All Forum Posts by: Haim Mamane Palman

@Amy Davidson. I agree completely. I would take this approach only if I know the higher/2nd bidder is serious and had bought properties from me in the past

Great point @Aaron Mazzrillo. I will do that the next time I have a similar situation. I gave my word and did the deal with the first buyer. We just closed last Monday. My profit was $3500 instead of $9500 but it will pay off in the long run. I hope.

Be patient or close the deal when you can?

Here is the situation:

I put a property under contract for 40k. ARV 70-75k and needed 5k in cosmetic repairs. I got a deal! no question.

I shopped it around to my buyers at $47.5k using the "text book" formula ARV x 70% - repairs and gave exclusive look to a buyer that I worked with in the past. Everything text book so far. After back and forth negotiations, to my surprise, the buyer offered me $41,500 (40k +$1500 assignment fee), final offer, sticking to his number. This is Friday

I thought that I can do better than that and shopped it around to everyone on my list. Another serious buyer saw the property and seems to be interested. He just told me that he has to submit it to his buyer in CA so he will have a response for me on Monday.

Monday arrives and I have no offer on the table. I follow up with the potential buyer multiple times on Monday and Tuesday morning and he tells me that he haven't heard from his CA buyer.

The only offer on the table at this point is the 41,500 and I know that the buyer will close the deal since we just closed on another deal a week prior. The guy is for real. On the other hand, I haven't done any deal with the other CA buyer but I heard from other wholesaler that he is serious.

Tuesday afternoon, I am focused to make a deal and to make more than $1500 in assignment fee. I contact the seller and tell him that I have a very strong buyer and if he can do 38k instead of 40k we close in two weeks or less. The seller agrees.

I go back to my buyer and tell him that I agree to 41,500 (38k + $3500 in assignment fee). He agrees, we have a deal and sign all the paper work on Tuesday afternoon.

A day later on Wed. the other buyer text me and offer me my full asking price of $47,500, $6000 profit that I left on the table had I waited one extra day.

What would you do? Discuss...

Yellow postcards also work for me and it is more cost effective. I personally hate the same squeeze page sites that every one use.

Love the social media idea.

Good stuff. I also just tested small amount of yellow letters as I usually send yellow postcards.

Few tips: you can set up multiple google voice accounts to help you truck your results. Different number per letter type or zipcode as an example.

I recommend to send to callers to a voice mail (as opposed to answering live) with a very simple greeting such as " hello you have reached John Smith. Please leave me a message and I will call you back as soon as I can. If you call about a property that you think of selling please leave the address of the property and I will call you back soon, thank you and have good day"

I always like to do a preliminary research of the property before calling to get a better understanding of the area, property size, #bed/bath, rent, etc. This will help me determine the target range of my offer.

good luck and keep us posted.

Just got a call from a motivated who received one of my yellow letters.

Background: Seller just got divorced and motivated to sell.

The numbers: ARV 60-65k, house will rent for $800-$900, estimated repairs 6-8k. My target price 30-35k (wholesale is the exit strategy but buy & hold might work as well) mortgage balance 39k, monthly mortgage payments $576 (15 year fixed loan to mature on 2026)

The challenges: Husband hold title to the property, mortgage under the name of the wife. loan balance is higher that my target price but not by much.

what is the best way to structure this deal? subject-to? lease option?

Any help/suggestions would be much appreciated, i'm sure there is a way to make it a win-win situation

This is a big topic and depends on your goals, your passion and your location.

I live in San Francisco and had to do my first buy and hold deal about an hour drive out of the city in order to buy something that I can afford and still be relatively close. I would definitely recommend to do your first deal close to where you live if you can. You want to work with a realtor, see the house before you buy it, attend the inspection, etc. It's important to understand the mechanics of a deal and I think it's important steps in the learning curve.

In my opinion, for a beginner the risk is higher to do a flip as a first deal compared to a buy and hold deal.

What excites you more? getting checks in the mail without doing anything? or getting big chunk of money upon a successful sale of a flip?

What scares you more? having a tenant not paying rent and evicting them from your property and have them trash your property?

or working on a flip where you miscalculated the repair cost and as a result not making any money on the deal and/or losing money of the deal. Working with contractor also can be a nightmare, you should listen to the last podcast to find out more.

Again, it's a big topic and depends on your individual goals, your passion and your risk tolerance.

Good luck

The key is always to have leverage and pay upon completion of agreed upon milestone such as end of demolition, upon successfully passing of rough inspection, upon kitchen installation, upon successful passing of final inspection, upon completion of final walk through and touch up list.

You should specify these milestone in the contract under "payment schedule" so there are no surprises.

Always keep a significant amount 20-30% as a final payment upon completion of final touch up list. And have them sign a lien waiver once receiving the final payment.

In general, I pay for the materials.

Hi John,

The are endless ways to structure this type of partnership. Here's what I did with my father and best friend who gave me their money to invest.

I assume that you don't bring any money to the table and all the money that you invest is theirs. In order to make the deal work you have to buy property with strong cash flow and preferably with equity to lower the risk.

You can do 50/50 split of the cash flow and of the profit of future sale of the property. This is what I did with my dad. With my friend I did 75/25 of the cash flow and 60/40 of future sell of the property. The money partner gets the higher return. Obviously, you can switch this around but obviously they will feel better if they get higher return and will feel more comfortable to do the deal.

You can also do a deed of trust to make sure it's a secure investment for your private lenders if things go sideways.

The key again is that the return on their investment will be higher than what their make in the bank (which is not hard to do these days).

AND you need to know what you are doing and give them the confidence that they will make money with you.

Good luck!

@Matthew Chauncey - thank you for your comment. At this point, I do 1-2 wholesale deals per month so I haven't met my goal yet.

I do everything virtually and by phone but I have people on the ground such as property managers, real estate agents and contractors that go to look at the properties for me, take pictures, meeting with sellers/buyers, and give me their professional opinions about the property, location, price, estimated repairs etc. These guys benefit from the relationship with me because their either get paid when I close on a deal and/or I bring them business/referrals on a regular basis.

I also own few properties in Memphis and have the ability to acquire additional properties so it adds to my credibility when talking with potential sellers/buyers.

It's all about bringing value to the table and creating a win-win situation. And yes, you can do that even if you don't operate locally in your own market.

@Curt Davis - you are correct, most of my buyers are local companies that rehab the houses and sell them as turn-key to end buyers. It makes things easier for everyone.