All Forum Posts by: Chinmay J.

Remember if its too good to be true, it usually is. Unless its some rich close friends or family members who are letting you use their money as a favor to get your business up and running, like @Jay Hinrichs said its 10-13% with or w/o points

@Rochelle Wilkinson - More common than you think. Have done it several times in VA right at the closing. He hands you the keys as the owner; and you hand them right back to him as a tenant. He writes you the rent check.

Training fees vary from broker to broker. The broker I am with (Samson Properties) currently does everything high tech. They have a very modern outlook on things. My old broker did things more old fashioned way. I had to pay $500+ one time training fee, E&O insurance, and desk fee with them. I also had 65:35 split. Their training system was pretty good and while they were expensive I learned some good basic things with them. Good thing was that they gave me leads. Samson Properties on the other hand lets me keep 100% of commission, but that brokerage is more for people who are at a point where they know basics and can figure things out themselves. So when you go to a broker, make sure you are getting what suits your needs the best. Interview them.

As far as other set up fees are concerned, I had some one time registration fees with DPOR (Dept of Professional and Occupational Regulation), and association fees. I am with DAAR (Dulles Area Association of Realtors), and pay something like $480 per 6 months, and MLS fees. It takes a little over $1500 to keep my license active. Well worth it.

First deal I ever did, I broke even, plus I had some walking around money left. I do zero advertising, because my focus is my own personal investing. If you want to do this full time as your bread and butter, you have to advertise.

Thanks a lot for tips to tweak the process. I want to go through listing agent, of course, like I said in my OP. It makes most sense ethically and business wise. Only if I don't hear from the listing agent or their relationship has soured, will I go directly to the seller. 

Whenever I hear about marketing from investor's perspective, I often hear about people sending batches and batches of letters. There are companies who specialize in this. Often the response is a few for 1000s sent, and typically it takes 4-5 batches of letters sent consistently to get any success.  All this costs money. Doing the basic math, it would costs an investor thousands of dollars before they can get a deal under way.  Another method often discussed is bandit signs and driving for dollars. A lot more cheaper than mailing, but still you are directly dealing with strangers, either by the virtue of them calling you or you calling them. And I am not shy about talking to strangers at all, but lets face it. There is no trust factor at all. 

I was thinking of a slightly different strategy for marketing - something I haven't seen discussed at all.

I went to MLS ( I am a licensed realtor in VA) and looked up all the listings in last 180 days under the price of $200 K (my target price) in various counties of my interest that have either EXPIRED or WITHDRAWN, and that are not Condos. I got 458 results. At some point, I will take additional step to weed out the duplicates, and those that got eventually sold. So this number will get shaved off a little bit. I can expand my search easily to 365 days or add another county. Not hard at all.

Once I get my final list, I can approach in two ways. Either send email to the listing agent to see if the seller would consider relisting again, or contact the owner directly from the tax records, which are linked to the MLS listing. Instead of trying to buy lists from places like listsource and hoping to find a motivated seller, why not just talk to someone who was motivated enough, at one point at least, and make them an offer. I like the idea of going through the listing agent a lot better as the seller is more likely to have some relationship with the listing agent than a stranger approaching the seller directly

Has anyone does this successfully? If yes, what was the success rate? Was it better than sending out postcards and letters? 

Lets discuss.

You are spot on regarding what happened. The yield on 10 yr Treasury went from 1.77% to 2.43% (which is what its at right now), and the S&P index jumped about 6%. As we all know, the market almost always overreacts. Stock Market overreacts and bond market also overreacts from time to time. Its easy to tell why the Stock Market acted in the way it did. Investors saw US as a better place to do business.  Whether bond market was truly panicking (I am sure there were some of those),or the bond investors saw better yields (opportunity) to make money in the Stock Market (I am sure there were some of those also) is the gray area.  Such reaction was imminent anyway, given the shock waves it sent through the media and world when Trump won.  Eventually, I am sure the bond markets will settle down to a new normal, and Stock markets will come down a little bit. Markets always love equilibrium in the long term. 

To suggest that the election results will lead to full blown recession as suggested by some posters is just overreaction, simply paranoia, or wishful thinking on one's part. 

I believe that the administration's business polices will be a lot more business friendly, although the administration's rhetoric will be somewhat extreme. That's just the Trump brand.  

I am sorry, but your three friends don't make the whole country.  Perhaps they haven't looked at the stock market lately to see how rest of the country is feeling about the new administration? 

Look at the consumer confidence data. Its at all time high. http://www.tradingeconomics.com/united-states/cons...

And how does exactly few people doing deferred purchase put the whole country in recession.. 

I was going to take a cheap pot shot at California liberals in general, but may be some other time..LOL 

@Brenda Hedges  - I am in same shoes as you are. I have couple of transactions from last yr, plus other sources of income along with rental income. This year I am using Turbo Tax for 2016 returns, but in 2017, once I have completed my first flip, I will be looking at EA or CPA to do my taxes. 

There was some good discussion on this thread not too long ago  Do I need CPA !

@Jordan Grimstad - If you are buying turnkey properties with expectation that they will appreciate down the road, and are offering close to asking price that's fine. If that strategy works fine for you, I am cool with that. But most people would consider you a speculator.  

In rental market 1% to 2% rule is what people use as a measurement yardstick to see if its a good rental or not. Its a little controversial, but you should read up on it. 2% rule says that for a rental to be a good investment the rent per month should be 2% of amount you paid. So for a property of $200,000 you need to collect $4000 per month in gross rent.  Very hard in single family houses, but quite doable in Multi Families.

@Jordan Grimstad - Without a concrete example its hard to say what you are doing is correct or you are being too generous. I have heard lot of experienced investors spew out a statistic that out of every 10 offers only 1 will get accepted. I am a new flipper as well (although I have lot more experience being a landlord), and I am finding that statistic to be  almost axiomatically true

Typically, when I am bidding as an investor I am bidding on properties that are CASH only. That means no bank will ever loan money for that property in the condition it is right now. So I am not really competing with retail customer who is more likely to get a loan through a bank on a property on which bank will lend money. I am almost always competing with other investors. 

Also, its almost a rule that unless you can buy the property at 70% of its ARV (After Repair Value) you shouldn't be buying it.

So if you are getting most of your offers accepted, you have either discovered some niche others haven't yet, or you are bidding too high. 

Also, you didn't say what you plan to do with the property? Do you fix and flip it or buy and hold it as  a rental.