Week 1 Review: Kool-Aid Check

[gt4329b 0]

OK, after my first week in the SLO bidness, I have some questions/thoughts to throw out there...

 

1) Most of the FSBOs that I've been pursuing are waaay pricier than most of the properties I see you Big Dog's talking about. And I mean in the $145k range ..with most closer to $175k-$215k. Regional differences aside, I've told myself this is still OK, since while the possible SLO rents on such a house would need to be higher ($1200-$1600), that's fine since (1) its still close enough to market rent plus rent credit and (2) any desirable T/Bs should be able to handle that. Thoughts/feedback/observations?

 

2) I've got a real estate agent to get me comps on sellers that pass the "I could consider a lease option" test -- I'm using the $/sqft approach, sorted by most recent, to get me a good number on the current FMV. But, having gotten there, I'm a bit hesitant on how to come up with a good SLO offer price. Any tips?

 

3) Having a phone/fax service already in place would have made things go soooo much smoother -- a good idea even if you're just getting started, especially with services like onebox.com that are month-to-month and relatively cheap (<$20). I wouldn't recommend jumping in without something like that in place, thinking that you'll get it if/when you need it (which was my thinking...)

 

4) Related to #3: develop a SYSTEM. Already I'm running into little considerations that, once things start to really take off, will eat time like my dogs eat ...well, everything. I'm also trying to constantly ask myself, "Will this scale well into a larger operation or into something that I can hire out?" I'm sure the Big Dog Pros on this forum can comment much more knowledgeably on this topic; my main point is just to state that I've already seen what a difference a system can make, and I've only been making calls for a week -- and have as yet to do anything more than that!

 

Intangibles: I'm a bit frustrated . Yeah, I probably had unreasonably high expectations (OK, I know I did), but none of the sellers that I talked to have panned out (so far). Then again, I left the ball in their court in every case -- a big no-no when dating, and probably a big no-no in this biz, too. But ...learning is the name of the game. Tomorrow is a new day and a new work week, and I have 20+ listings to call on, plus new Craig's List postings, better "infrastructure" in place, and a deep-seated burning desire to be free of The Treadmill.

 

Blue skies!

[813equities 0]

OK, after my first week in the SLO bidness, I have some questions/thoughts to throw out there...

 

1) Most of the FSBOs that I've been pursuing are waaay pricier than most of the properties I see you Big Dog's talking about. And I mean in the $145k range ..with most closer to $175k-$215k. Regional differences aside, I've told myself this is still OK, since while the possible SLO rents on such a house would need to be higher ($1200-$1600), that's fine since (1) its still close enough to market rent plus rent credit and (2) any desirable T/Bs should be able to handle that. Thoughts/feedback/observations?

 

2) I've got a real estate agent to get me comps on sellers that pass the "I could consider a lease option" test -- I'm using the $/sqft approach, sorted by most recent, to get me a good number on the current FMV. But, having gotten there, I'm a bit hesitant on how to come up with a good SLO offer price. Any tips?

 

3) Having a phone/fax service already in place would have made things go soooo much smoother -- a good idea even if you're just getting started, especially with services like onebox.com that are month-to-month and relatively cheap (<$20). I wouldn't recommend jumping in without something like that in place, thinking that you'll get it if/when you need it (which was my thinking...)

 

4) Related to #3: develop a SYSTEM. Already I'm running into little considerations that, once things start to really take off, will eat time like my dogs eat ...well, everything. I'm also trying to constantly ask myself, "Will this scale well into a larger operation or into something that I can hire out?" I'm sure the Big Dog Pros on this forum can comment much more knowledgeably on this topic; my main point is just to state that I've already seen what a difference a system can make, and I've only been making calls for a week -- and have as yet to do anything more than that!

 

Intangibles: I'm a bit frustrated . Yeah, I probably had unreasonably high expectations (OK, I know I did), but none of the sellers that I talked to have panned out (so far). Then again, I left the ball in their court in every case -- a big no-no when dating, and probably a big no-no in this biz, too. But ...learning is the name of the game. Tomorrow is a new day and a new work week, and I have 20+ listings to call on, plus new Craig's List postings, better "infrastructure" in place, and a deep-seated burning desire to be free of The Treadmill.

 

Blue skies!

 

I definitely related to #2. Hell...actually I'm down with all those, and I don't think it's sheer happenstance either. I think everyone is bound to run into the same things. Like my homie MichaelC says..."I hate to tell you this...but you're just normal..." haha.

 

I definitely agree with setting up systems. After about 10 or so phone calls I realized my way of operating, and even taking down info wasn't consistent. I also realized there had to be a better way to gather info through Craigslist...so...I made up a very convenient email form that people can follow through a link, and I also printed out some of what I call..."Phone Info" sheets. The reason for those is simply...I can remember to get certain info, and it can also act as a guide on the phone, and that was helpful for me. I can get to bumblin'and stumblin' sometimes, and it keeps my ADD-self in check.

 

As for you saying properties seem to be more exspensive for you...it's like the opposite for me. Pittsburgh is seriously dirt cheap, and you're in ATL...it's a pretty hot market down there right?

[MichaelC 160]

1) Most of the FSBOs that I've been pursuing are waaay pricier than most of the properties I see you Big Dog's talking about. And I mean in the $145k range ..with most closer to $175k-$215k. Regional differences aside, I've told myself this is still OK, since while the possible SLO rents on such a house would need to be higher ($1200-$1600), that's fine since (1) its still close enough to market rent plus rent credit and (2) any desirable T/Bs should be able to handle that. Thoughts/feedback/observations?

Ain't necessarily so, emthree. I couldn't find a property for $200K unless I had a death wish. I mean, we are talking Blood versus Crips type 'hoods for that money. But, like you said, those are just regional differences. Concentrate on finding properties that are close to the median price for your area. That gives you the greatest number of potential t/b's to market to. Obviously, a $500K property will have a smaller pool of buyers than will a $200K home.

2) I've got a real estate agent to get me comps on sellers that pass the "I could consider a lease option" test -- I'm using the $/sqft approach, sorted by most recent, to get me a good number on the current FMV. But, having gotten there, I'm a bit hesitant on how to come up with a good SLO offer price. Any tips?

With a SLO, remember that you are negotiating with a, (hopefully), very motivated homeowner. If not, you have no business making the offer. So, armed with the most self serving comps, you make your offer. Not so low that the homeowner thinks you are scamming him. And not so high that the homeowner accepts it. What you're aiming for is an offer that receives a counter-offer, and then you're on your way. When in doubt, go low. You can always increase your offer.

4) Related to #3: develop a SYSTEM. Already I'm running into little considerations that, once things start to really take off, will eat time like my dogs eat ...well, everything. I'm also trying to constantly ask myself, "Will this scale well into a larger operation or into something that I can hire out?" I'm sure the Big Dog Pros on this forum can comment much more knowledgeably on this topic; my main point is just to state that I've already seen what a difference a system can make, and I've only been making calls for a week -- and have as yet to do anything more than that!

Yeah, being organized is no doubt going to save you time, energy, and frustration. Easier said than done, though, when one is just starting out. There are certain things you can't anticipate when you're new out of the box. Experience is the best education. As you plod along initially, you begin to see what works, what doesn't, what you need, what you don't, etc. Don't aim for perfection and total harmony from Day One.

Intangibles: I'm a bit frustrated . Yeah, I probably had unreasonably high expectations (OK, I know I did), but none of the sellers that I talked to have panned out (so far). Then again, I left the ball in their court in every case -- a big no-no when dating, and probably a big no-no in this biz, too. But ...learning is the name of the game. Tomorrow is a new day and a new work week, and I have 20+ listings to call on, plus new Craig's List postings, better "infrastructure" in place, and a deep-seated burning desire to be free of The Treadmill.

Don't put that kind of pressure on yourself. We all go into this with visions of wine, women, and songs. But that's only on late night television. The reality is quite different. It's not get-rich-quick, and none of your body parts are going to get bigger if you buy my manual. If I had to focus in on the biggest enthusiasm killer for n00bs, I would say it's trying to make deals happen with sellers who don't want to dance. In other words, wasting time and energy with sellers who aren't motivated. Hearing "No" isn't a bad thing, as long as it is early in the process, emthree. Get to the point quickly, and if someone isn't interested, move on. Speak with as many homeowners as you can, make offers, and a deal will fall. Call and market, and then call and market some more.

[MichaelC 160]

I definitely related to #2. Hell...actually I'm down with all those, and I don't think it's sheer happenstance either. I think everyone is bound to run into the same things. Like my homie MichaelC says..."I hate to tell you this...but you're just normal..." haha.

For the record, I have never told Joe he's "normal".

[gt4329b 0]

Thanks for all the feedback -- all very good to hear (or hear again, as the case may be -- can't hear it enough when you're getting started). Things are already looking better today ...and the day's just half over!

 

I definitely related to #2. Hell...actually I'm down with all those, and I don't think it's sheer happenstance either. I think everyone is bound to run into the same things. Like my homie MichaelC says..."I hate to tell you this...but you're just normal..." haha.

For the record, I have never told Joe he's "normal".

For the record: if NI is where the "normal" people hang out, then I'm definitely in the wrong place

[813equities 0]

Thanks for all the feedback -- all very good to hear (or hear again, as the case may be -- can't hear it enough when you're getting started). Things are already looking better today ...and the day's just half over!

 

I definitely related to #2. Hell...actually I'm down with all those, and I don't think it's sheer happenstance either. I think everyone is bound to run into the same things. Like my homie MichaelC says..."I hate to tell you this...but you're just normal..." haha.

For the record, I have never told Joe he's "normal".

For the record: if NI is where the "normal" people hang out, then I'm definitely in the wrong place

 

Ha! In your face Mike!

 

Ain't necessarily so, emthree. I couldn't find a property for $200K unless I had a death wish. I mean, we are talking Blood versus Crips type 'hoods for that money. But, like you said, those are just regional differences. Concentrate on finding properties that are close to the median price for your area. That gives you the greatest number of potential t/b's to market to. Obviously, a $500K property will have a smaller pool of buyers than will a $200K home.

 

I love how you even color coded the corresponding gangs...

[Kimberly 0]

3) Having a phone/fax service already in place would have made things go soooo much smoother -- a good idea even if you're just getting started, especially with services like onebox.com that are month-to-month and relatively cheap (<$20). I wouldn't recommend jumping in without something like that in place, thinking that you'll get it if/when you need it (which was my thinking...)

 

You can get a free local vmail number at www.privatephone.com.

 

Kim

[<Steve> 82]

Hey Kimberly-

 

It's been awhile how's things in OK. How's your real estate market?

 

Steve

[Kimberly 0]

Hey Kimberly-

 

It's been awhile how's things in OK. How's your real estate market?

 

Steve

Hi Steve!

 

Life's great! If a turtle and rabbit were racing, our RE market would be the turtle. Appreciation was just over 6% last year, slightly more than usual. Oklahoma ranked 19th in foreclosures last year.

 

Hope everything is going well with you. Looking over a few posts it looks like you're doing more than alright. Do I see full-time investing in your future?

[<Steve> 82]

Kimberly your market sounds like mine. We are at 4% to 6% appreciation this last year or so which is rolling high here. It's definitely not the highs and lows of other areas.

 

...Looking over a few posts it looks like you're doing more than alright. Do I see full-time investing in your future?

Getting close, but it's hard to make the jump. Last year was a great year and I'm working for a repeat. January and into February seems to be the hibernating season but calls/emails are picking up daily from sellers so more deals should fall. Trying to arrange things for part time job/full time investing. Will see.

 

Good to see your post. You've shared a lot of good insight here which was/is helpful. Take care.

 

Steve