These are the results of the Twelfth 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.
These are the things I did this week:
Got Another One Under Contract!
The marketing is starting to bring steady deals now. New leads are coming in and I am still following up on old leads. This was one I had made an offer on a couple of weeks ago. Honestly, I didn’t think she would change her mind but she did. She was originally asking $150k. She does not owe anything except some property taxes. I originally was pretty conservative with the $160k ARV. This house would have sold for $180k two years ago. It still might get $170k and I will try to get that at first. I had offered $95k and she was not all happy with it. Several days later I called and asked if she had thought about it. She asked if I could pay $120k and I told her the most I could do would be $100k. Several days later she called and mentioned that another investor had offered her $105k and wanted to know if I could do $110k. I knew I couldn’t but scheduled with her to take my wife by to see it.
The reason I didn’t just tell her that $100k was the most I could do over the phone was because it would have been too easy for her to just say no and call the other investor back. I wanted more time in the deal and to discuss it face to face.
My wife and I went back over to the house and my wife got the tour. We sat and talked a little while and then told her that I just could not pay more than $100k. She asked if I could do the $105k the other investor had offered and I quickly told her that I just couldn’t. At $100k I knew I could close it and she could consider it a done deal. She thought about it and asked if could close within a week. It turns out that she would have the help of a friend to move the next weekend only and she needed money to move as well. I told her we could close before that weekend and allow her to stay in the house 5 days after closing if we withheld $5,000 at closing until she vacated ($100/day penalty for every day over – this is very important). She accepted our offer. She then told us that she went with us because she trusted us and liked us. I always like to hear that because it makes all the difference in the world. This proves that you can pay less than another investor and still get the deal.
The repairs should not exceed $6,500 for some paint and carpet and small cosmetic repairs. With the repairs I am just over my Maximum Allowable Offer of $97.5k, but remember I was really conservative with the resell value and the house will be on the market within a week. I will post pictures and rehab details once we close and the seller has vacated the house.
This deal came from Bandit Signs.
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.
Putting Final Touches on the Free Lead Manager Web Application
I’ve been fixing a couple things and adding a couple more features. Just a handful of things to do and it will be released. I think you will like it. 🙂
Prepared Letters For Mailing
Another batch of drive for dollars prospects has come due for more letters. I printed out a batch of letters and signed each one. Already had this new batch put into envelopes and hand addressed. These will be mailed out on Monday (want to minimize calls this weekend as I need a little break).
Marketing
Total Leads This Week: 12
Leads Analyzed
Homeowner wants to sell a 3 bedroom, 1 bath, 800 sf house in a bad neighborhood.
Here are the numbers:
| Asking Price: | $45,000 |
| Amount Owed: | $0 |
| Repairs: | $Everything (unconfirmed) |
| After Repaired Value: | $50,000 |
| Max Offer: | $Not For Me |
Seller just wants to unload this house in a bad neighborhood because they don’t need it. It’s been vacant over a year and needs a lot of work. It is in a historic district, but this one really has gained any traction and with the economy in the dumps, I just don’t see being able to sell this house easily. I passed it on to another investor.
Homeowner wants to sell a 7 bedroom, 4 bath, 3500 sf house in Laredo and willing to take $80k. I do not buy in Laredo. If you do, please contact me and I will pass on the seller’s contact info.
Homeowner wants to sell a 2 bedroom, 1 bath, 800 sf house in a neighborhood outside of town.
Here are the numbers:
| Asking Price: | $67,000 |
| Amount Owed: | $59,000 |
| Repairs: | $Garage doors, cosmetic work (unconfirmed) |
| After Repaired Value: | $75,000 |
| Max Offer: | $48,000 – Repairs |
Homeowners lost their jobs several years ago and have been living off retirement money they took out. They are now just about out of that and need to sell. The probably is that they simply owe too much. I cannot buy this. A short sale might be possible but would be too much work for a 2 bedroom that is a good distance from where I live and would sit on the market for a while. Next.
Homeowner wants to sell a 3 bedroom, 2 bath, 1500 sf house in a neighborhood outside of town.
Here are the numbers:
| Asking Price: | $55,000 |
| Amount Owed: | $46,000 |
| Repairs: | $Garage doors, Kitchen cabs (unconfirmed) |
| After Repaired Value: | $70,000 |
| Max Offer: | $45,000 – Repairs |
Homeowner just doesn’t want to do repairs on the house because they want to move to New Braunfels. Too much is owed and the area really is not one I am interested in. Next.
Homeowner wants to sell a 4 bedroom, 2 bath, 2000 sf house in a good older neighborhood.
Here are the numbers:
| Asking Price: | $100,000 |
| Amount Owed: | $0 |
| Repairs: | $A LOT – Repairs Not Calculated Yet |
| After Repaired Value: | $Depends on Rehab 160k-225k |
| Max Offer: | (range of $104k-135k) – repairs |
Homeowner inherited the house and has no need for it. It needs a lot of repairs due to deferred maintenance and does not want to deal with the hassle. I was unsure of her motivation because she seemed concerned about how we operate.
These types of sellers need a little extra explaining and talking to so that they are more comfortable with you. If you have subscribed and received the 7 Crazy Real Estate Investing Stories Ebook, you will recall the guy that thought we set up the attorney’s office just for appearance to get him to sign over his house (we had to meet there to sign the contract as I wanted to lend more legitimacy to the whole thing). You know, like in a movie where the guy goes back the next day and it is just a vacant warehouse.
Asking price was reasonable though and so I went to see it this morning. I think the ARV would probably tend to be on the upper end of that scale because the house has a lot of character, but it also needs A LOT of work! I need to figure out a repair estimate for this one and an offer price as I would prefer to wholesale it. So many calls this morning that I have not had a chance to.
Homeowner wants to sell a 4 bedroom, 2.5 bath, 2000 sf house in a good neighborhood.
Here are the numbers:
| Asking Price: | $165,000 |
| Amount Owed: | $150,000 |
| Repairs: | $Nothing (unconfirmed) |
| After Repaired Value: | $165,000 |
| Max Offer: | $107,000 – Repairs |
House has been listed forever and it’s because it is priced too high. They have no room to lower it. This conversation lasted all of 2 minutes. Next.
Homeowner wants to sell a 3 bedroom, 2 bath, 900 sf house in a decent neighborhood.
Here are the numbers:
| Asking Price: | $75,000 |
| Amount Owed: | $50,000 |
| Repairs: | $None (unconfirmed) |
| After Repaired Value: | $75,000 |
| Max Offer: | $45,000 |
He fixed the house with the intention to sell (sounds familiar). I’m not sure what it is with investors, but a lot of times they want to hide the fact that they are investors. I know when selling a house retail, people tend to be less apprehensive if they think they are buying from a homeowner that lived there. Possibly because of the flipping houses shows, people think that we all ‘slap lipstick on pigs’. This conversation didn’t last long. We were wasting each other’s time. Next.
Homeowner wants to sell a 3 bedroom, 2.5 bath, 1500 sf house in a good neighborhood.
Here are the numbers:
| Asking Price: | $113,000 |
| Amount Owed: | $113,000 |
| Repairs: | $bathrooms, siding & cosmetic (unconfirmed) |
| After Repaired Value: | $120,000 |
| Max Offer: | $78,000 – Repairs |
Homeowner separated from her husband 3 years ago and has been treading water. She simply can’t afford the house anymore and her ex-hubby had taken out a home equity loan right before he split. Too much is owed. This could possibly work as a short sale for someone. I’m not interested in spending the time on it, but if you are, contact me.
Homeowner wants to sell a 4 bedroom, 2.5 bath, 1700 sf house in a good neighborhood.
Here are the numbers:
| Asking Price: | $140,000 |
| Amount Owed: | $136,000 |
| Repairs: | $None (unconfirmed) |
| After Repaired Value: | $140,000 |
| Max Offer: | $91,000 – Repairs |
Too much owed. Next.
Homeowner wants to sell a 2 bedroom, 1 bath, 600 sf house in a not so good neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $0 |
| Repairs: | $Everything (unconfirmed) |
| After Repaired Value: | $? |
| Max Offer: | $? |
They inherited the house and were in the process of gutting and repairing it to move into. They quickly realized how much work was involved and decided to sell. I told them that, based on what they were telling me about the house, the offer would be around 10k. They didn’t get mad, so I told them another investor would call them shortly and passed on the lead to investor that buys in the area. If he does something with it, I’ll get paid a referral fee of course.
Homeowner wants to sell a 4 bedroom, 2.5 bath, 3100 sf house in a good neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $135,000 |
| Repairs: | $Cosmetic (unconfirmed) |
| After Repaired Value: | $195,000 |
| Max Offer: | $126,000 – Repairs |
Seller moved out of town and rented the house. Tenants trashed it. He moved back and into the house and has been fixing it up again, lost his job and has opportunities out of town. He does not want to rent again for obvious reasons. This one just owes a little too much. The ARV is conservative because there are a lot of foreclosure to compete with in that area. Probably will pass on this one, but will give it a little more thought. Maybe something creative can be worked out.
Homeowner wants to sell a 3 bedroom, 2 bath, 1300 sf house in a decent neighborhood.
Here are the numbers:
| Asking Price: | $Make Offer |
| Amount Owed: | $28,000 |
| Repairs: | $Cosmetic (unconfirmed) |
| After Repaired Value: | $90,000 |
| Max Offer: | $58,000 – Repairs |
House was inherited and they are living there. They both have had surgery recently and cannot keep up with the house maintenance and cleaning. This one seemed really embarrased about the state of the house and was hesitant to even schedule an appointment. Still ended up saying she wouldn’t know until Sunday which day next week she could show it. I told her that I understand how hard it is to keep up with maintenance on a house even without medical problems. I am only interested in the ‘potential’ the house has and don’t care what shape it is currently in. She seemed more relaxed immediately. We’ll see what happens.
Summary
Fewer leads this week. Actually only got about 6 before this morning. This morning, before noon (that is morning isn’t it), I got 6 of the leads. Now have 3 under contract awaiting closing so I will be able to get more into the rehabbing and selling side of things. I am still sending out letters and will attempt to drive for dollars again soon. Another priority is to find someone to go to the courthouse for me to research probates.
Plans For Next Week
Amen.
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.
Next: Follow Along As I Open Up My House Flipping Business
Comments (19)
The wholesalers in San Antonio must suck……..or you just haven’t hooked up with a good one yet?
Thru 12 weeks and no deals bought from wholesalers.
Just saying, it could be another source for deals. I think I’m gonna explore expanding our business to San Antonio. I’ll find you good deals!!
John
John,
Come to think of it, I don’t get a lot of leads from wholesalers and this is a pretty big town. I’m not hard to find. Really is strange. The only thing I can think of is that I am not one to get out and network much.
You’d be welcome in San Antonio, especially if you are sending me good deals!
Danny,
It seems as though many of your leads are coming from your website. Just curious if you think that many folks are getting your name from other sources and then go to check you out on your website? When you are asking how they heard about you do you try to pursue this if they simply say your website? In other words are they just searching for S. A. house buyers, are they obtaining it from your yellow page ad and then going to website or are they receiving your other marketing first and then going to website?
It is not a big deal but I am trying to put together my marketing plan and wanted your thoughts on the website leads.
Also, thanks for your website! Just received the email about the 5 things you should know before talking with sellers…excellent content that relates your actual experience and how others can use the info. to help them in their house buying.
Have a great weekend.
Ryan,
I have been better about asking how they found the website. Mostly they are coming from Google. I do have the website on some of my marketing, but not any of my letters. I want them to call me instead of going to a website and getting sidetracked surfing the web. If they find my site from marketing, it is usually from my yellow pages ad.
With a website you really need to study SEO (search engine optimization) and work at implementing it. The biggest thing is that it takes time. Don’t expect a ton of traffic immediately. Don’t give up.
3 under contract in 12 weeks is impressive to me. noted that your lenders, closing agents etc are all in place.
Will you focus any of your blog on the financing side of your business?
(that’s the piece that challenges me the most).
John
John,
I was actually considering writing a post in the near future about this part of it as it is what a lot of new people struggle with. It will probably consist of how we started and what options are available for funding deals.
Danny,
I know your not interested in lease option, but would it be something you could pass on? For instance lead #11. If the house is livable a lease option tenant may want to take on the repairs for a reduced sales price. Just a thought. Glad to see things picking up.
Jason
Jason,
Thanks for this comment. I noticed it at the right time. This seller called me a couple of hours ago but I was in the middle of a negotiation and said I would call back in an hour. It’s been about 3 hours. Oops.
Just called him. He is not nearly motivated enough, yet. I offered to buy the house subject to. He wants close to retail. I will call him again in a month. (My intentions were to buy sub2 and try to sell quickly at a good price, pay off his loan, and pocket the difference.)
Can you give us any details yet about that house you are trying to wholesale??
John
Also……have you ever tried getting your cities list of code violation properties and mailing them? I’d imagine in San Antoinio, being the 6th or 7th largest city, would have a pretty big list. My city had 159 properties……
John
John,
I have not closed on it yet as we are waiting for a release from Chase. Once I have it bought, I will sell and then give all details.
I’ve had the list before way back when I was just getting started and had some good leads. Since then, the city refuses to give out the list. I’ve tried and even gone as far as having a meeting with the city director for neighborhood services, but no go. Lately, I’ve thought about setting up a meeting with one of the code compliance officers to try and get the list but have not done it yet.
So it’s tough to get the list? I actually got mine from a newspaper reporter who did a story on some of the crappy houses in a certain neighborhood. He got the list from the city and I asked him to email a copy……..he did!
How can they refuse to give the list out? Ask them if they’ve ever heard of The Freedom of Information Act. Yeah, I would take one of the inspectors out for lunch and see where that goes. If the list is hard to get, that means nobody is mailing it!
John
That’s interesting about not being able to get the info – we have a publication called “The Mobile Record” – it’s a paper publication put out weekly by a group of little old ladies (at least that’s the picture I have in my mind) that has every public record regarding properties that week (sales, deeds recorded, loans, violations, etc.) – but if you asked people in Mobile, AL if they had heard of this most would say No. So maybe there is an underground paper like this in your market?
Brooks,
Got a good laugh about your idea of it being a group of little old ladies. Too funny.
We have a commercial recorder that used to always have each code compliance case, but last time I subscribed the notices were very few and far between and they were all for houses going before the board for demolition (most motivated sellers, but horrible properties, usually in bad parts of town) and not just the clean and secure violations. I’d love to just get the list in a spreadsheet. I’ll make a note to start calling around next week.
I have a couple of questions: what lead source came from each deal you got under contract?
What is your internet marketing budge for advertising?
Thanks – And keep those stories coming!
Jean Norton
Jean,
I’ve been planning on adding the lead sources for houses put under contract on the weekly post. Just plain forgot every week. Maybe I will remember this time. 🙂
I don’t really have a budget for it. Just spend as much as it costs. The return has always been worth it. I do not target broad phrases that generate a ton of clicks but little conversion.
Danny,
When to talk to the seller first time do you tell them that you can pay X amount(ARVx65%-repair)and if they accepted it than you go and see the property to see how much repair would cost?Or you go see the property,evaluate repair cost and than start negotiating?
Typically, if they do not seem motivated at all (examples being that they won’t tell me what they owe or they just go on and on about how their house is the nicest in the neighborhood), I will generally give them a ballpark figure based around that formula. If they are remotely ok with what I throw out there, I go and see it.
If they are motivated and it seems like it could be a deal, I go and see it and make my offer face to face after looking over the property.
Thanks,Danny.