated. Motivated means that they're willing to trade equity for someone else dealing with a problem. Otherwise, they're just looking for someone to talk to who will listen to them.

    2Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Thanks for the reply, Rick. I haven't really thought about filtering my list further, although it sounds like a good idea. Do you have any suggestions as to what I should be doing to appeal to the "triggers"?

    1Reply
  • Charles Cline
    Contractor · Bakersfield, CA · Member since 2012 · 67 posts · 13 votes
    13y

    This thread is great. I admire your dedication.

    0Reply
  • Gary Parker
    Real Estate Professional · Salt Lake City, UT · Member since 2010 · 608 posts · 163 votes
    13y
    Originally posted by Greg Smith:

    Before I even ask those questions, I end up saying something along the lines of "Let me be honest with you, if you can afford to list the house and wait for a sale, you'll make a lot more money than I'd be able to offer you." Now, I don't necessarily think that's a bad thing to say to them, since if they're motivated they won't have the option to wait for a sale. However, I find myself saying this MUCH too early, mostly because I'm afraid to ask them the "tough" questions or offend them with a low offer.

    I like to ask a lot of questions to the potential seller to try and determine how motivated they are. Talk with people like they are your neighbors. Find common ground to build trust. I am a licensed agent and I always give the seller a choice of list or sell to me, and I explain what I think the differences in price will be. People like honesty and a choice. Find a good agent to team up with you can refer leads to. Make sure they will in turn look for MLS deals for you. You also mentioned in your post that you think you should go meet people at the properties for practice. Best thing you could do IMO.

    0Reply
  • Steven Del Prete
    Contractor · Brick, NJ · Member since 2011 · 86 posts · 12 votes
    13y

    This thread was a good read. Great idea on keeping a journal so you know how your efforts are working out for you. That is great data for you. I will keep following the thread and watch your progress.

    All the best,

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    1/7/13 - Mailed 50 OOSO letters. Visited the office of the County Surrogate and gathered about 30 probate leads. I also received 2 more calls from my original OOSO batch. Called both of them back but received no answer. I left messages and will try them again tomorrow.

    1/8/13 - Called a few county court houses to see how I could find eviction judgements. Pretty much everyone told me that the documents are available online, but I am unable to search by document type. Instead, I need to know a docket number or party name in order to find the correct files. I plan on going to my county courthouse to ask someone about this in person. On a separate note, I received 2 more calls...I spoke to one of them, who isn't selling but gave me a referral to one of her neighbors. The other I called back but received no answer. I'm up to about a 7% response rate, which is better than anything I've had in the past. However, I'm not sure if this is a result of my new marketing letter, or people dealing with damaged homes from Hurricane Sandy. I suspect it's more of the latter.

    1/9/13 - Went over to inspect the property that wrote about in the last post. Overall, it was a very good learning experience. The property needs pretty much everything, more on account of the age than the flooding. The water only came up about 4 to 6 inches. I created a video of the home and uploaded it to youtube (http://youtu.be/OfMRMK_IxYI). I also put together an estimated repairs list, which I am going to post below. Estimating repairs is the thing that I'm least confident about. After getting some feedback in another thread (http://www.biggerpockets.com/forums/67/topics/80999-concerns-about-rehabbing-a-flood-damaged-house) from some more experienced forum members, I'm pretty happy with how my estimate sized up.

    1/10/13 - I called back the seller to present the offer. I figure an ARV of $175k, and total repairs around $55k (see next post). 70% minus repairs would put me at $67500. From speaking with the seller, I knew they already turned down an offer of $60k. I offered $62k so I'd be above the other investor while still preserving a wholesale fee. I didn't leave much room for negotation, but I pretty much knew they wouldn't be accepting $62k when they just turned down $60k. The seller wasn't interested at that price. I wished her luck and asked her if I could call back later in the year if I saw it hadn't sold, which she agreed to.

    Overall, this was a really good learning experience. I put together my first rehab estimate, and it seems like my numbers were at least in the ballpark. I also made an extremely low offer to a seller without chickening out. There was a bit of a safety net knowing that I was above the price the last investor gave them, but it's still progress.

    I'm up to 14 calls on 229 mailings, or about 6% response rate.

    1Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Here is my attempt to come up with a repair estimate for the home. As was pointed out in the other thread, I missed a few things (dumpster, demo, permits, etc) and was off on some others. However, it seemed like the consensus was that my overall number decent in terms of where I would end up.

    Roof - In good shape (about 5 years old). Appeared to be some water damage on bathroom ceiling...might need a patch where it meets the addition or at the chimney. ($100)

    Exterior paint/siding - Asbestos siding...Paint or replace with vinyl? I figure paint ($4000).

    Windows - Needs all new windows (I wasn't quite sure how to count them, since some are side by side, some are smaller, and some are 3 panel...I counted 25 not including the middle portion of the 3 large pane windows) $6000

    Foundation - Looked okay

    Landscaping - Remove trees and shrubs, tear down and remove shed, bring in landscaping rocks, power-wash sidewalks and driveway, remove fence in front and back, put new fence in back, new mailbox, plant new shrubs/flowers for curb appeal. ($3000)

    Exterior - New exterior and screen doors ($1000) Change exterior light fixtures, new shutters ($400)

    Interior paint/carpentry - Remove all wood paneling and add/replace sheetrock where necessary. Gut property to the appropriate height (1 foot? 4 ft?) and replace insulation and sheetrock. Paint walls and replace baseboard trim. Replace or paint all window and door trim to match. Replace all interior doors ($7000)

    Heating/Cooling - New Furnace ($3500), new baseboard heating ($1500), New A/C ($500), does water heater need to replaced? ($1000?)

    Electrical system - Water did not seem to hit the outlets. What needs to be repaired? Add overhead lighting to all bedrooms ($500)

    Plumbing system - No idea, should have checked faucets, under sink, etc.

    Flooring - Hardwood downstairs in common areas, kitchen, and stairs ($5000) Carpet in 4 bedrooms ($1500)

    Kitchen - New cabinets ($4000), new appliances ($2500), new sink and granite countertops ($3000)

    Bath - Gut. New tile, vanity, tub with tile surround, fixtures, etc. ($5000)

    Septic/Oil/Well - I don't know...

    Mold removal - $1000

    Miscellaneous - additional 10%

    0Reply
  • Jason Dover
    Wholesaler · Fort Lee, NJ · Member since 2013 · 9 posts · 2 votes
    13y

    Greg, much like everyone else, I must say that your relentless commitment and dedication despite the setbacks and lapses in motivation is brilliant. Keep it up!

    0Reply
  • Figen M.
    Investor · Hillsborough, NJ · Member since 2012 · 12 posts · 1 vote
    13y

    By reading your posts , I already figured out, you are an engineer :) Very inspiring and i think we should all be networking as NJ investors. Please let me know what kind of RE investment you are interested in other than wholesaling . I didn't read all your posts, because I am trying to not to spend so much time on BP during the day (Facebook for my son, BiggerPockets for me, yep very addictive. ) So you might already answered that (i.e. what your investment goals are), otherwise please let me know what kind of investments are you looking for other than wholesaling.

    0Reply
  • Jason Dover
    Wholesaler · Fort Lee, NJ · Member since 2013 · 9 posts · 2 votes
    13y

    Figen M. :) on the engineer comment... Agreed that it makes sense to network with those in our local communities. As can be seen from the overwhelmingly positive responses on this and the other threads Greg Smith has been posting chronicling his endeavors, the experiences, struggles and successes of others can motivate those that may have the desire to jump into the metaphorical pool but just need a little friendly nudge.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    1/13/13 - Put together a batch of Probate mailings (50). I put a business card in each letter this time. I'm interested in seeing if this increases my response rate.

    1/14/13 - Called back a few people who contacted me. One of them seemed fairly motivated. He lives in Colorado and hasn't been back to NJ in 7 years. He said he is "very interested" in selling his property. It currently needs a new roof, but he doesn't know the state of repairs aside from that since he hasn't seen the property in so long. I will be driving by it this week and giving him a call back.

    1/15/13 - Put together a batch of 50 out of state owner mailings. Also did a bit more research on finding Eviction data for my area. Unfortunately, I didn't have any luck.

    1/16/13 - Took the day off for my wife's birthday

    1/17/13 - Put together a postcard on Click2Mail to send to new probate listings. This was a small batch of about 15 sellers, so I'm not sure it will produce any calls.

    1/18/13 - Rented a PO Box at the local post office. It was $26 for 6 months. Up to this point, I haven't been putting a return address on my mailings. One was required for my Click2Mail mailings, and I didn't want to use my actual address. I'm hoping this will bump up my response rate on my yellow letters as well, but we'll see.

    1/19/13 - I called back a few leads I had received, including the seller in Colorado mentioned above. He moved out of NJ 7 years ago and hasn't seen the house since then. It is currently rented, but incurred some damage to the roof and pool during Hurricane Sandy. He wouldn't give me a number as to what he wanted, and I'm still not very good at pressing that point. I ended up giving a ballpark offer over the phone of $55k, which he turned down. I ended up referring it to a realtor I work with, who let me know that she spoke with him and he is way upside down. They are going to attempt a short sale, so hopefully she will be able to help him. This was a textbook example of me not asking enough questions.

    1/20/13 - Put together about 90 letters to be mailed out tomorrow. As I mentioned, these have a return address (for the first time), so I'm curious to see if it affects the response rate.

    Things to work on:

    I've mentioned this previously, but I don't ask nearly enough questions when I'm on the phone. I have a whole list of questions on my 'Seller Information Sheet', but I routinely only fill out about 10 or 20% of it. I really need to work on asking those questions even though it makes me feel awkward.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    I slacked off a bit this past week with keeping track of my daily progress. I'll be sure to get back into the routine this week since I'm able to hold myself accountable when I keep a record of what I do every day.

    This week, I mailed out 90 letters, comprising of about 30 to out of state owners and 60 to probates. I only received 4 calls, so it was kind of a light week.

    I've been working on a referring a lead to a realtor, since my wife is a referral agent and that can be a way to get some additional cash. This week, I referred 3 potential deals. One didn't really go anywhere, another is way upside down but they are going to hopefully pursue a short sale, and the third is being contacted tomorrow. Hopefully these will start to pan out in order to offset my marketing costs.

    I also put a lot of time into trying to find a list of code violations in the towns in my area. Unfortunately, I've been told that while the information is public record, I need to request info on a specific property. A list of all the properties doesn't exist, according to the people I spoke with.

    1/27/13 - Put together 125 mailings to out of state owners that will be mailed out tomorrow and Tuesday. This is the second town I'm mailing to. I just finished the first town last week, which (along with probates) made up my first 4 weeks of mailings. I'm mailing the entire town in one batch, and plan to mail an adjacent small town later in the week. I'd like to send 200 mailings this week, which is more than I've ever done before.

    1/28/13 - Mailed about half of the mailings I put together yesterday, with the other half going in the mail tomorrow. I also printed out letters and envelopes for another 75 to be mailed on Wednesday.

    0Reply
  • Greg S.
    OP
    Real Estate Investor · Forked River, NJ · Member since 2011 · 96 posts · 10 votes
    13y

    Also...I'm up to 32 calls on 422 mailings, or a response rate of around 7.5%. Not bad, but not great. My goal is to hit 100 total calls before February ends.

    0Reply
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