All Forum Posts by: Jeff Warner

Originally posted by Karen Parker:

I usually get comps from several different sources. Zillow (said to be not that acurate) and B of A's website are two that are very quick to pull up and between the 2 you can get in the ballpark. At least enough that you're not over valueing a property by $50K. There are several other similar out there as well. I recommend using several.

B or A huh? I learn something new everyday on this site. I'll check that out. I've also used cyberhomes, similar to zillow but it does not show the distance from the property so you have to double check everything and make sure it's not 20 miles away.

Jeff

Originally posted by Tod Radford:

Unfortunately, title companies do not track sales prices, at least officially. Finding a realtor that you can trust, would be an important addition to your team, at least in TX.

That's too bad. Here in OR, I can get comps from title companies but not all of them are willing to look up the info even though they have access to it.

Jeff

Originally posted by Randal D:

Maybe a silly question - but is there any risk in asking a realtor for comps - if they are investor savy, then they might jsut attempt to swoop in an buy the property out from under you?

I personally wouldn't worry about that. Realtors look at property all day long and don't buy. Some are Investors, most are sales people.

Another thing is, if your getting comps on a property then your either already in negotiations with the owner of the subject property or have the deal under contract. You may be able to get comps from a title company out there but I'm not sure.

Jeff

Originally posted by Randal D:

Thanks Jeff, that sounds like some good advice, especially for a newbie like myself. I just now starting to look for properties. So was it the 170K number which the banks were buying at? Also, I suppose when you went ot the county website, you were able to see the new owner as being the bank and that told you it was the bank buying at that inflated price?

Randal,

It was the 171k (that's the average anyway, some were higher) that the banks we're buying and yes when I went to the county site it showed the bank as the owner of the property.

I know nothing about TX Real Estate so I would also take Tod's advice into account and maybe have a few Realtors pull comps for you, then compare those numbers.

One thing you could do is tell the realtor to pull ALL sales within a one mile radius of the subject property (not just comparable sales) over the last 3 months, then weed out all the irrelevant sales on your own. Also, tell the realtor you DO NOT want bank purchases in your comps as that has no influence on market value.

Jeff

Originally posted by Rich Weese:

I also like having another level between tenant and me, the owner. I don't want to get caught up in sob stories from Tenant. I prefer being the bad guy, that mgmt can blame me for the decisions needed.

Rich you just summed up how I feel about owning rentals with the statement above. I don't know how comfortable I would be with tenants knowing I was the owner, and I certainly would not want to go around and collect rent. I know it can improve your bottom line but for me personally I think it would increase my stress level more then the extra money could benefit.

I tip my cap to MikeOH for being able to do it and stay focused, profitable and sane. Good job.

Jeff

I just wanted to point out something that happened to me the other day that might help people just starting out. I was working a new area and negotiating a deal with a seller so I made a phone call to get comps on the property.

When I opened up my email to check the comps I did not believe the value the comps were showing so I went to the county site to see what moron was paying these ridiculously high prices. Comps showed the property value at $171k, from working the area I had an idea and figured it would be closer to $120k .

When I went to the county site, the sales were on record and legit....but they we're BANKS buying the properties when they went to foreclosure. This is an example of someone not giving a CR@P about the quality of information they give you. The only reason I point this out is to alert newbies to learn an area so that you can spot bogus comps and save yourself from looking like a jack @ss to your buyers. Getting comps from a realtor can be good but VERIFY the info so that you can catch a problem before your buyer does.

Jeff

Originally posted by Carl Kahkonen:

What would a fee be for assigning a wholesale deal versus doing a double close on a deal. Would you make more money doing a double close versus assigning.

That all depends on what your buyers are willing to pay. There is more margin on some deals then others.

A general starting point for a rehab is 70% of ARV minus repairs. If your buyers are looking to buy and hold they may buy using the 50% rule, other landlords don't use that rule (all though I think they should).

I personally think it is good business practice to let your buyers make the bulk of the profit, after all they are taking all the risks. Take care of your buyers and they'll be lined up and ready for the next deal you have. That being said, you can still make good money Wholesaling. Some deals you may make $3k, others there will be tons of margin and you can pocket $10k, it just depends on the deal.

A double close is only necessary when a bank is involved, such as a REO or Short Sale.

Jeff

It's good to go out and look for deals but I think you should start look for buyers at the same time. Just because you don't have a deal in the works does not mean you can't find buyers. If your timid and hesitant to ask for a rehabber or landlord to add them to your buyers list then you'll come off as inexperienced.

Learn how Wholesaling works and be confident, then go find buyers. It's HOW you ask, not asking that is the problem with building a buyers list before you have deals. A good way to start is by saying "I'm adding to my buyers list and wondered if you would like me to call you the next time I have a truly great deal?" - or - "I've got a great marketing program in place and I'm coming across some great deals, would you like me to call you next time I get a great deal?"

There is no harm in asking. A true Investor actively seeking deals will be happy to have you add them to your list.

Jeff

While I don't own any rentals at the moment I know several people who do. I have a friend that's a contractor and does all his own rehabs, property management, repairs, etc. He doesn't have 50 but with how efficiently he runs it he certainly could.

I also know a guy that has several rentals in the same area and he is constantly working on the properties. The difference between the two is the first guy I mentioned can be "hands off" to a point because he takes the time to make his rentals clean and reliable. When he rehabs he goes through the whole house and makes sure everything is in working order. The other guy cuts corners everywhere he can trying to save money and then ends up spending all his time fixing things. Both are contractors.

That said, if done right and managed efficiently I could see the right person managing 50 or more units alone. I personally wouldn't want to collect rent and wouldn't mind paying for management. Just my opinion.

Jeff

Originally posted by Norm Chrostowski:

Thanks, me too.

I agree about the motivated thing. For me, it just been other obligations I've had to take care of, so lately I haven't spent as much time as I would like. (which burns my A$$). I want it done yesterday, know what I mean?

I did however get a separate phone line in for calls from my ads and mailers, and ordered my bandits signs, so they're on the way. Baptism party today, and I got stuck building a deck for my brother inlaw, starting Monday! Again SH@#!. Just have to do some work at nite, after the "hard" labor.

I know what you mean, things always get in the way and take up time. You could have the number forward to your cell phone and answer calls in between building the deck. Just make sure you always have a pen and paper or notepad and you'll be fine. I always do business on the road and just pull over when the phone rings from a number I don't know.

Stay on top of the deal, your getting close. You've got some sharp short sale investors helping out too so it's just a matter of time. I myself am just learning short sales too so I'll be watching the thread and learning as you go. Good luck.

Jeff