All Forum Posts by: Andrew Herrig

I have submitted several houses in the Dallas area to Opendoor to see what they would offer. Most of them came back saying they could not make an offer. They have fairly narrow buying criteria - they want newer, cookie-cutter houses that are in neighborhoods that are fairly homogeneous (I'm sure their pricing model works much better there).

The ones they did offer on came in somewhat under market, but more than a normal investor would pay. As someone else mentioned, they are in the high volume, low margin business. They have a good niche and I think will be successful, but they will by no means replace the mom and pop investor, at least until their pricing algorithms get much more sophisticated.

@Val J. Everything changes. A lot of areas near downtown have been revitalized and are attracting millennials who want to stay in the city instead of moving out to the suburbs. Oak Cliff especially has well-preserved mixed use developments and walkable neighborhoods that are in high demand.

@Brian H. I am not currently mailing, but I am scaling back right now for personal/family reasons. 

I think you are asking the wrong question. Motivated sellers are going to be getting a lot of mail these days. There are things you can do to try to stand out and get noticed, but I wouldn't stress about that. Have a clear, simple message. Be consistent.

Eventually you will hit someone at the right time and they'll call you. ANSWER THE PHONE! Set an appointment. Follow up. Do all the basic stuff nobody wants to do. You'll have more success that way than if you design the perfect mailer. 

@Account Closed I was not trying to discourage you. Do the mailings, stay consistent for 6 months. Dallas is extremely competitive, but there are deals to be had.

Sounds like you have experience already, but executing the basics well will help you out in a competitive market. Answer the phone (got that covered with Pat Live). Schedule appointments on everyone who seems even remotely motivated. If you do this right, you have a better chance of being the first and only investor they call. Get it under contract on the appointment. If you can't get it locked up...follow up, follow up, follow up. Most people don't consistently do this. I just signed a contract yesterday on a house we've been following up on for 4 months.

@Account Closed Are you focusing on the southern suburbs of Dallas? I like those areas for rentals. Don't own any down there because it's too far away from me, but have wholesaled to other landlords in those areas.

If you do better than 0.25% response rate, I definitely want to know about it. Just FYI, I count a lead as someone who I was actually able to talk to and was not a "take me off your list" call, so adjust metrics accordingly.

There is a ton of flipping going on in North Dallas. The problem is competition. Investors are crawling all over DFW, but particularly in North Dallas and northern suburbs.

@Hilary C. I am not a fan of the recent updates to the Keyword Alert emails. Snippets of text from the threads have been added, which is great for context, but the formatting is very confusing. Maybe it is an issue with my browser and/or email, but it seems like there should be more spacing between alerts as they all run together and it is difficult to tell which text snippet goes with which thread title.

See image for example (red lines drawn in by me).

@Account Closed Good luck on your campaign! Interested to hear your results. I stopped doing direct mail earlier this year, but at the time my response rates were a little under 0.25% (mostly letters and postcards). Even though you are mailing a very competitive list, I'd expect at least one or two deals to come out of it.

@Tae Jang Sounds like your goal is to accumulate a few properties for retirement purposes. I would never recommend buying a property with negative cash flow from the outset, but if your goals are mortgage paydown and capital appreciation over the long term, you don't necessarily need a ton of positive cash flow.

That said, $150-200k is probably the sweet spot as far as purchase price for this strategy. Rents would probably be in the $1500-1800 range. You could find this in parts of Plano, probably not Frisco. I would expand your range a little bit to include McKinney, Allen, The Colony, etc. where price points are a little better.

@Taylor Martel As others have mentioned, MF is hard to come by in DFW. I own one duplex and several SFRs. The duplex I bought in 2013 and is now worth way more than I would pay for it today.

If you really want to spend your full $400k, there are some opportunities to house hack MF (probably a duplex) in the Richardson area, East Dallas, or mid-cities (near DFW airport) depending where you want to live.

For SFRs, the best cash flow while still staying in B neighborhoods is going to be where houses are selling for around $100-150k. I think there is still appreciation potential here as houses in this price point are extremely underbuilt.

@Don Chambers Partner with a real estate agent. Let them take the calls and go see the houses and if they seem motivated to take a fast cash offer, then you can have the agent present it. Otherwise work out a referral fee if he agent can convert them into listings. You may have to have your license to legally get a referral fee.