All Forum Posts by: Steven Leigh

@DeMarrius Payne You're welcome. PM me if you have any questions or need help along the way in the process. 

One other note: You will get some results with lists you buy, but there is generally a lot of competition, so people on those lists may be getting a lot of mailings from other investors already. 

On the other hand, if you can find leads that no one else is marketing to, you'll get a lot better response rate. In addition to buying a list, see if you can get a tax delinquent list for your area (highly-motivated sellers!) or a code violations list. You can also do some driving for dollars and you might find some vacant or distressed properties that no one has really picked up on yet. And remember, the harder it is to get a hold of the owner, the less competition you will have. So if you can't find the owner at first, keep digging and doing some skip-tracing methods, etc.

Good luck!

Generally it's 65-70% of ARV minus repair cost minus the fee I want to make by wholesaling it. Some of my buyers are willing to pay a little more than 70 in certain areas though.

@Ahmad Darensbourg The tax delinquent list is all the properties that have overdue taxes. Sometimes your county tax assessor site offers it as public record on their website. Otherwise you might have to call or visit and ask for it. They may tell you it doesn't exist or that they can't give it to you. You have to be persistent, friendly, and you might even have to file a freedom of information form. 

An equity list is something you can get from a site like ListSource.com You will generally want to do a Last Sale Date of at least 5 years and choose an equity range of 40-100 or 60-100. You can choose owner occupied or absentee owner. I like both. 

Here's an example:

https://youtu.be/vhwy3BVYzpE

Equity of 60% means they have paid off at least 60% of the mortgage so they owe about 40%. This means they could sell it for less than its worth to you if they choose to. If they only have 10% equity, for example, they can only sell if they pay off the mortgage, which means you couldn't get a low enough price for the house to make money on the deal. 

Since this is the wholesaling forum, you might have better luck in the creative financing forum with this.

Also, my advice would be to talk to some investors experienced in this kind of deal. Anytime you go outside your normal investing model and expertise you open yourself up to huge mistakes. That's not to say you should run away from new opportunities, but do your best to learn from others' experience.

Actually?.......none. :)

It usually never comes up. Sometimes the seller asks about it, in which case I usually suggest we do $10 earnest money to "make it official", but unless you mention it, the seller usually doesn't think of it and doesn't care.

That being said, I would go as high as $100 earnest money with the initial contract if a seller wanted something more substantial, but it hasn't really come up so far.

@Paul Amegatcher I was definitely trying the free version. It's a marketing tactic. The longer they make you wait and the more steps they make you go through, the more invested you are, and the more likely you are to just pay the fee for the info you waited so long for. 

I just wanted to make sure the paid version doesn't also make me wait or I wouldn't use it. 

There are several in the FilePlace. Go to Tools above and the FilePlace and search for what you're looking for. 

Here's a direct link to some assignment contracts: https://www.biggerpockets.com/search/files?utf8=%E...

@Marcus Wallace I think you'll want to send a letter right away. Then follow up 30 and 60 days later, then either 90 or 120 days. Some divorced couples will want to sell immediately, and just as they are thinking about how to do it, your letter shows up. Others, one of them might try to stay for a while, but then realize they don't want to stay or whatever. Still others might stay to finish a child's school year or something and then leave. The point is you want your letter to be there when they decide. It's not an exact science.

@Robert Laird You DEFINITELY don't want to say anything about the divorce in the letter or postcard. The average person doesn't realize how much of their life is in the public record. If you tell them how much you know about them, they will think you're a creepy stalker. For example, I work the tax delinquent list in my area. My letter mentions that "it's okay if the house is in bad condition, has tenants in the house, has back taxes owed, etc." but I would never do a letter that says something like "I hear you owe back taxes and I want to buy your house!" That's just creep-tastic.

Interesting. I'm dealing with motivated sellers who are generally looking to me to walk them through the process, so they generally just look to me to tell them what title company we will use. If it comes up, I suppose you could just mention that you have a title company you generally use, because they keep the fees low and close really quickly. 

As a wholesaler you have to be a little careful with title companies, of course, because some have had no experience doing assignments and double closings, and they may screw it up royally. That's why I stick to the title company I trust. Even on an assignment contract the seller never sees my fee, just the buyer. (For the record, the seller ALWAYS knows I am making money on the deal, I would just prefer they don't necessarily want them to see the exact amount in case it freaks them out on closing day.)

The problem I run into is when the buyer wants to use their own title company. But it's their money funding the transaction, so I'm not going to put up a fight in that case. I just make sure their title agent understands the process and check the HUD before it goes to the seller, etc.

Your criteria looks pretty good. You might play with 3br/1ba vs. 3br/2ba and see what the difference in numbers and cost is. I know in my market 3/1 are pretty desirable to investors too.

As for your questions:

1. 100-150 is kind of small. Yellow letter response rate averages about 5% I think for callbacks. So you would only get about 5-7 calls a month. And it usually takes about 20 or more calls to get an actual deal that you will close. So statistically you could go 4 months or more without getting a deal. You could always get lucky of course, but hard to say. If you can afford it, I would buy a big list of say 2,000 or so, mail about 100-200 the first week and field some calls so you can get used to talking to sellers and get a little more comfortable. Then ramp up and do 200-300 or more per week as soon as you feel comfortable. You're better off splitting mailings up by the week instead of all at once for the month, as you'll get a lot of the calls within the first few days and then very little for weeks.

2. Sadly, not really true. The wholesaler with the biggest buyers list always wins! Start building your buyers list TODAY! Go to REIA meetings, meet people (Ignore all the seasoned veterans who tell you that wholesaling is a bad way to start/illegal/unethical. They just don't like the competition!). Tell them you are getting started and can you send them some deals? What are they looking for? What prices do they like? How many bedrooms, etc. Also, check out some of the ideas on this page, work your way through the processes and keep repeating them. You always want to be building your buyers list.

3. Because you can estimate repair costs better I guess? Completely disagree. I don't worry that much about repair costs. I take a lot of photos and make a detailed list of the kinds of repairs needed, do a broad rough estimate of the repair costs, and then let the buyer calculate the specifics. Spending a lot of time calculating home value and repair costs is just wasted time you could be using to find more deals. Do quick and simple calculations and move on. Which leads to...

4. Here's how I do comps, and also how I do quick and dirty rehab estimates. You may need to adjust the rehab cost per square foot for your market. Talk to some of your buyers and ask what they estimate the rehab cost to be and you'll get a sense of whether the dollar amounts need to adjust. https://www.youtube.com/watch?v=Cqgz5OpqvNU

Good luck!