All Forum Posts by: James H.

The silence says everything, doesn't it?  We're working North of I-30 and East of DNT --- out about 60 - 75 miles. 

We have not found that zip code yet.

Always 3 or 4 bedrooms. City size lot (i.e., no rural chunks). SFR. 50%+ equity so that there can be flexibility with price. The last mailing (#4) was targeted at seniors.

Hello BP'ers,

We currently have 6 rental properties that we have purchased over the past couple of years. Back in the spring, we decided to try our hand at flip/flip since we had experience fixing up rentals.

Mailing #1: 2500ish or so properties. 200+ calls. Most of the calls were from what I call "beaters" -- <1000sq ft homes in the bottom end neighborhoods with values less than $30K. Not our target; and I do not want to get involved in these kinds of homes since I have no experience with them nor the clientele. No leads that were worth even viewing in person.

Mailing #2: 1800ish or so properties - with a much better targeting. (No beaters.) We got about 20 calls. We ended up purchasing a home at 70% ARV minus $10K. Not the best deal; but a deal. Repairs were estimated at $37K but we ended up with $50K due to unexpected air conditioner issues plus a few misc things. Learned a lot. At this point, the ARV minus real estate commission is only about $10K away from what we put into the home. So, we are refinancing into a traditional mortgage and using it as a rental. Disappointing. But, the net amount invested is significantly less than what we would have paid on MLS and the property will cash flow nicely, once rented.

Mailing #3: 10 weeks after #1 and #2. Mailed to same group except that "beaters" were taken off of #1. There were around 2300 addresses. No responses except for standard threats of lawsuits, etc., for sending the mailings. :-)

Mailing #4: New group in larger geographic area. 4600 addresses. Targeted to seniors with 50%+ equity. 20 calls. Out of them, 19 were the standard lawsuit threats. One was serious. I went to her home on Friday. It was nice and only needed $5K of repairs. She was willing to sell it for 80% of market to get it out of her hair quickly and painlessly. She was well aware of market value. Obviously, this is a no-go for a flip and we do not want more rentals at this point.

So... About $12K has been spent and the only thing we got out of it was one nice rental at a do-able purchase/fix/rent price.

In the DFW area, my understanding is that the average flip nets around $30K - $40K. So, $12K is a huge percentage of that. And we have not even gotten a flip yet.

Obviously, things are not as easy as the gurus claim. And we never expected them to be. (We never went to any guru seminars past the initial freebees.) But... We are having second thoughts about trying this and are torn about where to proceed.

Ideas?

Jim

We decided not to work with them after they refused to meet with us except between 8am and 5pm on weekends.  We are landlords and have done a rehab.  But, they apparently did not want to work with us.

Hello BP'ers,

We currently have 6 rental properties that we have purchased over the past couple of years.  Back in the spring, we decided to try our hand at flip/flip since we had experience fixing up rentals. 

Mailing #1:  2500ish or so properties.  200+ calls.  Most of the calls were from what I call "beaters" -- <1000sq ft homes in the bottom end neighborhoods with values less than $30K.  Not our target; and I do not want to get involved in these kinds of homes since I have no experience with them nor the clientele.  No leads that were worth even viewing in person.

Mailing #2: 1800ish or so properties - with a much better targeting. (No beaters.) We got about 20 calls. We ended up purchasing a home at 70% ARV minus $10K. Not the best deal; but a deal. Repairs were estimated at $37K but we ended up with $50K due to unexpected air conditioner issues plus a few misc things. Learned a lot. At this point, the ARV minus real estate commission is only about $10K away from what we put into the home. So, we are refinancing into a traditional mortgage and using it as a rental. Disappointing. But, the net amount invested is significantly less than what we would have paid on MLS and the property will cash flow nicely, once rented.

Mailing #3:  10 weeks after #1 and #2.  Mailed to same group except that "beaters" were taken off of #1.  There were around 2300 addresses.  No responses except for standard threats of lawsuits, etc., for sending the mailings. :-)

Mailing #4:  New group in larger geographic area.  4600 addresses.  Targeted to seniors with 50%+ equity.  20 calls.  Out of them, 19 were the standard lawsuit threats.  One was serious.  I went to her home on Friday.  It was nice and only needed $5K of repairs.  She was willing to sell it for 80% of market to get it out of her hair quickly and painlessly.  She was well aware of market value.  Obviously, this is a no-go for a flip and we do not want more rentals at this point.

So...     About $12K has been spent and the only thing we got out of it was one nice rental at a do-able purchase/fix/rent price.

In the DFW area, my understanding is that the average flip nets around $30K - $40K.  So, $12K is a huge percentage of that.  And we have not even gotten a flip yet.

Obviously, things are not as easy as the gurus  claim.  And we never expected them to be.  (We never went to any guru seminars past the initial freebees.)  But...  We are having second thoughts about trying this and are torn about where to proceed.

Ideas? 

Jim 

And what are you going to do if you cannot buy a buyer?  If you put a home under contract, you are legally obligated to close.


Originally posted by @Marcel B.:

@Carnell Webb Wholesale and Lease Options. It's what I'm doing. With Wholesale you just need $100 to hold the property until you find a buyer within 21 days and with Lease Options you're controlling the property (may need to put down $1k for their moving expenses) but these are the 2 strategies (in my opinion) to start off with. Once you get enough capital, do the buy and holds, flips, etc. It can be done with very little of your own money. 

We went to a one night event.  He started talking about wholesaling without having any money.  At one point he asked the audience, "What do you do if you get a house under contract and then do not find a buyer?"  Then he made a motion with his hands as if he were tearing up a piece of paper.  He paused and said, "They are in a bad situation and they won't sue you."

No thanks.  We run our business ethically.