All Forum Posts by: Charlie John

I recently completed driving for dollars in 3 new areas of our greater Twin Cities metro that I will begin marketing to. These are desirable areas where you would actually want to buy a house to flip or hold as rental because they have good schools, safe neighborhoods and  little to no "war zone" type streets.

I drove EACH street looking for houses that are either outdated or needing serious repairs (based on exterior appearance). There are a lot of different things to look for but I will say this: you want to see some kind of distress.

Physically on the exterior is important (peeling paint, cracked driveways, original windows, overgrown landscape, rusty garage door, awnings, etc.) but also look for a messy yard or just ask the question-  Is the way this homeowner living kind of "weird"? Are there 3 broken cars in driveway? Do they have yard ornaments all over? Have the made they customized their house too much - like purple and pink house paint? That person might want to sell as-is because a cash buyer could make the sale of their home very easy, whereas if they suddenly needed to sell - getting the house ready for sale would take a lot of work!!

I take the data(house numbers) and go back to the computer to look up on the county's website to find the owners name and mailing address. I found this part interested once entered in the data :

List 1: 206 houses. Only 9 are absentee owned.

List 2: 189 houses. Only 11 are absentee owned.

List 3: 195 houses. Only 8 are absentee owned.

Now, these represent EVERY single house that has distress from the exterior in that ENTIRE zip code. I understand the motivated behind a tired landlord who lives 5 hours away and just wants to be done with the property, but how many of them are there? Especially one where the house needs a lot of repair...

Mailing to a blanket list of absentee owners seems like a waste of time/money because you are mailing to a lot of houses that may be in good shape and could be sold on a retail level. 

My custom driving for dollar lists based on distressed housing are made up of owner occupants with majority of them being older folks(55+). Names like Florene, Arlette, Gilbert, Eunice, Beatrice, Merton and many more! :-)

Just thought I would share this to BP! Hope it helps someone. Thanks!

@Mike Waltman

I wondered the same thing when I first started messing with List source. I would not pay the extra towards the CHV list because I don't think it matters. Use the total assessed value to filter out the more expensive properties off the bat. I know that in my area if I were looking for single family homes to buy and hold I would have that filter set at 200k and under so that I don't get a list with houses that meet all other criteria but are valued at 450k!

Use the savings to send more marketing 

@Earl Louis

Why do you use the 70% rule in the first place

@Willie Morales

@Ryan Dossey are right!

There have been a few times where I see a house come on the MLS that I have been marketing to and after checking through my box of returned mail, there were three letters all with a UTF sticker on it for that house that just came on the market!!

Create a spreadsheet with all of the returned mail and start researching the owners. It will depend on your list though- wouldn't make sense with a generic list of thousands of names, but for a smaller highly targeted list, I would all day long. Good luck man!

I am going to start a new marketing campaign to reach my goal of buying 2 properties for buy and hold.

Here is my criteria: Town house, built pre-1996, last market sale date 1996.

I am hoping to find original owners that have not made any upgrades or improvements to their town home since buying it 20 or more years ago. Clearly, if there is some distress then that helps! ( smoking in the house, cats, messy/hoarder, etc.)

I am looking to buy these as-is, direct from seller.

My plan is to have two offers:

1. Cash, if thats what they need (70% formula- which would then turn into wholetail/fix-n-flip).

2. Seller financing. I would offer to pay close to market price for the townhouse if they are willing to finance it at favorable terms. That would be a low interest rate(0-3%) and a long amortization schedule(10-15 years). Hopefully, it would help them provide a stream of reliable income and being able to get rid of the property without going through the traditional sales process with realtor. It would help me because with a low interest rate, most of my payments would knock down principal and provide cash flow. 

Have any of you done seller finance for the long term and with low interest rates? 

I received a call in July 2015 from my direct mail campaign. It was my third letter to her over about 6 months. All of you out there just starting to send mail-- keep sending because people really do wait to call you. 

She bought the house in 1991, but has not lived in the house for the last 5 years after moving to a condo. She claims there is a lot of stuff in the house (her mothers possessions after she passed away and her stuff too). Driving by, looking at the windows, it seems like a hoarder situation.

She expressed a lot of interest in our initial phone call. She liked the fact that I could buy it as-is with no realtors involved. But before she sells, said she needs to get all of the stuff out of there.

She sounds like she is in her late 60's / early 70's and probably has no capacity to move all of the stuff out on her own anyway.

I followed up with her early December and she said she still needs to get the stuff out, but it is now too cold and wants to wait.

How can I pitch an offer to someone like this that will help them to move the process forward? I feel like offering to move all of the stuff out of the house and into public storage as part of buying the house. But it seems like she is embarrassed by the situation. What kind of questions do you guys ask sellers to get them to take more action?

Thanks BP!

I have a stack of returned mail from last year and recently after organizing them and looking up the properties- a bunch of them sold.

I got a little disappointed in myself for not researching the owners right when I got the retuned mail, for if I did, I would have probably bought their house. 

Not only mailing more frequently @Bob C., but following up on the returned mail RIGHT AWAY.

Thanks @Steve Vaughan for your encouraging response!

It's not so much the work involved in creating the lists because I really like doing it. Driving the neighborhoods allows me to see where I am potentially investing. SIDE NOTE - there are unlimited opportunities out there to buy houses that need a lot of work!!! Getting in from of the sellers, getting them to call you and do business with you is the challenge. But there are so many of them out there once you drive neighborhoods and see with your own eyes. Buying lists from listsource doesn't make as much sense to me since a lot of the absentee or high equity owner occupants could have houses that are updated and in retail ready shape. 

Our family (I have a 3 and a 2 year old) comes first and right now- just paying the bills is tight. So, between spending $300 on stamps or $300 for groceries, it's obvious -- groceries. 

I feel if I partnered with someone who is willing to fund the marketing (with hopes to benefit way above and beyond what they put in), my wholesale/rehab business would explode  because my postcard would be getting to thousands of more people than if I had to save up first to send them. Does that make sense?

Thanks @Simon Shih for your input.

I would not sell the list because I could not sell to multiple people. If I did sell, I would sell to the investor guaranteeing them that they are the only one with this list (thats what gives the list value).

Plus, I have invested so much time into physically driving the streets, writing the house numbers and then researching the owners name on my computer. I want to be a part of the success of this list! Thats why I am doing it.

Clearly, the investor will have to understand that they might be funding an operating that does not see a return for months to come. But they will want to be a part of the potential that could come from it. 

Their investment into marketing is definitely benefiting me more over the long run because its helping to brand and build my business. If they decide not to fund anymore after a year, then a lot of the marketing we sent out could still contact me and want to sell. I would gain from that, the investor wouldn't.

I have been in real estate now for 1 year and have only done 1 deal. It was a wholesale deal that netted me 29,000 profit. I got the lead from a driving for dollars list I created. It was a 1970s house that had a lot of deferred maintenance from the outside. Sellers called me from the letters I sent and we met. The sellers were elderly and the husband was a hoarder. Basement had snakes, mold, 8 cats, and piles of ****. Bought the house on the spot and then double closed to another investor. Since then I have been on the hunt, have met about 30+ sellers and have learned a lot about sales, presenting offers, comping properties, etc. No deals since -  trust me, it has been a tough road! but I truly believe it will make me a great investor someday by learning how to actually do this (build rapport, negotiate and sell).

In the last 3 months, I have become very focused on driving for dollars (literally every street) in my farm areas as well as new areas and have created custom lists based on this criteria:

1. House needs to show neglect or deferred maintenance or datedness from the outside (usually a good indicator of the inside condition).

2. House needs to be purchased prior to 1996 (chances for significant equity)

I know have a list built of about 4,000 addresses all custom created from driving for dollars and then niched down further (last sale date) on the county's website. 

Here is my problem: I don't have enough money to send out the letters and postcards! I am a young guy supporting a family of 4 and our budget is tight already. As much as I want to get the mail out to these addresses, I can't do all of it. I am continuing to expand the driving for dollars areas too.

I am looking to partner with someone locally who would like to be apart of this. They would essentially fund the marketing machine for us. Our plan would be to wholesale any deals we get from these lists/leads. Out of the profits, the partner would get reimbursed for his marketing contributions and then we would split the profits above that. 

What I am asking BP is -- does this even make sense? Would someone want to do this? How should this be structured? Etc. etc. 

Any help would be much appreciated!! Thank you.