All Forum Posts by: Account Closed

I agree with Tim. Focus is the key to success. Whenever I try to do too many things or I get distracted by the latest fad or get my eyes off the ball, I lose and I get hurt financially.

I have not sold a deal to an "active real estate investor" who is based abroad but I have gotten passive investors from outside the US to lend their money to me for me to buy US real estate. You may want to consider this approach. It's more advantageous because as the owner, you get to benefit from the long term appreciation and income from the property. Disadvantages are hassles and hazards of ownership, specially if you buy the property in the wrong manner - e.g., paying too much for it.

Agree with Don - specially on his last point: never pay upfront for these services. If they charge upfront it's likely a scam.

One lady I dealt with before who was in foreclosure paid $3,000 to a guy who promised to stop the foreclosure. The guy never returned her phone call. Good thing she found me through a referral and one week before the foreclosure auction, I stopped the auction.

Sage,

Nope. You've read it right. 20.2%. I couldn't believe it at first. I stopped sending letters to people in foreclosure (my response rate was a pathetic 1% with pre-foreclosure leads because of competition in my market) when I discovered this niche - called building code violations. The reason why the response rate is phenomenal is because the sellers are desperate and I'm the only one doing this in my city.

The list is difficult to get (which is one of the reasons my competition does not want to do this) but worth it. You can check with your city's building department and ask for the list of properties with building code violations.

The other cool thing about code violations is that the property owners are usually landlords with multiple properties. For example, I bought 10 properties from one seller. Amazing.

Conversion is pretty high too. As you can imagine, I am the only one getting in touch with them and providing them a solution. I get remarks from owners like "Thank God you sent me this postcard!" There was one instance a seller was angry telling me the house is not for sale but other than that, the owners of properties with building code violations are very easy to work with.

I can send you the postcard that I use if you want. I want to see how well it works in your market too.

Sage,

1. The MLS
2. Referrals from "real estate people" - agents, mortgage brokers, lawyers; and from the sellers I've done business with
3. Bandit signs
4. Postcards to owners of properties with building code violations (the average response rate for this is a whopping 20.2%)
5. Website combined with putting the site out in Craigslist & Backpage

Scott,

This strategy is called "lease buy back" and is now illegal for example in the state of Ohio and I think (not sure) illegal also in the state of Illinois.

I agree with Mark - this strategy is going to land your investor in jail. I would not do this if I were you.

Sean, I can give you some of the forms I am using. See my email address below.

Here are my contributions: (in every rule of thumb there are always exceptions)

1. A deal being sold by a non-motivated seller is probably a bad one (not everytime of course but most often than not...it is)

2. The 70% rule does not work in many cases - in today's market, the 50% rule works if you're buying a property all-cash: if a property is being sold for 50% of the ARV, it's worth looking into (notice I did not say worth buying...see rule #4 below)

3. Learn the skills of buying properties with no money down and without using your credit and you'll be more successful in the business (because you can buy a lot more properties without being restricted by the difficult financing environment we now have)

4. Always do your due diligence before you buy regardless of how experienced you are. I became cocky once and went with my gut and I lost tens of thousands of dollars as a result.

5. You make money in this business either by buying a property dirt cheap (see the 50% rule) or buying it on good terms (e.g., buying it no money down with low monthly payments so the house will cashflow). The only exception to this rule is: unless you have a buyer lined up willing to pay more for the property (say at 80% of the value) allowing you to buy higher than 50%

I have more but, I would say those are my top 5.

Mitch,

You can do owner financing even on deals that are NOT free and clear. You can take over the existing financing in a property and provided the deal is not upside down (at the most, the loan balance is the same as the property value), you can still make money on it. I bought a deal for 93% of the fair market value by taking over the mortgage payment. I made $200 a month cashflow for 11 months. The tenant/buyer did not pay on the 12th month so he forfeited his $6K down. I then re-sold it to another tenant/buyer who gave me $3K down and made $400 a month cashflow for the next 15 months. After all is said and done, when the tenant/buyer bought me out, I made a total of $34,000+ profit on a house via owner financing buying it for 93% of the value (and there is an underlying mortgage on it).

This strategy is called buying a house subject to the existing mortgage. You can then sell the house through rent to own or via owner financing. I've made money on it by selling it at a higher price than what its worth and collecting a monthly payment higher than the mortgage payment.

The advantage of buying houses subject to is that you don't need to get bank loans and if you structure them right, they are truly no money deals. So what the 'gurus' say that you can buy a house with no money and no credit is apparently true. With the exception of a 36-unit apartment building, all the houses I own for rentals have loans not in my name (I did what I described above) and my 133 unit apartment complex has a loan which is non-recourse (so I am not personally liable for the loan which is cool).

For me, after 7 years of doing this, I realized that it's better to get properties without any cash and credit - even if you have the cash or credit. Knowing this skill will allow you to buy a lot more houses and apartments and you're not restricted by the difficult financing environment we're having right now.

Ryan, I have a student in the Detroit Michigan area and she is killing it. She buys and sells 1 house a week.

It's true Ryan...you can buy houses no money down, without using your credit and you can make money from the deal in a few weeks, even in a few days. It's not too good to be true...it's true and it's good. But as always, you need to do it right.

I agree. You need to work the business in order for you to get results. I coach people in my real estate business and I am amazed that I can teach two people the exact same thing and one will skyrocket to success and another will not do a thing with the knowledge I give.

You need 3 things actually as a wholesaler:

1. You need to build your buyers database on a daily basis
2. You need to put out marketing out there to find motivated sellers/ find good deals
3. You need to work with lenders and investors so you'll have the money to close on the deals (in case you need to - REOs and shortsales come to mind)

One way to work the business and get leads coming your way (buyer leads, seller leads and investor leads) without you spending so much time on the phone is to have squeeze pages or websites that can take in your leads' contact information. I give my students free websites/squeeze pages as part of my service to them. All they need is market those websites.