Is Holton Wise Sale of Quad in Cleveland a Scam? (7809 Franklin)

[Lenza M.]

I have been following the Holton Wise properties for awhile and finally saw one that interested me a few days ago. I am very concerned this might be a scam after @James Wise refused to provide what I believe is basic information that should be given as part of a real estate transaction, and wanted to ask what you guys think.

The property in question is a Quadruplex in Cleveland located at 7809 Franklin Blvd and featured here: https://www.youtube.com/watch?v=TkFnuAaENwY

 After watching the video, I wrote to James to inquire about the cash flow of the place and he replied only: "All info on the building is in the video." After watching the video a second time and not finding any mention of expenses I again emailed specifically requesting information on costs of operating the building. He pointed me to episodes of his Real Estate and Analysis show for other properties here: https://www.youtube.com/playlist?list=PLWaflf0vPbEnQ4v3Eyvw9HlbY8T7ZNLQE

In all of these videos James has a breakdown of operating costs for the building so he clearly recognizes that this is important information. For example here:

After watching the video for 7809 Franklin a 3rd time, I pointed out that I could not find any of this expense information and requested that he point me to the timestamp of the information in the video in case I was missing it. No reply.

Days later I sent a follow up email asking if the vacant unit mentioned in the video had been filled and if he had 2019 or YTD income information for the property. I was told "Again. All information that is available has been put in the video." Apparently information on how often tenants are paying rent is unavailable?

So, while I usually like to be very sure of an offer before submitting it, I sent James a full price offer assuming that I would be able to get documentation during a contingency period. My offer was rejected in 10 minutes and I was told that no document contingency would be acceptable.

So, I am left a bit bewildered -- what I am missing here? It seems like if you are trying to sell an income generating property but refuse to disclose any information about how much income the property in generating, you are probably running a scam of some kind? I thought James was a respectable no-nonsense person? What do you guys think, is this normal?

[Jill F.]

I buy small multi-family (side-by-side duplexes are my fav). I always ask and take whatever expense information I can get, but I don't really rely on what the seller tells me for operating expenses (and neither does my lender). I know what it costs *me* to operate a small multi-family. Providing more information about work completed probably helps most sellers because absent some sort of documentation on upgrades, or major work or accessibility to infrastructure, I'm going to assume that if it's an old building it has old plumbing and old electrical and submit an offer (or not) accordingly.

To make an informed offer: You must know gross potential revenue, recent collections, and landlord provided utilities to make an offer. To get operating costs: Most places the city water authority will give you 1&2 year averages (as will the gas and electric companies to determine other landlord provided utilities); your insurance agent should be able to give you a pretty close per door quote on insurance; you should be able to call the current trash provider for a price. An inspector or contractor ought to be able to give you a decent guess in life left in the roof and hvac systems. Property taxes and upcoming assessments are public records.

Only you can determine the level of renovation you will want to do on the first turnover and what it will cost you and the cost of the level of maintenance you plan to provide.

We have a team that goes in on inspection day and we document every maintenance issue we can find. Sometimes we can negotiate based on that and sometimes not. Sometimes (rarely) we find we need to take a walk. But when we get to the closing table we usually have a pretty good idea about what we're going to have to spend to bring the property up to our standards and how much it's going to cost us to do it and over what time periord.

[Lenza M.]

Originally posted by @Russell Brazil:

 Ive sold over $75 million in multifamily real estate. Not once has historical expenses been provided in that for a 4 unit or less property. So, I would say no, that would not be a reasonable request from a seller. In fact, I dont think a single one of those sellers would even have that documentation. Its not til you get into the 20 or 25 unit plus properties that are you likely to see any sort of seller with the organizational ability to have tracked their expenses properly.

I want to briefly note here that the seller in the thread is refusing to provide any historical expenses OR INCOME. Even a request for last 6 months income was denied. Has rent been paid on time this year? How about last month? We won't tell you.

Additionally, this is a property with a large tax abatement last transferred less than 2 years ago with a quit claim deed. This implies significant rehab has been done to the property very recently and a somewhat sophisticated seller. It is not plausible to believe they really don't know if rent was paid the last few months!

[Frank Agyeman-Duah]

@Lenza M.

I have the same experience. I was giving the same reply to go watch a video when I inquired about the financials of a property posted by James Wise.

[James Hamling]

After my last post in this thread I received an interesting alert, that Mr Lenza was requesting to connect with me, and I had a message in my inbox. That message was, in my book, the definition of sleezy. It was a serious accusation of @James Wise and request for me to delete my post on here critical of Mr Lenza. 

I am going to put that entire message below, the one Mr Lenza hoped to keep quiet and hidden, away from public eyes, with his doubled down accusation that James Wise is running a scam, or to be accurate the inference that he is, which is just a passive-aggressive accusation. Here it is folks: 

Lenza M. Sent 15 hours ago

Report SpamBlock Lenza

Want to write you privately regarding your reply to my last post on the Wise issue since I do not want to belabor the points already made in the thread. I don't think "walking it back" is a correct characterization of how I feel, as you correctly inferred from the passive aggressive comment.

I mean to apologize for my choice of words. But know that the interactions I had with James, including the responses in the thread itself (not to mention the many private messages I have received) show that he is on some level a person to avoid doing business with. This is demonstrated in his claiming a deal is "hot" in his video when the analysis he teaches in his videos would show it is not a deal that he would endorse.

But the larger, and original sin was violating his duty to his seller. I am a very interested buyer looking to pay cash for this property. The least he could do, on his sellers behalf as their agent, is to offer a reasonable explanation of why financials are not available and provide some other reassurances. If you are trying to sell a property at top dollar for cash right now you can at least bend over backwards to tell me if the tenants I am purchasing along with the property have paid rent through covid.

This property has obviously had significant money put into it very recently (hence the tax abatement). It is not plausible to believe that last 6 month payment information is not available. It is malfeasance against his seller to state to a buyer attempting to do their due-diligence and requesting this information: "if you are not able to make a buying decision based on what you see in the video then this property isn't for you."

On this note, I do wish you would retract your statement that I should learn about due diligence. Due diligence is exactly what I was trying to do. There is no other way to find out if the tenants have paid rent except through the seller/seller's agent.

[Daniel Judge]

Originally posted by @James Hamling:

After my last post in this thread I received an interesting alert, that Mr Lenza was requesting to connect with me, and I had a message in my inbox. That message was, in my book, the definition of sleezy. It was a serious accusation of @James Wise and request for me to delete my post on here critical of Mr Lenza. 

I am going to put that entire message below, the one Mr Lenza hoped to keep quiet and hidden, away from public eyes, with his doubled down accusation that James Wise is running a scam, or to be accurate the inference that he is, which is just a passive-aggressive accusation. Here it is folks: 

Lenza M. Sent 15 hours ago

Report SpamBlock Lenza

Want to write you privately regarding your reply to my last post on the Wise issue since I do not want to belabor the points already made in the thread. I don't think "walking it back" is a correct characterization of how I feel, as you correctly inferred from the passive aggressive comment.

I mean to apologize for my choice of words. But know that the interactions I had with James, including the responses in the thread itself (not to mention the many private messages I have received) show that he is on some level a person to avoid doing business with. This is demonstrated in his claiming a deal is "hot" in his video when the analysis he teaches in his videos would show it is not a deal that he would endorse.

But the larger, and original sin was violating his duty to his seller. I am a very interested buyer looking to pay cash for this property. The least he could do, on his sellers behalf as their agent, is to offer a reasonable explanation of why financials are not available and provide some other reassurances. If you are trying to sell a property at top dollar for cash right now you can at least bend over backwards to tell me if the tenants I am purchasing along with the property have paid rent through covid.

This property has obviously had significant money put into it very recently (hence the tax abatement). It is not plausible to believe that last 6 month payment information is not available. It is malfeasance against his seller to state to a buyer attempting to do their due-diligence and requesting this information: "if you are not able to make a buying decision based on what you see in the video then this property isn't for you."

On this note, I do wish you would retract your statement that I should learn about due diligence. Due diligence is exactly what I was trying to do. There is no other way to find out if the tenants have paid rent except through the seller/seller's agent.

Where's the sleaze? Seems like a pretty measured message sent in confidence.

[James Hamling]

@Lenza M. I think you have little to no clue what your talking about, that there is at least some component level of jealousy for this guy @James Wise who is blowing up all over YouTube and BP that everyone is talking about, and you watched a deal episode with the blinders of jealousy on and found some points that upset you and set out on a mission to find some kind of flaw with James WIse to yell from the Mt tops. You said it yourself, that you put in a PA NOT to actually buy the place but fishing for information to support your hypostasis. 

I have read all your posts Mr Lenza, and I don't believe you have much experience in MFH acquisitions, things you say and don't say highlight this to myself, and others have noted similarly, I see that as a mitigating factor. Same time absolute Titans of the REI industry have chimed in here, and the information ignored it seems.

James Wise is the Broker listing and marketing these properties, for the owners. This simple fact vindicates James Wise from every accusation I have read, yet you Mr Lenza keep on the attack. When listing a property we are limited to the means our sellers have and make available, it is their choice to withhold some information if legally allowed to do such, that's life and business, and it happens every day. It is no reflection of Mr James Wise character as he has clearly stated countless times, if it dosn't fit or makes sense for you as a buyer DONT OFFER OR BUY IT. 

And as  listing Broker/ Agent we have 0 duty to a buyer, ZERO, our loyalty is by law to the seller. Was James Wise in full disclosure of all information as he had it, yes. Was James Wise complying in full to realty law in his jurisdiction, yes. Was James Wise hiding important information that may negatively impact a buyer, no. What scam? Where is it? Lack of desired information and data is not a scam, if it were hundreds of realty sales per day would be scams. If a seller dosn't want to share rent revenues guess what, they don't have to, that is their choice. As brokers and agents we let them know how it will negatively affect a sale but it's their choice NOT ours. 

[James Hamling]

Originally posted by @Daniel Judge:

Originally posted by @James Hamling:

After my last post in this thread I received an interesting alert, that Mr Lenza was requesting to connect with me, and I had a message in my inbox. That message was, in my book, the definition of sleezy. It was a serious accusation of @James Wise and request for me to delete my post on here critical of Mr Lenza. 

I am going to put that entire message below, the one Mr Lenza hoped to keep quiet and hidden, away from public eyes, with his doubled down accusation that James Wise is running a scam, or to be accurate the inference that he is, which is just a passive-aggressive accusation. Here it is folks: 

Lenza M. Sent 15 hours ago

Report SpamBlock Lenza

Want to write you privately regarding your reply to my last post on the Wise issue since I do not want to belabor the points already made in the thread. I don't think "walking it back" is a correct characterization of how I feel, as you correctly inferred from the passive aggressive comment.

I mean to apologize for my choice of words. But know that the interactions I had with James, including the responses in the thread itself (not to mention the many private messages I have received) show that he is on some level a person to avoid doing business with. This is demonstrated in his claiming a deal is "hot" in his video when the analysis he teaches in his videos would show it is not a deal that he would endorse.

But the larger, and original sin was violating his duty to his seller. I am a very interested buyer looking to pay cash for this property. The least he could do, on his sellers behalf as their agent, is to offer a reasonable explanation of why financials are not available and provide some other reassurances. If you are trying to sell a property at top dollar for cash right now you can at least bend over backwards to tell me if the tenants I am purchasing along with the property have paid rent through covid.

This property has obviously had significant money put into it very recently (hence the tax abatement). It is not plausible to believe that last 6 month payment information is not available. It is malfeasance against his seller to state to a buyer attempting to do their due-diligence and requesting this information: "if you are not able to make a buying decision based on what you see in the video then this property isn't for you."

On this note, I do wish you would retract your statement that I should learn about due diligence. Due diligence is exactly what I was trying to do. There is no other way to find out if the tenants have paid rent except through the seller/seller's agent.

Where's the sleaze? Seems like a pretty measured message sent in confidence.

The Sleeze factor is in on public post he walked back accusations, then messaged me and not only reasserted accusation but states many are messaging him in the same, and then lays out several accusations of serious nature against Mr James Wise and his operation, and the construct of his accusations is always in a passive-agressive manner, not out right stating it but laying out a series of things to infer an accusation. Than closes by asking me to delete my post critical of him, so that it will make a perception on the public posts of Mr Lenza being in the right without questions or so on. 

The whole thing is sleezy. It's manipulative and clearly not interested in debate, instead focused to slander. It is a smear piece. 

[James Wise]

Originally posted by @James Hamling:

Originally posted by @Daniel Judge:

Originally posted by @James Hamling:

After my last post in this thread I received an interesting alert, that Mr Lenza was requesting to connect with me, and I had a message in my inbox. That message was, in my book, the definition of sleezy. It was a serious accusation of @James Wise and request for me to delete my post on here critical of Mr Lenza. 

I am going to put that entire message below, the one Mr Lenza hoped to keep quiet and hidden, away from public eyes, with his doubled down accusation that James Wise is running a scam, or to be accurate the inference that he is, which is just a passive-aggressive accusation. Here it is folks: 

Lenza M. Sent 15 hours ago

Report SpamBlock Lenza

Want to write you privately regarding your reply to my last post on the Wise issue since I do not want to belabor the points already made in the thread. I don't think "walking it back" is a correct characterization of how I feel, as you correctly inferred from the passive aggressive comment.

I mean to apologize for my choice of words. But know that the interactions I had with James, including the responses in the thread itself (not to mention the many private messages I have received) show that he is on some level a person to avoid doing business with. This is demonstrated in his claiming a deal is "hot" in his video when the analysis he teaches in his videos would show it is not a deal that he would endorse.

But the larger, and original sin was violating his duty to his seller. I am a very interested buyer looking to pay cash for this property. The least he could do, on his sellers behalf as their agent, is to offer a reasonable explanation of why financials are not available and provide some other reassurances. If you are trying to sell a property at top dollar for cash right now you can at least bend over backwards to tell me if the tenants I am purchasing along with the property have paid rent through covid.

This property has obviously had significant money put into it very recently (hence the tax abatement). It is not plausible to believe that last 6 month payment information is not available. It is malfeasance against his seller to state to a buyer attempting to do their due-diligence and requesting this information: "if you are not able to make a buying decision based on what you see in the video then this property isn't for you."

On this note, I do wish you would retract your statement that I should learn about due diligence. Due diligence is exactly what I was trying to do. There is no other way to find out if the tenants have paid rent except through the seller/seller's agent.

Where's the sleaze? Seems like a pretty measured message sent in confidence.

The Sleeze factor is in on public post he walked back accusations, then messaged me and not only reasserted accusation but states many are messaging him in the same, and then lays out several fingering accusations of serious nature against Mr James Wise and his operation. Than closes by asking me to delete my post critical of him, so that it will make a perception on the public posts of Mr Lenza being in the right without questions or so on. 

The whole thing is sleezy. It's manipulative and clearly not interested in debate, instead focused to slander. It is a smear piece. 

 lol pretty wild given that the entire thread was created to slander me for not being transparent. The irony of that is glorious.

[James Allen]

Wow, what an interesting thread! I think a few things can be pointed out here. 

1. To answer your original question, I don't believe that @James Wise is running a scam in anyway shape or form. 

2. It's not unreasonable to ask for financials but understand it is very uncommon for 2-4 unit property owners to provide to the buyer financial statements like a T-12. There is only 1 instance with a 2-4 unit that I've come across a seller that actually had all of that info. With that said, I would expect the lease agreement to be provided to verify the current income but that's about it. As some have already mentioned on here, those documents are really more common in the 5+ multi-family deals. 

3.  @Lenza M. - Asking if Holton Wise is a Scam was a bit much. There are much better ways to approach and word your concerns/due diligence and I think you've learned that lesson from the sounds of it. Unfortunately like others mentioned, you've likely burned a lot of bridges by doing this post. 

4. If he's not willing to provide financials for the deal and that makes you feel uncomfortable, then just simply walk away. There's tons of deals out there to choose from and there's no need to get so attached to a deal.

5. I'm sure James Wise could've responded to your initial email in a nicer way or just simply said that he doesn't have that information. With that said, he also has the right to run his business however he pleases. 
@James Wise

[Lenza M.]

Originally posted by @James Hamling:

@Lenza M. I think you have little to no clue what your talking about...You said it yourself, that you put in a PA NOT to actually buy the place but fishing for information to support your hypostasis. 

...

And as  listing Broker/ Agent we have 0 duty to a buyer, ZERO, our loyalty is by law to the seller. Was James Wise in full disclosure of all information as he had it, yes. Was James Wise complying in full to realty law in his jurisdiction, yes. Was James Wise hiding important information that may negatively impact a buyer, no. ...

I really hoped to avoid further discussion of my thoughts on James's character publicly, but I stand by the message privately sent to you. I honestly regret using the word "scam" in the title -- it is overly inflammatory. But, as my private message to you stated, I do not believe my poor choice of a single word means James has acted appropriately or in the best interest of his client.

I want to assure you that I am a bonafide buyer. James himself can attest that I messaged him 8 months ago requesting information on properties like this one. I put in an offer because I wanted to purchase the property and believed James (not the seller) was inappropriately stonewalling on providing last 6 months payment history.

Did the seller instruct James to dismiss all buyers requesting information not contained in the 3-month-old video? We don't know. Is James withholding from buyers important information about tenant defaults? We don't know. Did James comply with realty law and present my offer to the seller? We don't know. What we know is that the offer was *countered* within 10 minutes of receipt indicating that no rent payment history would be provided.

Not a "scam", but definitely a big red flag. To this guy with no clue, at least.

[Brian Ploszay]

@James Hamling   I've read your posts and most on this thread.  I have some different conclusions. ==As a listing Broker/Agent, we have 0 duty to a buyer==   Actually, a broker does have duties to provide disclosures for 1 to 4 unit properties and not withhold pertinent information.  A broker also wants to sell properties, so providing requested information is good marketing.  Also, certain states have very strict dual agency laws and may require the dual agency relationship in writing, which would include non representation. (unrepresented buyer).  Most brokers seem to love a dual agency situation, despite some potential conflicts.  If he was a dual agent, then he represented Lenza.

==I don't believe you have much experience in MFH acquisitions==  Maybe not, but his inquiries were within reason and the product that is being sold generally is bought by smaller / beginner investors.  I always believe selling properties should include high customer service.  Some people just need everything explained to them.

My interest in this post is not to question the business integrity of Mr. Wise who seems extremely knowledgeable.  I think his home market has some great returns.  But I like to mentor and defend new investors - as I've seen lots of abuse in the turn key property "industry."   And I think Lenza was within reason for asking for the documents.  James Hamling is ultimately correct, just don't buy the property.  

[James Wise]

Originally posted by @Brian Ploszay:

@James Hamling   I've read your posts and most on this thread.  I have some different conclusions. ==As a listing Broker/Agent, we have 0 duty to a buyer==   Actually, a broker does have duties to provide disclosures for 1 to 4 unit properties and not withhold pertinent information.  A broker also wants to sell properties, so providing requested information is good marketing.  Also, certain states have very strict dual agency laws and may require the dual agency relationship in writing, which would include non representation. (unrepresented buyer).  Most brokers seem to love a dual agency situation, despite some potential conflicts.  If he was a dual agent, then he represented Lenza.

==I don't believe you have much experience in MFH acquisitions==  Maybe not, but his inquiries were within reason and the product that is being sold generally is bought by smaller / beginner investors.  I always believe selling properties should include high customer service.  Some people just need everything explained to them.

My interest in this post is not to question the business integrity of Mr. Wise who seems extremely knowledgeable.  I think his home market has some great returns.  But I like to mentor and defend new investors - as I've seen lots of abuse in the turn key property "industry."   And I think Lenza was within reason for asking for the documents.  James Hamling is ultimately correct, just don't buy the property.  

Couple things Brian.

1. I did not establish an agency relationship of any kind with Lenza. He emailed me a question. I answered the question. He asked me the question again. I answered it again. He wrote himself an offer contingent on getting a different answer to his question other than the one I gave him twice. I informed him that his offer was declined. He then created this thread which has been proven to contain several false accusations against me. Namely; running a scam, not disclosing that there is 1 vacant unit and not disclosing that there are 3 paying tenants. That's the entire extent of our relationship and dealings.

2. I don't think Lenza was out of line for asking the question. In my line of discussion in this thread I've tried to point out the realities of the business and set the proper expectations for the next buyers who ask those things. What was way out of line was the way Lenza reacted to not getting the answer he wanted from me. That's why this thread hasn't gone favorably for him.

[James Wise]

Originally posted by @Michael S.:

@Mark Fries - I don't know, this thread has some interesting information and a bit of entertainment value to it.  So it's not a total waste of time.

Here's the threads that constitute a total waste of time:

1. "So, I have no real estate properties, no real estate experience, and no current properties I am vetting - should I make an LLC or not? Oh, I didn't use the search function to see there are 6,000 other threads about LLC formation."

2.  "Hi, I am new here.  My name is _____, I am ____ years old, and I live in _______.  I have no job currently, no capital to invest, and lease a 2019 Lexus; but I've a read a book about real estate and now I am ready to invest!  Anyone want to be my mentor?  Anyone know how I can get people to invest in my scheme without me investing any money whatsoever?  Should I buy OOS?" 

3. "I bought a house.  Now what?"

4. "I don't understand how to invest in Real Estate.  See, I read this book by Dave Ramsey..."

 You're too kind....Most of the time that much detail isn't included. It's typically 

"Hi, I'm Bill. I want to invest in real estate. What should I do?"

[James Wise]

Originally posted by @Russell Brazil:

Originally posted by @Lenza M.:

Originally posted by :

So you think his listing is a scam because he rejected your offer on something that frankly you're not a qualified buyer for? @James Wise puts a lot of educational video up on YouTube. He also does A LOT of deals. Imagine his email box. He can't hand hold everyone to the end of a deal. 

All you need to know is the price & utility breakdown. Everything else is a variable that YOU need to do research on. Even insurance is a variable since there are difference in carriers, risk profiles, and portfolio size. 

No one here actually knows me. So, I see no need to take the bait on the personal attacks. I will simply disregard the comments on my qualifications or level of expertise. I want to stay focused on the issue at hand: when purchasing a $500k property is it normal and reasonable that the seller provide historical income and expense information?

Some replies here, such as the one above, point out that one can work out estimated expenses from the purchase price. This is true, but I think for many reasons it is prudent to consider actual income and expense information before closing a deal. To use the insurance example above, looking at what the existing owner is paying is a great check on if your estimate is correct. Historical expenses will also let you know if there is a significant recurring utility or maintenance bill that that the owner is responsible for: James' video does not mention if the units are individually metered for electricity. Payment history for existing tenants is important to see if they are actually paying the advertised rent. Additionally, in this case there is apparently a unit that has been vacant for many months (a fact James refused to disclose in our email thread). Determining exactly how long the unit has been vacant and why is certainly something to inquire about before closing the deal.

But the key question here is not if historical data is absolutely necessary to consider -- the question is why a seller would REFUSE to provide this information? There is no real concern about wasted effort "hand holding" many potential buyers. You only have to gather the data one time for every potential buyer. And it takes very little effort to gather since you have to do it anyway to prepare taxes. Many brokers include this information upfront so we know at least some buyers are interested in historical data. Is a reasonable seller really going to flat out reject any buyer who wants to see historical data? It seems to me that the only reason to take that position is if you have something to hide.

...or maybe this is not the seller's position at all. It could be that the broker just doesn't care if their client's "hot" property sits on the market for many months since they are busy making big bucks on other deals and will get paid the same on this one no matter how long it sits. A successful broker doesn't need to do what is in the best interest of their client.

 Ive sold over $75 million in multifamily real estate. Not once has historical expenses been provided in that for a 4 unit or less property. So, I would say no, that would not be a reasonable request from a seller. In fact, I dont think a single one of those sellers would even have that documentation. Its not til you get into the 20 or 25 unit plus properties that are you likely to see any sort of seller with the organizational ability to have tracked their expenses properly.

 Good ole' trusty Rusty. Always dropping truth bombs in the threads.

[Chris Seveney]

You forgot,
1. I am broke have no job but want 100% financing. Who offers that?
2. Insert worst place to get a home value (zillow, realtor, tax value)  says the house is worth X, how much of a discount should I offer off that?
3. Where should I do with $x amount of dollars?
4. When is the next market crash, and should I buy now or time the market?
5. Can I sue (insert inspector, seller, agent) because (insert reason the buyer did not due their due diligence)?


Originally posted by @James Wise:

Originally posted by @Michael S.:

@Mark Fries - I don't know, this thread has some interesting information and a bit of entertainment value to it.  So it's not a total waste of time.

Here's the threads that constitute a total waste of time:

1. "So, I have no real estate properties, no real estate experience, and no current properties I am vetting - should I make an LLC or not? Oh, I didn't use the search function to see there are 6,000 other threads about LLC formation."

2.  "Hi, I am new here.  My name is _____, I am ____ years old, and I live in _______.  I have no job currently, no capital to invest, and lease a 2019 Lexus; but I've a read a book about real estate and now I am ready to invest!  Anyone want to be my mentor?  Anyone know how I can get people to invest in my scheme without me investing any money whatsoever?  Should I buy OOS?" 

3. "I bought a house.  Now what?"

4. "I don't understand how to invest in Real Estate.  See, I read this book by Dave Ramsey..."

 You're too kind....Most of the time that much detail isn't included. It's typically 

"Hi, I'm Bill. I want to invest in real estate. What should I do?"

[Chris K.]

@Lenza M.

I didn't read every single post here but I'm confused about what your issue with @James Wise is. Brokers and realtors for sellers refuse to provide representation or guarantees regarding past rent history all the time on these small deals. This is especially true when the owners don't have a track record of being able to provide accurate information to their agents. 

For example, I was tangentially involved in a deal where the sellers owned about 50 units under their own name. Every single income and expense came through their personal account that they also used for their other two businesses. It was a mixture of checks and just straight cash deposits. Sometimes they would bargain with their tenants on rent by trading services. 

Because their record-keeping was so horrendous, they honestly couldn't even say who paid the rent for a certain month. They had situations it would take them months to even notice that a tenant failed to pay rent for two or three months. 

Is that a horrendous way to invest and run businesses? Absolutely. But they just went along with them because they saw more money coming in than coming out. Such behaviors are fairly common even amongst people who made a lot of money. 

If you are representing such owners, there's really not much you can do to close the record gap. And in such situations, agents for sellers are uneasy about providing any warranties or representations in the contract (whether directly from the owner or the tenants) because they really can't verify it.

I have no idea if the above is the case here. But you are not privy to the conversations between James and his clients. They may have very good reasons for why he can't agree to provide the information you are asking for. As the agent for the seller, he has no obligation to provide that information to you unless he suspects fraud or material misrepresentation by the seller. 

If you don't like it, you don't have to buy it. Going straight to accusing him of running a scam or violating the law is too much based on the information you provided. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

[Jay Hinrichs]

Originally posted by @Jill F.:

I buy small multi-family (side-by-side duplexes are my fav). I always ask and take whatever expense information I can get, but I don't really rely on what the seller tells me for operating expenses (and neither does my lender). I know what it costs *me* to operate a small multi-family. Providing more information about work completed probably helps most sellers because absent some sort of documentation on upgrades, or major work or accessibility to infrastructure, I'm going to assume that if it's an old building it has old plumbing and old electrical and submit an offer (or not) accordingly.

To make an informed offer: You must know gross potential revenue, recent collections, and landlord provided utilities to make an offer. To get operating costs: Most places the city water authority will give you 1&2 year averages (as will the gas and electric companies to determine other landlord provided utilities); your insurance agent should be able to give you a pretty close per door quote on insurance; you should be able to call the current trash provider for a price. An inspector or contractor ought to be able to give you a decent guess in life left in the roof and hvac systems. Property taxes and upcoming assessments are public records.

Only you can determine the level of renovation you will want to do on the first turnover and what it will cost you and the cost of the level of maintenance you plan to provide.

We have a team that goes in on inspection day and we document every maintenance issue we can find. Sometimes we can negotiate based on that and sometimes not. Sometimes (rarely) we find we need to take a walk. But when we get to the closing table we usually have a pretty good idea about what we're going to have to spend to bring the property up to our standards and how much it's going to cost us to do it and over what time periord.

Ah the benefit of being local.. !!!   

[Joe S.]

This has been one of the most entertaining, inspiring, and teaching threads in a long time. 

1. The arguments were well written and thought out to the most part and the contributors tried to use tack more than not.

2. @James Wise is a pro on the keypad and was diplomatic especially under the setting.

3. @Lenza M. made a mistake in using the word scam, but was big enough to make an apology. 

P.S. I think Mr. Lenza M. has a well versed vocabulary with a great future ahead of him. We all have made a slip or two in life with our choice of words. May God help us ALL.

[James Wise]

Originally posted by @Joe S.:

This has been one of the most entertaining, inspiring, and teaching threads in a long time. 

1. The arguments were well written and thought out to the most part and the contributors tried to use tack more than not.

2. @James Wise is a pro on the keypad and was diplomatic especially under the setting.

3. @Lenza M. made a mistake in using the word scam, but was big enough to make an apology. 

P.S. I think Mr. Lenza M. has a well versed vocabulary with a great future ahead of him. We all have made a slip or two in life with our choice of words. May God help us ALL.

I agree with your assessment to an extent. However, you have overlooked a major issue.

After the facts were presented and it became clear to Lenza that the public wasn't buying his allegation that I attempted to scam him he made his apology. 

Then............

Shortly after the apology he began firing off new unfounded allegations that I was trying to scam the seller who hired me. This is a pattern of slanderous behavior, not an improper usage of one word.

[Joe S.]

Originally posted by @James Wise:

Originally posted by @Joe S.:

This has been one of the most entertaining, inspiring, and teaching threads in a long time. 

1. The arguments were well written and thought out to the most part and the contributors tried to use tack more than not.

2. @James Wise is a pro on the keypad and was diplomatic especially under the setting.

3. @Lenza M. made a mistake in using the word scam, but was big enough to make an apology. 

P.S. I think Mr. Lenza M. has a well versed vocabulary with a great future ahead of him. We all have made a slip or two in life with our choice of words. May God help us ALL.

I agree with your assessment to an extent. However, you have overlooked a major issue.

After the facts were presented and it became clear to Lenza that the public wasn't buying his allegation that I attempted to scam him he made his apology. 

Then............

Shortly after the apology he began firing off new unfounded allegations that I was trying to scam the seller who hired me. This is a pattern of slanderous behavior, not an improper usage of one word.

@James Wise

 I was trying to pour some balm on the open wound. I see your point clearly and was endeavoring to let Mr. Lenza leave the ring with a little hope and dignity left. Unless he is allowed that he might keep throwing punches....

[Kyle J.]

So here’s what it all seems to boil down to in my opinion...

What @Lenza M. asked for wasn’t unreasonable.

@James Wise response wasn’t what he was looking for yet isn’t uncommon in this business or with these type of properties. 

In the end, you two are not wrong but are simply incompatible and will never do business together. 

Time to move on.

[James Wise]

Originally posted by @Joe S.:

Originally posted by @James Wise:

Originally posted by @Joe S.:

This has been one of the most entertaining, inspiring, and teaching threads in a long time. 

1. The arguments were well written and thought out to the most part and the contributors tried to use tack more than not.

2. @James Wise is a pro on the keypad and was diplomatic especially under the setting.

3. @Lenza M. made a mistake in using the word scam, but was big enough to make an apology. 

P.S. I think Mr. Lenza M. has a well versed vocabulary with a great future ahead of him. We all have made a slip or two in life with our choice of words. May God help us ALL.

I agree with your assessment to an extent. However, you have overlooked a major issue.

After the facts were presented and it became clear to Lenza that the public wasn't buying his allegation that I attempted to scam him he made his apology. 

Then............

Shortly after the apology he began firing off new unfounded allegations that I was trying to scam the seller who hired me. This is a pattern of slanderous behavior, not an improper usage of one word.

@James Wise

 I was trying to pour some balm on the open wound. I see your point clearly and was endeavoring to let Mr. Lenza leave the ring with a little hope and dignity left. Unless he is allowed that he might keep throwing punches....

Lol, that's ok. I've got a strong chin.

[Joe Cassandra]

Being able to estimate the expenses of operating a SFH or a multi is pretty basic investing 101.

No owner is going to dig through records to find every penny. Most sellers will lie anyway hence DD.

I just met a seller who claimed hvac was "just changed."

Checked serial number and it is easily 10 years old.

In James case, he can only give estimates as the seller likely told him little...nor is he required to tell you anything about expenses.

For income, you look at the lease and make a proforma P&L from that...it's the downside and risk of buying tenant occupied...but you wouldn't have reached out if you didnt understand that already :)

[Alpesh Parmar]

@Lenza M. I don’t think it’s a scam but I wouldn’t be comfortable with dealing with anyone who asks me to go through videos of the property and videos of shows to may be increase view count of the show and properties on Youtube or wherever.

Even a smallest turnkey provider would be able to share tax numbers and may be an excel with numbers.

[James Hamling]

Originally posted by @Lenza M.:

Originally posted by @James Hamling:

@Lenza M. I think you have little to no clue what your talking about...You said it yourself, that you put in a PA NOT to actually buy the place but fishing for information to support your hypostasis. 

...

And as  listing Broker/ Agent we have 0 duty to a buyer, ZERO, our loyalty is by law to the seller. Was James Wise in full disclosure of all information as he had it, yes. Was James Wise complying in full to realty law in his jurisdiction, yes. Was James Wise hiding important information that may negatively impact a buyer, no. ...

I really hoped to avoid further discussion of my thoughts on James's character publicly, but I stand by the message privately sent to you. I honestly regret using the word "scam" in the title -- it is overly inflammatory. But, as my private message to you stated, I do not believe my poor choice of a single word means James has acted appropriately or in the best interest of his client.

I want to assure you that I am a bonafide buyer. James himself can attest that I messaged him 8 months ago requesting information on properties like this one. I put in an offer because I wanted to purchase the property and believed James (not the seller) was inappropriately stonewalling on providing last 6 months payment history.

Did the seller instruct James to dismiss all buyers requesting information not contained in the 3-month-old video? We don't know. Is James withholding from buyers important information about tenant defaults? We don't know. Did James comply with realty law and present my offer to the seller? We don't know. What we know is that the offer was *countered* within 10 minutes of receipt indicating that no rent payment history would be provided.

Not a "scam", but definitely a big red flag. To this guy with no clue, at least.

 You my friend have a very bright future at CNN or MSNBC with the mastery at which you can inject unfounded accusations sugar-coated as "curious speculation". "Did @James Wise kill Kennedy, I don't know, was James Wise at the Grassy Knoll, I don't know". 

Come on Mr Lenza, I mean really man, enough is enough....