All Forum Posts by: Lenzy Ruffin

Don't worry about finding solid wholesalers. Learn how to analyze properties. When you say "find solid wholesalers" that implies finding someone you can trust to bring you true deals. Trust no one. Once you know how to analyze properties, you'll know what a deal looks like, what a no deal looks like, and what a "there's no way these numbers are legit" deal looks like. At that point, you'll know who the professional wholesalers are based on what they present to you.

Just feed good data into the 70% rule and it will take care of you. Good data means true repair estimates and legitimate ARV estimates. If you use the most optimistic numbers for repair estimates and ARV, that's probably not how it will play out once you own the house.

https://www.biggerpockets.com/renewsblog/2014/02/1...

I have a property under contract and now I need a funding solution. I have a self-directed IRA that I thought I could use, but I just learned the hard way that there's quite a bit more to it than they tell you when they're promoting them. The property is under contract for $126K, my contractor gave me a repair estimate of $37K, and the ARV is conservatively $260K.

I don't have enough money in my IRA to purchase the property, but I have more than enough to pay for the rehab, closing costs, etc. My plan was to borrow the acquisition money and partner with my IRA to fund the deal. I've since learned that there are recourse loans and non-recourse loans and that it's unlikely that I will be able to use my IRA the way I thought I would.

So now I need to find a solution to fund this deal. I thought I had plenty of money to put into the deal via my IRA, but it doesn't seem like that's going to work and the IRA money is the only money I have.

If you don't find anybody, give Legalshield a try. I've needed to ask a few legal questions here and there over the years and most of the time, never got the help I needed. A couple of months ago, I needed some answers on how probate works and I decided to give Legalshield a try and it definitely works. You call the number they give you and tell them what you want to know and a local lawyer who specializes in that will call you back. I've only used it one time, so far, but it worked well for me. I'd heard good things about the service from a few different people and what I experienced was in line with what I was told by the people who recommended it to me.

This will get you started.

https://www.biggerpockets.com/renewsblog/2015/01/3...

Look at it this way, Tre. That house that's been vacant for ten years and the houses immediately surrounding it that have been occupied and maintained during that period probably all have the same assessed value. But are those properties worth anywhere near the same amount? The assessed value has no relevance to you as an investor. Assessments are done on a given geographic area every few years (how many years varies by municipality). They don't go out and look at every house. The assessed value has nothing to do with the condition of an individual property. The house in perfect condition and the house next door that looks perfect on the outside, but has three feet of water in the basement every time it rains will have the same assessed value. Investors, homeowners, and renters are evaluating an individual property on its own merits. The assessed value has no meaning to anyone other than the tax office. 

Also, $40K doesn't seem like enough rehab to correct ten years of neglect. I don't know your market, but if that's an estimate you came up with on your own, I'd suggest you ask a contractor to give you a free, ballpark estimate on what repairing a house in that condition might cost.

Here are some links that will show you how to evaluate a property either as a flip or as a rental. You shouldn't buy anything (whether from a wholesaler or directly from a homeowner) until you run the numbers using these rules and determine that it's a true deal and you will make money. There are lots of wholesalers who will try to sell you a "deal" that is actually a property they were foolish enough to put under contract for too much money and now they're looking for a greater fool to unload it on. These formulas protect you from being that greater fool, as long as you input legitimate comps, rehab costs, and rent rates into them.

https://www.biggerpockets.com/renewsblog/2014/02/1...

https://www.biggerpockets.com/renewsblog/2010/06/3...

https://www.biggerpockets.com/renewsblog/2013/01/1...

You can run the numbers on the property that is being presented to you just so you get some practice doing it, but I would suggest you not even consider purchasing that property, regardless of what the numbers are. Two hours away from your house is just too far. If you live in a market where you don't have any choice but to invest somewhere non-local, then you should be making a deliberate choice to invest in a particular non-local market after you've done your research and put the necessary things in place to enable you to invest there. But don't go two hours away just because somebody is selling a house there. Here are some links that will help you choose a market to work in.

https://www.biggerpockets.com/renewsblog/2010/7/10...

https://www.biggerpockets.com/renewsblog/2014/04/1...

I don't read where you are making any promise to do anything. Saying that you will make a cash offer is not the same thing as saying that you personally will pay cash for someone's house. And this is a marketing letter, not a contract. When you put a property under contract, you're making a commitment to buy it and if you don't follow through, you've misled the homeowner. In a marketing letter, not only are you not committing to buying the house, you're not even committing to making an offer on it. There are plenty of reasons why you might screen out a property and decide not to make an offer on it after talking to the homeowner. I don't see anything wrong with the language in the letter.

I don't have any books, but here's some BP links that should keep you busy for a while.

https://www.biggerpockets.com/renewsblog/2013/01/25/how-to-start-wholesaling-getting-past-the-education-and-into-the-field/

https://www.biggerpockets.com/renewsblog/2015/01/31/ultimate-beginners-guide-real-estate-wholesaling-2/

https://www.biggerpockets.com/renewsblog/2014/02/14/70-rule-bible/

https://www.biggerpockets.com/renewsblog/2010/7/10/new-investors-focus-target-markets/

https://www.biggerpockets.com/renewsblog/2014/04/11/your-target-real-estate-market/

https://www.biggerpockets.com/renewsblog/2010/06/30/introduction-to-real-estate-analysis-investing/

https://www.biggerpockets.com/renewsblog/2013/01/19/real-estate-math/

http://www.biggerpockets.com/forums/93/topics/54108-buyer-s-list-how-to-

Check out this link regarding guru programs, Gregg.

http://www.biggerpockets.com/renewsblog/2014/05/17/dirty-truth-guru-programs/

To summarize, all these programs work, but it doesn't mean the one you paid for will work for you. Every real estate business is different and the system you paid to learn may not work for you. That's the risk with these programs. It's not that they don't work, you just don't know that the program you paid for is going to work for YOU. I'm glad you found BP after only going in the hole for $6300. I, and many others on here, paid A LOT more than that before finding BP. 

To add to what @Ayodeji Kuponiyi said, $6300 is a good size marketing budget for a direct mail campaign. Here's a link on direct mail.

https://www.biggerpockets.com/renewsblog/2014/04/09/direct-mail/

BP teaches you how to generate the leads as well as how to handle the calls when they come in. All for free. Figure out what investing strategy you want to pursue and then listen to podcasts that focus on that. Good luck, man.

This will get you started.

https://www.biggerpockets.com/renewsblog/2010/7/10/new-investors-focus-target-markets/

https://www.biggerpockets.com/renewsblog/2014/04/11/your-target-real-estate-market/

You can also use city-data.com to do get all kinds of data on different municipalities.