All Forum Posts by: Michael R.

@Adonte Lipsconb the best way to get in touch with him is through his website, marketlikeawholesaler.com.  I filled out a form on there with information about where I'm located, and the size of my campaign, then someone got back to me soon after.

@Mike Percy  I did a ton of due diligence on answering services since I was also really sceptical.  I thought, like most people do at the beginning, that I was the most qualified person to take the phone calls from my campaigns, and that nothing was a more important use of my time.    Now that I've made the switch, it turns out that people that call in and speak with "my office assistant" are either motivated to sell or they're not.  If they're motivated they'll answer any questions necessary...plain and simple.  

The most important thing I've found is that the answering service simply provides a consistently answered phone call, and follow-up prep tool.  We don't make a pass-fail decision based on the notes in the CRM.  I still call back within 30 minutes of the original call.  The difference is, now I call after reading details about the situation, I've had some time to pull comps, and I have a couple of solutions in mind before I get on the phone.  

Call Porter is an answering service, but, unlike PatLive, their people only take Real Estate related phone calls.  The CEO at Call Porter spent weeks with his employees teaching them every RE scenario they can expect and the questions to ask.  What that means is their people are having conversations with only homeowners all day long, and they know ancillary questions to ask as they work through the script to dig a little deeper.  I've heard people having good experiences with PatLive too, it's just my understanding that they take phone calls for all sorts of businesses as well.  The person answering the phone is an admin at a doctors office one minute, and your assistant the next.  

I don't know how people do the marketing, AND the phone answering, AND go to all the appointments themselves, for a decent-sized campaign.  My time has been best spent doing follow-up and being face-to-face with people who need my help.  

At the onset I was pulling my own list, printing out letters, writing in addresses on the letter/envelope, and sending them out as fast as I could (not nearly fast enough).  Then I would also be the one answering the phones, and going to appointments.

Now that we're running like a business, we work with @Jerry Puckett and could not be happier with his services (a true veteran of the direct mail biz).  He pulls a leads list, populates our CRM, and stuff-stamp-sends a series of yellow letters to the leads.  We also use Call Porter's answering service, and all we do now is show up to appointments.  It feels amazing to have the front-end automation and only having to focus on meeting with sellers.  

 I have nothing to gain by this review, just a very satisfied and grateful customer.

@Dan Williamson my partner and I agreed that there were just too many unknowns to take the risk.  I went back to the homeowner and laid out the other avenues they could consider to help them get out of their situation, apologizing that I wasn't able to create a solution for them.  I still think about them and wonder if everything would have worked out, but, again, had to pass on it.

Curious to know what you would have done?

@Jordan Moody when it comes to partnering on a buy-and-hold you can run it a couple of different ways.  One is to have someone bring the cash and the other one manage the property for a 50/50 split of the profits.  The other way is to split the initial investment 50/50, agree to have any rental property managed by a PM, and split profits.  You will cash flow less than self-managing, but you'll avoid the conflicts of who does what (can't take half a phone call, trip to the property, etc).  

Whichever route you intend to go, it's prudent that you lay out the terms of your partnership early, in writing, that you both sign and date, and let that piece of paper be the referee when needed.  

Not a lawyer, or CPA, and don't play either on TV.

All the best!

It all began with a net worth of -$75,623 (student loans, consumer debt, tiny 401k). I finally got over the fear of missing out in 2014 and decided to spend a weekend at the bookstore. Found Rich Dad Poor Dad which, like many, slingshot me into reading 10 other REI books in a matter of a few months (education). I prioritized learning how to analyze properties, practiced on 6 houses a day, until I found a great house-hack opportunity 5 minutes from my day job (education & discipline).

With about 2 grand in my bank account, I then took the maximum loan that I could, based on my balance, from my 401k (~$6500), and used it to FHA finance that duplex in June of 2015 (education & risk). I use the pay-as-you-earn loan payback on my student loans (5.5% interest) to help accelerate my savings rate (risk). A big factor has been setting a strict budget that eliminated things I don't really care about, allocated a portion of that spending to things I do like (eating at restaurants from time to time, vacations, etc.), and saving the rest (sacrifice & discipline). My girlfriend (now fiance) moved into the house hack and we decided to save all of her income for the entire year and live off of mine (sacrifice & discipline). I spent the better part of a year learning how to be a landlord, and dialing in my business to be ready to scale down the road (education).

In 2016 preparation + opportunity = luck and one of my coworkers heard that I was interested in buying houses. He had just inherited a home from his mother, and was very motivated to sell. I bought the house for 78k (owner financed with a 10% downpayment, 6% interest, 20yr am), rehabbed for 6k and rented it out. The same month we closed on a duplex 15 mins away for 159k (25% down) with money saved over the past year (205k appraisal). The property had amazing numbers since the out-of-state owner that had just rehabbed the place and got in over his head forcing a sale. 1 year later the SFR cash out refi appraised for 185k.

We still live well below our means in that original duplex looking for another house hack opportunity.  A portion of cash flow now funds direct mail marketing since deals are so hard to come by.  We also work very hard at our W2 jobs so our income has increased significantly to help support more purchases.  We've been fortunate enough to love what we do so that's a plus.

You'll notice a common theme of education, discipline, sacrifice, and some risk that led to the growth of our business.  No parental subsidies or gifts here, unfortunately.  I'm leaving out the sleepless nights, tenant headaches, and creativity that were all necessary as well.  Getting fed up and wanting it more than whatever shiny object came along was the thrust.  Make a plan, set a budget, and stick to it...you'll get there!

I received a call last week, off a mailer, from a very motivated seller two towns over.  The couple is 3 months late on their mortgage payment, and their daughter is living in a home a couple of blocks away not paying rent.  Their plan is to sell the home they're living in, kick the daughter out of their other house (she hasn't been paying the rent), and move back into that house.   I visited the home this past weekend and here are the details on the situation:

Public records:  3 beds, 2 baths, 2 car garage 1350 finished sqft, 650 unfinished

Currently:  5 beds, 3 full baths, 2 car garage 2000 sqft finished

ARV as a 3/2/2: $210,000 conservatively. A house 2 blocks away, with the same layout, not on a small lake (this one is) sold for $200,000 two years ago.

ARV as a 5/3/2: $230,000 (very tough to find reasonable comps)

Repairs not including what's needed bring addition to conform with building and zoning:  $15,000 conservatively (interior paint, carpets, landscaping, deck/floors resurfacing)

Outstanding Mortgage:  $158,000

Past due amount:  $4650

As we walked around in the basement the man explained to me that he finished the basement himself: framed walls, added electrical outlets, and closets to create two additional rooms in the basement along with another full bath.  He also added a kitchenette down there and he was basically running a business out of the basement.  There are full-sized windows in each room as the house is on a hill and this basement has a walk-out to the back porch and yard.  He told me he never pulled permits for any of the work he did downstairs.

The plan is to assume the mortgage, get it current, and either tear out the additional rooms or get them approved by the county.  Then perform the rest of the repairs and flip.   This could either be minimal headache to get the other rooms approved, or a complete demo of the work which could lead to considerable headache.

Possible case:  $220,000 - $15000 repairs - $5000 for permits after the fact + fines - $162,000 owed - $10,000 cost to sell = $28,000

Are there too many unknowns here and too much risk for the return on this deal?  

It's fun to speculate about what will end up happening to the market and when.  It's also easy to let that speculation become an excuse to take no action, thinking that you'll be able to time a crash and take advantage when it happens.  Massive action and creativity in finding motivated sellers of all sorts of Real Estate, along with persistence, will continue to be the name of the game.  

This may be a good exercise for all, in their respective markets:  Take a look at the market sale history of the micro market(s) you invest in all the way back to before the crash.  I noticed, in my market, that great deals were bought/sold at every phase of the market cycle.  Sure there were some "home run" deals made here and there after the crash, but I wouldn't have spent 2 years waiting around to take advantage of them in lieu of the consistent "base hits/doubles" that still continue to take place to this day.  You have to be more creative to find them, no question, but there are people out there in a bind looking for you to bring a solution, regardless of market temperature or "bubbles".  

@Justin Silverio thank you for the response, that's very helpful information.  

What is it that keeps you from taking off your wholesaler hat in these instances, and putting on your agent hat to list the property yourself and collect the commission? 

Unreal thread!  Well worth the read and endless nuggets of wisdom.  Thank you so much for sharing your story, I'm certain many will benefit from it!