Rehabber, Landlord, Marketing, Wholesaling

[Ryan D.]

When you first got into this industry, what prior knowledge/experience did you have?

How do you handle your direct mail campaigns? Do you write them yourself, hire someone to do it, or use a service?

I had worked in a call center dealing with Direct Mail. Actual Real Estate experience? ZILCH.

I pay a provider to do it for me. I did it myself and once you've stuffed 2k envelopes you realize that is for the birds. The .20 it costs to have it all done for me is worth my time.

 

[Ryan D.]

One of my favorite ways to get a property is by taking over a failed flip. Typically folks will pay retail not knowing that there are contractors who work volume exclusively with investors.

Ex: New concrete driveway and back patio, complete guy/remodel of the kitchen and bath, paint the entire home, new hvac, new concrete porch/steps, 900sqft of hardwood refinished, all trim redone, new plumbing stack, electrical issues, landscaping, and other odds/ends for under 15K. If I called a company I saw on Tv or in the YP I guarantee I would have paid double if not more.

I just got a call on one of these. People watch the house flipping shows on HGTV and think its easy. Then they get bored. Then I pick it up for less. They can't unload it in its current shape to a retail buyer, Realtors don't want to mess with the miniscule amount of commission, and typically there is a financial or time constraint.

 

[Ryan D.]

Well I decided it couldn't hurt to get my Real Estate License. I just passed the Indiana exams this morning. I'm meeting with an investor/managing broker on Wednesday to discuss hanging my license with them. I'm also partnering with another gentleman in Michigan to do direct mail up there as well. (no not Detroit) Its been a decent week of "growth" so far.

 

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[aldenatienza]

Thank you for sharing your knowledge it's good to know that there are people like you out there who gives time in providing information. May I ask do you consider doing some mentoring or coaching in the future?

 

[LateStarter]

We've been doing a few buy and holds in recent years and are happy with our returns on those deals. In Canada we don't do wholesaling, so it's either flipping or rentals really. We haven't networked enough (or the right network I suppose) to identify investor partners to help grow our portfolio. My wife is an agent and a little gun shy about taking on external partners too. So for now, we're finding growth difficult. We have duplexes and a triplex and toyed with the idea of larger, purpose built multiplexes. The challenge is we're in the Toronto area and prices are insane. I'm not sure if you have any advise for this kind of a market, but I'm all ears.

 

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[Chazmania]

What do you do to protect yourself from lead paint disasters (lawsuits)? It's not covered by home owners insurance or a personal umbrella policy.

It's pretty scary too because some of the more degenerate tenants discussed earlier don't seem to have a problem mixing up some paint chips in the little kid's oatmeal and then suing the "evil landlord" for toxic exposure. And even years later too.

I've been reading some articles online that are extremely disturbing. I'm really starting to dislike landlording more and more. Not so much for the business side of it, but how easy it is for sidewalkers to bend you over the barrel if they really put their mind to it.

 

[Ryan D.]

What do you do to protect yourself from lead paint disasters (lawsuits)? It's not covered by home owners insurance or a personal umbrella policy.

It's pretty scary too because some of the more degenerate tenants discussed earlier don't seem to have a problem mixing up some paint chips in the little kid's oatmeal and then suing the "evil landlord" for toxic exposure. And even years later too.

I've been reading some articles online that are extremely disturbing. I'm really starting to dislike landlording more and more. Not so much for the business side of it, but how easy it is for sidewalkers to bend you over the barrel if they really put their mind to it.

You either buy homes post 1978 (I believe was the year) or most states have a standard disclosure form that you make your tenants sign. I also have a commercial insurance policy for my legal entity that covers it. Maybe look into potentially setting up an LLC or other entity and looking into the insurance benefits available? Your safest bet though is just buy homes without it. The commercial policy covers several MM and was dirt cheap.

 

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[LynnD5000]

Great question. It all comes down to how good you are. Really.... I watched a guy drop over 65k on marketing and he only made like 98k back. That is HORRIBLE. I would not waste my time. Typically my ROI is double to triple my amount invested. However that value can vary. It depends if I keep the home as a rental, wholesale it, or flip it myself. It also depends on the time factor. I have made 10k in 45 minutes and 1 phone call. I have also spent 30 hours marketing, networking, and showing a deal to make $3,500. It really all depends on what your exit strategy with the deal really is.

I know people that are happy if they make a few grand on a deal. My average profit per deal is over $8,300. But that's not including the deals that are an actual rehab/flip where 20k+ is on the table.

Lets see - $98,000 - $65,000 = $33,000 - From where I sit in the slowlane trying to get to the fast(er)lane - I'd take that much all day long....If the money was separate from my day job - That might give me what I need to pick up one of those "producer" instead of consumer deals - Everybody has to start somewhere...So Ryan, How long have you been doing what you do to get that good at it & what's your secret to make it work?
L

 

[Chazmania]

A good portion of the drama can be screened out. Also if you own nicer homes you tend to get better tenants. I get a kick out of folks who own slumlord properties and wonder why they get drama.

Totally agree with that.

 

[Chazmania]

Easy. Don't rent to degenerates. Know your property, know your tenants.

That's the truth and I agree.

My post was to point out that lead paint is quickly becoming the new EPA debacle like asbestos was, and anyone owning anything (including decent areas) should understand what's involved with it. If you do any kind of remodel, renovation or even a simple repair to a rental, you are required to be RRP and Leadpaint certified and follow procedures to cover your rear-end. It's a pain in the neck but contractors and landlords are the ones getting taken to court.

Not looking to go tit for tat here, just informing anybody in the biz that may not be clear on the realities of it. It's apparently only covered by a commercial pollution liability policy. A general commercial policy won't cover it. If there's any doubt get your insurance agent on the phone and ask specifics.

 

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[jon.a]

Well I am officially a licensed Broker in the state of Indiana effective today.

Broker or agent?

 

[Ryan D.]

Broker or agent?

The state of Indiana did away with "agent and salesperson." They increased the pre licensing from 60-90 hours. Which makes me a Broker. After two years I can go out on my own as a "Managing Broker".

Good looking out though!

 

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[Ryan D.]

Fancy to see you here, Ryan

My worlds just collided! This is a pretty cool group. Fun to see people having success in other areas. I've picked up a few hobbies already! PS: I'll be in Lima next weekend. Some distant friend of my wife's parents are getting married.

 

[jon.a]

Fancy to see you here, Ryan

Good to see you over here, Ben

 

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[Ryan D.]

Are you guys from BiggerPockets? Nice to see some RE guys here, usually this forum is the one exporting users over there due to their RE focus.

Yes sir! Really like the site/book by the way.

 

[jon.a]

Are you guys from BiggerPockets? Nice to see some RE guys here, usually this forum is the one exporting users over there due to their RE focus.

A couple of RE guys that are actually qualified to do an AMA.

 

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[jon.a]

...I'm just a dumb landlord

Bullshit!

 

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[jon.a]

Yes, not sure about Ryan, but BP is definitely home base for me. Glad to be here, MJ. As to qualifications, Ryan knows stuff...I'm just a dumb landlord

Do a 30k pig thread. It would be valuable.

 

[Ryan D.]

Hey Ben. Not a lot of real estate over this way but a very different overall outlook to investing than over at BP.

This guy just bought a damn golf course. How badass is that?

 

[Ryan D.]

Ryan - if you spent half as much time studying CFFU as you do on social networks, you might be able to actually afford to pay for my lunch... Thoughts on that...lol

Man that was low! I've actually read it front to back a few times! Thank you very much. Pretty sure I gave you an absolutely glowing review on BP a week or so ago as well! Actually looking at a few triplex properties as we speak.

 

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[SteveO]

This guy just bought a damn golf course. How badass is that?

Thanks Ryan. The golf course is not that big of an investment by comparison. It is smaller than each of the last three real estate transactions that have been done. The purpose is more for a "retirement" type of a setting.

The apartment real estate game seems to be played out for now.

 

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[jon.a]

Thanks Ryan. The golf course is not that big of an investment by comparison. It is smaller than each of the last three real estate transactions that have been done. The purpose is more for a "retirement" type of a setting.

The apartment real estate game seems to be played out for now.

Funny Marcia was just asking me why, over breakfast.

 

[SteveO]

Marcia was just asking me why

Have heard that question a lot recently.

 

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[Travispassiveinc]

Try to buy rentals in places where you could live. The nicer the home you get the lower your maintenance costs, the more you appreciate, and the less of a hassle it can be. Remember you need to make your money when you buy.

So true!


Sent from my iPhone using Tapatalk

 

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[GSF]

Hi Ryan
How did you get started in RE? Do you focus on a particular area/ niche of RE? How do you find these properties? Can you expand on how you use direct mail? I assume it's to contact owners of distressed properties to convince them to sell? How do you finance/ find private lenders?

 

[TaylorB]

Great progress! Thank you for this thread!

I'm just finishing my first rehab project here in Canada. What are some things you consider when deciding the list price for a flip in a stable market?

Currently the comps in my area don't have much recent sale data for the type of home everything is around 6 months old. I'm definitely the nicest of all the active listings in the area.

Thanks,
Taylor

 

[eliquid]

Ryan -

Glad I caught this thread. I posted in the other active thread about rentals the other day and now I see this one too. Awesome timing.

I am in a market very very close to St. Louis and Indy actually, so I am not far away from you ( about 2 hours drive prob. )

I am looking to get into RE but I am also very interested in your direct mail approach ( not specifically for RE, but because I am a marketer and haven't done direct mail ).

Just so I got this right, you're doing direct mail to get people who might be interested in selling their home, right?

If this is correct, are you also doing this for people who might be wanting to buy as well?

 

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[eliquid]

Gonna ask another -

This math you are throwing around in the posts, like the 50% litmus.... where do you learn these things?

Is there a RE book(s) or course you can take to get someone up to speed? Let me rephrase that, I know there are tons of books and course on RE, but do you recommend any? Digging around posts on different forums gets a bit hectic when trying to learn from others.

 

[jon.a]

Gonna ask another -

This math you are throwing around in the posts, like the 50% litmus.... where do you learn these things?

Is there a RE book(s) or course you can take to get someone up to speed? Let me rephrase that, I know there are tons of books and course on RE, but do you recommend any? Digging around posts on different forums gets a bit hectic when trying to learn from others.

https://www.biggerpockets.com/forums
No big news so far.

 

[Ryan D.]

Great progress! Thank you for this thread!

I'm just finishing my first rehab project here in Canada. What are some things you consider when deciding the list price for a flip in a stable market?

Currently the comps in my area don't have much recent sale data for the type of home everything is around 6 months old. I'm definitely the nicest of all the active listings in the area.

Thanks,
Taylor

So when you say "active listings" is yours listed so far? What was your plan when you started the rehab? Target % of ROI or did you have an ARV in mind? I would look at homes that are similar in the level of quality even if they are a smaller size. You can average out the sqft. and multiply up by yours. How fast you want to sell is also a determining factor. I would look at homes that are same bed/bath/size and target the high end of those values. For instance one of my rehabs right now has granite, ss appliances, new hvac, plumbing, and a roof. I'm going to list it at a price that reflects the condition. Don't get greedy. But don't sell yourself short.

 

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