Wholesaler can't find "real" investors - Posted by Kathryn

Posted by kevin on August 21, 2004 at 20:21:29:

She’s obviously doing something wrong".
cough paying too much cough

I’d like to see some numbers. not just “my deals are good” How much is the ARV how much is its current value. How much is repairs? what are the EXACT repairs estimates. I’d like to know how much you think it costs to repair rooms bathrooms/kitches/blah How did you come to your values?

Oh, those guys who asked for 10-15 thousand less. Did they happen to say “if i pay all cash and close quickily what is the least you’ll accept?” and then when you told them the price did they say… “is that the best you can do?”

These deals are probably deals if you’re gonna buy it and dump 10 grand into it and rent it out for the next 50 thousand years.

Wholesaler can’t find “real” investors - Posted by Kathryn

Posted by Kathryn on August 19, 2004 at 19:21:07:

I have been a follower of this newsgroup for a year now. I have learned & received so much support from everyone & now I am stumped again! I used to bird dog for some investors & graduated to doing my own deals with some help from them. Now am quite good at finding deals alone & decided to start “wholesaling” them out to investors. The spreads are 25k to 45k and some have been alot more. But it seems the list I have of investors; around 40, takes forever for these guys to respond & if they do, they want more $$$ out of the deal or when I ask why they would not jump at this opportunity, say “this is their first deal…” For instance, I offered a house for $45k it needed carpet, paint, and a few minor repairs. The ARV $85k. Would you believe, (without even seeing it) many wanted it for less; about 10k to 15k less. Most investors can get comps, know what an area brings, & have some sort of hml or heloc, yet they demanded a lower price. So I call up my “old” investors & they snatch up any deal I have. I was hoping to establish a list of “new” investors, but I keep getting armchair investors or greedy guys. What gives? Where can I find investors other than the “I buy houses”. These guys want me to sign over the deed or lease option with no money down. I have bandit signs up, & I find many deals that way so where are the “real investors”.

A question… - Posted by Gary (MO)

Posted by Gary (MO) on August 21, 2004 at 15:55:27:

Kathryn, do you mind sharing how you find your deals in such a competitive market? How’d you get started?

Try this… - Posted by rm

Posted by rm on August 21, 2004 at 12:37:28:

If you can get MLS access, research all the REO home sales.

Then, take the addresses and look up who the current owner is.

The ones you want are NOT the ones who live in the property, you’re looking for the non-occupant owners.

Then, compile those names and addresses into a mailing list, and start sending postcards when you have a property to flip.

Wholesaler can’t find - Posted by Arthur

Posted by Arthur on August 20, 2004 at 20:25:20:

I haven’t read all the posts made, but i sure wish you were here in AZ, i would snap your hand off on those kinds of deals.

I think the problem is people just don’t have the balls to take the first step…they read up on it on sites like this, buy the books, buy the courses, and then do nothing.

What i would do is ask each “investor” on their requirements. i.e. Price v FMV, SFH, MFH etc. When you get an idea of who wants what, then you can target those buyers more effectively and not get frustraited.

Good luck

Re: Wholesaler can’t - Posted by Rob FL

Posted by Rob FL on August 20, 2004 at 08:08:56:

A good place to find other investors is your local REI club. I’m sure Jacksonville has something.

Another place is the local newspaper. Everytime I put an ad for a handyman special in the paper, my phone rings off the hook with investors, newbies, Realtors, etc. calling for more info.

Re: Wholesaler - Posted by Potash

Posted by Potash on August 19, 2004 at 23:29:20:

There are not that many real investors. The real investors that do exist are out doing the real work (fixing up houses for resale or rent). Most real investors don’t want to waste their time looking at yet another skinny deal from some flipper, because they know from experience that most flippers are hacks and that only one out of ten such deals is worth the effort to investigate. As you have figured out most of the ‘I buy houses’ people are just flippers like you. The obvious solution would be for you to stop whinning and fix/retail the property yourself. But we both know that is not going to happen, because you would not know where to start.

Re: Wholesaler can’t find - Posted by Kristine-CA

Posted by Kristine-CA on August 19, 2004 at 22:05:47:

The real investors are the ones that already own several properties in the neighborhoods/areas you are working. Have you checked surrounding addressess for owners of multiple properties.

You can hardly blame any investor, newbie or not, that wants a property for 10-15K less than your asking price. After all, when you made your offers and got your contract, you got it way less than what your asking price is. So, if you can got a deal, you have to at least let your buyer try to get one too. :slight_smile:

Also, have you kept any properties as rentals or done any rehabs since you started? I am almost positive that you that you will see your asking prices differently once you do this. Rehab costs plus hard money plus agent and closing costs and insurance for the rehab can really eat into what you perceive as profit for the rehabber. I speak as someone who mostly wholesales. But the few I have kept have taught me a ton about what a real deal is.

Also, where I am I have found that buy and hold people can pay more. They usually know their numbers better and are more sane about gambling with appreciation. They just need the cash flow to work. I’m not sure what rents are where you are, but since you mention low valued properties, I would guess that there is possible cash flow there. Try looking up owners of multiple properties and contact them with your deals.

Happy selling. A real investor for me is the one that shows me the money and performs per the contract. To each her own…Kristine

Re: Wholesaler can’t find - Posted by Jane

Posted by Jane on August 19, 2004 at 19:40:09:

“So I call up my “old” investors & they snatch up any deal I have.”

If this is working why may I ask are you looking for fresh new real investors?

Thanx-Kristine, Darren, Jane, Arthur, Rob, Rm - Posted by Kathryn

Posted by Kathryn on August 21, 2004 at 17:46:46:

I want to thank all of you for your advice to help me when I was stumped on what to do. I have already have taken steps to find new investors so I can move my properties. I have already placed an ad for my rehab & put one out today for one I just bought. I am going to visit my local REIA’s (5) in Jacksonville over the next few weeks. Also, I’ll work on getting some appointments to do some presentations. (Thanks Darren) I am going to add to my mailings to out of area/state for BUYERS, since I was always looking for sellers. Next week I should see something pop as I work on more promoting of what I do using all of your advice. I appreciate everyones help and I was so busy concentrating on the “list”, I was not “investing” in promoting myself. Thanks everyone & Creonline!

Re: A question… - Posted by Kathryn

Posted by Kathryn on August 21, 2004 at 16:46:43:

Gary, I got started when I found myself & my husband working fulltime with 2 kids and struggling to make ends meet. It wasn’t that we were living the high life, we were paying normal bills & couldn’t get ahead no matter what we did. When I did not work for 2 lousy weeks after my son was born and that put us way behind is when I got fed up. I dusted off my Carleton Sheets, reread the general info, went to Barnes & Noble & read every real estate book there. I did this almost everyday. I took notes & took the plunge. I called on any ad that looked good, I talked to people who had FSBO signs on their property, I went to open houses to learn the market of a particular area, I picked the brain of real estate agents, and I listened to successful real estate investors. I joined the local REIA, I read more books and found a wealth info on internet sites & free books. It talked about CREONLINE! Then it started to come to me. Reading the posts everyday. Asking Questions. Looking at the mindset of the “regular” posters & their advice. They were successful, even when they failed. They never gave up! They tried something different. They asked advice, but they never gave up. So, I did everything. I would work on preforclosures one week, send out letters the next, call on FSBO’s & ask about lease options, call the banks with letters of intent for REO’s, call up realtors, give out business cards, act with a mindset of a successful real estate investor.
Sometimes the preforclosure worked or the mailing, or maybe someone called my bandit signs, but very slowly, I was getting calls, people were calling ME about selling their house. Yippeeeeeeeee. I was ready!!! I failed the few times, I messed up the terminology or I forgot a certain form, but I slowly did it!!!
Do all of the things above. Work on your presentation. Interact with successful real estate investors or just successful people. You will become more confident. So my first deal I really made was a preforclosure. My professional presentation that I had rehearsed went out the window. I did not “sound like a used car salesman”. I had a cold & a headache and felt like dying so I talked slowly, non-professional and just said I was here to help them out of a difficult situation & offered them a fair and reasonable price considering the circumstances. It worked. The minute I started acting “super professional” in future dealings of any deal; I lost, when I was “down to earth” with most people, I got the deal. Same with subject 2’s. With Lease Options, I am a little more pushy because I flaunt the money around more &
act a little like “used car salesmen”.

In a hot market such as Jacksonville, Florida there are still forclosures, divorces, relocating people, deaths. That is all over. But there are always & will be people in distress. My market, there are so many houses that need to be bought, it is not funny. People have walked away or are from out of state & just leave it empty for years. The ones I bought that way people told me they were glad someone contacted them. Someone always wants to sell and there are buyers everywhere. This is a military town but all I get with the military is sub2’s. I get houses with people just wanting out because they are building a new house or they can’t afford it, or they hate real estate agents or they want to move South :wink: or they know I helped their friend out when she sold. So I suggest to brush up educating yourself on the basics of all techniques, stick to creonline & others, talk to everyone, put in offers on as many properties as you want, learn something new about real estate everyday, talk to potential sellers everyday even if you have no intention of buying (because it gives you practice) & then do it. Also, I have found many fellow “investors”? crunch the numbers so much that they talk themselves out of deals & I just bid usually $800 to $1200 more than an investor would and get the house! Everyone knows the formula, so why be like everyone else. Loose a few hundred bucks but get the deal instead. Stop trying to be perfect with the numbers, so I have houses and you are going to have to buy them from me! So now your “numbers” are on my wholesale price to you!!! So just be flexible, never give up, and keep learning & the deals will come to you.

Re: Wholesaler - Posted by mark

Posted by mark on August 20, 2004 at 09:18:22:

Potash - your rude!

Re: Wholesaler - Posted by Kathryn

Posted by Kathryn on August 20, 2004 at 06:28:29:

I think it is fair to say that I have worked really hard to find deals when I started doing this business and I made sure the seller & the investors were both happy. I fine toothed what I do by recognizing a deal without wasting my time with trying to make a deal when there was “no deal”. My spreads that I offer are 25k to 40k NET, which means there is alot of money in the deal for everyone. There are many posts on this board of investors who try to find deals & I fill a need for everyone. I have great negotiating skills & a sales backround to boot, but I find that the more down to earth I am, the better the deal I get. So when I call those “I buy houses” ads to find fellow investors, they are either rude, full of bs, or want the deal for nothing and those are the ones that call back. I must admit, I found a few that were decent & they would flip & be done with their properties. They didn’t believe in double flips etc either. As for as rehabbing, I have 2 different contractors who look at all of the houses I get & give me the numbers. No, I do not rehab at all. I will do carpet & paint etc., but I keep the 10k & up for anyone who wants to do it. I have not started to buy & hold yet, but I will when I have more time. I don’t rehab because I do not know what to do, so you are right about that. But I know my limitations & can admit it.

All I want to accomplish is to have a stable of ready investors that would act & not talk about acting. I was wondering if there were either groups or companies that I should contact where they may be happy with investments opportunties. I know I read it on this board about pension companies or something. I am confident that the answer is here on this board. I do appreciate all of the responses I received & keep them coming. I learn everyday something new. Thanks.

Re: Wholesaler can’t find - Posted by Kathryn

Posted by Kathryn on August 19, 2004 at 20:11:41:

Thanks for asking, I should have explained this part…
I just wanted to spread my wings, so to speak. I have been with these guys from the begining & I have learnt alot from them, but they made a tremendous amount of money out of me, so I “paid” for my education. Unfortunately, they sometimes still treat me as though I am a “bird dog” & still try for a huge profit for them, and want me to pay me $500! I charge them what I want in the flip, but they “miss” the old way. Well, call it silly, but I am all grown up now & know what to do. I make a great deal on my “flips” 10k-20k is not unusal for me, but I do for alot less for newbies getting started or a break for a friend. So, I have to move on, (just like growing up & moving out of your parents house) & I want to find other investors to add to my wholesale list. I won’t have to justify to anyone what I charge & not be made to feel guilty by these past mentors. They just lost the goose that laid the golden egg(s)…

Re: A question… - Posted by Gary (MO)

Posted by Gary (MO) on August 21, 2004 at 17:06:02:

Thank you Kathryn for sharing your experience. You will probably never know how inspiring and helpful it was for me. I wish you the best in your re career!

Re: Wholesaler - Posted by Darren

Posted by Darren on August 20, 2004 at 09:32:08:

Please don’t take Potash’s advice personally. For the most part, I find his posts to be full of vitriol and generally worthless.

You can cultivate your own end buyers by creating a turn key business for them. There are A LOT of intelligent people in the corporate world that would love to be in this business but haven’t put it all together. Create a presentation showing them how they can profit (using a profit formula and CMAs), what risks are involved, and that you can line them up with a team of lenders, contractors and sales agents who will assist them. You should be able to demonstrate how they can walk away with $15-$20K after 4-6 months. Rehabbing is basically project management and it is a valuable skill to have. Explain that you are entitled to make a profit for facilitating the deal and no one has a right to question that. If your numbers are solid and you leave the Lion’s share of profit to the rehabber, you will build your own network of loyal customers.
You have more options than you realize.

Re: Wholesaler can’t find - Posted by Jane

Posted by Jane on August 20, 2004 at 09:15:11:

Gotcha! Don’t blame you one bit. Here’s any idea the next time you have property put signs in the yard and an ad in the paper cash only investment property. If you have a REI club you could also put an ad there to get some players.

Good luck!

Re: Wholesaler can’t find - Posted by Chris-Fl

Posted by Chris-Fl on August 19, 2004 at 22:05:42:

Where are you located?

Re: Wholesaler can’t find - Posted by Darren

Posted by Darren on August 20, 2004 at 09:37:09:

Legrand has trained half of Jacksonville. There have got to be tons of retailers in your area.

Re: Wholesaler can’t find - Posted by Kathryn

Posted by Kathryn on August 20, 2004 at 06:29:43:

Jacksonville, Florida, but I buy houses anywhere.