All Forum Posts by: Eric Metz

@Dion DePaoli

My plan would have been simply to wholesale the deal. The value from this deal wouldn't be the monetary value, but going through the process and learning the steps. Obviously I would make strong contingencies in my favor on the contract.

I asked about any possible liens, and although the owner said there weren't any, I was considerate of the possibility.

I thought about the insurance factor as well. The owner stated it was the "neighbors tree that fell on the house." I was curious about insurance as well, but hadn't considered whether the private lender had. With only a 5k loan I doubt it. I think the previous owner is the lender and was trying to help these people out.

I think I am just going to ask for 2k and see if they agree. If so I might get it under contract and start the process. I'll be clear with the seller my intentions. I don't think I have anything to lose.

Are there any expenses I might be missing? I know you need to run title for liens. Does that cost or is that part of the closing expense? I should probably know the answer to this.

Thanks for your response.

For those of you following the thread I have posted one of my deal analysis on BP at

http://www.biggerpockets.com/forums/88-real-estate-deal-analysis-and-advice/topics/101297-deal-analysis---the-roof-smasher

It's not the best lead ive ever gotten, but it is one that still has intrest and I can work on right now.

This will be my first time posting information regarding a lead i have gotten. I have not closed a deal yet, so I force myself to remain emotion free and not try to force something to exist when it doesn't. On the other end of things I am new enough and have enough money into this without profit, that getting a little bit of a return would be better than no return at all! So without further ado.

I'm guessing this made you cringe, right?

The facts:

Damage is from a tree falling on house. Owners didn't have cash to fix it so they just moved. They have a private loan on the house which they still owe 3k. I talked them down to taking that 3k.

2Bed/1Bath

1176 sq/ft

Here is the county data:

I have no idea how much it would cost to fix that area of the roof, or if it is even fixable. I looked through the windows at the rest of the house and it mostly seemed in good condition. Actually had nice hardwood floors in the back of the house. I couldn't visibly see a lot of water damage on the inside through the windows, but I am sure it is there.

The reason I think there might be value in this property is it's location. It is located about 10 blocks away from the major university for Little Rock, Arkansas. I noticed that 2 houses down lived 2 college students. I tried to strike up a conversation but they didn't seem comfortable so I went on my way. The house next to it was well kept as well.

Appraised value of the land according to the county was 7k. Most of the lots that have sold in that area recently seem to only have gone for around 1-2k.

Some of the recently sold comps in the area for investor prices purchases are:

$11 sq/ft - moderate repairs.

$15 sq/ft

$19 sq/ft

There were no properties recently sold that required this extent of repairs.

Comps for what is for sale in the area that is comparable is about $20 a sq/ft. None of the properties I see though need as extensive repair as this house. I am assuming a much less $ per sq/ft.

So my question would be, is there something here? My mentor said I should shoot for 2k, but I didn't really get much reasoning behind that value. I have no qualms with asking, but if they cant cover the load, then what is the point? I am wondering if I shouldn't just get the property under contract and market it. I am just concerned with the numbers. If there is value there to an investor, or if I need more information. Like a contractor giving me a price on fixing it or if it can be fixed. I don't have a lot of money to put into a contractor.

Tips, ideas, lifevlessons... im open ears.

@Karin Demonbreun

Just know its not my intention to bash this person at all. I respect his position and he is running a business. I've tried to reach out by contacting cash buyers in the area. I've had little luck and it probably has a lot to do with not being established enough. I like the idea of a letter. When I find a property that is a "maybe" I'll search the neighborhood for properties owned by companies or obvious investors. Tracking them down can sometimes be difficult and most that I have gotten in touch with are no longer looking to buy more. I really think the REIA meeting would be my best bet to start really getting that network going. I've reached out to a few members from there but most have just said "well come to the next meeting and let us meet you." Will do. Thanks for the reply Karin and hopefully our paths will cross and we will work together one day.

@Chad Clanton

Yes, I have been wanting to do a lot of due diligence. Mine mainly stems from wanting to be as honest a business and individual as I can. I take shortcuts on something's, but I don't want to when it comes to someone else. I think I will use the out mentioned but be sure to disclose it in a manner that doesn't scare the seller away. Thanks again.

@Tim G.

I appreciate your response. I've read and gained a lot from other posts you have been involved in. I have a few bookmarked as well. I've set a goal to get a property under contract within a month. It's a reasonable timeline.

This morning I've followed up with some old leads and two still have not closed. One is super motivated but the place is a wreck. I'll post more in the deals area and link to it from here later. I wrote a follow up e-mail with the commercial realtor and he responded to set up lunch later this week. I got in contact with a Realtor friend and he set up his MLS to push me properties with certain conditions. Last night I wrote another article for my site and tuned it for a key word phrase. I used this article on ezinearticles to get a new external link from a new source pointing to my site. Once it goes live I will social media share it and build more links. I followed up with a landlord who is dealing with an eviction and due to his age, he is ready to get out of the rental business. He is motivated but it's a tough one since there is the eviction being worked and it's hard to know how the tenant will leave the property. I'm mainly just keeping in touch to maintain the lead. He presents motivated. Lastly, I tell a lot of people I work around in the medical field what I do and give out cards. I contacted a nurse this AM who must sell to deal with major medical expenses in her family. She is very emotionally tied to the house, so she is currently offering only 10k less than ARV which she thinks is a great deal. I'm going to go look at it tomorrow and work on educating her and to look at the property. Being a newer house she states that the property is in very nice condition and maybe some slight paint and carpet cleaning. I'll make the wholesale offer, but this seems like a property better suited for a Lease Option or maybe even owner financing. This is another I need to post in deals... I don't have enough capital set aside. This is where I wish I had a better network.

I say all that to say I take similar actions to this most days that I can. Days I work, I commit to work. I don't need to be focused on anything when dealing with patients. I again appreciate your directness in reply and definitely take it to heart.

@Elizabeth Colegrove

It seems a good number of people just "jumped in" and sort of figured things out along the way. Lack of financial reserves has made me weary of getting ahead of myself, but after the responses I can't help but think that the fear of failure far trumps everything else. Thanks for your response.

@Chad Clanton

I am betting there are a ton of people on the site that have a similar story. I really want to emphasize that I think this person has the best intentions. Having only been doing it a few years maybe he is still building his mentoring side of things.

Being only a few months from 30 years old has really ignited this fire to push forward with what I consider success and wealth. Your response really hits home and I appreciate your reaching out. I really can not see myself not being successful in this endeavor. I have a well built plan, but it does require that I start getting some deals done and able to turn some of the profits back into the business. I am not the type to give up. Thanks again!

@Ryan Arth

I appreciate your straightforwardness. I have my days where I lose some of the drive to push forward, but it generally gets re-ignited quickly. I definitely will be reaching out more to the community.

Another reason I mention the desire to have a "buyers list" is that those deals where the 70% ARV - Repairs is possible, but not much more than that... I would like to present those to my "best buyers" or at least use it to gain a solid relationship. If they make a good profit and can throw a little cash my way then great. More than once I've been only a few thousand away from closing a deal but didn't close it. If I knew who to call to say "are you interested" and maybe close that deal while taking less... then that would have been great.

Anywho, I appreciate the response.

@Matt Morgan

Thanks for the response. I think my fear of stepping away from the mentor ship lies in my realization of all that I don't know. I don't have a buyers list. I haven't reached out to a title company. I haven't completed all the necessary paperwork before. I haven't been to a closing. I am betting that I could make it through all that without someone, but it sure would be easier to do it with someone knowledgeable. I've considered how I could use that extra money for marketing and it has tempted me greatly. I didn't take the step of discontiuing things because I really want the first deal to go right and see the steps.

Thanks again.

Firstly, let me say that I apologize if this gets long winded. I have a few issues but will break them up into separate posts to help make things easier. Since I haven't closed a deal, I figured this was the best place to post. I am just looking for feedback, ideas, or personal experiences that might help me get things moving forward a little better.

I decided about half a year ago to get into REI. The "why" is that I want an additional source of income, to build something that I can look at and be proud of, and to eventually have enough income to step away from my job. I work as a paramedic in Little Rock, Arkansas and I love my job, but the pay isn't going to set me up for long term goals I have.

After much time on the forums here "lurking" I decided that wholesaling would be my initial strategy. I had a little savings, and had some extra monthly income that I could put a little into marketing. This monthly budgeted for marketing isn't much. My past experiences in Internet Marketing and the lack of competition in my area was what I felt would be my competitive edge. It can be a low cost form of advertising (PPC), and I am pretty confident that I can build a solid infrastructure targeting highly converting keywords for my area. This does take time however.

I did my research from the big guys websites and got a list of keywords. I built a site around those keywords. I set up PPC. When I hit to GO button in Adwords, I got a call to my business line in 3 hours. Great start right? It was a motivated lead.

So Issue #1 - Mentor

I attended a few local REI type meetups. I have yet to go to a REIA meeting and know that I must attend the next one. This led me to a local mentor (the only one I have really seen locally) who really was the only name in the game as far as online advertising goes. I signed up for his program which was a monthly fee and half of the profits from wholesale deals. He had some basic educational material and some forms to assist with getting things going. I've never wanted someone to hold my hand when I am experiencing something new, but someone who motivates and adds value has always helped. I've learned a bit from him, but have never really taken anything away that I haven't seen on here. I feel like I might have gotten better advice on some things having listed them in the deal analysis area of this forum! He is a great guy, and I feel like he has good intentions. Here are some qualms I have,

1.) A few times I have called about a lead and one of his other "students" have already contacted him about it. So it generally is like... okay, so I guess I have to ignore this one.

2.) I feel that a few deals were passed up because they didn't meet his minimum requirements. I understand that he has goals he wants to make on each deal so that it feels they are worth his time. Personally if I could walk away with $500 or $1k it would be well worth it to me. The experience of going through the steps and seeing things in action would be extremely beneficial to me. Also based on my current financial situation, that amount of income would be a great assistance.

3.) Bear with me on this one; I feel at the mercy of my mentor, because I don't have a buyers list. Okay, I KNOW from all I have read that it is a great idea to have a buyers list. Not mandatory, since if you have a good deal, buyers will find you. However, with the structure of mentor ship, the property would be marketed to his buyers. I have grown to realize that this leaves me at the mercy of my mentor. Never has there been a "you should start finding buyers and building a list." It's the fact that he hasn't mentioned this step after months or pushed the point that leads me to wonder about his overall intentions. I want someone to teach me to be successful mutually. I hope the point of this comes across correctly.

4.) I am not sure that having a mentor ship with my biggest competitor in my direct area is the best idea. So far it hasn't lead to anything. Many of the motivated buyers just wouldn't go low enough for the deal to work. I have seen a response to my online marketing by his team to be more competitive and therefore more costly for me. There was even an idea that I had not long ago that I discussed with him that (maybe not intentionally) was targeted by his marketing. Sometimes, I am suspicious of his overall intentions for not only myself but the other members. I don't think he would do anything that is overly dishonest, but might have some underlying intentions with working with his direct competitors.

So my questions is, what should I do in this situation? I haven't been able to successfully find another mentor and I just don't feel like I am getting enough from the current guy. Maybe my expectations are a little high. I am more than willing to put in time and work to make things successful. I have presented 20 + leads with about 5 being very motivated. Sadly there just wasn't the wholesaler profit involved to close the deals. I probably should utilize the resources here on BP more to get assistance.

My Plan of Action on This Point

1.) Attend the next local REIA meeting. Unfortunately they only do them every other month. The next one is in November. I have tried to reach out to some of the members, but most say "come to the next meeting." I have worked very successfully in sales and am good at networking with people. Now it is just taking action on this point.

2.) Start utilizing the BP community more. I am getting about 10 leads a weak simply through online marketing. Usually about 1 of those is fairly motivated. If there is not direction with my mentor I will post them here and see what people think. I will ask questions and get more involved with other conversations on the forum.

3.) Buyers list. I have about 6 resources (most from BP) on finding buyers. I am going to take action and start building a list. I have created a website that is specific as to the geographical area we serve and will possible to a little PPC for specific keywords if I can get them dirt cheap. Time permitting, I will focus on some natural results for the site as well. I will call around to title companies this week until I find one that will provide me with a list of cash buyers for the last 6 months. I will contact these buyers and let them know who I am and what I can offer. I am a big fan of the reverse wholesaling method (yeah even though I haven't incorporated it) but more importantly not shotgun blasting your list with every property.

4.) Network. I have a local commercial realtor who we started communicating but he never responded to my last. I will reach out to him again, and see what I can do. I would like to find other people in the area who I can network with.

That about sums the first part of this up. Looking forward to your replies and criticism.