All Forum Posts by: Cornelius Garland

@Jay Ingram Thank you for the in-depth post on this process. I'm looking to buy my first rental with a VA loan in the next few months. While I hope I'm never in this situation, it's always best to know what to do in worst-case scenarios like this.

@Shannon DeLaune In your experience, when can a homeowner sell their property if they don’t want to fix it? Would they need to wait until the insurance adjusters do their assessment of the damages, or could the homeowner sell beforehand. I’m looking at possibly buying a fire damaged property as my first purchase. Thanks in advance.

I've been in your spot before. If you're aiming to buy multifamily properties, then I would definitely pull a targeted list of sellers and market to them. When I was helping a friend get more units, I had him pull a list on List Source of everyone that owned complexes with more than 5-100 units. However, I told him to exclude any properties owned by LLCs. We just wanted "mom and pop" owners. I'm not saying that you can't get deals from LLC owners; however, most of them are playing the same game as you and will be reluctant to give you a good deal.

After you have your targeted list, I would add phone numbers to the list because this gives you another way to target your sellers. If you're just doing direct mail, you're going to be missing out on some sellers that may not be receptive to direct mail. Similarly, if you're just doing voicemail broadcasting, some sellers may not respond to that. I would type a formal letter to these sellers and also include a credibility kit that has background on you and the properties you've worked with. This puts me ahead of my competition.

I would hit them with direct mail, text messages, cold calls, and voicemail broadcasts aggressively for a month and then let your foot off the gas on month two. Once you've identified warm-to-hot leads, focus the majority of your attention on those. You'll get deals. Let me know if you have any other questions.

@Jason Miles Datazapp is subpar, in my opinion. Their hit rates are less than 40% and they don't provide which numbers are wireless or landlines. They reached out to me a few months ago indicating their data improved; however, I didn't see any difference in the quality.

@Brandon Beatty I found that it's time-consuming to skip trace the wrong numbers rather than just following up with the leads that came in. However, I rarely get wrong numbers whenever I skip trace my lists, so this is a non-issue.

@Tyana CarpenterI actually have a huge flowchart that addresses what happens based on how the leads respond to my marketing. Here is an overview, though. I work with large lists. In January 2019, I messaged 130,890 sellers and we closed 10 deals, during down months. December and January are very slow months for us. We're gaining a lot more traction now. Our sellers were waiting until late-January to late-February to move their properties. If our sellers want an offer, we have our VAs vet those. I rely on my team of VAs to do a lot. I would say a lead is dead if they opt out of our marketing or respond negatively to our messaging (i.e., cursing). If they say no, we'll put them on a month followup. I will aggressively target my lists for 2 months then "retire" it for a few months. The great thing about having the skip traced lists is that the sellers rarely change their phone numbers. I'm closing deals off of lists I skip traced 2 years ago. It's way quicker and less expensive to shoot the sellers an RVM or text message than to do direct mail. Also, it's easier to track. I do cluster marketing, so I'll cold call the lists at the same time as I'm sending RVM to it. I don't overthink it. One way to look at it is that you can never market to your sellers too much. Sure, some sellers may get upset but I don't care. I need to find motivated sellers. The more times you touch the sellers, the better.

@Autumn Allen I'll send you a message.

@Cameron Robinson I sent you a message as well.

@Michael Batts Thanks for the kind comments! I try to give back whenever I can. I hope my posts help you out.

@Darius Anderson When I'm scoping out a new market, I always go where the investment activity is happening. One way to do this is to find all of the zip codes in your target market and determine how many cash sales there were in the previous 12 months. If you have MLS access, then you can easily research these stats. I jump from market-to-market, so to get a realtor in every city I analyze would be time-consuming. I do this by going on List Source and entering in set criteria that can give me an estimate of how many there were. This isn't the most accurate way, but there's only about a 5% margin of error as compared to the MLS. Here is the criteria I use:

I just enter in my zip code to get the number of cash sales in that particular zip. If you see there are like 100 sales in a zip, that's a good sign where you need to be investing in. It's hard to argue that 100 other investors are wrong with where they're buying. Go where the experts are! Hope this helps.

@Darius Anderson Not South Carolina...I don’t even invest in my own backyard. The cities are too small, and the sellers in the hot zip codes think their houses are sitting on gold. Texas, some areas in Georgia, and South Florida are areas where I’m focused.

@Alesha Bracey Paying a skip tracer any part of your deal is ridiculous. Look at skip tracing like direct mail. It's a marketing expense and should be comparable to the cost of a mail piece. For instance, one skip trace for a seller should cost at or below the price of a mail piece. 

A lot of investors make the mistake of contacting private investigators. These people skip trace for law enforcement or similar purposes. You're barking up the wrong tree. Find a service that can skip trace in bulk. Whatever you do, please do not pay anybody a percentage of your deal for just finding owner information. Don't even pay anybody a flat fee. I would check out Locate Plus if you're doing volume under 100 searches per month. They have the same exact phone numbers that TLO does, except you don't have to qualify through a site inspection. That's a rip off! 

@Account Closed Hey man, I really like pulling highly targeted lists in my area because it has made it a lot easier to move the properties. I bring deals to my buyers in areas that they're looking for and that fit their specific criteria. It's a great feeling when every lead that responds to my marketing has a property that checks all of my blocks for being a qualified lead.

I'll explain the criteria that I usually use and why I do. Since most of the areas I target have bounced back from the recession (in a big way), I'm not too concerned with equity. I even wonder how these list providers are determining equity. If it's based on the year it was purchased, then the equity filter most-likely will be way off. For instance, if it was bought in 2010 for $100k, but the area has seen a 30% increase in property values, then the equity in the list vendor's system will be too low. It'll have the equity around 33% when in actuality, it will be around 60%. The only accurate way to pull equity, in my opinion, is for the house to be appraised and then calculate the equity based on the appraised value (not the purchased year and price). 

I know most list providers aren't calculating equity this way, so what I do is target properties with 20%-100%, but I put the last purchase price at or below what the cash sales are going for. So in my area, I'll add a filter to only target properties that have been purchased for less than $100k. In my area, if I can get a house below $100k, I know I can make a profit. I only need the seller to have enough equity to cover their taxes and any liens at closing. So if they owe $99k on a mortgage and owe $1k in taxes, then I can buy this property all day because I know the ARV will be around $175k. This is just in my area. Your metrics may be different.

You'll open yourself up to a lot more leads if you do this because most investors are still targeting high equity, not realizing that equity really isn't that important nowadays. I do put my last sale date before 2005, to avoid the recession. Also, I'll put the year built of the property around 2000 prior. Hope this helps and wasn't too confusing. Let me know if you want me to explain anything I stated.

@Forrest Shealy No problem at all! Hope this helps.