Question For ALL? - Posted by DavePA

Posted by SCook85 on January 31, 2002 at 12:43:12:

At time of assignment.

Question For ALL? - Posted by DavePA

Posted by DavePA on January 30, 2002 at 23:28:30:

How did most of you start out in R.E.? Did you do Rehabs first? Flipping prop. to investors? Concentrating on L/O ONLY? Did you find that one worked for you the BEST and stayed with it? And then went on to other creative ways to invest NO $$$ Down. I think it would be good if I continue on L/O for awhile and then try other ways. Thx, dave

Re: Question For ALL? - Posted by DavePA

Posted by DavePA on January 31, 2002 at 11:57:43:

I sincerely, appreciate everyone’s feedback!! I guess once you get going there is no looking back. You, will always stumble along the way, but sooner or later you will figure it out. I dove right in and started doing real estate in Sept. Purchased my first property in Dec. NO $$ DOWN!! I thank everyone who has posted “great” info. on this site!! Keep up the good work. dave

Re: Question For ALL? - Posted by Rob FL

Posted by Rob FL on January 31, 2002 at 11:49:24:

I started out kind of by accident. I bought a duplex with an FHA loan and lived in one side and rented out the other. I liked duplexes so I bought another one by assuming the prior owner’s mortgage. Then I decided to take the plunge and do a rehab and did about everything wrong you could do. I ended up basically breaking even on the deal. It took me nearly 4 years to get to that point.

Then I started wising up and figuring out what works and what doesn’t. Now I’m mostly into wholesale flips, lease options, and playing Realtor, but I do take on the occasional rehab. I also have a medium-size portfolio of rental properties.

If I were to start from scratch I would concentrate on wholesale flips and also taking properties subject to and reselling on a lease option.

Re: Question For ALL? - Posted by Carey_PA

Posted by Carey_PA on January 31, 2002 at 08:27:31:

I started w/ mh’s and then i did a sfh deal w/ 0 money out of pocket. and i’m going to try to keep it that way :slight_smile:

Dave, I think you responded to a post of mine before about wanting to talk about real estate, etc…I’m sorry that I haven’t responded to you, but I forgot where the post was, so email me privately and we can talk.


Re: Question For ALL? - Posted by Jim FL

Posted by Jim FL on January 31, 2002 at 24:11:02:

This depends on your needs and resources I suppose.
I started with wholesale assignments, and double closings.
I needed CASH to replace my job income right away.
I then moved on to L/O’s because they were relatively easy to grasp, and obtain.
Also, with wholesale deals, I had to find deals with a TON of equity.
With a L/O, I could turn a nice profit, with houses that were not at 50%-70% of value.
I then realized that I wanted to own, not just control and learned subject to.
I did try holding a few houses as rentals, and decided that being a landlord was not my bag.
And, rehabbing, well, I’ve done a small bit of it, and it was not my cup of tea either. (having to rely on contractors to perform, and dealing with repair cost and budget over runs was not my idea of fun.)

Cash deals, done a few there as well, but not until I had done quite a few other types of deals and had the cash myself, or a good money partner.

I am not the type of investor that found one way and stuck with it.
I look at it this way…
I try to keep my REI toolbox full of several methods for solving sellers problems, this way I have a better chance of doing more deals, since there are sellers with a multitude of issues to deal with.
I will admit however that I’ve done more Subject to deals that any other.
The only reason why I suppose is that I am comfortable doing them, and have gotten rather good at it.
I use L/O as my exit strategy on most deals, no matter how I aquire the property.
The reason for this is that there are a TON of buyers out there for these.

Could I pick a favorite method?
Honestly, no, whatever makes the deal work for all parties involved is what I do.
Solving sellers problems while making a nice profit is the name of the game for me.

Do what YOU are comfortable with now, and as you make more money and do more deals, keep studying and learning. (I still read new books all the time, education in this business is ongoing, and you never know, some material just may give you one little piece of info you can use to make money.)
You will eventually find a place where you are most comfortable.
Just do not forget the things you learned along the way, because someday one of your sellers who call just may need a solution different from what you do “most of the time”.

Let me give you an example:
I have not “flipped” or wholesaled a house in a while now. But, I spoke with a seller today who has a duplex that is in need of MAJOR rehab.
I do not want to do the rehab, I hate that.
But, the loan on the property has only a $4k balance, and is held by a private individual.
I called him up and talked to him today.
I told him what I saw when I inspected, as well as asked him some questions about the mortgage he holds, and whether or not he wants the property back.
He said, “No way, I want nothing to do with it, and could care less if they pay me or not.”
The reason I called the lender was because the seller neglected to pay the last two months payments, and never heard a word from the lender. I figured this meant the lender was ripe for accepting a discount to release the lein. (I was right!..and love when that happens.)
So, I’m taking the property subject to, and paying off the lender for a discount.
I’ll be in the place for about $1500. ($500 to the lender for a release, and approx. $1k in back taxes and a small utility lein…unless I sell it before then, in which case, I’ll just use the rehabbers earnest money to pay off the underlying, since I told them both it would take $2k to “Tie this up”.)
I already spoke to a couple of rehabbers who will pay me between $10k and $15k sight unseen. (they know the area, and know me, therefore my discription of the property and repairs it needs, they trust.)
I’ll “Flip” this puppy and make a few bucks in the process.
I also met with a seller today who has inherited a free and clear house from a relative, along with enough cash to pay taxes on what they inherited. They are willing to walk away from the house they have now, and could care less “how?” I buy it, just so long as the payments are covered.
The house is worth approx. $90k, and the loan balance is approx. $62k.
I signed this one up subject to.

Each one used just another tool in my REI toolbox.

Good luck to you,
Jim FL

Re: Question For ALL? - Posted by SCook85

Posted by SCook85 on January 30, 2002 at 23:36:35:

I started out bird dogging for another investor, then I began wholesaling, then I started rehabbing, and then started holding properties.

I progressed through the stages rather quickly. Within 6 months I was rehabbing, and 9 months I had rentals.

If you are looking for guidance. I feel that if you don’t have cash reserves, holding and rehabs are something that you should not consider because they both can require cash. Wholesaling can help you to get that cash with little financial risk on your part. It takes time, but not much money.

Happy Investing,


A question for CAREY - Posted by Jesse (CO)

Posted by Jesse (CO) on January 31, 2002 at 09:23:31:

Hi Carey,

I’m considering a local bank that’s not too far from where my investment neighborhoods are. I was wondering how you approached them. This particular bank has 4 branches. I was wondering if it’s enough (or a start, at least) to deal with the branch director on questions of financing deals, etc. The branch nearest my neighborhoods isn’t the main branch but does do most, if not all, the transactions and services of the main branch.

In another post, you mention writing up a biz plan so they see how serious the biz is.

  1. Is this a lengthy doc?
  2. Do you bring letters of recommendation from your CPA, Accountant, Atty…

You also mentioned ‘knowing your stuff’ so when speaking to the head officer, you come off as not being a green horn (not how you said it, but that’s the idea I got…).

I’d appreciate any input from a veteran!


Jesse (CO)

What exactly is wholesaling? - Posted by Tim (CT)

Posted by Tim (CT) on January 31, 2002 at 09:18:19:

I’ve read the word ‘wholesaling’ alot on this board and I’m curious to know what it is. Is it anything like flipping?

Thanks in advance.

An answer for Jesse (long) - Posted by Carey_PA

Posted by Carey_PA on January 31, 2002 at 23:27:12:

LOL well Jesse, I don’t know if I’d call myself a VETERAN…actually I’d consider myself a BEGINNER still and always learning…but thanks for the thoughts :slight_smile:

anyway, this local bank was actually referred to me by another investor who i met through a guy i worked with (see all you gotta do is run your mouth and talk about what you do!)

Anyway, when I called the banker, I explained what I wanted to do and he explained what he could do, then I had to fill out an application, give him personal and corp. tax returns, and then i also included a business plan that i had put together (it totally wasn’t perfect, trust me!)

But it showed all the deals that I had did (they were only mh deals, but every single one of them made me a heck of a lot of money and I’m sure he could see that.) now i’m not saying that’s why he decided to work w/ me, but anybody could have seen that i make money on those deals.

also, i spelled out word for word, sentence for sentence, boring paragraph after paragraph of waht i wanted from him, what i intended to do…and how i planned on going about it.

Now after all that, he called me and said (about my biz plan), “so you want to borrow money to buy mh’s?”

lol I was like NOOOOOOOO, I want to borrow money to buy sfh’s and I want the money to fix 'em up too, because I’ll be getting them way below your 75% ltv.

and he said “well go get a deal and bring it to me and we’ll start small”

so that’s what i did. very, very nice guy and I think he’s the best for giving me a chance. (at the time i had no job, no money, and frankly no income…but my credit was ok and the deal that i presented was at 50% of fmv)

anyway, i would ask to speak to someone in the commercial lending dept. (asst. vice president or something) that’s my guys title, so i’m always looking for that…heck for all i know the could ALL call themselves that

I had no recommendations from my attorney or CPA, although they were all listed as RESOURCES in my biz plan. Perhaps now, I will try to get some recommendations from my new cpa and this banker that i’m using. (my banker that i’ve talk about just referred me to another bank in my new area, because he isn’t authorized to do deals in my new area that i moved to)

As far as a biz plan being a lengthy document…to me, mine was long and a pain in the a** to write, but it is very, very important to your business to write it and you’ll be rewriting it FOREVER! I’ve been rewriting mine for the past 2-3 yrs.

I think I rambled on enough…sorry!

Good luck and take care,


P.S. I got your email and I apologize for not getting back to you sooner, but I just moved and I’m…well extremely disorganized still!

Re: What exactly is wholesaling? - Posted by Talia (NY)

Posted by Talia (NY) on January 31, 2002 at 10:59:39:


Wholesaling is buying junker properties literally dirt cheap and re-selling them at a low price to investors who do rehabbing. It’s referred to as buy-low sell-low. What many wholesalers do is put a junker property under contract and then assign the contract to another investor. The fee you charge for the assignment is your profit (from what I hear it is between $1k and $5k). Most of the profit on the final sale of the house to an owner occupant goes to the investor who did the rehab.

Re: What exactly is wholesaling? - Posted by Tim (CT)

Posted by Tim (CT) on January 31, 2002 at 11:11:05:

So, my profit is not realized until the rehabber actually sells the property or at assignment time?