Do not forget to follow up with your sellers.

Tenth Week – Following Up Is Important

Danny Johnson / 29 comments

These are the results of the tenth week of opening up of my business for you guys to see how my wife and I are building back up to 30 deals a year. If you missed the first post explaining what I am doing, please visit This Post.

These are the things I did this week:

Bandit Signs Were Put Out
50 bandit signs were placed in the same areas as the first batch.

Made Offers On Listed Properties
I was spending a lot of time driving out to look at a single property when I got a decent lead. Sometimes it will take an hour round trip to go and see one across town. What I decided to try and start doing is look for some bank owned or otherwise distressed listed properties near the house that I am going to see. Might as well, look at a couple others while I am out and about. I feel this is a better use of my time. It also reminded me of when I tried to train a relative to go and look at REO’s for me. He was to fill out a quick checklist about the details of the house and take lots of pictures. I then could analyze the deal from my office and make a ‘conservative’ offer based on the info. Almost always a bank will counter. If they countered close enough to where I thought we had a chance at getting it, I would then go and see the house myself. There is some obvious risk in doing this, of course.

Made 6 offers on listed properties. Mostly REO. I was targeting properties that have been on the market 45 days or more. Have had some counters, some rejections and some I am still waiting for a response. I will follow up with all of them and resubmit the offers if they are still available. For what I am using to help keep track of the leads and follow up, see the next item.


Worked on Lead Manager Web Application
I spent a lot of time this week working on a project of mine that I have been slowly putting together. What is will do is allow you to enter leads, notes, follow up reminders, and allow you to perform deal analysis. To me the deal analysis part is the coolest part as you can play with the numbers quickly and easily. Sometime over the next week I should have it ready for beta testing and have several FlippingJunkie subscribers set to test it. This web-based software will be FREE to subscribers of FlippingJunkie (which is FREE to become 🙂 – see the form at the right side of this page).

Dropped The Price on the Hidden Iron House
We were not getting very many showings on the Hidden Iron house, so we reduced the price $5k. Some investors hold out to try and get the absolute top dollar and end up spending more in holding costs and problems. If there is no negative feedback about the house, dropping the price is one of the best ways to move it. I started this one a little higher to see if we could get it, so this quick price change is not hard to do.

Marketing

Total Leads This Week: 18

  1. Bandit Signs – 2 – 50 were put out. They disappeared pretty quickly this time. I am going to give it a break for a month or so.
  2. Yellow Pages – 4 – For a picture of my ad, visit the ‘The First Week’ post.
  3. Buying Website – 8 – For a link to my site, visit the ‘The First Week’ post.
  4. Drive For Dollars – 1 – This is from the 49 letters that went out last week.
  5. Probate Mailing – 1 -The guy that I trained to go and get them is not returning my calls (Was he another investor that wanted to get trained and then just get them for himself? I’ll never know… – I don’t really think so, but it crossed my mind).
  6. MLS – 6 – These are ones I found myself and went and looked at. I did not included them in the weekly total.
  7. Wholesale Deals – 1 – Seemed like it might be possible, but he did not call back. I’ll check again.
  8. Referral – 1 – My closer called with this one and he was given a certain price. Then, the next day, the seller submitted her info on my website with a lower price.

Leads Analyzed

  1. Inherited and Wants To Buy Another House

    [Source: Website] 

    Homeowner wants to sell a 3 bedroom, 1.5 bath, 1300 sf house in a so-so neighborhood.

    Here are the numbers:

    Asking Price:$80,000
    Amount Owed:$0
    Repairs:$Says Not Much (unconfirmed)
    After Repaired Value:$85,000
    Max Offer:$55,000 minus repairs

     
    Seller wants to sell because he inherited it and they want to move to another area. He says they have done a lot of repairs and just need to finish a bathroom. Honestly, most of the time, I do not like to hear that a homeowner has done lots of work. For the obvious reason that they will want more for the house, but also for the reason that the repairs are usually not up to snuff. He didn’t seem very motivated and really didn’t have any reason to be so I shot him a ballpark figure of $45k-$50k depending on repairs. He said $60k would be the absolute least and even then wasn’t sure he’d want to do that. I will follow up.

  2. Manufactured Home In Bad Area

    [Source: Website] 

    I just don’t buy these unless they have land with them, are newer, and I can get them dirt cheap. Of the given criteria, this only matched one of those. It is newer. Next.

  3. Divorcing And Need To Sell

    [Source: Bandit Signs] 

    Homeowner wants to sell a 3 bedroom, 1.5 bath, 1500 sf house.

    Here are the numbers:

    Asking Price:$70,000
    Amount Owed:$40,000
    Repairs:$20k (conservative and includes new AC)/td>
    After Repaired Value:$90,000
    Max Offer:$38,000

     
    Seller wants to sell due to divorce. House looks good on Google Maps. I went and looked at it and the front of the house was the only thing it had going for it. The house had several additions and a very amatuerish apartment garage in the back. He had an inflated opinion of what the house was worth and was not on the same page as me regarding the amount of repairs the house needed.

    Pictures Here

  4. Tired Landlord

    [Source: Drive For Dollars] 

    Homeowner wants to sell a 3 bedroom, 2 bath, 2000 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price:$No Idea
    Amount Owed:$65,000
    Repairs:$needs finishing (flooring, counter tops, etc- unconfirmed)
    After Repaired Value:$125,000
    Max Offer:$80,000 minus repairs

     
    The owner used to rent the house out. The tenants are gone and he started renovation. He does not have the time, nor the energy, to finish the house and wanted to see what he could get for it. He was not motivated and I gave him a ball park figure of somewhere in the $70’s and he immediately said no. I will follow up.

  5. Moving Out Of Town

    [Source: Bandit Signs] 

    Homeowner wants to sell a 4 bedroom, 3.5 bath, 2500 sf house.

    Here are the numbers:

    Asking Price:$150,000
    Amount Owed:$0
    Repairs:$8,000
    After Repaired Value:$160,000
    Max Offer:$97,000

     
    Seller wants to sell quickly so that she can move back to her hometown. She paid cash for the house a couple of years ago and is negotiable. Even though she was asking close to retail, she seemed motivated, so I went to see the house. This is another tough one. She seemed motivated, but I guess she was not motivated enough to take my $95,000 offer. I would love to buy this one and will follow up.

  6. Out of Town Owner

    [Source: Yellow Pages] 

    Homeowner wants to sell a 3 bedroom, 2 bath, 1300 sf house.

    Here are the numbers:

    Asking Price:$70,000
    Amount Owed:$0
    Repairs:$cosmetic (unconfirmed)
    After Repaired Value:$75,000
    Max Offer:$45,000 minus repairs

     
    Caller is a friend of the seller and has done some work to the house. He wanted to see if they could sell it as-is and what they could get. Tire kickers. They kicked my tires and then moved on. I offered ballpark of $40k and he said they would call back if they couldn’t do anything with it. I’ll follow up.

  7. Ready To Be Done With It

    [Source: Website] 

    Homeowner wants to sell a 4 bedroom, 3.5 bath, 2900 sf house newer house.

    Here are the numbers:

    Asking Price:$300,000
    Amount Owed:$274,000
    Repairs:$none (unconfirmed)
    After Repaired Value:$300,000
    Max Offer:$210,000 (70% of ARV) minus repairs

     
    Seller is in the middle of a divorce and just wants to have everything over with. Doesn’t want the house. They just owe way too much. I used 70% of ARV because the house does not need anything based on the MLS pictures. That’s another problem. They have it listed with a Realtor. Unless their agreement specifies that they can find a buyer themselves and not pay a commission, someone is going to have to pay the commission. Too much owed anyway. Next.

  8. Inherited Condo

    [Source: Probate] 

    Homeowner wants to sell a 1 bedroom, 1 bath, 870 sf condo.

    Here are the numbers:

    Asking Price:$60,000
    Amount Owed:$0
    Repairs:$cosmetic (unconfirmed)
    After Repaired Value:$60,000
    Max Offer:$35,000 minus repairs

     
    Seller wants to sell condo in a retirement CO-OP tower. Maintenance is $1200/mo and I’m guessing is also the reason for the super long days on market. It’s a great area. He was not going to budge on price and this resuled in a ‘No Deal’ situation.

  9. 25 Acres South of Town

    [Source: Yellow Pages] 

    Seller wants to sell 25 Acres about an hour from where I live. I would consider this if the price was really good, but it’s not. He wants $300,000. Moving on.

  10. Tiny House

    [Source: Referral] 

    Homeowner wants to sell a 2 bedroom, 1 bath, 700 sf house.

    Here are the numbers:

    Asking Price:$35,000
    Amount Owed:$22,000
    Repairs:$quite a bit based on pics
    After Repaired Value:$60,000 Owner Financed
    Max Offer:$30,000 minus repairs

     
    Seller wants to sell a tiny house that needs a lot of repairs and in an area that is not selling on new loans. This referral is from my closer. Told him I would probably need to buy for $15k. We’ll see. Update: Seller submitted this property on my website now with a lower price (just above what is owed). I am scheduled to see it tomorrow, just for the heck of it.

  11. Large Inherited House

    [Source: Website] 

    Homeowner wants to sell a 3 bedroom, 2.5 bath, 3000 sf house.

    Here are the numbers:

    Asking Price:$Make Offer
    Amount Owed:$0
    Repairs:$unknown
    After Repaired Value:$260,000
    Max Offer:$170,000 minus repairs

     
    Seller inherited a house and is trying to avoid using a Realtor. The house is large and needs repairs (mostly updating). Schedule to see it this afternoon. Hopefully we can build a good rapport and help her to decide to sell quickly for cash. Sometimes it hard with these higher dollar properties because the discount has to be so huge. Scheduled to see it this afternoon.

  12. Tired Landlord

    [Source: Yellow Pages] 

    Homeowner wants to sell a 3 bedroom, 2 bath, 1500 sf house.

    Here are the numbers:

    Asking Price:$80,000
    Amount Owed:$67,000
    Repairs:$unknown
    After Repaired Value:$100,000
    Max Offer:$65,000 minus repairs

     
    Sellers have tenants in the house and they live 50 miles away. They are tired of dealing with the hassles. The problem is that they just owe too much. Next.

  13. Wholesale

    [Source: Wholesaler] 

    Homeowner wants to sell a 3 bedroom, 2 bath, 1000 sf house.

    Here are the numbers:

    Asking Price:$45,000
    Amount Owed:$?
    Repairs:$AC Roof Cosmetic
    After Repaired Value:$85,000
    Max Offer:$55,000 minus repairs

     
    Wholesaler wants to sell this house cash. This might be doable, but he has not returned my phone call.

  14. Inherited Property I Looked at in 2007

    [Source: Yellow Pages] 

    Homeowner wants to sell a 3 bedroom, 3 bath, 1400 sf house.

    Here are the numbers:

    Asking Price:$unkown
    Amount Owed:$45k
    Repairs:$20k
    After Repaired Value:$110k
    Max Offer:$48,000

     
    Caller is the son of the lady I talked to in 2007. He called on my Yellow Pages ad because he inherited the property. Sadly the mom passed away recently. I was entering the information for the lead into my system and the record already existed. This happens from time to time and is always interesting. I looked at the property back in 2007 and had notes on what I had offered and what I had found out home–vestors (don’t want to put the word together because they will track me down and tell me to pull it from my site – had this happen when I submitted an article that had it as a tag – they actually called me and told me to remove it.) had offered. Making the offer today.

  15. Cannot Afford Repairs

    [Source: Website] 

    Homeowner wants to sell a 3 bedroom, 2 bath, 1500 sf house in an older neighborhood.

    Here are the numbers:

    Asking Price:$63,500
    Amount Owed:$62,500
    Repairs:$quite a bit (foundation, etc.)
    After Repaired Value:$90,000 (if done with historic charm)
    Max Offer:$58,000 minus repairs

     
    Seller just cannot afford the repairs needed for her house. It’s an older house and I am sure the repairs will be at least 10k+ giving them the benefit of the doubt. I did not see the house and don’t plan on it because they just owe too much.

  16. North Texas Property

    [Source: Website] 

    Homeowner wants to sell a 3 bedroom, 2 bath, house in Garland, TX. I do not buy that far away. If you are interested in the lead, contact me. Asking price is 108k. He owes 20k.

  17. Mid Texas Property

    [Source: Website] 

    Homeowner wants to sell a 2 bedroom, 2 bath, house he built in Blanco, TX. This is about an hour north. The house is on 2 Acres and he wants 100k. Just not interested at that price. Next, please.

  18. Wants To Move Close To High School

    [Source: Website] 

    Homeowner wants to sell a 3 bedroom, 1 bath, 1000 sf house in an older neighborhood on the southside of town.

    Here are the numbers:

    Asking Price:$60,000
    Amount Owed:$33,000
    Repairs:$addition is shifting
    After Repaired Value:$65,000
    Max Offer:$35,000 minus repairs

     
    Seller wants to move closer to the High School because her daughter will be going there next year and she does not have transportation. I’d think it would be easier to find a way to get transportation that to sell a house in this market. Sorry. No can do.

Summary

Got some offers out and am following up. I’m sensing the next one is close. This amount of leads should be sufficient to meet my goals. Just have to keep this going and I’m sure to be able to buy the number of properties we want to this year.

Plans For Next Week

  • Make Lots Of Offers
  • Follow Ups
  • Have Beta testing started for the Lead Manager
  • Prepare article on how to talk to sellers.

I want to leave you with a quote from a sign I saw yesterday as I was going to the airport to get some R&R.


Thinking will not overcome fear, but action will.

This should be printed and posted on your computer or mirror in your bathroom. This quote sums up a lot of what keeps people on the sidelines.


As a side note, I went flying with my instructor to work on some things. He threw in some engine out emergency procedures randomly. This is where we will be flying along and he will chop the power (engine to idle). I absolutely love practicing these. You have to put the plane in the best glide speed and immediately look for a place to land. Most of the time we can barely make an airport and these are the ones I really like because I have to take it all the way down without any use of power. So speed and altitude management are key. I only bring this up because if I just sat arround worrying about my engine going out one of these days, I might not want to fly as much. Instead, I go and practice the scenario and take action. This makes me a lot more confident and want to fly more often.

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29 awesome responses to “Tenth Week – Following Up Is Important”

  1. Jay Palmquist on

    There’s a few deals you’re sharing about that seem like ones I would want to do a Sub2 transaction on. Hmmm.

    Love reading your journal/blog!

  2. Steven Blanton on

    Great quote and example to follow! Thanks for being so willing to share your info and allow us to use your new lead tracking/deal analyzer system for free! I’m excited to see how it functions!

  3. Brooks on

    Danny,
    I’ve done 2 deals from my website leads (one of them was my personal home!).
    The site’s nothing pretty – http://www.mobilehousebuyers.com – not nearly as impressive as yours!
    Any pointers? You seem to get A LOT more leads via your site than I do.
    Possibly because your market is larger?
    Possibly you do a better job at pushing people to your site?
    Any thoughts?

    And GREAT info on ‘feel the fear and do it anyway’ — I appreciate reminders like these as I approach different obstacles — makes the climb (or busting of) over that wall much easier!

  4. MortgagesByMark on

    Hey, I really like your site. Lots of good practical info about real estate investing. If you don’t mind, I’ll add you to my blogroll. Have a good one!

  5. Lupe on

    Thanks again for the great post!
    I just have a quick question…when you submit offers on listed properties do you have your own agent or do you let the listing agent represent you as the buyer?

    Thanks

  6. Brooks on

    Ask and you shall receive — great feedback and thanks again!

  7. Brian on

    Love the blog… keep up the great work! I just read through your entire site in about a day…it makes it hard to walk away and do work lol.

    Question about driving for dollars- Have you or anyone you know thought about just having prewritten letters where you can just write in the address while in your car and dropping them in the mailbox? Idk if I’m just a noob thinking a little too out there or if this might actually make some sense (cutting down on stamp costs).

  8. Lupe on

    Danny you are AWESOME!!!

    Thanks for the response.

  9. Brooks on

    Danny’s got a great tool coming out for analyzing and tracking your deals — stay tuned!
    By the way, great advice for my site, I took it to heart! Have a look — http://www.mobilehousebuyers.com/

  10. Bailey on

    Brooks, I have some suggestions for your site. Is there a way to contact you ?

  11. EJ on

    Hi Danny,
    A follow up question to what Brooks asked about website leads. At one point you mentioned that you had a$120 monthly budget for pay-per-click (did i get this right?). Again, you seem to get lot of leads thru your website. I have had my own Google Adwords campaign running and the amount i need to spend to get 4-5 clicks per day is pretty high (~$30/day). And, of course, this does not mean that all this clicks translate into leads.

    Could also be that SoCal is more expensive to advertise in but it seems to me that your website efficiency is pretty high.

    You already mentioned SEO and time as two important elements to drive numbers up. Do you have a way to track how many of the clicks that your website gets come from sponsored ads vs organic search results?

    thanks,
    EJ

  12. EJ on

    Thanks, Danny!

  13. Fred on

    Hi,

    Can you explain for newbe how sus2 works?

    Thanks.

  14. Fred on

    Danny, love your blog. I am just getting started, and have had a few near misses but no deals yet. I love the amount of detail you are sharing. It confirms that a lot of my thinking is on track, but I need to work harder at finding the deals. Thanks for being so generous with the information.

  15. Nate K. on

    Danny,

    I am planning on going to Realtor school to get licensed. I figure this would be beneficial for me since I plan on doing this for a career. I have no interest in actually being a Realtor, I just figure that it would be beneficial in the future for both getting more properties or leads and selling them so I can post up on MLS myself and dont have to pay a Realtor for something that I could do myself and give them 3-6% for doing something that is simple. Not to mention I would have access to the MLS and could filter out my own leads, instead of hoping that a Realtor I used filtered properties the same way that I would. Do you think this is a good plan and that I would benefit from this, or do you think that I would be wasting my time? If not, please explain. Thanks.

  16. Chris on

    Hey Danny, I have a couple of question about your offers.
    1. When you say Maximum offer $65,000 minus repairs, do you go see the house, estimate repairs ($7,000 for example) and then make an offer at <$58,000? Or do you tell the seller "$65,000 minus repairs"?
    2. Many times your maximum offer is lower than the amount owed. I can' t recall an example where the deal went any further than that but if it did, what happens to the difference.