Flip This Wholesaler

Trying to get back into the swing of things after the holiday. I had plans of putting out bandit signs the night after Thanksgiving, but it never happened. My Thanksgiving turned out to be a complete nightmare and I spent the next day unwinding. Thinking about putting them out this week, but not sure if it is worth the time and effort.

I got 3 calls today from my advertising. Made offers on all of them, but the sellers were looking for more money. 2 of them I will follow up with in a few weeks, the other guy was a complete jerk and not willing to budge on his price. Maybe I will call him in a few weeks just for fun.

While speaking with another investor today (emailing, actually), I learned that it may be very difficult for the guy I’m assigning my contract to to get conventional financing. I don’t know how I missed this very important detail in all of the reading and studying I’ve done over the years. Luckily I still have over a month until the closing, so I will do what I have to do to get it closed. I met an experienced investor a few years back who is also a mortgage broker, so I am going to try and get in touch with him tomorrow to see if he knows of any lenders who will finance an assignment deal. I also have a few other investors who may be able to help me out.

I have always read that this business is a business of problem solving, and now I am beginning to see why. It seems like there is always some sort of glitch that has to be figured out. I guess that’s why most of the sheeple out there never succeed at it. It certainly isn’t easy (at least in the beginning).

I had someone look at my townhouse today (for the 3rd time). She’s a college student (I live very close to USF), and her Dad wants to buy her a place instead of having her rent somewhere. I really thought they were going to put an offer in today, but haven’t heard anything. Keeping my fingers crossed.

A have 30 postcards to send out tomorrw. Also going to call on some ads from the Sunday paper.

Well, today turned out to be a great day. I showed the house before I met w/ the realtor, and ended up getting a full price offer ($113k contract price + 5k assignment). I met w/ the realtor to sign the new contract, then went home and faxed the assignment over to the title company. What a relief. It’s nice to know that all my hard work is finally starting to pay off.

I got two calls today. The first was from a postcard I sent out. The seller has a new house that he’s trying to get rid of. There’s only about 20k in equity. The other was from an investor I met a few weeks ago when I went to look at his house for sale. He was supposed to close on a house today, but his financing fell through at the last minute. Probably a blessing in disguise for him, because the numbers were not good at all. His estimated ARV was about 30k too high. He may have been using comps from the beginning of the year.

Friday night I’m putting out bandit signs with another investor. We are going to target the areas near the malls since this weekend will be a busy shopping weekend. I hate putting signs out, but it will be a lot easier if I have someone with me. In the past, I’ve always done it solo, and it prettty much sucks. I hope to get some calls from those next week. The month is almost over, and I would really like to get something under contract so I have some cash coming in next month. This last weekend I gave my notice at work (I’m going to finish the year out), so I really have to hustle from here on out. My buyers list is growing by the day, which I think will make it a lot easier and less stressful next time around.

A few weeks ago, I got a property under contract from a seller in pre-foreclosure. I am not in the position right now to hold anything, so I ended up assigning the contract to another investor for 2k. The closing is set for next Friday. I have a few deals under my belt (nightmarish rehabs), but this will be my first wholesale deal, and I have to say it is (if it closes), the easiest money I have made thus far. It’s not a lot of money, I know, but when I look at the amount of time I have invested in this deal (maybe 10 hours at most), and compare it to the 2 rehabs I have done and the stress level and time involved, this flip seems like a piece of cake. In the process of looking for a buyer for this property, I made some very good contacts, and in a short period of time (about a week), have developed a very good buyers list. I have no doubts whatsoever that if I can get deals under contract at around 70% FMV, I will have cash buyers ready and waiting. Before doing this deal, I was very concerned with the market being the way it is (very slow, lots of inventory), that there would be a shortage of investors willing to buy. I now know that is not the case. I also have been attending a weekly investors meeting and see that there are many experienced investors who are actively looking for properties. I have made some very good contacts at these meetings as well, and have learned alot from the investors who attend- many who have been investing for 20+ years. From attending these meetings, and getting out and talking to other investors, it is becoming more and more apparent to me how important networking is in this business.

I also have recently met a realtor (I went to look at one of his listings), who I get along with very well (most agents usually annoy me for one reason or another) who has been sending me listings of properties that may have motivated sellers (I asked him to do a search for the word “motivated” in the remarks section). So, I have a ton of listings that I have been sifting through over the last week.

A few days ago I was reading through the articles on Flippinghomes.com, and happened to stumble across Steve Cook’s article entitled “An offer a Day Keeps the Bill Collectors Away.” (If you haven’t read it yet, you should). I know I have read it many times before, but for some reason this time it really made sense to me. I printed it out and have read it over and over again. It seems so simple, but when I think about how long I have been working at this, and then think about how many offers I have made- it makes complete sense why I have only done a handful of deals. I have spent hours and hours and hours and hours researching properties, getting comps, sending postcards, putting signs up, etc. etc. but how many offers have I made? Not many. It’s really quite embarassing . One of the investors I spoke with while I was trying to find a buyer told me that he makes about 100 offers A WEEK. Needless to say, he is doing fantastically and making a whole boat-load of money. It seems so simple when you think about it- you have to make lots of offers to make lots of money. Why have I not been doing this all along?

So, here I am, with a realtor who is willing to work with me, a list of properties for sale that have motivated sellers, and a great buyers list. All I have left to do is start making offers. My goal is to make an offer a day from this day forward. I have all my ducks in a row- a pre-approval letter, investor friendly title company, buyers list, realtor, earnest money, hard money lender. There is no reason whatsoever for me to not succeed.

This morning I went through the listings my realtor sent me and picked one in an area I am pretty familiar with. It is listed for $227,900. It says “owners are extremely motivated-make an offer.” It is in a cookie-cutter neighborhood, so the comps were pretty easy to get. ARV is between 245-250 (conservatively). I just put a call in to my realtor to look at it tomorrow, and I will make an offer on it tomorrow. I don’t really even care if my offer gets accepted, I just want to start making offers and moving forward in a constructive manner. I have a very bad habit of starting things and not finishing them, which is why I wanted to start this blog and tell everyone what I am doing. I think it will keep me motivated. I will update daily. Hopefully other people can learn something from my endeavors as well .