All Forum Posts by: Judith Sullivan

Hi Michael,

 Courtney's idea is easiest--work with wholesalers. If you buy from them, they will love you and bring you deals. Win-win for everybody. 

Alternatively, you can find your own. 

It seems crazy, but just because there isn't a sign in the yard doesn't mean that that the owner doesn't want to sell a house. Drive around, find properties that look a little off (overgrown, in disrepair, vacant, dusty yardcar with flat tires etc). Then get on the county or city GIS, find the owner's address, and send them a note. 

--Don't type it

--Don't include a resume or explain your position

--Don't suggest an offer

Hand write: 

Hi, my name is Michael Lee. I want to buy your property at "ADDRESS". 

Please call me. "PHONE NUMBER"

Thank you, 

"Your signature"

Response rate on handwritten yellow letters is about 10% and up to 30% in markets that don't have a strong investor community.

Some people will call back because they are curious and they'll ask "What's your offer?" Don't offer. Ask if it needs repairs and when they want to sell. Many will be motivated sellers who consider the house a problem and just want a quick solution. Not everybody will want to sell for what you want to buy, so move on if it's not a good deal. And don't forget to ask if they'd be willing to take a payment. Many are willing to offer seller financing. 

Good mentors for this method are Ron Legrand (https://www.youtube.com/user/ronlegrand) and Michael Quarles (http://michaelquarles.com/)

I purchased 10 properties last year, and 8 of them came from hand written yellow letters. It's a solid method and eliminates the competition of the MLS .

Last tip--don't involve an agent. Sellers want to deal directly with you, so be real, be on time, and be honest. 

Happy investing! 

This is a real life example from the area I live in VA.

$200,000 buys a modest 3b/2b townhouse. 

$7,000 down

$8,000 closing costs

HOA $200 per month ($72,000 total)

Insurance $500 per year ($15,000 total)

Taxes $1500 per year ($45,000 total)

Estimated repairs over 30 years: $33,000 (replacing appliances, HVAC, flooring etc)

Total repaidover 30 year term at 4%

$331,708

Plus all expenses 

$511,708 or 1,421.31 per month for 360 months. 

Appreciation is probably null when you consider inflation is neck to neck. 

Rent for this house currently $1,500 but will obviously increase. 

I think the best you can hope for is breaking even on a retail house with a traditional mortgage. 

Maybe you're right! But my goal was to get my system down. And part of that is building the right team. This is the third law firm I've worked with in the area, and I do like this one the best because they have a great attitude. And they don't give me any flack about the types of deals I want to do. I've spoken to a variety lawyers or their paralegals, not all of them are interested in Creative Real Estate. Many lawyers don't even do private real estate transactions. So you are right, I do love this one paralegal but that is because I've spoken to so many others that are hard to get along with. 

I never would have thought finding a good lawyer would be such a difficult part of being a real estate investor. 

What's your biggest holdup to getting deals done? Contractors? Realtors? 

Mine is definitely the legal side. In NC you have to go through a lawyer (but actually the paralegal does the work) to close, not a title agency. 

I love the firm we've been working with but they are small and don't move quickly. We have 4 deals to close and it's been about 6 weeks. Finally got one closed last week. I'm thinking that I am going to have to take part of my business to another law firm just to get it done in a reasonable time frame. 

What slows your deals down? How do you overcome it?

Smh. 

It seems that you need to know a bit more about me to get my point: 

I'm 30. I have 4 kids under the age of 8. I've run 4 successful (read: money making) businesses since I was 21. From age 13-21, I primarily made a living as a performing musician playing gigs with a "for profit" band. 

By the age of 19 I completed 2 associates degrees. I transferred to a university and completed 2 MORE degrees (in Music Education and in English). I graduated ahead of schedule Magna Cum Laude. 

I got married at 21. 

I enrolled in an online master's degree program in Library Science right before getting married. 

I moved to another state because that's where my husband's job was. He already owned investment properties. 

At age 21.5, I found out I was pregnant. Finished my master's ANYHOW. 

Became a freelance writer and completed over 300 articles for the company wisegeek.com and stayed home with my little boy. 

Quit wisegeek to be an assistant to a real estate agent. We have 3 investments bomb big time, back to back. I was pregnant with my second kid by this time. 

Also played music in church and sang in a barbershop choir for fun.  Had to quit because hubby had to take a second job to cover investment loss. I couldn't take a "regular" job because of my little kids. 

I discover the magic of Ebay. 

Resell the crap out of women's clothing I buy from thrift stores. Husband quits his second job because my income is great. 

Pregnant with #3. Yay!

Life is better now, easier with the extra income, we recover from the DEVESTATING loss of  investments gone wrong. But we're gun shy. I'm overworked and overwhelmed. Three little boys is no joke, even though we definitely want a big family, there is nothing that can prepare you for the job of raising kids. 

2015--we talk about investing again. 

2016--We pull the trigger. I go full time into real estate investing. Yellow letters. Talking to sellers. Overcoming FEAR and lots of negative talk from friends. People yell at me over the phone for sending them a letter in the mail because HOW DARE I (lol) and we buy 6 properties in 6 months. BAM. All this while breastfeeding BABY #4. And since then, we've added five more. 

So dude, don't tell me I have a victim attitude or that I clearly am one of those people who gave up on my dreams. You don't know what you're talking about. 

Having an education has given me MORE opportunities, not fewer. It's not a cop out, it's broadening my path to success. 

I'm just sorry I didn't squeeze in a tour of duty. Man, I'd love to have added "veteran" to my list :) So many more doors would open. 

hi! go to https://www.fbo.gov/ which is Fed Biz Opps . They post open contracts there. Look at the "Getting Started" tab. Good luck!

 You sound like my peers when I was a teenager. The ones who wanted to get into music school but couldn't read music. They'd all say "Buddy Rich couldn't read music!" But Buddy Rich was a world class drummer DESPITE the lack of reading skill. Not because of it. 

Sure, you can be successful without getting a college education. But it will despite your lack of education, not because of your lack of education. A college degree will open more doors, as well as a military background. At 14 --or even 20--it is easy to go to college. And if someone recommends that path, it isn't because they don't think you can be successful otherwise, it's because they are older and realize that life throws things at you that makes everything harder. Kids. Relationship problems.  Illnesses. Depression and anxiety. Just other people being jerks and screwing up yoir plans. 

So if there are things you can do while you are young to make the path to success easier, definitely do them. You never know what you will need. 

You should try contacting owners of properties directly. Drive around, pick properties that make sense for you, and send the owner a note. Look up the contact info on the county or city property site (GIS). It doesn't matter if there is a "for sale" sign in the yard or not. Go ahead and contact owners. It will be a much faster path than waiting for a listed deal and you'll have a lot less competition. Be prepared for owners to be suspicious and most people won't respond anyhow. But keep going and you will find a deal. Off market is the way to Go! Alternatively, find some wholesalers in your area and let them do the hunting for you. 

Foremost insurance, builders risk or "Basic three" policy. Vacant is more expensive than occupied. Just got several quotes from that company.

I second the person wgo says do 4 years in the Army and then house hack with a quad plex. Get a degree through the military. 

Don't underestimate getting a college degree and that title of "veteran". A lot of doors open for you with those 2 things under your belt. Want to be an entrepreneur? Be a vet so you can run a "vet owned" business. You get first priority on government contracts. 

Want to get capital from others? Get into the school with the biggest reputation you can and join a frat and learn to talk football.  But don't fool around and don't waste your time. Get a job. Take more classes. Finish early with a focus in finance, engineering or some other seriously marketable skill. 

It is a huge mistake to say "I'm going to he an entrepreneur, I don't need an education." You never know what's going to happen and you may find yourself in a situation where you need that stable job with the insurance and paid leave.

It will be nearly impossible to go back to school once you get married and definitely after you have kids. So do it now. Don't be one of those people who wonder if you should have gotten a degree. It's not that hard.

Seriously think about the military option.  Don't throw it out becuase you're afraid of discipline or following orders or whatever. It is worth it. 

And yes, flip stuff on eBay. And when you're making $5000+ per month don't think that this is all you need to do. Go to school anyway. 

Hey, you asked for advice, right?