So, I took some time and put together a list of what I look for in deals (along with other information that should be interesting to wholesalers). If you’re a wholesaler in the Atlanta area, and want to start offering me deals, do me a favor and read this first:

WHOLESALERS: HERE ARE MY REQUIREMENTS

In fact, if you’ve been following my site for the past 18 months, you’ll know that as of yet, I’ve NEVER recommended a single outside product to my readers.

But, every once in a while, though, I find someone selling real estate learning materials that are reasonably priced and tremendously valuable. When that happens, I’m happy to promote them here on the site.

Such is the case with the Flip This REO! eBook that teaches all the basics (and some advanced stuff) on wholesaling REOs.

It was written by an investing colleague of mine — Stephani Davis — who wholesales REOs for a living in Tampa, FL. Let me explain why I’m willing to recommend this book to my readers who are interested in getting into wholesaling, and specifically are interested in wholesaling REOs:

1. Stephani Is Really Doing It: Most so-called experts who peddling seminars and systems aren’t in the real estate business; they’re in the “guru” business. They know how to sell products, but they generally don’t know how to buy and sell real estate. Stephani was a bartender three years ago who taught herself the business of wholesaling, and after a year of struggling and refining her techniques has built a full-time business doing it. She makes very little money selling her eBook…and makes most of her money actually investing.
2. REOs Are Different: For those people who just want to wholesale properties purchased from private sellers, I would say that you don’t really need a book on the topic. Sure, a good book on marketing, negotiating, etc, would be useful, but wholesaling regular properties is pretty straight-forward. Wholesaling REOs is more complicated, as the sellers (banks) would prefer you not to wholesale their properties…so they make it a bit more difficult.
3. I’ve Learned From The Book: If I thought it was just as easy to learn how to wholesale REOs on your own, I’d be the first to tell you. I’m not a fan of paying for learning materials if you don’t have to. But, despite the fact that I specialize in buying REO properties, when I first read Steph’s Flip This REO! eBook, I learned a whole lot of things about investing in REO properties that I never knew. I was both surprised and impressed.
4. There’s a Money-Back Guarantee: I would never recommend any product that didn’t promise a refund if you weren’t satisfied. While I think the eBook is fantastic, if you buy it and disagree, you can return it. That’s the way it should be.
5. I Earn A Commission: If you read my blog regularly, you know that I don’t spend a dozen hours a week writing this for the purpose of making money. But, for the sake of full disclosure, let me tell you that if you click on the link above or below to be taken to the eBook, and then purchase it, I will get a commission. That said, there are a LOT of products that I could try to sell you that would generate a LOT more money in commissions, but I’m not willing to sell out for quick cash. I’m promoting this product because it’s good, and in my opinion, worth every penny it costs (and more).

So, if you’re interested in learning how to wholesale REO properties, check out Steph’s eBook:

Flip This REO! eBook

Today, I wanted to provide an article on the topic of negotiating with private home sellers who may be desperate to get rid of their property, and therefore might be ready to provide you with a fantastic deal!

The article was written by guest author Scott Costello. Scott currently runs Struggling Investor.com, where — between his blog, his articles and other great material — he is giving away a tremendous amount of information that up-and-coming investors should greatly appreciate. Scott previously wrote “Building a Buyers List” for 1-2-3 Flip, and I’m thrilled that he’s back again with another article:

Top 4 Seller Questions – Answered!

If you’re working directly with motivated sellers, this article is for you…thanks again, Scott!

Scott currently runs Struggling Investor.com, where — between his blog, his articles and other great material — he is giving away a tremendous amount of information that up-and-coming investors should greatly appreciate.

Scott has been kind enough to write a guest article for 1-2-3 Flip.com, aimed at helping up-and-coming wholesalers build their buyers list:

“Building a Buyers List,” By Scott Costello

If you’re looking to beef up your buyers list for your wholesale deals, this is a must-read…thanks Scott!

It pretty sad to think that we hadn’t considered calling this guy to ask if he wanted this one also, until we were on our way to the closing. Had we called him a week or two ago, we likely could have done a double-closing, and saved ourselves a couple days (and the $75 we spent to mow the lawn and trim the bushes).

While I think we could have gotten more for this place, the fact that we were able to sell it quickly and to someone we know can close quickly and reliably makes it worth giving up a couple thousand dollars. In the end, we should net about the same profit as we did on The Roach Duplex, which isn’t bad for a couple hours work…

Hopefully, we’ll be able to get all the paperwork done and the closing scheduled for next week…our buyer is ready to close “as quickly as possible.”

In fact, we may even sell it to the same buyer!

We called the buyer of The Roach Duplex today on the way to the closing, to let him know that we had another one on that street and to ask him if he was interested. He didn’t answer, so we left a voice mail message.

When we got to the closing, the listing agent mentioned that she may have a buyer for the duplex if we wanted to immediately turn around and sell it. We said “Sure!” and she told us that she was showing it to him first thing tomorrow morning. After a bit more discussion, we realized that the buyer she had lined up was the guy we just left the message for. He had called the listing agent when he saw the For Sale sign, not knowing we already had it under contract.

Even funnier, as we were having this discussion with the listing agent, that buyer returned my wife’s call. He was completely confused, as he still had no idea we were buying it (the agent told him it may be available, but didn’t tell him that it was from us, not the original seller).

Anyway, we straightened it out, and I have a feeling he’ll be putting in an offer on it. Additionally, we’ve already gotten a couple other potential buyers who have looked at the property, so if we can get rid of it in the next week or two, I’ll be very happy.

Hopefully I’ll have more to say about this one in a few days…

For the sake of other wholesalers who are interested in providing me wholesale deals in the future, I wanted to give some feedback on the types of deals I’m looking for, my purchase criteria, and some thoughts I have about purchasing wholesale deals…

- Most importantly, as I mentioned above, I’m always interested in having others bring me deals. I’m looking to buy about 20 more properties before the end of the year, and need all the help I can get to find great deals.

- I mainly invest in Cobb County, GA, specifically in the cities of Smyrna, Marietta, Mableton, and Austell. I’m always looking for great flip properties or rentals.

- I know that a lot of wholesalers are focusing on REO deals these days. To be honest, I have a pretty good handle on the REO market around here (my wife is an agent and we’re friends with a couple of the big REO listing agents), so if there are good REO deals, I’ve probably seen them. That said, other investors might come across something I missed or be able to negotiate a better deal, so I’m always happy to look at any deals (REO or otherwise) that are sent my way.

- My rule is that the first person to bring me a deal is the one I’ll work with on that deal. If several people point me at the same property, I’ll work with the first person who sent it to me. In general, I’m on the MLS first thing every morning, so if you bring me something on the MLS, don’t be surprised if I tell you that I already know about it. That said, if you bring me an MLS deal that I saw but that I purposely chose not to look at, and then look at it based upon your recommendation, I’m happy it to buy it through you if I’m interested. I’ll always be immediately upfront about whether I’ve seen a deal before or not.

- In general, here are some basic property attributes I’m interested in these days:

• Good neighborhoods
• Built after 1965
• Houses under $100K
• Minimum 3 bed, 2 bath
• Brick is better than other siding, but will consider others

- Here are my financial requirements for houses:

• If I plan to rent it out, my maximum purchase price is (generally) as follows:
  
  Rental Purchase Price = ((Rent / 2 – $100) * 150) – Repair Costs
  
  As an example, if a house will realistically rent for $1000/month and needs $10,000 to get it into rental shape, I’ll pay at most:

  (($1000 / 2 – 100) * 150) – $10,000 = $50,000

• If I plan to flip it, basically my maximum purchase price is:
  
  Flip Purchase Price = ARV – $40,000 – Repair Costs
  
  As an example, a house that will realistically resale for $120,000 after getting $30,000 in repairs, I’d be willing to pay up to $50,000.

- I tend to be very conservative with rental comps and resale comps – I don’t look at what’s on the market now (those probably aren’t priced correctly), only what’s sold/rented within the past 4 months within the subdivision (or within about half a mile radius).

Again, if you’re a wholesaler in this area, feel free to shoot me an email, and let’s grab lunch…

Most calls were from my signs, and many of the callers weren’t clear on the fact that this property should be geared towards an investor who would be able to afford and handle the repairs; in fact, I had more than one person who said, “I’ve been looking for a house I can move into in this price range!” Well, sorry to inform them, but there are no move-in-ready houses in this price range anywhere around here — but I guess people are a bit more optimistic than I had planned for. From now on, I will be a bit more clear in my marketing that the property is geared specifically towards investors and perhaps note that it is a “fixer-upper.”

Regardless, I did get a few calls from serious investors, and a couple of them will be viewing the property over the next couple days. I’m still not sure if I’ll be able to move it for the price I’m asking, but I’ll keep trying.

And, while we were supposed to close on this one tomorrow, not-surprisingly, I got an amendment today from the bank asking that we push the closing to “no later than February 18.” Not a big deal, as it gives me a couple more weeks to find a buyer (or to buy some plywood to board this baby up for the next couple years while I wait for the market to bounce back).

To wholesale, I need to do a lot of marketing. I started by creating a flier. I next linked that flier to my website. And then I placed ads on every major real estate website I could think of, including Craigslist, Backpage.com, RehabAHouse.com, StevesHotList.com, and others. Then I sent email to each of the buyer’s that signed up for my Buyer’s List. Lastly, my wife made 20 signs that my brother has started placing around the city.

Not sure if I’ll get any response to this first wave of marketing, but I figure it’s a start, and I’m curious to see what happens…

That said, I want to start posting ads on some real estate websites, and start putting out signs to market this property to other investors, and it would be very nice to have a list of investors in the area that I could contact directly. The first step to accomplishing building this list was to create a web-based sign-up form so that investors could submit their info to me. Of course, to do that, I needed some sort of reasonable web presence for my business (a random web-page with a sign-up sheet isn’t going to garner much trust).

So, I quickly rebuilt my Lish Properties website from scratch…

Next, I created a web-based form that other investors could fill out and submit to me…

And lastly, I put an ad on Craigslist looking for other investors who might be interested in getting included on my mailing list…

Within about 12 hours, I had 74 people click through to my site, and 8 people sign up for my “Buyer’s List.” Apparently I need to do some optimization to get people to sign up once they get to the sign-up page, but I’m guessing a lot of people were more interested in seeing actual properties for sale than they were to get added to a mailing list. Point noted, and I’ll use that to hopefully improve my sign-up rate. Additionally, I’ll use other marketing tools to drive traffic to this sign-up page, and hopefully build a much larger list.

Tomorrow — once I actually get access to the duplex, as no-one seems to know the lockbox code — my brother and I will start putting up signs advertising the duplex deal, and if I can find a buyer in the next week or two that will allow me my desired profit, I’ll make a quick sale. If I can’t find a buyer at my asking price, I’ll likely board the place up, throw it on the MLS, stick a “For Sale” sign out front, and wait. At some point, either a buyer will come along or the market will improve and I’ll figure out another exit strategy. It may take a year or two or five, but for $22K in this town, I’m sure I’ll make a good profit on this property at some point.