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Thirty Third Week – Another Wholesale Flipped

Danny Johnson / 15 comments

Here is what happened during the Thirty Third 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:

Audi House Wholesale Closed

The Audi house has been sold ‘As-Is’ and I couldn’t be happier. Less work for me and some quick cash in our pocket. My intentions were to rehab and sell this house, but just got too busy and I just couldn’t resist when the first investor to see it wanted it. 🙂

The before AND after (same pictures because we didn’t work on it) are also posted.

See the post wholesale flip numbers here.

Rehabs Going Well

The rehabs at the Honk Your Horn house, the Perp house and the Flatulent house are going well. The Flatulent house and Honk Your Horn house are almost complete. We should be putting in flooring, cleaning and hopefully staging both this next week. The Perp house is complete and up for sale with owner financing. Should be able to post the after rehab pictures for that one this coming week.

More Mailings Coming Soon

Didn’t have much time to put together any new mailings but fully intend to this coming week. The letters for the probate leads we got last week should be going out this week as well. We need to generate more leads. That’s all it really takes.

Almost Had a Serious Collision

Went to fly a couple of really cool older airplanes yesterday at a grass airstrip south of town. Just as I was a couple minutes from the field I noticed a giant buck running out of a field toward the road. He was running FAST!

I was doing about 55 or 60 and it seemed as though he was keeping up (sure it wasn’t but it looked that way as it happened so fast). My instinct was to hit the breaks, but as I quickly mashed them I realized that I would probably beat the dear to our fateful intersection and so I returned to the gas. As I passed I saw him leap up and over the back end of my car. I watched him fall behind my car and slide on his hind end a little as he lost his footing when he landed from his, what appeared to be, 20 ft leap into the air. He didn’t even wait a millisecond to transition from the slide back in to a 50+ MPH run. We were both very lucky not to have collided.

Caught Up On Follow Ups

Spent some time this week calling the follow ups reminders that I had due. If you have not signed up for the free lead manager you should do so now. check out the real estate investor lead manager here There are a lot of people using it and you can easily have the system automatically remind you when to call leads back along with all of your notes on the property. It really is indespensible.

Anyway, I was calling follow ups and I had a lot. It’d been a while since I did because we’ve been so busy. For some of them, I was checking the county appraisal website first to see if a new deed had been recorded, signaling that they had sold the property. One of the ones I was really interested in had shown a transaction and I immediately became disappointed. Not as much as I did after I then found out that they just painted the place and have it under contract after 6 days on the market. Darn.

This goes to show why it is so important to use the follow up system and constantly be following up. You’d better believe that that put me back in the follow up mode.

Marketing

Total Motivated Seller Leads This Week: 12

Lead SourceLeads This WeekNotes
Bandit Signs0Been over a month since some went up.
Yellow Pages1For a picture of my ad, visit the ‘The First Week’ post.
Buying Website11For a link to my site, visit the ‘The First Week’ post.
Drive For Dollars0Been a while.
Wholesale Deals0Made Offer
Absentee Owner Mailing0Have not mailed in a while.
Probate0Have not mailed for several weeks.
Craigslist0Just a basic ad saying we buy houses.
Referral0Word of mouth. FREE

Total Leads To Date [475] 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:2647
Bandit Signs:642
Yellow Pages Ad:53
Absentee Owners:291
Driving For Dollars:18
Probate Letters:111
Wholesalers:12
REO Realtors:7
Referrals:9
Realtors:3
Craigslist:2
MLS Search:2
For Sale By Owner:1

Leads Analyzed

  1. Investment Property Wants To Cash Out Of

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 2 bath, 1200 sf house in a decent neighborhood.

    Here are the numbers:

    Asking Price:$70,000
    Amount Owed:$0
    Repairs:Central Air & Cosmetics (unconfirmed)
    After Repaired Value:$80,000
    Max Offer:$50,000 – repairs

    Bought this HUD house a year ago and now wants to sell. He doesn’t seem to be interested in getting much less than what it is worth though. The problem with the house is that it does not have central air conditioning AND the pitch of the roof is such that it would be impossible to run duct work through the attic. It would still sell without the central air, just at a lower price.

    I made him a ball park offer. We will see where it goes. Will follow up as there may be more to the story than I am being told.

  2. Behind On Payments

    [Source: Website]

    Homeowner wants to sell a 4 bedroom, 2 bath, 1400 sf house in a bad neighborhood.

    Here are the numbers:

    Asking Price:$70,000
    Amount Owed:$62,000
    Repairs:Cosmetics (unconfirmed)
    After Repaired Value:$70,000
    Max Offer:$45,000 – repairs

    Homeowner was having trouble keeping up with his house payments and then got laid off today. Bad situation. He owes too much and the house is in a bad neighborhood with a lot of houses for sale. A lot of foreclosures for sale. I’m afraid I cannot help.

  3. Lost Job. Got New, Lower Paying Job

    [Source: Website]

    Homeowner wants to sell a 4 bedroom, 2.5 bath, 3300 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price:$180,000
    Amount Owed:$180,000
    Repairs:Cosmetics and Plumbing (unconfirmed)
    After Repaired Value:$180,000
    Max Offer:$120 – repairs

    Homeowner lost his job at the beginning of the year. He ended up having to take a lower paying job and now cannot afford the house they were living in. He mentioned low flow to several fixtures in the house and is not sure what is causing it.

    They owe what it is worth but wanted an offer from me anyway. So, I made them a ballpark offer based on my usual calculation.

    He didn’t immediately get angry so that was a good sign. He said he would have to talk it over with his wife. I will follow up with this one.

  4. Retired and Moving In With Son

    [Source: Website]

    Homeowner wants to sell a 2 bedroom, 1.5 bath, 1200 sf condo in a good neighborhood.

    Here are the numbers:

    Asking Price:Make An Offer
    Amount Owed:$40,000
    Repairs:Cosmetics (unconfirmed)
    After Repaired Value:$65,000
    Max Offer:$35,000 – repairs

    Seller is moving in with his son and wants to be rid of this condo. Probably more to the story, but this is all I got.

    The Days on Market were horrendous for the complex and so I made my ARV conservative and increased my percentage of ARV for the Max offer.

    My offer would be lower than what is owed so I birddogged this lead.

  5. Relocating

    [Source: Website]

    Homeowner wants to sell a 4 bedroom, 3.5 bath, 2400 sf house in a good neighborhood.

    Here are the numbers:

    Asking Price:$150,000
    Amount Owed:$150,000
    Repairs:none (unconfirmed)
    After Repaired Value:$135,000
    Max Offer:$88,000 – repairs

    Seller relocating and wants to sell his house fast. He owes more than it is worth now due to foreclosures and short sales in the area selling for below value. This is a tough position for a lot of people. Wish I could help, but I cannot.

  6. Weird Complex

    [Source: Website]

    Owner wants to sell five one-bedroom apartments with a restaurant in front.

    Here are the numbers:

    Asking Price:$120,000
    Amount Owed:Nothing
    Repairs:Everything (unconfirmed)
    After Repaired Value:Who Knows
    Max Offer:FREE

    Owner’s health has diminished and she needs to sell this property because the city is going to tear it down. The picture of it on Google maps was enough for me to try and end the conversation early. WOW. Horrible and I can see why the city wants it gone. The place is vacant and the seller had plenty of time to comply with the city but has not and it will now be the new owner’s problem. Not an impossible task, but a very time consuming one. I may have had some interest but not anywhere near the price she is expecting.

  7. Cannot Keep Up With Repairs

    [Source: Website]

    Homeowner wants to sell a 4 bedroom, 2 bath, 1500 sf house pretty far outside of town.

    Here are the numbers:

    Asking Price:Make An Offer
    Amount Owed:Don’t Know
    Repairs:Flooring, Appliances, Plumbing (unconfirmed)
    After Repaired Value:$100,000
    Max Offer:$65,000 – repairs

    Seller cannot afford to keep up with the repairs required at the house. This is over an hour from where I live and is in a rather junky area. Not interested. Next.

  8. Niece Moved Out and Cannot Afford Two Payments

    [Source: Website]

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

    Here are the numbers:

    Asking Price:$70,000 ($65k is least will take)
    Amount Owed:$65,000
    Repairs:Lots of Cosmetics (unconfirmed)
    After Repaired Value:$85,000
    Max Offer:$55,000 – repairs

    Seller’s niece moved out unexpectedly and did not give them time to put the house on the market to sell. She cannot afford the payment for this house and the house she lives in. She is not behind on payments and is not interested in a short sale at the moment.

  9. Pregnant and Needs a Bigger House

    [Source: Website]

    Homeowner wants to sell a 1 bedroom, 1 bath, 400 sf house in a bad neighborhood.

    Here are the numbers:

    Asking Price:$15,000
    Amount Owed:$?
    Repairs:Cosmetics (unconfirmed)
    After Repaired Value:$25,000
    Max Offer:$5,000 – repairs

    Seller is pregnant and needs a bigger house. This house is tiny and located near a huge group of train tracks and a highway. The lot is tiny as well. Birddogged it.

  10. Wants To Move Out Of Town

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 2.5 bath, 1700 sf house in a decent neighborhood.

    Here are the numbers:

    Asking Price:$115,000
    Amount Owed:$101,000
    Repairs:None (unconfirmed)
    After Repaired Value:$115,000
    Max Offer:$75,000 – repairs

    Owner wants to move out of town and needs to sell this house first. It is currently listed with a Realtor at the listing price. There is just too much owed for me to make this work. Better deals are out there. Next.

  11. Lead On My Dad’s Turf

    [Source: Website]

    Homeowner wants to sell a 3 bedroom, 1 bath, 1400 sf house outside of town.

    Here are the numbers:

    Asking Price:$35,000
    Amount Owed:$0
    Repairs:a lot (unconfirmed)
    After Repaired Value:not sure
    Max Offer:not sure

    This lead is for a house in my Dad’s area so I just passed it on to him. Too far for me and I just like to be able to give back a little.

  12. Became Disabled And Cannot Afford

    [Source: Yellow Pages]

    Homeowner wants to sell a 2 bedroom, 1 bath, 800 sf house in a so-so neighborhood.

    Here are the numbers:

    Asking Price:$55,000
    Amount Owed:$45,000
    Repairs:Cosmetics (unconfirmed)
    After Repaired Value:$55,000
    Max Offer:$30,000 – repairs

    Disabled seller cannot afford to keep up the house (repairs and payments). Too much is owed for me but I birddogged it to see if someone else could make a deal out of it. Next.

Summary

I’m glad that the rehabs are progressing and near completion. That will free up a lot of my time to focus more on marketing and leads. The payout on the wholesale deal was great for us this week. The front yard stink house is also being wholesaled and I will give all the details next week. I will be doing more following up this week and trying hard to finish up the rehabs, including the touch ups at our old house so that we can put it on the market.

Plans For Next Week

  • Mail some more postcards.
  • Manage rehabs.
  • 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

Bonus: Click Here to Download My Top 5 Motivated Seller Marketing Methods Guide pdf that will show you, in awesome detail how to use 5 different marketing methods to generate great leads consistently.

Awesome quote this week: I really like this one.

“As I grow older, I pay less attention to what men say. I just watch what they do.” – Andrew Carnegie

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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15 awesome responses to “Thirty Third Week – Another Wholesale Flipped”

  1. Gilberttribe on

    Thank you for the great information. You mentioned that one of the houses you have for sale will be offered with owner financing. How are you providing owner financing? Do you make adjustments in holding costs based on the time of the year. More specifically, you are close to putting a few houses on the market in the middle of November. Is this a concern for you?

  2. Don on

    Danny,
    I am interested in how you sell with owner financing.

    What are the tax ramifications of selling a house and financing it yourself?

    Say you spent $60k on ahouse and sellit for $100k. Do you owe taxes on that $40k right now? Or doyou qualify for installment sale treatment and pay the taxes as you collect the money?

    If the buyer defaults do you have to foreclose? What does that cost?

    How much do you try to get as a down payment when doing your own financing?

  3. Mike G on

    It looks like a lot of the leads you get are for underwater houses. Do you generally not pursue short sales?

  4. steve on

    Wholesale question for you danny. I am trying to find deals on my own but also trying to be in the loop to purchase wholesale deals in my area for rehab. There are several websites and networking groups that I have joined that could lead to some potential deals. I have also been approached by several wholesalers that want me to sign agreements with them (nondisclosure of the deal, payment, etc.). I understand the need to get those things agreed to but I am hesitant to sign what I have seen. They are very vague and IMO could be used to ask for a fee on deals that I find from other sources. Just wondering what your experience has been in this area. Thanks.

  5. Shane in Weatherford on

    OMFG I made it through your blog yay! I’m uber motivated now. Working on my lender packet. I have an acquaintance with money to invest, but he’s gun shy about real estate. I’m trying to sway him. Wish me luck!

  6. Don on

    I have been looking for private lenders without much success. It seems that most recent investment houses I have found have been financed by local banks. But these local banks do not want to be involved in flips and they require 20% investment (based on actual cost – not value). I already use many of these for rentals.

    I need to find a way to lookup houses that were actually flipped. I have been using our tax assessor’s site which is about 6 month out of date. I do not have access to the MLS. My agent just retired and I need to build a new relationship with another agent.

    I have been recommended an agent who is a top seller in the area. I was planning to talk to her about selling the house I am currently working on. Do you use the same agent for offers (if you need an agent)?

    I buy about 4-6 houses a year, but I make a lot of offers. I am not sure if a great selling agent would want to be bothered with all these offers. I am planning to contact one today.

  7. Don on

    I hgad been working with a single agent to make all my offers. So far, I have only bought listed properties. I did give him a ‘blank’ signed contract and he did nto mind making a lot of offers. But he has now left the business.

    I am going to try to develop my own lead so I doubt I will use an agent that much for buying. I hate to bug someone for a lot of MLS data and then never buy through them.

    Thanks for you help.