What Am I Doing Wrong???
I am a relatively new RE investor (under a year), but I have a number of properties under option &/or lease option contract. I've been having good success finding properties and putting them under option contracts. But I'm having trouble getting them turned into cash! I've been working on some of them a long time and need some income NOW for my family.
Here is a list of some of the properties I am currently working on (all in western NY state):
1) Spring St, Jamestown, NY: Fixer-upper; large, 3+BR house; lower neighborhood, but not war zone; needs $5K work to be livable; under contract for $8K; advertising at $13K; worth estimated $35K fixed up.
2) Lincoln Ave #1, Jamestown, NY: Fire damaged; pretty deep fixer-upper; 3-4BR house; medium neighborhood; needs probably $10-15K repairs; under contract for $5K; advertising at $10K; worth estimated 40K fixed up.
3) Lincoln Ave #2, Jamestown, NY: 4-plex w/ four 1BR apartments, 2 of which are currently occupied; needs estimated $10K repairs; fixed up income of $250/month x 4 units = $1K/mo; nice neighborhood; under contract for $16K; advertising at $20K; worth estimated $40-50K ARV.
4) Franklin St, Jamestown, NY: duplex; both 2Br apartments rented now; $575 monthly income ($300 & $275); needs minor fix up work to increase rents to maybe $625 together; lower neighborhood, but not war zone; under contract for $13,500; advertising at $20K; worth estimated $30K in nice shape.
5) Allegany, NY: SFR; 3BR, 2.5 bath double wide on 5 acres; 2 miles from new high school; country living; recently appraised at $90K; under option and lease-option contracts for $65K, payments of $795 PITI; advertising at $79K w/ lease-option of 6K down and payments of $995/mo. If I get a motivated buyer that wants to buy outright, I will assign my option contract to them for $5-10K and they can work directly with the owners at $70-75K.
6) Sinclairville, NY: SFR: 3BR, 2 bath country home on 4 acres; nice condition, very livable as is; worth $65K assessment; under contract for $50K; advertising at $59K. If I get someone that is very interested in buying, I'll assign my contract for $5K and they can have it for $55K.
7) Cuba, NY: Exquisite, immaculately maintained 16 room mansion; Greek revival style; 4+BR; 1 full bath, 3 half-baths; 4 fireplaces; comes with all furnishings - over $80K of antiques; house value $280K, with furnishings $360K+; I have this under contract for $300K fully furnished; owner will carry some financing - he wants $75K down and carry the rest at 5.5% on my end; whatever arrangements I make w/ subsequent buyers is up to me - probably $100K and carry at 10%. If I get a motivated buyer, I'd assign my interest for $25K so they would be at $325K rather than $360K.
My question is this: I have been working on these properties for 6 months, with zero results. What am I doing wrong? Especially with the ugly houses and the multi-units. These should be a pretty quick turn-around, I would think. What am I not seeing that is holding these up? I am self employed, business has been miserable and I am looking at REI for additional business that I can create for quick cash and even long term returns with lease-options, etc.
I'm not trying to 'gyp' people; I'm helping people solve their real estate problems, providing others with opportunities, and creating income for me and my family. That seems like good commerce to me. What am I doing wrong that is keeping me from profit here???
Thanks.
- Todd
I commend your modivation! Nice job! Although I'm no expert, I have a few words for you. You may want to start using professionals to finish your projects. It seems that you have no problem finding deals, you just need to finish them. Hire out the work. This will free up your time to find more deals and also solve your exit strategy timeline problem. Although this is vague, you have a vague question. GOOD LUCK
Where are you advertising these properties? They should be in the realty section on the website. Have you joined local REI groups and talked your business up to other investors. Call some of the bandits signs that say they buy houses. What exactly are you doing to let the everyone know what you have?
Kecia
You don't say how or if you are advertising these. My suggestion is to be vague on your ads. Like: Rent to Own (or FSBO) 3 Bed 2 Bath House on NW side. Call XXX. Ask folks who call what they were planning on paying, how much down they have, etc. Keep a log of names and numbers.
OR, have a 5 day (9 day) auction...advertise the auction, have an open house, keep a log of attendees and their downpayment money, sell to the highest bidder.
Thanks for your responses, gang! I have been advertising in our local newspapers under the Realty For Sale section. I've been keeping a detailed log of who calls, what was discussed, when we talked, when I called them back, etc. It seems like I'm just spinning my wheels. Even the 'rehabbers' that call that are very interested (or say they're very interested) don't get back to me, I can't get ahold of them...
It's almost like there is something in the way preventing me from assigning these and creating income from them. It's not really this hard! (Although I'm not expecting it to be a piece of cake! )
I know I have to work hard and call people back and follow through, but I've been spending hours and hours day after day on the phone, meeting people, following up on messages, trying to make these connections, in prayer about them...
I just tried posting these on the realty section of this site and came up with 2 error messages each time. I'm not giving up, though - I'm going to keep trying.
I just am very discouraged because I keep hammering and hammering and the nail just won't seem to go in!
Thanks again for your input.
I'm still in the game!
I have to be. My family's depending on me.
- Todd
Your playing in the country Boyo. Go to the city
Well, you know, I've been wondering about that...
Little league vs Big League and all that.
You confirmed what I've been thinking for some time now.
Thanks.