All Forum Posts by: Mitch Messer

Hey Francis, we've funded a bunch of deals in Harrisburg, so I may be able to help you there.

After all, we electrical engineers should look out for each other!

Finding a cash buyer is only easy in wholesaling if the deal makes good financial sense.

If you've put this "deal" in front of serious, active buyers, and none of them have jumped on it, then you've got a dud.

Is this a fix-and-flip, a buy-and-hold, or something else?

How did you determine that this would make your cash buyer money? How much would it make them?

Sending the "pay or quit" notice is the first step in the negotiation. Filing for eviction is the next. There's a process here that needs to be consistently followed, for everyone's benefit.

Sure, the tenant is welcome to call me. But it's not like they forgot rent is due. There's no need for more conversation between us.

They must pay. Or move.

Otherwise, off to eviction court we go!

@Cristin Andrews The very next step is to engage an experienced local attorney who handles evictions and immediately begin the eviction process.

I urge you NOT to delay. 

You'll likely start with a demand letter to the tenant, letting them know exactly how much they owe and instructing them to either pay or move out.

Ask other landlords or your local real estate investors association (REIA) for referrals to find a great attorney who will help you through the exact process.

Fortunately, Texas is relatively fast in evictions. But, YOU have to start!

Good luck!

My preferred strategy for getting leads is to contact "tired landlords."

I identify property owners who have recently filed an eviction suit against their tenants, filtering the court data to pick out high-value prospects, as evidenced by:

- plaintiff (landlord) is a natural person, not an LLC, corporation, trust, or apartment complex

- active (unresolved) case status

- large unpaid rent balance

- plaintiff's address is an actual physical address, not a P.O. box

Depending on the state and county, I can usually extract this data directly from public data sources, such as online court systems.

In addition to names and addresses, often this case data includes landlord phone numbers and sometimes email addresses!

I usually text, but one could also call or send direct mail.

We did this when I was wholesaling and focused on Tulsa as my primary market, and I personally closed half a dozen deals there in 2022.

Understood. Yes, this is how I would do this.

We pay property taxes as well as a landlord insurance policy. We require the tenant to get a renter's policy, with penalties for non-compliance.

If you're going to market the home as "rent-to-own," consider including a one-page signed addendum that makes it clear the tenant understands they have NO ownership interest in the house and that they are "just" a tenant. (Or, if you have such a statement in your lease, make them initial that clause!)

I would also strongly recommend you have your mortgage broker vet all serious applicants as part of your qualification process to see who actually has a serious shot at qualifying for a mortgage in the future. This will save you tons of wasted time!

Serious question: If you did hire them, how would you know if they're any good?

Without some performance benchmarks, I could see you paying out for months with nothing to show for it. Getting 6 leads per week may sound good, but that's only true if these are qualified leads that you can turn into revenue.

I'd definitely want to speak with several of their existing clients to see just how valuable these leads are.

Also, watch out for long-term contracts. These folks are probably going to want you to commit to several months of service, so keep that in mind when you set your budget.

Lastly, it's worth asking if cold-calling is the best way for you to reach prospective clients. (Honestly, it's my least favorite method!)

What made you choose it?

I avoid the term "rent-to-own" since some may confuse it with seller financing.

I think you're referring to here is a "lease-purchase" or "lease-option" (depending on the paperwork used).

If so, I've spent two decades doing EXACTLY these types of deals, and I LOVE them!

Here are my responses to your questions:

1. Upfront payment: We aimed for between an amount equal to 2 months rent up to 5% of the purchase price. This should be referred to as the earnest money deposit (for a lease-purchase) or option consideration (for a lease-option). Be careful NEVER to call this a security deposit, because it's completely non refundable if they don't buy.

2. Term: We gave everyone 1 year (regardless of credit score), with the opportunity to extend (at a higher price) if they weren't quite ready to buy when the term is up. We found that giving more time upfront didn't attract better qualified residents.

3. Commissions: I recommend not doing this with an agent involved, because you'll likely have to pay a commission on the rental AND on the sale.

Hope this helps.

Good luck!

Before you consider giving anyone money upfront to help you "win a grant," I urge you to ask them to provide you with names and phone numbers of 2-3 former clients who actually received money.

As far as I know, the U.S. Small Business Administration (SBA) does not offer grants to start a business, but rather offers funding and support programs for existing small businesses.

If your goal is to become a real estate investor, then I recommend you learn how to analyze, recognize and structure great deals instead.

No, this is home, for now.  We've been doing the #digitalnomad thing since 2018!

Before that, it was 3 months in Medellín, Colombia!

We don't do "cold." 😁