These are the results of the Thirteenth 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.
“The probability that we may fail in the struggle ought not to deter us from the support of a cause we believe to be just.”– Abraham Lincoln
Thank you!
These are the things I did this week:
Got Really Close to Signing Up Another One
Went and looked at the first house from the first lead for this week (see below). The seller divorced several years ago and the house is now vacant. The ex is remarrying and wants to have the house out of her name, so she wants it sold.
The house was in good shape, it just needed cosmetic repairs for the most part. The master bathroom could use another vanity. Paint, carpet, siding repair, sheetrock repair, new light fixtures, landscaping etc.
After walking through the house, it got really interesting… The seller informed me that the house is haunted. He had seen a young blonde girl that looked like she was straight out of ‘Little House on the Prairie’ on two occasions. The first was during a party they were having and he was walking to the kitchen to get a drink and happened to look up the stairs and saw her standing there looking at him and she smiled really big. The other time, he was lying in bed and watching tv and she walked in and stood between the bed and the tv and just looked at him for a couple seconds and then turned and walked out of the room. I feel weird just typing this…
He then told me that he had a plumber working on the master bath one day and he and his wife had left the house. The plumber called shortly afterward and asked him if they had left someone at the house with him. The seller then asked if it was a little girl and the plumber said yes, he had noticed a little girl. The seller then told him not to worry about it, that it was just a ghost. The plumber then laughed awkwardly and hung up. When they got home, the plumber had all his tools in his truck and was leaving, with the job unfinished. He never did come back to finish.
Sort of creepy. Out of the 18 years, he only saw her twice and he said it has been a while.
Anyway, the numbers looked pretty good but I needed to offer just above what they owed. I really didn’t think he would at all be interested in this (well maybe he would have been, after the story he just told me). I had offered $50k and he then told me that he really wanted to get $4k more than that. This was an occasion where I made my offer at the max because of what they owed. The extra 4k needed some more consideration, so I told him I would call him later after I considered it some more. After rechecking the comps, I’m sure I can make it work at the 4k but he would have to pay title policy and his part of the closing costs. I’m awaiting his call for us to meet at the house again to discuss it.
Closed on the Deal From Last Week
We closed on the deal from last week and are just waiting for the seller to move out before we begin work (we had given her a week to move after closing). After she moves out, I will post some pictures and scope of work.
I need to come up with names for these houses so that I don’t get them all confused while talking about them. This house will be called ‘The Def Leppard House’ because the seller was a big fan. So from now on, this house house will be forever known as the ‘Def Leppard House’. Just got an idea to get an artist to do a mural of one of their album covers on the side of the house, but I bet my wife will completely hate it. Just kidding.
Confused a Wholesaler
Sometimes I like to play small pranks on people. I had seen a bandit sign on a pole near a house I was looking at and decided to call it to talk to the investor. When he called me back (after 5 hours!) I told him that the pole he had his sign on was my pole. He was asking what I meant and I told him that I had paid the city to use that particular pole and it was now mine. He didn’t know what to say at that point and I told him I was just joking. I’m sure it doesn’t start me out on the right foot with some people, but I can’t help it. Gotta lighten up sometimes.
Closing On Historic House Still Held Up
We are still awaiting Chase to send a release of lien on the property. The seller has informed me that he sent everything they asked for and we are just waiting for them. We are checking with them every 2 to 3 days to make sure someone is pushing to get this thing done. Geez. I hate waiting.
Recording Help Videos for the Free Lead Manager Web Application
The lead manager is ready for release. I just have to record the help videos and set up the main page for it. Should be really soon.
Prepared Letters For Mailing
Another batch of drive for dollars prospects has come due for the second letter. I printed out a batch of letters and signed each one (49 letters). My daughters are working on hand addressing these (bribed them with a little money and a trip to Orange Leaf – frozen yogurt place).
Called Accurint for Pricing
They have gone up. It used to be about $150/mo and now they are at $300/mo. This might be a little much. I might be ok with it if I would just pay for a month at a time, but they want a year long commitment. Anybody know of a good service that does not cost so much and provides better data than the free sites?
Hidden Iron House Under Contract
We accepted an offer on the Hidden Iron house yesterday. 🙂 I will be posting the final numbers after we close.
Marketing
Total Leads This Week: 5🙁
Leads Analyzed
Homeowner wants to sell a 3 bedroom, 2.5 bath, 1700 sf house in a decent neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $Wouldn’t Say (this is rare) |
| Repairs: | $None (unconfirmed) |
| After Repaired Value: | $89,000 |
| Max Offer: | $57,000 – repairs |
Seller is divorcing and moving in with his disabled parents to help them out. I thought he wasn’t very motivated as he was refusing to tell me how much is owed. In this case, I didn’t want to waste time so I told him a ballpark figure would be in the $50’s depending on what repairs are needed (even if he said none were). He was actually willing to consider it and was going to talk to the ex and let me know if they would be interested the next day. I’ll follow up for sure. Followed up and he told me they owe $48k. He told me to come and look at it and we could talk about it. So I did. Working on buying this one. Wish me luck.
Homeowner wants to sell a 3 bedroom, 2 bath, 1100 sf townhouse.
Here are the numbers:
| Asking Price: | $70,000 |
| Amount Owed: | $0 |
| Repairs: | $None (unconfirmed) |
| After Repaired Value: | $70,000 |
| Max Offer: | $45,000 – repairs |
Seller just needs money. They were asking what it was worth though and I just can’t pay that much. If they decide they need the money enough, they will call me back.
Homeowner wants to sell a 3 unit apartment house.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $24,000 |
| Repairs: | $Cosmetic (unconfirmed) |
| After Repaired Value: | $65,000 |
| Max Offer: | $40,000 – repairs |
Seller inherited the house from her friend. She lives in one of the units. Looked at it this morning and got pictures. I am sending this out to a friend of mine to see if he would be interested.
Homeowner wants to sell a 2 bedroom, 1 bathroom, 800 sf house.
Here are the numbers:
| Asking Price: | $35,000 |
| Amount Owed: | $0 |
| Repairs: | $~20k if I remember correctly (unconfirmed) |
| After Repaired Value: | $60,000 |
| Max Offer: | $30,000 – repairs |
This seller is an older investor that has been buying and selling for 40 years! She really talked up a big game of how much potential the house has. I actually went and looked at this house over a year ago and it is a real dump. The corner lot is right on a busy road in a rental neighborhood. She says she turned down an offer for $25k already and I know I will be below that, so I am not going to waste my time. I did ask what her buying criteria was in case I come across something she might be interested in. Didn’t want to let this call be a complete waste.
Homeowner wants to sell a 2 bedroom, 1 bathroom, 800 sf house.
Here are the numbers:
| Asking Price: | $30,000 |
| Amount Owed: | $22,000 |
| Repairs: | $10,000 (seller’s opinion – unconfirmed) |
| After Repaired Value: | $50,000 |
| Max Offer: | $25,000 – repairs |
This seller is behind on their mortgage payments 9 months. The house is in a rental area and needs a lot of work. This is not my cup of tea at the moment, so I will pass it on to someone that buys in the area and see if they can make it work.
Summary
Very few leads this week and I had to check and make sure my website was still up. This next week will not have much going on because I want to take my kids and a nephew to have some summer fun.
Plans For Next Week
[fj_optin type=”random”]
Amen.
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Comments (21)
Danny,
The ghost house, now that is something you don’t run across everyday! I’ll be following along to see if you end up with than one.
Have been following your blog and just curious, when you are analyzing these leads are you giving them your offer on the phone right when they call or are you taking time to develop an accurate ARV and then calling them back with an offer or talking directly with them at the property?
Congrats on getting one under contract and closer to a payday!
Ryan,
That one would definitely be an easy one to name. I had to laugh at the name I gave the other one. Sorry, Def Leppard fans.
I will typically make a ballpark figure for the ones that don’t seem motivated at all just to feel out their motivation without wasting a whole lot of time driving over. If they are motivated they will say that they might consider something close to my ballpark at which point I go to see it and make a solid offer. Sometimes this works well because they are already expecting a low offer and it is not such a shock.
The ones that show some motivation and have enough equity will get an appointment scheduled on the phone during that first conversation and I make my offer while talking with them at the property.
Danny,
quiet week for you. Great lessons for everyone, though. Question: Are you using postcards for out of town owners and hand written letters for estates/probates? I’m confused on when you’re using what /when
Bailey,
It was pretty quiet and it allowed me to get a little caught up and spend more time on each lead. It’s always a balancing act.
I try to alternate letters and postcards. The absentee owner list seemed really bad so I decided to not waste time or money mailing to it again. What I typically do is mailed handwritten yellow letters to new drive for dollars leads (vacant houses). The second letter is a typed letter that I use the mail merge feature of Word to print. After that I like to mail a postcard. Sometimes, I mail the postcard as the second mailing piece and then the typed letter. For other mailing lists, like probate, the first letter is a typed letter because I want to say more and look more professional. The second and third ones are also printed letters and postcards.
To be honest, in the past I have always become busy with the deals that I get from the letters that I never get to mailing more than 3 or so mailing pieces to each lead. This time I am going to try to get to 6 or 7 mailing pieces to each lead.
Thanks for the great questions. I feel like I haven’t explained some parts of the operation in enough detail.
You had chills writing it – I had chills reading it!
That’s great about what you did to the wholesaler! I think I might borrow that one if you don’t mind…
PS – do you have to disclose ghosts? 🙂
Brooks,
I’ve never had an conversation with a seller as interesting as that one. He went on to tell me of some other ghost experiences his friend had, but those included some really strange things. Something about shadow ghosts, where you can’t see the person, you just see a shadow and they are the bad spirits. This guy did not seem at all ‘off his rocker’. Perfectly sane. The girl he saw did not even appear transparent. Weird.
My father told us about how he saw a ghost once. I always thought he was just telling us a tall tale, but he insists he was not joking.
As far as disclosure is concerned for Texas, the Texas Property Code covers death disclosures in Section 5.008(c):
Section 5.008(c) A seller or seller’s agent shall have no duty to make a disclosure or release information related to whether a death by natural causes, suicide, or accident unrelated to the condition of the property occurred on the property or whether a previous occupant had, may have had, has, or may have AIDS, HIV related illnesses, or HIV infection.
http://www.trec.state.tx.us/pdf/articles/trec/5.008.pdf
So if not caused by the condition of the house, disclosure does not seem necessary and I don’t see any mention of ghosts (I am not an attorney and this is not legal advice). I have always heard that murder needed to be disclosed, but it seems more of a gray area. This house did not have a known murder or death. I think if there was a known murder, I’d probably disclose it as the neighbors would probably say something anyway.
Thanks, Danny. I nabbed that nugget by reading the posts. For some reason I was hung up on the yellow letters today, (my marketing supplies came in the mail!) and I couldn’t find it in the previous posts.
Probably analysis paralysis… but I did a drive for dollars and found 30 houses to mail to in 1 session.
I also used your smart tip about trash day, and (don’t tell my boss) drove around looking for missing cans and captured more addresses.
Bailey,
That’s great.
Be careful about writing down all of the addresses that don’t have a trash can out as some people don’t put them out every trash day. It’s a great way to easily spot the ones to look at more closely to determine whether they are likely to be vacant.
Let me know how your mailings go.
Hey Danny! Accurint is a great site. I currently use it at my day job. One site I also use is http://www.pipl.com. It’s free. A couple of other ones are http://www.intelius.com/ and the other one is http://www.people-finders.ws/processor.asp. They charge per lookup. Not sure if this is the info that you are looking for, but these sites help with relatives and they almost always know how to get in touch with the property owner that you are looking for. Let me know if you have success with these or
Greg,
Thanks. I’ve used intelius before, but have not tried the other ones. This is what I was looking for. I will look into them before spending the monthly fee for accurint.
Thanks, again.
Danny,
Did you come up with the design/wording of your Yellow Pages ad or have an ad rep help you?
John
John,
I came up with my own several years ago and I had used a $60 course I bought online to learn the best way to design it. I thought it was well done and I did not have much color as most of the other ads were so colorful. Thought it would stand out better that way.
This last year, maybe it was two years ago, the ad rep asked if I wanted a designer to “play with it”. So, I did. The result is the ad as I have shown it. They mainly changed some fonts and added more color. I don’t think it has made much of a difference in the leads I receive. They have dropped a little but I think that is more due to more people going online than anything else. I’ve noticed that the national real estate investing franchises have either reduced the size of their ad considerably or removed them altogether.
I know an investor in Chicago who did over 50 deals last yr just from his Yellow Page ad. This guy is a marketing/copy writing stud…..really knows his stuff. He said with a yellow page ad most sellers that call aren’t on some “list” that hundreds of other investors know about. I’ll ask him to send me a copy and post it here!
John
John,
I’d like to see the ad. That is an awesome response for a yellow page ad. Chicago is a big city, but still, to be able to land 50 deals just from that is pretty darn good. Do you know if he has a full page ad?
I think it was a 1/2 page ad. We’ve never used yellow pages b/c everyone kept telling us it’s like a billboard…..not very targeted. But this guy from Chicago said that homeowners look for solutions before anything else and will flip through the yellow pages to find it.
The reason I asked if you designed it or and ad rep is he said whatever I do don’t let the ad rep design ANYTHING……message, pics, color, placement. For the most part they aren’t marketers/copywriters.
I’ll see about getting that posted next week!
By the way, this investor made a little over $500k in profits!!
Congrats on your win Danny! You have an awesome blog and deserved it. Keep up the Great work!!
Thanks, Althea. Your site is awesome also. For those of you that have not checked out Althea’s site, you should (blog.reimillions.com).
Congrats to you as well!
Danny
I not only love how informative and helpful you are with your blogs, but it is really nice that you make it personal and add little things about your family, “My daughters are working on hand addressing these (bribed them with a little money and a trip to Orange Leaf – frozen yogurt place).”
Your awesome. Thank you
Thanks, Eric.
You reminded me of this. I haven’t ‘bribed’ them in a while to do work for me. Now I just need to figure what they can do…
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