All Forum Posts by: Steven Leigh

Don't be baffled by the negativity. As I said, people have their own motivations for wanting to cut down wholesalers and discourage them. Just ignore it. 

As for mailing companies, a lot of investors use yellowletters.com. They have a lot of good yellow letters and postcards and you can upload your lists easily. Yellow letters get more calls than postcards but postcards are generally thought to get more "quality" calls. Yellow letters sometimes get a lot of annoyed calls telling you to stop mailing them for some reason. But either work. 

I've also heard good things about 3dmail.com thoughi haven't used them personally. 

Good luck!

Well, the devil is in the details. Finding sellers and finding buyers is actually the hardest part. And there are often several hurdles to overcome along the way with most deals. But yes, the logistics are actually very simple.

As to why people make it seem complicated? 

1. Investors often don't like wholesalers, so they try to discourage them as much as possible. One of the ways they do this is adding multiple layers of complexity to a very simple process. Sad but true.

2. If you convince yourself that something is really difficult and complicated, then you'll feel much better about giving up because you were too scared to take action. It helps people sleep better at night, I suppose.

So as for finding motivated sellers and finding cash buyers? I like these two links a lot for generating ideas:

http://retipster.com/50-quick-actions-you-can-do-t...

http://retipster.com/buyerslist1/

I'm copying this from a similar thread because what you're asking is way too broad to really answer.

What you really need to do is just build your broad base of knowledge. I always recommend checking out some podcasts and YouTube videos to get a better idea of the process, talking to sellers, etc.

Here are a few to check out:

Investor Grit podcast (Tom Krol and Cody are awesome)

Sean Terry YouTube channel and podcast (podcast isn't updated anymore, but back episodes are great)

Also check out Tom Krol's appearances on other podcasts like the Bigger Pockets podcast.

https://www.youtube.com/results?search_query=tom+k...

This won't teach you everything, but it will at least fill in some of the gaps. Get some of this knowledge under your belt, then start asking more questions here in the wholesaling forum. You'll start to understand it a lot better.

Good luck!

Ignore the negativity.

You're asking good questions, but what you really need to do is just build your broad base of knowledge. I always recommend checking out some podcast and YouTube videos to get a better idea of the process, talking to sellers, etc.

Here are a few to check out:

Investor Grit podcast (Tom Krol and Cody are awesome)

Sean Terry YouTube channel and podcast (podcast isn't updated anymore, but back episodes are great)

Also check out Tom Krol's appearances on other podcasts like the Bigger Pockets podcast.

https://www.youtube.com/results?search_query=tom+k...

This won't teach you everything, but it will at least fill in some of the gaps. Get some of this knowledge under your belt, then start asking more questions here in the wholesaling forum. You'll start to understand it a lot better.

If you need specific help send me a PM and I'll try to help you.

This is a LOT to cover in one post, but I'll give it a shot. :)

1. Find a motivated seller, agree on a price, and put it under purchase contract, with you as the buyer and a closing date of say 21-30 days.

2. Find a buyer who wants the property. Agree on a higher price and sign an Assignment Contract at that price, which assigns all your rights from the purchase contract to this buyer.

3. Take the contracts to a title company that understands how to do assignment wholesale deals. They will open escrow and do a title search, looking for liens, encumbers, etc. so you don't have to worry about that part.

4. For the closing, the end buyer brings all the money to the table. The seller gets their agreed price (minus some fees usually) you get the difference between the two contracts as your assignment fee. The buyer gets the deed.

As for estimating values, I really like Sean Terry's method. It's quick and simple. You could spend 4 years learning about property values, repair values, etc. and it really wouldn't make you much of a better wholesaler. Do a broad estimate and adjust as needed.

https://www.youtube.com/watch?v=Cqgz5OpqvNU

Good luck!

Tag me if you have further questions about this. Just type the @ symbol and start typing my name.

I've never had this problem. It might be your approach. When I talk to sellers, one of the first things I say is "I can close within about 21-30 days, and I never ask you to make any repairs." I put 30 days on my contracts and tell them I will try to do it quicker if possible, but sometimes the title process and inspections slow it down.

I am also very upfront about my intentions. From your wording it sounds like you're sort of "hiding" the wholesaling angle. I tell sellers I am an investor and I am buying their property to make money. Are they okay with that? I will do one of three things. 1. I will fix it and re-sell it for a profit. 2. I will turn it into a rental and make a profit. 3. I will pass it along to one of my partners and make a profit. Is all of that okay with you?

They always say yes, because realistically, they don't really care what I do with it. It's just that they're scared and suspicious or whatever and it makes them ask a lot of questions. Just hit them with a lot of honesty right in the face. It has a really calming effect and makes them trust you right away.

By the way, I also usually mention to sellers that if they have the time and money to fix up the property and they have time to list it with a realtor, that will always be their best option, as they will get more for the house than I can offer. I also ask if they've thought about holding onto it and turning it into a rental?

This does two things. 1. It builds trust because I'm literally pointing out that they have better options than me. 2. If they tell me a reason why they can't do these things, they just eliminated their other options and they start to realize that I'm their best current solution. They usually stop asking so many questions at that point (questions are really just objections) and start actually talking to me and working on making a deal.

You'll be amazed how being upfront about things and open and honest with sellers will actually win you MORE deals over time. I have had several sellers where I didn't even make an OFFER because I knew we weren't even close. I told them their best bet if they were looking for that kind of price was to call a realtor and list it, because I wasn't even in the ballpark. They were sort of shocked by my honesty, and they were expecting the hard sell. Flash forward a month later and I get a call back from that seller saying "Just out of curiosity, what kind of price COULD you do?" It's all because I built trust by backing away and giving them better options. Now if they later realize that they'd much rather sell quickly or with no repairs, etc. than they would to get market value, I'm the guy they call!

@Ranjit Wasu I would advise you to ignore the negativity. I think the motivation is pretty obvious, and clearly not on topic in regard to your questions.

So...about your actual questions.

Yes, you should mail to the mailing address, not the property address. Those where the mailing address is different are called NOO or non-owner occupied, which means it's likely being rented out, or even better, it might be empty! These are good leads. You could have a tired landlord who wants out, an inheritance, etc. That's not to say that owner-occupied properties are bad. In fact, they can be great leads too, if there is equity.

For 70% ARV, it's 70% of the After Repair Value. So, let's say the house would be worth $100,000 completely updated and fixed up. So $100k is the ARV. An end buyer investor generally wants to pay about 70% of ARV, minus repairs. So let's say it needs $10,000 worth of repairs. 70% of ARV is $70,000 and then subtract $10,000 for repairs, so an end buyer would want to pay about $60,000.

Then you have to build in your assignment fee, so let's say you want to make $5,000 on the deal. You would want to get it under contract for no more than $55,000 in that case.

Here's a good method from Sean Terry for calculating comp values. However, I don't use the "Offer Price" because it always comes in way too low. Instead, look at the "Sell Price" for 70% ARV and subtract your fee. That will give you an idea of your Maximum Allowable Offer (MAO). You will understand what I mean when you watch the video and test it out.

https://www.youtube.com/watch?v=Cqgz5OpqvNU

A few things:

1. Your strategy sounds pretty good. You're doing great.

2. Have you seen this? Might have some useful tips: https://www.biggerpockets.com/renewsblog/2013/05/0...

3. You don't have to do transactional funding. You can just do an assignment to the end buyer. You assign your purchase contract to the end buyer for a higher price, who closes on the deal, and you keep the difference as an assignment fee. You will find that many investors on Bigger Pockets and in general look down on wholesaling and wholesalers, and will say things like "You have cash to close the deal?" to discourage you. My advice is to focus on what you need to do and ignore the negativity.

4. Keep in mind wholesaling is a numbers game. The average is that you need to talk to about 40 sellers before you will find a workable deal. Not 40 mailers, 40 phone calls from your mailers. The average is about a 4% response rate from mailers. So you can expect to average about 1,000 mailers to get 1 or maybe 2 deals. May happen sooner, may happen later, but just have realistic expectations going in.

Good luck! Keep up what you're doing and you'll close a deal soon!

Ah, I forgot to mention, your best bet is to reach out to other wholesalers in the area, or even just go to REIA meetings and ask other investors (wholesalers or not) what title companies they like. If investors are using them, they are probably good at outside the box deals.

If they don't have any clue, just move on. It's hard enough to find a title company that DOES understand the process and is ALSO really good. You don't want them bumbling up your deals.

It's very understandable that title companies don't understand assignments and "outside the box" deals, as many are just part of the MLS/Realtor system where everything is done a certain way, day in and day out. It's also why so many realtors look at you like you have two heads when you suggest that you have off-market deals their investor buyers might be interested in. *sigh*