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The Fourth Week

Home » Blog » 34 Weeks Flipping Houses » The Fourth Week

These are the results of the fourth 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.

Didn’t get to fly to Carsbad Caverns because of 35+ mph surface winds that do not bode well for small airplanes. I wasn’t really phased though as I also got the best news this week. I am going to be a dad again! My wife and I have 4 beautiful girls (2 are twins) and now we are expecting another (maybe a boy… not that I wouldn’t be happy with another a girl :)).

Note: I am only going to be showing
repair estimates
for houses I bought as I cannot go into enough detail for the ones that I am making offers on. It would just be too time consuming to explain that the kitchen repair estimate only includes repair two drawers, installing a new dishwasher, replacing the backsplash, providing a roll of paper towels, etc. for every property I analyze. If you are learning how to flip houses, it will be more easily understood this way.

These are the things I did this week:

Had lunch with one of the top REO agents in San Antonio on Tuesday. We had a great time and got to hear some good stories. In the near future we are going to have an interview with her about how to contact and deal with REO agents. This will be a great way for people to see their point of view (the most important). A lot of courses tell people to just call them up and tell them you pay cash and they will send you all kinds of deals and it just does not work that way. This interview will be sent to all subscribers when done. So, you might want to subscribe. 🙂

Got a list of 487 address for absentee owners. I got an account set up through the title company we use for The title company had already worked out pricing for accounts through them. I called to see if anyone could get an account and they said you could. You just need to call sales and talk with an account manager to set up pricing. The title company we used to use went through which is another list provider company. PropertyInfo was free if I remember correctly, but REISource seems to allow for more targeting with loan amounts.

To narrow down the list, I chose to owner receive absentee owners, with 3 bedroom or more single family homes and 30% equity or more with property value below $150,000. This criteria narrowed it down from 33,000 properties to 487.

This list is highly targeted. When you target your list like this you should be confident in spending more money sending repeat mailings (which is where you will get the most calls – repeat mail!).


Total Leads This Week: 9

  1. Bandit Signs 40 signs were put out last week (none this week).
  2. Yellow Pages For a picture of my ad, visit the ‘The First Week’ post.
  3. Buying Website You can view my website here:
  4. Drive For Dollars Sent the 75 letters out to the owners of the vacant houses 2 days ago. No calls yet.

Leads Analyzed

  1. Investor Selling As-Is[Source: Bandit Signs]

    Investor wants to get rid of a 3 bedroom, 2 bath house that he has partially rehabbed.

    Here are the numbers:

    Asking Price: $57,000
    Amount Owed: $0
    Repairs: $Complete Rehab – Probably about 20k.
    After Repaired Value: $80,000
    Max Offer: $48,000- Repairs

    Investor trying to find the greater fool. There is no way I would buy this house any where near his asking price, even if it didn’t need as much repairs as I am guessing.

  2. House Bought Few Years Ago[Source: Yellow Pages]

    Family wants to sell a house they bought a few year ago with very little put down. They just don’t have any equity. I could not help them.

  3. Great Wholesale[Source: Bandit Signs]

    Homeowner selling a 2 bedroom, 1 bath, 1200sf house, built 1950.

    Here are the numbers:

    Asking Price: $12,000 – Gotta love reasonable asking prices 🙂
    Amount Owed: $0 (some back taxes)
    Repairs: $Unknown
    After Repaired Value: $45,000
    Max Offer: $20,000 – Repairs

    This is an inherited house that needs repairs. The neighborhood is a rough one but I’m sure I could wholesale it.

  4. Bad Neighborhood – House Looks Decent on Google[Source: Website]

    This house is a 3 bedroom, 2 bath, 1400sf house that was built in 1956.

    Here are the numbers:

    Asking Price: $20,000
    Amount Owed: $0
    Repairs: $?
    After Repaired Value: $50,000
    Max Offer: $Not For Me To Figure Out

    Another inherited house. This one is in a neighborhood that I do not buy in. The seller is asking a reasonable price and this one is going to my go to guy. He can probably work it and give me something for my referral.

  5. Tiny House – Bad Neighborhood[Source: Bandit Signs]

    This house is a 2 bedroom, 1 bath, 624sf house that was built in 1925.

    Here are the numbers:

    Asking Price: $20,000
    Amount Owed: $0
    Repairs: $?
    After Repaired Value: $40,000
    Max Offer: $Not For Me To Figure Out

    This one is also in a neighborhood that I do not buy in. I am birddogging this one also.

  6. Duplex – Bad Neighborhood[Source: Website]

    This house is a duplex with both 3 bedroom, 1 bath, units. Total 1772sf and was built in 1938.

    Here are the numbers:

    Asking Price: $30,000
    Amount Owed: $They are not sure – inherited
    Repairs: $?
    After Repaired Value: $Landlord Determines
    Max Offer: $Not For Me To Figure Out

    Repeat. Nothing new. I am birddogging this one also.

  7. Decent Area – Owe Little Too Much[Source: Website]

    This house is a 3 bedroom, 2 bath, 1300sf house that was built in 1985.

    Here are the numbers:

    Asking Price: $75,000
    Amount Owed: $75,000
    Repairs: $? (probably 5-10k)
    After Repaired Value: $105,000
    Max Offer: $68,000 (65% ARV) – repairs

    I would have gone and seen this one if he had owed a little less. It’s tempting to try to work the numbers to make it work, but you just can’t. This lead is going to another investor to see if he can make it work.

  8. A PO Box[Source: Website]

    This house is a PO Box.

    It’s the first time this has happened. Someone actually put their mailing address for the property address. I have sent an email and awaiting information on the property they want to sell. [update – not a deal, the po box needed too much work (lots of dents) – but seriously, it was not a deal.]

  9. Wanting to Move Overseas[Source: Yellow Pages]

    This house is a 3 bedroom, 2 bath, 1200sf house that was built in 1951.

    Here are the numbers:

    Asking Price: $75,000
    Amount Owed: $0
    Repairs: $? (said minor repairs)
    After Repaired Value: $90,000
    Max Offer: $58,000 (65% ARV) – repairs

    I made a ballpark of about $50,000 on this one because they did not seem at all motivated. They will call me if they decide that number is reasonable for them. A note to follow up with them is already in my planner.


I have been birddogging a lot out the last few weeks. So far 3 are under contract and I will get paid finder’s fees for each when they close. One of them is supposed to pay a $5k finders fee (that’s what I requested).

Plans For Next Week

  • Send Postcard to List of Absentee Owners.
  • Put out more bandit signs
  • Call more REO Realtors.
  • Provide a Getting Started Post – My recommendations for what to do to get started.
  • Closing on the house I put under contract a couple of weeks ago.

If you have not subscribed, please do so on the right side of this page. This way you will be notified when my new posts are posted. Besides, don’t you want to read about the crazy adventures you can experience as a house flipper? Flipping houses is the best business to be in, bar none.

Follow along and learn how to flip houses.


Comments (35)

  • Mat

    Thanks for keeping us in the loop! Enjoying every “episode”. Looking forward to next week.


  • Shanti

    Congratulations on the baby news! I’m really enjoying your blog.

  • Litia

    Thank you very much for your post full of good information. I am learning a lot from your posts.
    Is it possible that you share with me the wordings you use for the yellow page.
    Again thank you Danny.

  • Mike


    How are you determining the ARV? Is it just from years of doing this? I was talking to an appraiser today and they mentioned that they did different types of appraisals and one of them was to provide an investor with and ARV figure.

    Will be heading to the local home improvement store this weekend to take note of the cost of materials. Hope this helps come up with some sort of figure on repairs.


    • Danny Johnson

      I am checking comps on my local MLS. As part of your team, you should build a relationship with a Realtor or two. They will be able to run comps for you to help you determine the ARV for properties.

      Some people use for determining ARV. Just make sure you are not in a non-disclosure state as they do not report what houses are sold for and the data is usually a best guess in those states (Texas is one of them).

  • stephen j. moore

    danny u mentioned a 5k finders fee whats the average of your wholesale fees u making per deal

    • Danny Johnson

      I typically ask for $2,000 for a bird dog fee to the wholesaler that I send a lot of leads to. That deal was a good one with a big upside so I requested $5k. That is for bird dogging (I am not getting the house under contract, just passing the lead on to someone else to determine value and put under contract). When wholesaling you can typically get whatever room you have built into the deal. If you have a house that will be worth $100k fixed up and needs 10k in repairs and you buy it for $50k, you can mostly likely get about $10k because you could probably easily find a buyer that will want it for $60k (70% of ARV minus repairs).

  • Tara

    So you are not licensed? Did a realtor give you access to the MLS? Good point about non-disclosure states!


    • Danny Johnson

      I am not a Realtor.

      How do I word this…. Some investors get access to the MLS from Realtors.

      Once you build a relationship with a Realtor they will probably allow you to at least come into their office and pull comps in their office. This way you are not wasting their time and they know when you are on it. It’s really not that hard to build relationships with Realtors. Let them know that you will need someone to list your properties after you rehab them.

  • Tara

    So how did the lunch go with the REO agent? If she does the most volume in town you should have deals coming at you left and right correct?
    Also, what do you think that agent saw from you that she didn’t/won’t see from others?

    • Danny Johnson


      The lunch with the Realtor went great. My wife and I really enjoy talking with her and always have a good time.

      She does tell us about deals that fit our criteria. I wish deals would come at us left and right from a single Realtor, but it just doesn’t happen that way. There is still competition and we won’t pay as much as the competition most of the time. The ones that she thinks will be a good fit for us are the ones she calls us about.

      The biggest thing that I try to make clear to agents, is that I am not going to waste their time. I will make a decision quickly and close no matter what. But to be more exact, I am going to interview her within a week or two and you can find out straight from her.

      Thanks for the great questions.

  • Tara

    The other thing I was gonna ask is how are you and your wife paying for marketing, living expenses, etc etc? Do you have rentals that cashflow?
    Hope that isn’t too personal a question……
    Also, that list of absentee owners seems low. I would think in a city that size the list of landlords with equity would be larger?


    • Danny Johnson


      We have had a number of houses for sale (the ones that I mention rehabbing at one time in the video). Some of those have sold and some are still on the market. I’ve got two under contract to purchase. One closing Monday (put under contract after starting to blog about what we do) and one closing at the end of the month (put under contract before blogging about it). So financing for marketing is coming from flips we’ve already done. I haven’t gone into what we currently have because I wanted to have it start from how we get them and go through to selling and making profit.

      The list of absentee owners is just for one area of town that I am focusing in. It’s much easier to have rehabs and properties just in certain areas you like. I don’t want to spend all day driving all over town checking on properties. These are the same areas I am putting up bandit signs in.

  • Tamara Pickens

    I need to sign up, because i am definitely looking forward to that REO agent interview.

    I do have a question, it seems dumb tho but i’ll ask it….how are you determining how bad a neighborhood is? Is it just a common known thing, number of rented vs. owned properties, crime reports?

    • Danny Johnson


      There are several ways to determine how bad a neighborhood is. The really bad ones should be obvious (gang problems, prostitutes walking street in middle of the day, etc.). You can make money buying and selling in any area. It really just depends on what you want to accomplish. If you want to rehab and resell to buyers that can get qualify for a bank loan, you will want to choose an area where people are buying. The areas that are not so good are the ones where there is a lot for sale, but little that are actually selling. Realtors can help you determine this easily. Target where the majority of buyers are buying (usually around or just below median house price for your area).

      What are you waiting for? You should subscribe. It’s free and I won’t spam you.

  • John

    How important is follow up in regards to marketing and sellers? For instance how often do you mail a particular list? Do you follow up with all sellers you’ve made an offer to?


    • Danny Johnson


      With direct mail, it is best to follow up several times. I send a sequence of postcards and letters, sent out about every 3 weeks. This is hard to keep up and I am really going to try to follow through with it this time.

      I also try to follow up with sellers that I make offers to. Secret: I am working on a free tool to help with this. Hopefully it will be done in about a month.

  • Matt K


    Your website brings in a good flow of leads. Do you use Google Adwords or is it all from organic search traffic??

    Congrats on the new addition to your family.

    • Danny Johnson


      My leads come from a mix of adwords, organic search and my offline marketing (with website address). I try to incorporate it in most of my marketing as another way for people to contact me.

  • Mike

    Question on the absentee owners list. Did you first set up an account with and then ask your title company if they could pull information from them for you. Or did you have to find a title company that would do this and set up an account with them. Just want to make sure I am understanding what you wrote.

    I will be getting that set up soon. Thanks

    • Danny Johnson

      I just called the title company we have been using to see if they had an account with a list company to find absentee owners. They were using REISource and set up an account for me. I do the searches myself at home and pay for each record that I find. I did not know about REISource until I talked to them. You should be able to set up an account for yourself directly by calling them.

  • Lin Arington


    First, thanks for all the great info. It has really helped me a lot. I’m interested in making offers on REO properties so I have a couple of questions…

    1) Do banks accept “soft”(computer generated from the company website) prequalification letters from hard money lenders and transactional funding companies?

    2) since I need to buy at under 70% – repairs – finders fee to wholesale properties, should I wait for a property to be on the market a while before I make my offer or is it normal for banks to accept theses offers as soon as they are listed?

    It has been my limited experience that banks will first only accept retail offers. I want to save myself time and keep the broker happy too.

    • Danny Johnson


      I see that you are my competition, so I cannot answer your questions. Just kidding.

      Banks will accept the prequal letters but will probably ask the REO agent if they’ve dealt with the lender and what their opinion is of the likelihood the deal will close and fund. The big thing is to say it’s hard money if it is hard money. Agents really get ticked when buyers say cash and sign the contract as a cash sale and then spring it on the title company that they are getting a loan.

      You never know what a bank will accept and when. In order to not waste the agent’s time, you should only make offers that are within a reasonable amount of the asking price when they are first listed. The longer it has been on the market the more willing they will be to sell for much less. The best time to hit them is right before they are about to price change. Sometimes there will be a pattern to the price changes (i.e., every 30 days). Make the offer right before the next likely price change.


  • Mathew

    How much can one expect to pay for about 500 absentee owner leads?

    I’ve yet to read something as thorough and informative as your blog. I hope it continues for a long time.

    • Danny Johnson


      Thanks. I paid about $52 for the 487 absentee owners with equity leads I got.


  • Bailey


    Do you seriously mean yellow legal/letter paper from the walmart??! Holy cow.

    Thanks in advance.


    • Danny Johnson


      Yes, the yellow pad of paper, but not legal or letter size. I use the smaller paper that fits in personal sized envelopes.

  • Bailey

    Another HOLY COW @ the lead list investment. I was about to plunk down almost $400! Thanks

    • Danny Johnson


      You can still get a list, but you might want to get a smaller one first and test it out. Check the addresses with your county tax assessor website and make sure they are correct.

  • Bailey

    Danny, yes, I’ll still get a list. I was just stunned by the price difference.

  • Nancy

    Danny, your blog rules! Found it from reading the forums at Thanks for sharing your experiences!

    • Danny Johnson

      Thanks, Nancy.

      Glad you found it.

  • Louis


    When you turn over your leads for a birddog fee. Dont you put it under contfact first? The reason I ask this is because of the slim shady’s out there tha2 would put a deal together and not tell you. Thanks

    • Danny Johnson

      No, I do not put it under contract first. I spend time finding people I can trust that act fast on leads and don’t hesitate to make decisions to buy. Those people (just a select few) are the ones that get the leads and they know it is in their best interest to keep me happy. I do randomly call back sellers to see if some were bought that I was not informed about. If that ever happens, the person is informed and will no longer receive leads from me.

      If I put them under contract first, I would be wholesaling and would want more of a fee for going through the hassle.

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