All Forum Posts by: Joshua Martin

@Roxanne McCallister The COCR looks so impressive I'm certain that we're missing something. You have vacancy at 5%, depending on the area this property is located you might want to go higher. And I can't tell if property management is at 10% or $10 a month? And are rents really that low in your area? Jeez.

@William Huston I suppose whatever you have can work, but the questions is how efficiently. I have a HP Laser Jet Pro M452dn, works fine for the volume I'm going. Fast as hell, but not terribly fast with the envelopes. 

Pretty quickly I'll be sending about 100-150 letters a week, with various forms of marketing, and I think it'll do just fine.

Could there be better? Yeah, once I'm making some money I'll outsource the whole process down the way.

Best,

JTM

And no one uses toner to do mass mailing, if that's what you mean by 'inkjet.' But, to be fair, I don't really know a damn thing about printers.

Hey gang, So I'm just brainstorming here, but here's my situation: as a wholesaler I've been marketing to probates for a few months, about 150 pieces sent out, and 3 responses. Not bad. Wrote on one with a partner, they got a better offer however. But now as I'm trying to get the ball rolling working in the 'on market' traditional real estate world, it occurs to me that I might be passing up a major opportunity here. While in 100 houses there might be a few who want to sell for cash and quickly, the majority are probably willing to take a little longer and sell the property for top dollar. So, assuming you could do it professionally and offer all the affiliate services of clean out and contractors and whatever else they need, and, should the want a cash offer, you can ALSO offer this, it seems like a no brained. However, I'm wondering if people think there is some violation of professional decorum in doing this? Or if any agent does it and does it successfully? Thanks in advance. Best, JTM

@Adam Dassie It's not all about cash flow, and depending on the investor you'll find different strategies. In some areas people are happy with the long term play, what this could turn out to be, and you'll just slowly be building equity. 15 years out you might feel like it was a great move.

As far as the numbers, I'm not really sure because they're not all there. Obviously you'd use property management at, we'll assume 10%, so another $120 p/m, now we're at $865, and then stick away another 10-12% for CapEx and repairs, so call that $140, now we're at $1,005, but there's still a few variables.

This is a single family, I assume, and is it common in the area for the tenant to pay water and sewer and also care for the property? (It often is, but not always). If that is the case, then you might even be looking at around $200 a month. Again, not cash flow to retire on, but think of it as an investment account with pretty hands off management.

Also, the fact that homes sold lower and were then rehabbed may actually help you out in 5 years if the finish level in the area was brought to a higher standard. Might turn out to be a pretty nice block, but that is speculation. In any case, hopefully a stable neighborhood will keep up with inflation and the value of the home will continue to rise as the debt on the property continues to decrease. 

I'd hold on to it. Worst case scenario, sounds like you'll be breaking even.

Best,

JTM

Thanks for the input everyone, and great insights. I was waiting for you to weigh in @John Thedford, thinking any topic with 'wholesaling' will pop up in your alerts ;)

And I guess what I'm going to continue doing is both. Sending out my second mailing on all my probate leads (just finalized yesterday), and I'll keep at it, but due to budgeting I might have to stick with postcards straight through instead of using some other slightly more expensive pieces.

As far as working as a traditional agent that's where I'm putting a lot of energy at the moment and will continue to. Basically my plan is to run the businesses in different areas. I'll continue to market for wholesale deals in Milwaukee county, while I'm going to start some old school marketing, door knocking and chasing FSBOs, in the lake country area. Like you said, @Jay Hinrichs, there's a lot of low value properties in certain areas here, specifically Milwaukee county, but the suburban areas could be a gold mine for an agent, and I know several that do very well.

And these are both cash strategies for me, where my money will go as soon as I'm making it is into rental properties, and I currently have different savings categories, with one being the down payment for a first property (assuming I don't find a convenient sub2 or seller finance before that).

Thanks again everyone, and happy investing!

Best,

JTM

I'm trying to find a way to market it to, as I'm in a similar situation. I don't know about your state laws with respect to marketing, but I don't see why it'd be required there, however I would disclose early and make it clear. I've been trying to find ways to approach the situation with some of my leads lately, but I think if you market as a cash buyer (implying discount), they won't follow your conversation towards listing the house. 

With one recent lead, however, (off a cold call to a vacant), I made it clear right away and said depending how he would like to proceed we can go two routes, then I clarified them, and he wanted to consider the cash buyer route, so I gave him a picture of that.

Obviously, however, if you go for a cash buy and then say "no, you don't want to sell cheap? Well I can get top dollar for your house on the MLS!" there is a conflict of interest and an immediate breakdown of trust that makes of that an impasse.

Anyways, I'll be tuned in for others experience.

Best,

JTM

Hey @Trey Foradory. From what I can tell, there's no great, sure-fire path to finding it. I've used spokeo and intellius, and frankly, both seemed a bit useless as they didn't have current address or the 'current address' they provided was incorrect and my mail was returned again. I currently have about 20 pieces of return mail that I need to track down, and a local wholesaler told me she has good luck with peoplesmart for about $60 a year. Otherwise I don't know all that much about skip tracing, but know that's it's a little more expensive per search because you're hiring a professional to track someone down. I bet it's more reliable and they know what they're doing, but the value also costs more. For me, I'm going to try that peoplesmart I just mentioned and see how it goes.

Best of luck,

JTM

There will be a handful of serious buyers at any REIA meeting, and you really only need a few. I wouldn't spend time building a list of a hundred, just find a hot deal first.

rentometer actually seems to be pretty accurate in my market. Otherwise you can always talk to investors and call for rent signs, to me doing that just feels more accurate since you're getting it from the source (or one of the sources).

Best of luck,

JTM

@Matt Costello Hey! Welcome to BP! Milwaukee can certainly be great for cash flow, but it seems to me when people are talking about 2 1/2 or 3% rules they mean C areas. The nicer areas still make good investments, but perhaps more of a long term play. Depends on your investment strategy. Where you are looking there, near the campus, rents tend to be some of the highest in the city (except, perhaps, for lofts downtown and such) because it's almost entirely student housing. I'd call it B to B+ because you are dealing with students, often young ones so close to campus, who can put some real wear and tear on your property. Previous poster's analysis of areas seem pretty on point. Bay View I guess I'd call B+ to A, lots of young adults with careers and family, and currently a very desirable place to live. Downtown is A, with lots of professionals, but the property values to go with it.

PM me if you would like to get on the phone some time, I'm an realtor and trying to work with more investors in the area.

Best of luck,

JTM