So I got the EMD money orders in for the HUD properties I have under contract. I just happened to get my rent deposit check in the mail yesterday and thankfully, my Mom covered the rest. The EMD’s were 1K per house…so 2K isn’t that much money by any means, however when your bank accounts are in the minus…it’s a fortune. My Mom has been preaching to me about getting a J-O-B ever since I came back. As much as I reason with her and explain what I’m doing…she’ll never understand…that is until I show her some checks! She didn’t want to loan me the dough and wasn’t going to do so, until asked her if it was cool to borrow her car in the evenings because I was going to sell my car the next day. She hated that idea.

When talking to the HUD broker, he told me that HUD is so backed-up right now, I’ll most likely get 45 days or longer to close. However, I’m just going to pretend I only have 30. It’s a mad-dash at this point. Yesterday, I snapped a gang of pictures and shot some video. I’m putting together the marketing for this stuff RIGHT now. I even found a way to scrape the STL Realtor Association website…so I now have the email address of every Realtor in Saint Louis. I’m not a spammer…but I’ve got to make it happen.

Yo! It’s been a lil second since I checked in. I’ve been working non-stop for the last few days. It’s been eat-sleep-work…nothing else. Depressing. But what’s free-time good for with empty pockets? So, I’ve been spitting out offers, talking to other wholesalers, talking to Realtors, talking to sellers. I just noticed that’s way too much talking. But as much as I would love to outsource (talking) stuff right now, there’s not too many people who would rather work for a share of your deal versus an hourly wage …such losers. But I digress. I’ve got short-sales that fell through (more on that later), 2 East STL hood houses to sell, 2 other wholesaler houses to push, and 2 HUD houses I just got approved for (scrambling to scrape up this damn earnest money deposit they want in the form of cashier’s check…like my personal checks ain’t good or something). Some of these short-sale/REO/HUD properties want you to tie up ridiculous amounts of cash…like $3,900 EMD money order for one property…WTF! Anyway, I’ve got to make some supreme sacrifices if I don’t figure something out in the next 12 hours…It’s like the 4th quarter right now and I’m at the 2 minute warning…down by 14 points. Gotta make it happen…stay tuned….

You ever have a long list of stuff to do and you know what’s a top priority, however you start with the stuff you feel like doing?  That’s what I face all of the time.  On one hand, at least you’re getting stuff done…but on the other hand, priorities are priorities for a reason.

Anyway, since I’ve been making to do lists every night before sleep, I’ve doubled my production.  Nothing like seeing your list with all check-marks on it, right.  Even though I get my lists accomplished now, I still struggle with doing the stuff I don’t feel like doing at the time I need to do it.  I’m getting better at it though.

Like right now, I’m on my way out the door to get some boxes from Wal-Mart (you know how they stock shelves in the middle of the night).  If I don’t leave to go get them now, I won’t be able to put any signs out this weekend.  Trick off this task and I waste a week of advertising.  Also, as a side note, I’ve got an idea about these signs that I’m not sure has been done before.  I may post about this later.

I made a post to BiggerPockets for the first time in a long time.  The article is about using a software called ShortKeys.  It’s awesome for automating some repetitive keystrokes, check it out.

And my new found recreation is adding to my compilation of hot verses.  I spit hot fire…at least more so than Dylan.  Volume 2 of my mixtape just hit the streets, I got the hood going crazy….I’m so focused…that’s what’s up…real talk….check my swag…I’m so ill….okay, I just ran out of Hip-Hop buzz terms but you get where I’m coming from.

And speaking of the hood…remember when I was venting about some people would claim that Champaign had it’s “rough” areas…and I was like, there’s no such thing in Champaign?  Well anyway, yesterday I went to the hood for real.  A lady called me telling about two properties that she practically wanted to give away.  So I went to check them out…they were in Washington Park, IL….what I learned later to be the worst part of East St. Louis, IL.  I knew it was going to be bad, but damn!  Even my Mom tried to pull rank on me and tell me not to go.  I assured her that I wasn’t going to get shot in the day-time (not that I knew that for sure, it’s just what I told her).  These properties where in bad shape, but for practically free, I may be able to find someone to buy them.  It’s a long-shot though…this neighborhood is that bad.  The owner accepted my verbal offer of $500 each and it would be an option-contract (yes…$500).  Even with this negotiated, I’m not going to put too much time into this.  I’m learning as I go what to put the most effort into…this stuff will just sit on the back burner from the get-go.  And I guess your Mom always knows best…I don’t watch the news (intentionally) but I walked in on this story on the news this morning.  This happened less than 100 yards from the houses I looked at and less than 6 hours after I left from there.  Crazy stuff.

Anywho, on a positive note. Check out this hot flame:

J-Suave Mixtape v2

]]> http://js-kit.com/rss/justinmcclelland.com/p=785 0 http://www.justinmcclelland.com/index.php/2010/06/wtf-wednesday-v5/ http://www.justinmcclelland.com/index.php/2010/06/wtf-wednesday-v5/#comments Wed, 30 Jun 2010 20:53:45 +0000 Justin McClelland http://www.justinmcclelland.com/?p=782

Here we go with volume 5 of this WTF! Wednesday series.  I swear I am running into every possible road block ever conceived in this Real Estate game.  So check this shit out.  I received word last week that the two Champaign properties, which were held-up due to a bankruptcy, were clear to close from my Realtor.  Apparently, bankruptcies take forever and a day to resolve, as these properties were put under contract in February.  So I start making calls and getting things ready for the closing of one of them.

Everything was going smoothly, I went to follow-up with the bank that held the note on the two properties.  The reason being that their original approval letter was vague due to the fact that it didn’t specify what the payoff amount was.  As a matter of fact, I’ll give you exactly what this letter said:

February 18, 2010

To Whom It May Concern:

Please allow this letter to serve as notification of approval for the [Jon and Jane Doe], to sell property located at [1234 Main Street] and [4321 Main Street] both located in Champaign.  Should you have any questions, please contact me at [217-222-2222].

Sincerely,

[Deez Nuts]
Assistant Vice President

So, as you see, this letter is completely vague.  So I made a call to the bank, to request a more specific letter per my lawyers instruction.  See email chain:

—Message Reply—

Justin,

They need to specify the amount of money they agree to receive in exchange for releasing their mortgage on the subject property (i.e., a specific payoff amount).

—Original Message—

[Lawyer],

I guess it’s time to revisit the (vague) bank approval letter.  We spoke months ago about this and you said that once the time came I’d need a more detailed letter.  If you tell me what is specifically needed in the approval letter, I can contact the bank and request what I need.

So I give the bank a call and get connected to the Assistant Vice President that drafted the original letter.  I proceed to request that I need a more specific approval letter.  He then proceeds to tell me that the sellers no longer own the properties and that they deeded them both back to the bank.  And there is no way that he was going to sell for the 30K price I had each under contract for! (and dude kinda copped an attitude)

I was completely baffled by that statement, I thought everything was going smoothly and now this.  First thing I always do in these situations is play “devils advocate”.  So after the phone conversation, I begin to brainstorm how this “deed in lieu” could legally have been done.  These are the points I’m able to come-up with:

• Bankruptcy actions supersede any previous contracts
• Contracts were expired

Those are the only pro-bank arguments that I can think of.  Now onto what matters, the pro-Justin arguments.  Here are my arguments:

• I was able and willing to close (in March) before contracts expired
• I had the required 3rd party bank-approval (in February) before contracts expired
• I made numerous efforts to update contracts with seller (once in April and in May)

As I write this, I’m still waiting to hear back from my lawyer on this issue.  But, the realistic part of my brain is thinking that pro-bank bullet point #1 is what may be true.  Perhaps, bankruptcy actions overrule in this matter.  The emotional side of my brain is thinking “F#&K You, Pay Me” (cool points to who can name the movie with that quote).  But anywho, this is a stellar example of why I must increase my lead quantity and concurrent deals in the works.  When you’re counting on one deal, it’s almost guaranteed to fall through.

Even if there was some illegal foul-up on behalf of the bank or the seller, it would most likely cost more time and money to correct.  And if it involves court-action, I can forget about it.  These aren’t marginal deals, but court costs aren’t feasible.

I’m curious to hear if anyone else has experienced something similar, or if you have any expertise on the matter.  Please provide your input in the comments.

- Justin

Almost one week left in the month and I still have my 30-day challenge in my sights.  I’m very close to meeting it, that’s all I’ll say for now.  It seems like I’m a damn magnet for failed closings right now, so I’d rather not type any further in vain.

Anyway, in follow-up to “Accountability Monday”, I’ve accomplished most all of my tasks.  I put in 4 REO offers, I put in approximately 30 offers, I’ve created my outline for my internet marketing endeavors, I created my STL squeeze page (just need to make it pretty and mesh it with Aweber), and I found someone to place my bandit signs for me in Champaign…but after one weekend they quit.  So I’m back to square one with that task.  I’m taking a completely different approach to recruitment this time, I’ll post later about the outcome.  So, in conclusion, I half-ass met my accountability goals to be completely honest.  Perhaps, if I met them all, then that means they aren’t high enough?  Is that just a psychological trick?  Oh well…I’m going to adopt and roll with it.

So for next week, my goals are:

Create a local STL roster of 20 wholesaler/investors

• Find at least 3 good wholesale deals to advertise
• Hire sign distributor for both Champaign and STL
• Kick the ass of the person who flags my CriagsList ads
• Make at least 10 offers each day (REO, MLS, FSBO, etc)

That should keep me more than busy for the next week.

Almost one week down in STL and I’ve got a lot to show for it. I’ve got my CraigsList game on full attack with more ads recruiting property scouts, ads for cash buyers, etc. The post and repost process is almost impossible to keep up with, I can’t wait until I can get the funds for a CL Autoposter.

Let’s see what else is new…well I’ve picked up a new scout out of Cali who is on the ball. Hopefully, he’ll keep up the pace that he has going now so we can get something closed together. Also, my assistant in Champaign is back from her vacation, we just caught up via phone today on some things and she’s ready to get things rolling.

Since my Mom still has dial-up at the house, I had to get an Air-card for the laptop. It’s a helluva lot better than dial-up but the speeds aren’t quite broadband-like. One drawback is that I have issues uploading videos. I made a video covering how I was able to shoot out 49 offers in an automated fashion using MS Excel, MS Word, and Adobe Acrobat. I’ll have to get that thing uploaded next time I’m on a better connection. Maybe this card will be better once Sprint goes to 4G in Saint Louis, for now it’s still 3G. The salesman at the sprint store said the area should be 4G within the next 6 months. And that same salesman had extra disproportionate skinny hands. He was a chubby dude, but his hands were anorexic…the thought of shaking his hand made my skin crawl. Thus, I made sure to make sure my hands were full during the checkout process. Anyway…I digress. I can’t let you all too deep into my mind…then you’ll find out how it works.

So Next Weeks’ Tasks:
1. Going for a 10 offer a day average
2. Get at least 10 REO offers in
3. Get my STL wholesale wordpress site and squeeze page live
4. Find someone to put my bandit signs up and take them down this weekend
5. Create an outline for all of my near future Internet Marketing projects.

That is all.

- Peace

Last week I had to pull out of 3 properties that I had under contract. I knew going into these that they were marginal in nature, I was expecting to make a 2K spread on each one. The reason that they were so marginal was that the owners owed too much to the bank on each house. All three properties had the same owner and were in Foreclosure, however the lender wouldn’t consider a short-sale. The properties were owned by a husband and wife…soon to be ex-husband and ex-wife and the bank felt that the husband’s income at his 9-5 was too high to qualify them for a short-sale. This divorce/foreclosure situation is A LOT more messy than I’m explaining, so I’m just giving the core details.

So I felt like I’d take a stab and them and see if I could move them. I had some interest from the cash-buyer roster that I have in Champaign. But not quite the same response that I had with earlier properties. In the end, after about 6 weeks I pulled the plug, with no contracts assigned. This cancellation was after one contract extension already. I felt it was best to cut my losses (marketing dollars, effort, time, etc.) and focus on other deals. Sadly, they’ll probably get foreclosed on, the bank will buy the property back at auction, list it high with an REO agent and eventually accept a very low offer (perhaps it will be mine). I guess that’s how it goes sometimes….

The moral of this story for me was to never take on marginal deals when your gut is telling you you’re buying too high and so they’re priced too high wholesale. This would’ve been a different story had I had a buyer lined-up that was willing to pay the price I was asking. In that case, 6K for just a few hours of work isn’t bad. But in my case, even if these deals did go through, it would’ve been a total of 6K for hours and hours and hours spent….too much like a job.

No more ‘marginal’ deals for me. Not worth it.

- Peace

So I decided to start a new series called “WTF! Wednesdays”. This series is going to be based on some of the senseless occurrences that I face in my day-to-day dealings as an investor. No eBook, DVD, or seminar can really prepare you for this. If you’ve got years of experience, then you know what I’m talking about and most likely have a ton more stories than I do. If you’re brand-new or still on the fence, allow me to open your eyes.

So, to kick things off real proper like. I have a voicemail I’d like to share which was received from a lady who received a Yellow Letter from me recently. If this wasn’t 2010 and more like 1990, it would be an answering machine tape that would be worn-out by now. I have played this thing SOOO MANY times….just cuz.  So, click the ‘fitting’ image below to listen in.

I doubt this lady thought I’d find her message entertaining and put her on blast.  She doesn’t know who she’s messing with.  I refuse to take life so seriously.  But anyway, I’m interested to know what other investors run across.  Perhaps, if you have a blog you can participate in this “WTF! Wednesdays” series.  C’mon…it’ll be fun.

- Justin

So I’ve spent the past few days finishing the details for my property scout program.  I’ve got a pretty good grasp on how I’m going to coordinate this thing all the way from recruitment to contract.  I’ve got a pretty unorthodox (my middle name in case you forgot) model, I my opinion.  And that is that I’m going to split half of my assignment fee with my property scout.  That’s right HALF.  If a scout brings me a qualified lead for a property that I end-up wholesaling, they get paid just as much as I do.  And after much brainstorming, I found a legitimate way to legally split these fees and be in accordance with the law.  Not that complex really, just involves the assignment of assignment contracts.

I’m going to be very “open-source” regarding this program and am very open to suggestions.  I’ve put together some training videos, some resources hosted on a Google Docs cloud, and have created a Facebook Fan Page for my scout program.  It took me days to think of a good platform to communicate with my scouts with, I didn’t want to be archaic and use emails.  So Facebook it is, can’t deny the power of this platform.  Plus, I found a way to create custom tabs on the Fan Page that allows for usage of your own HTML, this allows me to really customize the Fan Page to display the content I need it to.  The plugin is called FBML.  Pretty cool…so now I have a Fan Page with some custom tabs containing links to the Google Docs folders, Champaign county/Saint Louis City resources, and etcetera.

I think I’m going to make a transition regarding my approach to recruitment.  At first I was screening alot of scouts out that were recruited via CraigsList.  Mainly due the fact that I got burned-out on corresponding with lame-brains at my 9-5.  I don’t need those types in my life anymore.  So at first, I wanted to hone in only on top talent for scouts.  I was thinking Quality of Quantity.  However, I think this isn’t the best approach.  If you never finished High School, that doesn’t mean you don’t know a ton of people (some which may need to sell their house).  So I think the screening process is out.  Maybe I’ll have two-tiers of scouts….I don’t know.  Too many possibilities at this point.  It’s very easy to get overwhelmed with the scope of new ideas sometimes.  I don’t have to get it right, just get it started….that’s the quote people tell me.

So, check out my Fan Page when you get a chance.  Browse over the “How It Works” tab, look at a few videos, tell me what I’m missing.  You can let me know on this blog in the comments.  Fresh new eyes are needed…this whole working smart-thing has my brain fried….thanks in advance.  And by the way, gone ‘head and click the “Like” button while your there if you don’t mind.