All Forum Posts by: Account Closed

@Donald Capwell, good point about RE agents. I also really like what you said about keeping the end goal in mind. I'm starting wholesaling because I think I just need to start taking action, and it seems to be one of the easier ways to begin--and beneficial too. But I am planning on eventually getting into rehabbing, and should definitely not forget that! I guess it's an art of balancing the practical short term plans while also not losing sight of the long term dreams or getting too boxed into one plan. Thanks so much for your comment and advice!

@Kevin Rodriues, good words. Thanks. All the best to you too!

@Matt Bell, thanks. Will do!

@Devin Morgan, makes sense.

@Steve Driscoll, thanks! Yes, it's pretty much just what I've read, but it feels reassuring to have it confirmed :-) I'll let you know if I have any deals. I can call you sometime; just tell me what time is best and at what number.

@Mike Watkins, thanks! I was hoping that was the case. Thanks for the tip about Montgomery. I'll probably start out in Birmingham, but will keep an eye on Montgomery.

@Devin Morgan, thank you! In terms of sequence, one cannot try to sell a deal to an investor until they have a deal, so that makes sense. I have read that it's often a good idea to have a list beforehand, though. I'm not very experienced, but I suppose the order is flexible. Anyway, I'll plan to seek deals AND connections. As for partnering with someone on a deal, it's certainly possible and something I'll keep in mind; thanks for the suggestion. Once I find a deal there will likely be multiple ways to profit.

Hi all,

I've been studying real estate and am considering rehabbing once I save more money.

In the meantime, I'm looking for ways to get started in real estate that require little money (but more time), and so wholesaling seems like a possibility.

As I tend to be detail oriented and very careful, I've made a plan with specific steps, details about those steps, and then my thoughts/questions. If you could evaluate it I'd be very thankful! I'm especially wondering about the 7th point regarding double closing vs. assigning.

So here's my plan:

1.Create a list of possible buyers and learn what they want.

• This seems logical because if you know what people are looking for, you will know what kind of property to look for and save a lot of time, and also have people to contact if you do find a deal.
• I'm hoping to do this partially by this post. Please let me know if you want to be added to my list!

2. Find potential deals.

• There are multiple ways of doing this (mail, signs, driving around, craigslist, etc).
• I plan to especially drive around and look for distressed properties.

3. Find the owners of these potential deals.

• Look at online records, go to the courthouse, and talk to neighbors.

4. Figure out which deals are good/what to offer.

4.1. Estimate the after repair value (ARV).

• I plan to find this out by looking at prices on zillow and other similar sites. I've also been looking at lots of listings to get a rough idea of prices.

4.2. Estimate rehab costs.

• I'm a handyman and have experience working for real estate investors, so I'm relatively confident.

4.3. Estimate what rent would be.

• From working on rental properties for investors, I think I have a general idea of this.

4.4. Estimate other costs, such as taxes, insurance, utilities, etc.

• I plan to get most of this from the owner and then verify it.

4.5. Learn as much from the seller as possible. (e.g., are they happy to have the property taken off their hands? Do they have an asking price?)

• Basically I plan to take the price I think an investor will pay, subtract the expenses (and what I want to make), and then this would be the maximum I'd consider offering.

5. Make an offer.

• I want to be honest with the seller, and let them know that I will be looking for other real estate investors who want the property, and if I cannot find them, I probably would not buy the property.
• I'm thinking that the best way to do this might be with an option to purchase contract, because then it's clear I'm not agreeing to purchase the property but do have the right to do so. There would be some cost for this, but in real estate there is risk. Thoughts?

6. Find someone who wants the house.

• If a list was made earlier, then this should make things easier.
• I've heard that there are some problems with closing a wholesale deal if the end buyer is using a conventional loan, and so it is best to find a real estate investor. Is this true?

7. Close/Assign

• I know that a double closing is possible. What are the typical costs of this?
• Assigning a contract seems simple, and in my opinion is ethical and should be allowed in a free market, but whether it's legal seems unclear. Does anyone know if it is legal in Alabama? How about assigning an option to purchase contract? I could just double close, but in some cases having the possibility to assign the contract might be nice.

Does this sound reasonable? Any tips or constructive criticism? If you know of a better strategy for a beginning investor who has time and energy (but not so much cash) please let me know!

Thanks so much!

That does sound high. I'm not in the area and don't know the quality of materials you're looking for, but that sounds expensive, especially for the size.

In addition to what you mentioned, the electrical and plumbing might be a bit high.

I've done some handyman work and sometimes price a job at 2x the cost of materials (including both the material and labor) if there is a lot of material and a lot of labor (I got the idea from a very experienced handyman). So the framing and drywall does seem high. Not entirely sure about the ductless mini split system; I don't have much experience with HVAC, but if it's ductless it doesn't sound like it should require too much work.

Probably the best thing to do is get several other bids. $38,900 for 300 square feet, even with major repairs, seems high. Houses sell for less.

Best wishes,

Stephen