All Forum Posts by: Lucas Machado

Aryelle Collins As mentioned, plug your criteria (property type; equity; age of owner) into Listsource and it will provide you a list. Since you are targeting tired/retiring landlords, have you considered eviction filings? Eviction info is often available online. It will require some manpower to process the court data into a mailing list; but probably worth it given your narrow focus on older landlords. Property assessor site also has last sale date; so you can exclude any recent purchases. In the eviction niche, consider avoiding all corporate ownership and owners of more than 4 properties.

@Matthew Simmons The MLS is certainly competitive, and with properties in good condition, you are competing with a large pool of buyers. I have gotten good deals off the MLS, but only after considerable labor and hundreds of offers (South Florida is competitive). Off-market has worked better for our business. The advantage of MLS is that it is free however.

As to your question: "Is paying 90% of market for a listing on the MLS pretty much automatically mean it's not a good deal?" You can't look at it this way. I've seen good deals sell above list price, and bad deals below list price. It depends where list price is set. The only takeaway for me is if it sits on the market for a long time at list price, list price is too high. The more important question is: where does your offer stand relative to comparable sales and your rental return goals.

In your post you suggested you are conservative on your cost estimates and return goals.  That's not a bad thing per se; but if you are conservative on every measure, are you still making a competitive offer?  When analyzing properties, if the seller insists on a higher price, we ask ourselves if we being overly conservative.  It's nice to remove 100% of risk, but you can't pass up strong deals because your requirements are too strict.  Navigating and mitigating risk is good investment; assuming every cost will be high and insisting on high returns is not necessarily good risk management.  It's a tough line to walk, but an important one if you wish to close deals in a multiple buyer situation.

@Jameel Swinton With absolutely no capital, credit, or real estate experience, you are not going to qualify for any funding for a fix and flip (at least nothing I'm familiar with). Your best option is to build real estate contacts on BiggerPockets and at your local REIA that can partner on your first deal. You will need to do the leg work in finding the deal, of course, and will need to give 50% or more of the profit to your partner since they will be taking the entirety of the financial risk and will essentially be your mentor. As to finding the fix and flip deal with no funding, you can scour the MLS, Craig's List, network, join wholesaler mailing lists, cold call, and door knock.

@Gleason Jones Welcome to the world of real estate investment!  As others noted, the county normally maintains a website where you can enter property address and obtain the mailing address of the owner.

Are you also targeting owner occupied (from your post, it sounded like you are)?  Nothing is impossible, but targeting owner occupied with direct-mail is against conventional wisdom.  Direct-mail investors often don't target absentee owners unless they live out of state.  I tested owner-occupied violations leads in Miami-Dade County, and had literally no call backs in ~500 letters.  Just make sure you think out that strategy before sinking too many stamps into owner occupied.

Congratulations!

@Account Closed Don't limit yourself. Why can't you buy a house fast for cash in any condition? Whether rehabbing or wholesaling, unless you are lucky enough to be wealthy, you need a financial partner starting out. Go to your local REI (or look on BP) and you can easily line up 5-10 cash buyers / deal partners that finance deals. That should take 2-6 weeks max. Honestly, if you contract a good deal it could take 1 hour. If you are willing to share your profits, whether in the form of profit sharing or interest, there is no reason you can't do this now.

Also - do not put this decision off.  Google prefers old domains.  You can make a gorgeous optimized site, rich in content, but it will not rank for months because of time.  Our site began in February 2016, and we are just now beginning to enter pages 1 - 3 on key searches.

Your website should have: (1) conversion forms - level 1 and level 2 forms; (2) about us; (3) testimonials; (4) blog; (5) links to find you on social media outlets.  I have no financial stake in InvestorCarrot, but it is affordable and will give you the basis of an effective site.  We use InvestorCarrot, but spent many hours customizing our site (I am a computer programmer by trade).  I recommend trying InvestorCarrot for 1-month to get a strong handle on what a real estate lead optimized site feels like.  If you want to build your own, you will know what to do then.  The other issue with DIY; how much time can you commit to maintaining the site?  We are real estate investors not website managers, so prefer a vendor to handle the day-to-day of website maintenance and let us focus on the day-to-day of real estate decisionmaking.

@Antoine V. Have you considered a probate campaign? This is our most successful marketing in terms of ROI and response rate. We do the entire process in-house with relative ease, following the processes outlined by probate expert Sharon Vornholt at louisvillegalsrealestateblog.com.

@Drew Dordan

First, there is absolutely no reason to not customize your letter and/or postcard.  Even for a DIY campaign, you can use a laser printer and Microsoft Excel / Microsoft Word to create customized white letters.  I run a probate campaign around 500 business letters per month using this method.  Response rate around 1.5%.  I use a small local team of a letter folders/envelope writers for .20 per letter.

If you are doing the "hand written" yellow letter (which is huge labor but high response - close to 2% in my testing), you can simply customize as you write.  If you are vendoring yellow letters, customization should be easy for your vendor.

As to customized postcards, this will need to be done by a professional vendor.  I personally tested customized v. non-customized postcards.  My response rates on a generic "We Buy Houses" postcard was .25%.  My response rate on a customized postcard calling out the name of the owner and property is .5%.

I want to stress direct-mail does not really work like "Mail 100 letters get 1 deal."  You must view it as a long-term investment.  If you mailed 1,000 letters, that costs say $1,000.  If it were that easy to make $40,000 (a good fix and flip deal) everyone would mail 10,000 letters and make $400,000.

Test everything.  Have a script ready for your calls and practice your script.  Have voicemail ready for calls you miss. Set-up a follow-up system for when/how to follow-up on your calls over the course of months/years.  Be ready to explain your end-game to the call of what you plan to do with this property.  Getting the call is step one; being ready to execute is just as hard/important.

@Andre K. Sounds like you are just beginning your real estate adventures - otherwise, I apologize for some basic points.  Have you determined how you will market this property, if wholesaling is your plan?  It's related to your question regarding pricing.  If you have a good deal to market from $0 to $150,000 you likely will find a buyer (at least down in South Florida where buyers are plentiful).  In the $750,000+ ranges, you need a strong network/buyer to complete that wholesale.  There is also a credibility issue: are you able to convince a buyer to enter a contract with you concerning a $1,000,000 asset?

With limited marketing budget, and just starting out, focus on the prices ranges that will be more effective.  Once you close a few wholesales, start looking in the $1,000,000 range!  

Beautiful!  Congrats!