All Forum Posts by: Dave Savage

@Damon Armstrong I would try to find a local REIA, there you will find a lot of investors and if you offer your services you will start to get mentoring over time. You might have to drive to New Orleans if there isn't one in your town, but the hour drive would definitely be worth it as I am sure there are plenty of investors there that would be glad to have free labor in exchange for sharing what they know.

Keep reading BP and you will learn a ton as well....Good Luck!

Non-financeable due to missing roof/bathrooms/kitchens, etc are perfect for investors as we can come in with cash (or Hard Money) and buy the property when a typical home buyer could not get a mortgage on a property like that.

This makes them really good targets for wholesalers

If you are going to take comps with you try and find some REO comps or something to better represent a house that needs work.

Remember you are a solution to their problem - problem being a house they need to sell, but can't sell through a traditional agent. Frame the discussion as how you can fix their problem, not directly about the numbers. "What do you need to move on from this property" "If I can help you by allowing you to move only what you want, not perform any repairs, not have to worry about the lawn/pool/snow removal, etc what would you take for a cash offer"

IMHO once someone moves out there is always going to be a need to do paint and flooring to get it in shape to sell to a retail buyer. A lot of times if you put $5-10k into those things you can increase the value $20-30k.

Like @Ted Akers said - always make an offer - and ALWAYS follow up a few weeks later

@Curtis Daniels - I would take a slightly different tact. I would never explicitly look for money out of a relationship with a real estate agent, it is about building the relationship.

This could help in two ways - 1. you never know when a property is going to come into their office that is non-financeable and you will be the first one they call even before it hits the MLS and can end up wholesaling it for a nice profit, 2. Some day you may want to get into rehabbing and having a good relationship with a few agents could pay off with lower listing fees or flat fees for all of the work you have done together over the years.

It doesn't hurt you as if a deal isn't going to be a deal, find someone who can prosper off of it and it will be paid back over time.

Real Estate Investing Mastery is good to jump into after listening to 60 or so of the Flip2Freedom podcasts. There is a lot of discussion about lease options with Joe M. but Alex is a full time wholesaler so there are plenty of tips on marketing, negotiating, finding buyers, etc that would be useful for you.

Quick Analysis For you

ARV $140k * 70% = $98k (search for 70% rule in the forums, it is a good rule of thumb to cover carrying costs, acquisition costs, and rehab profit)

Always assume minimum $10k in repairs unless seller tells you it needs more (roof, siding, etc) = $88k

Profit you want to make - ~$5k = $83k

You need to get it for $83k or less as a very rough estimate.

Ask the seller what they would take for a cash offer today, if they won't give you a number I would give them a range $75-80k to see if they express any interest before driving out to the house. If they are sticking to $109k or more move on to the next one.

A key though will be to follow up with them every few weeks to re-express interest - they may become motivated months from now and you don't want to lose a potential deal

@Richard Bell I like how you are thinking about catering to a specific set of your customers to provide added value - I think long term this could be a big boost for your company. As finishes will vary from region to region I think you try and determine your best repeat customers and invite them to a free lunch or dinner at a nicer local restaurant and perform a customer survey right there through discussions at the event. Offer them 10% off their next purchase as well and I bet you will get some of the better investors to attend and give you the feedback you need to create these templates.

Then after the event you can create your lists of preferred products for a specific type of investment, send it out for feedback to the group and refine it.

Great idea!

How many Beds and Baths does the home have currently?

@Will George - I might recommend listening to the BP Podcasts from #1 to the latest. They are the right price (free) and have a ton of great info on all aspects of real estate investing to get you started.

Use your commute time to and from work to listen to the podcasts and you will find it well worth your time.

@Brittney Lynn it is normal to be nervous, don't let analysis paralysis set in, but take a hard look at the numbers and the feedback I am sure you will get on the forum.

A few things I saw:

Vacancy at 3% might be right for NYC, but you need to make sure you have a good reserve fund counting on $1000+/mo rents in case it takes you two months to fill a vacancy if you end up evicting someone, or they leave mid-month and it takes a few weeks to turn the property.

Depending on the age of the property I would definitely increase the maintenance to ~7% at a minimum as things will come up and unless it has been recently rehabbed I would expect plumbing, etc issues to be common plus any costs to prep the property upon a turn(unless you are counting on CapEx for that).

The one thing I didn't see you mention was Property Management. Most investors even if they are self-managing at first usually include that as a 10% fee to ensure that if they ever didn't want to/couldn't manage the property they could pay someone to do it. This may be an acceptable risk if you are buying in an area that has historical appreciation both in property value and rents - as you could build in the 10% over time with appreciation in rents.

Good Luck