Experienced Investor Will Answer Questions for next few days

[WeSellHomes2Fix]

A brief background and why I am doing this.  I started investing in real estate 4 or 5 years ago and learned everything to get started on the internet.  I probably spent under $500 on my education per courses and books.  Now I run the largest wholesaling company in Philadelphia with my partner and would like to give back to help people that might have questions.  I know it would have helped me when I first started.  I will answer questions on things I know well and for the things I dont know well, I will just let you know.  I have a niche and know a lot about it and won't B.S. you on what I dont know well enough.  Feel free to PM me as well

[Mr Investor]

Can I have your buyers list

[Stanfield]

How much cash did you have to start?  How did you make your first deal?

[WeSellHomes2Fix]

1. Question 1 - Sorry, no buyers list.  We have 15,000 people on it (not purchased emails) and it took lots of time and effort to get there.  We'd probably sell it for around $1,000,000.  We've had offers.

2. Question 2 - My very first deal was actually not a wholesale deal in its purest form.  It was almost a birdog type deal that I got the contract for.  I actually went around my condominium complex and posted notes on peoples doors letting them know I buy houses in any condition.  Printed out 300 note cards and grabbed some scotch tape.  I got a call the next day from guess who.....my neighbor.  I sat down with him, told him what we could pay and called the guy I was working with that was a large house flipper in South Jersey and he purchased it.  I made around $1500 or so. Nothing crazy, but the lesson I learned was that there are more deals under your nose than you have any idea about.  When people ask how big their farm area should be, I tell them 2 miles and once you outgrow that, you'll know how fast to expand. 

[WeSellHomes2Fix]

Forgot to answer how much cash I had when I started.  I had plenty, but only spent maybe $1,000 between education and marketing before I got my first deal.  Just a round number.  It doesnt take much

[herbster]

How do you wholesale a sub2 deal?

[WeSellHomes2Fix]

I recommend not doing it. We have done a few and they are not worth the pain in ***.  The homeowner doesnt truly understand the transaction no matter how you explain it to them and you end up being the middle man after it is sold.  If you are looking to structure the fee, we have put it on the closing papers as a consulting fee.  Again, we dont do these anymore.

[WeSellHomes2Fix]

Also forgot to mention that you are potentially liable for certain things in the transaction if docs arent worded correctly

[JCC]

I am new to income properties.  Have built a lot of homes and flipped a few - never held.

What debt coverage would be advisable?  How should I build the portfolio?  Should I look for low end home that cash flow well but have more risk or entry level homes that cash flow but with not as much "debt coverage"?  If you were starting over how would you build a portfolio of income properties?

My market:
$40,000 homes to rent for $800
$60,000 - $70,000 homes to rent for $1000 - $1200. Not war zone but certainly lower end.
$120,000 homes in entry level neighborhoods to rent for $1300 - $1400.

How do you determine or look at cash flow?  Do you include a vacancy factor in your evaluation?  What cost of funds do you asume and how do you charge for the cash in the deal that i not financed?  Should I look for all fixers that I can purchae, fix, and then cashout re-fi and have $0 in the property?

I really am looking for a specific strategy/formula - or where to look to put a strategy together - so I can implement.  Finding the wholesale home and financing is not my issue - what strategy/formula is my main problem.

[justin0419]

JCC,
I suggest you do a search on here for the 50% rule.  It's the way most of us here evaluate properties to be held as rentals.  There are tons of posts on here about it and that will answer lots of your questions. 
For your strategy, begin to form it by looking at your goals.  How much income do you need and when do you need it?  For example, my goal is to be semi-retired and doing REI full time in about 8-10 years.  My wife and I are aggressively building our portfolio now.  I have a good income, so I don't have to survive off the monthly cash flow.  Most of the extra money goes into getting us into new properties.  Our loans are 10 yr amort. so they'll be pretty much paid off when I really need the money.  We've got a good relationship with a local bank who is helping us buy additional properties all the time.
From your market numbers, I like the $40k level speaking from a cash flow perspective.  The rent on the 120k homes is not enough and any vacancy there will kill you because your margins are too thin anyway. 

[WeSellHomes2Fix]

JCC,

If you have flipped some homes and built homes from the ground up, you actually have a good part of the battle out of the way.  The best $50 I ever spent was before I started acquiring properties on a book by a guy around here named propertymanager.  I think that was his name.  He is from Ohio if I remember correctly.  Great guy, no B.S. and I have been very firm to what I had learned in that book but have obviously had to adapt my own procedures and such because of Philly laws and the adjusted market.

The 50% rule is addressed in there and is very very very good. Don't trick yourself into thinking that a property cashflows when it really doesnt.  Dont forget any real expenses associated with the properties.  I am not sure about your credit/ cash etc, but you would most likely be a very good candidate when dealing with a local bank for either commercial loans for your properties or even construction loans to do the deals at good rates.

[Gilberttribe]

Do you focus on properties in certain locations or within certain price ranges OR primarily just focus on the numbers?

How has your approach to finding deals changed over time if your approach has changed?

Where do you see the housing market trending based on your experience in the last few months?

[WeSellHomes2Fix]

We primarily focus on cashflow areas because we are a volume based business.  We used to look for flips a bit more, but now about 90% are cashflow rentals areas.  The market will continue to stay soft and big buyers will continue to grab homes by the boat load at these mega discounts. 

[Peter114]

1.  How does one find short sale leads?

2.  How does one get Realtors with listed short sales to respond to Investor to work short sales with the homeowner?

Thanks, Peter

[AKF]

How much does it typically cost to do a double closing in a wholesale deal?
How much does it cost to file all the paperwork in a purchase option?
Where do these transactions occur?

These are a few of the fill in the blank questions I have.

Thanks!