All Forum Posts by: Lucas Machado

@Nick Campanella

(1) Look up subject property on county online database.  Note: year built, living area, lot size, beds/bath, last sale price/date, home features (pool, waterfront, garage).  County database is not perfect, but gives a basis to understand the property.  Also look up listing history: if a property was listed and it didn't sell, most likely it was worth less than list price.

(2) Look up "comps". Find recent close by sales and active listings, similar to your property. Determine how much subject property is worth after repairs (so called "After Repair Value" or "ARV"). More of an art than science, but look at all available data.

(3) Make repairs estimate to establish ARV.  We use $10,000 for light rehabs, $20-30,000 for medium rehabs, and $40,000 for full rehab.  Adjust based on square footage.

(4) Apply Formula. Many investors use (.70 x ARV) - repairs = Offer price. Not a golden rule, but it's a decent guideline. For rentals, conduct a capitalization rate analysis. Just google cap rate for a detailed explanation (it's an ROI measure based on financial investment).

That's how we start working up numbers.  If you and seller are worlds apart, no reason to go further.  You can't create motivation to sell.  If you and seller are in range, dig harder into the data.

Welcome @Eric Jacobs!

Welcome @Aleksandr Bezgin!

Welcome @Jonathan Phillips!

@Udell Wiggins you may also want to get on some wholesalers' buyers lists as they may have rental properties that are not on the MLS.

Welcome @Anaisy Alfonso! When starting out with very little capital, the first step is to focus on low cost methods of building up your capital. Most common routes are either to start out as a wholesaler or an agent. Buying to fix and flip or hold is more capital intensive - you'll either need your own capital, or know someone with money who is willing to lend you money or partner with you on deals. Best of luck on your journey!

@Travis Stok There's plenty of great advice in this thread (even for me, and I've been around for a while!).

One other point to consider is volume.  I can't speak for Utah, but South Florida has substantial competition and a small amount of direct-mail marketing will not close one deal per month (as noted earlier in the thread, you didn't define deal so that needs to be fleshed out).

What is enough mailing?  I can't answer that directly.  We close a deal once every 40-60 leads (but our current goal as a business is to improve deal conversion to get to a deal every 20-40 leads).  We average around a 1% response rate when you sum up our lowest and highest response rate marketing (which depends on the type of mail and type of seller).  To close one typical fix-and-flip per month for around 20-80k profit, I would expect you need to mail around 4,000 leads per month (depending on your methods, that will cost between $2,000-$4,500).  That may sound like a lot, but if you wish to have deal profits of $600,000 per year spending $48,000 (or more if you are also doing online) in marketing makes sense.

Welcome @Aida Hofmann!

Welcome @Kay Rock! Hope you get that duplex!

Welcome @Lennon Lee! Joining BP is a good start - lots of good people on here willing to give advice...But I'll second @Account Closed's suggestion - check out some local REIA's and investor meetings! I see you are from Miami, so you may want to check out Dade REIA (www.dreia.org). There are tons of other meetings in the area as well!