I've been very, very busy this week. I had to close on the triplex myself because my buyers needed more time to close than the seller was willing to give me.
I found a transactional funder who financed the property for a week. It's costing me 3.25 points (which I thought was 2, but when I read the loan docs, it costs an additional 1.25 points when I pay off the loan). So, with the funder who got the loan approved in 2 days - kudos to her!!! - I was able to close on the triplex on Friday afternoon.
Also, my Realtor wrote a contract between me and my end buyer and I'm paying him extra for all the work that he did to help me. He's been a rock and I'm so happy to have him on my team.
Friday night, I put a "free stuff" ad in Craigslist and spent Saturday morning giving away all the stuff people had abandoned in one of the 2 bedroom units. They literally left a houseful of stuff, as well as 9 leaf sized trash bags of trash (so far). Tomorrow someone is driving up from Colorado Springs to get much of the rest of the stuff (woohoo!).
My buyers are going to close sometime on or before the 29th - hopefully before. And I must say that not going with these buyers in the first place cost me around $5,000. This was a very expensive lesson to learn, but believe me when I say that it is well-learned. And even though it cost me money, I have made quite a few good contacts from it, including 2 more cash buyers and 2 good funders.
I'll let you know what happens next week.
Until next time...
Saturday, January 23, 2010
Monday, January 18, 2010
Lessons to Learn
So, now there's a gap between when my buyer can buy and when the seller needs to close. I have put down $2,000 of my own money and am looking for the best rate on transactional funding for a week.
I had a very frank conversation with Brad of IRR and he told me that I could have avoided all of these buyer problems if I'd had a tighter process. He's absolutely right... This really is all my fault. I've let the buyers roll all over me and have been far too accommodating when they've asked me to change things in the assignment contracts. I need to get tougher. No more working with anyone until they sign the contracts and put down some money, because if they haven't done that, they aren't really a buyer... and I need to add a clause that says if a buyer defaults after their inspection (like my first buyer did), they have to pay my whole fee. That would certainly make them think a lot harder about backing out when they have money approved. I'm thinking that I need to get IRR's assignment contract.
And, I have to tell you that Bill Twyford, who I coach with on Skype, really has my back. He actually contacted the most recent buyer and chewed him out for backing out at the last minute.
So, I'll let you know how it goes. Until next time...
I had a very frank conversation with Brad of IRR and he told me that I could have avoided all of these buyer problems if I'd had a tighter process. He's absolutely right... This really is all my fault. I've let the buyers roll all over me and have been far too accommodating when they've asked me to change things in the assignment contracts. I need to get tougher. No more working with anyone until they sign the contracts and put down some money, because if they haven't done that, they aren't really a buyer... and I need to add a clause that says if a buyer defaults after their inspection (like my first buyer did), they have to pay my whole fee. That would certainly make them think a lot harder about backing out when they have money approved. I'm thinking that I need to get IRR's assignment contract.
And, I have to tell you that Bill Twyford, who I coach with on Skype, really has my back. He actually contacted the most recent buyer and chewed him out for backing out at the last minute.
So, I'll let you know how it goes. Until next time...
Saturday, January 16, 2010
Challenging Week
Well, I thought I had the property sold to someone that I know and trust. However, he couldn't find money for some reason or another, so said I should shop the deal. That took about a week, but it was actually very helpful. We got an inspection and we got an estimate from a roofer on what the roof would cost.
Therefore, I pitched the deal at our local REIA meeting, to IRR. I was mobbed at the meeting. All 25 of my flyers got snatched up and 8 other people left me emails or cards. I showed the house to 4 people the next day and accepted the first guy who offered to give me a check. That's where the problems started.
While the buyer seemed to be very eager to buy the property, he had to work with hard money. The hard money lender was awesome. Their appraiser said the ARV (after repaired value) of the property was up to $300,000. A screaming deal when you look at the buyer's purchase price of $150,000 plus his estimate of $27,000 in repairs. Well, they approved the buyer, but the buyer didn't like the terms of the loan, so backed out. He told me at 10:17 Thursday morning. Closing was supposed to happen Friday at 3:00.
Thursday morning I started calling everyone I could think of who had shown interest in the property and who might be able to come up with cash to close the deal on time. The hard money lender called people too. So, I showed the house to a couple of people on Thursday at 3:30. One was the man who had been going to fund the loan for the hard money lender to the first buyer. I'll call him funder guy. The second was partners - one of whom could come up with cash in the short period of time needed.
The funder guy and his wife looked around and left, saying that he would call me later. The partners stayed for 3 hours. They did a very thorough review. They talked about just letting them take over the contract and give me a note for some part of my fee... I wasn't comfortable with the options they were offering because at this point, I would really like to just sell it and move on, so I promised to think about it and call them if I decided to go ahead.
The funder guy called me later and agreed to close on the property on Friday for $145,000. So, I was on the phone with him all Friday morning, sent him documents, my rehab contacts and all that. He signed the assignment contract, after getting me to take out any non-refundable part, since we were doing the deal in just a few hours... and met the realtors and the seller at the property.
So, I'm driving to Golden for the closing, which is a half hour drive and the buyer calls me up 5 minutes before closing time. He tells me that the seller pays $140 a month for trash and between $50 and $150 a month for water (I'll just call it $100 to keep it simple). He thinks that this $240 a month changes the value of the property by $30,000 to $65,000. He steps out of the deal. When I get to the closing offices, where my realtor is, they're on the phone... negotiating a much, much lower price than the one we had agreed to. I told my realtor to tell him we'd get back to him.
We called a buyer who's been interested in the property the whole time, who buys around 10 houses a month and asked if they wanted it since it appeared the deal had fallen apart. They do!!!! So we got the seller to extend the contract, which wasn't an easy thing, let me tell you, because they were highly annoyed at being put off again.
This has been the most trouble I've ever had closing a property. I'm trying to keep the deal alive, but am very worried that it's not actually going to work.
Until next time.
Therefore, I pitched the deal at our local REIA meeting, to IRR. I was mobbed at the meeting. All 25 of my flyers got snatched up and 8 other people left me emails or cards. I showed the house to 4 people the next day and accepted the first guy who offered to give me a check. That's where the problems started.
While the buyer seemed to be very eager to buy the property, he had to work with hard money. The hard money lender was awesome. Their appraiser said the ARV (after repaired value) of the property was up to $300,000. A screaming deal when you look at the buyer's purchase price of $150,000 plus his estimate of $27,000 in repairs. Well, they approved the buyer, but the buyer didn't like the terms of the loan, so backed out. He told me at 10:17 Thursday morning. Closing was supposed to happen Friday at 3:00.
Thursday morning I started calling everyone I could think of who had shown interest in the property and who might be able to come up with cash to close the deal on time. The hard money lender called people too. So, I showed the house to a couple of people on Thursday at 3:30. One was the man who had been going to fund the loan for the hard money lender to the first buyer. I'll call him funder guy. The second was partners - one of whom could come up with cash in the short period of time needed.
The funder guy and his wife looked around and left, saying that he would call me later. The partners stayed for 3 hours. They did a very thorough review. They talked about just letting them take over the contract and give me a note for some part of my fee... I wasn't comfortable with the options they were offering because at this point, I would really like to just sell it and move on, so I promised to think about it and call them if I decided to go ahead.
The funder guy called me later and agreed to close on the property on Friday for $145,000. So, I was on the phone with him all Friday morning, sent him documents, my rehab contacts and all that. He signed the assignment contract, after getting me to take out any non-refundable part, since we were doing the deal in just a few hours... and met the realtors and the seller at the property.
So, I'm driving to Golden for the closing, which is a half hour drive and the buyer calls me up 5 minutes before closing time. He tells me that the seller pays $140 a month for trash and between $50 and $150 a month for water (I'll just call it $100 to keep it simple). He thinks that this $240 a month changes the value of the property by $30,000 to $65,000. He steps out of the deal. When I get to the closing offices, where my realtor is, they're on the phone... negotiating a much, much lower price than the one we had agreed to. I told my realtor to tell him we'd get back to him.
We called a buyer who's been interested in the property the whole time, who buys around 10 houses a month and asked if they wanted it since it appeared the deal had fallen apart. They do!!!! So we got the seller to extend the contract, which wasn't an easy thing, let me tell you, because they were highly annoyed at being put off again.
This has been the most trouble I've ever had closing a property. I'm trying to keep the deal alive, but am very worried that it's not actually going to work.
Until next time.
Thursday, January 7, 2010
Holy Cow, It Works!!!
So, the seller of the triplex who had dropped $60,000 off his price on the phone called me the day after Christmas and again a day later. He really, really wanted to get rid of the property.
So, I figured out what I would be comfortable offering (which was around $108,000), then Skyped with Bill Twyford, who advised me to start at $120,000. The seller had the triplex on the market for $250,000. I got on the phone with the seller (nervous as all get out) and explained that I was embarassed to make this low offer, but the property wouldn't cash flow at $190,000 (which was what he told me earlier was the best he would do). He told me to just tell him the number, so I did. He told me I was a little off. For once, I actually remembered the negotiating tactic of he who speaks first loses... and I shut up and let the seller tell me how much I was off.
He said "$10,000."
So I said "You'll take $130,000?"
He said, "Yes."
So, I told him I had to think about it and would get back to him. I got off the phone, did the happy dance and called back a while later to accept the offer. I called up my fabulous real estate agent to write the offer on the 28th and we had it all signed and sealed up on the 29th.
Meanwhile, I started calling people on my buyers list... people that I was sure could perform. Well, long story short, I spent a few days working with someone who I greatly respect and he couldn't come up with the money and was kind enough to tell me that I could shop it.
So I called Michael Jake to talk to him about it... Now I gotta say that I feel extremely blessed to have access to Bill & Dwan Twyford and to Michael Jake. They are a giant help!
Michael told me how to pitch the deal at the IRR meeting the next night since it has both equity for a flipper (between $60,000 and $90,000) or is an excellent rental property which will cash flow some $1,200 a month. So, I called up my sister to watch the kids, made up my flyer just before the meeting - yeah, it was very badly organized... I put in the numbers, but forgot to put in the property address. I printed 25 flyers, thinking that would be plenty.
I have to admit that the IRR meeting was almost perfectly designed to sell a property. Brad and Andy were talking about getting past your fears of wholesaling and went through the 9 deals they had wholesaled last month. When I got up there with a property, which I must say is an excellent deal, I got mobbed. Literally. They had to restructure the meeting because so many people were running up to the front to get my flyer. Not only did I run out, I took approximately 8 other emails who were interested. And, one lady called me before she left the meeting because it was too crowded for her to get through. Trust me when I say that this was not what I was expecting.
I emailed the flyer to everyone when I got home Tuesday night and called back the lady who had called me first. Wednesday, the calls started pouring in. I showed the property to 4 people between 4:00 and 5:00 Wednesday afternoon & had a call from someone else who wanted to see it after I already accepted the first guy's deposit to assign the contract. Obviously, I had to tell him it was gone.
Now, the guy who I accepted is going through a hard money lender, so has to wait a week to close. The other people there could close faster. I called a Denver investor friend of mine and Bill Twyford (unfortunately after the fact) and got excellent advice to always accept the guy with cash first. Put the other guy in 2nd position.
Still, I feel as if I gave a newer investor a chance to get a great deal. It helped that I talked to the hard money firm he's going through before he ever did, so they're pretty forthcoming about whether they can fund the deal. At this point, it looks like a "slam-dunk." All they're waiting for is the buyer's list of repairs.
Which, of course, I helped with. I sent the buyer some contractor resources, including a roofer who had already given an estimate for necessary repairs.
My realtor told me to make sure the money commitment is firm by tomorrow in order to let the guy keep the deal. One of the excellent new clients he got from my showings really wants it - and they have cash.
So far, this has been a win for a number of people.
1. The seller who is getting rid of a property he doesn't want & getting a profit out of it.
2. The seller's realtor who is getting a commission.
3. My realtor who is getting a commission and a few new investor clients (Did I mention that he's the best investor realtor in Denver?)
4. Me - I'm getting a $20,000 assignment fee.
5. My buyer who is getting a property for $150,000 + $22,000 in repairs that will be worth $262,000 (10% CAP rate on NOI) when it's all fixed up and rented out.
6. The hard money lender who is getting points and interest.
7. The title company who is getting their fees.
8. However many contractors the buyer uses to fix up the property.
9. Some section 8 renters who will get a fixed up place to live in a decent area.
Well, to be fair, the last 2 haven't gotten any benefit yet... but they will.
This is a pretty cool business. The property must close by the end of next week, so I'll let you know what happens between now and then.
Until next time...
So, I figured out what I would be comfortable offering (which was around $108,000), then Skyped with Bill Twyford, who advised me to start at $120,000. The seller had the triplex on the market for $250,000. I got on the phone with the seller (nervous as all get out) and explained that I was embarassed to make this low offer, but the property wouldn't cash flow at $190,000 (which was what he told me earlier was the best he would do). He told me to just tell him the number, so I did. He told me I was a little off. For once, I actually remembered the negotiating tactic of he who speaks first loses... and I shut up and let the seller tell me how much I was off.
He said "$10,000."
So I said "You'll take $130,000?"
He said, "Yes."
So, I told him I had to think about it and would get back to him. I got off the phone, did the happy dance and called back a while later to accept the offer. I called up my fabulous real estate agent to write the offer on the 28th and we had it all signed and sealed up on the 29th.
Meanwhile, I started calling people on my buyers list... people that I was sure could perform. Well, long story short, I spent a few days working with someone who I greatly respect and he couldn't come up with the money and was kind enough to tell me that I could shop it.
So I called Michael Jake to talk to him about it... Now I gotta say that I feel extremely blessed to have access to Bill & Dwan Twyford and to Michael Jake. They are a giant help!
Michael told me how to pitch the deal at the IRR meeting the next night since it has both equity for a flipper (between $60,000 and $90,000) or is an excellent rental property which will cash flow some $1,200 a month. So, I called up my sister to watch the kids, made up my flyer just before the meeting - yeah, it was very badly organized... I put in the numbers, but forgot to put in the property address. I printed 25 flyers, thinking that would be plenty.
I have to admit that the IRR meeting was almost perfectly designed to sell a property. Brad and Andy were talking about getting past your fears of wholesaling and went through the 9 deals they had wholesaled last month. When I got up there with a property, which I must say is an excellent deal, I got mobbed. Literally. They had to restructure the meeting because so many people were running up to the front to get my flyer. Not only did I run out, I took approximately 8 other emails who were interested. And, one lady called me before she left the meeting because it was too crowded for her to get through. Trust me when I say that this was not what I was expecting.
I emailed the flyer to everyone when I got home Tuesday night and called back the lady who had called me first. Wednesday, the calls started pouring in. I showed the property to 4 people between 4:00 and 5:00 Wednesday afternoon & had a call from someone else who wanted to see it after I already accepted the first guy's deposit to assign the contract. Obviously, I had to tell him it was gone.
Now, the guy who I accepted is going through a hard money lender, so has to wait a week to close. The other people there could close faster. I called a Denver investor friend of mine and Bill Twyford (unfortunately after the fact) and got excellent advice to always accept the guy with cash first. Put the other guy in 2nd position.
Still, I feel as if I gave a newer investor a chance to get a great deal. It helped that I talked to the hard money firm he's going through before he ever did, so they're pretty forthcoming about whether they can fund the deal. At this point, it looks like a "slam-dunk." All they're waiting for is the buyer's list of repairs.
Which, of course, I helped with. I sent the buyer some contractor resources, including a roofer who had already given an estimate for necessary repairs.
My realtor told me to make sure the money commitment is firm by tomorrow in order to let the guy keep the deal. One of the excellent new clients he got from my showings really wants it - and they have cash.
So far, this has been a win for a number of people.
1. The seller who is getting rid of a property he doesn't want & getting a profit out of it.
2. The seller's realtor who is getting a commission.
3. My realtor who is getting a commission and a few new investor clients (Did I mention that he's the best investor realtor in Denver?)
4. Me - I'm getting a $20,000 assignment fee.
5. My buyer who is getting a property for $150,000 + $22,000 in repairs that will be worth $262,000 (10% CAP rate on NOI) when it's all fixed up and rented out.
6. The hard money lender who is getting points and interest.
7. The title company who is getting their fees.
8. However many contractors the buyer uses to fix up the property.
9. Some section 8 renters who will get a fixed up place to live in a decent area.
Well, to be fair, the last 2 haven't gotten any benefit yet... but they will.
This is a pretty cool business. The property must close by the end of next week, so I'll let you know what happens between now and then.
Until next time...
Wednesday, December 16, 2009
Chris Chico's Real Estate Voodoo Part 2
So, I called the 6 people who left messages with information using the "script" that Cris Chico provided.
1. One guy dropped $60,000 off his listing price for his triplex right there on the phone.
2. One lady is a good prospect for a short sale on a reverse mortgage, but seems to have a foot injury that precludes her involvement for the moment so I will need to follow up with her.
3. One guy was just calling to see if I was one of those "lowballers"... why, yes, indeed I am.
4. One set of sisters who have an inheritance have differing levels of motivation. The out-of-state sister is far more motivated to sell than the in-state sister.
5. Two guys are also investors but they don't want to sell their properties at a price low enough for me to wholesale... though one's property has 2 houses on it which can be sold separately. He's a bright savvy guy, but the amount he wants to net might preclude wholesaling the houses - and he has them happily rented, so we'll see. He did mention wanting to cash out to pay off some debt. He might turn into a more motivated seller.
6. The other wants too much for his duplex, but is working on a wholesale deal in another area and might be a good wholesale buyer.
A total of 31 people called to listen to the recording, which, by the way, is still the one from Michael Jake's coaching program that I took in the spring. I use voiceconnectinc.com and they've made their customer sign-in button disappear so I can't sign into the account to change the voice mail. That was very frustrating.
An aside: All of the coaching students in Michael Jake's program have done at least one deal if they did what he said to do. I got sidetracked by bulk REOs (which my sellers never were able to deliver or if they did, I never heard anything), then summer came and I had both kids at home with no help, so no time to do real estate investing work.
Back to Voodoo... I checked out the triplex this afternoon and will give the owner a call tomorrow morning to see if he'll drop his price some more. This place needs a lot of work, though it's considerably better than some I've seen. Two of his units will be vacant as of next month, so he should be even more motivated. And, I'm going to continue to follow up with the short sale prospect. Her deal will be a win for both of us.
Until next time...
1. One guy dropped $60,000 off his listing price for his triplex right there on the phone.
2. One lady is a good prospect for a short sale on a reverse mortgage, but seems to have a foot injury that precludes her involvement for the moment so I will need to follow up with her.
3. One guy was just calling to see if I was one of those "lowballers"... why, yes, indeed I am.
4. One set of sisters who have an inheritance have differing levels of motivation. The out-of-state sister is far more motivated to sell than the in-state sister.
5. Two guys are also investors but they don't want to sell their properties at a price low enough for me to wholesale... though one's property has 2 houses on it which can be sold separately. He's a bright savvy guy, but the amount he wants to net might preclude wholesaling the houses - and he has them happily rented, so we'll see. He did mention wanting to cash out to pay off some debt. He might turn into a more motivated seller.
6. The other wants too much for his duplex, but is working on a wholesale deal in another area and might be a good wholesale buyer.
A total of 31 people called to listen to the recording, which, by the way, is still the one from Michael Jake's coaching program that I took in the spring. I use voiceconnectinc.com and they've made their customer sign-in button disappear so I can't sign into the account to change the voice mail. That was very frustrating.
An aside: All of the coaching students in Michael Jake's program have done at least one deal if they did what he said to do. I got sidetracked by bulk REOs (which my sellers never were able to deliver or if they did, I never heard anything), then summer came and I had both kids at home with no help, so no time to do real estate investing work.
Back to Voodoo... I checked out the triplex this afternoon and will give the owner a call tomorrow morning to see if he'll drop his price some more. This place needs a lot of work, though it's considerably better than some I've seen. Two of his units will be vacant as of next month, so he should be even more motivated. And, I'm going to continue to follow up with the short sale prospect. Her deal will be a win for both of us.
Until next time...
Thursday, December 10, 2009
Chris Chico's Real Estate Voodoo
So, I let the Virtual Wholesaling program go a while ago. I didn't really see the point of paying almost $900 a year for online access to a program. However, I got a recent ad from Cris Chico (Virtual Wholesaling's creator) for his Real Estate Voodoo program. It only cost $27, so I figured, what the heck; why not try it out?
Well, boy howdy! I already had a source for absentee owner leads as I can get them through my title company. Therefore, I didn't need the videos on getting leads through Realquest or SiteXData. I also already have an automatic answering/voice mail service, so didn't use the one he recommended. But... the postcard that he gave and the instructions for using Click2Mail to send them were excellent.
I sent approximately 600 postcards that went out Monday and the calls started flooding in Tuesday. It's Thursday and I've received 25 calls and 6 of them left messages saying they're interested in selling property. I'm very happy with that response rate. The mailing cost right around $170.00 and if I can flip even one of these properties, my returns will be amazing.
I've been watching the videos on how to speak to the sellers and how to craft the offers. In order to follow this program, you need to have sitexdata comp reports, so I just ordered those and must wait for approval (on a free trial) before I call the sellers back.
So far, the Real Estate Voodoo program is simple, easy to follow and quite effective. Frankly, I like it better than the Virtual Wholesaling site - ESPECIALLY for the price! The Real Estate Voodoo web site is actually lined up, top to bottom with the document you need, videos explaining what to do and links for other web services.
I'll let you know what happens when I call the sellers using the script that Mr. Chico provides.
Until next time...
Well, boy howdy! I already had a source for absentee owner leads as I can get them through my title company. Therefore, I didn't need the videos on getting leads through Realquest or SiteXData. I also already have an automatic answering/voice mail service, so didn't use the one he recommended. But... the postcard that he gave and the instructions for using Click2Mail to send them were excellent.
I sent approximately 600 postcards that went out Monday and the calls started flooding in Tuesday. It's Thursday and I've received 25 calls and 6 of them left messages saying they're interested in selling property. I'm very happy with that response rate. The mailing cost right around $170.00 and if I can flip even one of these properties, my returns will be amazing.
I've been watching the videos on how to speak to the sellers and how to craft the offers. In order to follow this program, you need to have sitexdata comp reports, so I just ordered those and must wait for approval (on a free trial) before I call the sellers back.
So far, the Real Estate Voodoo program is simple, easy to follow and quite effective. Frankly, I like it better than the Virtual Wholesaling site - ESPECIALLY for the price! The Real Estate Voodoo web site is actually lined up, top to bottom with the document you need, videos explaining what to do and links for other web services.
I'll let you know what happens when I call the sellers using the script that Mr. Chico provides.
Until next time...
Friday, July 31, 2009
What's Been Going On
Quick update.... Mr. Goins put out a new (updated) Ultimate Buying Machine system in October 2008. I bought mine in October 2007. However, for people who purchased the system from him, there is access to a website with all the updates. That's a refreshing change from say, Cris Chico's system, which costs about the same, but is internet based, does not offer as much... and is only accessible for a year. If you let Cris Chico's Virtual Wholesaling system expire, which I did, you get an email with the header "I must be crazy to take you back." Well, don't let me make you crazy, Mr. Chico, I ain't comin' back.
Anyway, back to Larry's system. The updates have all the newest bookmark links online. Now, you're supposed to be able to download them... but I wound up clicking each link and creating each bookmark in Firefox. It took me about 2 hours. The whole time, I kept thinking how much longer it would have taken if I actually had to go search out all of this information... and believe me, there is a lot of amazing info contained in the links alone.... Now to follow the Ultimate Buying Machine and figure out what I need to do with all this info.
Also, I just couldn't resist... had to do it. I bought Dwan Bent-Twyford's short sale teleseminar system that starts Monday. I got an electronic manual and forms and will have a pre-recorded teleseminar emailed each Monday that I can listen to at my leisure. It has homework for each week and promises that I will have a deal closed at the end of the 4 week training. It also comes with coaching access to Dwan. I'm pretty psyched about that.
Until next time.
Anyway, back to Larry's system. The updates have all the newest bookmark links online. Now, you're supposed to be able to download them... but I wound up clicking each link and creating each bookmark in Firefox. It took me about 2 hours. The whole time, I kept thinking how much longer it would have taken if I actually had to go search out all of this information... and believe me, there is a lot of amazing info contained in the links alone.... Now to follow the Ultimate Buying Machine and figure out what I need to do with all this info.
Also, I just couldn't resist... had to do it. I bought Dwan Bent-Twyford's short sale teleseminar system that starts Monday. I got an electronic manual and forms and will have a pre-recorded teleseminar emailed each Monday that I can listen to at my leisure. It has homework for each week and promises that I will have a deal closed at the end of the 4 week training. It also comes with coaching access to Dwan. I'm pretty psyched about that.
Until next time.
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