All Forum Posts by: Todd Toback

Jay, I agree that wholesaling is not "investing" in a traditional sense. However, it is a cash cow and can enable you to buy discounted properties and live VERY well while you build up a portfolio if you desire. Wholesaling is a business and should be treated as such.  Oh... and yes I agree.  It's all about the sales and marking.  

 Jeff,  the easiest way to start is to get the list of tax defaulted homeowners in your county. You can also get a list from list source, which we do but going to the county (for the tax defaults) is the hottest list.  Be aware that you will most likely get a "this list does not exist" before you get a yes.  Prepare to hear "no" from 5 people before getting a yes.    Hope that helps!

I'm curious to hear from both new and experience investors.  What is your biggest challenge, fear, obstacle in your wholesaling business.  How do you plan on blowing through it in 2016? 

I'd love for everybody to invest in this thread and I will do my best to contribute as best as I can.  

I'll share mine and my idea for tackling it in 2016.  Can't wait to hear yours.  

 Hi Laurence,  

A mentor once taught me to "Never Partner With Somebody If You Can Hire Somebody Instead".  I don't have any partners, but I pay my team members well with unlimited upside.  I started out mailing and handwriting letters myself.  I suggest that as a last resort. I wish I would have invested in myself sooner with large direct mail campaigns.  I buy my lists from list source. Steady Income is the key.  This means steady mail, steady interviewing, steady hiring, steady eye on the metrics in your business, and steady investment in yourself.  

Hi Laurence,

You are in an awesome yet competitive market.  The secret to thriving in a market like that is to pick 2 or 3 marketing channels and keep marketing to the same lists.  Hit them over and over again and you will get noticed.  

Our team wholesales 10-15 houses a month and our best deals come from the prospects who we have talked to 15-30 times.  I have always been a fan of direct mail and it is the primary way we generate our business. Good luck! 

@John Jackson , long time no speak.  

Keleko, the good news.  I have done hundreds of lease options in San Diego.  The bad news: It's been about three years since I have done one.  The only reason is we switched our business to 100% wholesaling around that time.  You will have no competition and I used to be an absolute ninja at constructing these things.

1. Here is a couple of suggestions.  1. Remember you need a motivated seller to put together a decent deal.  I used to prefer mostly assignments here in San Diego because I could collect 3% down on a $600 Khouse. That's around 18K. You can also finance your assignment fees. 

Here is the exact info you need.

1. Motivation

2. Loan Payments and Debt Owed

3. Market Rent and Value of those house.

You can offer to pay 95% of value, 100% of market rent, and still make money.  Just sign up a two year lease with an option and assign that sucker. Hope that helps.  

Mike,

You can certainly rehab on a lease option! There is a major catch though. The lease option should be so well protected it is really a disguised “subject to” deal.

Many sellers would be completely freaked out about doing a “subject to”. Their brother-in-law, lawyer, dog, or undeducated CPA told them it was illegal. Let’s be real for a moment, I love getting the deed to a property when I make money, but the seller can often be putting their equity and credit on the line. So if the seller won’t do a “subject to”. What to do?

A lease option on steroids. I would do the following:

First, build rapor with the seller. Get him talking about all the pain on the property and get him/her/they all angry about this “real estate problem”. Build rapor and trust here.

Then start talking about all the ways that they win and are protected. i.e- they get to keep the deed, you are fronting the rehab money, your are such a honorable guy, yada, yada, yada.

Then let them know that you need to be protected and for you to solve there problem and invest five figures, the following needs to happen.:

1. Record a memorandum of option
2. Have them sign a second mortgage/trust deed in the amount of the purchase price of the home with you as the beneficiary
3. Have the seller sign all the necessary documents, including the deed, needed to close the deal.

If I had all three of those, and the deal was good enough, I would do the deal. Have penalties drawn up in your option agreement if you seller won’t close when it is time.

Memorandums are great, but when you are dealing with 5-figure investments, it’s time to up your game. GAME ON! I can’t wait to hear about your check.

-Todd

Joe,

I have heard of them before. It could be used as a selling point to close a lease purchase deal especially when you are assigning the contract.

I know Lee Arnold is using them and I believe you must have the service to get an investor loan through his company (don't quote me on that). Interested to see how this plays out.

I don't see all that much value though. It looks like the cover the rent for 60-90 days. So if you pay $300 + $30 a month, and the rent is $1500, you are looking at $660 for $4500 worth of protection. I could certainly use this as a selling point to a seller to "close a deal" i.e could "throw it in". However, if it were my own property or I was subleasing I don't think I would jump on it.

Thoughts?

There is a major opportunity here! If you can't beat them...join em.

The first thing I would do is go over there and introduce yourself with some refreshments. Tell the operator of the place you will give him $1,000.00 if he will refer a buyer to you for the place.

Offer to cover 3% at closing so the buyers has to come in with next to nothing for the place. Offer credits to make the place handicap accessible at closing. Do whatever it takes. During the busiest time of the day at the place, hand out fliers and make it happen! Good luck.

Hello everybody. My name is Todd Toback and I am excited to be introduced to the Bigger Pockets Community! I specialize in Lease Options- I have been specializing in them for 11 years. I'm looking to contribute and network with like minded individuals. Just saying hello, and thanks for having me.