These are the results of the Fourteenth week of opening up 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.
We Won!!!
Thank you to all of the people that voted for Flipping Junkie in REIClub.com’s Best Real Estate Investing Blogs contest. We took 1st place in the “up and coming” category and I’m pretty sure had the second highest number of votes for any category. That is truly amazing and I truly appreciate all of the support and interest in this site.
THANK YOU!
These are the things I did this week:
Had A Frustrating Morning
I had two appointments this morning. The first was at a house from a lead this week. Nobody showed up. Got up early this morning to be there and I was pretty tired from being at Six Flags all day yesterday. I called the seller and asked if they planned on meeting me. She informed me that she could not make it and had called her brother, who had the key, to see if he would show up. He had told her no. For whatever reason, she did not feel it necessary to CALL ME! What is wrong with people?
While talking to her, I was trying my best to not say something to that effect and to keep my cool. She then informed me of how bad they need to sell it and asked if I could give them an idea based on the exterior. With this I had to assume most everything inside would have to be fixed/replaced and offered $15k. If I get it, I will either wholesale, or fix up and sell with owner financing.
It is important to not complain to the seller about things they do. They are likely doing this to other investors as well and the ones that get angry and do not try to keep a good rapport will lose out on the deal if it becomes one.
The second appointment was for a seller that had called me back in January. I had gone by to see his house and made him an offer then. He finally called me back (now after 6 months) and said he wants to go ahead and sell it. We agreed to meet at the house at 11:00 today and sign the contract and he would take it to his separated wife and get her to sign.
I got to the house and sat down at the table with him to go over the contract and he was really nervous. Small conversation and chit chat did not seem to help any. He then informed me that he should have waited to call me until after he had talked with his ex. What? You mean you did not talk with her first, during that whole 6 months?! So now I’m wondering about the whole thing. How hard should I push? Not very. I left the contract with him and told him I really need to know something by tomorrow because I have other houses to see and need to know if I can make offers on them as my money might be tied up with his house.
Just have to wait and see what happens.
Def Leppard House Is Being Rehabbed
The Def Leppard House is now being rehabbed. View the scope of work, the numbers and the before pictures here.
Closing On Historic House Should Happen Any Day Now
Last Friday, the seller for this house that we have been trying to close, called me and was pretty upset. He mentioned that his attorney had found the release of lien we had been trying to get from Chase. It was apparently already recorded at the courthouse. I was floored as well and was wondering why the title company did not find it. It turns out that the recorded doc was not associated with the house.
The seller had a right to be angry as he had spent no less than a total of 15 hours on the phone trying to get the release. Well, now we are having trouble with Chase getting the payoff, but that should not be too bad. Hopefully we will have this thing closed by tomorrow or early next week. Geez.
Free Lead Manager Web Application To Be Released THIS WEEK!
I should be able to have the Free Lead Manager go live this weekend. This thing is AWESOME! Check back on this site to find out about it and to get access. Or, better yet, subscribe and you will be informed as soon as it goes live.
Gathered Some Probate Leads
Was at the courthouse last week and gathered some leads for another probate mailing.
Hidden Iron House Inspected
The inspection for the Hidden Iron house was completed and went well. Mainly minor things like the kitchen faucet leaking, some damaged shingles need replacing, etc. These things will be fixed within the next couple days and we will continue to be on track for our scheduled closing date and our PAYDAY. The numbers should look pretty good on this one and I will share those once we close.
Marketing
Total Leads This Week: 15
Leads Analyzed
Homeowner wants to sell a 2 bedroom, 1 bath, 800 sf house in a bad neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $0 |
| Repairs: | $10k (based on conversation – unconfirmed) |
| After Repaired Value: | $55,000 |
| Max Offer: | $30,000 – repairs |
Seller inherited the house from his dad and the dad had a crew working to fix it up. The son has the job of making sure the work is done right and the crew is working but is having a tough time. Tough time with contractors, imagine that. 🙂
There is an inherent clash between investor and contractor whereby the investors want the best work at the cheapest possible cost and the contractor wants the work done to a decent standard (some want perfection) for the highest possible cost. Which is understandable. Each side is right. This obviously can lead to a lot of problems. It’s always a balancing act keeping everyone happy and chugging along (hopefully not chugging beer all day – as has happened before with a foundation crew – not good!).
The seller mainly didn’t want to deal with the hassles of the property and I think he did not really care for the area. I passed this one on to a wholesaler friend of mine because the guy did not seem terribly motivated. The title for this lead was his response to me about it. Next.
Homeowner wants to sell a 2 bedroom, 1 bath, 1200 sf house in a so-so neighborhood.
Here are the numbers:
| Asking Price: | $74,000 |
| Amount Owed: | $39,000 |
| Repairs: | $15k (guesstimate based on conversation – unconfirmed) |
| After Repaired Value: | $85,000 |
| Max Offer: | $55,000 – repairs |
Seller is moving out of state and needs to sell this house. She has it listed with a Realtor but the listing is going to expire soon. The house was put under contract, but the buyer backed out when the inspection came back with a mention that the foundation (pier and beam) needs work. The seller got an estimate for a couple grand for the foundation but does not want to spend the money on the house (may not have the money). This is a house that was built in 1920 and does not have central air conditioning. The repairs consist of fixing the foundation and associated damage from that and adding central air and doing updating (saw pictures from the MLS listing). Told her I would need to be in the 40’s and she was not at all interested. I will follow up though.
Homeowner wants to sell a 3 bedroom, 2 bath, 1200 sf house in a decent neighborhood.
Here are the numbers:
| Asking Price: | $125,000 |
| Amount Owed: | $125,000 |
| Repairs: | $none (house 3 years old) |
| After Repaired Value: | $100,000 |
| Max Offer: | $65,000 |
Seller is divorcing and cannot afford the house on one income. They bought in an area that has had a big drop in home values and are now upside down. This might be a good candidate for a short sale. Anyone interested?
Homeowner wants to sell a 2 bedroom, 1 bath, 1500 sf house in a decent neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $0 |
| Repairs: | $15k |
| After Repaired Value: | $65,000 |
| Max Offer: | $35,000 – $15,000 = $20,000 |
Seller has two houses and does not want this one. The problem with this house is it is on the access road to a major highway, albeit the highway is raised. I need to get this one cheap enough to be enticing to a landlord. The house needs about 15k in work to be rentable or sellable on owner finance. I offered the $20k and he seemed really deflated. He will most likely get estimates from other investors. We’ll see if he decided to go with me or not. I won’t be waiting around though.
Homeowner wants to sell a 3 bedroom, 2 bath, house on a busy street.
Here are the numbers:
| Asking Price: | Least Will Take $42k |
| Amount Owed: | $25,000 |
| Repairs: | $? |
| After Repaired Value: | $? |
| Max Offer: | $? |
Seller bought this house 3 months ago! He now does not want it. I’m sure there is something he is not telling me, but honestly, I don’t care as I am not interested in this house. I sent this one to another investor to try and make a deal of it.
Homeowner wants to sell a 3 bedroom, 2 bath, 2000 sf house in a good neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $? (Still waiting ot find out) |
| Repairs: | $quite a bit (unconfirmed) |
| After Repaired Value: | $135,000 |
| Max Offer: | $85,000 – repairs |
Seller called from my letter to them. We found the house by driving for dollars. This is a super motivated seller. The mother-in-law passed away and the house has fire damage. The city also has a case against the house for not keeping it clean and secure. I have to go by and try to get in, as the sellers live out of town. This one might take a little while to work, but I am going to see if I can make it happen. I will keep you all informed on this one. Should be some good pictures after I go by there.
Homeowner wants to sell a 3 bedroom, 2 bath, 1400 sf house in a good neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $0 |
| Repairs: | $12,000 |
| After Repaired Value: | $90,000 (maybe a little more) |
| Max Offer: | $46,000 |
Mother of caller is going to assisted living and needs to sell the house. They have a lot of cats and a dog in the house and it has a definite smell. The house is in good shape except that the bath and kitchen needs updating. I went by and made an offer of $45k as I was conservative with my ARV and I knew that others were making offers. After making the offer, I made it a point to just chat with them for a while to make sure that I had good rapport with them to help nudge them in taking my offer, even if it is a little less than one of the others. Will have to follow up and see what they decide to do.
Homeowner wants to sell a 3 bedroom, 2.5 bath, 1800 sf house in a good neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $25,000 |
| Repairs: | $12,000 |
| After Repaired Value: | $100,000 |
| Max Offer: | $48,000 |
This one is down the street from the ghost house. Seller wants to buy another house but needs to sell this one first and does not want to wait. She knows the market is very slow right now and just wants to get going. There is equity and some motivation so I went to see the house and make an offer.
One of the neighbors is super junky and will definitely make it hard to sell this house. Because of this I decided to offer even less than normal because I would want to wholesale this one to avoid sitting on the house forever. Not to mention the possibility of the house getting vandalized while vacant. I ended up offering $40k and made a point to let them know that the reason is the neighbor. They then confirmed that they do not work and party all the time. Nice. Our taxes at work. I informed the homeowner to contact code compliance (yard is trashed).
I will follow up with this one. They will probably get a higher offer from another investor if they call enough of them. If they don’t, I’ll have a chance at it and will follow up to see.
Homeowner wants to sell a 2 bedroom, 1 bath, 1200 sf house in a so-so neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $0 |
| Repairs: | $quite a bit (unconfirmed) |
| After Repaired Value: | $65,000 |
| Max Offer: | $35 – repairs |
Caller’s parents’ house and they are going into assisted living and need to sell the house (sounds familiar). This house was built in 1926 and does not have central air. I want to be able to buy this cheap enough to either wholesale or sell with owner financing. This is the one I mentioned at the beginning of this post about no one showing up to meet me.
Homeowner wants to sell a 3 bedroom, 2 bath, 1300 sf house in a not-so-good neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $0 |
| Repairs: | $quite a bit (leveling, cosmetics – unconfirmed) |
| After Repaired Value: | $70,000 |
| Max Offer: | $40 – repairs |
Seller simply wants to move and not deal with the hassles of selling a house in this market. The house needs a lot of repairs and is in an area that is mostly rentals and owner financed houses. I went to meet the seller at the house and a strange guy was waiting out front. When I got out of my car and introduced myself, he started acting funny and asking what this was all about. He must have taken a bath in cheap cologne too, because I could barely breathe and could still smell it on my hand hours after shaking his hand. He informed me that the house is his son’s and he is not selling it.
It was obvious the dad was not interested and I was not going to waste my time. The mom was the one that had called me, so I called her. She did not pick up, but did call back 2 minutes later with a blocked phone number. She mentioned the house is the son’s and that the dad lives there and needs to move because the son wants to move to Louisiana. When asked, she said the dad was on title and when I mentioned that the deal could not be done without his signature, she changed the story and said he wasn’t. I told her to get it all straightened out and to call me when I could actually see the house. Don’t know that I would go back anyway as she didn’t bother to tell me she was going to be a no-show at the house this morning. Some people! I could not imagine making an appointment and then not showing or calling OR apologizing when called. (So this has happened twice this week – at least at the one this morning, there wasn’t a stinky, cologne-drenched weirdo.)
Son of homeowner wants to sell a 2 bedroom, 1 bath, 1000 sf house in a decent neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $0 |
| Repairs: | $quite a bit (unconfirmed) |
| After Repaired Value: | $85,000 |
| Max Offer: | $55 – repairs |
Caller’s parents’ house needs a lot of repairs and they cannot afford to fix it. Son feels that they need to sell and move. He wants to see how much they can get so that he can approach his parents. They don’t know he is doing this. I researched it and gave him a ball park of in the $40’s based on what he had told me. I will follow up on this one to see what is happening.
Homeowner wants to sell a 3 bedroom, 2 bath, 1600 sf house in a decent neighborhood.
Here are the numbers:
| Asking Price: | $73,000 |
| Amount Owed: | $Low 20’s |
| Repairs: | $quite a bit (unconfirmed) |
| After Repaired Value: | $105,000 |
| Max Offer: | $68 – repairs |
Seller wants to sell her house so that she can move, but is afraid it won’t sell in its present condition. She also wants to avoid having to wait for a qualified buyer if she somehow manages to find a way to repair the house. I am scheduled to see this one on Friday.
Homeowner wants to sell a 4 bedroom, 2.5 bath, 2200 sf manufactured home south of town.
Here are the numbers:
| Asking Price: | $105,000 |
| Amount Owed: | $94,000 |
| Repairs: | $Minor (unconfirmed) |
| After Repaired Value: | $90,000 |
| Max Offer: | $55 – repairs |
Seller is relocating and needs to sell his house south of town. Too much is owed and it is further out than I want to buy. No thanks.
Son of homeowner wants to sell a 3 bedroom, 2 bath, 1500 sf house in a not-so-good neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $0 |
| Repairs: | $minor (unconfirmed) |
| After Repaired Value: | $70,000 |
| Max Offer: | $40k – repairs |
Caller’s father’s house and he has fallen ill lately and, after recovering, wants to move to an assisted living facility. I think that is 3 times this week. Maybe I should look into assisted living facilities for investments. They did not have an idea of what they wanted and the area has really only had investment property sell in the last year. I don’t like the area and just gave them a ball park of in the 30’s that would allow me to wholesale if bought. Much too low for them, but I will follow up.
Homeowner wants to sell a 2 bedroom, 1 bath, 1000 sf house in a not-so-good neighborhood.
Here are the numbers:
| Asking Price: | $45,000 |
| Amount Owed: | $0 |
| Repairs: | $minor (unconfirmed) |
| After Repaired Value: | $75,000 |
| Max Offer: | $45k – repairs |
Seller inherited the house and does not need it. He had talked to a Realtor and was given higher numbers for listing than what I had determined from my own research (very minimal). The house is on a half acre lot and sitting on one side which might be good for splitting. The area is not one I am interested in so I birddogged this one.
Summary
Leads increased again this week from the low last week. Last Friday, one slipped through my hands as I waited two hours too late to call and the people I was in touch with informed the decision maker of the wrong number. Another investor ended up with it. Getting really close on some this week and feel like we should have a couple more under contract soon.
Plans For Next Week
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Comments (10)
Nice work. Your’e one of the very few who actually takes the time of what you did
that week. Keep up the good work!
About probate…. maybe you can explain in more details how to go about it, where
in what division at the court house, this is located and to whom do we talk to?
Do you buy probate leads, if so from where do you buy probate leads?
James,
Thanks.
Great questions. At your courthouse just ask someone where the probate or death records office is located. Go to that office and ask the person behind the desk or counter for a stack of probate case files preferably from several months ago. This is because if you get the really recent ones, there will be a lot missing as they are in use. Go through the files and look for the ones that mention the deceased owned real property.
I do not buy my leads from any companies. I try to find someone to go to the courthouse for me and gather them just for me.
Congrats on your win Danny… You deserved it!!
Thanks, Althea.
Congrats on winning the blog contest Danny….. I can’t believe you beat me 🙂 lol!!!!
Matt,
Thanks. The win was owed in large part to my wife. She helped get out the vote.
What’s the scoop on the “Historic House” you planned on wholesaling??
We are just closing that one today. We’ve had all kinds of problems with Chase with payoffs and such. Going to start finding a buyer now and will give all details once it’s sold.
Danny,
How do you base your farm on? Do you decide how far you are willing to drive to that area?
Great posts
Thanks
Craig,
Determining your main areas that you want to invest in is based on several factors.
First, are you wholesaling or rehabbing? If wholesaling, you probably want to start with where you most serious buyers are buying. If you don’t know any investors that you would consider serious yet, try to find areas where there is a lot of rehabbing going on. Target those areas.
If you are rehabbing, you can target those same areas as you would for wholesaling, but you want to make sure that the area supports what your exit strategy would be. If you intend to sell retail, after the house is remodeled, you wouldn’t want to choose an area that consists mostly of renters. You would also want to make sure that the price range of the area is within the range of where the majority of qualified buyers are.
If you find several of these areas to fit the above criteria, you can narrow them down more to ones that are closer where you live and/or are areas that you feel more comfortable in (don’t let this stop you from working in certain areas though – some of the best investment areas are not considered great places by most people and you will eventually be comfortable there (this does not apply to war zones where prostitutes are walking the streets and people are openly dealing drugs in the middle of the day)).