All Forum Posts by: Brian Bandas

I have known wholesalers who do an excellent job, and others who give the whole group a bad name--this is probably true of every profession under the sun. To me, the one thing that can separate a good wholesaler from a bad, in practical terms, is a good grasp of comps and a non-inflated ARV. That seems to be the most consistent issue that I run into. The ARVs just don't tend to be realistic. They are always inflated to make the deal seem stronger. That last 4 or 5 I've seen have all been that way, except for one. Shockingly, I'm closing on that one next week. I want to see a good ARV. It gives me confidence in the deal. If the ARV is off, I wonder A) does this wholesaler not know what he/she is talking about? That's scary to me. Or B) does this wholesaler just want to manipulate the numbers and hope I won't know any better? That's also scary to me.

A realistic ARV tells me they know what they're doing and they're a straight shooter intent on bringing value. That's someone I want to work with over and over again.

GREAT advice in there @Sean Walton. Love the first class stamp advice. I'm marketing to find deals to apply the BRRRR method to, but trying to generate more deal flow by marketing on my own instead of just waiting and hoping that wholesalers bring me something. What I'm running into--and I think it's a function of being in a very UP market--is that I can't seem to pull very many truly distressed sellers. What I'm wondering is, in your experience, are NOO homes worth mailing? How frequently do you find the level of motivation needed to generate a 30%+ discount on the sales price? I need a list of 200-400 to mail, but I'm finding very small numbers of truly distressed leads when I go to create a list. @Will Flores I've read/heard a lot recently about varying you types of mail pieces. i.e. start with a postcard, move to a yellow letter, move from there to a branded, "professional" looking letter, etc. I believe I heard it on a Sean Terry podcast and I think that's the approach I'm going to take. His theory was that different people are going to be more responsive to different types of mail. One person is going to be more trusting of the individual (yellow letter) while the other will feel better about working with what the believe is a more legit company (professional, letterhead, etc).

Good luck!

I am no expert on which ones are the best, but a few that I'm aware of are ReboGateway.com, ListSource.com, FindMotivatedSellersNow.com, USLeadList.com, Melissadata.com... There are many more out there, and pricing and structure varies pretty widely. I just signed up on ReboGateway. It has a lot of functionality but is limited in that you have to pay a subscription per county. Listsource.com is a good option if you just want to make one list and pay for it. No subscription, just pay as you go, a list at a time. Hopefully that's a helpful starting place!

Fantastic, @Bob Okenwa, thanks for weighing in! I've been reading a bit more about this today as well and have seen several things that coincide with what you're saying. From my lender friends, I don't get the sense that the due-on-sale clause is particularly likely to happen, but it IS a possibility and would have to be a calculated risk.

Someone else brought up insurance--homeowner's and title insurance are both in my name, not the name of an LLC. So those are other problems/questions to be answered.

These are all growing pains. In the book The 10X Rule, Grant Cardone says that if you're creating new problems that you haven't yet solved, that's how you know you're growing. So I'll take a little comfort in these growing pains.

Thanks for your help!

Please forgive the cheesy title. I couldn't help myself.

I have a number of questions about forming and using an LLC. Right now I own 3 cash-flowing rentals, I am 10 days away from closing on a flip as well and have begun marketing for deals in an effort to ramp up my portfolio as rapidly as possible.

I guess the question, despite the title, isn't whether or not to LLC--it seems inevitable--but HOW and WHEN and what are the implications?

1. Do you recommend forming an LLC through an attorney versus using one of the many online legal platforms?

2. How will my lender respond if I quit claim my current homes into the LLC?

3. How do you get financing for an LLC versus an individual? I can get really good financing right now as myself--what changes if I begin to attempt to do business as an LLC instead?

4. Which strategy is preferred? One LLC for all rentals? Or one LLC per property? (My properties are all buy and hold long-term, so that could affect the answer to this question, as the cost to form an LLC will likely be spread out over many years.)

5. What am I missing?

Thanks for sharing your experience and non-legal advice with me!

@Ray Lai thanks for the tips and encouragement! I'll definitely be committed to mailing to the lists over an extended period of time, with various postcard and letter templates in mind. I"ll shoot you a message. I've ben reading and researching a lot and am definitely hungry for more and more info on how to do it most effectively.

@Dinesh Siwakoti I agree with everyone else and would add this: the potential for wealth growth in real estate investing--especially with $160k to start out with (that could probably be at least three 20% down payments, if you're looking at single-family rentals)--is so substantial, that even if you didn't quite break even by selling your home, it would still be well worth it, in my opinion. Scott Trench wrote a great article along these lines here:https://www.biggerpockets.com/renewsblog/becoming-a-landlord-the-easy-way/

The financial/wealth doors that open up by starting out with investments INSTEAD of a big, awesome, shiny primary residence, are incredibly powerful, and well worth the sacrifices made at the beginning of your journey.

It is also fortunate that we are in a market that, in most areas, is appreciating healthily. So it seems likely to me that you've gained enough equity through appreciation already to break even by selling. Heck, maybe you'll even have some gains in there!

Welcome man, and good luck in your journey!

"the more you learn and apply, the more you mitigate the risk."

This is absolutely RIGHT ON. I've noticed how much more confident I feel now when I work on buying a rental, than I did a couple years ago. I used to be terrified, now I just do the homework, trust my numbers, and keep moving. You can never fully remove all risk, but you can definitely mitigate it significantly by educating yourself.

I can definitely relate to building a legacy. I have two sons and that is absolutely my greatest motivation. Go build that legacy!

Oh, I've also been networking pretty aggressively with as many wholesalers as I can find, although so far I've found their offerings to be pretty hit or miss in terms of realistic ARVs and realistic rehab costs. Somehow the ARVs keep ending up a bit high, and the rehab costs seem to be consistently low. Go figure.

Hello BP community!

It's been a slow, steady growth for me over the last few years. Right now I have 3 pretty solid rentals and have just eclipsed the $2000/mo mark in passive rental income (before maintenance/vacancy). I've also owned a couple others that I sold last year to refine my holdings and my strategy.

I'm finally to a place where I have a pretty solid income and can easily get a bank loan, and I have some experience and a more refined strategy under my belt as an investor.

I began to look at this more as a business, and less as something I do on the side as I save money; my first thought was, "If I were an entrepreneur in any other capacity, I wouldn't limit myself to whatever money I had in the bank--I'd raise capital, whether private or from a bank, and build a business that way!" This allowed me to start considering more possibilities than just waiting to save up my next down payment. (I've been buying properties between $200-275k, so it takes me a while to come up with a down payment.)

I've finally landed on a strategy/model that I'm excited about, and that should finally allow me to grow quickly from 4 mortgages to 10 (then we'll cross that bridge when we get there!)

I know this is obvious to most of you, but it will start with launching my own consistent direct mail marketing to generate deals. For those that I want to keep, I will use private money to buy directly from distressed sellers (at or below 70% ARV) and then will do a cash out refi at 70% of appraised value.

(This creates two first steps: create my marketing campaigns, and lock in a few short-term private lender options.)

For those properties that I don't want to keep, I intend to rehab them and list them myself. (I am an agent as my day job. I've heard this called whole-tail.)

I'm curious what advice or thoughts you would be willing to share as I ramp up this business. I'm ready to grow my portfolio to a new level, first hitting the $5k/mo mark as quickly as possible, and eventually building a rental business that generates $100k/mo.

On a personal note, because a person's WHY is very important, this will allow my wife and I to support and even fully fund hundreds of families' adoptions over the years. I don't need $100k/mo to live comfortably. But I do WANT to generate that because I can give generously and impact the world around me in powerful ways.

Thanks in advance for your tips, advice, encouragement and cautions!