All Forum Posts by: Steve Wilcox

@Aaron Mazzrillo that these deals are traded all the time before closing but very rarely by someone whose sole intention was to wholesale the deal. It is possible for anyone with the drive, determination, and hard work to get into the big leagues of rei, but experiences gained from flipping a single family house are not necessarily comparable to developing a 300 unit apartment complex. 

We pay 5-7% of gross rents in tough towns to an experienced manager. He handles tenant issues, places new tenants, collects rent, and gives specific advice on how to handle situations. 

His fee does not include landscaping/ snow removal, evictions, maintenance, or repairs. 

We are looking at starting a full service PM company in essex county that will integrate current manager as well as provide detailed financial breakdowns and records, and provide clear communication and status updates to clients. 

I am looking to do this out of necessity, a number of local investors have a hard time with quality management that can do the field work as well as the office work.

Hey @Mary june Martillo where is the subject property located? Have you driven the neighborhood? What is your plan for this property?

To answer your question you can make an offer on the property until it has been sold or the wholesalers agreement with the seller expires. 

FYI if the wholesaler has a rehab estimate double it and that should be a reasonable estimate.

@Wayne Chappel 

I invest in Newark, and caution you that there are lots of extra challenges in urban towns that you dont face in nicer areas. Define your current strategy based on capital constraints, and also set some long term goals to work towards. 

If you have any deals in Newark let me know

Good Luck

Hey @Dan Wieczorek , good luck on the journey. 

Save up as much cash as you can from your job, build your credit score and decide what types of areas you are looking to invest in. 

I invest in Union and Essex county, but also have interest in Monmouth as well. 

I recommend you decide how much cashflow you are looking to generate, how much cash you have to play with, and get your personal financial house in good order before you start investing. 

If all those questions are answered yes your only hurdle will be the low loan amount. 

I recommend you put a presentation piece together as well as an example of the type of deal you are going to look for or what you plan to use the proceeds of the refinance for. 

Once you prepare your presentation you can start to call all the local banks in your area and speak with someone in lending department (whether you  go commercial or residential is another discussion). Don't give up on the first few no's you get, keep in mind all these banks have different criteria they lend on, and different programs. 

Other local investors might know what banks are active in your asset class and area, otherwise hit the phones, ask lots of questions, be upfront about everything (because it will all come out during the process) and you should be able to get someone to give you 65-75% of the appraised value of the properties you own outright. 

As someone who started with very little savings I warn you first to be careful

Warren Buffets Rule #1- Dont Loose Money, Rule #2- See #1

Partnering is very risky if you know nothing. If you go that route do not allow yourself to be a silent partner, or absent partner because you wont learn anything and you are at great risk to get the wool pulled over your eyes. There are alot of sharks out there and you want to be careful you dont loose your fathers money. If you go this route you need to have your hand in every single decision and be present every step of the way. 

As @Will Barnard said if you make him a 10-12% return on his investment it can be a win win for both of you.

A major word of caution- Money that's not your own may not seem as real as 100K you had to sweat, suffer, scrimp, and save to generate. You need to have the fire in your belly to make sure not to loose a dime and to turn his 100K into a bigger number that allows you to cash him out (if that's what makes sense for you both). 

Make sure you set up a formal agreement between yourself and your father in regard to payback period, interest rate (or percentage of equity in your business), ect.

If your father is willing to shell out a significant amount of capital for you to get started and your true goal is to be a real estate investor then you need to be present every minute of the process and involved in every decision along the way.

Finally if you do decide to partner with someone make sure you do not put up 100% of the cash and that they have skin in the game as well, make sure you are on the title and have a clearly defined JV agreement drawn up by an experienced attorney

@Nhi Nguyen Hit the nail right on head. 

Reality is that most average contractors have no desire to work with investors because investors want things done to a million dollar finish level, and pay prices for work in the hood.

I am also a GC and can tell you that having reliable workers costs money, and operating a business costs money. If you look around the forums you will hear alot of horror stories about contractors and most often I think its because we as investors are attracted to the lowest price. While they may not pay monetarily they pay with hours of wasted time chasing there contractor to get him to finish, complete less projects per year then if work were handled professionally, and years off their lives from stress associated with dealing with someone who is completely unprofessional. 

Also keep in mind that 95% of repair estimates from wholesalers are falsified (maybe intentionally to make a deal seem better, or maybe due to inexperience)

We do work for a few high volume flippers, and they know that we are not the cheapest (we are still reasonable), but they decided that time has value as @J Scott mentioned. 

Self completing work does not count as free- you have to at least bill yourself at $10 per hour because you could earn that at McDonalds or Delivering Pizza. Also we can do a full rehab in a month including rewire, replumb, insulate, sheetrock, flooring, and all finish work. How long would that take you to do on your own? How many deals a year can you do if your doing work? 

This will all depend on your story. You can get a line of credit or refinance them with a blanket note. 

A challenge you will have based on a $60K value for your properties you will fall bellow the minimum loan amount of many banks. Most banks in our area of the country dont want to bother with less then $150K for a mortgage. 

The big questions will be:

1. Your Personal Credit Score? (needs to be above 720)

2. How many years have you owned these properties? (Its very hard to refinance without owning for at least 1 year)

3. Do you show the income from the properties on your last 3 years tax returns? (this is how you will prove that you actually make money from the properties)

4. How much in liquid capital reserves do you have (most banks will want to see around 6 months of PITI payments sitting in the bank)

Hey @Ahmad Austin , I invest in Newark NJ and buy 3 and 4 family in most areas. 

If you quit your job already you better be ready to really hustle hard. Wholesaling is all about finding deals dont waste time building a buyers list there are lots of people here who will buy and you can throw a good deal up on craigslist and sell it quickly. 

Learn about real estate, valuations of areas and houses, try to get an idea of rehab costs, ect.

Good luck! feel free to ask any specific questions you might have