News From the Front - Posted by Carmen

Posted by johnman on March 25, 1999 at 18:13:11:


It’s nice to hear from you buddy! Thanks for the kind words! Hey, would you comment on my other post titled “TITLE PROBLEM…”? I guess this were knowledge really comes from. Those little obstacles that make our brain cells go crazy trying to find that solution. CREATIVITY maybe? Thanks again my friend!

see yah,

News From the Front - Posted by Carmen

Posted by Carmen on March 25, 1999 at 12:19:03:

OK, this is it. Note the new e-mail! Thought some “newbies” may be able to benefit from our experiences. And would appreciate encouragement from “oldies”.

It’s been 12 days since my husband left his frustrating J.O.B. to do this full time. I’ve been reading up and studying for a little while; he’s a fresh newbie with a lot of guts and a mission. We had 2 month’s income in the bank. I have just negotiated with my employer to let me work 6 hours a day for the same pay (in lieu of a raise). It’s sink or swim, and we are doggy-paddling like crazy.

So far we have had many nibbles, these four are worth mentioning:

  1. One deal from a fellow investor(for which we had tentatively found a buyer already) pulled back at the last minute (“it’s yours, guaranteed, no problem, we’ll get you financed, we’ll even finance you ourselves…oh, you mean you want an inspection - sorry, sold the house to someone else”). Lesson: Don’t believe everything you hear; people may not be as “nice” as they seem.

  2. One deal from a bird dog (62K purchase, 101K low comps, maybe 5K worth of work) where the Hard Money lender is skittish 'cause we don’t have 10K in the bank. Still working on this one. Found a contractor/partner to “show” 10K in the bank & help do the work. Waiting for call back from HML. Lesson: If needed, partnering (NOT legal partnerships!) is a good way to get things done - if you’re not too greedy, 50% of $30K is better than 100% of 0. Potential: $15K

  3. One deal from MLS with a “tired landlord”, FMV $55-60K, was asking $49, $14K mortgage on it, gets $750/month rent, tenant has been there 3 years. No rehab; minor cosmetics. We offered $32, he countered at $42, and will take a large second, just wants to move on. Have left message, waiting for call back to finalize terms. We will try to sell this back to tenant on L/O or owner-financed (sell the note). No fix-up! Potential: 10K (after closing, etc.)

  4. Learned big lesson from another newbie. Suggested they visit this site, so if they see themselves here I hope they don’t mind - they took a potentially good deal and are now in a bind. 2 homes, purchased at $55K each, comps at $85-90K. They began rehab, installed air conditioning in neighborhood where it is not the norm (“we heard houses sell faster”), berber carpeting, all new fixtures, new kitchen cabinets, looks like they even tried to add a new bathroom and a 4th bedroom in one - put in $10K of their own money into each home already, and their handyman never finished the work. They now have 2 semi-finished properties, for which they are paying HML $700/month each, wanted to sell to us for $74K, didn’t make sense for us. Still could make them some $ if they can finish and do a quick sale. They said they would be happy to “make $1,000 on their first deal”. Lesson: You are not going to live in the home. Do enough to resell, but don’t overdo.

Hope this was of interest. Will update if anyone is interested.

Also, please share your “war stories”! Always good to know we’re not the only ones…

Re: News From the Front - Posted by mike

Posted by mike on March 25, 1999 at 23:14:09:

sounds like you had better concentrate on cash flow, build a little breathing room. you can get burned out and beat up if you get in too far too fast. avoid the high end stuff. cost overruns can kill a rehab done wrong. what happens if your car breaks down ??

Re: News From the Front - Posted by johnman

Posted by johnman on March 25, 1999 at 16:05:01:


I would like to share my “war stories”

  1. I have a rehab that the contractor I hired decided to just leave me hanging because he wasn’t going to be able to finish the job on time. It’s a good thing the A/C man I hired knew of a better contractor. I’m now working with the new contractor. I will pay a little more but I will still come out ahead after all is said and done. I will be taking the first contractor to court! The lesson here is try to cover yourself at all times and keep your reputation clean. Because of my reputation the A/C man stepped up and said " I got you covered. You were scr@@d and that’s not right. Here’s this guys number … " Be true to your word and good things will happen!

  2. I was supposed to close on two properties last week but it didn’t happen. The one on 37th st has a title problem. The bank that foreclosed the property has half interest and the person foreclosed on has the other half. STRANGE!!?? The one on Kingsridge didn’t close because the termite inspection failed. The lender of this foreclosed property is getting a second opinion on this situation. We still might close on this one.

Even after all of this THE FIRE IS STILL BURNING!!! I’m still looking for deals and my ad still brings the calls. Just have to keep plugging away! It’s the only way I know! DON’T GIVE UP!!!

see yah,

Re: News From the Front - Posted by JHyre in Ohio

Posted by JHyre in Ohio on March 25, 1999 at 15:24:00:


This is the kind of stuff I love to hear…it keeps me going! Thanks for the great post.

John Hyre

You are NOT alone… - Posted by Jim IL

Posted by Jim IL on March 25, 1999 at 15:00:22:

Well, thank you for the info. We too are in the middle of making deals and encountering some problems, but rather than shrugging our shoulders and walking away mad, we are taking these “problems” and learning from them.
I also had a deal go sour this week, and just as I was calling my wife at work to inform her of the specifics, my phone rang with another offer accepted.
So, keep up the good work, and thanks for sharing.
Best of luck to you,

I know you’ll make it 'cause… - Posted by Sue(NC)

Posted by Sue(NC) on March 25, 1999 at 14:11:24:

you negotiated the same pay for working 6 hrs (vs. 8, i assume). that’s a 33% raise. IMPRESSIVE NEGOTIATING SKILLS!

Re: News From the Front - Posted by KF(Phoenix)

Posted by KF(Phoenix) on March 25, 1999 at 12:26:38:

Thanks for sharing your experiences. I can’t tell you how important it is to me as a newbie to hear about specifics of deals that may be similar to ones I may be encountering. Especially if the details are not always positive. Rather than discouraging me, it helps me know what to avoid and also lets me see that this is a real business with real problems as opposed to some of the pie in the sky infomercials.

Thanks again,


Re: News From the Front - Posted by Carmen

Posted by Carmen on March 26, 1999 at 08:05:39:

You’re right, of course. We are trying to concentrate on doing a “quick in-quick out” deals - such as the purchase with a tenant for a quick resale, the creationg of notes for quick owner-financed sale, and working with contractor partners for the rehab side of it. We’re also looking into doing some flips. These three deals were just the ones that have come closest.

As far as rehabs go, I think I prefer the “prehab” and resale to an owner/buyer for below market (sweat-equity) rather than waiting for the retail “I-have-a-million-houses-to-choose-from-so-why-should-I-buy-yours” type of buyer. Less cash at close, but less carrying costs, less rehab costs, etc., etc.

Re: News From the Front - Posted by phil fernandez

Posted by phil fernandez on March 25, 1999 at 17:33:41:


Your never say die attitude is refreshing to all of us. With that kind of attitude there is no way you can fail. Keep up the good work and keep us all informed of your progress with these three deals.

By the way, I had the pleasure of meeting John in Dallas.

So True!!! nt - Posted by KevinMiami

Posted by KevinMiami on March 25, 1999 at 13:48:14: