All Forum Posts by: Eric F.

Out of the box idea. If she can't afford to fix it, she can't afford to keep it. Find an investor on here in Pueblo and have them contact her. I know if you were in Raleigh I'd already be sending you a PM for the address so I can get in touch with the owner.

@Nikolas Ferreira, out of your higher response rates of yellow letters vs postcards, if you broke it down into "good leads" instead of just total calls how does it stack up? I found I get more calls with yellow letters, but quality leads per $/piece is much closer to even, and everything I bought in 2016 was a postcard...though I sent postcards way more than yellow letters. The additional calls from letters are people who think I know their house personally for the most part, at least in my experience. 

I don't know the exact vacancy percentage, but I know if you put up a for rent sign in front of a house or post it on craigslist you're going to get so many calls you have to take it down in 24 hours. I put one up in Zebulon and I am not exaggerating when I say I got so many calls I drove back and took it down the same day. I ended up selling the house to a guy who knocked on the door and offered ~93% of FMV cash purchase before we were even done (contingent on us finishing the work as we described we would, which we did, we were basically done when he looked at it). That about sums up this market!

Additionally, the past couple houses I have rehabbed I have had people stop and ask if we will be renting it regularly. I would say it happens at least weekly. The first week we're working it is daily.

Now most of these calls/drop ins are people who would not qualify to rent, but that should give you an idea of how competitive it is.

I posted this in another thread but this is why I have not gotten my license.

All I want to do is rehab properties, hold some, sell some, and wholesale deals if I already have a couple of projects going. I don't really think a license would help me. I buy my houses directly from the property owners so being a broker doesn't help me, and if I see a good deal on the MLS (which I never do in my market) I can have a broker make an offer for me and happily let him have the commission. There might be a few deals I have lost because I was not a broker so perhaps I lacked credibility in the seller's eyes, but I can accept that. I totally understand why a seller would rather deal with a broker sometimes. 

I have spoken with a couple of investors who have a license even though they only do their own deals and they almost convinced me to get one, but honestly I didn't want to deal with the classes, exams, and most importantly finding a place to hang my license. I didn't get out of my job to still have to report to someone. If I could get my license and never actually have to do anything (work x hours a quarter at an office, go to meetings, be on e-mail chains...basically all the reasons I quit my job) I would do it. But the fact that even once a week I might have to look at "work" e-mails or go to a meeting with 30 other people at an office keeps me away...it sounds dumb but I've had enough office meetings for the rest of my life thank you. And I NEVER want to list or buy a property for someone else. 

I started investing while working a full time job. If I didn't have a job I probably would have gotten my license and supplemented myself with broker commissions.

Every now and then I think about getting my license but I really have trouble finding the value for me. 

Now, I would get my license if my market was different. If there were good deals on the MLS regularly I would get it instantly. If I could have a guarantee I could have my license but never have to go to a company meeting, get cc'd on e-mail chains, have a supervisor, or act like most brokers I would get it. And there is no way I ever would actually want to represent someone (especially a buyer) going to 35 houses, talking about the cabinets, and all that crap.

Also, this is just an observation, most agents seem to enjoy telling everyone they are an agent, socializing with agents, networking, and all that crap rather than doing work. Most agents make under 50k. I know a couple of agents who work their butts off and they probably make 20x the average agent. 

I do it different than @Jesse Tsai . I considered doing it his way, but I was afraid if they didn't move then I would have to do an eviction and I'm suddenly 3 months behind. I came up with something different and my lawyer agreed it would work. I did this two times last year (numbers made up).

I buy the house for 50k. The seller receives 45k at closing. 5k stays in escrow contingent on them moving out in 15 days. If they are out, they get it, if they are not then I go through the legal system to get them out. 5k covers my holding costs + expenses during this time. 

The closing attorney holds it in escrow. You can bet your butt for 5k they get out! I went to one house and they had 9 people moving everything on the second to last day. 

@Ushi Hastie I am interested in hearing how it worked out. I am going to see if I can get TLOXP, I have a home office but I have all the security measures I read they require so we will see.  

Do you have a full time job? If so, trying to market for deals AND do rehabs will probably overwhelm you. Wholesaling is a lot more work than people think. 

I enjoy the process of getting the deals. Meeting with sellers and making offers is actually my favorite part of this whole business. I could see how for most people it is not their favorite activity. I actually used to hate it and was terrible at it but I learned to love it. 

If I just wanted to be a rehabber and not deal with marketing, taking calls, meeting sellers, etc. I would certainly just buy from wholesalers. They are two different skillsets. I am much better at getting deals than rehabbing I have found. I think in 2017 I am only going to rehab properties I intend on keeping and wholesale all my other deals. 

Have you marketed directly to sellers in the past? It sounds like you have not. If so you have to learn all these skills

• Source Leads
• Create marketing materials and get them mailed (advice: skip the part where you try to print them at home and outsource from day one)
• Field calls (gather motivation, assess deal, build rapport, set an appointment)
• Go to the seller appointment. (repeat above + present offer)
• Sign the deal

That is a lot to learn. If you are not comfortable talking to strangers on the phone and in person it could take years. I'm not ashamed to admit it took me at least 18 months to even answer the phone without getting nervous. Do you want to learn all that? Does it sound fun?

I'm not trying to discourage you. If that sounds fun I encourage you to give it a shot. Honestly, send a couple thousand mailers just to see how you do with talking to sellers. Maybe you hate it, maybe you are a natural.

It depends what you want to do. All I want to do is rehab properties, hold some, sell some, and wholesale deals if I already have a couple of projects going. I don't really think a license would help me. I buy my houses directly from the property owners so being a broker doesn't help me, and if I see a good deal on the MLS (which I never do in my market) I can have a broker make an offer for me and happily let him have the commission. There might be a few deals I have lost because I was not a broker so perhaps I lacked credibility in the seller's eyes, but I can accept that.

I have spoken with a couple of investors who have a license even though they only do their own deals and they almost convinced me to get one, but honestly I didn't want to deal with the classes, exams, and finding a place to hang my license. I didn't get out of my job to still have to report to someone. If I could get my license and never actually have to do anything (work x hours a quarter at an office, go to meetings, be on e-mail chains...basically all the reasons I quit my job) I would do it. But the fact that even once a week I might have to look at "work" e-mails or go to a meeting with 30 other people at an office keeps me away...it sounds dumb but I've had enough office meetings for the rest of my life thank you.

I started investing while working a full time job. If I didn't have a job I probably would have gotten my license and supplemented myself with broker commissions. 

Every now and then I think about getting my license but I really have trouble finding the value for me. 

A deal is a deal. If the numbers work for the buyer then who cares what the seller makes? That is small minded thinking. If I sell a house to a rehabber, and he thinks he will make 40k off it, why should he care if I make 20k or 5k? I wouldn't. If a wholesaler brings me a great deal I don't care what he makes. I hope it is a lot so they stay in business. Good wholesalers are hard to find. Ones @John Thedford talks about in every thread on this forum are a dime a dozen, but they don't last more than 3 months before you never see them again. The free market solves that problem. 

Basically, professionals don't care what other professionals make. If someone agreed to a price then got mad that I made too much I wouldn't deal with them again. It has not happened to me yet. I am pretty sure every time I have sold a house to a rehabber they knew what I made. And you can bet your butt it was more than 3% of the sale price! 

Agents don't regularly bring deals in my market (btw technically they are all brokers here). They have MLS properties, and anything worth a darn on the MLS receives multiple bids in 24 hours in my market. I would love to be able to buy deals off the MLS regularly through a broker instead of having to hustle for them. I really would. But where I live the market is just too hot. If I could dial up the MLS now and find 10 great cash flowing holds here I would be all over it.

Let me put it to you another way. You are a professional rehabber.

You have two houses you can buy, both which have an as is value of 100k. This is a totally realistic scenario by the way. If anything, the gap between the wholesaler price (from a real wholesaler) and the MLS would be even larger (again, in my market, everyone's market is different)

• One is from me, I will sell it to you for 80k and I make 15k
• The other is from the MLS. It will cost 94k. The agent will make $2,800

Which do you buy? I mean seriously, think about your question objectively. Why would anyone care what anyone made? The price the buyer paid is what matters. Your entire question is based on the premises the wholesaler's profit being larger than an agent's commission is the most important factor in the transaction. What you pay is always the most important factor. When you shop for insurance do you look at your premium price or the agent's commission? Would you pay more money for a Chevy at one dealer if you knew the sales commission was less there?

I understand the value an agent adds. I am not being dismissive of them. I just think this question shows a bad mindset when it comes to business. Your thinking is all wrong. Worrying about other people's pockets all the time doesn't lead to growth and success in the long run. 

Are you trying to buy it to live in at first? That will open up your options a lot. It is a bit confusing because at first you say it is a buy and hold, but then you say you will live in it. 

If it is to be owner occupied, assuming it appraises and all that Amy Bonis can probably get you in it as @Andrew S. said. I used her for my personal house and my loan was smaller but so was my downpayment (I think 135k loan, downpayment about 5k, but I immediately put 30k cash into it and created probably 60k equity)