Busy day again. Mailed out some more postcards along with a letter to the owners of a property in probate. I called on a bunch of ads from last Sunday’s paper. In doing so, I got a lead on another property from a realtor. It was a duplex that needed a lot of work. Not enough room to do anything with, but I had a nice talk with the realtor and gave him my contact info. in case he came across anything I might be interested in.
I am going to look at a house tomorrow @ 10am. It’s been listed since June, is vacant, and the listing says the owner is motivated. It’s listed for 159k, ARV around 170, not sure what repairs it needs.
I also got an email from a guy tonight who is in the process of moving and needs to sell asap. He called shortly after he emailed. ARV is 165, he’s asking 145 obo, and said he is willing to negotiate. Home doesn’t need any work. I was busy pulling daggers out of my back when he called (will explain in a second), and forgot to ask him what he owes. I told him I would call him back in the am.
Just for kicks, I decided to look up the listing for the townhouse I am living in that I rehabbed. I bought it with a friend 2 years ago, and now I know why people say to never do business with friends. Anyway, she apparently took the liberty of lowering the price without asking me. I thought it must be a mistake in the system, because who does something like that without consulting first with their business partner? I tried calling, but of course there was no answer. I left a message and haven’t heard anything back. I’m going to try to not let this bother me too much, although I must admit I ain’t too happy about it.
Luckily, today I was able to focus all of my efforts back into finding deals. I got a phone call this morning from one of the realtors I spoke with last week. Her client wanted to know why I wasn’t interested in buying his homes. I explained to her again that there wasn’t enough equity, and that also I am staying away from the area the houses are in (all brand new construction, tons of homes for sale mostly investor owned). I again told her to keep me in mind if she comes across anything that fits my criteria.
I received an email today from a guy who has an investor friend who is in big trouble. He has 5 properties for sale (most of them were bought recently) ranging from 300k-700k. The two most expensive ones are both sitting empty. They all have negative cashflow. He is starting to get behind on some of his payments and is desperate to sell. He is willing to sell any of them sub2. There isn’t enough equity in any of them to do anything with. Funny thing is (or maybe not funny), if I would have come across these properties a few years ago, I probably would have signed some of them up and then ended up in the same position as this guy. I got very lucky on the sub2 I did, and would never attempt to buy and hold again until I have a whole lot of cash reserves (everyone told me this before, but it never really made sense until I had tenants that took off for Alaska in the middle of the night leaving the place trashed). Luckily for me I bought the house right before the market started going crazy, and in 2 years it appreciated about 100k. Even after screwing the rehab up, I ended up walking away with a nice chunk of change.
Anyway, I sent out some more postcards today. I’ve only received a few calls from the ones I sent out last week, which is kind of disappointing, but that’s the way it goes I guess. I also followed up with some old leads via email. This is one area that I am really trying to improve on. Especially with houses staying on the market so much longer now, I think it is really important to follow up every few weeks or so.
I am meeting with an investor later on this week to talk about bird-dogging for him. He and a group of friends are looking to buy properties now that the market has slowed. I want to get a little more info. from him about what exactly he is looking for. I’ve known him for some time and we both have a mutual respect for one another, so I think it could work out well. I have more time than I do money, and he has more money than he does time. We’ll see.
I’m going to look through some listings tonight and go make some offers tomorrow. Hopefully something will stick. I’ll be living in a cardboard box soon if not. Just kidding.
Went to view the property I saw on Craigslist today @ 10am. Waited 20 minutes in the driveway for the realtor to show up (being late is a huge pet peeve of mine). Everything looked ok, except updating in the bathrooms is needed. House has been on the market for 5 months, vacant for 3. I put in an offer this afternoon for $160,250.
I have had my eye on a townhome for sale near where I live that has been vacant and listed since June. The owner bought another, bigger townhome in the same neighborhood and is now paying two mortgages. The listing says the seller is extremely motivated, make an offer. So, I did. List price is 160k, ARV 175k. My offer was $121k. My realtor called the listing agent and told her he had an investor interested and told her the price I was offering. My realtor said the listing agent laughed at him. She said the owner would maybe take 10k less than the list price, but only if we could close in one week. What a bargain.
I can sense that my realtor is already getting annoyed with me, and think that down the road I will just go directly to the listing agents and make my offers to them. I used to be intimidated by making low offers to agents, but now I don’t really care.
This evening I got the first call from the postcards I have been sending out. The sellers moved out of town in March and have had the home for sale since then. I had a rental/lease option/rehab disaster in the same neighborhood, so I know it well. I had a long talk w/ the seller about different options (subject to, cash offer, lease option). I asked her what was the lowest amount she would take in cash if I could close tomorrow . She said 215k, but I think she will go lower. Mortgage balance is 180k. ARV 260. She is going to call me back tomorrow.
I’m going to sift through some listings tonight and pick 3 to go look at and make offers on tomorrow. I also sent out about 45 more postcards today (the postcards I’m sending out are targeted to motivated sellers that I find on Craigslist, the newspaper, FSBO websites, and listings that my realtor sends to me).
I am amazed at how many people (realtors and sellers) still do not realize that the market has changed drastically in the last 6 months. Some realtors are still using appraisals and comps from the beginning of the year to assess value. Maybe they know better but just think I’m stupid.
The offer that I put in last week on my realtor’s listing countered @ 200k. The house was listed for 229k, worth around 260k. My offer was 177k. I think my realtor wasn’t too happy that I didn’t take it @ 200k. I again explained to him that my MAX purchase price is 70% of value minus repairs. I will keep my eye on it and put in another offer in a month or so if it hasn’t sold.
Yesterday I went to look @ a townhome that I saw listed on Craigslist. The owners have relocated to Atlanta (actually they’ve been there since June), and the house has been vacant all the while. It needs updating throughout, paint, and carpet. Listed @ 124k, ARV 130k. My offer was $80,225. I haven’t yet heard back.
I also sent out a bunch more postcards yesterday and today. I have about 100 out there that I’ve recently sent (within the last week), so I expect my phone to start ringing in the next day or so. Hopefully.
Today I checked out another home I saw listed on Craigslist. It’s been vacant for about 3 months. ARV 240-245. Asking price 230k obo. Owners have moved into another property and are motivated. I have an appointment to see it tomorrow @ 10am. Going to offer 163k.
Still no luck selling the townhouse I’m living in. Haven’t had any showings in 2 weeks or so. Hopefully it will sell by the end of the year. With the market the way it is though, who knows.
Well, I picked up my 2k check from my first flip this last Friday. I still can’t believe how easy the whole process was from beginning to end. I guess after doing a nightmare rehab, anything seems easy. Also, I think the fact that the guy I flipped the contract to was an experienced investor helped out tremendously. The closing took place at the title company he uses. They are investor friendly, and everything went smoothly. I will be using them for my next deal.
I am meeting for lunch with my realtor tomorrow. I want to go into more detail with him about what my investing strategy is. I am also putting in an offer on one of his listings. I actually met him about a month ago while I was looking at this particular property. He called me today letting me know the seller had just reduced the price again and is very motivated. The list price now is 229k OBO. Comps around 260k. Doesn’t need any repairs. Going to offer 177k.
I have been getting a great response from the postcards I have been sending out. They are the same cards I have been sending out for the last few years, but I have never had such a good response. I’m sure it has to do with the slow market here. Most of the calls are from people still living in la-la land thinking they are going to get the price they were asking 6 months ago.
My goal is to have another house under contract to flip by this time next month. It would also be nice to get a contract on the townhouse I’m living in that I rehabbed, but I’m not holding my breath
