All Forum Posts by: Timothy Howdeshell

@Luther Wilson III wish I was in a position to join! Great post though and best of luck on your search. I'm working on building up the bank so hopefully just a few years now :-)

@Doug Fluckiger I use RD Title for title work and Josh Russell at Fairway Insurance Group for builder's risk policies. Best of luck on your flip! 

@Christopher Mooney I agree with the other comments that you've received here. I do a similar strategy and invest and wholesale in Kansas City. You can get a deal...eventually, with the strategy that you're proposing (invest $500/mo.), but I question whether that would be worth your time. 

Leads require either time or money to generate and are on a sliding scale. More expensive leads are generally higher quality meaning that you need less of them to do a deal. All leads require follow up, so need to factor that in as well. If you're going to do this you need to start thinking of it like a business. So let's run some numbers (these are estimates, not gospel). We'll assume $10k/deal. You need to market, negotiate with cash buyer, TC and close the deal too. So we'll add 10 hours/deal. Also, keep in mind that your sales, marketing and negotiation skills will not be great initially so these numbers are wildly optimistic. Let's look at lowest cost and highest cost lead types. 

Lead source, leads/deal, phone time per lead, total time to deal, cost/lead (including overhead), total lead cost, $/hr. 

Cold calling: 60, 3 hr, 180 hr. +10, $30, $2,300, $45/hr

PPC: 15, 3 hr, 45 hr +10, $200, $3,000, $127/hr

As you can see, the $/hr on this work is high, but you're either going to need a good amount of cash monthly for marketing, or a shitload of time. Yes, it can be lucrative, but how likely is it that you're going to spend an additional 10-20 hours/week and a few thousand dollars per month to try and get 1 deal? Are you willing to spend the time and money for 3,6,9 months until you get your first deal? 

I'm not trying to discourage you, but just trying to be realistic. Go into it with eyes wide open if you do. It is a full time job and highly competitive. 

Lastly, I'm not sure about Cleveland, but KC is very neighborhood dependent. Values can be 3x block to block so boots on the ground and local knowledge are paramount!

Best of luck! 

 haha. Sign me up!

Hi @Elizabeth Park, 

You're getting some great advice on loan products. You will need some cash however, at least for the earnest money deposit. You can also raise private capital, but structuring creative deals and private money does have its own learning curve outside of the real estate itself. 

I'm curious, why try to do this all on your own? If your husband has already figured these things out himself, I feel it would be much faster to have him show you what to do. Asking for help doesn't make you weak, it ultimately makes you stronger as you can level up faster. 

Podcasts are certainly going to sell the hype. They are a business afterall and while bad news gets attention, it is counter to the aims of those trying to sell the dream. 

The main mistake is believing that there is an "easy" way to make money. Sorry to tell you, but there isn't. If there was an easy way, people would flood into it and it would no longer be available or profitable. 

This belief prolongs the search for a "secret" and makes people suscesptible to scammers. Real estate does work, is reliable, and profitable. But it is not "easy". There are no shortage of horror stories. 

My horror stories are primarily financial thus far as I've outsourced all maintenance and renovations after my first property. 

@David Taylor I think you are getting a few things confused. 

1. You can work with agents as a wholesaler. You will be a source for them to provide cash offers to their clients or potential clients. Perhaps they have a seller lead, but the seller doesn't want to list on the MLS. They can use your service to provide a solution to the homeowner. This doesn't happen very often.

2. You can buy from an agent, find an end buyer and then sell the property to them. Most contracts are not assignable via the standard state contracts as they specifically state this fact. (contracts by their nature are assignable unless specified otherwise). So you will need to double close (buy the property and then sell it to the next person in a separate transaction, but can be on same day). 

3. Agents can list your flips, or list properties for sellers that you run across. They can't pay you a commission or referral fee, but if they happen to pay for some of your marketing I don't think anyone minds. 

In the end, working with agents is totally possible. I see wholesalers in my market list on market deals all the time. But it is not the most common way to wholesale. It is difficult to convince an end buyer to purchase your deal when they can see it listed on the MLS for 10k less (assuming you go under contract at the list price). The end buyer feels that they could have just purchased the property off of the MLS themselves (whether or not that's true). There is less perceived value here.

Agents are willing to work with wholesalers sometimes, but only the ones with a proven track record and ability to actually close. They're wary of just receiving "low ball" offers and tying up a property only to have it fall out of contract several weeks later because you don't know what you're doing and can't actually close on the contract. 

Robert Kiyosaki was trying to create a mindset shift in his readers to focus on positive cash-flow via your personal financial system to create financial freedom. 

He presents this as a simplistic (over so? perhaps) system wherein things that you have to pay for are liabilities. Things that pay you are assets. 

The point he was making was that, while we all need to live somewhere, it is wise to limit cash outflows to free up capital to increase cash-flow until escape velocity is reached. 

There are too many avenues in real estate, and too many different life goals among investors for a universal answer. One person may love having 10 paid off houses in class-B areas, and another may feel bored or broke at that level. 

It is ultimately a mixture of cash-flow needed to obtain financial freedom, and enjoyment of the activity. There is always some trade off and nothing is truly 100% passive. 

I suspect that the "small and mighty" portfolio is the right answer for the majority of people due to less overhead, decisions, and the high degree of achievability. 

I fail to see how this is specific to STRs at all. True, any property owner and landlord bears responsibility for providing a safe product/service, but due to the nature of property there is simply no way that any responsible owner could predict every means with which someone could hurt themselves. 

If people are irresponsible and determined to hurt themselves and others, they will. This goes for short, long, commercial, and any other type of rental. 

Safety is important for sure, but the fear mongering is a little much.