All Forum Posts by: Scott R.

very interesting. this is something i will have to bring up. i mean i know i cant get in any trouble but if im doing the deals down here then they get in trouble and fold, now the agents here would be looking at me and wondering if im doing the same thing and make me look bad.

well, i dont think they are by the way he explained it i think the net is the net like its suppose to be BUT i was brain storming trying to think what would a company do if.... i just didnt want to have 60 deals in the pipeline and about the 3rd month the checks finally start to come in from closing them and its like hey heres 500 bucks thanks..... because they sent all the profit to the negotiation company as a giant fee to avoid capital gains and the only thing that flowed to the other company that i get my split is 2k. that would suck.

ok let me run this by you. i wont mention company names or locations. i have talked to a group of investors who have these laws down GREAT and im becoming an affiliate with them. i get 25% of the net profit the first 5 deals and 50% from there on.

here is where my mind goes off. these guys are smart, so i would think they may do this but im not sure if there is a max the negotiation companies can charge

so they have TWO companies. one negotiates (they still own it) and one takes the net profit. im paid out of the net the 2nd company gets. so lets say co A is the negotiator and Co B is the company with the contracts on homes and flipping them.

so co B buys the home co A negotiated for them down to 100k. then (simple numbers here no closing etc.)they resell for 140k following the new laws too (20% over purchase etc.) so technically there is a 40k profit i split BUT what if they pay the Co A a negotiation fee of who knows, 35k ( see they can do whatever or can they?) then only 5k flows down to co B and im paid 25% of 5k?

cant they do this and i cant say anything? it makes sense to me because they only pay short term capitol gains on the 5k when they pay me and the co b. the other 35k goes into the other company capital gains free then they can use it all or whatever and by the end of the year if that acount says $0 they arent paying taxes anyway? or they reinvest it etc. does this make sense? im just wondering if this is a possibility cause when i talked to the guy i started getting more ideas on what they could do and i find out im not getting much later on. Unless there is a limit to the amount the negotiation comapny can charge in the state of Ca i dont see why they couldnt... help??

oh and another thing. if you cant sell a home for more than 20% (unless renovations.) of what you paid. is it talking you cant PROFIT more than 20% or you cant SELL for more than 20%? im reading SELL but im hoping im missing something.

yay! yea i got the email form REItips.com this is great news. the 20% flip thing kinda gets me.

i mean if there were small things like paint, carpet, etc. its not extensive rehab. The investors i work work negotiate their own deals in CA and they dont need a ton of rehab, then they resell. so hope it works out!

here is an article on it

http://www.nctimes.com/business/article_d743162e-03d5-5ffd-af48-24717bd099f2.html

you know, i heard a good story before from an investor at a club. he buys mobile home parks and i had no idea how much of a cash cow they were.

he said he was trying to buy some units in the park to do what you were saying, he also owns a couple parks so he understands how the process works of buying one.

the manager was a hard core jerk and wouldnt let him buy one to do what he was doing. so he asked for his manager and he claimed " i am the manager". so he tried to talk it over a couple times and just couldnt swing this guy but it was a good park.

so he pulled up the tax records and the actual owners name was there not a company name. he wrote the guy a letter and recieved a call back. He told the owner, i will buy your park off you, and the owner wanted to sell and sure enough he owner financed it from the guy, he showed back up to the park and the manager tried to give him crap not knowing he was now the owner. he told the guy he owns the park now, and fired him. THEN he got his own manager who was ex military. says they are the best managers. i thought it was funny.

i plan on doing the same thing one day to my friend who thinks investing is a bunch of crap. he will rent his whole life and i will buy the house one day, show up, knock on his door and say hey, make sure you pay your rent on time!

About the broker making any money off the transaction, yes! thats what i was telling him to begin with on the phone the first time.

i told him look, im in this to be an investor so i may benifit from the MLS access. I do not wish to do retail although who knows, one or two might come up every year. I also said, i dont know if you would be interested in having me on board because i wont be doing any retail sales on behalf of your company. he said, oh no its fine we would love to have you on board so come on down tomorrow at 11.

at the meeting he tried to sell me on the fact that invessting is great, and what i want is rental properties. I told him i will get to that point and i will also be doing flippin in the sense of wholesaling and possibly fixing and flipping. then he said, " look, the real money is in cash flow. flipping isnt where you want to be. And besides, if you sold retail, you can make alot more money than being an investor.."

then a saying rolled into my head from other investors i have talked to " you know why im not an agent? cause i actually want to make money", i started to think what this guy is really saying is, " you want to sale retail sales because i make more money off more agents if they do"

i understand they want to make money and i have no problem paying people their full commission, but this started to make me understand the intentions of the company. ohwell for now i will scratch the agent side, see how this pans out and if not, be an agent and dont partner!

hmm ok. so as to what you said, what if i was purchasing under my name, or selling under my name then turn for profit? i wouldnt think the same rule would apply right?

if not, would it still apply if i had a partner on a deal we buy together both on the purchase contract?

Ok, im confused. Im in california, i have everything done to get a 4 year license except my exam. Talked to century 21 today for an interview to be an agent under them. I told them im not going to be focusing on the retail side of sales, im working with investors and my own benifit. They were totally fine with that and said we have agents that only do 1 deal a year so not a problem.

Then i told him i am now an affiliate with 2 investors in so cal and i will be working up here working on gathering information on shortsales properties by talking to agents with the listings, getting what the investors need information wise. If they buy, i get 25% of the profit whent hey sell as a general partner in the company. They flip retail. They negotiate, fix if needed and flip to retail buyers with good credit who are pre qualified non FHA (pre 90 days). I get education and 25% profit share.

NOW, the guy (licensed agent who works the recruitment side of century 21 here) said well you cant do that.... If you are an agent you cant take 25% of that deal because you are obligated to your broker.. I told him, the properties being bought then sold are listed with an agent already, i take no commission as an agent nor do i list the property on the sale side. They agent with the listing gets full commission. I simply am using the license for access to the mls to gather information for myself.

Now if i listed the poperty, took my 25% and a commission on the sale, that i believe is conflict in intrest. By the way the 25% will be made out to my LLC at closing. He has me confused. That means i could NEVER partner for anymore profit with ANYONE except to make my normal 3% commission. guys, any help here?

I have heard from another investor a couple months ago that there usually are local programs where you dont have to be licensed and can go to classes to learn contracts, contract law, RE law, etc. I have tried the local community college but nothing. I cant find anything one the DRE's web page. anyone know what this is or the name of it?

i seem to remember him saying " people think you cant go to the course that realtors go to for education, truth is you dont have to have a license to go."

See i understand this too. But then your own access to the mls would be great IF you dont already have connections with the agents listing in that area and they are calling you first. I wouldnt want to have an agent sending me all this info then not let him put in the offer.

i just decided to take my license test. i probably failed horribly because im pretty much retarded when it comes to reading comprehension. pros and cons with having your license, and one bad thing is, a broker has to have you under him to have access to the mls here!! and if im just investing (not being an agent) he doesnt want anything to do with me! AHHHH! such a pain