I get asked from time to time if I will offer advice to newbies to real estate as to how they can do ‘bird-dogging’, which is basically finding leads of potential properties, sometimes just the address, or a phone number, and passing those along to one or more active investors who may buy them and then offer you a fee from their profits or a small payment per-lead for the referrals.

I think it’s for most people not the best use of their time and frankly, small potatoes. Still, I’m not harsh on these people who usually picked up the idea from some internet product launch for an information product purporting to tell you how you can jump on Loopnet and grab commercial property listings, put the property information in a memo and then somehow get paid for it by more experienced, richer investors who are ‘too lazy to find their own deals’. Yes, I’m speaking here with some sarcasm because there’s just too much in that sentence that is ridiculous.

Fact is, it’s great to believe you can make money in real estate without any of your own (you don’t) and I don’t want to discourage these folks because I once was one of them.

Instead, I advise them to raise their sights a bit higher.

As far as birddogging, why settle for a few crumbs of the loaf when it’s just as easy to get a full slice to come your way for just a little more effort as a wholesaler?

Better yet than bird-dogging, here is my advice. Forget trying to find everything for everybody with visions of finding leads on the internet of houses already for sale and somehow that’s going to get you paid by telling someone about it when they do all the real work with the seller and the property itself.

Jump right past these silly people and become a wholesaler instead. There you can make some actual money, not just in your dizzy daydreams about getting paid for sharing something on the internet anyone can find.

I tell these folks to take the initiative and go LEARN AN AREA. It doesn't have to be huge, one or two neighborhoods can be plenty, 5-8 square miles even is OK. H

owever big it is, just make it your business to know everything in the area. Make it your business to FARM IT like a farmer tills the soil and plants his crops not all over the world but in a small plot of land he can keep an eye on, learn everything about, and easily control what happens there better than if his efforts were scattered all to hell and gone.

Drive your “farm area” regularly. Get out and walk. Go to every open house. Collect business cards from all professionals working the area you come across (realtors, mortgage brokers, especially investors). Talk to people. Talk to the mailmen. Talk to the garbage men. If you see a rehab in progress, go talk to the laborers. Talk to the contractor. Find the owner investor doing that flip property and introduce yourself.

Call all the bandit signs you see on the roadside. Call all the "We Buy" guys who advertise in the paper in that area. Find out what everyone in THAT area is looking for and keep it in a list. Get phone numbers. Get email addresses. Begin to create a DATABASE of people who buy and invest in that area. Hand out business cards too; don't be just a dreamer. Take yourself seriously. You can get some cheap ones from Vista Print for five bucks if you have to. Let everyone you see know you are looking to BUY houses.

I say that because really no one takes a 'birddog' seriously on the sell side and on the buy side no one takes you seriously without a CONTRACT. You CAN make money as a bird-dog giving people leads that they can’t find on their own on the internet-- vacant homes, abandoned homes, homes in code violation, FSBO homes etc-- but WHY would you want to do that!?

Get the education and go out and negotiate the deal yourself. You don't have to have the money to buy it and once you have it under contract to purchase with the seller you can wholesale it to them. That is where that database “investor’s book of business” I mentioned earlier comes in, without which you’ll still be on the sidelines forever while everyone else makes a fortune in your real estate market.

When I tell people starting out in the real estate investing arena to start building their “book of business” by reverse marketing people who are potential buyers and investors by databasing their contact information from the advertising those buyers and investors put out there marketing their own businesses from bandit signs on the side of the road, yellowpages, newspaper “I buy houses” ads, real estate investor clubs, landlord associations, real estate internet forums and more -- I sometimes get a blank stare.

When I then calling those buyers and investors to open the relationship, I often hear an almost audible “gulp” in the voice of the person asking me for advice.

I don’t need to be a therapist for that to tell me that that person is a little uncomfortable with calling “strangers” on the phone and giving them a value proposition to do business with you-- even when those very same “strangers” are advertising and saying in essence “Call me! Contact me!”. Have you ever felt that way? Why is that?

 If you have questions, are having trouble, or are just plain scared (that's ok), you’ve just got to get over it if you are looking to make your mark in business. The phone is an investor's friend and you will have to get over the fear of dialing for dollars.

Look at my own personal business, it’s grown to the place where calling first is no longer time effective. But it’s how my business partners and I really got our start.

Until our investor prospect database was well over 1500 I’d say every single one of them got calls from me and one other principal as well multiple times to feel them out, ask questions, create value and separate out the players from the wanna be's, and find the cash investors and the movers and shakers with contacts. We’d also  call to get criteria from the landlord/rehab buyers that are your bread and butter for doing wholesaling as we were.

Today, I could call 10 investors every day for 10 years and not reach all of the investors in our database. Think about that and do the math.

So we do things a bit differently at a higher level just due to bandwidth limitations and the lead generation flow I've put in place for our companies over the years.

But many of you do NOT have an investor database and are just beginning to grow it, right?

Would it help if someone simply GAVE you a small database of investors, a section of hundreds of investor prospects, who were all local to you within a 100 mile radius according to their city, zip code or area code?

People you'll be able to call in YOUR area, build a relationship and pursue doing business? Who may become rehab or landlord buyers for your fix and flip deals? Or wholesalers you JV with to market their deals? Or private lenders/investors who place capital with you? Or agents who help you re-sell your rehabbed homes? Or loan officers who can get your retail buyers pre-qualified or members of your local power team ETC ETC?

My partners and I have done just that for dozens of entrepreneurs-in-training who interned with our company...as a jump-start for our MMM Challenge apprentices.

Because it can be useful to call someone from a warm referral (they know who we are), and knowing that they're local to you opens a world of opportunities doesn't it?

And that tactic won’t just help you if you come intern with our company. Anyone can do that with a little gumption and asking around.; If you’re just starting out, there’s a good chance you can add value to other investors locally by helping them work their database of investors, offering their deals and opportunities to their people with you doing the relationship marketing as a joint venture. Make the calls to their people, offer some properties for sale, and ask questions so you can stay in touch afterwards.

It’s just like I tell interns who work with our company. Contacts are nothing. Connections are everything. Connections can be channeled to create cash (in this or any business). The phone is the greatest tool for turning one to another in my experience.

It can be used to set up a meeting, invite for coffee, schedule a dinner, ask for an in-person presentation, or invite to an event. It can be used to “ping” (briefly contact to stay in touch and top of mind), ask probing questions to find out what others are doing and what their challenges are, to uncover ways to add value to others-- and then to actually follow through on that value add—and to see what investors are looking for that you can sell them.

It's all right there for us. But if you’re looking at a spreadsheet of contacts, and you’re not yet sure how to turn them into connections that create cash, then my advice is simple: grab your friend the phone and start dialing.

And if you don’t yet have a database “book of business” for your real estate efforts, it’s time to get one. I just gave you two options to build your own through reverse marketing databasing or aligning yourself with a company through joint venture who’d only be too happy to have you make them money offering their opportunities and properties to their investor database with you doing all the work to work their contacts and you splitting profits when those connections create cash on transactions.

Multiple Ways to Market Real Estate Deals

If you get enough eyeballs in front of a good deal, somebody will snap it up.  There are multiple ways to market real estate deals.  Let’s take a look at some of them, shall we?

You’ll want to make sure that the local influencers know about your deals.  They will most likely be a part of your local REIA (real estate investor association) club. Post them on the local REIA’s website if you can. Pass out one pagers on your deals at local meetings. Talk to the person who runs your local club.  Become friends with them.  Take them out for lunch.  Let them know what you have, and they’ll know people in your local area who buy those particular types of deals. That’s a great way to market real estate deals through an influencer and a group format where people who share an interest in something come together.

Bandit signs are another among the list of great ways to market real estate deals.  I’m not advising you to use them, especially if they’re illegal in your area. If that’s the case you probably shouldn’t; however, they are a one of multiple ways to market deals that I’ve used with success as have a number of other entrepreneurs. So check out the local ordinances in your area about the use of roadside bandit signs stuck in the ground or to a telephone pole with messages marketing your business or real estate deals.

Blogging is a good way to market your deals if you develop a nice following. You want to make sure you update your blog if you have a deal for sale, and hopefully, you’ll have put things on the blog previously where people know you’re a marketing wholesaler so when you offer them a wholesale deal they’re expecting it. 

When I tell people they should develop their elevator pitch, they sometimes don’t understand the power of their own mouth and the people they meet on a regular basis to help them get the word out about their business. Consider that sometimes you may meet 10 people in a day, sometimes only two, and sometimes you might meet 50, but if you have a property under contract for 30 days that’s a potential of 50 to 1600 people that you run into who ought to find out about that property. That’s a great addition to your plan of ways to market your real estate deals, right? 

Now, your elevator pitch may no longer be the general, “I wholesale properties in the North Carolina area, are you a landlord or rehab buyer looking for a rent-ready property here or maybe a fixer-upper?” Instea, when you have a deal for sale your elevator pitch can become specifically, “I have a deal that’ll be worth $87,000 once it’s fixed up and you can get it for $57,000 because there’s a ton of equity in it and here’s what it’ll do for you. Are you a rehabber? Are you interested? Are you a landlord? Are you interested?” Boom! There’s your elevator pitch way to market that deal.  You want to switch it up to whatever your most pressing need is in your financial life or career, or whatever your best current opportunity to turn a profit gets mentioned in your elevator pitch. If you have a property to sell now, then that’s an easy choice.

Social media is another good one I won’t go into depth on though. Just make sure people know you have something to offer and that those who they know should jump on it.  And continue building your following so that next time you have a deal for sale you can market it to more people at once by using this strategy.

Article marketing is a fun way to market properties believe it or not.  Here’s a cool tip among the various ways to market real estate deals I’ve used.  You can use a re-direct link in the resource box of an article that can later be re-directed to somewhere else.  The resource box is the only place you can normally have a link when you are submitting articles online. It is where the reader looks to get more information about the author.  You’ll set up the re-direct link to go to a page that says something general about you.  

Here’s an example: “Find out more information about Danny Welsh, marketing and real estate, blah-blah-blah, go to blah-blah-blah dot com.”  When you have something that you really want to drive traffic to such as a real estate deal you currently have under contract, you can drive traffic through a simple re-direct through your website domain registrar. (if you don’t know what that is, please find out). Then, instead of someone clicking the link at the bottom of your articles and seeing general information about your business, you can then for a limited time re-direct that domain directly to the flyer for that real  estate deal you’re trying to sell, because people are clicking on that all the time. People are finding that in many different ways and you can use that re-direct strategy to drive attention and traffic on the web, for example, to whatever you specifically have to sell.  

For an example of how that might look as a way to market your real estate deals, let’s say your name is John and you have a re-direct and it might be something simple like JohnsNewRealEstateDeals dot com, so you consistently and over time build up links out on the web that go to JohnsNewRealEstateDeals dot com to find out what you’re up to and what opportunities and deals you have available. You use that website domain name on your article marketing and other sources of online marketing so people are always clicking through to that site. So, when you have a new deal today you want to sell, all you do is re-direct that domain to your postlets flyer, your Craigslist listing, the specific deal on your blog or what have you—wherever has the information on that particular deal.

That’s a GREAT way to market real estate deals and get immediate attention it from the moment you have it available for sale. So the more general marketing you do out there on the web through article marketing or other that’s promoting your business and typically is driving people to JohnsNewRealEstateDeals dot com can when the opporetunity presents itself target and hone attention in on your current real estate wholesale deal. 

Of course, even though it’s among my favorite ways to market real estate deals, this website re-direct strategy works in many businesses and not just real estate. The key is to direct people’s attention to a generalized source of information of value at a website link, and so continually over time through internet marketing strategies that are permanent (meaning the links and information associated with your marketing last forever). Then, when you have a special promotion, sale, or other piece of news or opportunity you want new potential clients to see FIRST when they learn about your company you simply and for a temporary time re-direct that link directly to the webpage, flyer, or listing for what you want them to see.

Pretty slick, huh?

By the way, I do not own or control JohnsNewRealEstateDeals dot com nor do I plan to at the time of this writing article. That was mentioned for an example only.

These I’ve mentioned are multiple ways to market real estate deals that you should have setup in the background before you need them, where you’re very easily able to turn the faucet on and drive attention, traffic and interest towards whatever it is you currently have to sell.

 They are some simple things everyone can do.

 A note to beginners looking to sell their first real estate deal, for instance as a wholesaler: Get rid of any social fears you may have, talk to people and make sure to let them know when you have a deal for sale, because when you have a wholesale deal and you’ve yet to wholesale one, the most important thing you can do is wholesale it. That’s your focus, that’s your mission. You don’t need a million ways to market real estate deals to get your first or next deal done. You just need a few things you do consistently, week in and week out, and of course you can (and should) add to these over time. I’ve just shared with you some of what’s worked for me to market real estate deals.

Are you a dabbler dreamer or a powerful entrepreneur  who wants to master wholesaling real estate properties?

 When you commit to changing your circumstances, you must be like a flower bursting through the concrete sidewalk of circumstances, surging upward through solid obstacles like time limitations and job necessities because you absolutely MUST get to the warming sunlight on the other side of what's holding you back.

To use another analogy, in my experience those who succeed despite significant obstacles do so because they MUST experience life on the other side of their obstacles in the same way that they MUST breathe.

What about that real estate wholesaling business you wanted to create and grow? You know, the one you’ve read every ebook available online in pursuit of starting but still haven’t done so much as put together a spreadsheet of contacts who have money, buy properties, or may know someone who does both, much less pick up the phone and call those folks to find out what kind of properties they’ll buy so you can line them up.

Are you even building your buyer's list? If you’re not building this important component of your book of business, in my opinion you’re just not committed to the reality of doing business, but only the idea of it. I’m no longer currently involved in real estate wholesaling, as I found other areas of the business to be less time intensive, more exciting, scalable, and ultimately with better opportunities for larger profits. But as someone who started his career wholesaling houses to make a buck, I despair when I hear from people all the time that they want to start a wholesaling properties business but haven’t yet done a deal. Uh…pick up the phone man!

Put that list together, find them from your own contacts, social networking, websites, bandit signs, ads that say “we buy houses” on the side of the road and in your local newspaper and Pennysaver. Database their contact information until you have a couple hundreds and then start making calls to find out who is a serious buyer, for what, in what areas, and with what kind of buying power. It doesn’t have to be much more complicated than that. Armed with the information from a few serious buyers—typically as a wholesaler your buyers will be landlords who plan to rent the house or rehabbers who plan to fix it up and resell it—you’re ready to go make money in the middle when you find and tie up those deals.

Make sure when you make your buyer investor calls that you are asking them their criteria, what they're looking for and where? How they are prepared to buy and when? As them for referrals too. You’ll be surprised how many will tell you about their “buddy John” or “boss Sandra” who buys properties too, and get their contact information to add to your database. This is how you set yourself up to be matchmaker for wholesaling.

Are you lining up inventory sources indirectly, through other wholesalers, developers, or what? If so, you can scale that business better than if you have to also in addition to finding buyers find sellers too. If you are doing both, and directly finding motivated sellers with deals, you can do both but remember you can find motivated sellers all day long—what gets you paid are they guys and gals who can write a check for one of those deals and are happy to write one with a few extra digits on it so you can make a small profit too. Focus on finding them, and you’ll be way more than half-way there to success as a real estate wholesaler. This is how you make money from those buyer relationships, by matching what you can find with what they are willing to buy.

If not, that cash infusion you want and need is not likely to come from real estate efforts. Because those are the activities that create profits in a wholesale real estate business.

Disclaimer: I am not an expert nor a mortgage broker or loan originator. Do your due diligence. :)
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This is something I have learned in networking with other investors here in Tampa bay. 

FHA 203KS loan is the streamlined version of 203K FHA loan. And 53rd Bank have a great program wherein they brought Lowes and Home Depot in the picture. What do I mean by that? Well for a first time home buyer they now have the priviledge to work with their favorite and trusted brand names Lowes and Home Depot in doing their rehab work for them. Home Depot and Lowes works with 53rd bank in order to get the rehab done up to $35,000 worth of repairs as long as it is none-structural (no additional or removal of rooms), no fencing, no landscaping and the likes... again I am not an expert nor a mortgage broker or loan originator, please perform your own due diligence. 

What happens is, this gives the qualified buyer the ability to renovate to their hearts content up to $30,000-$35,000  worth of repairs. New kitchen, new bathrooms, new a/c, new roof, new flooring, new cabinets... etc. etc.... and with the assistance of Home Depot or Lowes where they will estimate, guide and will do the renovations for the buyer. Buyer would feel more comfortable doing their own renovations with their own taste.

This should address the dilema of not having the money to renovate for the first time home buyer. 

Total cost of acquisition and renovation should be close enough to the after repair value or future value of property after fix-up.

Ok, so what does that do to my wholesaling business? Want to profit up to 20% mark-up? If you bought a property and will sell it 90 days or less to these type of buyers, FHA will allow up to 20% mark-up profit. If more than 90 days and with a little improvement on the property, FHA will allow a 40% profit by wholesaling the property to this first time home buyers.

These type of buyers are most often outbid by cash buyers and are not able to get a property under contract because they go after the properties in which 25++ investors are eyeing upon too. Want less headache without the renovations? Wholesale to these type pre-approved buyers. Where do you find them? Talk to your local Mortgage Loan Originator. They've got a pile of them. Ask them where and what these buyers are looking for?
Now make offers on these properties that these  buyers are looking for and sell it to them. 

Smart for Fifth Third bank to bring in Home Depot and Lowes into their program. :)

Hope you picked up some great ideas here.... happy wholesaling! :D

Here's a resource from Director Jo Amick: (Thanks Jo!:)  http://www.brianbeattyonline.com/xsites/Mortgage/258/content/uploadedFiles/203Ks%20Quick%20Reference%20Guide.pdf

And here are some resources from google library:
 http://www.dallasfhaloans.com/493/fha-203k-or-203ks-may-be-your-answer-when-buying-a-home-that-needs-work/

http://www.loansquawk.com/blog/fha/fha-203k-remodel-loan-rehab-loan-fha-203ks%E2%80%A6what-read-on%E2%80%A6/

http://pulsefunding.com/loans/rehabilitation-loan/ 

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Disclaimer: I am not an expert nor a mortgage broker or loan originator. Do your due diligence. :)

Hey everybody,

This is my first post. I wanted to take the time to introduce myself and also give a first-person account of how to build relationships.

I'm a young man who has taken the road less traveled by his peers. I'm sure most of us have a similar story. What's interesting about it is how it came to be. We have all had a defining moment that has pushed us or pulled us into the real estate world. Some of us have wanted it from the very beginning (such as myself). Some of us have stumbled upon it as an alternative or supplemental income source. But all of us realize the potential. And this is my story.

I grew up in a middle class home in Freeport, New York. For those that are unfamiliar with the town, it's on Long Island in Nassau County. I was a great student in school, graduated number 19 of 460 people and had great relationships with some of my more vocal teachers. Meaning, the teachers that my friends hated, I loved because they expected more from me than to just regurgitate info. They wanted me to think. And I showed them that I could.

I went to college for 3 semesters in two different schools (Nassau Community College & DeVry Institute). I hated it. It wasn't what I wanted to do. I knew I could do better even at the tender age of 19. So what did I do? I joined an MLM company, that's what I did. It was called Primerica (God, I hope I don't get sued for mentioning the name. Not that they'd get much at this point in time :)  I learned about loans and securities and finance. But mostly, I learned about myself. I learned that I had the mental capacity to do just about anything but I was lacking the courage to try (sound familiar?) I stayed in that company for 3 years and even made a few insurance and loan sales but the time had come for me to move out and live on my own. Here's where it gets interesting...

My first move was an attic apartment within the same home as my immediate family. My mother, sister, brother, and stepfather lived on the first floor. My aunt, cousins, nieces, and nephew all lived on the second floor. And I was in the attic. I lived there for years until my landlord decided that he wanted me to move out. I was rowdy and had small parties all the time. My family didn't mind because they were my family but I guess someone heard something and told on me.

So I had to move in with a friend. But he lived in Brooklyn. I learned a lot about him and myself during that time. It was only 8 or 9 months. Then I moved into my own apartment in Brooklyn for about a year. Then, a few months before my lease was up I got laid off from my job as a marketing analyst for a small internet firm called Partsearch Technologies (hope they don't sue either). It was five months before my lease was up and I was running out of money fast. I was on unemployment but it wasn't enough. I needed more.

I started picking up books and buying courses and trying to learn what I needed to learn so that this crap would never happen again. I read the book "Rich Dad, Poor Dad" and it changed me forever. I spent ALL my money on books and courses and read them all but I was stuck. I didn't know how to do anything although I had read all about it (I know that just hit somebody on the head...probably really hard too). I was scared out of my mind to do anything. So what did I do? I bought MORE books and courses (ok, your head hurts now, I'll stop, I promise, I think ;)

I was flat broke and had to move in with the same friend I moved in with in Brooklyn but by this time he had moved to Atlanta. That was December of 2008 and I've been here ever since. I don't live with him anymore. I got my own apartment but then I lost that because the Census job I worked was only temporary and I was out of money again. So I moved with another friend (not the same one).

During the last 60 days I have taken action. I read a bunch of stuff online and I educate and motivate and inspire myself regularly. Hell, I'm the only one who can anyway (that should be a revelation but I promised I wouldn't hit you on the head anymore). I've met the most wonderful people and I've met some duds but this is where I'm going to outline my formula and give you some real-life examples. Here goes...

I jumped on LinkedIN and started poking around. People posting about buying, selling, lending. I injected myself into conversations and started talking to people digitally. When I didn't have an answer or I needed help, I would go post on REI Club and Bigger Pockets. Man, did I learn a lot. I took that same information back into those conversations and people started noticing me. People sending me colleague requests and emailing me out of the blue. Apparently my style (which you are just now getting to witness) is very authentic and real. People are drawn to that. Especially with so many 'fakers' out here trying to get something for nothing. Has anyone ever heard of a deal with 15 intermediaries? No? You know why? Because it never closed and never would. Who is gonna pay 15 different people for finding the same deal? Answer? Nobody.

I joined this network about a week or two ago. I've got a few friends and have one in particular that I would like to take a minute to rave about. Anthony Silva. The man is a wealth of knowledge. And apparently I am too. We were on the phone today for almost 90 minutes, 83 to be exact. This was our first phone call. We have never spoken to each other before. I learned quite a bit about him and he about me on that phone call. It's like we knew each other. Our stories are similar. As I'm sure yours is too. He lives in Utah and I live in Atlanta. That's a rather large geographic gap. However, the internet and this network in particular is responsible for us connecting. Well, I'm sure the good Lord and the law of attraction had something to do with it too.

I say all that to say this: It's ALL about RELATIONSHIPS. If you're the kind of person who just wants to do a few deals and get on with your life, you're going to have a tough time. But if you're in this thing for the long haul you are going to need to develop certain skills. And the one skill that will pay every bill that you have is People Skills. We've all heard it. We all know it. But very few of us DO IT. And that's the difference between a champion and a chump.

Which one are you going to decide to be?

P.S. Don't just sit here and say "I'm gonna be a champion, I'm gonna learn (or begin to show) people skills. That's not enough. A decision is not real until its acted upon. Ask Tony Robbins and anyone else who understands this profound fact.

If you want more of me you're gonna have to fork over big bucks. I may never post another blog again. Get it while it's hot...

Until next time (if there is one),
Allen T. Gregory

P.P.S (P.S's a are so lame but they're useful). Anyway, I might be kidding and I might not. But you're going to have to use your people skills to find out.

Carpe Diem

I've been a Realtor for over 15yrs now and an Investor for two and I've never seen a market so full of excellent deals. I decided to take advantage of my realtor connections to help others that may want to invest in the Baltimore area. I hold multi-units simply because it produces more cashflow and I wholesale single and multi -units the great thing about real estate is that its never the same and its a great challenge. I'm always looking for partners and funders for my deals have an excellent day.

About a month ago to the day, I finally got my first deal under contract. I found the seller through a bandit sign and boy was he motivated! He owned a rental property that he had paid cash for and couldn’t afford maintain it any longer. His personal residence was going through foreclosure and he had a ton of credit card debt that he racked up through a failed business venture. This guy was hurting!

So needless to say I rushed and got the property under contract for $17,500 and I promised I would close within 30 days. I hadn’t realized that once I got it under contract, I was about to be schooled in the School of Wholesaling-For Hardknocks. Unfortunately I didn’t close the deal, but here are the valuable lessons I learned through the process.

Lessons Learned

1)      LOCATION LOCATION LOCATION! Focus within your immiediate area when starting off! DUH!!

The house was located 1.5 hours away from where I live. Correction: it was 1.5 hours away on a good day, with minimal traffic. On a regular weekday it would take me 2+ hours to get there. Once it took me 3 hours 45 mins to get there!! Yes-traffic was terrible that day and I encountered 2 fatal car accidents on the way there, one of which a medical helicopter had to be called in to pick up one of the victims. God bless them. My daughters were in the back seat and they were not happy that day, which leads me to lesson 2!

2)      When meeting a seller: Leave the kids at home!

I had to bring my daughters with me a few times (ages 5 and 2) to meet the seller and see the property, and although I love spending time with them- I found myself fussing with them and trying to keep them under control when speaking to the seller. I felt this was very unprofessional on my part but it may have helped the seller feel more comfortable with me and view me as a family man. I’m not sure. But I learned, it’s best to keep business time and family time separated when conducting business. Some people may consider it unprofessional and rude when your kids are playing loudly , screaming and running around their problem property.

3)      Due Diligence! Know ALL the FACTS before making an offer!

After finding the ARV, market rent, annual taxes, HOA fees and other factors that are pertinent to the deal, I made my offer. “I’ll take it for $17,500!” , I said to the seller when I called him with my offer. But I under-estimated one thing: actual REPAIR COSTS. As a matter of fact, the word “under-estimated” is in itself an “under-statement” in this case. On this deal I estimated, in my own little mind, that repair costs would be about $1,000 or less. That would consist on a new interior paint job, and replacing a few bathroom fixtures. Yeah, this house is GOLD I thought and I made my offer. Ooopsie!

            After getting the house under contract and getting a copy of the key, I called in a contractor (contractor lesson learned is to follow) and we went and walked through the house. The contractor pointed out many OBVIOUS repairs that I had overlooked because of my initial excitement. Bathroom floor tile needs to be bleached or re-grouted, shower tiles were missing or falling, the bathtub had rust and holes in it and so water was leaking through onto the floor underneath, the ceiling throughout the house had become loose and was about to cave in (the 3^rd bedroom was BAD) so it needed to be reinforced, the roof in the back was rotten and obviously leaking so roofers were going to have to be brought in to repair it, windows were cracked and needed replacing. In total, it would cost well over $7000 to make these repairs. Take the time to gather all the RIGHT information before making your offer and negotiating! I'm not a contractor and I know almost nothing about contruction so I should have contacted a contractor from the start before making the offer.

4)      Contractors! Grrr…..!

The contractor I met with was one tough cookie. As soon as he saw me, he knew exactly what I had called him in for and he was determined not to help. This guy refused to give me a number to go by as far as repair costs were concerned.

After walking through the house and taking notes, I asked “So given all the repairs we need to make, how much would it cost me for materials and labor?” He replied, “Oh, I can’t give you a number."

I asked, "Oh? Why not?" and he answered, "Well a lot of people ask me that only so they can see how much their going to profit on the deal and give the job to another contractor. It's a big waste of my time. I just can’t tell you.”

I was HEATED after that! “What a waste of time driving 2 hours all the way out here for this estimate only turn up empty handed!” I thought. After pushing him a little more he was kind enough to say it would cost a lot more than $7000 but that he couldn’t tell me any more or give me a breakdown of the costs and, then he left. Somehow I felt cheated after that. LOL

Anyway, find a contractor you can trust and explain to them BEFORE you meet with them at the property that you will need a solid estimate by the end of the walkthrough so they know what you expect and what they can expect as an outcome of the meeting. Tell them if their estimate seems the most reasonable then they will get the job once you close on the deal or you will highly recommend them to the end buyer to do the job. It wouldn’t hurt to actually get multiple estimates either. I just went with the one, another mistake. 

5)      Re-Negotiate!

After finding that the repair costs were going to be higher than previously thought, I recalculated all my numbers and found that I was going to have a harder time selling it at the price I planned on offering it at and I would make less profit as well. But me being the shy introvert that I am, I refused to call the seller to re-negotiate for a lower price.

6)      Marketing! Let the world know dammit!

Once I recalculated everything, I was ready to market the property to the world. But I didn’t. For reasons yet unknown to even myself, I only listed the property on Craigslist, Kijiji, and Oodle. Why? Good question. Maybe because these sites were free. Although I could have afforded to buy a few bandit signs to post around the neighborhood, or maybe even a classified in the local paper, I simply chose not too. Perhaps I was over-confident that the property would sell itself through the ads I posted onine. Either way,  I am more than convinced that THIS is a major reason as to why the house did not sell. Next time, once I get a house under contract I’ll make sure to spread the word like wildfire and tell everyone and their momma about it!

7)      BUILD A BUYERS LIST!!

This should be at the top of this list as it may be the single more important key to wholesaling. Always have a buyer’s list available. Now although I did have a buyer’s list of about 30 investors, neither of them were “serious” cash buyers and they especially were not looking to buy investment properties 2-3 hours away. Now, I am on a mission to find SERIOUS cash buyers that can close at a moments notice. I’ve learned the hard way how important this really is.

These are a few of the lessons I learned from my first deal...which never closed. Many of these mistakes seem like common-sense but for some reason or another I missed the clues. All of you beginners out there, take a moment to learn from my mistakes. All you veterans, just have a laugh why dontcha! Heck, why let you have all the fun?  I’m laughing about these myself now.  :)

 

5934 E 21st Street
Indianapolis, IN




3BR/2BA Single Family House $17,000
don't know if it was a crack house but the price is really cheap
3br/2ba with basement, large living room with fireplace, 2 car detached garage, large utility room with washer/dryer hookups, enclosed front porch, large, fenced backyard with more than 20 trees. Needs some siding replaced, kitchen needs repairs. Call me at 317-855-8366 or go to

http://www.hoosierflippers.info

http://www.flickr.com/photos/30889687@N05/sets/72157625152920130/

http://www.youtube.com/watch?v=X7uC1m_5gVQ



Bedrooms 3
Bathrooms 2.0
Floors Unspecified

Sq Footage 1,404
Lot Size 12,000 sqft
Year Built 1940


Condition of sale: Home being sold “as is” – no repairs will be done. Pre-approval letter & earnest money required. Offers made without proof of funds or pre-approval letter will not be considered



Elia Santiago
317-855-8366
Turn key Homes LLC
http://www.hoosierflippers.info