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Thirty Fourth Week – Another Awesome Wholesale

Danny Johnson / 51 comments

Thank you, sir. May I have another? ๐Ÿ™‚

Here is what happened during the Thirty Fourth week of documenting our flipping houses business on this blog. If you missed the first post explaining what I am doing, please visit this page: See How We Are Flipping Houses.


These are the things I did this week:

Front Yard Stink House Wholesale Closed

Yes. I said the Front Yard Stink House was wholesaled. My intentions were to fix it and sell it with owner financing. With 4 rehabs going, it was just sitting and waiting for work to be done. Stuck a sign in the front yard and put an ad in the paper to sell it as-is for cash.

The second family I showed it to wanted it. They are going to fix it up and live in it. It’s an interesting story really.

You can read all about it here (very interesting story) and see the wholesale flip numbers.

One Contractor Awesome – The Other…

I’ve had two new crews working at the rehabs over the last several weeks. One contractor was very professional and I did not have any problems with him. Work was great, he was on time. The extras did not cost a fortune and some minor extras were just done for free. This is what you want.

The other guy….ARRGH!

I don’t know how many times he told me he was finished. The house is about 45 mins away from where I now live so it really was wasting my time every time I went out there. I don’t think I’ve ever had to write that many punch lists. The items that needed to be fixed or were just not done were even plastered with blue tape so that they could walk through the house and know where things needed attention. After the first round, they even removed some of the tape and did not do the work. It’s hard to keep a level head at this point. Trust me, he knew I was not happy. I’ll just leave it at that.

Can you guess who is going to get the next job? The problem contractor because he keeps things interesting. Just kidding, of course. ๐Ÿ™‚

Bandits Were Busted

Had my guy put out 40 bandit signs. I wanted to get the phone ringing right away so I had him put them up on Tuesday. Not a good idea.

He called me and was frantically telling me that code compliance stopped him and hassled him for a long time. He then made him drive back down the really long and busy street to pull the signs he just posted off the poles. He followed him and watched him take them down. He left some on the side streets and I got a couple calls from those, so it wasn’t a complete waste of money.

They are REALLY cracking down on those things these days.

(Part of me is wondering about this whole situation though. Reason being that the code compliance office did not call the number on the signs. Hmmmm.)

Perp House Going Under Contract

Melissa got a call from a buyer wanting to see the Perp House. After seeing it, they decided they wanted it. ๐Ÿ™‚ Not bad for a first showing. Their credit, income, and job history were great. All looks good and we will be closing within a couple of weeks. Numbers and after pictures will be posted shortly after closing.

Flipping Junkie Format To Change

I’ve done a lot of thinking about the format for the posts on this blog. With this week’s leads, there have been almost 500 leads discussed. Lately, it’s felt like I am just repeating myself with most of them and have grown a little tired of talking about each one (not to mention the time it has taken). I’m not exactly sure how much will be changed, but for now I’m sure that I will not be discussing each lead after this week.

I’d like to start providing more how-to posts and helpful and entertaining stories to jazz things up a little. The posts might not be weekly (that part is starting to feel too much like a job lately – and J.O.B.s and I just don’t agree), but there should be more variation and hopefully more helpful information. That way there might be more than one post per week on occasion and when I want to spend the week playing basketball with my daughters or flying or just lounging around, I can without feeling guilty about not putting the weekly post out. Besides, my son is on the way and will be here very shortly (6 weeks! Woohoo!) and our schedules are likely to be pretty hectic.

So, thank you all for following along and being a part of this and I hope that the change will be for the better.

Marketing

Total Motivated Seller Leads This Week: 20

Lead SourceLeads This WeekNotes
Bandit Signs2From the few that stayed up.
Yellow Pages2For a picture of my ad, visit the ‘The First Week’ post.
Buying Website13For a link to my site, visit the ‘The First Week’ post.
Drive For Dollars0Been a while.
Wholesale Deals1Made Offer
Absentee Owner Mailing0Have not mailed in a while.
Probate0Have not mailed for several weeks.
Craigslist0Just a basic ad saying we buy houses.
Referral1Word of mouth. FREE
REO Realtor1Not good though.

Total Leads To Date [495] Deals Under Contract To Date [11]

‘to date’ means from when I started keeping track of this information on this blog (late March 2011) to the present.
This is the total number of leads for each source and the number of deals put under contract from each lead source.

Lead SourceTotal Leads To Date  Put Under Contract
Buying Website:2777
Bandit Signs:662
Yellow Pages Ad:55
Absentee Owners:291
Driving For Dollars:18
Probate Letters:111
Wholesalers:13
REO Realtors:8
Referrals:10
Realtors:3
Craigslist:2
MLS Search:2
For Sale By Owner:1

[UPDATE: I am now offering websites for real estate investors just like mine. Check out LeadPropeller.com to see how you can generate more motivated seller leads.]

Leads Analyzed

  1. Military Relocation

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 2.5 bath, 1800 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price:$134,000
    Amount Owed:$134,000
    Repairs:None (unconfirmed)
    After Repaired Value:$135,000
    Max Offer:$88,000 – repairs

    Military and he is to be relocated. He has it listed with a rental agency, but has had no takers for several months. There is just too much owed. Next.

  2. Cannot Afford To Keep

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1700 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price:$118,000
    Amount Owed:$118,000
    Repairs:None (unconfirmed)
    After Repaired Value:$120,000
    Max Offer:$78,000 – repairs

    Homeowner cannot afford to keep the house and needs to sell. The problem lies in the fact that they owe what it is worth. Once again, can’t do it.

  3. Slab Leak Likely

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 1 bath, 1000 sf house in a not-so-good neighborhood.

    Here are the numbers:

    Asking Price:$47,000
    Amount Owed:$47,000
    Repairs:slab leak and cosmetics (unconfirmed)
    After Repaired Value:$55,000
    Max Offer:$30,000 – repairs

    Seller has the misfortune of most likely having a slab leak and the resulting serious foundation problems. These houses are no joke and usually require a lot of costly repairs. Too much is owed to even consider anyway. I don’t want to have anything to do with this house.

  4. Tenants Trashed

    [Source: Yellow Pages]

    Homeowner wants to sell a 4 bedroom, 2.5 bath, 1800 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price:$110,000
    Amount Owed:$100,000
    Repairs:trashed – mostly cosmetics and AC (unconfirmed)
    After Repaired Value:$120,000
    Max Offer:$78,000 – repairs

    Seller lives about 4 hours out of town and had this house rented. The tenants trashed the house and she just evicted them. She no longer wants to be a landlord and is coming to town to show the house and sell it quick. I’m afraid that is not possible for me with what she owes. No thanks.

  5. Manufactured Mobile Home

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, single-wide ’95 palm harbor home.

    Here are the numbers:

    Asking Price:$50,000
    Amount Owed:$0
    Repairs:cosmetics (unconfirmed)
    After Repaired Value:not sure
    Max Offer:not sure

    The seller mentioned just needing to get out of it. He does not live there and wants to get the cash out of it. This is in an area my dad buys in so I just passed it on to him.

  6. Rehabbed And Needs Out

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1200 sf house outside of town.

    Here are the numbers:

    Asking Price:$160,000
    Amount Owed:$115,000
    Repairs:none (unconfirmed)
    After Repaired Value:$100,000
    Max Offer:$65,000 – repairs

    Seller rehabbed this house and had it sold once but the buyers backed out. The MLS did not show any listing changes to reflect it being under contract at any time (it was listed). His idea of the value is super skewed and way too high. I’m not remotely interested.

  7. Inherited and Lives Out Of Town

    [Source: Website]

    Homeowner wants to sell a 2 bedroom, 1 bath, 800 sf house in a not-so-good neighborhood.

    Here are the numbers:

    Asking Price:$50,000
    Amount Owed:$0
    Repairs:a lot (unconfirmed)
    After Repaired Value:$50,000
    Max Offer:$25,000 – repairs

    Seller inherited this house and does not know what to do with it. He lives out of town and would like to just sell it and avoid the hassles of becoming an out-of-town landlord. I’m not interested in this type of property in this part of town so I birddogged it.

  8. Tired of Trying To Sell Through Realtor

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1400 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price:$110,000
    Amount Owed:$100,000
    Repairs:cosmetics and minor foundation (unconfirmed)
    After Repaired Value:$115,000
    Max Offer:$75,000 – repairs

    This is another situation where knowing what has happened with a listed property really helps in determining what it should actually sell for (or at least what it hasn’t sold for). This house has been on the market for a long time and has not sold. When the house does not look like it needs much in the way of repairs and is on the market, priced at it supposed value, it likely is not really worth that much.

    They don’t owe very much less than what they are asking and there is just no way for me to make this work.

  9. Does Not Want To Mess With Anymore

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1700 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price:$100,000
    Amount Owed:$84,000
    Repairs:cosmetics (unconfirmed)
    After Repaired Value:$150,000
    Max Offer:$97,500 – repairs

    Seller does not live at this house and does not want to mess with it anymore. She had just had some foundation work done and the house needs some updating. She is not sure whether she wants to sell just yet so I just made a ball park offer. Waiting for her reply and will follow up.

  10. Cannot Afford Anymore

    [Source: Website]

    Homeowner wants to sell a 4 bedroom, 2.5 bath, 2000 sf house in a so-so neighborhood.

    Here are the numbers:

    Asking Price:$80,000
    Amount Owed:$61,000
    Repairs:kitchen and inground pool repair (unconfirmed)
    After Repaired Value:$90,000
    Max Offer:$59,000 – repairs

    They cannot afford to keep the house anymore and are having trouble keeping up with the repairs. Though they are asking $80k, I’m sure they will be willing to take a lot closer to what they owe. I would need it still cheaper, so I just birddogged it.

  11. Bank Owned

    [Source: REO Realtor]

    Bank wants to sell a 3 bedroom, 2 bath, 1000 sf house in a not-so-good neighborhood.

    Here are the numbers:

    Asking Price:$61,000
    Amount Owed:$0
    Repairs:cosmetics (unconfirmed)
    After Repaired Value:$70,000
    Max Offer:$45,000 – repairs

    Realtor called with a new listing for a bank-owned property. The starting price is a little high and there are a lot of foreclosures in the area bringing the prices down and the days on market up. I don’t even really want to follow up with this one because I don’t want it. Even cheap REOs are taking a while to sell.

  12. Wants a Bigger House

    [Source: Website]

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

    Here are the numbers:

    Asking Price:$116,000
    Amount Owed:$82,000
    Repairs:cosmetics (unconfirmed)
    After Repaired Value:$105,000
    Max Offer:$68,000 – repairs

    Completely unmotivated seller. Does not need to sell the house, but would simply like to. And for above full market value. Next.

  13. Realtor Selling Run-Down Old House

    [Source: Bandit Signs]

    Homeowner wants to sell a 5 bedroom, 1 bath, 2000 sf house in a decent neighborhood.

    Here are the numbers:

    Asking Price:$105,000
    Amount Owed:$0
    Repairs:Everything (unconfirmed)
    After Repaired Value:$150,000
    Max Offer:$90,000 – repairs

    This house needs everything. The rehab costs for these old houses can get out of hand very quickly and I would rather avoid them. 5 deals can be done while you are working on one of these. I will be following up to see if I can get it cheap enough to wholesale though.

  14. Wholesale

    [Source: Wholesaler]

    Wholesaler wants to sell a 5 bedroom, 2 bath, 2000 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price:$138,000
    Amount Owed:$0
    Repairs:Cosmetics (unconfirmed)
    After Repaired Value:$180,000
    Max Offer:$117,000 – repairs

    Wholesaler with a deal. Based on my calcs, I would need to buy this one for around 100k. So, no go.

  15. Two Super Tiny Houses

    [Source: Yellow Pages]

    Homeowner wants to sell two 1 bedroom, 1 bath 400 sf houses in a not-so-good neighborhood.

    Here are the numbers:

    Asking Price:Make An Offer
    Amount Owed:couple thousand back taxes
    Repairs:Everything (unconfirmed)
    After Repaired Value:$?
    Max Offer:$?

    Selling because she is disabled and cannot keep up with them. Also owes taxes. Too small. Birddogged.

  16. Foundations Problems and Bad Economy

    [Source: Website]

    Homeowner wants to sell a 4 bedroom, 2 bath, 1500 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price:$65,000
    Amount Owed:$40,000
    Repairs:Foundation and Bathrooms (unconfirmed)
    After Repaired Value:$105,000
    Max Offer:$68,000 – repairs

    House needs complete leveling and the bathrooms need remodeling. I’m sure there are other cosmetics that are needed as well (especially if we level the house). Scheduled to see this one.

  17. Facing Foreclosure

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1600 sf house in a decent neighborhood.

    Here are the numbers:

    Asking Price:$60,000
    Amount Owed:$?
    Repairs:Unknown (unconfirmed)
    After Repaired Value:$90,000
    Max Offer:$58,000 – repairs

    Facing foreclosure. Going to see this one.

  18. Tired Landlord

    [Source: Website]

    Homeowner wants to sell a 5 bedroom, 2 bath, 1400 sf house in a not-so-good neighborhood.

    Here are the numbers:

    Asking Price:$50,000
    Amount Owed:$0
    Repairs:Everything (unconfirmed)
    After Repaired Value:$50,000
    Max Offer:$25,000 – repairs

    Sleepy landlord. Doesn’t want to deal with tenants anymore and would like to dump this headache and nightmare factory. I don’t want it either so it is going to a buddy as a birddog deal.

  19. Realtor Short Sale

    [Source: Referral]

    Realtor working a short sale on a 4 bedroom, 2 bath, 2000 sf house in a decent neighborhood.

    Here are the numbers:

    Asking Price:$85,000
    Amount Owed:More than 90k.
    Repairs:Cosmetics (unconfirmed)
    After Repaired Value:$110,000
    Max Offer:$66,000 – repairs

    Realtor working a short sale and needs a cash offer. Will go by and make one.

  20. Tenants Trashed The Place

    [Source: Bandit Signs]

    Homeowner wants to sell a 4 bedroom, 2 bath, 1200 sf house in a so-so neighborhood.

    Here are the numbers:

    Asking Price:Make An Offer
    Amount Owed:$0
    Repairs:Everything (unconfirmed)
    After Repaired Value:$70,000
    Max Offer:$45,000 – repairs

    Tenants moved out, but not before trashing it. Makes for a good buy. Going to take a look at this one also.

Summary

Leads picked up quite a bit this week. With the rehabs pretty much completed, I can focus more on the marketing and flying. Did I say flying, I meant working on the business. ๐Ÿ™‚

Plans For Next Week

  • Mail some more postcards.
  • Have 3 rehabbed houses on the market and listed.
  • Work at wholesaling a house that I have under contract.
  • Follow up on old leads.

Please ReTweet and Like this post because it’s the nice thing to do and I truly appreciate it.

Danny
Google+

I really like this quote:

“Things do not change; we change.” โ€“ Henry David Thoreau

Thank you for following along with us on our adventures in flipping houses. We hope you are enjoying it and that it is helping you to learn how to flip houses or improve your house flipping business, whatever the case may be.

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51 awesome responses to “Thirty Fourth Week – Another Awesome Wholesale”

  1. Shane in Weatherford on

    Change is good. The last thing we (I) want to read, is a blog put together who feels obligated. Quality over quantity, always.

  2. Jon on

    I had a couple random questions since following from the beginning. BTW, I’ve really appreciated the weekly evaluations. Real world examples with real numbers really helps to vizualize your thought process as well as ground it all in reality. For example, we can see most people are tire kickers or owe too much and most of the time, its not a deal. But we also get to see the diamonds among the junk. But since you have been doing the same thing a long time, I believe change is good. Anyone can go back and review all the old posts to get the same info. Anyway, questions:

    1. You seem to get a lot of leads from your website. At some point, could you explain your internet marketing and website? For example, you have a more developed site, rather than a simple splash page. Reasons/opinions for one over the other? Regarding advertising, I assume you use google adwords. Some details into that would be nice as well.

    2. As you go down your leads, first, I assume you call back everyone to get more details? From my limited website experience, people tend to put the bare minimum to fill out forms so I assume the details are from your callbacks. Also, sometimes you will ballpark a figure over the phone but not always. For example, when the deals seem really juicy(asking price near your max offer price + high motivation), you make appointments. Could you explain your opinion on making offers over the phone or not?

  3. James on

    I agree with Shane. Changed is good! Keep up the good work! Love it!

  4. Mark Wallis on

    Danny, You’ve done an excellent job! It’s OK to make changes in the style or format. But don’t stop posting the weekly flipping junky!!

    Thanks for sharing all your hard work…it’s helps me to know where I should focus my attention in our investment LLC.

    Mark
    Tucson AZ

  5. Don on

    Danny,
    Maybe, instead of listing each lead, you can add a category called โ€˜Leads with No Equityโ€™ and just say how many you got from each source. It seems that a lot of leads owe too much and you still put the info there. This could save you a lot of time. I still like see how many leads you have to go through to find a deal โ€“ this is the real work.

    I have been following your lead and buying houses to flip. I now have contract of two houses. The first I bought as a rental (before you inspired me). It should make about $15k on this one. I have been trying to close it for 4 months (REO Bureaucracy). I had an offer accepted yesterday where I should make about $35k. Itโ€™s a little scary because I have never been inside the house. You can read about the details on my blog.

    I am running out of financing options, but still looking for more. I am still trying to generate some leads. I have a website up and running but I am not getting traffic.

    I am still trying to figure out how to get that #1 spot on Google. Yesterday, I setup an adWords account and I am still working on keywords. Part of my site targets investors (like your wholesale buyers list) and I am concentrating the adWords here initially so I can develop some contacts. I would like to wholesale but I do not know anyone.

    I stole a lot of ideas from your website โ€“ hope you donโ€™t mind.

    Can you give me any tips for getting my site ranked higher on local searches?
    With adWords I can restrict to a city. However, with a Google search I have only been able to find a place to set the country. Is this just done with keywords and content?

    Thanks for all your help.

  6. Don on

    I did not plagiarize from your site – I just used similar concepts. I still donโ€™t think I have as much content as you do. You can take a look and I will remove anything you think I should.
    http://sellmyhouseinwarnerrobins.com/

    Do you think your blog helps the rating of your lead generation website?

    How long did it take you to get the #1 Google spot?
    The #1 spot in my area is not for direct competitors. The top few results go to real estate agents.

  7. Tom Tarrant on

    I agree with the change Big Danny, I am sure it was getting old entering all that raw data all though there are plenty of numbers nerds loving it. I’m so burned out on blogging too its not even funny, but we keep pushing. Like you said its fun to show neat tidbits and keep it fresh. Good luck with the new format, I’m sure it will work out with how much stuff you have going on. Happy Holidays too to you and yours!

  8. John on

    Danny,

    Your blog is a god-send through all the “I got the answer” courses offered. Per the discussion above, looks like adwords as brought a lot of your leads. Can you give me a rough idea of cost of your adwords marketing budget ?

    Keep it coming !!
    John

  9. Kyle on

    Great Results! It seems you are not mailing to anyone that is in the pre-foreclosure process? If this is the case, is there a particular reason for it?

  10. BBrunelle on

    Hi Danny, I was wondering if you had a percentage limit on how much is owed compared to what the house was worth?
    Bill

  11. BBrunelle on

    Thanks for the response. I’ve been on every site on the net and there’s not a one that can compare with yours. By the way, that lead tracker (which I use) is a fantastic item. Thanks again. Bill

  12. Kyle on

    Hey Danny, I was wondering if you were putting your website address on your direct mail pieces for driving for dollar leads, probate letters, absentee owners, or even your yellow page ads? And if so, does this mean that a lot of your “Buying website” leads come from your website plugs in your direct mail pieces?

    The reason I am asking is I am curious about roughly what percent of your website leads come from being #1 on the search engines, what percent come from pay per click ads, etc, because your lead results seem to be extremely lopsided towards your website!

    Thanks for your time!

  13. Eric on

    I just finished reading all weeks. Again, thank you so much.

  14. Kevin on

    I have been reading a lot of the weeks and it has been great info. Gives me hope that someday I can leave behind the annoying jobs I have had and move on to a much better life I control.

    At this time I don’t really have much money and want to start out birddogging and sending leads to wholesalers. Where do I start if I’m not interested in buying properties? Do I just do the marketing like you and then just push all the calls that are decent leads to someone else for a fee? Or would I just look for places without all the marketing?

  15. Bailey on

    Kyle,

    You can get Voice Over IP for $3. Voipo is the one I use and I have 5 numbers coming to my cell phone.

  16. Ahne on

    Hi. I’m new to your site and have read some of the weeks posted above. Thank you so much for taking your valuable time to share openly with us investors all of your ‘tricks of the trade’. You have shared several tips on marketing yourself to sellers, but what are the most cost-effective methods that you use for selling your properties at retail to buyers once they are rehabbed? I’m assuming that you avoid working with realtors and paying them 6%? Do you generate all of your leads through signage at the houses and your website, which, again, is geared towards motivated sellers, not buyers. Thanks, in advance, for your advice!

  17. Patrick on

    Hi Danny,
    Just found out your websites 2 days ago, I really appreciate what you did. This is precious information that you gave out for free. The analysis just talks by itself. I flipped 3 houses and always had in mind to do at least 30K profit, but now I’m stuck in the “how to bring high quality leads with the least effort” minding. Having now some coaching to fine tune all of it. I really thank you for what you did. Hope you won’t stop giving back your gift.
    Patrick

  18. Jim on

    Hi Danny,
    One quick suggestion on the format- since you encapsulated it over a specific period of time with all the stats, could you add a summary income/expense for the period as well? In that way, others (like me) can get a better sense of what it really takes to do this business and what potentials are there from someone who has done it. It would help with the naysayers too! ๐Ÿ™‚

  19. Kyle on

    Hey Danny,

    I used to visit your site frequently a few years back when I was first looking to get started. Fast forward to today, and I’m doing well enough that I am working real estate investing full time now. A big part of my success is due to the knowledge, as well as the inspiration, that I got from flippingjunkie.com!

    One of the biggest things I took away from flippingjunkie.com is the leads and deals you generate from your lead generating website. I have a few sites that solidly generate a low volume of deals annually, but I am looking to step it up tremendously. And unfortunately, I do not have the time or expertise to manage the Pay-per-click campaigns, nor the SEO. However, I am prepared to spend whatever money is necessary in order to get sites that regularly produce deals all over the Northwest.

    My only issue is, picking an SEO guy or PPC guy that I can trust to get the job done. After struggling to even know where to begin in finding a trustworthy expert, it occurred to me that if anyone might know, it would be you.

    Do you know of any individuals/companies that you could recommend whom have the time and knowledge to be able to regularly work on my site(s) – focusing on PPC campaigns, as well as SEO (focusing on getting #1 for numerous key search phrases)?

    Or do you know of how I can find/interview one? My biggest issue is that I am not an expert in web marketing, so it would be very hard for me to know what to even ask.

    Lastly, does leadpropeller.com offer any such services?

    Best,

    Kyle

  20. P-dog on

    So in 34 weeks, thats quite a few properties–nice!

    Can you break down the cost per lead and cost per sale per campaign type?

    I calculated a 2.2% lead to deal rate. What about total est. time to market/work the leads? If I hire someone instead of doing it myself, I’d want to figure the rough cost.

    Best blog ive read on flipping so far!!!

  21. Tony Sera on

    I know this thread is 4 years old, but wanted to say thank you for putting together this 34 week “life of a wholesaler” series. I actually read through it all during a long flight overseas. Great education. Hope you are still wholesaling away ๐Ÿ™‚