Can this be made to work?

[Jason (AL) 1]

HOLY CRAP. MAN YOU MUST HAVE A NICE BUSINESS MODEL PUT TOGETHER.

Warning Rex:

He does these CAs exclusively.

I know how you like those 5 figure paychecks.

But he's made some nice coin with 'em.

 

 

 

What is our website?

Here it is.

[MichaelC 160]

HOLY CRAP. MAN YOU MUST HAVE A NICE BUSINESS MODEL PUT TOGETHER.

Warning Rex:

He does these CAs exclusively.

I know how you like those 5 figure paychecks.

But he's made some nice coin with 'em.

 

 

 

What is our website?

Here it is.

70 properties, three to five grand, sometimes more, per deal. Do the math. No liabilities, no tenants and toilets. Pilot is crazy like a fox, I suppose.

[pilot76180 51]

Well, certainly more to it than just the $$. Keep in mind, I have reps that work for me and they get a piece of the option fee on each house, but hey, I never even SEE most of the houses we do.

Also, to make this grow like we have, we hold the tenant's hands till close, which means we have everything on a database etc., and we're in touch with the seller till close as well. Makes for lots of work. Not a simple in/out, thank you, and run to the bank thing. We have an office manager, we have the credit improvement in house which our loan officer put together herself, and everything is monitored and tracked on the databases.

If we assigned the contract and never did anything else, obviously most of the people wouldn't purchase, the seller's would be ticked, and we wouldn't have grown like we have.

[Jonathan RexfordFL 8]

That has always been my issue about the CA side of this business. I am glad that you have a system in place to keep track of everything. Have you placed everything in a business model? What duties for Admin, Manager, Credit, Sales....etc

 

It would make a good course....let me know if you are interested in how to do it.

[pilot76180 51]

We are (FINALLY!) selling licenses for Leasing to Buy, which would allow the business owner to utilize our complete program and everything we have at our disposal, including website, marketing power, admin, credit repair, financing, etc.

We looked at Franchising, but after $10k realized that that wasn't the way to go for us, because we just wanted a few more offices, not 100's of franchises.

So we are now offering the license usage, but to do it at this volume really does require 50 plus hours a week.

CLoser to 70 hours. So a potential licensee would have to approach it as a full time job.

We're not looking to take over the world, but this is about the only way to get a few more locations up and running properly.

[Jonathan RexfordFL 8]

Good for you. It sounds like you guys already on track to do the work.

[pilot76180 51]

We are finally there it seems. My biggest issue is that I'm still at the point of working IN the business instead of ON the business. Growing pains it seems. I get people contacting me every now and then about my input on CA's, which is certainly fine, but I think MC's manual covers it pretty well. I think at this point I'm better to offer business input to anyone who is trying to make this what it should be, which is a business. I think if people approach this as a hobby, they should find another hobby. If people approach this as "Well, I was thinking of getting into real estate".. they are doomed.

I was thinking of getting a date with Selma Hyak before she got pregnant.

Didn't work out.

[Jonathan RexfordFL 8]

Well after looking at your numbers you sure got my head spinning. Like you I like business systems. Man you had me on the floor about the hobby thing. I think too many pie in the sky people are shoving this info into the market place. Well when you get around in licensing let me know. I would be interested in speaking to you about the systems. If anything to see about a consultiation on what you guys are doing.

 

My money of course......

[MichaelC 160]

Well, I guess I could be ugly, but really, I think ugly is best defined as an Italian sitting in a dark closet in a bathrobe playing with lasagne noodles overseeing an online forum.

 

 

. . .I was thinking of getting a date with Selma Hyak before she got pregnant.

Didn't work out.

There's always room in my closet, BigGuy

[pilot76180 51]

Well, that's a little concerning MC. Let's see..you said you were holding a flashlight....not wearing a bathrobe....what exactly are you using to type?

I have GOT to find another forum!

 

Jonathan, feel free to shoot me an e-mail and we can discuss the business side in more detail.

[sukrpunch 0]

...Also, to make this grow like we have, we hold the tenant's hands till close, which means we have everything on a database etc., and we're in touch with the seller till close as well. Makes for lots of work. Not a simple in/out, thank you, and run to the bank thing...

 

Hey Pilot,

 

Newbie here. Since you stick around the deal for the duration of the lease, why don't you focus on SLO's instead of CA's to get a higher payout? More risk with SLO's?

 

Thanks,

 

Chris

[pilot76180 51]

Well, currently, in Texas, you must be on title to LO a house to someone. Hopefully that will change in 2009.

But SLO's do carry a greater risk, and I have just found my niche I guess.

If someone is starting out and wants to do SLO's, I would suggest to be sure you are capitalized properly.

If you do a SLO, make one empty house payment, get a tenant, get $3k down, then a few months later the tenant is slow to pay, you keep calling him, he's dragging his feet, you go to evict, he pays you say a few hundred and says he only needs two more weeks to get caught up. You can't evict now, because you've taken $. You know have to wait till next month. Next month is here, and you all go back and forth, and finally you evict him and get in the house and it is trashed. You are now out at least 3 months rent, so there went your $3k. Now you need to get paint and carpet. You need $5k to get it livable, and it will sit empty for maybe another month or two.

Now, obviously this is a scenario of things going bad, but the point is, you want to have some cushion there.

You don't want to cry yourself to sleep because you have an empty, trashed out house.

SLO's are great, don't get me wrong, but it all goes back to daytrading for me.

Lots of people made a bundle of $$ with futures, but I stuck to swing trading because it was lower risk. Lower return, but lower risks.

[sukrpunch 0]

Very good. You may have just shined some light on how I approach deals. I usually try to get a SLO before a CA because I think it sounds more appealing to a homeowner ("I'll manage your property for you for free, blah blah blah"). I've always been aware of the risk involved with SLOs, but now seeing it how you've written, I might rethink my strategy a little lol Thanks again for the response!

 

Chris

[pilot76180 51]

Well, it's just my opinion, for what it's worth,that people wanting to do LO's should start off with some CA's under the belt.

With CA's, you really get to know the rental area and market on the HO's dime, not yours.

You get a very good feel for how quickly you can turn a property.

I don't think most people can stomach making an empty house payment for a couple of months starting out.

For example, I know areas that are decent areas here, with homes that are two years old, nice schools, but I would never for my life do a SLO unless there was a very large amount of money in it, because I know the rental market there.

I suggest knowing the rental market like a pro before risking your own money.

You get to learn that by doing CA's.

But, you get to earn while you learn!!

[sukrpunch 0]

But, you get to earn while you learn!!

 

Yet another good quote! lol

 

So in all of your experience, what percentage of t/b's do you have skipping out of the property early....both with and without property damage? Also, in your market and throughout your experience, what percentage of properties are you able to find t/b's for? And roughly how long? We're lookin at using a 45 day window, but not sure if that'll be sufficient enough. I know all markets are different, but I'm just trying to get a general idea.

 

Thanks!

 

Chris